Digital Business Is Here To Stay
Consider the major disruptive forces in business today: the dominance of tech giants like Amazon, Google and Facebook expanding their ecosystems; the disruptive impact of digital startups like Airbnb, Gilt, and Betterment; the explosion of digital interactions and services like voice, chatbots, and augmented reality apps. Last, but certainly not least, the evolving expectations of customers and employees. Just one of these factors should be a cause for concern for traditional organizations, but contending with these new realities all at the same time requires even bigger thinking. The core of your organization will always be whatever it is you do best —retail, education, media, healthcare, travel, finance, and so on. But effectively reaching your customers, patients or users through digital channels is no longer something organizations should do but something they must do, and do today. To survive and to grow in the digital era you need to evolve beyond conventional brick-and-mortar or even web and mobile applications and use the 5 success factors below to develop, experiment, and deliver best-in-class modern digital customer experiences at lightning speed.
The One Thing We Can All Agree On
In a recent Thoughtworks survey of technology teams, only 20% of product managers, designers, and innovation leads indicated that their organizations were “fairly advanced” in their digital transformation journeys. That’s a low percentage considering the ubiquity of digital experiences being driven by tech giants, the increasing number of digital customer touchpoints like voice and chatbots, and the pressure modern consumers exert on organizations to improve digital experiences. So why are so many companies are not further along in their digital transformation?
The answer—because it’s hard. The companies we surveyed noted that their two biggest innovation challenges were “building something customers go wild for” (38%) and “possessing the ability to discover and test new ideas” (38%). And those were only the top two challenges. When it comes to innovating and transforming a traditional organization to successfully leverage technology, there are multiple blockers. Organizational processes, culture, legacy systems, and talent shortages also rank high on the list of things that stand in the way of digital transformation.
Source: Thoughtworks Enterprise Innovation Survey, March 2018
5 Success Factors for Teams Building Digital Customer Experiences
So what can organizations do to begin to remove those obstacles and truly embrace a digital-native way of working that will allow them to deliver seamless, delightful, and intuitive customer experiences?
In our experience, successful teams create best-in-class digital products and services by doing the following:
1. Put the user at the center: While this may seem obvious, many teams remain disconnected from their users. Whether your user is an internal employee or an end customer, using design thinking places your user at the center of product development cycles and ensures you deliver a valuable and intuitive user experience that masks any behind-the-scenes organizational complexity. Australia’s largest supermarket chain, Woolworth’s, did just that and saw the value firsthand. Recognizing an opportunity to better serve their customers in their small-format stores, they wanted a way to test and validate their ideas before making a big investment. To do this, they set up an in-store innovation lab.
The lab involved rapid-prototyping and customer interviews that enabled the team to trial new ideas with shoppers, obtain real-time feedback, validate concepts, and bring new concepts to life in a short time. The in-store innovation lab also helped the team gain greater insights around the differences in shopper behavior between Woolworth's smaller format stores versus standard supermarkets. As a result, the team was able to quickly pivot from their original concept, a mobile checkout app, based on real-world feedback and validate a new and more valuable service offering, a tablet-based recipe ingredient selector, in a matter of days.
2. Create seamless digital-physical interactions: Today’s digital experiences need to think beyond the traditional channels of a browser or an app; and utilize and experiment with emerging technologies, such as voice, augmented reality, sensors, and artificial intelligence to remove boundaries between digital and real-world experiences. “We need to meet the customers where they are” is an increasingly common realization, shared by one digital executive at an insurance company. For example, IKEA’s augmented reality app lets shoppers preview what a piece of furniture looks like in 3D their living room. Apple’s iPhone now prompts users to share wifi passwords instantly with friends, based on proximity. Unfortunately, many organizations decide to build an app without adequately which technologies will create the best experiences.
3. Be data-driven: There are dozens of ways to empower your organization, employees, and customers digital experience using data. Personalization has now become a norm that customers expect, as one Retail CIO said, “Our customers are changing, the customer experience is so unique to each individual that personalization will be critical.” Artificial intelligence and machine learning are also on the rise with 76% of survey respondents saying their organization is looking to implement them as part of their core customer or employee digital experience. Yet, many teams and organizations are not very sophisticated in their use of data, and even accessing user analytics quickly and easily to make decisions can be a challenge. Consider how this might be holding you back from building the best possible experience: At one of the world’s largest investment advisor’s, approaching product innovation with a data-driven mindset kept them from misallocating ten million dollars and building the wrong thing. Initially, the organization intended to revamp a retirement calculator that wasn’t widely being used by their client base. The hypothesis was if they improved the calculator, clients would increase their use of it and thereby increase their retirement savings. However, as the product team dug in and reviewed the advisor’s existing data to determine opportunity size, target audience and likely conversions rates, tested multiple hypotheses and used statistical analysis to assess if their experiment results were significant, they discovered that their initial hypothesis was false. The issue wasn’t that people needed a tool that advised how much to save or explained the impacts of compounding interest, the issue was that their client base struggled to have any capital to save at all. As a result, the advisor scrapped the project to revamp the calculator and instead reallocated the ten million to explore alternatives on how to best engage the client base.
Source: Thoughtworks Enterprise Innovation Survey, March 2018
4. Operate like a startup at scale: Even if your organization is a legacy enterprise, it’s possible to operate like a digital native. Yet only 42% of organizations utilize cross-functional teams with product, design, and technology embedded together to own products end-to-end. Operating in silos is the antithesis of urgency and agility. Start small and simple by bringing all the collaborators to a shared space and prioritize speed to market. Launching a small MVP experience sooner allows teams to validate customer value early on, win media publicity, grow your customer base and ultimately beat the competition.
Take the Australian insurance giant, IAG, as proof this is possible to put into action even in highly regulated domains. Operating in an industry that is changing rapidly, IAG knew they had to evolve to keep up and serve their customers. The organization committed to taking a fresh look at their existing operations, and applying a lean transformation approach they redefined their prioritization and funding processes and implemented technical practices that would foster, not hinder experimentation. The result - IAG has been able to build an environment which allows for ideas to be quickly tested and validated, and a capacity to pivot and adapt with speed to ensure it delivers value to its customers, at a lower cost, risk and time to market.
Source: Thoughtworks Enterprise Innovation Survey, March 2018
5. Build on a digital platform: Organizations must be able to access data, experiment, and test in real time to win moving forward. So rather than building a mobile app as a one-off product, taking a platform approach enables organizations to quickly spin up new digital experiences and adopt new technologies faster in future by leveraging their existing platform services. Or they can even open up their APIs to external partners and third-party developers to unlock opportunities for innovation and new streams of revenue. Delta Airlines has done that with their mobile platform, which is designed around the customer to enhance the travel experience at every phase like a travel companion. The platform is designed for flexibility and responsiveness, so Delta can easily respond to market changes and release new features quickly thanks to a hybrid approach of cross-platform and native development. Building a high-performing mobile capability on a digital platform has also unlocked entirely new revenue streams for Delta’s business as they license their mobile Platform-as-a-Service to other major air carriers.
Technology is Not Enough to Be Digital
Building a tech platform is not enough. Unless your organization can quickly test ideas and experiment with your users at the center to continually launch and evolve the best possible digital experiences, you risk losing market share or being left behind altogether. The competition is out there testing, learning, and moving fast, so get started today making these five changes to ignite innovation, enable growth, and transform your customer experience.
If you would like to learn more, check out this podcast: CX: Building a customer engagement framework.
Consider the major disruptive forces in business today: the dominance of tech giants like Amazon, Google and Facebook expanding their ecosystems; the disruptive impact of digital startups like Airbnb, Gilt, and Betterment; the explosion of digital interactions and services like voice, chatbots, and augmented reality apps. Last, but certainly not least, the evolving expectations of customers and employees. Just one of these factors should be a cause for concern for traditional organizations, but contending with these new realities all at the same time requires even bigger thinking. The core of your organization will always be whatever it is you do best —retail, education, media, healthcare, travel, finance, and so on. But effectively reaching your customers, patients or users through digital channels is no longer something organizations should do but something they must do, and do today. To survive and to grow in the digital era you need to evolve beyond conventional brick-and-mortar or even web and mobile applications and use the 5 success factors below to develop, experiment, and deliver best-in-class modern digital customer experiences at lightning speed.
The One Thing We Can All Agree On
In a recent Thoughtworks survey of technology teams, only 20% of product managers, designers, and innovation leads indicated that their organizations were “fairly advanced” in their digital transformation journeys. That’s a low percentage considering the ubiquity of digital experiences being driven by tech giants, the increasing number of digital customer touchpoints like voice and chatbots, and the pressure modern consumers exert on organizations to improve digital experiences. So why are so many companies are not further along in their digital transformation?
The answer—because it’s hard. The companies we surveyed noted that their two biggest innovation challenges were “building something customers go wild for” (38%) and “possessing the ability to discover and test new ideas” (38%). And those were only the top two challenges. When it comes to innovating and transforming a traditional organization to successfully leverage technology, there are multiple blockers. Organizational processes, culture, legacy systems, and talent shortages also rank high on the list of things that stand in the way of digital transformation.
Source: Thoughtworks Enterprise Innovation Survey, March 2018
5 Success Factors for Teams Building Digital Customer Experiences
So what can organizations do to begin to remove those obstacles and truly embrace a digital-native way of working that will allow them to deliver seamless, delightful, and intuitive customer experiences?
In our experience, successful teams create best-in-class digital products and services by doing the following:
1. Put the user at the center: While this may seem obvious, many teams remain disconnected from their users. Whether your user is an internal employee or an end customer, using design thinking places your user at the center of product development cycles and ensures you deliver a valuable and intuitive user experience that masks any behind-the-scenes organizational complexity. Australia’s largest supermarket chain, Woolworth’s, did just that and saw the value firsthand. Recognizing an opportunity to better serve their customers in their small-format stores, they wanted a way to test and validate their ideas before making a big investment. To do this, they set up an in-store innovation lab.
The lab involved rapid-prototyping and customer interviews that enabled the team to trial new ideas with shoppers, obtain real-time feedback, validate concepts, and bring new concepts to life in a short time. The in-store innovation lab also helped the team gain greater insights around the differences in shopper behavior between Woolworth's smaller format stores versus standard supermarkets. As a result, the team was able to quickly pivot from their original concept, a mobile checkout app, based on real-world feedback and validate a new and more valuable service offering, a tablet-based recipe ingredient selector, in a matter of days.
2. Create seamless digital-physical interactions: Today’s digital experiences need to think beyond the traditional channels of a browser or an app; and utilize and experiment with emerging technologies, such as voice, augmented reality, sensors, and artificial intelligence to remove boundaries between digital and real-world experiences. “We need to meet the customers where they are” is an increasingly common realization, shared by one digital executive at an insurance company. For example, IKEA’s augmented reality app lets shoppers preview what a piece of furniture looks like in 3D their living room. Apple’s iPhone now prompts users to share wifi passwords instantly with friends, based on proximity. Unfortunately, many organizations decide to build an app without adequately which technologies will create the best experiences.
Last year, Thoughtworks had the honor of working with Tiffany Lundeen on her grant-winning application to save the lives of mothers who experience postpartum hemorrhage. Lundeen, a midwife and member of the Maternal and Newborn Health Research Cooperative at UCSF Global Health Sciences, developed a virtual mentor to guide birth attendants through complicated or emergency procedures. Using NLP software and a conversation user interface - in this case Google Home - the virtual mentor walks birth attendants through the correct steps in the proper sequence for treating postpartum hemorrhage. This solution is extraordinarily powerful for women in developing countries, where optimally trained medical staff can be scarce, and postpartum hemorrhage is the cause for up to 60% of maternal mortalities. By choosing a voice assistant as the technology, the user experience allows birth attendants to keep both hands free and focus on the patient in the room rather than having to balance using a cumbersome app or tablet.
3. Be data-driven: There are dozens of ways to empower your organization, employees, and customers digital experience using data. Personalization has now become a norm that customers expect, as one Retail CIO said, “Our customers are changing, the customer experience is so unique to each individual that personalization will be critical.” Artificial intelligence and machine learning are also on the rise with 76% of survey respondents saying their organization is looking to implement them as part of their core customer or employee digital experience. Yet, many teams and organizations are not very sophisticated in their use of data, and even accessing user analytics quickly and easily to make decisions can be a challenge. Consider how this might be holding you back from building the best possible experience: At one of the world’s largest investment advisor’s, approaching product innovation with a data-driven mindset kept them from misallocating ten million dollars and building the wrong thing. Initially, the organization intended to revamp a retirement calculator that wasn’t widely being used by their client base. The hypothesis was if they improved the calculator, clients would increase their use of it and thereby increase their retirement savings. However, as the product team dug in and reviewed the advisor’s existing data to determine opportunity size, target audience and likely conversions rates, tested multiple hypotheses and used statistical analysis to assess if their experiment results were significant, they discovered that their initial hypothesis was false. The issue wasn’t that people needed a tool that advised how much to save or explained the impacts of compounding interest, the issue was that their client base struggled to have any capital to save at all. As a result, the advisor scrapped the project to revamp the calculator and instead reallocated the ten million to explore alternatives on how to best engage the client base.
Source: Thoughtworks Enterprise Innovation Survey, March 2018
4. Operate like a startup at scale: Even if your organization is a legacy enterprise, it’s possible to operate like a digital native. Yet only 42% of organizations utilize cross-functional teams with product, design, and technology embedded together to own products end-to-end. Operating in silos is the antithesis of urgency and agility. Start small and simple by bringing all the collaborators to a shared space and prioritize speed to market. Launching a small MVP experience sooner allows teams to validate customer value early on, win media publicity, grow your customer base and ultimately beat the competition.
Take the Australian insurance giant, IAG, as proof this is possible to put into action even in highly regulated domains. Operating in an industry that is changing rapidly, IAG knew they had to evolve to keep up and serve their customers. The organization committed to taking a fresh look at their existing operations, and applying a lean transformation approach they redefined their prioritization and funding processes and implemented technical practices that would foster, not hinder experimentation. The result - IAG has been able to build an environment which allows for ideas to be quickly tested and validated, and a capacity to pivot and adapt with speed to ensure it delivers value to its customers, at a lower cost, risk and time to market.
Source: Thoughtworks Enterprise Innovation Survey, March 2018
5. Build on a digital platform: Organizations must be able to access data, experiment, and test in real time to win moving forward. So rather than building a mobile app as a one-off product, taking a platform approach enables organizations to quickly spin up new digital experiences and adopt new technologies faster in future by leveraging their existing platform services. Or they can even open up their APIs to external partners and third-party developers to unlock opportunities for innovation and new streams of revenue. Delta Airlines has done that with their mobile platform, which is designed around the customer to enhance the travel experience at every phase like a travel companion. The platform is designed for flexibility and responsiveness, so Delta can easily respond to market changes and release new features quickly thanks to a hybrid approach of cross-platform and native development. Building a high-performing mobile capability on a digital platform has also unlocked entirely new revenue streams for Delta’s business as they license their mobile Platform-as-a-Service to other major air carriers.
Technology is Not Enough to Be Digital
Building a tech platform is not enough. Unless your organization can quickly test ideas and experiment with your users at the center to continually launch and evolve the best possible digital experiences, you risk losing market share or being left behind altogether. The competition is out there testing, learning, and moving fast, so get started today making these five changes to ignite innovation, enable growth, and transform your customer experience.
If you would like to learn more, check out this podcast: CX: Building a customer engagement framework.
Disclaimer: The statements and opinions expressed in this article are those of the author(s) and do not necessarily reflect the positions of Thoughtworks.