Developing the digital business: trust
Last week, we covered what a digital business means, especially in a B2B2C scenario, how a business should extend its digital footprint to its partners, then to its customers, then to the ecosystem. However, with this comes an immediate challenge and insecurity on the part of stakeholders. This is the first and biggest challenge of digital transformation, TRUST.
Everyone is worried about the impact of your brilliant digital transformation on them in person.
- Employees are afraid of losing their jobs.
- Partners are afraid that you will go or sell directly to customers.
- Customers are afraid of how you will use the more comprehensive information you have now.
For example, in an auto company, if the dealership doesn’t trust you, why would they participate in what you are trying to transform with your customers. This also applies to other industries. I learned this the hard way when we were making the best and biggest CRM in the industry about 20 years ago.
Read also: The journey to a digital business
There was everything good about the program, but the dealers were concerned that we might have the information, use it to control it, lose their customer data to OEMs, and so on. I have personally organized communication sessions all over India, often in partnership with my regional leaders to communicate a win-win-win image; as well as providing assurances and evidence of data security and confidentiality to our partners. I don’t think the program would be successful without such trust efforts. But why do you need it more today – digital disintermediation.
Digital disintermediation shapes market models
Digital channel disintermediation is now commonplace. Sector after sector, the first digital players own customers and disintermediate companies and distribution partners; dictate terms and change market dynamics. It is about concentrating power in the hands of platforms and removing intermediaries from the value chain. Some examples are:
- Taxi services: Travel agencies are disappearing as Uber and Ola create countless options for people to travel short and long distances.
- NoBroker.com: It excludes real estate brokers and connects the lessor and the tenant together, and provides all the intermediary services.
- Food delivery services own customers and impose onerous conditions on partner restaurants.
Trust: threat of internal disintermediation
Companies that are expanding their digital footprint are working with the good intention of empowering channel partners. However, in the current market context focused on digital disintermediation, this risks raising the partners’ eyebrows; if the intention is not well communicated and if the change is not well managed.
People have watched the digital footprint move away from middlemen, and they view your digitization efforts with suspicion.
I once booked a vacation with a travel company using their website. I still had to go to the local office to give my passport and other documents. I was shocked at the differential treatment I received, probably with the label I wore – via a digital channel. It was very evident to me from the way my transaction was handled that I was not welcome.
The answer will likely lie in policies and processes. If that travel agency does not offer portal-based lead incentives at its local offices (which handle the physical part of transactions); digital customers will face discrimination – as I have experienced. Likewise, if you don’t offer incentives to your resellers for such portal opportunities, will they treat customers well? These examples show the importance of communication, change management, and explicit efforts to build trust. You need to create the policies and limits for digitization. For example, “we will not sell directly to customers. We will activate the platform where the customer will buy from my resellers ”. It can be a statement from a business with existing channel partners, which creates a platform for customers to buy directly. It obviously doesn’t want to prevent its channel partners from serving digital customers well and therefore needs to provide explicit policy clarity. Or you can offer additional incentives to your resellers for portal or app-based opportunities – to shape your own digital future.
As a corollary, in the absence of such policies, you will find digital customers receiving differential treatment, simply because you haven’t created enough trust.
So your policies, processes, incentive programs should reflect your focus on digital and instead give better treatment to your customers who go through digital channels.
The article was written by Jagdish Belwal, Founder and CEO, Jagdish Belwal Advisory