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Insights / Business

Changes in the digital economic landscape

June 12, 2015
About the author Alain VeuveAlain Veuve
Managing Director, AOE Switzerland

What do dismissing 20 percent of your customers annually, optimism for digital transformation and ad agencies have in common? They are all topics dealt with by Alain Veuve in some of his recent blogs. Read the executive summaries to find out his take on the subjects – or click the respective link to read the entire post in German.

Executive Summary 1: “Dismiss 20 Percent of your Customers every Year!”

Everyone wants long-term customers and partnerships (at least overtly), which leads to service providers trying to please everyone, all of the time. As a result there is an “at any cost” mentality when it comes to retaining clients.

The price we pay for this is too high, Veuve asserts. We need to continually reassess every customer relationship and check whether it still works for both sides. To continue a deteriorating business partnership doesn't help service provider or customer. On the contrary, both suffer; and holding onto the relationship leads to a downward spiral that can spin out of control.

One way to avoid such situations alltogether is to place particular care in winning new customers. Nevertheless, sometimes the paths of business partners just diverge over time, necessitating a reevalutation.

Find out more, including how to check if a particular business relationship has reached the critical stage, the real impact such a partnership can have on the parties involved, and how to terminate customers for mutual benefit.

Dismiss 20 Percent of your Customers every Year! (June 3, 2016)

Executive Summary 2: “Dear Digital Economy: Please show more Optimism for Digital Transformation!”

Many decision makers view digital transformation as a threat to their business. To some extent this attitude is understandable. After all, digital transformation means leaving the (perceived) safe harbor of a tried-and-true business model. At the same time, one needs to get rid of this sense of loss in order to make way for new developments.

Some of the blame for creating such anxiety can be squarely placed on the shoulders of the industry itself, says Veuve. The digital industry has approached the topic of transformation with a negative mindset, e.g. with the idea of mastering digital transformation. According to Veuve this leads to companies merely transposing a non-digital business model into the digital era something which rarely works.

The approach should be a different one: We should use our existing resources and know-how to develop new business models.

Digital professionals also don't tire in spreading negative propaganda, claims Veuve. This only serves to amplify fear of the unknown, of leaving the corporate comfort zone.

The lines between on- and offline are blurring, if they even exist at all anymore. We can therefore cease playing online and offline against each other. Rather, we should focus on the heretofore undreamed-of opportunites provided by digital transformation. This new optimism will lead to better business for all, concludes Veuve. And, don't forget, digital transformation is just the beginning!

Dear Digital Economy: Please show more Optimism for Digital Transformation!(June 9, 2015)

Executive Summary 3: “The Ad Agency is dead – long live the Ad Agency”

For as long as I can remember, I have had trouble with advertising agencies."

For as long as he can remember, Veuve has had problems with ad agencies, whether as customer or as project leader or consultant for web projects. There was always an issue that caused trouble: for example, designs with new functions not discussed with the client, or unfinished design in two files and four views, with the hint to execute the entire website in this style.Or, art directors who acted like Steve Jobs - without "stuff" that was anywhere nearly as good.

And even though this often lead to friction, one had to accept the circumstances, for the ad agency controlled the customer relationship – despite usually knowing far less about the Web than external consultants or project leaders.

Enter the financial crisis of 2008, which changed this paradigm. Budgets were moved from offline to online, automatically strengthening the position of Internet agencies. Requests now came in directly, not through third parties such as ad agencies.

Parallel to this development came a significant shift in how creative agencies did their work. For many years they were paid through a fixed, dependable budget for their services. These services included not only graphic design, but also product development and creative consultancy, even recruiting.

Gradually, the large budgets were shifted and partitioned into smaller pieces. The impact was substantial; most creatives focused exclusively on the graphic design aspects of the business and began selling services by the hour.

This dual change in the business environment has caused a transformation among the agencies. Most now offer a wide range of digital services, having essentially become web- / digital shops.

A smaller, but more innovative, portion of ad agencies has begun with changing their business model; these companies have, once again, become the creative corporate consultants they once were, but with a digital twist. These agencies outsource most of the production work and operate as brokers between their external partners and the customer.

This requires a fundamental change of the business model. Find out how customers can benefit in this brave, new world.

The Ad Agency is dead long live the Ad Agency(June 11, 2016)