The increased role of information in marketing, sales and the customer value proposition and the increased volatility in consumer preferences require firms to create some form of information superiority, that is the capability to acquire, record, store, retrieve and interpret information and turn this into product and price differentiation and adjusted customer value propositions. Building information superiority requires a number of elements to be in place.
Understanding of the information economy
An understanding of the working of the information economy, as opposed to the industrial economy: how consumer behaviour is affected by information, how industries change due to lower costs of and availability of information, how rules of play change, how different types of information exists and that information is a ubiquitous multi-faceted phenomenon, both inside and outside the firm.
Role and nature of mission
A second requirement for information superiority is to define a mission for the firm that resonates with the social characteristics of an information economy and information society. Google’s mission is “to organize the world’s information and make it universally accessible and useful.” This mission is made operational in: “to monetise consumers’ intentions as revealed by their searches and other online behaviour.”
Hierarchy of values
A firm needs to embrace information as a leverage to set itself apart in a world of commoditised products and services. Doing this enables the company to differentiate its position in the market, to attract customers on non-price attributes and avoid price competition, create an atmosphere that attract creative knowledge workers and guide within the organisation the process of selection from available data, sensemaking , taking initiatives and making decisions.
Reflexive relationship with markets
An understanding and acceptance of the reflexive relationship between a business model and its customers. Business models are becoming more information based, and as a result we have witnessed the emergence of information goods, the increasing role of information (data) in the marketing, sales and distribution channels and the increased availability of information for customers. The intensity of the reflexive relationship between a business model and its customers increases, whilst the cycles of change become much faster, in some cases even of a real time, continuous nature.
The organisation of sensors
The ability of a firm to acquire and sense data from the outside world as well as that which originates from its internal organisation. Sensors exists in different types, varying from human to technological and need to be organised and distributed at various levels in the organisation. The organisation of the business’ sensing function should be independent of existing business models and existing products/services, to avoid biases in sensing information and new market opportunities. Increasingly firms delegate the responsibility for sensing marketing opportunities to a different area from that which is responsible for exploiting resources.
The objective of the sensemaking process for sensed, acquired data or information is to make data meaningful in a typical combination of a human facility and technology. As a result of advanced technologies, opportunities for sensemaking (i.e. algorithims, machine learning) without the need for human facility are rapidly becoming mainstream. In addition a company needs to master different types of sensemaking to build up information superiority:
- Sensemaking used to determine the business development path of the company. Sensemaking may include inductive thinking or deductive thinking, but ultimately it should feed the essence of entrepreneurship: abductive thinking. Sensemaking is about seeing new opportunities, new possibilities, new relationships. In this way, entrepreneurial sensemaking is different from business intelligence or data mining.
- Sensemaking used to execute information-driven business models, serving as the lynch pin between gaining information and applying this in the customer value proposition
Turning information into revenues
The ability to turn information produced in the sensemaking processes into new products, services, customer value propositions, tactical industry moves and other actions needed to create and maintain a profitable flow of revenues in a timely and efficient way. To absorb the uncertainties in the market, this will require modular processes organised across resource units, including those open to external suppliers (open business model). In addition, a co-location of knowledge, information, decision rights and feedback is needed in order to enable value creation throughout the firm. This usually requires the elimination of information asymmetry, all types of information included.
Multi-level fast feedback and explorative learning processes as an essential element to maintain control. This contains:
- traditional performance management to adjust the quantity and mix of products, including price adjustments
- monitoring which adjustments need to be made to the business model(s) of the firm. This may include value propositions, revenue models, delivery processes, etc.
- monitoring strategy, especially the strategy at industry level. This feedback should provide insights on how to acquire and maintain market power, what assumptions within the market power strategy are at stake etc
Fast feedback is at the internet real time, in sync with customer behaviour.