2023 Will Be a Huge Year For Digital Revenue Growth Despite Economic Headwinds

According to a new survey of over 1,300 global director-level digital experience professionals responsible for their company’s digital experience strategy (maximizing revenue from digital channels and transforming the digital experience), more than 70% of companies generate greater than 40% of their revenue from digital channels today.

Those numbers aren’t necessarily shocking –organizations in every industry were forced to accelerate their digital investments and programs throughout the pandemic to stay afloat. What may come as a surprise is that 85% of those same leaders predict that their digital channel contribution to revenue will continue to grow over the next 12 months, despite fears of a recession in 2023.

These professionals understand that digital channels are an important way for companies to grow revenue and improve margins, especially in uncertain economic times. Many individuals have become accustomed to using digital platforms for communication and engagement. Digital channels also offer a low cost of service for organizations, which can lead to higher margins on sales. An effective digital program can enable personalized content and offers for each customer, resulting in increased customer satisfaction, retention, and repeat purchases. Additionally, digital channels provide a broad reach that can help regional brands expand their customer base and become global brands.

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Building connected digital experiences isn’t easy

The advantages of offering a comprehensive and personalized digital experience are evident, but many companies continue to face significant challenges in this area. These challenges include providing a high-quality user experience on websites and mobile apps, safeguarding customer privacy, creating a seamless experience across physical and digital channels, and effectively managing the large amount of data generated by their business. Despite these challenges, companies that successfully address these issues can gain a competitive advantage in the marketplace.

On average, companies have access to at least five different sources of customer data, such as purchase and transactional history, social media, website analytics, digital content effectiveness, and mobile analytics. While this wealth of data can provide opportunities for personalization and a deeper understanding of each customer, it also poses challenges for data teams trying to track customer engagement and accurately segment their customer base. According to the survey, 41% reported that balancing personalization with customer comfort is difficult, and only 40% felt that their companies go above and beyond to protect and respect customer privacy. While data is readily available, the real challenge is in developing a data strategy that is compliant and actionable in real time.

This leads to the frequently disjointed and frustrating digital experiences that nearly everyone has experienced in the past year, whether booking travel, returning ill-fitting clothes, dealing with the fallout of a customer data security breach, or describing a service issue to a digital customer support agent.

In fact, according to the research, digital leaders’ top three goals for the next year are to create cohesive customer journeys across all their channels, innovate and enhance their internal structures and processes.

What success looks like for digital programs in 2023

Many companies are still in the early stages of their digital evolution. Organizations should start with the customer profile as the foundation for building a great experience. While this sounds obvious, 39% of digital leaders said creating and updating customer profiles in real time is a top pain point for their business. It is imperative to capture the right types of data to capture and populate in the customer profile.

Savvy organizations capture customers’ preferences and intent at the beginning of the journey, usually by simply asking the customer what they are looking for when they activate their account. Customers are typically more than willing to provide this context in return for a tailored experience on subsequent visits. When combined with digital activity data, organizations can easily determine if they delivered an experience that matched the customer’s intent and preference.

As companies refine their personalization approach, another way to ensure superior customer experience is to set up mechanisms to quickly close the loop with the customer when their expectations are not met. Organizations must find ways to access meaningful data through tailored listening throughout the customer’s digital journey and ensure they have the right technology, process, and people in place to take in-the-moment actions. Brands will need to balance communicating with customers in the ways they prefer while building an emotional connection that resonates –a difficult balance to strike over digital channels.

As companies collect and store more customer data, compliance, security and privacy should be placed at the forefront of their digital programs. Legislatures throughout the U.S. are introducing comprehensive data privacy bills in 2022 that will go into effect in 2023, so it comes as no surprise that data privacy is ranked as the most important data initiative to an organization among digital leaders. There is no quicker way to lose a customer than to lose their trust.

Ultimately, digital teams will be relied upon to generate even more revenue in 2023. Will they be prepared for the challenge?

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Bio:

Abishek Viswanathan is Head of Product for Qualtrics Digital CX portfolio, responsible for the Qualtrics vision, roadmap and go-to-market strategy for serving digital experience leaders around the globe. He has over 15 years of experience in product management, strategy and engineering roles with companies like Qualtrics, Zynga, Amazon, and Microsoft.