Digital transformation is critical to the longevity of any business and their ability to meet consumers' changing online demands. Such transformation is not a single event, but rather an ongoing effort that has become even more urgent as companies navigate through the lingering effects of the pandemic and an unstable economy.
Continuously adapting to these challenges, and those lurking in the shadows, is critical to a company’s survival, so it’s imperative that organizations make the right changes and understand the strategies that go into a successful transformation.
As a first step, companies should adapt their business model to a product-led growth (PLG) strategy. However, in order to reap the benefits of such a strategy, digital product builders need access to comprehensive data about how users interact with the product. Without this, PLG will fail.
Companies must put PLG and data strategies into action to improve customer experiences of their products. A standard that customers strongly desire is personalization of the digital offerings they use, so companies must meet the customers’ needs. This can be accomplished by implementing a personalization strategy based on what teams learn through their PLG and data.
Investing in product-led growth
Having a PLG strategy allows teams to better understand how successful their digital products are by placing the product at the center of their efforts to help drive business value. For example, instead of requiring a customer to 'contact sales' to see a new feature, why not let them try it out several times themselves? If successfully executed, the product does much of the 'selling'. (In this example, customers who are able successfully to use the feature multiple times are now highly qualified leads entering the sales funnel). Over time, as companies adopt more product-led growth strategies, they will start to see sales cycles shorten and customer acquisition costs decrease.
According to Gainsight's Product-Led Growth Index, “a PLG motion exists in 58% of companies across market segments” and “91% of companies adopting PLG plan to increase their investment in PLG.” The most successful PLG motions will be built by the teams that fully harness the why (insights) behind the what (customer journey). In other words, teams must invest into understanding the consumer’s experience, particularly through data, to make the necessary changes to their offerings.
Relying on data, not guesses
As mentioned earlier, PLG without comprehensive data is a recipe for disaster. According to the Mckinsey Global Institute, organizations that are data-driven are 23 times more likely to acquire customers, six times more likely to retain customers, and 19 times more likely to be profitable.
A key aspect to instilling a data-driven mindset is to invest in a data culture capable of making data-based decisions, and to be given insights on product performance and customer experiences. Unfortunately, many companies depend on the highest paid person’s opinion (HiPPo), which does not realistically portray user feedback like data does. It can be hard to transition to relying on data, but through intentional decision-making and a firm commitment to a data culture, it is achievable. As a result, teams will be able to drive consistent outcomes, rather than making hopeful guesses surrounding their digital offers and goals.
Personalizing the online experience
According to a Salesforce report, 74% of Gen Zers want products that provide personalization, as compared to 67% of Millennials, 61% of Gen Xers and 57% of Baby Boomers. With a PLG strategy in place, supported by data, companies are able to enact the changes customers want from the brands they invest their time or money into.
This process includes understanding the customer journey, and identifying friction points to offer those better, personalized experiences that all generations are craving. This can be answered via data insights, and by keeping products at the center of the business for continued examination of their offerings. Personalization of online experiences can include things like select offers and recommendations and targeting individuals and not just as a broad group. Doing so ultimately provides the company with a greater ROI through a satisfied, and potentially loyal customer base.
Together, implementing these three strategies means that companies will have the tools and frame of mind to be conscious of the customer journey, and they will use that information to enact and sustain a successful digital transformation. This process has become increasingly necessary to ensure a brand's digital growth, but even more so now as companies respond to the effects of our shifting economy.
Without this kind of growth, companies can find themselves in danger of not keeping up with their customers and competitors, and at risk of failing altogether. Ultimately, a company should continue to digitally transform and ensure their offerings are providing quality experiences if they want to survive.