The impact digital transformation has on new customer experiences
Digital leaders in every industry outperform their competition by a wide margin. After comparing financial results of companies based on their degree of digital sophistication, an assessment by Bain & Company found that revenues of digital leaders grew more than twice as fast as those at digital laggards. Profit followed a similar pattern—leaders were nearly twice as likely as laggards to increase profit. These findings leave little doubt that digital transformation yields significant results.
With customer experience (CX) overtaking price and product as the top brand differentiator, many businesses recognise that they need to become truly customer-centric to not only excel, but survive.
At many industry events, members of the audience asked ‘what impact does digital transformation have on new product development?’ My response is one based on situations we have witnessed many times with some of the companies we work with – that the two don’t exist in their own bubbles.
After two decades working directly within product management, the one thing I know for sure is that product managers are always on the lookout for the next innovative new technology to make their product and customer experiences better. After all, customers are becoming increasingly savvy to traditional marketing techniques, seeing through the rose-tinted glasses the teams behind the product are attempting to place over their eyes. With this trend continuing to grow, it will be left to the usability and reliability of the product itself to draw in repeat users.
These days most products have at least some form of digital dimension. Most will have a web presence and many have their own social media feeds, apps, geolocation features or smartphone integrations. Some offer remote software upgrades to extend their life, or even real-time data streaming for analytics, personalisation and optimisation. It’s not like any of this has required a large scale digital transformation programme to happen, it’s just part of the process of product management, where new innovations are integrated within the product offering – however, their role is predominately focused on what happens in their product domain, not what happens either side of it.
Customer experience is changing. For years, organisations have been able to do well by being better than their competitors on average, or on occasion, without any tracking methodology whatsoever in place. In the age of mass personalisation, every customer expects a good experience across the entire journey – and this is what digital transformation brings to product development.
For a number of years now digital transformation has been driven by technology. However, organisations pursuing digital transformation are realising that technology alone does not provide the answers: an aligned product design and delivery process enables organisations to not only track the end to end journey across multiple channels, but also ensure the product experience is positive. Today, the experience is the product. Product managers need to think about the journey from start to finish, breaking down organisational silos as they go.
The objective is to create a personalised experience that meets the needs of each customer for the entire journey. In order to do this, there needs to be a concerted effort to collect the right data to drive the insight to personalise these experiences, and to identify opportunities for innovation. Data is the fuel of customer experience and product managers will need to have a plan for how this data is collected and used, as well as what additional sources of data may be mashed up with it.
While data allows innovation and personalisation, it also needs to be accompanied with a new approach to product management and innovation. Digital products are about evolution, not revolution - agile practices, continuous delivery and testing, and analytics are standard practices. As digital becomes a bigger component of the product offering, product managers will need to adopt this agile mind-set.
Digital transformation offers tremendous potential when it comes to product innovation and management. However, while the tech is important, the most important aspect will be in how we use it. Customer experience continues to grow in importance for brands’ marketing identities, without the continual digital focus it’s all too easy for a company to become the next Blockbuster, in the right industry but left far, far behind by the competition.