As digital technology has enabled shoppers to easily research and buy products online, sellers have been scrambling after them, trying to understand and satisfy their wants. Savvy companies, however, are using new tools, processes, and organizational structures to proactively lead digital customers from consideration to purchase and beyond. They are creating compelling customer journeys and managing them like any other product--and gaining a source of competitive advantage. Building successful journeys requires four key capabilities: (1) Automation, to smoothly carry customers through each step of their online path; (2) Personalization, to create a customized experience for each individual; (3) Contextual interaction, to engage customers and appropriately sequence the steps they take; and (4) Journey innovation, to add improvements that enhance and extend the journey and foster customer loyalty. In addition, the most successful companies have a particular organizational structure, with a chief experience officer overseeing a journey-focused strategist and a "journey product manager." This latter role is critical--the journey product manager leads a team of designers, developers, data analysts, marketers, and others to create and sustain superior journeys, and he or she is accountable for the journey's ROI and general business performance.

No matter how monolithic they may seem, most companies are really engaged in three kinds of businesses. One business attracts customers. Another develops products. The third oversees operations. Although organizationally intertwined, these businesses have conflicting characteristics. It takes a big investment to find and develop a relationship with a customer, so profitability hinges on achieving economies of scope. But speed, not scope, drives the economics of product innovation. And the high fixed costs of capital-intensive infrastructure businesses require economies of scale. Scope, speed, and scale can't be optimized simultaneously, so trade-offs have to be made when the three businesses are bundled into one corporation. Historically, they have been bundled because the interaction costs--the friction--incurred by separating them were too high. But we are on the verge of a worldwide reduction in interaction costs, the authors contend, as electronic networks drive down the costs of communicating and of exchanging data. Activities that companies have always believed were central to their businesses will suddenly be offered by new, specialized competitors that won't have to make trade-offs. Ultimately, the authors predict, traditional businesses will unbundle and then rebundle into large infrastructure and customer-relationship businesses and small, nimble product innovation companies. And executives in many industries will be forced to ask the most basic question about their companies: What business are we really in? Their answer will determine their fate in an increasingly frictionless economy.