In this day and age, you would be hard-pressed to find an organisation that hasn’t contemplated digitising certain aspects of its operations. While digital transformation may seem like a buzzword, it remains a huge priority for most organisations. In Asia-Pacific (APAC) alone, IDC predicts that one in three companies will generate more than 30% of their revenue from digital products and services by 2023.
However, businesses are having a hard time calculating the return on that investment. Most do not have insights into how customers use their digital products, and can only guess what digital transformation project to undertake next. The key for businesses to stay on top of their game is to remove these digital blind spots. Only then can companies gain a clear understanding of how their transformation efforts drive the business outcomes they care about most.
To ensure that the value of digital transformation investments are optimised and impactful, organisations need to take three important steps:
1. Know your customers better than they know themselves
There is often a mismatch between customers’ intentions and their actual behaviour, which is why it is vital to have visibility into your customers’ product journeys. Identifying where the product’s biggest drop-off rates are, or which part of the purchase process users are stalling in, will allow you to optimise your digital product.
However, the sheer amount of data points required to join, analyse, and correlate customer actions to outcomes makes this incredibly complicated. While certain web and marketing analytics tools offer some respite, it is still not sufficient enough to handle the scale and complexity of today’s digital products.
Instead, teams should look towards product-specific tools that leverage machine learning to offer real-time insights. Glints is a prime example of this. The talent recruitment and career discovery platform used their first-party product data to understand their users’ journeys and ultimately improve their product to drive growth and retention.
2. Democratise data across your business
In many organisations, data is aggregated and analysed by data science teams before the results are reported back to business units. However, this operating model impedes productivity, with even basic data requests taking days or even weeks to be executed and delivered. In today’s ever-changing environment, this is enough time to be disrupted by a competitor. To maximise efficiency and free up data analysts time to focus on larger issues, businesses need to democratise data across the organisation.
Traveloka, an Indonesian company that provides online airline ticketing and hotel booking services, used to face the same challenge. Its analysts were inundated with ad-hoc requests that took up about 60% of their time. This meant that the analysts could not tackle bigger, more complex data issues, while the product team had to contend with long wait times on requests, stalling progress. To solve this problem, Traveloka expanded access to its product data to more than 200 employees in other teams.
Democratising data across product, engineering, sales, marketing, and customer support teams not only increases efficiency; it enables visibility and alignment. When everyone has access to the same information, it empowers teams to better understand their product and their customers, and ultimately make wiser and more informed decisions.
3. Prioritise customer retention
While customer acquisition is a fundamental part of business, organisations should not underestimate the importance of customer retention. By removing their digital blind spots, businesses can increase the amount of time they spend engaging with customers, shifting investment away from securing one-time purchases and towards building lifetime customer loyalty. This change in strategy will help increase the returns on your digital transformation investments and create a more efficient growth model for your business.
This begins with understanding how customers are successfully using your products, such as user paths that lead to a sale, or features that are used the most, and then applying those insights to other users. This is not a quick and direct process as it requires rapid A/B testing to get it right. However, it is worth noting that the cost of acquiring a new customer is five times the cost of retaining an existing one. For example, Pratilipi, a platform for writers to self-publish their original work, meticulously tracked customer retention figures and found that the likelihood of customers returning to the platform was in part influenced by which campaigns and advertising channels they came from. This provided the marketing team with deeper insights and allowed them to double down on the best performing campaigns and channels, which enabled the platform to hit 25 million monthly active users.
They say the future of business is digital. Well, the future is already here. If the decades of investment into digital transformation is going to be worth it, business leaders need to bridge the gap between transformation and optimisation, and data is that bridge.