When we speak face to face, we communicate in part through our words, our tone of voice and our body language. In total, only 7% of our communication is achieved verbally, while 55% is accomplished through body language and 38% through tone of voice. That means that when you communicate online, relying on words alone, you risk missing out on the majority of our powers of persuasion. The solution is to use marketing psychology to supercharge your communication and replace that 93%.
The good news is that techniques like hyperbolic discounting, loss aversion and FOMO — and the Von Restorff effect are more common and easier to implement than you might think.
More importantly, they are applicable to a wide range of consumer facing businesses. After all, the likelihood of the success boils down to one factor, — how well consumers purchase what you offer; your business.
Hyperbolic discounting is the practice of offering consumers an immediate reward rather than a long-term incentive.
It may surprise you to learn that behavioral studies show that most people will choose $50 today rather than $100 in six months. Interestingly, if you offer the same financial incentives but at 6-month and 12-month intervals, people will choose the latter.
In other words, it is the promise of getting a benefit at this exact moment, that is persuasive. The message to the consumer is that they are valued right here, right now, no strings attached.
Whenever you see a brand offering immediate discounts, they are taking part in hyperbolic discounting. As a customer, the offer is clear and uncomplicated. There’s no need to sign up for an annual subscription, or loyalty benefit. Instead, have a simple, easy to understand $5 off. If you were torn over whether to buy that $30 shirt, now it’s only $25.
Gap offering store wide discounts is an example of hyperbolic marketing. (Source: GAP)
Grow your data. Grow your community
Hyperbolic discounting also functions as a community building tool. Examples of this include offering discounts if users refer a friend. Businesses like AirBnB, Deliveroo, and others employ this approach.
You can also use it to gather data, which will provide deeper customer insight. You might offer a $5 voucher to visitors if they subscribe to your newsletter, helping you build up a mailing list.
You can also use that mailing list in tandem with viewed products or items left in a basket and target customers. For example, send a reminder email or reduction for this specific product. Writing a follow up email with text like “waiting for you”, can be the small nudge people need to complete a purchase.
It doesn’t have to be expensive
If you’re worried about the potential cost implications of hyperbolic discounting, you can mitigate this by providing clear terms and conditions. Many brands ensure that offers only apply to full price items, or limit referrals to one per customer.
New Balance offers 15% off a first order if you sign up to their newsletter, but the offer only applies to full price items. (Source: New Balance)
Because buying into these kinds of deals is commitment free, this approach is particularly effective for capturing first time customers. Your targets are people who have been considering a purchase, or people who are coming across you for the first time and may need an incentive. That being said, it is also an effective way of increasing the total value of a loyal customer, who may buy more than they ordinarily would without a discount.
Equally, since these deals feel quick and easy to the consumer, they are also easily achieved during those moments of procrastination that research suggests most consumers indulge in during the day.
It doesn’t have to be a discount. Advertising an offer of free shipping, or free returns, can also be a way of lowering barriers to entry for new and returning clients alike. Highlighting these offers on your home page will help grab customers’ attention and reduce click away rates.
Face your fear (of missing out)
If hyperbolic discounting focuses on making the desirable seem easy, loss aversion or FOMO marketing is all about making things seem desirable in the first place. Thanks to the internet, and particularly to social media, global consumers are more attuned than ever before to the fear of missing out (FOMO). T
he reason for this is simple – we are more aware than ever of what others are doing or buying. Think about your Instagram feed, your Facebook wall, or even your LinkedIn account. All are full of exotic destinations, restaurants, shiny products, and recommendations for great new services. Together, these things have changed the way we shop.
FOMO marketing takes advantage of this cultural shift to increase conversion and minimize the number of consumers quitting during signup or leaving the site with a full basket before checkout.
The power of running out of stock
British sportswear brand Gymshark effectively used FOMO marketing as part of its rapid growth into a billion-dollar company. Its blackout sales were preceded by shutting down the website and showing only a timer counting down to the start of the sale. When users reached the checkout, they often found that many of the products in their basket were sold out.
Even those users who didn’t manage to buy what they wanted came back more determined to triumph in next year’s sale.
You can make the most of this technique, for example, by including out of stock items on the page. If you are concerned about frustrating customers, keep out of stock items at the bottom of the page.
Software like Exponea can also help by showing real-time inventory data as users browse the website. Airlines often do this, for example to show that there are only four seats left at a particular price.
Partnerships and word of mouth
All of this works for a simple reason. Scarcity breeds desire. Think of the long queues outside Apple stores when it releases a new phone. The resulting pictures and reports create further interest and encourage those thinking of buying later to do so faster.
Think of the race to get tickets for festivals. Even things that are difficult can benefit from this, for example challenges like Tough Mudder which offer early bird prices, or marathons which are oversubscribed year after year.
Former Fintech start-up and now established bank Monzo also channelled FOMO when it burst onto the scene. Monzo created a virtual queue for its signature coral cards. Cleverly, that queue could be skipped if customers had a golden ticket, which could only be given by another user. Monzo used this system to incentivize referrals and create word-of-mouth marketing.
Monzo’s golden ticket created buzz and at times also worked in tandem with a referral bonus. (Source: Monzo)
Companies can also use FOMO to benefit from the marketing buzz around another brand. For example, phone companies often bundle free headphones, or subscriptions to services like Spotify, Now TV or Sky Go that consumers might otherwise consider unaffordable. In this scenario, both companies win, building on each other’s audiences and increasing the perceived value of their offer.
Make it easy for customers
FOMO also plays a role in disrupting industries. FOMO is actually driving customers to be less loyal to brands, because their chief concern is not the quality of what they know, but the worry that what they don’t know might be better. Because of this, it can also work well in harmony with some of the principles of hyperbolic discounting.
For example, to help convince potential customers to take the leap, reducing barriers to entry with free shipping and an attractive returns policy is critical.
Creating a minimalist customer journey is also crucial. This means smoothing the path from homepage to checkout so that consumers are encouraged to purchase or sign up quickly and easily. Software that allows customers to buy or sign up with one click works well too.
If you’re looking to get even more precise with your campaigns, bear in mind that some studies suggest people’s fear of missing out deepens later in the day and later in the week. This may be because we associate evenings and weekends with socializing, fun, and exciting experiences.
Creating visual change – the Von Restorff effect
Human beings are neurologically programmed to detect change. From our hunter / gatherer roots, we evolved to quickly notice differences in the world. Brands can take advantage of this by setting up their websites, or also their physical stores, in such a way that change is everywhere. Website designers are increasingly using asymmetrical design, or at least alternating text and images, to draw the eye around the page.
In e-commerce, this can be enhanced with the use of different fonts, colors and sizes to promote high-margin items. Or, you could use different-colored call to action buttons on products that your insights, perhaps generated by a Customer Data Platform (CDP), show often lead to cross-selling.
A different-colored call to action button can promote high-margin items. (Source: Exponea)
Your marketing doesn’t have to be the same as everyone else’s, it just has to be different from your standard content.
Make marketing psychology work for you
Your business is unique, and so are the ways in which you will be able to take advantage of these techniques. What is certain is that a clearer understanding of your customers and their psychology will enable you to communicate more effectively with them, almost as if you were face to face.
The Benefits of Bootstrapping: 6 Things You Need to do in Order to Succeed Without Investors – ReadWrite
Have you ever seen the show Shark Tank? If you haven’t, it is a reality show that features various inventors and business owners pitching their businesses to a panel of entrepreneurs (sharks). The goal is to strike a deal that exchanges entrepreneurial funding for a percentage of the business.
Shark Tank is immensely popular, and when a plucky business owner strikes a deal with one of the sharks, the music swells and the audience is led to believe that this is the beginning of their success.
It makes me cringe.
I have been working as an entrepreneur in Los Angeles for more than twenty years. I have founded and sold a variety of businesses, and the companies I have developed currently exceeds $1.1 billion in valuations.
I have been fortunate to enjoy tremendous success, and in my experience, it is always better to grow a company without the interference of investors. Investment is not the way to launch your company into the stratosphere, despite what most people believe.
Once you accept funds from an investor, you are beholden to them.
Their ideas, desires, and financial considerations cannot be ignored. The moment you accept external funds, you relinquish control of your business. I firmly believe that start-ups will soon have more options for funding, but at the moment, I encourage entrepreneurs to chase success without the support of investors.
After all, bootstrapping is the American way. We need to stop seeing investment as the finish line and start seeing it as an albatross. If more people found ways to keep their start-ups independent, the creative minds that are responsible for these startups could retain control.
I have been starting and running businesses without investment for years, and I have developed a few key practices that have allowed me to avoid outside funding. Here are the six tips every business owner and entrepreneur needs to do in order to achieve success without external investment.
In recent years, businesses operating in the red have become trendy. Amazon famously spent more than they made for over a decade, but companies like Amazon are the exception, not the rule.
I see a lot of business owners overspend on office spaces, branding, marketing stunts, and corporate perks when they should be focused on creating a product or service that people will pay money for. Investor money tends to lull business owners into a false sense of security.
They think: Well I have all of this money, why not go on a golf weekend with my executives to inspire them? Instead, business owners should be using profits to inspire their executive team, not perks.
I see the generation of revenue as the turning point of a business.
Before your company actually starts making money, it is nothing but a foundation. Too many people get stuck on the foundation phase and forget to focus on the build of the actual house. They spend hundreds of thousands on a gorgeous website, rent a luxurious office space, and launch expensive marketing campaigns before ever selling a thing.
As a business owner, you are responsible for setting a profit-first culture. Get your executive leadership aligned on profit goals early, and reinforce them often. Remember that a company does not need a huge trade show installation, catered lunches, or celebrity endorsements to succeed.
All of those things can certainly help to grow a business, but the first stages of any company should consist of a strict strategy that focuses on bringing in more money than is spent.
If you are worried about this attitude creating dejection among your team, don’t be.
People respond to the culture you set up for them. Instead of handing your team perks before they deliver results, offer them perks as a reward for results. Instead of treating your team to lunch every Friday, only treat them to lunch when revenue goals have been met.
So many business owners have this backward. Prioritizing profits is the only way to achieve financial success without relying on external investors.
When most people think of business owners and entrepreneurs, they think of the fun and flashy side of things. They picture Richard Branson and other rockstar entrepreneurs enjoying the spoils of their good ideas and creative leadership.
The reality is that any given snapshot of a business owner’s life should see them pouring over spreadsheets, tracking every single dollar that their company spends.
This tip goes hand-in-hand with the first one on this list. Without a complete understanding of every expense your business is subject to, prioritizing profits becomes difficult if not impossible. Knowing your budget is absolutely vital. If you do not know how much you are spending, you cannot know how much you are making.
Nothing makes me crazier than when I see a budget presentation from a business owner who cannot speak to their entire spend. I like to ask these people things like: How much money does your company spend on coffee on a monthly basis? And What kind of per diem do you offer to employees who travel? How much travel do your employees do in any given month?
If they cannot tell me off the top of their heads what their current spend is, then I know that they do not fully understand their budget, and therefore cannot give me a confident answer about their profits.
Watch your dollars like a hawk!
If you want to grow a business without the interference of investors, then you need to watch your dollars like a hawk. When there is no stream of incoming investor money, it means that you are fully responsible for making and managing your own funds, and both your customers and your employees are relying on you to do it right.
There is no one to call for a bailout. You are the last line before bankruptcy, and you need to take that responsibility seriously.
Success is a game of inches. It does not happen overnight. You can obsess about your budget and prioritize profits all you want, but it is equally important to understand that money will not magically start rolling in. At the beginning of any business, the wins are small.
The goal should be to develop a steady stream of small wins that swell and grow into a massive over-all win. Every dollar of revenue, every sale, and every customer conversion should be celebrated since it contributes to a larger whole.
I said earlier that business owners set up a culture of profit prioritization. Similarly, they set up a culture of celebrating any and all wins so long as each win is understood to be in service of their profit prioritization.
Think of it this way, success on day one may be one customer conversion. Success on day 365 might be 200 customer conversions, but does that make a single customer conversion any less important? It does not, since your success on day 365 is actually made up of 200 small wins.
Incremental improvement is what success is.
It does not look the way most people expect it to since it happens gradually and over time. This fundamental misunderstanding of business success is why so many contestants on Shark Tank are thrilled when they get their investment. They think that a big sum of money equals success when in reality true and independent success happens gradually.
As a business owner, if you take a moment to celebrate each achievement as it comes in and reward your workforce for contributing to your bottom line, eventually your entire business will be a success.
Hard work is absolutely necessary for starting and running a successful business, but unnecessary work can mean the death of a small business.
When I was 13 years old I found work on a cattle farm at the California/Mexican border. It was grueling, dirty work (often in 115-degree heat), and I went home every day absolutely exhausted. One day, my boss approached me about a special project. He asked who I would like to select to help me. I chose the man who was the hardest working and most eager to help out. He never shied away from a task, and always did what was asked of him without complaint.
Shockingly, my boss told me that he believed the hard-working man to be the wrong choice, and gestured to a man who was literally sleeping in the dirt. He explained to me that lazy men were often creative thinkers, and pointed out several homespun inventions and pulley systems around the farm that made our job easier every day.
Up until that moment, I did not realize that the lazy man was actually responsible for these inventions. In his desire to avoid hard work, he had come up with creative solutions that made life easier for all of us.
Man hours are one of your most expensive resources.
That lesson has stuck with me ever since, and I have applied it to every company have I founded and run. Man hours are one of your most expensive resources. Do not waste time doing things manually when they can be automated. Always ask yourself and your team: Is there an easier way to do this? And always, always, always, choose the easier way. As a result, your team will be more efficient, your expenses will be lower, and everyone will come to work happy.
So many successful people claim that they have a “knack” for recognizing a good business opportunity, but the truth is that intuition is nothing more than years of experience at work.
When you are starting a business, you absolutely should not “go with your gut” because your perspective is limited. With every business I have ever started, I have built an airtight model that was designed to generate revenue, and I have lived and died by that model.
Throughout the course of business, people will come up with fun and flashy ideas. They will case study themselves and think: Well if I was the customer, this is what I would want to see. But the thing is, if an idea doesn’t fit the model, it simply is not worth exploring.
Don’t make guesses about your customers.
It is vital to put time and effort into understanding your consumer, build your strategy around that, and then put every new idea through that lens. Do not try to make guesses about what people may like or respond to. Perform tests, lean on what has already been successful, and never let someone’s intuition be the reason behind a major decision.
Foster Strong Relationships
The people you choose to surround yourself with have a massive influence on your life. Your friends, spouse, and business partners will all impact the way you think, the way you make decisions, and how you feel about yourself. It is supremely important to be discerning about who you let have your ear.
By extension, who you choose to form relationships with is incredibly important to success. Hard work is not enough. Knowing the right person can open doors that you didn’t even know were there.
I have found business partners, incredible team members, and tremendous exit opportunities through networking. I am ruthless about keeping my network tight and about only allowing in people with a positive influence, and in that way, I have fostered some fantastic and incredibly beneficial relationships.
Who do you know? Who knows you?
Hard work is only part of the equation. The other part is who you know and who knows you. If you only ever work with your head down, doors of opportunity will always remain closed.
When in Doubt, Don’t Take the Money
An investor flashing a check is incredibly appealing, but remember that all money comes with strings attached. It is possible to found and manage a successful business without venture capitalist funds. I have done it.
The sharks on Shark Tank are referred to that way for a reason. They are not your friends. They will keep you lean, hungry, and constantly chasing their goals instead of your own.
Before you find yourself on ABC celebrating a new burden disguised as an opportunity — try these six tactics and see if you can’t do it by yourself. You may be surprised by what you can accomplish.
Image Credit: karolina grabows; pexels
4 Ways Tech Can Bring a Federal Infrastructure Bill to Life – ReadWrite
The stimulus bill approved by the House of Representatives in late February was the first of two major budget initiatives President Biden is seeking in the opening months of his administration. The second bill, expected soon, will address the president’s longer-range objective of creating jobs by, among other things, overhauling the nation’s infrastructure.
It’s a fact that people on both ends of the political spectrum can agree on: The nation’s infrastructure is in immediate need of an update. The most recent Infrastructure Report Card from the American Society of Civil Engineers gave U.S. infrastructure a D+ rating.
As the new administration and Congress begin the process of updating the country’s crumbling roads, dams, and electrical grids, one unsettling fact looms large: no one knows exactly how the federal government will be able to solve such a large problem. Improving the country’s infrastructure will require extraordinary levels of investment and public- and private-sector cooperation.
Bassem Hamdy, CEO ofBriq, the leading financial management platform for the construction industry, looks forward to this massive undertaking but warns of potential pitfalls. “The lack of infrastructure development in many areas may be attributed to the bottlenecks existing in construction,” he says. Easing these bottlenecks is going to require tech assistance. This article will discuss how technology can help overcome the industry’s challenges and bring a federal infrastructure bill to life.
The construction industry has been notorious for relying on manual and paper-based workflows for decades. That paperwork can lead to scores of errors and delays that push projects further back from their intended completion. By digitizing all information, using paper as a backup only, information can be easily shared and accessed at all times.
Hamdy acknowledges the impact technology has already had on the construction industry, noting that “Over the last 10 years, a whole host of software providers emerged, turning paper-based workflows into digital workflows, and in the process, moved general contractors specifically to the cloud.” Moving documentation from paper to the cloud has greatly impacted project efficiency in just a few short years.
While cloud storage and instant messaging have become more widespread in the industry, other forms of technology are pushing the construction world even further into the future. One example is digital contract signing, which makes it possible for documents to be verified and signed digitally, eliminating or reducing the need for paper in most situations.
A federal infrastructure bill might not take into account the labor gap in the construction industry. “While the construction industry accounts for over 10 million jobs in the U.S., there is a significant labor shortage to execute the projects that currently exist,” says Hamdy. “Many of the subcontractors are typically responsible for providing labor but consistently struggle to meet labor requirements, which means that projects often fall into delay and cannot meet schedule requirements.”
Certainly, opening up new jobs is a good thing, but only if skilled applicants can fill them. One way to work around the construction industry’s labor problem is through automation. This could take the form of modular construction (think factory-produced or 3D-printed facades) or the digitization of planning, design, and management processes. Even bricklaying or road paving could be automated.
When automation lightens the workload, it frees up the construction industry’s scarce human workers to perform the tasks only they can do. One further upside: the savings that result from implementing automation could improve the industry’s often razor-thin profit margins.
3. Reduced Overhead and Improved Financial Planning
Even though the construction business is very profitable in certain areas, contractors inevitably face risks inherent to large-scale projects. Robust financial planning capabilities enable them to assume such risks and take the necessary precautions to ensure projects are successful.
Financial technology (fintech) allows contractors to more easily develop budgets and track expenses without an extensive finance background. Predictive modeling and analytics enable more accurate forecasting of cost to completion, while streamlined workflows reduce overhead costs. Both functions will help contractors keep projects within their designated budgets.
Some examples of fintech in action can be found at Harper Construction and Wescor, two companies that have seen massive savings by working with Briq. The technology has added the power of automation as well as additional tools necessary to improve financial analysis and workflows.
4. Data Analytics for Current Projects
Data provides insights for calculated decisions on how to proceed with discrete projects and the day-to-day running of their businesses. “The most important thing a contractor can use technology for is in the management of their cash flow,” observes Hamdy. Data can inform everything from the most cost-effective material choices to the most productive hours for employee scheduling.
Data analytics also helps contractors think bigger picture. “Contractors will embrace intelligent financial forecasting, data analytics, and predictive modeling to better anticipate risk,” Hamdy predicts. And as important as it is to anticipate and brace for potential risks, data analytics can also act like a compass pointing toward new opportunities. Pinpointing growth zones before they explode allows construction companies to tap infrastructural gold mines before the space gets too crowded.
The best of tech is yet to come, but what is available today in the construction sector can bring a federal infrastructure bill to life. In fact, it would likely be impossible to carry out such ambitious plans without leveraging technology in these four ways.
Is 2021 the Year of Digital Transformation? – ReadWrite
While all large and successful organizations have already gone through significant digital transformation, 2021 may be the year that small and medium-sized businesses dive in headfirst. Are you ready to join the fold by embracing the next iteration of the business world?
What is Digital Transformation?
Digital transformation has been called a lot of things over the years. And while some would argue that it’s nothing more than a buzzword, those who are involved with it know that it’s more than conceptual. When executed with vision and precision, it can revolutionize a business from the inside out.
In the simplest form, digital transformation can be described as the process of leveraging the correct blend of digital technologies to modify existing business processes and/or create new ones. The objective of digital transformation is to enhance the customer experience and establish simpler, more cost-effective systems that streamline every aspect of value creation.
As industry thought leaders often say, digital transformation begins and ends with the customer. When businesses recognize and follow through on this idea, they can expect to yield an array of benefits, including:
- Greater efficiency. Think about the bottlenecks in your business – the things that slow down processes, frustrate employees, and prevent you from reaching your full potential. In many cases, technology is involved. And if we dig a layer deeper, we’ll find that these technologies are outdated and/or being improperly leveraged. The beauty of digital transformation is that it allows you to fight through these bottlenecks and speed up your business through greater efficiency and output.
- Better decision-making. It’s not enough to have data. You need to know what to do with that data. Digital transformation ensures you’re collecting and interpreting data correctly, which allows you to improve decision-making and guide your company in a better direction.
- Enhanced customer satisfaction. Research from Gartner shows that more than 81 percent of companies are competing primarily on customer experience. And as we said on the front end of this piece, digital transformation is ultimately about the customer. By enhancing customer satisfaction, businesses can cultivate loyalty and squash the competition.
- Increased profitability. An impressive 56 percent of CEOs say digital improvements have helped them increase revenue in the past. And as we move forward into a world where digital transformation becomes even more integral to the health and well-being of organizations, we’ll see this number grow even more.
- Superior company culture. While customers may be the focal point, digital transformation has a positive impact on employees as well. Over time, this emphasis on digital transformation fosters a superior company culture that reduces turnover by elevating retention.
Identifying and understanding these benefits provides some context as to the value that digital transformation provides. The only question is, are you doing what it takes to yield these advantages?
6 Strategies for Seamless Digital Transformation
Digital transformation doesn’t happen overnight. It takes months and years of proper planning and careful execution. However, you can begin experiencing positive results almost immediately. Here are a few tips to help you do just that:
1. Gain Top-Down Buy-In
There is no digital transformation without comprehensive buy-in from all organizational stakeholders. And more specifically, you must begin the process with buy-in from the C-suite.
Research from McKinsey & Company finds that companies who engage the chief digital officer (CDO) at the beginning of the process are 1.6 times more likely to report successful digital transformation on the back end.
Achieving buy-in requires you to be knowledgeable and articulate in your messaging, but it shouldn’t be difficult. If you do a decent job explaining the benefits of digital transformation, the C-suite will have every reason to support the strategy.
The bigger challenge, per se, is that you’ll have to reaffirm the buy-in continually. In most C-suites, approval is not a one-and-done idea. You’ll need to show momentum and progress through objective data. Be prepared to document the results every step of the way.
2. Assign a Point Person
Don’t be fooled into thinking you can roll out an entire digital transformation strategy with a hodgepodge team of people who already have their hands in a dozen other duties and responsibilities. If you want to be successful with your approach, you should find someone who can lead the way. This may look like hiring a new person for the job or reassigning someone. Whatever the case, be sure to practice discernment.
There are a few key characteristics to look for, including a comprehensive understanding of the digital marketplace, as well as a personality that’s conducive to building rapport and moving others to action.
“For business leaders driving digital transformation, they must be able to lead change and communicate a vision to superiors, peers, direct reports, and users,” mentions Box, a leader in the digital transformation space. “They must understand the impact of a new business model. At the same time, They have to be adept at working with IT managers — explaining the big picture and negotiating specific requirements from IT.”
This person won’t be in charge of executing every element of the strategy, but they will be the ones championing the cause. Everything flows from this person, so get it right!
3. Establish Clear Vision
Your “point person” will be in charge of helping to clarify and communicate the vision for your digital transformation strategy. It’s more important that your vision is comprehensive than catchy. It should be a holistic yet specific idea that considers every aspect of the organization. This includes:
- Tech stack
- Budget and operational costs
- Expected Outcomes
- Stakeholder impact
Your vision essentially amounts to a digital roadmap for the future. It explains where you’re going and which aspects of your organization the strategy will touch. (Which should end up being every department, element, and asset.)
4. Evaluate Current Gaps
Take a look at your current technology stack/processes and contrast this with where you want to be in six months, a year, or three years from now. Consider where there are opportunities to pivot and improve, as well as where you’re coming up short. These are your gaps.
Technological and process-based gaps are where the opportunities for significant digital transformation exist. It’s not just about replacing legacy systems and doing away with obsolete processes that no longer produce the results you need. You need to rethink your approach to certain areas of your strategy – like marketing and sales – and imagine what these areas could look like in a perfect world.
As always, think about these gaps through the eyes of the ideal customer. Every digital initiative should support the customer in specific ways. If an “improvement” happens at the customer’s expense, it’s not true digital transformation. It should start by enhancing the customer experience, then (and only then) should you consider the internal impact.
5. Set the Appropriate KPIs
Every organization goes into a digital transformation strategy with the hope that it’ll work out, but there’s a difference in hoping and knowing what’s actually happening. The best way to evaluate the success of your strategy is to set objective measurements ahead of time. Well-developed key performance indicators (KPIs) with pre-defined benchmarks give you something to measure against.
Setting KPIs begins with figuring out what you want to measure and then building from there. If, for example, you’re trying to measure the success of a new application that you’re introducing to your user base, good KPIs would include: daily active users, ratio of repeat to new users, conversion rates, abandon rates, and average time spent on the app.
Is the goal to evaluate customer experience based on a new onboarding process or customer loyalty program? Metrics like customer satisfaction (CSAT), customer effort score (CES), customer loyalty index (CLI), and sentiment analytics are insightful.
User engagement is a fun one to track. You have options such as net promoter score (NPS), traffic sources, customer satisfaction index, bounce rate, and exit rate.
If it’s the reliability of IT systems that you’re interested in measuring, you may keep an eye on specific metrics like uptime, mean time to failure (MTTF), mean time to resolve (MTTR), and mean time before failure (MTBF).
Other large-scale KPIs that touch various aspects include employee performance, innovation, operational performance, and financial performance.
6. Beware of the Shine
It’s tempting to become mesmerized by the shine of new tech and innovation. And with so many different tools and applications being released on a regular basis, it’s difficult to differentiate between the ones that have the potential to be useful and the ones that are a waste of your energy and resources. Be diplomatic in your decision-making!
Where is Your Focus?
Every digital transformation strategy will have a unique flavor. And while it’ll look a bit different in execution and application, many of the same underlying principles are present across the board. For best results, study what others are doing and view their approaches through the lens of your customer and your business. Your roadmap lies somewhere inside these lines.