An important determinant of Platformization is how a company views its customers and beyond.
Vivaldi’s Platformization Potential Study is a forward-looking, comprehensive report that introduces the top S&P 500 companies such as Netflix, Pfizer, MGM Resorts, Nike, etc. with the most potential to capture exponential growth. We divided our analysis into two lenses: (1) the brand relationship between a company and its stakeholders and (2) how the company performs across the following five factors: The “Customer Centricity PLUS” Mindset, Value through data and analytics, Social Currency, Industry Position and Ecosystem Potential, and Agile Experimentation with New Technologies. Below we highlight the first factor.
FACTOR 01: The “Customer Centricity PLUS” Mindset
An important determinant of platformization is the mindset of the leadership of the company. The mindset determines how the company views its customers and beyond. Companies that view customers as end-users, end- customers, or as targets score lower on this factor. These companies are ‘customer obsessed’ focusing on customers and declaring their devotion to customer centricity.
In general, being customer centric is positive. Amazon said at its launch in 1995 that it aimed to be the most customer-centric company, where customers can find and discover anything to buy online, at the lowest possible prices. But this was in 1995. In 2000, Amazon changed its mission and opened its retail platform to third-party sellers. Today, the platform hosts more than 6 million sellers. The Amazon Marketplace platform is the company’s ‘cash cow’ that supports its still unprofitable retail business.
With that said, Amazon views customers as more than just shoppers; they are contributors and collaborators to its platform. Every time customers search, shop, or purchase on Amazon, they contribute to Amazon’s data collection.
This allows Amazon to aggregate and extract data to suggest or recommend additional products or services to alike customers. In short, an important determinant of platformization opportunity is having a business mindset of looking at customers as contributors to your business, not just as targets to be obsessed about.
It doesn’t stop there. Companies need to look beyond consumers or customers, and look at suppliers and other partners in new ways as well – not merely as an input into the value chain, or partners adding value along the value chain, but as essential providers of value, as participants in overall value creation, even connecting partners or suppliers directly with customers.
Amazon weights third-party sellers with equal importance as customers. Today, these sellers contribute more to Amazon’s convenience positioning than Amazon itself does. Third-party sellers deliver more products and services than Amazon itself could ever deliver – while Amazon realizes the majority of profits.
Explore the full study here for action-oriented strategies that can help businesses build better and stronger brands for today’s consumers.