Disruption, Performance & Measurement, Strategy

Is product optimisation the key to Digital Transformation success?


The general view is that the product and service experience makes or breaks the brand. Consumers now have more choice than ever, tools to voice their approval or disapproval and historical competitive boundaries or geographies no longer exist with hyper competition now regarded as one of the biggest challenges. This post discusses the approaches adapted by contemporary and legacy brands when tackling product development and service.

Continuous improvement is a term entrenched in the technology and digital lexicon! The majority of progressive organisations (Facebook, PayPal, Google, Spotify) are comfortable with launching Minimum Viable Products (MVPs) with the intention of optimizing the consumer experience in real time, as users interact with their products and services – continuous improvement if you like. Access to real time analytics and implementing “agile” enables these companies to effectively optimize; hence we’ve seen the emergence of data and collaborative team structures. Getting this mix right establishes a clear competitive advantage.

The MVP approach seems to spook companies late to online product development, such as companies that predate the Internet boom. The thought of not having a perfect product launched on day one fuels high levels of anxiety. This is where traditional companies really struggle with digital products and invariably fall into the large bucket of companies that fail (70%) with digital transformation and tend to fold in years, outflanked by these more nimble and customer focused competitors.

Lets look at why product optimization and testing is key to delivering great digital products and experiences.

Testing and personalization must become second nature

One of the most progressive DTS partners is Compete Shark. This innovative tech player measures the volume and velocity of online content changes – product & offers – along with tracking the types of online experiments carried out by companies on their websites and/or mobile. This intelligence provides a really deep insight on how brands tailor their personalized content (offers and messages) to online audience segments with the ultimate goal of increasing conversions and retaining customers – increasing lifetime customer value metrics in the process.

From a cultural perspective, testing and experimentation data separates the good from the underwhelming. E.g. Many executives claim to have developed the operational nirvana – an agile organization, but at the same time irregularly run experiments or A/B testing for that matter. It’s safe to suggest they are not nimble or agile? Right?

UK & US lead the way in testing. Australia & Asia is lowly benchmarked

According to Kiran Kumar, Co-Founder of Compete Shark, Australia & APAC possesses a low testing and experimentation maturity profile benchmarked or compared to the US & UK. “However, as orgs recognize the need to be agile and customer obsessed we have seen a clear shift in priorities from the second half of 2016. In terms of execution, testing was historically out sourced to agencies (test & validate business case) and now brands acknowledge the need to bring it in house and therefore make testing part of their core competencies. “ 

Australia & South East Asia currently asleep at the wheel

When I was running e-banking at ING Direct (back in 2000) we would test 1024 variations of a landing page serving up different versions to multiple traffic sources using a ground breaking tool called MEMTRICS (later to sold to Accenture). E.g. Passive audiences (originating from banners) received varied messages and creative, typically would convert at lower rates and active prospects (from search) would convert at higher rates, typically showed more “rational” messages having already travelled further down the conversion funnel.

Fast-forward 15 years later and I’m concerned that this isn’t standard practice? Sure brands are launching MVPs and making some changes but not at the rate that’s required to delight customers. We know from best practices abroad personalization and customer service are crucial to winning. Despite Compete Shark’s comments relating to improvement there is still a long way to catch up and with competition emerging from well-funded offshore players things must change now.

Strategy development before tech investment

Way too many companies have implemented tools such as Adobe test & target, Optimizely and other solutions however their frequency and level of testing is very low. Given that these tools require reasonable size investments, including licensing fees and tech resource management is well in their right to be asking hard questions and demanding accountability! The DTS scoring approach flags this gap and frequency of occurrence and it is one of the most common challenges we observe with traditional firms that grapple with Digital Transformation.


As a result, DTS is seeing stricter governance measures coming into play, magnified by an increase in CEO & MDs driving digital transformation (>50% of initiatives) moving away from IT and CIOs. This coincides with customer first strategic imperatives and the reliance on digital technologies to facilitate better relationships and ultimately expected to drive revenues and profit margins.

“Retail Armageddon” might happen across most industries.

“Companies must pivot and evolve into software based organizations & platforms,” according to Paul Shetler, former Digital Transformation Officer to the to the Turnball government. Paul is adamant that product iteration and optimisation is the key to being successful in the digital age and ultimately surviving. I recently reviewed DTS research findings with Paul and we couldn’t believe that optimization and experimentation was ranked so low within the digital strategy dimension across APAC.

At the end of the day if products and services don’t resonate with consumers they can easily take their business elsewhere. On a positive note there is a lot of upside if businesses adopt new approaches and get into a rhythm of testing and learning. The arrival of Amazon will finally put a lot of this inertia and complacency to the test. This is clearly happening in North America with the tales of destruction picking up speed every week:

This was summarized well on Paul Shelter’s blog:

“Macy’s has already said that it’s planning to close 100 stores, or about 15% of its fleet, in 2017. Sears is shuttering at least 30 Sears and Kmart stores by April, and additional closures are expected to be announced soon. CVS [a shopping centre owner] also said this month that it’s planning to shut down 70 locations. Mall stores like Aeropostale, which filed for bankruptcy in May, American Eagle, Chicos, Finish Line, Men’s Wearhouse, and The Children’s Place are also in the midst of multi-year plans to close stores.”

Its been well documented that we live in a world where hyper competition is the new normal. So to not optimize or test online is the equivalent of keeping your shop door closed on a busy trading day. Many pundits claim we now operate in the “ experience economy” so treat your customers accordingly and delight them in the process.






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