Organizing API ecosystems to drive better customer experiences

Organize API economy

In 1989, when Jan Carlzon, the now former CEO of Scandinavian Airlines (SAS), published his book Moments of Truth, he posited that a customer’s journey with any organization involves an untold number of seminal moments, each of which possesses the power to make or break that company’s future with that customer. Yet, somehow, long after his book was published, if you ask anyone who regularly travels by air about their experiences, you will likely hear a list of grievances about how one airline or another failed miserably during one or more of these critical moments; what Carlzon called “moments of truth.”

The airline industry apparently didn’t get the memo.

Whether it has to do with customers, partners, employees, or other stakeholders, every organization, regardless of industry, has its own moments of truth. Hopefully, by now, you’re already forming a mental inventory of your organization’s moments. And maybe, if you’re a real go-getter, perhaps you’ve gone so far as to calculate an honest score of how your company is performing in those moments.

What’s so incredible and prescient about Carlzon’s ethos – one that he used to transform the culture of SAS and rescue it from financial ruin — was how he published it long before mobile technologies, the web, and social networks empowered organizations and customers alike with even more such moments. Taken together, all your moments with all your stakeholders – not just customers, but suppliers, employees, partners and other constituents too — harbor game-changing potential for your organization.

Today’s always-on, always connected, always-engaged of technologies – the Triple-A of the real-time world — create the opportunity for your organization to fabricate new, just-in-time, digitally-driven moments of truth and experiences that simply weren’t possible before. These moments, involving everything from optimized supply chains to timely, personalized customer experiences, are a clarion call to strategically re-imagine some or all of your business as a digital platform.

According to Gartner“Digital strategies are about looking for new business moments which could benefit your company but are currently not addressed… customers are delighted when service providers anticipate their needs. A business moment occurs when a change in state provides an opportunity to provide a service and sets in motion a sequence of actions.”

For example, in search of ways to form a personalized relationship with its customers, a leading global airline envisaged more of its passengers downloading its mobile application. Airline applications typically offer a range of digital services; everything from mobile check-in and boarding passes to flight status updates to special, new revenue generating travel offers (all of which are moments of truth). But, in true chicken-and-egg fashion for any airline, there still remains the challenge of how to get the most number of fliers engaged with such a mobile application.

Today, for many of its flights, the airline’s gate personnel encourage waiting passengers to download the company’s mobile app in order to view in-flight movies and TV directly on their smartphones and tablets. In fact, the airline’s personal device entertainment option is one of a growing list of features that incentivizes fliers to download the app and register to use it (such registrations are regarded as a digital business metric known as “online conversion”).

Imagine the benefits that accrue to businesses that convert more customers into registered and engaged users. In the case of an airline that provides in-flight entertainment through its downloadable app, the airline can complete more of its single customer view; like the data that includes his or her tastes. For example, the genre of movies that a passenger prefers. Or, if the app is enabled for in-flight food orders, the type of food the flier typically orders. That data, in turn, helps the airline anticipate customer requirements, thereby becoming the DNA for timely, personalized, digitally delivered and, in many cases, easily monetized moments of truth.

It’s no accident that this airline imagined a more deeply engaged relationship with its customers; creating more moments, opening up new business models, new channels of business, and ultimately producing more revenue. Nor is it an accident that the company is saving millions of dollars in the process by avoiding the installation of costly seat-back entertainment systems into its aircraft. These and other business outcomes are the result of a holistic, deliberately conceived, executive-backed digital transformation strategy that, in addition to providing air travel, envisioned the airline as a both a platform and a factory of such moments.

When conceived, deployed, and managed properly, traditional and digitally-synthesized moments and experiences can fuel a completely new kind of ecosystem for your organization; one that, in addition to improved customer loyalty (and the revenue that goes with it), will involve new customers, new partners, more efficient supply chains, new business models, and most importantly an investor-friendly bottom line. Done improperly however, or worse yet, ignored, and you not only run the risk of unfulfilled possibility, a potentially lethal outcome awaits your organization if outmaneuvered by a more digitally-savvy competitor or disruptive startup.  

Consider how Sears recently declared bankruptcy. Business pundits unanimously pointed their fingers at Amazon. Early on, Amazon envisioned itself as a digital platform. Sears – referred to by some as “the original Amazon” – saw itself for too long as a retailer. While Amazon leveraged platform-thinking and an integration solution to create manifold opportunities for new digital moments of truth and revenue across an ecosystem of stakeholders and technologies, Sears (like many other legacy retailers) spent much of its digital energy trying to strike a balance between its online and physical shopping experiences. Among other opportunities, it waited too long to re-envision its Kenmore and Craftsman brands as potential home automation platforms.

In contrast, Amazon is a master of a thriving platform; one that routinely leverages a networkable software interface known as the API or application programming interface as its means to that end. For example, the full capability of Amazon’s Alexa technology – well-known to end users of the company’s Echo brand of voice-enabled personal assistants – is also available over the Internet as an on-demand service to non-Echo and non-Amazon products. To achieve this, Amazon uses APIs to export Alexa’s capabilities for re-use by an ecosystem of independent software developers, device makers, and, in “eat your own dog food” fashion, even Amazon’s own “Works with Alexa” offerings like Echo and Fire TV. Each of Amazon’s constituencies, including Amazon itself, involves different business channels and, in turn, each of those channels involve different business models and different moments of truth that ultimately drive value for all parties involved, all enabled by APIs.

The Alexa APIs are just some of the hundreds of APIs that Amazon offers across its sprawling Amazon Web Services (AWS) platform. This ever-growing portfolio of APIs (each of which exports different business capabilities) have, over the years, transformed Amazon from a retail shopping service to a business that’s also a digital platform. And, contrary to popular belief, Amazon didn’t start with this platform and ecosystem thinking. It wasn’t until the year 2000, six years after being founded, that the company’s executives realized it was time to transform its business. Nearly two decades later, the journey is still in progress and similar to the leading airline, the decision to embark on that journey was no accident.

Naturally, whether it’s Amazon, Uber, Lyft or any of the other darlings of the digital age, APIs are invariably the under the hood, forming the foundation of their platforms, and driving value across their customer, partner and employee ecosystems while also serving as business channel and business model multiplexers.  More importantly, out of ecosystem and platform thinking emerges the opportunity to forge delightful customer experiences and satisfying moments of truth that will attract loyal customers, ambitious partners, and motivated employees, all of which will drive enduring value and competitive advantage for your organization. Airlines like Airbus and Southwest Airlines are great examples of companies that have successfully done this. The only barrier to unlocking the full potential of those experiences and moments is an organization’s ability to imagine them in the first place, and then align the ecosystem to deliver.

Ready to get started on your journey to unlocking this potential? MuleSoft’s API strategy essentials provides an enterprise-tested framework for success.


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