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This article was written by Ken Fine, CEO of Heap
The reign of the digital economy is upon us. It has become increasingly difficult to differentiate between the digital economy, the physical economy and the service economies, as digital technology and the Internet now mediate many transactions across all sectors. Now, even the traditional barber shop understood that delivering a great digital experience is key to business survival.
“Digital economy” and “economy” may not yet be synonymous, but that gap is closing fast. A recent analysis predicted that digital and digitally transformed businesses would account for $53.3 trillion, or roughly half of the United States’ gross domestic product, by 2023. And, since these projections do not take into account free goods and services in the digital economy, some economists believe that the estimates given are probably too conservative.
New expectations are the new normal
In 2011, venture capitalist Marc Andreessen observed that “software is eating the world”. Ten years later, the coronavirus pandemic has only made technology even more greedy. The iconic experience is now digital and takes place on the screens of our computers, tablets and phones. During the first lockdowns, people who might never have ordered groceries started using mobile apps like DoorDash; an obscure Zoom teleconferencing system has become as familiar as Google and Facebook. With emergency rooms overcrowded and hospital staff overwhelmed, many routine medical interactions have migrated to telehealth, which McKinsey predicts could be a quarter-trillion-dollar business.
For companies in the digital economy, the main by-product of moving everything on screen and online was that consumers increasingly expect their needs to be met through digital experiences. . The average consumer has now internalized Amazon-style one-click convenience as a baseline. Disappoint them and they’ll take their business elsewhere, “walking” to the next business with a few screen taps or keystrokes. A sticking point that slowed down a trade yesterday is likely to cancel that trade today. When a check can’t be deposited through a credit union’s phone app, when a local restaurant’s website won’t load, when a digital storefront isn’t integrated with familiar payment processors, customers simply leave. And chances are they won’t be coming back to give the platform a second chance.
The three Is in a digital economy
How will companies be competitive in this increasingly digital environment? As they have always done: meet the needs of their customers. What has changed is that being a leader today means setting the bar for the digital experience, then raising it again and again. The best companies will achieve this by adhering to the three i’s: information, insight and iteration. Armed with a wealth of data and a powerful set of new tools, the next generation of industry leaders will be those focused on continuously improving the digital experience they deliver to their customers. With frequent releases and updates, they will continue to set, and then surpass, new standards for accessibility and ease of use.
Digital businesses produce terabytes of information every day, but relatively few companies capture all of the data produced by their customers. It’s leaving money on the table in a digital economy. How long does the average potential customer spend on the website or in the app? Where do customers leave the sales funnel? What age groups aren’t responding to your sales pitches and what cities do your biggest fans live in? This information is the foundation of the best digital experiences.
Data tells stories that people alone cannot decipher. While big trends may be obvious even to a stats buff, best-in-class insights rely on the subtle, the hidden, and the counter-intuitive. A part of your website that seems intuitive and user-friendly to your design team may actually be a sticking point for consumers; another page could send an unduly high number of customers to their browser’s “back” buttons. Assumptions and hunches about the customer experience may not reflect reality, and even when broadly correct, details are more helpful than generalities.
All the knowledge in the world is useless if it is not put into practice. In a time of rapid and confusing change, companies cannot rest on past achievements: they must continually reintroduce and refine their offerings. A/B testing, revised sales funnels, and modified landing pages all have roles to play. The top performers of today’s major digital economy players, like Amazon, Netflix, and Google, are constantly tweaking their websites and updating their apps in hopes of producing stickier, more convenient experiences. . The information-insight-iteration cycle should only end when the company does: each new product iteration that goes live provides additional insights that the company can turn into insights. This knowledge is quickly integrated into the next version. The customer gets a better and more satisfying experience; the business increases its revenue and lifetime value.
As the OECD has pointed out, the economy now faces “Digital Acceleration Induced by COVID-19.” The digital economy of 2023, when digital businesses are expected to account for half of GDP, will undoubtedly hold many surprises for even the most informed prognosticator. Businesses cannot expect their December 2021 offerings to be enough for January 2022, let alone January 2023. As we enter a new era of digital competition, tomorrow’s future winners must continue to collect the data whose they need to innovate and iterate. . Customers are demanding better digital experiences. Companies that fail to adapt must plan for obsolescence.
Ken Fine is the CEO of Heap.
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