Not too long ago, I introduced the growingly attractive notion of a digital business model -- one that focused on creating content and experiences that customers and partners preferred. My thanks (once again) to Dr. Peter Weill for introducing this powerful concept.
Many of these stories are coming to me via EMC Digital, the boutique consulting specialty within the broader EMC Consulting organization.
And -- at the end of the day -- this particular story illustrates how a combination of innovative thinking and strong leadership can transform the seemingly mundane into a potentially compelling competitive advantage.
Do You Like Your Credit Card?
Personally, I don't think much about credit cards -- or credit card companies for that matter. I want a low interest rate, a good customer experience, and a few useful freebies if they're available.
About 0.01% of my brain is engaged with the topic of "what is the best credit card I should be using?". One unpleasant experience, and I'm probably off to the next provider. You may be the same.
There are literally thousands of credit cards available from many dozens of institutions. It's safe to say it's a mature industry with a mature model.
So -- if you're in the credit card business -- how do you meaningfully differentiate? Lower rates? More freebies? Cool elite branding? Big name advertising? Slap a little social wallpaper on your website?
Or perhaps by thinking in terms of a completely different digital customer experience -- one that is far more engaging than the norm?
Dr. Weill's Digital Business Model In 30 Seconds
In the future, customers will prefer digital relationships with companies centered around content, experience and supported by platform.
He argues that a "clean sheet of paper" approach is justified, rather than simply recreating physical experiences in a digital world, e.g. now you can see your physical credit card statement on your digital iPad, or similar.
OK, fair enough, but exactly *how* does one go about creating the differentiated and meaningful digital customer experience?
Enter EMC Digital
One of EMC's more interesting acquisitions a while back was Conchango, a UK-based consultancy with a flair for, well, digital user experiences. Since then, we've been able to attract an extended core of very talented people in the US as well who have this unique expertise.
Now, as part of EMC Consulting, their expertise has grown and matured considerably over the years, with a compelling set of digital experience methodologies to help clients go from A to B.
Their client? Barclaycard -- familiar in Europe, less so here in the US. I am told that Barclays is among the top 3 of retail banks in the UK, and among the top 5 in Europe. And now they'd like to bring their credit card brand to the US market.
Based on previous experience helping with iPhone apps, EMC Digital was able to secure the prized "agency of record" designation with the new markets group at Barclaycard.
And they came up with an exceptionally innovative -- and some what fascinating -- approach to the challenge of creating a differentiated digital experience around something as familiar as a credit card.
The Mindbending Power Of Social Business Models
If you're reading this blog, you're familiar with the transformative power of social media to engage people in ways that weren't just practical in the past. Communities of engaged participants -- all focused on shared goals and passions -- are wonderful things to behold.
Barclaycard wanted to work towards creating a US credit card product that represented the most advanced of social models: an open community where stakeholders could fully participate in the offering -- to a degree far beyond what most "social types" would envision. Full transparency and an open business model, for example. Pretty scary stuff for most corporate types, you'll have to admit.
But how do you go about building a "social financial product?"
One of the rubrics I learned long ago when I was doing social media strategy here at EMC is that you use community techniques to tackle community challenges. Basically, when you're trying to figure out what to do, you form a community of interested parties around the topic.
Yes, it takes a bit longer -- and stands in stark contrast to the familiar command-and-control models we're familiar with -- but the outcome is always much better :)
And thus was born the Barclaycard Innovation Lab
Introducing The Barclaycard Innovation Lab
While the card itself is not formally announced, the community is open to interested parties. The way it works now, you've got to sign up for the existing card to join the community, but that should change as things progress.
In a perfect world, the community would be open so you could look around, but -- at least to my eye -- it's very engaging, as it should be.
Community designers everywhere, take note.
Scary Thoughts -- Or Are They?
Imagine you wanted to run an open business model -- one where the stakeholders were fully briefed on such things as the P+L, key choices the virtual management team had to make, likely implications of different choices, etc.
For example, it's easy to imagine a sub-community forming that wanted the "dividends" from the enterprise to go to social good, e.g. charity or similar. Another sub-community would probably want the "dividends" coming back in the form of one sort of incentive or another.
Billing practices and fees could be an open topic of discussion with full transparency. Participants could express preferences on how they'd like to be communicated with (hey, only alert me if there's a problem), or perhaps express preferences for other related financial services, for example how to use a credit card intelligently without mangling your finances.
As in any community, not everyone has to agree. Over time, participants might organize into different camps; each with different needs -- and each which could potentially be served with a different variation of the credit card "product". Even if it doesn't go there, the feedback mechanisms are in place.
There's no telling where it might go -- and that's the idea.
Now, how different is that "engaged" experience from your current credit card experience?
Learning To Think Digital
One around strong leadership and vision from the team at Barclaycard. And another one from EMC Consulting that helped the client to "think digital".
The EMC Digital team has a singular perspective: what should the ideal user experience be -- that works for the business?
And, if you're not exactly sure what "ideal" might mean, how can we use social mechanisms to continually improve on that ideal over time?
That last point is a key one: as we collectively gain comfort with increasingly digital experiences, our notions of "ideal" are evolving very quickly indeed. Simply because what might have appeared to be leading edge in 2011 probably won't look so hot in 2013.
If you're going to have a cutting-edge digital experience on the front-end of your digital business model, what better mechanism is there to have an enaged community to tell you what they need and want?
In my earlier post, I offered up the notion of a Chief Digital Officer, whose task it was to transform an organization's business model from a legacy view to a competitive digital business model.
In this case, there appears to be just such a person who spotted the opportunity, and provided the strong leadership needed. I understand that this person certainly fits the profile; if not in title, certainly in role.
And I dearly hope to interview this individual at some point if circumstances permit :)
Time will tell if Barclaycard's strategy and forthcoming offering will shake things up in an otherwise staid (and occasionally unpopular) industry.
While it might not be an overnight sensation, the underlying strategy and model are compelling: the social feedback mechanisms are fully capable of crafting exactly what customer want.
It is brave, new thinking at its essence.
And that -- in the final analysis -- is what digital business models appear to be all about :)