Strategy & Organisation
Why experimentation is the secret sauce of optimal experiences
According to McKinsey, companies that base decisions on data, rather than instinct, are 19 times more profitable and 23 times more likely to acquire new customers. Yet 62% of businesses are still making decisions based on gut instinct alone. This approach is neither sensible nor sustainable in the digital realm, where the savviest brands are experimenting with strategies and technologies to connect with customers on a more relevant and meaningful level.
Experimentation is the process of running tests on your site with actual visitors in order to learn from them and take action based on the results. A/B (or split), multivariate and multi-page testing are all examples of experimentation, each of which enables companies to gather feedback, discard what doesn’t work, and build on what does.
This theme was put under the microscope at ‘Optimising the Future’, Dept and Optimizely’s joint virtual event designed to inspire and accelerate digital strategies through 2022 and beyond. Dept’s Head of Data, Cristian van Nispen, and Optimizely’s Director of Strategy and Value Consulting, Elizabeth Gabster, explored why ever-changing customer journeys demand a robust, future-ready experimentation and optimisation solution. Here are the top three insights on why and how experimentation can help to take your business to the next level and deliver the experiences that customers want.
#1 Elevate strategy with sophisticated testing
Embedding digital within your business strategy is essential to long term success, evidenced by the fact that revenue growth now directly correlates with digital transformation. Businesses can no longer operate with siloed business and digital strategies; you need a holistic approach that gives a complete picture of how to best serve customers.
Experimentation solutions can be implemented to bridge the gap between business and digital strategies to elevate both. Something as simple as pasting a snippet of code on a page that you want to test can remove any guess work and empower companies to make optimisation decisions based on customer sentiment, helping to decrease customer acquisition costs without increasing ad spend or developer workload.
#2 Exceed KPIs through objective assessment
Unfortunately, the majority of people working in digital have at least one story about a failed update that was implemented on instinct. For example, a senior team member suggests changing the ‘add to basket’ button colour from blue to grey as they heard it worked for a competitor. The team obliges but the colour change has a negative impact, with customers overlooking the button, resulting in an immediate financial loss for the company.
This is the digital equivalent of throwing spaghetti at the wall to see if it sticks. And it’s not a robust enough strategy in 2022. Alternatively, an experimentation mindset encourages businesses to take a more holistic approach, fully considering what they want to learn or achieve and defining KPIs before running tests in a controlled environment. Using a framework to consistently and objectively test ideas enables businesses to optimise their digital experiences. For example, Optimizely’s web experimentation platform allows teams to run multiple tests in tandem, access statistically valid results and use them to implement a best experience for customers.
#3 Identify project ROI in advance
From building new products to fixing existing features, development requires resources and can be uneconomical if the outcome is not positive. At the end of the day, businesses want to know if they’re offering a product or service that creates value for customers, or not. And holding on to products that nobody wants and features that don’t work are a waste of resources.
By putting testing at the forefront of development cycles, businesses can better identify ROI and make quicker, more informed decisions about whether to pursue a project or not. Testing and experimentation empowers teams to question whether a product is worth launching, or if an old feature should be improved or removed completely. These are some of the difficult questions that are best answered upfront, before spending time, money and manpower on projects that are likely to fail.
An experimentation mindset and the right tooling has huge potential to take your business to the next level, providing unique data that you can trust. Decisions driven by gut feeling will not cut it in the new digital reality, but by pooling resources to develop projects based on hard evidence, businesses can operate efficiently and effectively, while delivering optimum value to customers.
To find out more about how experimentation can drive growth within your business, click below to watch the session in full, or get in touch with a member of our team.