CX, Magnified: A Guide for Digitally Transforming a Conglomerate
Digital transformation is a huge undertaking, one that involves investing in new technologies, upskilling workforces, and defining new workflows and processes. In a diverse business group or conglomerate, this becomes all the more complex because decisions need to be made that support objectives of both the individual businesses and the company as a whole.
I recently consulted on a digital transformation for a multibillion-dollar, multinational conglomerate headquartered in Mumbai, India, and gained considerable insights into what it takes to do so successfully. Suffice to say, many moving parts need to work in tandem across different sections of the organization. A great deal of time and patience from all business stakeholders is also involved.
Here are four broad initiatives that must be defined and executed.
For a conglomerate with diverse businesses, a key priority for transformation is to create a single, centralised customer data platform (CDP) across relevant businesses. This involves selecting which businesses should be part of this endeavor. The company’s corporate or head office should lead this initiative, as it typically has oversight of each of the group’s businesses.
I observed that not every company within the conglomerate will be enthused about sharing its customer or prospect data, with concerns ranging from doubts over the value of doing so to the overall business, to loss of potential business opportunities due to not being able to keep the customer value proposition targeted enough. In such a scenario, consider asking individual companies to volunteer to be part of the project, rather than forcing them. They can then serve as a pilot for the rest of the group’s businesses.
Also, be sure to explain the huge advantage of having a centralised CDP: It has much richer information about both existing and prospective customers, thereby bringing greater intelligence into the decision-making for both the group’s head office and individual business teams. Think of a conglomerate that has more than 100 websites and the insights it could draw from prospects’ interests and affinities by collating behavioural data of website visitors from all of them. As an example, a customer interested in purchasing a car from a conglomerate’s auto business could also be a great prospect for its insurance business. A CDP enables businesses to leverage the power of customer data by sharing such actionable customer segments across teams, and by setting up real-time, predictive analytics dashboards to inform on trends.
Successful companies are those where everyone has a stake in the end-to-end customer journey. For conglomerates, working collaboratively helps to ensure consistency among their companies and defines the rules of engagement for a wholistic approach to customer experience management (CXM).
In my experience, I have seen businesses successfully tackle the customisation of customer journeys by managing parts of it, then transferring the same foundational process to the next team. For example, the group marketing team could work with an individual business’ marketing team to come up with customer segments and managing the discovery of products and services, along with generating engagement with the prospect. Then the individual business would own the final conversions, sales and services.
Of course, a common and integrated data platform that I mentioned previously must be made available to the teams to draw insights and orchestrate the customer journey across multiple teams.
Loyalty management is one of the key levers through which businesses seek to engage with their customers on an ongoing basis. Many businesses within a conglomerate have their own loyalty programs, and sometimes a single business has multiple loyalty programs, depending on the value proposition and target segmentation. Although these loyalty programs work for an individual business, they do not necessarily add any overall value to the overarching organization. If anything, they could dilute the brand.
Conglomerates would be wise to find synergies within their businesses, such as between travel and hotel businesses or in automotive and finance businesses, and set up a common loyalty program. A single loyalty program connects the group’s brand with its customers and helps deliver an exclusive experience through offers that could not be delivered by an individual business.
One conglomerate that has successfully delivered on this initiative is Virgin, which created a single loyalty program called Virgin Red across all its ventures, including travel, retail, and telecommunications. Within the Asia-Pacific region, companies including the Tata Group (cars, consulting, chemicals, and beverages), the Future Group (fashion and supermarkets), and Grab (rides, payments, food deliveries, and hotel bookings) are taking steps in this direction.
A single technology architecture is one of the foundations of any digital transformation. Adopting open application programming interfaces (APIs) that facilitate the sharing of data among multiple businesses paves the way for the delivery of a contextualised customer experience.
Many companies have existing investments in varied technology solutions, and teams often develop a strong attachment to a particular technology. In these cases, rationalising technology and gearing it towards optimum delivery of the customer experience can be one of the biggest hurdles to overcome.
I have seen organisations take various approaches, with the most successful opting for the best-fit technology stack at the group level, then building multiyear road maps for phasing out the inconsistent technology products at individual companies over time. In my latest engagement, leadership decided to being by adopting the common architecture at the corporate level and with five of its individual businesses.
I have seen others opt for adopting the tech stack that is used by one of the biggest businesses within the group. This approach has some merit when one of the businesses is much bigger than the others put together. However, it doesn’t necessarily solve all possible use cases, and some businesses end up fending for themselves through stop-gap solutions, thereby eroding the success of the transformation.
The digital transformation of a conglomerate involves considerable planning. Because the gains are not immediately visible and sometimes not quantifiable in the short term, doubts and confusion can arise. It falls upon leadership—the “transformer-in-chief”—to make sure the goals of the transformation, and the path to it, are repeatedly communicated well to all stakeholders within the organisation.