The digital economy has created a new risk and reward model.
Guest Post: Why optimisation should be a priority for company chiefs
By Marie Despringhere, UK Country Manager at Optimizely
The digital economy has created a new risk and reward model. The online and mobile population is set to double by 2020, millennials have ever increasing buying power and the opportunities ecommerce vendors have to drive revenues have never been greater.
However, in this new model, organisations that continue to make decisions the traditional way, based on opinion and gut feel, are less likely to see explosive growth and more likely to churn customers and lose business to competitors.
Marie Despringhere, UK Country Manager, Optimizely, calls on firms to explore the power of testing and personalisation and truly embrace data-driven decision-making to quickly and easily create best-in-class digital customer experiences that can drive innovation and mitigate business risks.
The speed of digital economic change has created new challenges for company chiefs:
• How can a business mitigate the risk associated with new, essential online initiatives – from introducing changes to the look and feel of the website, adding new product lines, or managing seasonal events such as Black Friday?
• How can they ensure that the overall digital customer experience is one that resonates best with their most valuable customers, and as such drives maximum revenue?
• How can businesses achieve effective use of resources – both financial and people – in order to stay ahead of the competition?
When executive performance is increasingly measured in months rather than years, the speed and confidence in decision-making needs to improve, fast.
The problem for many organisations is that the data needed to support such critical decision-making is not often available within the business, or, is only available in pockets and is difficult to digest and take action on immediately. Without this data, company chiefs have no option but to base key strategic decisions on belief rather than fact.
Data driven decisions
Growing numbers of organisations, however, are turning to optimisation technologies – including A/B Testing – that enable them to easily make decisions based on data, not hunches, with a significant positive impact on their business.
From insight that supports critical thinking around customer experience and retention, this new approach to decision making saves time, mitigates risks, and can increase conversions and revenues.
To maximise impact, there needs to be a culture of optimisation throughout organisations – not just in certain pockets – and that starts at the top.
It’s true that an increasing number of data scientists and ecommerce professionals have embraced the power of optimisation and testing to improve the online customer experience. But, all too frequently, these teams operate in silos.
Few executives are aware of the value of this data and, as a result, are unable to take advantage of this strategic insight to inform their decisions.
Indeed, according to a January 2016 Forrester report, online testing lacks executive visibility and is starved of resources. Only 32% of respondents to Forrester’s Q3 2015 Global Online Testing Platform Customer Online Survey were executive level or higher.
The rest of the respondents were departmental managers or individual contributors. In addition, within the same study, only one-third of online testing practices employed multiple full-time resources. The remaining practices were managed by a single full-time employee, by part-time resources, or a mixture of both.
Making the change
While these tactical optimisation projects rapidly prove their value, by failing to elevate this insight, they remain tactical rather than strategic. Indeed, despite the massive dependence upon digital performance, the majority of businesses clearly still consider online testing and optimisation to be only relevant to digital marketing or product managers.
Yet testing offers so much more than effectively placing ‘call-to-action’ buttons, increasing open rates or tracking cost-per-impression; A/B testing can and should be used to inform strategic business decisions.
For example, testing can provide the executives with insight into which digital channels are delivering Return on Investment (ROI); the value of a new online media campaign; the influence of different strategies on customer retention figures or a way to rapidly identify new customer groups.
The organisations that have ingrained testing and optimisation within the business culture are reaping the business benefits of company chiefs that are data driven by default. After all, data driven decision-making delivers the best, and most innovative, results when it’s combined with human knowledge and experience.
By supporting critical thinking around customer retention, customer experience and identifying new market opportunities, data driven decision-making is transforming businesses. Without doubt, the speed with which company chiefs begin to harness this information will differentiate the next generation of winners.
The right message
The digital economy presents huge new opportunities to drive up revenue and profitability but also creates challenges. It demands new business models and new ways of customer engagement, which inherently come with an element of corporate risk.
These changes can have a significant impact on the customer – which is why gaining data-led insight into the customer reaction, the cost implications and resource utilisation beforehand is fundamental to changing the risk profile and maximising the opportunity.