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Digital products are the best way to be more “sticky” with customers and stand out in this already crowded market. When businesses build an experience, engagement comes and goes as customers rotate free trials. But, with the enticement of a digital product, you can keep them around longer. Subscription-based fitness apps such as Peloton and Fitbit have created a whole new stream of revenue that goes beyond their apps with their digital products like the spin bike and wristband tracker that allow members to feel a part of a greater community.
To gain an insight, Digital Journal spoke with Andy Norman, Co-CEO and President (North America) of Mobiquity (a digital consultancy) on this topic of digital products.
Andy Norman, Co-CEO and President (North America) of Mobiquity
Digital Journal: Why are all products seemingly going digital?
Andy Norman: The coronavirus pandemic has changed the way that consumers interact with businesses, causing a massive shift toward digital products. Customer desires for convenience and safety are at an all time high and digital products offer consumers both. In fact, our research has shown that digital products drive more customer loyalty than many other factors and adoption is at an all-time high:
- 40% of customers say they are likely to switch banks to get better digital tools.
- 56% agree that they are more likely to place a larger order at a convenience store or restaurant with an easy-to-use mobile app.
- 30% would switch insurers for better digital features.
- And even among the baby boomer population, digital use has increased. Before COVID-19, only 10% of baby boomers had used telemedicine, and this has since increased to 48% after the pandemic began – a 469% increase in telemedicine utilization.
All of this just proves that products are going digital because they offer consumers what they want and need to live easier lives.
DJ: How do you define a “digital product?”
Norman: Digital products can be digital applications, platforms, or a combination of hardware and software that drive new revenue streams for an organization. The immersive experiences that digital products provide connect the dots between multiple touch points using a data-driven approach, enhancing the overall brand experience that it delivers to customers.
DJ: What are some of the products that do it very successfully?
Norman: WHOOP provides one of the best examples of a successful digital product strategy. Leveraging heart rate data, WHOOP is a coaching tool that enables consumers to have a balanced sleep, exercise, and recovery routine that promotes overall wellness. They do this by combining hardware (the WHOOP Strap), a digital application (a mobile app membership), and software (a digital journal and access to online teams for accountability and motivation). This combination of hardware, software, and a digital application is a uniquely immersive digital product for the health-conscious consumer and that’s exactly what makes WHOOP so successful.
DJ: There are times when consumers are forced to download the app before they can use the product they have bought. Do you have any examples of products where the digital side actually makes it worse?
Norman: While I don’t want to call out any companies by name, I’ve certainly experienced this myself. I’d say that the experience tends to go sideways fast when companies fail to obsess over ensuring the customer experience is frictionless and true to the brand promise. More and more we have worked with companies that are adding digital products as complements to their existing services or offerings.
The biggest mistake we’ve seen is companies failing to treat these products as connected parts of their ecosystems. For example, if a store is rolling out a mobile app to enable a new channel for food distribution, they need to be certain their in-store associates are fully trained on this new channel as well, otherwise the experience will be disjointed from one channel to the next. Likewise, companies need to use the data that they are collecting to personalize the experiences for their customers. Chances are if I’m working out daily, I would be interested in purchasing fitness apparel or subscribing to a healthy meal service but I would not be interested in a donut of the month subscription! If the experience that a customer has with a product doesn’t match the experience that they expect with the brand, you risk loyalty and customer retention.
Ultimately, companies need to think about the product from all angles, from how customers and employees will use it to scaling it over time and constantly measuring its success with the goal to continuously impress customers. Otherwise they won’t get the results they want.
DJ: Subscription revenue is great from a brand/company side. Is it always great for the consumer?
Norman: Consumers are savvy and will only stick to paying a subscription as long as there’s a fair value exchange for the money. The most successful subscription models keep their clients coming back month after month because they check the right boxes for the consumer, from compelling original content to providing a sense of community, access to exclusive features or offers, and/or a discount or added perk pricewise.
Let’s look at WHOOP again. The key to sustaining success for WHOOP will be to continue ensuring their subscription service adapts to their customers’ rapidly changing needs, all while providing a frictionless fitness experience, each of which are key factors in building brand loyalty.
DJ: How do you build a compelling, useful, and genuinely compelling digital portion of your product?
Norman: Launching a new digital product into the market takes a lot of work and patience. It all starts with examining your digital strategy and defining a North Star that you can align every part of your product to in order to measure success over time. Having your strategy and goals documented enables your teams, processes, and technologies to continuously improve for a digital product that delights the customer.
Do you have any other thoughts on digital product development?
Norman: Bringing a digital product to market takes work. There should be a thorough, strategic approach to product engineering, design, and delivery for a strong solution fit, market fit, and human-centric innovation that meets customers’ needs. And the work does not end once your digital product is in the marketplace. Marketing, user experience, and data analysis should be part of your post-launch plan to scale and build a following and affinity for your product, unlocking true traction and ultimately success for your business.