Without a doubt, the importance of Customer Experience (CX) for any business growth shouldn’t be underestimated. CX is how customers perceive and feel about your business and brand. In fact, companies that worked on improving customer experience saw a 92% increase in customer satisfaction, 84% uplift in revenue, and a 79% cost savings. In recent years, a number of strategies and tools have been developed to measure and analyze customer habits and preferences. Yet, the most valuable information you can get comes directly from your customers themselves. It’s called customer experience metrics.
According to Forrester’s CX Index, 72% of companies admit that working on improving customer experience is a must. However, only 1% of organizations manage to provide a superior experience. Measuring and carefully benchmarking customer satisfaction metrics is already a big step for businesses to start enhancing their customer experience.
But how to measure customer experience? And which metrics are worth considering for your business? In this blog post, we’ll explain to you how to start measuring customer experience, and how to apply those metrics so that to improve your business overall performance.
WHAT ARE CX METRICS?
Simply put, cx metrics help your organization to measure how happy your customers are so that you can actively work towards increasing competitive advantage, expanding revenue, and boosting customer loyalty and retention.
Even if customers are unhappy with your product, they choose to say nothing. Those are customers you are likely to lose if you don’t take necessary measures. That’s why tracking customer satisfaction metrics is crucial. These measurement tools can help you collect valuable feedback, analyze it, and based on the received insights make improvements to your digital product strategy.
WHAT METRICS MEASURE CUSTOMER SATISFACTION?
NPS, CSAT, and CES are the most commonly used customer satisfaction metrics. We’ll introduce you to each metric and show how they can help improve your business performance.
NET PROMOTER SCORE (NPS)
The Net Promoter Score measures the willingness of customers to recommend a company’s products to others. It is used to identify the loyalty of customers to a company. We usually measure NPS with a single question survey:
“On a scale from 0 to 10, how are you likely to recommend company/brand/product X to a friend/colleague/relative?“
Accordingly, 0 is not at all likely, and 10 extremely likely. Depending on the response, customers fall into one of three categories to establish an NPS score:
Consider implementing NPS metric into your customer experience strategy, as it can be used with industry NPS benchmarks to see how your product is doing compared to your competitors.
The formula to calculate the NPS metric is simple. You just have to subtract the percentage of customers who answer the question with a 6 or lower from the percentage of customers who answer with a 9 or 10.
NPS = % PROMOTERS – % DETRACTORS
If you apply the NPS feedback correctly, you can adjust your business to meet what customers want without over-delivering in one area or under-delivering in another.
We also recommend asking follow-up questions as a part of the survey:
What’s the reason for your score?
What can we do to improve our product and bring more value to you?
Customer satisfaction is the key to acquire new customers and keep old ones. In addition to that, remember that NPS is just a part of a bigger picture. Don’t view it as a standalone metric that determines your whole customer experience. Combine NPS with other metrics. Customer Satisfaction Score (CSAT) and Customer Effort Score (CES) will be a good company.
Focus on value and quality rather than numbers. It means that you should aim at improving the score rather than just increasing the figure. Take what you have learned from your insights and apply results to grow promoters, and convert passives and detractors into promoters.
Summing up, the goal of the Net Promoter Score is to help you analyze and support the relationship you’ve created with your audience. To make it effective, you should always listen to the voice of your customers and act on it. Instead of trying to improve the numbers, focus on understanding what drives the score, and improve it to create and sustain long-term customer success.
CUSTOMER SATISFACTION SCORE (CSAT)
CSAT is a commonly-used key performance indicator. We usually apply this metric to track how satisfied customers are with your product.
CSAT surveys are usually sent when you want to see how happy customers are with a certain aspect of your product. For example, you’ve added a new feature and want to see how efficient and useful it is to the end-users and if any improvements are necessary.
Here’s an example of common CSAT questions:
“How are you satisfied with our product?” or “How would you rate your overall satisfaction?” with the company, its product, or a certain interaction.
A five-point scale is used, with options very unsatisfied, unsatisfied, neutral, satisfied, and very satisfied. Companies can calculate CSAT by using an average of 1-5 or by focusing on the 4-5 responses.
(#) POSITIVE RESPONSES / (#) TOTAL RESPONSES X 100 = (%) CSAT
To calculate the Customer Satisfaction Score, divide the number of “satisfied” or “very satisfied” respondents by the total number of respondents, and multiply it by 100. This results in your CSAT percent.
CUSTOMER EFFORT SCORE (CES)
With the CES, we ask customers to score the amount of effort involved with a specific interaction. Using CES surveys, you can ask the question,
“on a scale of ‘extremely easy’ to ‘extremely difficult’, how easy was it to interact with
The idea is that customers are more loyal to a product that is easier to use. Customer churn is one of the main business drivers and customer effort is a great indicator of loyalty. CES impacts your business outcomes and is easy to track over time.
To calculate the Customer Effort Score, determine the percentage of positive (very easy and easy) and negative (very difficult and difficult) responses to your CES survey. You can then subtract the number of negative responses from the positive responses.
CES = % EASY – % DIFFICULT
If you get a high average, it shows that your company is making the experience convenient for customers. A low average indicates that there’s still work to be done to make the customer experience easier and engaging. However, the drawback of CES is that it is more focused on evaluating a particular process of customer interaction, so it doesn’t give a broader understanding of the entire customer experience. For this reason, we apply CES together with Net Promoter Score and Customer Satisfaction Score to get a better understanding of customer satisfaction.
IN CONCLUSION
We believe that a well-designed CX strategy combines multiple CX metrics, based on user feedback. When you collect different types of feedback data, you get a holistic view of what exactly is going through your customer’s mind. To do so, it’s important to follow up CSAT, CES, and NPS questions with open-ended questions where users can leave qualitative feedback.
There is a myriad of methods out there to choose from when it comes to the product design process and development. In this article, we would like to give an overview of the steps and frameworks we consider essential and provide a toolbox you can pick ideas from when designing a Minimum Viable Product, which is the first version of a product with just enough features to satisfy early customers, create value and provide feedback for future development.
The ideal product design process can vary depending on different factors, such as the project scope, the size of the company, budget, deadlines — just to mention a few. In a good design process, the business requirements meet the user needs, which are satisfied within the feasible technical possibilities.
Even UX studio’s product designers don’t have just one, crystal clear and always followable guide for design processes. We all see the necessity of getting together from time to time and share our experience and knowledge acquired from different projects and clients with each other, so we can improve our processes effectively, meeting the requirements and demands of the market.
We encourage an Agile style of work, working in design sprints, but we are flexible. Should you need help with product design, fill out our contact form and let’s discuss how we can help you.
Table of Contents
Steps of a user-centered product design process
The Double Diamond is a product design process with four phases: Discover, Define, Develop, and Deliver. The product design process starts with a “diverging phase” of the diamond, a problem, and topic discovery. We do not define anything yet, but we step back a little and open our minds to new insights.
The second part of the diamond — Develop and Deliver — mainly feeds from the product discovery findings. However, the Discover-Develop tracks can also run in simultaneously and support and feed into one another at regular intervals, so this is not a linear process.
Step 1: Product discovery – What problem we want to solve and for whom
Product discovery is the preliminary phase of every human-centred product design process, and its purpose is to base the product idea on real demand.
However, carrying out research is important not just at the beginning, but during the project as well, whenever there are too many open questions and uncertainties. Validating ideas helps us to avoid burning money and waste time.
We need to reach out to both the stakeholders and the users to explore the problem (and opportunity) space and find the real pain points we want solutions for.
There are two frequently used product discovery activities we’ll be looking into a bit more:
Workshops (e.g. kick-off workshops),
Exploratory research; user research (Market research findings are also important. We don’t do this one, but if you’re curious about the differences between user and market research, check out this article.)
Kick-off workshops Meet the client, understand the current state of the project and the additional knowledge needed.
Workshop techniques are great for acquiring domain knowledge in a topic and get acquainted with the stakeholders. To create the first draft of our roadmap, we start every project with a kick-off workshop that usually takes about one to two days. At this time, we get to know the company, its processes, and roles and gather all information we can about the project.
If the client already has some quantitative and qualitative data about the market, client segmentation, competitors, target group, buyer personas, we go through them, make a common understanding of the objectives and facts, and build assumptions and hypotheses.
The more variety of expertise involved in the workshops, the more insights we can utilize from different stakeholders of the company. It’s important to understand experiences on previous solutions and key business objectives (such as KPIs, success criteria).
Kick-off workshop techniques frequently used by us: /Note: At this point, most of the workshop deliverables are assumptive, and that’s fine because we’re going to research what we need to validate or change.
Assumption matrix: We collect the stakeholders’ beliefs about different topics, find the most important, high-risk “leap of faith assumptions” so we can validate these with research and find out if they’re real.
Persona and/or Jobs-To-Be-Done workshop: Assumptive personas are our best guesses on who will use the product and why. It helps us to recruit for interviews and for the client to empathize with their future users.
Customer journey workshop: These workshops help us get a view on how people navigate through the product or service. It is also an excellent opportunity for knowledge sharing with our clients.
Value Proposition workshop: We map out the perception of the value of the product identified by users. We also validate assumptions and thus Value Proposition for each customer segment. This provides vision and guides the design.
Brand Vision, Mission, and Values: The best way to reveal the vision is by asking the brand’s key personnel why it was created. For every answer, they provide, make it hard on them, and keep asking why. After a few rounds of whys, we get to the heart of the matter.
At the end of the kick-off workshops, we should have a clear overview of what we don’t know but should do so we can create a research plan to kickstart our discovery.
If you’d like to know more about how to organize a kick-off workshop, check out this article.
Research There are a couple of research methods out there; however, in the discovery phase of a product design process, we don’t aim to evaluate possible solutions yet as that comes later with usability tests. Still, we may already have assumptions to validate, and we certainly need to have a well-defined topic and a target group that is interested in our topic. At the same time, it’s crucial to keep an open mind to be able to discover entirely new aspects and problems of our audience.
Of course, the research method that requires the least experience and professional knowledge is desk research, available for anyone who has a computer with internet access, an account for social platforms and some time to dig up the pain-points of online communities, find opinions and reviews shared in social platforms, forums, mailing lists, or blog comments.
Diary study can also be useful in some cases, or, if you want to gather data on a larger scale, you can use online surveys — preferably with a mixture of open-ended and closed questions — that can be used with qualitative insights from other methods.
Research methods we frequently use:
Semi-structured User interview is the method we use most frequently in the discovery phase, as it’s relatively easy to organize and provides great insights into exploration. The 10-15 interviews we start with usually provide enough insights to move forward. We try to recruit interviewees from each segment/target group we defined earlier and involve the stakeholders in writing the interview script. Our researchers evaluate the previous results before each interview and iterate the questions to get the most useful answers from the remaining interviews. If it’s necessary and our collaboration has the resources, we do follow-up interviews to dig deeper into sub-topics.
Field research is among the most reliable methods as it is based on observing user behavior in their environment. But for this very reason, it’s also harder to organize and conduct without influencing the users’ behavior and interfering with the natural way of executing their daily tasks.
Competitive research can also be applied, as it’s very likely that by this point, the product team already gathered the main direct and indirect competitors from stakeholder meetings and user interviews. More knowledge about successful competitors can aid us with feature ideas or design inspirations and can help us to position our client’s product. Even if there is no in-depth competitive research, we should at least maintain a competitor list in a collaborative spreadsheet or any cloud-based tool.
Step 2: Narrow down – Define
This step is about making sense of the data, synthesizing them, choosing one main goal to solve, figuring out the “How” and the “What”.
By the end of the discovery phase, we are likely to have enough insight to synthesize our findings, refine our previous assumptive deliverables or create new ones by user analysis, define the core problem we want to solve, build themes, and deduce potential fields of action.
There are many synthesizing activities to use, such as:
User personas
Jobs-to-be-done
How might we
User stories
Storyboards and scenarios
These exercises can be used at various points of the product design process; at the very beginning, in an assumptive way, it can help with synthesizing the research data and define the project scope, but it can also be applied when ideating about solutions. The when and how really depends on the team, project, and available insights. In the following section, we focus on the methods we use the most.
User Personas These are fictional (yet realistic) representatives, archetypes of our key user groups with certain goals and characteristics. We use personas to help us understand and map out the main segments of our users, with their different goals, and motivations. We can also use them to help us empathize with them in order to make a more suitable product.
At UX Studio, we do create assumptive, theoretical persona mock-ups at kick-off meetings. If provided, we can use already existing research data (e.g., survey results, built buyer personas, or other related market research findings) to start off with, but at this point in the design process, our personas should be validated and based on real user research data.
How we create personas: There are many contradictory opinions out there about whether it’s good to give names and faces to personas, or if demographic data is relevant if it needs to be printed or should include an empathy map, and so on. This is how we usually do it:
You would rarely need to go above 3-5 personas, but the number highly depends on the project scope and product type; the broader the target audience, the more persona you may need. However, it’s better to iterate on categorization to avoid having too many personas as it can jeopardize your design process in the long term (it’s pretty hard to design for too many people with different sets of characteristics)
We don’t spend hours and days creating stylish persona posters to hang them on the wall because we know they’ll change and get refined, so there is no point to waste hours with this analog process.
We love how these stylish persona artifacts look, but they become pretty useless, pretty fast, when new findings force them to evolve.
Our persona sheets include goals, motivations, frustrations, behavior patterns, background, and context-specific details (details relevant based on the project, e.g., which mobile platform they use). We also add a profile image, name, some personal details, and demographic data to help with building more empathy and make them easier to remember.
We use a great online collaborative tool, Miro to create, share, and update our digital personas.
There are plenty of methods for synthesizing information, but we only dig deeper into the ones we use most frequently. You can find a few related, downloadable templates here.
Jobs-to-be-done JTBD is another framework we can use to find out more about the users’ needs and preferences. It is absolutely compatible with user personas, so often used together.
The personas focus more on the users’ behavior and attitude, thus helps with empathizing and segmenting the different types of users, while the JTBD places a more significant emphasis on features, aims to discover the purpose why people ‘hire’ a product in order to solve a specific problem and fulfill a need.
The “template” JTBD structure
A famous JTBD example is about McDonalds milkshake. When the company wanted to increase the profit on their milkshake product, they first started interviews with representatives of their persona groups, the customer types they knew to be the main milkshake consumers.
The researchers tested the temperature, the viscosity, and the sweetness of the milkshake with this group, but they couldn’t find out what the problem was and how they should improve the product.
So they tried another approach; started observing and interviewing consumers onsite, in McDonald’s restaurants. It turned out that people bought milkshakes mainly to keep them full till lunch and entertained them for the whole journey of driving to work.
As a result, McDonald’s made the shake thicker to last longer while commuting and moved the milkshake machine from behind the counter to the front, where the customers could easily and rapidly buy a milkshake with a prepaid card when rushing to work, avoiding the queues. Solving the real job-to-be-done, resulted in a sevenfold increase in the sales of the milkshake.
“How Might We” The HMW exercise is a great way to narrow down problems and to discover possible opportunity areas.
We are not looking for exact executions on solutions here yet, but rather brainstorm, explore questionable areas of one core challenge while keeping an open mindset for innovative thinking.
For this to work, first, we need a clear vision or goal, a Point-Of-View statement that is made based on a deeper user need discovery. The POW should be human-centred, neither too narrow, to sustain creative freedom when brainstorming, nor too broad, so it remains manageable.
For defining the POW statement, your previously made personas and jobs-to-be-done (as a result of your user’s need discovery) come in handy. By synthesizing the essential needs to fulfill, you can make a template like this to create your statement:
In short:
[User . . . (descriptive)] needs [Need . . . (verb)] because [Insight . . . (compelling)] Once you have the POW statement, you are ready to form short questions that can launch brainstorming on actionable ideas. For example: How might we…?
In What Ways Might We….?
What’s stopping us from…?
In what ways could we…?
What would happen if…?
Then you may ask follow-up questions on the previous questions to examine the angles a bit deeper. By completing HMW sessions, we can get one step closer to forming ideas about exact solutions and executing the best solution.
Look and feel, mood boards, branding Of course, at this point, we’re far from creating high-fidelity prototypes and design systems, but it’s important to set a couple of broad, basic directions to have a general idea of where we’re heading and keep nurturing the creative imagination as we progress in the design process.
(Moodboard and Brand wheel)
Depending on how many designers working on a project, you can share the workload and either work on the same design or split up the tasks and progress simultaneously (e.g., one does the prototyping and the other building the design system and hi-fi part).
At this point, we should have a condensed brief of research findings, a strategy, and a clear idea about what problem we want to solve.
Step 3: Brainstorm solutions, define and prioritize features.
The tips and techniques mentioned here can be done or can at least be started way before this step; remember, this is not a linear process and you may use these techniques in a different order at different times of the project timeline.
The developing/ideation phase begins when we have a good understanding of the project goals, and we narrowed down what we want to solve first. (Note: by development, we don’t mean any code-related development yet).
If there are still open questions about what features we should start with, the Kano model and Impact-Effort Matrix could serve us well.
Impact-Effort Matrix – To fasten up decision-making about what to implement.
User journeys/customer journeys Both customer journeys and user journeys are tools for mapping out the flows users go through, using a service or an application with one specific task to carry out.
Customer journeys/experience maps encounter the online and offline aspects of the users’ flow, providing a more holistic view of the process. As the output, the customer journey diagram basically lays out a big table. The columns of the table represent different phases or steps a customer goes through.
These can be unique in every project, but most customer journeys contain three phases: before, during, and after the usage of our product.
These can be unique in every project, but most customer journeys contain three phases: before, during and after the usage of our product.
As opposed to customer journeys, user journeys analyze a smaller part of the journey, focusing only on what happens in the application; for example, during a sign-up process. At UX Studio, we mainly use user journeys, but for longer projects with a bigger scope, especially if there is already existing user data about the customers and there is a journey that goes beyond application usage (e.g., arriving at the airport and using a ticket machine software), the customer journey is the preferred tool.
How we do user journeys:
To start off, determine the two or three most important goals to achieve with your product. Every journey must have a task, a motivation, and context.
It’s also good to include a simplified empathy map nested within the journey map, indicating what emotional reaction the user has to each step. These are good indicators for us to which points we should handle with extra care and improve on. These emotions can be assumptive but also based on solid data we gathered from our product discovery and research before. Use your personas.
Creating user journeys is still part of the experimental phase, so we encourage you not to stop with one idea but try out different paths, reorder the steps, complete the ideas, and explore.
You want to find many different versions for each journey, as sometimes there are great first ideas, but oftentimes these are not the best solutions. For this reason, create at least three different journeys for each goal. Then, once you come up with several solutions, decide on the winner.
User stories User story creation is a good way to define features with stakeholders. What we want to accomplish in the product, why, and as what kind of user. It helps us stay focused on what features are necessary and what could lead to a “feature creep.”
High-level example: As a sales agent, I want to turn more leads into customers so I can increase my income. And a more detailed version of the example above:
As a sales agent, I want to keep track of unprocessed hot leads so I can make sure I don’t miss out on an ‘easy’ deal.
We can do it in several ways and styles, if we do it with developers, it may become more technical and scrum-oriented.
Building the IA, sketching and wireframing Building an Information Architecture is basically the blueprint of the design structure, the foundation of our first wireframes. IA is formed by creating a hierarchy and categorization of the information that results in a coherent, meaningful, navigable system. How we sort out the features, functions, and available data in our product will have a great impact on the user experience.
Our best intentions with features can diminish if users don’t find them. Card sorting is a great technique to validate our IA. You can do it on paper, but there are online tools that you can use, such as Optimal Workshop.
Sketching You may start sketching way earlier, right at the beginning when the first problems gain their shapes. Sketching is great not only to serve as the base when building something but also to help understand a problem and share ideas within the team.
Sketching on paper, where complex interfaces and functions of the software don’t limit or distract us, is an effective and rapid way to explore ideas and spot any design problems early on.
We don’t need to be skillful sketch artists or graphic designers who can draw and paint photo-realistically. The point here is not to create a refined artifact, but to focus on single ideas, flows, and possible layouts, and use simple placeholder boxes for images and text. It’s about exploring ideas of execution, so no need to worry about the copy yet.
It’s very recommended to showcase these first sketches and wireframes to the developers and other team members at an early stage because they can assist us with information on what is feasible technically, which saves us from unnecessary rework.
A blank paper and a pencil are all you need, but if you’d like some guidance, you can download sketch mockup sheets from here. The output, a wireframe, is basically the skeleton of our upcoming prototypes — a barebone, static structure that will soon evolve to a refined design. Wireframes can be made on digital platforms as well using tools such as Axure, Adobe XD, Sketch, Figma, or even Photoshop.
Wireframe in Sketch
At this point, you should have the concept, the “what to do”, and the strategy of how to prioritize. We have the definition of our MVP, the core features, the core problem we want to solely focus on.
If you are searching for the most suitable UX agency, contact us, and let’s see how our UX experts can help you with your current challenge.
Step 4: Narrow down – Deliver
Prototype, test, iterate, implement. This phase is all about doing the right thing in the right way, reaching our goal, refining our MVP, and implementing the solutions.
Low-fidelity Prototyping Making our ideas tangible with quick prototypes and test them out as soon as you can save a ton of time and resources. For the sake of definition, what we call a prototype here is a modest-looking clickable digital product that resembles the features we aim to develop, but in a simplified way.
Paper prototypes exist too, but we prefer the freedom and opportunities only digital solutions can provide. The goal here is to find out the usability issues before starting the detailed designs to avoid burning time and doing reworks.
Low-fidelity, interactive prototype for testing
How we build prototypes:
We mainly use Axure for interactive low-fi protos. With Axure, you can add dynamic elements, Javascript, create databases, which are uniquely complex features in the world of prototyping tools.
There are always three essential questions the user needs to be able to answer on every screen you design: Where am I? What can I do here? How can I move forward?
Forget lorem ipsum and be scarce with dummy text. A sensible, contextual, guiding copy is just as important as visual hierarchy and affordances.
Follow UI patterns and keep best practices in mind (a couple of great resources of inspiration: Mobbin, Muzli, UI patterns).
Keep it simple. We’re testing the usability of layouts, key user flows, and navigation at this point. Don’t test refined visuals yet, unless it’s not an MVP and you are testing already existing features in a live product.
Design for mobile first if the project allows you.
Create the first protos as soon as you can and evaluate them for usability tests. Refine your prototype iteratively after every usability test until you’re confident that you ruled out every major usability risk. (And of course, later on, continue usability testing before and during every new feature.)
High-fidelity prototyping Now that you have the base of a usable product, it’s time to make the whole thing sexy by adding the visual attributes, colors, icons, shadows, and images and refine the look and feel. The product’s design language has to be in harmony with the target audience and should be aligned with the brand’s vision. When testing the high-fidelity prototypes, visual elements are also important, and it leads to creating a stable, harmonized design system that you can rely on.
Quick tips for hi-fi prototypes:
We mainly use Figma, Sketch, or Adobe XD in UX studio, however, the choice often depends on the preferences of the client’s team and the technical requirements.
Create and maintain a design system based on brand guidelines and vision. Design systems facilitate effective collaborative work, alleviates decision fatigue, and assist designers in keeping consistency throughout the product. Even if it’s an MVP, you’ll be wanting to scale up your product if everything goes right, so building a design system is inevitable at some point when managing a successful product design process. It’s better to start building it sooner than later.
Some tools, like Figma, have a built-in collaborative feature (that sadly Sketch still lacks), but Abstract also can be a great complimentary software for version control and storing files in the cloud. We export our design files to Zeplin for the developers.
Ideating and prototyping should be an iterated process, such as continuous discovery with user research beyond MVPs.
Takeaways
Launching the MVP product doesn’t mean the job is done, and the product design process is over. Testing and designing should be an ongoing, iterative process that is the key to improve the product and bring it to success.
Follow along with the metrics; get client feedback, use analytic tools and heatmaps (such as Google Analytics, Countly, Hotjar), do A/B testing, and measure the success of your choices.
As I mentioned at the beginning of this article, this collection of ideas and steps are not set in stone, simply aimed to raise awareness of the available tools and methods to start off a product design process. The whole process becomes super iterative when working in a dynamic environment, such as agile.
The main takeaways perhaps are to make your process user-centered, apply design thinking, and execute it as a non-linear, iterated process. Do user research whenever you can to design with the people, not just for them.
Take the next step to improve your website’s UX
UX studio has successfully handled 250+ collaborations with clients worldwide.
Is there anything we can do for you at this moment? Get in touch with us, and let’s discuss your current challenges.
Our experts would be happy to assist with the UX strategy, product and user research, and UX/UI design.
Digital strategy is the application of digital technologies to business models to form new differentiating business capabilities. In the future, all business strategy will be digital strategy.
Table of Contents
Evolving the Definition of Business Strategy
Digital strategy focuses on using technology to improve business performance, whether that means creating new products or reimagining current processes. It specifies the direction an organization will take to create new competitive advantages with technology, as well as the tactics it will use to achieve these changes. This usually includes changes to business models, as new technology makes it possible for innovative companies to provide services that weren’t previously possible.
Today, technology has integrated with business to become something more than hardware or software. As digital technology becomes more pervasive and companies move further in the journey of digital transformation, digital strategy and business strategy will be the same thing. For now, it is still useful to use the term “digital strategy” to focus the effort behind digital initiatives.
It’s important to remember that digital strategy is both a concept and a thing — that is, a digital strategy should eventually lead to the creation of a concrete plan or roadmap. While you can keep changing the specific tactics you’ve decided to pursue, there should also be a clear commitment to your understanding of what digital means for your company.
As an example, say your digital strategy (ultimate goal) is to monetize basic productivity software that your business has already developed and uses internally. At first, you lay out a strategy (plan) to package it as a mobile app and sell it to individual users. Later, you realize that it has more value if you sell it to businesses to incorporate into their own mobile apps. Your strategy (ultimate goal) didn’t change, but your strategy (plan) did. Changing the guiding idea of your digital strategy should amount to a big shift or reorientation for your company, but ideally, the concrete steps will be flexible enough to allow you to pivot as needed.Digital strategy needs to become the essence of business strategy.REQUEST A DEMOSee how Liferay can help solve your unique challenges
Digital Strategy in the Context of Digital Transformation
There is a tendency to talk about digital transformation interchangeably with digital strategy. The two terms are closely related, but differ in scope. Digital transformation drives change in three areas: customer experience, operational processes and business models. The process of digital transformation requires coordination across the entire organization, and involves business culture changes.
Digital strategy, on the other hand, focuses on technology, not culture. Digital strategy is most relevant to changes in business models, and uses technology to create the capabilities a company needs to become a digital business. Setting down a strategy is a key component of the transformation process, and ensures that technology is being implemented in a way that supports the business objectives.
Digital Strategy vs. IT Strategy
According to Accenture, digital strategy looks for ways to use technology to transform activity, and therefore business, whereas IT strategy aims to transform technology in isolation from the rest of the business. Traditionally, the process of IT strategy has been to determine which technologies to invest in, based on the current direction of the business. Digital strategy instead looks at the activities and processes that need to be transformed to provide better services for customers. Then, it looks for the right combination of technologies and strategies that can be combined to create these experiences. Digital leaders have found new competitive advantages and opportunities for growth by making this shift in strategy.Digital strategy instead looks at the activities and processes that need to be transformed to provide better services for customers.
Where to Start
How do you build a digital strategy? Rather than asking, “What’s our digital strategy?”, an article from Harvard Business Review suggests using the five following questions to ground your understanding of digital technology:
Does digital technology change the businesses you should be in?
How could digital technology improve the way you add value to the businesses you are in?
Could digital technology change your target customer?
Does digital technology affect the value proposition to your target customer?
How can digital technology enhance the enterprise capabilities that differentiate you from your competition?
To some companies, these questions will have obvious answers, especially those that have already experienced disruption or competition from new digital players. The intention is to identify how digital changes what you do, and then refine your understanding from broad industry trends to specific values that will form the foundation of your strategy. By beginning with a clear understanding of your company’s purpose, you can avoid wasting time and resources implementing technology that doesn’t enable new competitive advantages.REQUEST A DEMOSee how Liferay can help solve your unique challenges
Common Elements of Digital Strategy
Choose a Leader — This is arguably the most important part of creating a digital strategy, but choosing the right person will depend on company culture, structure and priorities. Whether companies place leadership with the CEO or an appointed Chief Digital Officer, the leader’s influence will need to match the scope of digital strategy; otherwise, it will be difficult to create the full buy-in from each department necessary to make effective changes.
Attack vs. Defend — McKinsey & Company emphasizes that companies would do well to categorize their potential threats and opportunities in digital business, then compare these against their own purpose. This clarifies whether a proactive or defensive stance needs to guide new initiatives.
Take a Measured Approach — Digital strategy often incorporates a process for assessing whether new technology will really complement or grow the current business. If you fear that your company is already behind on digital, it can be tempting to rush into a project without looking at how it fits your current strategy. By taking a measured approach, you can avoid wasting resources on initiatives that don’t align with your business’s needs and priorities.
Future Proof — The goal of digital transformation is to create an appropriate foundation for digital business. This means creating an organization that can continue to reinvent itself as necessary to keep up with changes in technology and customer expectations. Digital strategy should be visionary enough to carry companies through changes in the digital economy, in a way that continues to bring a digital edge to the business.
Without a solid base of links, your site won’t be competitive in the SERPs — even if you do everything else right. But building your first few links can be difficult and discouraging, especially for new websites.
You decide to invest in making SEO and online marketing more of a priority. After doing the initial improvements yourself, you realize you have the budget, but not the time to devote to internet marketing.
All of us consume thousands of images every day. They are on our TV’s, they cover our social media profiles, and they are in every single magazine article. An awful lot of SMB’s aren’t taking advantage of this medium.
You’re excited about how your business is growing. More and more people are becoming aware of your company and brand. You want to continue to advertise your business and its products. You’ve heard great things about Google Adwords and think it’s a good next step to grow your business.
