Today's customers increasingly prioritize dynamic engagement and experiences over products. Deloitte Digital US Chief Commercial Officer Dounia Senawi and Mark Litwin, principal, offer valuable insight on how brands can approach rapidly evolving customer demands.

The needs of today’s customers are evolving on a minute-by-minute basis. Our digital world has allowed for brands to build dynamic, engaging relationships with their customers that spark loyalty and trust. But many businesses are falling behind, lacking the agility and capabilities to meet new customer demands. The world is changing, and business strategies need to change with it.

To become truly future-proof—to be able to launch new offerings, design and digitize middle-office capabilities from lead to cash, and attribute revenue properly—is a game-changing advantage for today’s brands that choose to invest in it. The “messy middle office,” as we have coined it here at Deloitte Digital, is the nexus between the front office and back office of business operations—and it’s where many of our clients across industries face challenges.

To best position your business for customer satisfaction and agile success, it is important to answer three key questions:

  • Has your organization made the shift from transactions to relationships? Is it woven into your culture?
  • Is your technology—specifically in the middle office—optimized to support a relationship-based subscription model?
  • Is your leadership prepared and courageous enough to drive the change?

We’ll explore each of these now.

  • Has your organization made the shift from transactions to relationships? Is it woven into your culture?

    Dounia Senawi & Mark Litwin:
    A subscription model is an increasingly attractive option for businesses that want to enable higher returns on investment and stronger customer relationships. In fact, the revenue of companies with a subscription model is
    valued 2-3x higher than those with a one-time, transactional sales model. A subscription model offers a foundation of revenue predictability, lower cost of entry, and longer-term customer relationships.

    To move to a subscription model is to acknowledge that the preference of what, when, and how customers engage is theirs. To thrive in a subscription environment is to be focused on deepening and nurturing customer relationships.

    This shift isn’t just executed through sales teams. It must be foundational in all that you do—how you engage, the strategy you create, the business processes you deploy, and the technology you implement. This means developing a clear definition of the customer agenda and unlocking insights in your data that allow for true personalization (and, ultimately, conversion).

    The shift to a subscription model can be thought of in the context of moving from linear transactional engagement—I have a product, who can I sell it to?—to a circular model—I have a customer, what do they need?
  • Is your technology—specifically in the middle office—optimized to support a relationship-based, subscription model?

    DS & ML:
    What can initially seem like a simple problem to solve can quickly become complicated by distinct middle-office legacy systems. Solving this problem and building flexibility to expand—by creating bundles and tailoring offers enhanced with alliance technologies such as Zuora and Salesforce, for example—is central to the shift from product-centric brand to customer-centric brand.

    So, how do you evolve from simple, single-price subscriptions to more personalized offerings featuring recurring and/or usage-based pricing options? The answer lies in your technology.

    In one example, a portfolio company relied on manual, high-touch processes across their existing lead-to-cash journey. Behind this journey existed a web of systems creating a disjointed sales process, complex product catalogs, and, in many cases, pricing errors. We helped the company design and implement an all SaaS-based architecture to solve these issues.

    By transforming their messy middle office, this company simplified their end-to-end sales and renewal processes, enabled low- or no-touch transactions for the first time, and improved their renewal rate. We also helped them implement new sales tools such as a restructured product catalog and improved recognition accuracy for invoice and revenue attribution. Results included a 90% reduction of SKUs, a 90% reduction of custom IT code, and a 20% improvement in deal conversion.

    The experience you deliver is only as good as your weakest link. The front-end, flashy user experience is important, but as much, if not more, attention needs to be focused on the technical foundation that stitches these experiences together.

  • Is your leadership prepared and courageous enough to steer these difficult transitions?

    DS & ML:
    We know firsthand the time, money, and reputational risk that comes with leading transformational change. It involves making difficult decisions, and it brings up the tough possibility of abandoning practices that have made you successful in the past.

    Some recurring setbacks we’ve seen when leaders want to take on these programs include a lack of top-down sponsorship and engagement, inconsistent stakeholder alignment and communications, and siloed teams that prevent true collaboration.

    There are four core qualities that leaders need to adopt to successfully execute middle-office improvements and become future-ready. They are:

    • Radical transparency.
    Transparency is critical when managing change, and at times of ambiguity. It shows empathy and enables your teams to come on the journey with you. Fixing the “mess in the middle” most directly impacts staff and teams first. Know your people and understand their challenges.

    • Willingness to challenge orthodoxies. The way things have always been done isn't necessarily the best way. Challenge existing orthodoxies and instill the expectation that new solutions should bear changes to the current process.

    • Openness to feedback. Success stems from having open, honest, and consistent dialogue with your teams and partners to identify the right solution. It is important to ask for help when needed, get feedback, and lean on it to fill knowledge gaps.

    • Decisiveness. You will almost never have all the information necessary to make a perfect decision. Trust the data you do have and be willing to make tough decisions based on your core set of guiding principles.

At Deloitte Digital, every problem is a customer problem—not just a “technical” problem or a “growth” problem. Because of this, we are able to drive the orchestration that connects people to people, brands to demand, services to sales and marketing, and the front office to the back office—with special focus on the “messy” middle office in between. With the right agile mindset, technical foundation, and committed leadership, your brand can build its strategy to become truly future-ready.

Dounia Senawi, Deloitte Digital’s US chief commercial officer, leads the go-to-market efforts and commercial strategy across Deloitte Digital’s offerings, alliances, product, and marketing functions. Dounia connects strategists, designers, engineers, storytellers, and architects to help clients shape strategy, unlock insights, build brand value, elevate experiences, create customer solutions, and optimize operations.

Mark Litwin, a principal at Deloitte Digital, founded the firm’s XaaS (“X as a Service”) market offering, which integrates business strategy through technology implementation for companies transitioning to the subscription economy. Mark guides complex subscription business transformations across sectors. He is also a senior advisor on the topic of subscription management and billing technology and leads our global alliance with Zuora.