From the freemium business model to an aggregation business model, the 21st century digital economy has shown that serving customers well may not necessarily provide sustainability for a company unless the firms actively find ways to capture value in the process. It sounds obvious, but many media and e-commerce companies have gone bankrupt, despite improving customer experiences through digital channels, simply because they neglected to capture value.
For instance, many startups emerged and provided cheaper or completely free means of making national and international calls via the web, but later collapsed when they struggled to capture value. A direct 30-minute traditional phone call from Lagos to New York may cost $10, but using an app, the same call may cost an equivalent of $1, where that dollar is the cost of mobile internet services spent on the call. If the app is free (and most are), it has destroyed a value of $9 for the traditional phone operator, even though the app maker has not captured any for itself. Read More >>