Digital Growth Strategies That Work

Companies have been executing various digital transformation strategies for several years. During that time, they’ve learned the difference between digitalizing the business for competitive advantage and staying afloat during the pandemic. Now, change is occurring once again, and in interesting ways. 

Customer-centricity is driving a lot of innovation, driven by shifting customer expectations and an ever more competitive landscape. 

“[C]ustomer expectations are very different than they were 10, 15, 20 years ago, so the expectations around technology and digital business today is a requirement. There are very few businesses that can engage with customers effectively without having that digital strategy,” says Krishna Prasad, CIO at digital transformation services company UST. “In many cases, as long as you start with the end in mind, and you have a way to constantly get that feedback throughout the design of the processes as well as [after] it’s implemented, I think that piece is very critical.” 

For example, during the pandemic, restaurants replaced physical menus with QR codes to curb the spread of the virus. However, post-pandemic, some restaurants have continued the practice even though some customers don’t prefer it. 

“If you can find a way to drive more productivity and automation for whatever somebody is doing, that always yields benefits, both to the customer in terms of responsiveness and to the organization in terms of cost,” says Prasad. “A second theme I find is companies that focus on spending the time to understand experience, as felt by the customer, or the employee, whatever it is that they're trying to change. The third element is the partnership between the business and the technology organization in terms of execution tends to be another critical factor for success.” 

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Personalization Is Important 

With major changes in digital advertising, like the deprecating of third-party cookies in 2024, grabbing and retaining customer attention is more complicated than ever. To win customer loyalty and attract new customers, brands must show customers they truly understand them, which means delivering valuable and compelling information and meeting customers where they already are, according to Scott Bergquist, senior director of emerging solutions GTM at insight company SADA. 

“AI-powered insights combined with personalized recommendations, which you can quickly implement using a solution like Google Vertex AI, can give organizations a deeper understanding of whatever audience they’re targeting and create experiences that are more likely to lead to conversions,” says Bergquist. “For example, retailers can create tailored shopping experiences for individual shoppers.” 

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It's also important to deliver a consistent, omnichannel experience. 

“[C]ompanies that offer a strong omnichannel customer engagement strategy experience more growth with a higher close rate than those that offer a single threaded experience,” says Bob Lamendola, chief digital services officer at workplace solutions and digital transformation services provider Ricoh USA. “A key component of a successful growth strategy is to remain responsive to the changing expectations of customers, employees and partners. This requires a strategy that embraces change and is designed for agility to ensure a sustainable future.” 

He also says while B2B consumers are more likely to do business with organizations that offer self-service capabilities, there is still significant room for transformation to provide easy, convenient, and comprehensive self-service models. 

Digital Ecosystem Expansion Fuels Innovation 

Digital ecosystem expansion is a strategy that involves joining networks of interconnected businesses, devices, and consumers through many digital platforms. According to Deb Golden, US chief innovation officer at audit, consulting, tax, and advisory services provider Deloitte, the way it’s implemented is through strategic partnerships (APIs), fast integrations through platforms as a service, and community building. 

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“[I]t’s really about building access to new consumer bases and entering net-new markets and creating partnerships that you wouldn’t have otherwise thought of, if not for this ecosystem. That is going to create all kinds of new co-creation opportunities around innovative products and services,” says Golden. “The benefits could be innovations or collaboration that wouldn’t exist, if you were in your own silo, or your own organization by yourself. It extends your market region, penetrates new segments, and it allows us to not only create new revenue streams through cross selling, but this notion of bundled offerings is completely new.”  

Those new opportunities translate to new revenue.  

“It’s a built-in annuity, so I don’t have to think about revenue over and over again. I can sell one thing, yes, but I’m now bundling my offerings in a way that it’s not just the one thing I’m selling, I’m selling a continuation of revenue capacity within this offering and the expansion of capability,” Golden says. 

While app marketplaces are designed to drive higher value, the larger trend is a convergence of markets that requires organizational adaptation.  

“[T]he traditional silos fundamentally cannot exist: the types of ways that we’ve looked at problems, resourcing [and] the types of ways that we’ve looked at evolving our thinking,” says Golden. “Innovation, creativity, and imagination -- we need all those things, but we also need to understand open innovation and open ecosystems to solve problems. How do we exist in that world to solve for the things that we’re talking about? Corporate America hasn’t really thought through a lot of that challenge, neither have regulatory environments.” 

Ricoh USA’s Lamendola agrees. 

“Leveraging digital platform ecosystems can be an important and powerful competitive advantage,” he says. “Organizations should focus on creating a seamless digital experience for the adoption of new services and capabilities to enable growth and enhance engagement.” 

The Benefits of a Winning Strategy and the Challenges Preventing One 

Organizations reaping the benefits of their digital growth strategy are more likely to achieve enhanced customer loyalty, customer brand advocacy, higher efficiencies, lower costs, and competitive advantage, according to Lamendola -- and the challenges are many. They include cloud migration complexity, security and data privacy concerns, UX design consistency, vendor lock-in, change management, and organizational agility.  

In the next year or so, he expects organizations will either embrace generative AI or suffer the consequences. 

“All growth strategies must incorporate GenAI as a core component, from the front-end user experience to the incorporation of data privacy standards to the backend data aggregation methodologies,” Lamendola says. “GenAI possesses the potential to positively impact each layer of the architectural design.”  

Specifically, he means: 

Change management also must be prioritized because humans naturally resist change. Pay and incentives should be aligned with what the organization is trying to achieve. However, compensation strategies do not always keep pace with shifting business strategies. 

Bottom Line 

Digital growth strategies vary among companies, particularly in different industries. Yet, customers and employees expect to engage with companies on their own terms, which necessitates the use of proven and emerging technologies. 

More fundamentally, organizations need to build the type of culture and organizational agility that allows winning strategies to work. As part of that, they should constantly be assessing their competitive stance and be open to new and additional ways of going to market, including participation in digital ecosystems.