Match-Maker Ventures was proud to co-host our final Scale Up Now webinar event with Arthur D. Little on June 1st. With the help of the expert-led panels carefully curated by Match-Maker Ventures, the event helped generate discussion and share valuable insights surrounding one of the most attractive topics in business today: collaborations between innovative scaleups and large corporates. With our lineup of world-class speakers, Match-Maker Ventures and Arthur D. Little compared insights on the value, challenges, and different approaches to these collaborations with respect to both customer experience (Session 3) and Environmental, Social and Corporate Governance (ESG) (Session 4).
Read on to learn more about the key insights shared during our 3rd session on customer experience.
What did we talk about?
The topic of our third webinar session was customer experience, and the impact that scaleup-corporate partnerships in this area can achieve. Panelists discussed the rapidly growing role of digital customer experience, the benefits of external collaboration, and the tangible business impact that innovations in customer experience can generate. The content of the session was especially meaningful for corporates who are looking to understand the importance of customer experience and digitalization, scaleups who are seeking to identify corporate problems that need to be solved, and industry experts looking to better understand the value that scaleups bring to customer experience in the digital age.
Who did we talk to?
What did we learn?
Below are our top five key takeaways:
1. Customer experience is transforming rapidly due to accelerated digital adoption
Customer experience is unsurprisingly among the many aspects of life transformed by the COVID pandemic. Panelists discussed the fact that, where once there was a choice between digital and brick-and-mortar commerce, there came a sudden necessity to conduct nearly all business online, a move which drastically reshaped the digital transformation roadmap of corporates around the world.
Complicating the digitalization process, as one panelist highlighted, is the disruption of expectations that many formerly “analog” customers have been facing as they try to do business in the relatively unfamiliar digital landscape. Those who would have preferred an in-person service were forced into the sudden, uncomfortable position of trying to get the same experience from a computer, a less than ideal digital adoption process. These analog-to-digital customers exposed flaws in processes designed for digital natives, and have underscored a crucial consideration for any successful corporation’s customer experience logic: how to create and manage a seamless customer journey for all users? In a consumer mix ranging from highly sophisticated long-time users to first-time online customers, corporates need to generate customer journeys that can somehow encompass a broad variety of user needs.
Challenging or not, more than a year into the pandemic, customers of all kinds have now grown accustomed to digital experience as their primary form of customer experience. Some corporates have successfully managed to navigate this accelerated digital adoption timeline, but others are still struggling.
While there is good news on the horizon with regards to the pandemic, consumer habits have changed, and our panelists suggested that this change is likely to stick. The challenge for corporates now is to serve their new digital clients in a manner which meets customer expectations and harnesses the revenue potential of the expanded digital market – a potential that has enabled those corporates who were willing to innovate over the past year to thrive rather than perish or simply coast. For those corporates who were ready to partner, scaleups have already proven an invaluable asset throughout this global digital transformation process, enabling giants like Walmart and the NBA to adjust their entire operations more quickly than ever thought possible.
2. Customer experience has a tangible business impact, and should be prioritized accordingly
Customer experience innovation does not only improve the digital experience of consumers: it also has a concrete relationship with corporate costs and revenues, and as a result, it should be a top consideration in any corporate’s digital transformation strategy.
As a representative panelist from Match-Maker Ventures’ portfolio scaleup Glassbox explained, every failed user session can lead to the loss of potential transactions, which directly correlates to a loss of revenue, higher customer support costs, and even the long-term loss of customers. In short, failed customer experience is expensive.
Consequently, corporates who are more accustomed to doing business differently must realize that smooth customer experience is no longer just a nice-to-have; rather, any corporate who does not take the necessary steps to prioritize customer experience will surely suffer losses. Knowing how to target customer experience flaws and repair them, however, requires the ability to identify where they are happening in the first place – a functionality which many corporates lack, and do not have the available resources to develop internally.
Enter Glassbox, a prime example of scaleup-corporate collaboration enabling greater business outcomes. The solution offered by Glassbox enables corporates to analyze customer journeys and identify, quantify, and appropriately prioritize the exact friction points that customers are facing. They have empowered their clients to resolve potentially massive issues, saving some clients up to USD$9 million in recovered revenue and reduced costs. While this is just one of many scaleup solutions available to optimize different factors involved in customer experience, it demonstrates how important these specialized technical innovations can be for a corporate’s bottom line. Scaleups can provide truly crucial services.
3. Outside perspectives are invaluable – if you allow them to be
Our panelists acknowledged that it can certainly be challenging for corporates to partner with any third party, especially with younger and smaller companies. In addition to the large customer impact, corporate adoption of scaleup solutions can require an overhaul of massive internal systems, a resource-intensive process that could make a potential partnership cost more than it is worth, even if a potential scaleup partner has a concrete value proposition. These hurdles undoubtedly have an impact on corporate willingness to even consider partnering.
Corporates still need help innovating, and partnerships with scaleups are a valuable means of doing so. Panelists across industries emphasized that, even with immense resources and a will to make changes, corporates face inherent challenges when attempting to innovate by themselves. They are large and can be slow to make decisions; they must prioritize normal operations of the company and have a hard time devoting the necessary space/resources to innovation; they keep a broad domain and cannot often focus on niche solutions; they may not be willing to pursue solutions that would entail a large-scale disruption of their former workflows due to sentimental attachments; and they may lack awareness of the latest changes/innovations in a targeted field.
Scaleups, on the other hand, are agile, bringing smaller team structures that can be much easier to work with than other corporates. Their smaller size makes them a natural choice for quick deployment when a corporate encounters an urgent issue, as many corporates have experienced firsthand during the COVID pandemic and the ensuing flurry of collaboration. Furthermore, these innovators often bring a laser focus on a niche domain, allowing them to achieve a very high quality solution for specific corporate problems without as much distraction.
Perhaps most important, as one panelist noted, is the overall value of inviting in an external perspective – even if doing so is uncomfortable. If a corporate has enough humility to accept that there may be something happening outside of the company that would be beneficial for them, then and only then can collaborations be fruitful. Indeed, corporates who resist external collaborations may unwittingly trap themselves in inefficient or ineffective systems, subjecting themselves to unnecessary losses due to their understandable blindness to their problems – or, more challenging, due to their hesitance to let go of something familiar. Scaleups are great tools for a much-needed fresh take on things, willing to make the right decision without being hampered by sentimentality for previous processes.
4. Corporates have to identify their problems before they can solve them
Even if a corporate is willing to partner with a third party, the first step in the collaboration has to come long before the third party joins the conversation: identifying which problems need to be solved.
According to one of our panelists, when a corporate can proactively identify and prioritize key problems, they can then take the requisite steps of allocating budget and setting goals for a solution. When possible, internal teams should therefore be fully aligned on the necessity of solving a problem before inviting a third party to consider collaborating – a decision which might risk wasting the scaleup’s time and precious resources while awaiting a deal that may never come to fruition.
Having these initial internal discussions and decisions out of the way enables collaborations with scaleups to be streamlined, avoiding many of the classic pitfalls that can befall such collaborations. Rather than waiting around for months until a corporate decides to prioritize its solution, a scaleup can be brought in with a specific target in mind, shortening the time to impact and reducing resource waste on both sides.
Not only will prepared collaboration partners reach better results, but they will also become more attractive partners for future collaborations, establishing a reputation for successful and effective partnership with benefits on both sides.
5. Optimized customer experience will look different for every corporate, making space for a variety of scaleup solutions in this field
Part of acknowledging your problems is acknowledging that there is no one-size-fits-all approach to any problem, including optimized customer experience. For online retailers or telecoms, optimizing might entail a more efficient digital customer journey. For the NBA by contrast, it might mean making sure players can play reliably and bring the best possible viewing experience to audiences.
Ultimately, if a corporate takes a serious approach to customer experience and recognizes its tangible business impact as discussed above, they should have a fair sense of what kind of challenges their customers might face. Given the wide variety of needs this might expose, the message for scaleups is: many different kinds of solutions can be rightfully positioned as improving customer experience. Whether the focus is on health screening to help sports teams play safely, or on digital experience management, or on something in between, scaleups should not discount the impact they can have on corporate customer experience, and should remain ready and willing to explore partnerships in this focus area, even if it is not something they have considered before.
Considering the clear necessity for smooth customer experience, scaleups and corporates alike should approach the issue with an openness to discover new problems (for corporates) and new solutions (for scaleups). With digital innovation accelerating at an unprecedented speed, the time to get involved in customer experience is now.
Interested in learning more? Check this out!
If you have made it this far and you are interested in learning more about scaleup-corporate collaboration, we highly recommend reading the Age of Collaboration, a joint study between Match-Maker Ventures and Arthur D. Little which gives valuable empirical insight into this collaborative phenomenon.
To learn more about our portfolio of innovative scaleups who are making these kinds of collaboration a reality every day, head over to our LinkedIn or check out the rest of our blog to see all of our latest portfolio success stories.
Finally, if you have any questions or would like to learn more, feel free to contact us here.