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How to Drive Value with Digital Product Creation
Now more than ever companies across every vertical are scrambling to adapt to a world dominated by the digital. For many that means updating their current digital product or creating one from scratch. These are processes that require planning and careful intention with the end goal of creating as much value as possible.
But how exactly do you measure the return on investment of your digital product? In the digital age, it’s rarely just one measurement and it varies for each product. That being said, most products drive value in one of a few ways:
- Direct product sales
- Customer satisfaction/retention
- Employee productivity
- Equipment utilization
- Process optimization
Let’s take a closer look.
Value Driver #1 – Product and Service Sales
When most people think of digital product development, improved sales tend to be the first benefit that comes to mind.
The most apparent value driver of an externally facing digital product is to help increase your sales, which are tied to your core competencies and represent your primary source of revenue. They are the backbone of the business and allow you to finance other products, functions, or activities along the way.
A digital product can drive product sales in one of two ways:
- Directly – The digital product creates new value for both the business and its potential customers. For instance, the Starbucks mobile app added the “Order+Pay” feature, which provides users with an easy way to order and pay directly from their phone on-the-go. Naturally, this helps increase drink purchasing since shoppers who would otherwise turn away from a long line no longer have to wait.
- Indirectly – Often, a digital product can enhance or augment the core product without generating direct revenue. For example, adding digital products such as AI to a manufacturing process can create new efficiencies that improve a product’s quality and reduce production errors. When that occurs, the price point of the product goes up and the cost of waste goes down.
Regardless of how your product impacts your sales, it’s vital that you take the time to chart a customer’s purchasing journey. This will help you gain a deeper understanding of what the customer wants, their specific pain points, and the ways that a digital product could address those issues.
Value Driver #2 – Customer Satisfaction/Retention
In a day and age when the customer has easier access to reviews, more ways to shop, and various alternatives to choose from, customer loyalty is more fickle than ever. Simply put, it’s harder to get new customers and more difficult to keep them.
Customer satisfaction and retention are amongst the most important elements for any business to consider. Happier customers, especially those that feel valued and heard, are loyal customers. If you work to win them over, they’ll stick with you, whether that entails repurchasing products or renewing contracts.
Much of customer retention is directly related to customer satisfaction. The question at the heart of this is—did the good or service meet their expectations about:
- Customer service
Digital products can help improve customer satisfaction and retention in one of several ways, such as creating conveniences or improving communication.
This could be anything from developing chatbots that answer quick questions, to streamlining customer service operations digitally, to mobile app development to make it easier to order your product or access your service straight from their mobile device. A lot of what makes an application or digital product easier to use comes down to the customer experience. Does the product have an intuitive UI and UX? Can the customer find what they are looking for easily and without unneeded steps? Being able to answer the questions is the bedrock of a solid customer experience.
When going through the design process, understanding your target audience is key to creating your first digital product. If your business model works, be sure your new product is user friendly and benefits the customer.
By understanding the customer and then creating your own digital product that meets their needs, you can improve the customer satisfaction metrics critical to customer loyalty and retention.
Value Driver #3 – Employee Satisfaction = Employee Productivity
For a business to thrive, your employees should ideally believe in what they do and enjoy it to boot. By better providing ways of working that are less time consuming, you’ll see not only an uptick in employee satisfaction but in productivity as well.
Digital product creation can optimize employee workflows and help them excel in their roles. It can also streamline processes, or help them overcome obstacles that might negatively impact employee satisfaction and retention.
For example, let’s think about an application that increases the ease and speed of executing complex tasks, whether in the office or on the go. This makes it simpler to get tasks done and reduces employee frustration.
Or there could be software that filters data to help predict which customers are more likely to be repeat customers. This information would augment sales reps’ ability to use their time efficiently by targeting the most profitable customers.
When employee productivity increases, that positively impacts your bottom line. Although it may take a while for those benefits to manifest, they can be significant over the long haul.
Value Driver #4 – Equipment Utilization
Similar to your employees, it’s mission-critical that your physical capital—tools, machinery, property, and buildings—is being utilized efficiently.
At its core, utilization is all about ensuring that every piece of equipment is not only working but creating value. This could be anything from maximizing physical manufacturing output to improving table and bar seating at a restaurant.
Digital products can utilize machine learning and AI to gauge capacity and availability and then optimize them in order to rescue capital expenditures. For example, McKinsey writes about the impact of digital product creation in the world of manufacturing:
Many large manufacturers are starting to use data analytics to optimize factory operations, boosting equipment utilization and product quality while reducing energy consumption. With new supply-network management tools, factory managers have a clearer view of raw materials and manufactured parts flowing through a manufacturing network, which can help them schedule factory operations and product deliveries to cut costs and improve efficiency.
By analyzing your equipment utilization, you can strategize more ways for digital products to drive value or create new solutions to old capital investment problems.
Value Driver #5 – Process optimization
No matter the industry, every business relies on a series of processes that are tied to resources, decisions, and output. The speed and efficacy of these processes is a critical component of success.
Today, digital product design and creation can improve efficiency and increase the quality of output. This optimization is largely accomplished via automation, which digitizes manual processes, allowing you to operate more efficiently. Additionally, there’s no need to waste resources on manpower that could be better utilized elsewhere.
In a similar way, digital products can create new competencies within processes that make a business more:
- Responsive to opportunities
Business process optimization typically involves addressing a mixture of both internal and customer-facing goals.
How Digital Product Development Partners Can Help You Drive Value
Do you have an idea for an application or digital product that could drive value and change the way you do business? Whether it’s a bold new idea or an update to an internal application, actually creating the digital product is easier said than done.
Building out a digital product that delivers the desired value and provides a positive end-user experience requires the proper infrastructure and resources. Many digital products inevitably fall short because a business is unable to execute its vision internally. This is why a growing number of companies are turning to digital product development partners to help them turn their dream to reality.
But what is the value created by partnering with digital product development firms?
- Provide a full-service team – Maybe you have a great digital product idea but lack the team to build it out. A digital product development firm can step into the role as a full-service product partner that works to:
- Help you further define your idea and validate market demand for the product
- Design and develop your product
- Launch the new product to market
- Uncover business problems and solutions – What if you know that you need to make some changes, but don’t know what that would look like or require? Digital product development firms can help identify your business’ core problems and then come up with new solutions. Together, you can take a concept from the drawing board to launch.
- Train your team – Do you have the internal resources but think they need to brush up on their skills or new technologies? Corporate training arms your engineering and design teams with the skill they need to code more efficiently and create digital products internally.
- Increase your team’s output – Perhaps you have an existing engineer and design team but need some gaps filled or you can’t devote all of your staff to a given project. Senior engineers and designers can be enlisted to come on board as a part of or as leaders to your internal resources. This ensures that you have guidance, mentorship, and a final product that delivers on both design and code quality.
Big Nerd Ranch – Driving Value with Product Creation
You can have a brilliant digital product idea, but you need to know how to develop it. When they’re created the right way, digital products can drive direct and indirect value in a number of ways. But you have to make sure that they are, in fact, made the right way.
Enter Big Nerd Ranch.
We’re digital product creative experts that can help you unleash your potential, whether that’s filling in the gaps, providing a full-service product team, or training your existing employees to broaden their skill set.
Our mission is to create an environment for continuous improvement and growth, both within our organization and yours.
Want to drive value with digital product creation? The Nerds are here to assist.