How Businesses Are Winning the Digital Transformation

There was no big announcement. There was no single invention that spurred it. And you can’t pin it down to a single technology. But there has been a great shift in the last five years. This shift in our expectations as consumers has happened gradually and almost imperceptibly.

This shift has been talked about as an ‘on-demand economy’ or the ‘access economy.’ According to Mike Jaconi (Co-founder of Button) who has written a considerable amount about this shift, “the on-demand economy will usher in a paradigm shift similar to what was seen with the advent of the internet in the late 1990s.”

Simply put, this shift was created by companies that leveraged technology to create radically fast and frictionless experiences. The core tenets of this movement are speed and efficiency—make something hard, effortless, and immediate. Think Uber, Grub Hub, Amazon, or Carvana.

“If you study what the really big things on the internet are, you realize they are masters at making things fast and not making people think.”

– Ev Williams, Co-founder Twitter

Just like you’re the average of the five people you spend the most time with, you’re expectations are the average of the five companies you spend the most money with.

While there has been some sort of societal tipping point that happened over the last five years, it can’t be pinned down to a day, week or month because it was rather something individual—a coming of age— something we were all going through when the time was right.

Not all are through this change, but enough of the majority are through that it makes it feel as if it were all of us. A combination of factors needed to come together for an individual to begin this change.

For each of us, it looked different, but perhaps there are some similar threads that could have looked something like this:

• You signed up for Prime
• You began to use Uber or Lyft on a business trip
• You began a text relationship with a plumber(not like that)
• You started watching ‘House of Cards’ or ‘Stranger Things’ and couldn’t stop
• Someone at the office ordered lunch through DoorDash
• People started texting you from your driveway instead of coming to your door
• You started getting groceries exclusively through pickup
• A friend of yours bought a used car online without ever seeing it

Somewhere in the middle of all of this, you began seeing things differently. Suddenly, experiences at places like theaters, car dealerships, furniture stores, and doctor’s offices seemed painful. Forget about ordering anything that isn’t here within a week. And you wouldn’t think of calling someone over the phone and giving them our credit card number.

There are thousands of us born every day. We want it now and we want it easy. And if companies haven’t figured out how to give it to us wherever, whenever, however, it’s not worth our time.

Yes, this means you.

“Everyday purchasing driven through smartphones will result in one of the most transformational shifts in consumption patterns in history—never before has a consumer been able to buy anything that they want at any time with simply the tap of a button.”

– Mike Jaconi, Co-founder of Button

Here to stay

There are millions of fads out there. This isn’t one of them. The National Technology Readiness Survey (NTRS), which tracks technology behaviors and beliefs in the U.S., indicated that participation in the on-demand economy is growing at a rate of 58% with an expected 93 million people participating by 2022. To put that in perspective, that’s almost half of the adult population.

The data shows that the on-demand economy isn’t just for the wealthy. Charlies Colby and Kelly Bell of the Harvard Business Review pointed out that “46% of on-demand consumers have an annual household income of less than $50,000 and only 22% have a household income of $100,000 or more.” The typical on-demand consumer is also geographically diverse with 39% living in rural areas, 30% in suburbs, and 31% in cities.

The on-demand economy is not going away. Billions have been invested in space. Semil Shah (General Partner of Haystack.VC) noted: “every week a new service seems to launch that aggregates and organizes freelance labor (those with excess time) to help those who have money but not time.” Research firm BIA/Kelsey estimates that the on-demand economy only served 7% of its $758 billion US addressable market in 2017. This means that we’re only getting started and there is still plenty of space for anyone to play.

Adapt or Die

Back in 2014, Mike Jaconi predicted, “this new industry, and its ability to satisfy consumers increasing demand for simplicity, efficiency, and convenience is novel today. Tomorrow, it will be an expectation.” And it is.

Just as today you would never consider filling out an order form at the end of a catalog and mailing a check to a company, tomorrow you’ll laugh about the days of calling in an order for take-out or entering a showroom.

Anyone looking to offer services to the on-demand consumer will need to adapt or die. Because there are now enough companies offering fast and frictionless on-demand services, the participating consumer has developed a sense of what “now” feels like. Sort of like indoor plumbing—once you’ve tried it, you don’t want to do your business any other way.

Let’s be clear—we’re not trying to encourage you to start an “Uber for [your industry]” type of business. We’re trying to issue a call to those brave enough to adapt to the changing world around them. A world that is rapidly developing a taste for on-demand experiences. In order to continue to thrive in the days ahead, you’ll need to provide a fast and frictionless experience.

One of the easiest and most impactful ways to adapt to the on-demand shift is how you communicate with your customers. Snail mail died long ago. Phone and email are knocking on heaven’s door. And until mental telepathy becomes a thing, text and chat are the vehicles of choice for today’s on-demand consumer.

Doin’ it right

Alright, let’s get to the meat. In the following segments, we’re going to tell a few stories of small businesses that are elegantly evolving to better serve the on-demand consumer, specifically when it comes to customer communication. As promised, we’ll give examples of a pawn shop, a dentist, and a car dealership.

A Pawn Shop

What would be the most unlikely business to adapt to the needs of the on-demand consumer? If you said a pawn shop, we’re right there with you. However, the R&J Jewelry & Loans is not your average pawn shop and Angel Manzano is not your average proprietor. He believes that “customers want the simplest, easiest, fastest way to connect with somebody and they want to talk to a real person.”

Angel and his wife are taking over the family business, a pawn shop, which his parents started in the ’70s. They provide immediate cash and short-term loans based on collateral. They also have a retail side of their business, but unlike the typical pawn shop, they only focus on jewelry, watches, handbags, diamonds, gold, or silver.

As you can imagine, they deal with a different type of customer than the other businesses we’ve covered in this piece. However, we’ve also discussed that there are seemingly no socioeconomic or geographic boundaries around the on-demand consumer. Angel says he used to run his entire business through “traditional phone calls—texting was super limited because we used our own phones. So obviously we’re not going to give that out to very many customers.”

Angel adopted Podium in order to create a central messaging system for his business. The results have been astounding. He says “It’s brought us a lot of customers we wouldn’t have otherwise.” Understanding that the typical on-demand consumer isn’t willing to put up with the same old experience, he mentions, “we get a lot of business we wouldn’t normally get because people that don’t want to make a phone call.”

Angel believes this increase in business is from a subtle difference between text and phone calls—anonymity. He observes, “customers like some anonymity until they’ve decided that they actually want to do something with you. I think they enjoy being able to be anonymous through text messaging.” This anonymity, whether real or perceived seems to be a hallmark need of today’s on-demand consumer.

“It’s brought us a lot of customers we wouldn’t have otherwise. we get a lot of business we wouldn’t normally get because people that don’t want to make a phone call.”

– Angel Manzano, R&J Jewelry & Loan

A Dentist – Inspire Dental Group

Would you guess that your dentist has 1,298 reviews averaging 4.9 stars? Well, you might if you were a patient of Inspire Dental Group in upstate New York. We were able to catch up with Lisa Blair, the Chief Operating Officer of Inspire Dental recently to see how they do it.

Their goal is to be 100% digital in their customer experience. Lisa said they try to provide an “easy way for patients to come and see us—online booking, easy web access, electronic communications from start to finish.” If you’re following this lesson well, you will have felt a slight tingle when you read the words “easy” and “electronic” as those are the keys to the door of a fast and frictionless customer experience.

It wasn’t until recently that they have been able to offer such an experience. Lisa said they used to do the whole email and phone call reminder thing to help patients remember to keep their appointment. She also said that they tried a chat client on their website back in 2011, but “patients weren’t ready to do it and we weren’t properly manned on the inside.” They now use Podium and a handful of other tools to help create a seamless digital experience for their customers.

She validated the idea of a recent on-demand shift stating “there’s been a huge cultural shift now even in the older generation because it used to be the older generation that didn’t like the electronic communication. That has shifted now and the older generation is getting much more tech-savvy.” Even the younger generation has shifted their expectations. She that many of the “35 and under generation” won’t even show up for an appointment if they don’t get a text reminder.

Lisa says the phone isn’t going away soon as they still have “a huge volume of incoming phone calls and missed opportunities.” However, she has seen texting grow significantly because she feels that texting allows “better time management” for her customers.

“there’s been a huge cultural shift now even in the older generation because it used to be the older generation that didn’t like the electronic communication. That has shift- ed now and the older generation is getting much more tech-savvy.”

– Lisa Blair, COO Inspire Dental Group

A Car Dealership – Van Horn Automotive Group

Over the last 50 years, Van Horn Automotive Group has successfully grown from one car dealership in Plymouth, Wisconsin to 15 dealerships across Wisconsin and Iowa with another one on the way. Five of these dealerships have opened in the last two years.

Tina Tasche is in charge of solving the communication challenges that arise with the fast growth that Van Horn Automotive Group has seen. “We’re always trying to make sure that all of our customers have the same experience regardless of what dealership they’re dealing with,” says Tina. She uses Podium and a handful of other tools to manage the chaos and provide a consistent experience across the brand.

As their customers have increasingly been expecting fast and frictionless experiences, Van Horn Automotive group has had to be innovative in how they interact with customers. One simple thing they did was allow customers to text their landline phone numbers. Tina said, “it was just crazy after we did that—the amount of messages we didn’t realize that we weren’t getting from our customers. It’s been a huge new source of communication for us.” She adds, “the conversion rate for text messaging is mind-boggling.”

“The conversion rate for text messaging is mind-boggling” – Tina Tasche, Van Horn Automotive Group

“There’s been a huge change, even over the last 12 months or so with the customer desire to text and chat instead of being on the phone or emailing,” Tina mentioned. Because of this shift in customer expectations, Van Horn has consolidated their internet sales department into one central hub to better train them on how to best interact with a customer over text or chat.

With all of these changes, Van Horn Automotive Group has not only been able to provide a consistent experience across all stores but has been able to respond to new leads from any source in a remarkable 15 minutes or less.

Tina says their next goal is to figure out how to create a situation where a customer never needs to come to the showroom and the car is delivered directly to their garage. They can order a car “on-demand.”

Growing Pains

Change isn’t easy, especially in business. All three of the companies we just explored shared similar challenges in adapting to the needs of the on-demand consumer.

A common hurdle for anyone adopting a digital form of communication is consistent messaging between operators. Lisa considers this her number two goal at Inspire Dental stating they need to make sure they’re “sending the same message across the board in our organization.” Overcoming this hurdle will require proper training for everyone who is interacting with customers. Even those who are familiar with digital communication such as email may need help making the shift to a text-friendly on-demand consumer. Tina at Van Horn says “people have been training on email for years, but texting is different—it’s looser—more shorthand.

Angel at R&J Jewelry & Loan said another challenge has been keeping up with the social expectations of on-demanders once you open the door. He warns that “text messaging comes the expectation that you’re going to get a response pretty quick.” While this is wonderful the have the opportunity, this can be a problem for employees who are multi-tasking and helping R&J Jewelry & Loan customers. Tina at Van Horn agrees with Angel’s assertion saying that “one of the biggest challenges is responding quickly.” She states that “there’s an expectation growing on the consumer end that dealers are available 24/7.” She said it’s been a challenge to meet that expectation with their own employees so they have had to partner with people they can trust to take care of their customers as they do.

While these challenges seem difficult to overcome, all three of these companies wouldn’t have it any other way. They understand that the world around them has changed and the only way forward is to adapt.

Pulling it all together

With a little more knowledge under our belts, let’s pick up again where we started. The tie that binds a pawn shop, a dentist, and a car dealership happens to be the same that also binds your business.

Every day, the percentage of customers visiting your website or walking through your door is increasing as they develop a taste for the on-demand world that is unfolding around them. More and more, they will be demanding a fast and frictionless trans-action. The easiest way to meet their needs is through frictionless communication. Only one question remains: will you adapt or die?