How platforms deliver value to their ecosystem

How do we deliver consistent experiences for ecosystem stakeholders through a single view of the ecosystem?

This article is part of the Digital Platform hub

Product organizations are customer-centric, platform organizations are ecosystem-centric.

Platform organizations need to ensure that they have a single view of the customer and of every ecosystem stakeholder across the organization. 

Platform users – both producers and consumers – should have a consistent experience across the platform. In order to achieve this, the platform owner must unify assets, touchpoints, and communications. A unified data layer is key to achieving all of these priorities.

Platform firms must build a holistic view of users across their journey with the platform. They should identify and track every interaction at every touchpoint with the ecosystem.

Incumbents pursuing a platform strategy have often started with disparate innovation efforts, before realizing that it is ineffective to serve the ecosystem without a single view of the user (and of every stakeholder in the ecosystem).

A single view of the user may involve implementation of some form of single sign-on. For instance, the Schibsted Media Group launched the SPiD (Schibsted Payment ID) as a single sign-on and payments system that allows the firm to track users across its many disparate touchpoints. Retailers like Walgreens, CVS, and Lowe’s often use a loyalty program as a lead-in to get users to sign up onto a single sign-on system, which they then further integrate with third-party partners. For instance, users can sign in to third-party fitness applications using their Walgreens ID to earn loyalty points for their activity on these applications.

A unified view may also be set up without the need for single sign-on. For example, Verizon tracks mobile customer behavior across all its phones to create a single ID, the PrecisionID, and provides brands and agencies with an analytics platform and ad network targeted to these mobile customers.

Beyond creating a single view of every ecosystem stakeholder, ecosystem centricity also involves incentivization choices, where some participation for some ecosystem participants may be subsidized because their participation is valued by other participants. Arguably, platforms like Google and Facebook subsidize consumer participation to attract advertisers. Similarly, many content platforms like YouTube and TikTok incentivize producer participation to enable content creation, which in turn attracts consumers. The review platform Yelp, for instance, gained traction in its first market in San Francisco attracting users interested in discussing local businesses and nightlife, by providing them special access to invite-only events in the local scene.

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Platforms like Amazon and Google, which harvest consumer attention and engagement, primarily seek to be consumer-centric to best engage and target the consumer across their journey with the platform. B2B platforms, like Shopify and Autodesk, which empower producers to build their business on top of their infrastructure, similarly focus on supporting the producer across their journey with the platform.

Finally, a note of caution on strategizing for ecosystems. Ecosystems are not merely defined by industry boundaries (e.g. energy) or by domain expertise (e.g. trade). Ecosystems are defined around user needs. To precisely define the ecosystem, the platform firm should first start by identifying the user need being addressed and then structure the ecosystem of interacting actors required to address that need.

Firms looking to pursue a platform strategy often confuse ecosystems with industries or domains. Instead, viewing the ecosystem as the system of interacting actors working together to address a user need ensures that ecosystem actors are prioritized and engaged towards solving the initial problem the platform business set out to solve.

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Frequently Asked Questions

How can platform organizations balance data privacy with a unified user view across ecosystems?

Ensuring data privacy and security while implementing a unified view of users across a platform ecosystem is a paramount concern for platform organizations. This involves implementing robust data protection measures such as encryption, access controls, and anonymization techniques to safeguard sensitive user information. Additionally, compliance with relevant regulations such as GDPR or CCPA is essential to maintain user trust and legal compliance. Platform organizations often invest in stringent data governance frameworks and conduct regular security audits to identify and mitigate potential vulnerabilities.

What challenges do platform organizations encounter in incentivizing participation among ecosystem stakeholders and addressing them?

Incentivizing participation for different ecosystem stakeholders can pose significant challenges for platform organizations. One common challenge is balancing the needs and motivations of various stakeholders, such as consumers, producers, and advertisers. For example, platforms like Google and Facebook subsidize consumer participation to attract advertisers, while content platforms like YouTube and TikTok incentivize producer participation to drive content creation. Addressing these challenges often requires a deep understanding of the ecosystem dynamics and designing incentive structures that align with the goals of all stakeholders. This may involve offering rewards, discounts, or other incentives tailored to each stakeholder group’s preferences and motivations.

What pitfalls do companies face transitioning from customer-centric to ecosystem-centric platforms, and how do they mitigate them?

Transitioning from a traditional customer-centric approach to an ecosystem-centric platform strategy can present several pitfalls for companies. One common pitfall is the failure to adequately define and understand the ecosystem surrounding their platform. This can result in misalignment between platform goals and ecosystem dynamics, leading to ineffective strategies and poor engagement with ecosystem stakeholders. To mitigate this, companies should prioritize thorough research and analysis to identify the user needs driving the ecosystem and structure their platform strategy accordingly. Additionally, clear communication and collaboration with ecosystem actors are essential to ensure buy-in and alignment with the platform’s objectives. By addressing these pitfalls proactively, companies can increase the likelihood of success in transitioning to an ecosystem-centric platform strategy.