December 6, 2019

We know digital experimentation drives growth. But why?


Vantages

Customer-centric, evolutionary steps create innovation and drive business growth, not “transformative projects”

They come in many forms. Conjured up in meeting rooms and over email, their names sound harmless and helpful e.g. “retool,” “redesign,” “repackage,” “restructure”, “revamp” “reorg”…  The prefix “re” a telltale sign of impending frustration, if not destruction.

All businesses seek growth and innovation. But despite an abundance of evidence that warns against relying on transformative projects to achieve growth, too many companies rely on them for revitalization and transformation. 

The most recent high-profile, project-failure came courtesy of Accenture Interactive and Hertz, whose partnership to “redesign” or “retool” Hertz’s e-commerce platform ended in an ugly lawsuit.

…Smart companies realize that transformation is ultimately about better serving customer needs…

Digital experimentation enables companies to avoid the trap of project-suck. While projects are notorious for crippling businesses, the real pain and danger of relying on projects to power growth and innovation are that they lock up a business’s best talent and capital while their competition and industry continue to advance and evolve.

“You hope by the end of the project, you’ll be better, but at the end of the project, you changed so many things you don’t know what works and what doesn’t,” says André Morys, co-founder of konversionsKRAFT and managing director of GO Group Digital. “Companies die because they do ‘projects.’”

Smart companies know that digital experimentation drives growth and innovation by leveraging customer data to create a more rewarding customer experience. The practice is so successful that organizations that practice digital experimentation grow at least eight times faster than global GDP.

Companies die because they do ‘projects.’

“How many times have you seen a company paralyzed by a web redesign while its competitor is racing ahead gobbling market share?” says Chris Goward, CEO and founder of Widerfunnel. “Great digital experimentation programs enable businesses to quickly meet the customer’s needs.

Chart showing experimentation steps and how it promotes agility and growth

Digital experimentation accomplishes big goals by breaking them down into short sprints

Instead of one transformative project, which ties up resources with no guarantee of success, digital experimentation goes after quick wins using agile methodology, or sprints.

Characterized by time boxing, or sprints, agile methodology reverses the way executives traditionally think about achieving growth, transformation, and innovation. Instead of heavy upfront planning, documenting, and design to achieve a large goal, agile methodology breaks down a large goal by forcing advancements to occur within small increments of time. The methodology is so successful that agile projects are 28% more successful than traditional.

“It’s especially important that the timeboxing slots get shorter and shorter, as the faster you can execute a business change, the faster a company can validate its impact on business growth,” says Morys.

Digital experimentation leverages data-driven decision making to maximize customer impact

To raise the chance that a sprint positively impacts the customer, experimentation programs use customer data to propose and develop product and business changes. Any change is compared to a control version. Customer behavior is measured before, during and after a change is implemented. Changes that accomplish a business goal i.e. “winners” or, “evolutions” in GO parlance, compared to the control, are implemented and the business evolves to better meet its customers’ needs.

Digital experimentation is customer-centric

While agile software developers also work via sprints, they aren’t able to see and appreciate how their changes affect customer behavior. Siloed and bereft of customer data, agile software developers face the same challenge a traditional project team confronts after implementing a business change. Both cannot answer simple business questions such as, “Did transactions surge because we changed product categorization? Or because we changed search functionality?” Experimentation programs can point to precise customer data to prove causation by comparing any business change to the control version.

Whether a winner or a loser, the data extracted from every change reveals an insight into the customer’s needs. Consider: Without a control to compare against, no executive could confidently verify where social proof would be most effective in the sales funnel. Nor could a chief product manager prove that curated options outperform customization when pitching a new business direction. The validated learnings earned by digital experimentation give executives a nuanced portrait of what affects their customers, enabling them to craft even more effective customer-centric solutions to power business growth. 

Digital experimentation creates a culture of innovation by proving thoughtful changes can have a real business impact

Human behavior is economical. If we don’t feel our efforts will have an impact, then we won’t make the effort. The feedback loop of seeing a business change affect customer behavior accelerates the digital transformation of the organization. Ideas aren’t trapped behind HIPPOS or in committee. Instead, any data-backed hypothesis merits sincere consideration. Those most promising can be quickly tested without destabilizing the existing operation. Empowered and inspired, employees can propose and trial increasingly smarter changes at a faster velocity. They can see and understand the direct correlation between their proposal and the value created. Growth and insights begin to scale and a healthy culture of experimentation, proven to accelerate growth, takes root.  

By rapidly delivery incremental change, digital experimentation delivers reliable and transformative growth compared to “transformative” projects.

While it is tempting to believe an organization can leapfrog their way via a blockbuster project to business growth and innovation, in fact, incremental changes, accelerated through a powerful digital experimentation program are more reliable. 

Stuck with projects as solutions? Reach out to GO for a conversation about how to affordably start-up or scale an experimentation program.

Got Questions?

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About the GO Group

The world’s leading experimentation experts build global experimentation programs and solutions for the GO Group. Contact the Group to learn how its experience and international setup can build or revitalize your experimentation program. The GO Group operates at the intersection of consultancy and conversion, enabling its enterprise clients to unlock business growth and value through the power of experimentation.

Learn more about the GO Group at www.gogroupdigital.com

Copyright © 2019 GO Group Digital. All rights reserved.

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