Countless industries and sectors are in the crosshairs of digital disruption, so it’s best to proactively change an outdated business model.
It's clear that digital disruption is everywhere. Over the last few years, we've seen the taxi industry reel as a result of Uber and the hotel industry recoil as Airbnb has taken shape. Countless other industries and sectors are in the crosshairs.
Unfortunately, business leaders—particularly in legacy industries—aren't keeping up. In many cases, executives are mired in industrial-age thinking. They fail to view disruption as a way to remap business models and exploit opportunities. As a result, they miss revenue opportunities and ways to boost brand loyalty.
Here's an example: I just booked a vacation to Spain and France on Delta Airlines. The website was easy to use, the booking went smoothly and there wasn't a hiccup or a hitch. On a scale of 1 to 10, the experience was a 10. However, two days later, when I realized I'd like to add two days to the front end of the trip and asked Delta about changing the departure date, I was told by a Delta Airlines representative that I would have to pay $300 in change fees per ticket.
One has to wonder why an airline, which has all this data completely computerized, would charge such an exorbitant fee. All that's required is a change in the computer. We're not living in 1960, where an agent would have to reissue a paper ticket and send off a blitz of documents to other departments or airlines. Heck, it's not even 1985, when it would have been necessary to fax the changes.
The current system simply penalizes those who must make a change. Why wouldn't Delta (and just about every other airline) charge a modest fee, perhaps $25 or $50 per ticket and actually encourage people to change flights to their heart's content? Why wouldn't they build this into their business model and the computer system and view flight changes as a revenue opportunity? I'm pretty sure they would make more money this way.
The airline industry isn't the only culprit. If I initiate a transfer between accounts at my bank, Wells Fargo, there's no fee. But if I fail to have enough funds in an account, the bank transfers it from my savings and charges a fee -- despite the fact there's no manual intervention. It's all happening in the computer either way. Why not just do this for good customers to cement loyalty?
CIOs must understand something: At some point, someone or some company will step in and disrupt. So, it's often better to think like a disruptor, reduce or eliminate the disruption threat, and demonstrate to customers that you have their backs.