By Steve Tan, VP & General Manager, EMEA/APAC for Airship
Brands that embrace a product-led growth strategy can outpace their competitors by up to tenfold, based on industry estimates. But how can product managers unlock this potential? Rapid experimentation is the key. By constantly experimenting and testing new ideas, companies can challenge assumptions, constantly improve products and boost the customer experience – especially within mobile apps.
However, a Gartner study found that just four out of 10 marketers said testing and experimentation was critical to their success. Similarly, Harvard Business Review found that a lack of shared behaviours, beliefs, and values often proves to be the biggest hurdle facing organisations when attempting to increase their online experimentation capacity, not a lack of technology. Writing for HBR, Stefan Thomke said, “For every experiment that succeeds, nearly 10 don’t — and in the eyes of many organisations that emphasise efficiency, predictability, and ‘winning,’ those failures are wasteful.”
Companies need to move past this focus on efficiency and predictability, and instead foster a culture of experimentation where ideas are allowed to fail. Those who achieve this are more likely to succeed in the long run.
Defining a Culture of Experimentation
Companies with a culture of experimentation possess a mindset that prioritises data-driven decision-making and recognises the indispensable value of continuous experimentation in achieving enhanced outcomes. Central to this culture are core values such as a dedication to “continuous incremental improvements” and empowering individuals throughout the organisation to test their own hypotheses.
For brands with mobile apps, experimentation is essential to boosting engagement and growing customer lifetime value. In the retail landscape, mobile apps have become a pivotal channel for consumer interaction and revenue generation: according to Ipsos, 74% of retailers acknowledge the importance of investing in mobile apps to drive profitability. However, most consumers choose to uninstall apps after just a handful of uses.
Experimentation can help brands counteract this trend and reduce app deletion rates. For example, techniques such as gamification have gained traction among marketers to grow app engagement and incentivise user actions. The willingness to experiment and adapt strategies that complement specific products or audiences is key to success.
Leading global brands, including Amazon, Google, Facebook, Netflix, have enthusiastically embraced a culture of experimentation. At Netflix, for instance, culture is applauded as “the secret sauce that turns the raw ingredients of experimentation into supercharged product innovation.”
There are multiple benefits to fostering a culture of experimentation, including powering smarter decision making, faster innovation cycles, optimised resource allocation and enhanced revenue generation. Collectively, these advantages offer businesses an edge in today’s competitive market.
Looking back to the past reveals how some of the most significant market breakthroughs were driven by experimentation, from the creation of the McDonald’s all-day breakfast to the $80 billion revenue generator Amazon Web Services.
Foster a culture of experimentation in five steps
So, how can organisations weave a culture of experimentation into their fabric? The solution lies in a strategic blueprint consisting of five key principles.
1. Get executive buy-in: Leaders must become champions for this new approach by exhibiting a willingness to embrace failure and extolling the virtues of how experimentation will lead to stronger outcomes. Executive support will set the tone for future experiments and facilitate the alignment of business goals, as well as the allocation of funding and resources.
2. Tear down barriers to testing: Empower all staff to initiate and refine tests by providing accessible tools and platforms. Collaborate with technology partners offering A/B testing capabilities and user-friendly interfaces to democratise the experimentation process.
3. Motivate and encourage: Foster a culture where experimentation becomes a daily routine. Employees should be encouraged to adopt experimentation tools, be creative and take risks. Create an environment where risk-taking is safe and discoveries are celebrated.
Staff should be authorised to implement and quickly test ideas. However, do consider adding controls for alignment, so that experiments do not interfere with one another.
4. Embrace failure: Failure is an invaluable learning opportunity. Most tests will fail, but each test will contribute to refining strategies and focusing resources on optimal solutions. Amazon founder Jeff Bezos said it best in 2014: “Experiments are by their very nature prone to failure. But a few big successes compensate for dozens and dozens of things that didn’t work.”
5. Implement reporting
Establish a centralised reporting framework providing real-time insights from active experiments, including customer feedback and campaign data. Develop a dashboard to monitor mobile app key performance indicators throughout the app lifecycle to enable rapid performance assessments.
Successfully building a culture of experimentation needs executive-level support and for all teams to commit to experimenting regularly and instinctively. All parties must be behind this initiative and agree that experimentation will lead to better results. A concerted effort will lead to enhanced innovation and a sustained competitive advantage.
