As your organization takes its place in the digital transformation that’s underway everywhere, you’ll inevitably need to create or update a large number of different products. But just because you think your shiny new app, website, service, or other digital offering is great doesn’t automatically mean the customer will.

According to Nielsen, 85 percent of new consumer products fail in the marketplace. Yours doesn’t have to be one of them. Just make sure your “solution” isn’t less desirable than the problem you’re trying to fix.

Sometimes what seems like a great idea doesn’t resonate with consumers. The problem is that you can spend a lot of money on an innovation that unintentionally detracts from the customer experience rather than improves it.

Back in the early 2000s, I moved my business into a shiny new skyscraper in Times Square. The building had a keypad-controlled elevator. Instead of “calling” your elevator and having to pick a floor once you got in, you used a numerical touchscreen that you had to touch only once.

To request an elevator, you typed the number of the floor you wanted and received a response from a screen with a letter of the alphabet that corresponded to an assigned elevator. You went to “your” elevator, and when it arrived, you got in, and it automatically took you to your floor. Presumably, this got you there faster. 

Maybe. But people found the new system extremely confusing and off-putting in other ways.

For instance:

• If you were already in the elevator, there was no way to change your mind without getting off at the wrong floor, and then repeating the process above.

• Even if you didn’t change your mind, you didn’t like the feeling that you couldn’t. You were locked in a metal box that was taking you to one place, and you felt powerless.

Frankly, you just didn’t want to relearn a skill you had already mastered — knowing how to work an elevator — (even though it took only 30 seconds).

It’s not that people are unwilling to learn new things. We’re happy to learn to use iPhones and Kindles. But these devices delivered enough value that it justified the investment to understand them. The keypad elevators didn’t provide enough value to overcome the pain of change — and this is why they haven’t caught on in a significant way (though they are still found in some very large buildings). One office building in Houston went so far as to remove these “smart” elevator controls and revert to the “old-school” form due to so many tenant and visitor complaints.

The good news is that there are specific methodologies to massively reduce the likelihood of this outcome (like Design Thinking). For now, though, let’s focus on a few of the big reasons new products fail.

Reason #1: The Wrong Value Proposition. For a product to be successful, it has to meet customers’ needs and do so in a way that is “worth” more than the cost the customer is asked to bear. Furthermore, it must offer a value that is superior to competitive options at that price point. This “value proposition” is the core of any product idea — a specific solution to a customer problem delivered at a defined price point and revenue model. 

The quality of a Skype call may not be the same as expensive teleconferencing equipment, but it’s free. So, for many customers, it’s a more compelling value proposition. Of course, other customers prefer to pay more and have more reliable connections. That’s fine as well; both are valid propositions and address different markets. 

The “right” idea for a successful product is one that will resonate with its intended customers, be worth the cost, and be either better than the competition or cheaper. Ideally, both. How do you find it? Understanding your customers’ unmet needs, pain, or problems is the starting point. But some solutions may work well for the customer, while others might just not be worth the trouble, like the numerical elevator keypad.

Reason #2: Failure to Execute. It’s not enough to have an idea with the right value proposition because ideas are not products. You still have to bring them to life. Many products born of grand ideas fail in their execution. Take the beloved 2017 Galaxy Note 7 smartphone. Even though it launched with rave reviews, Samsung’s valuation dropped by over $26 billion when the phones’ batteries started catching on fire. The point? Some products just don’t work quite the way they are supposed to. 

My team was brought in to help “save” a project management software tool that a client had launched. They built what they thought was a “killer” app, but the market was rejecting it. We conducted some market research and found that while the tool had excellent features aligned with what customers wanted, it had one problem: It was slow. It required so much computational power that each change to your project plan took 5-10 seconds to “recalculate.” That was all it took for users to reject it. This is a big challenge of product development: A lot can be right, but if one critical thing is off, it can tank the whole thing. 

We improved the project management software in part through performance optimization but mostly by removing features that weren’t “worth” their impact on speed. After that, the product was more successful.

Reason #3: Lack of Awareness. You know the adage (attributed, perhaps falsely, to Ralph Waldo Emerson) about building a better mousetrap and having people beat a path to your door? It’s not true. There have been 4,000 patents for new ideas for mousetraps, yet the world continues to use the classic (grisly and dangerous) “snapping” model. Even though this customer journey has many pain points — from the need for insect-attracting peanut butter to the disturbing front-row view of a dying mouse — none of those new designs have overshadowed the original model. Even if an idea is well-executed, it can still fail if nobody knows about it. 

Awareness does not just mean customers know your product exists. It consists of three critical components:

• The product’s existence and core value proposition. 
• The product’s claim of differentiation. Why choose this one over all the other options? 
• How to take action — where to order the product and how to access it. 

In “old-school” product development thinking, you’d consider these marketing issues. But if you embrace a Design Thinking approach, you realize you can’t split them out that way. Every stage of the customer experience must be considered together.

By no means are these three obstacles insurmountable. When you address them head-on, you’re all the more likely to launch a highly successful product.

Today’s customer is “digitally driven.” So, if your brand is going to thrive, digital must be at the core of what you do. Add-ons and tweaks aren’t good enough. To earn and keep customer love, you’re going to have to make sure they can access your products and services quickly and seamlessly.

For most legacy companies, this requires total transformation. In the new book, Winning Digital Customers, I lay out a five-step process to help you make the shift.

Step 1: Understand Your Customer

Customer centricity is essential. You must understand your customer on a deep level if you are to create the kinds of experiences that will move their behavior in the right direction. This requires several types of research, such as:

Indirect Customer Research. You probably already have a wealth of customer insight tucked away in various, disparate places within your enterprise, from databases to PDFs to the knowledge in the brains of your customer-facing teams. Start analyzing it to understand what it means and how it relates to the research questions you defined earlier.

Direct Customer Research. Reach out directly to your customers using best-practices techniques, such as customer interviews, observational research (observe them buying or using your product), standardized measures (like the Net Promoter Score), and surveys.

Synthesis of Research into Customer Personas. The final step of understanding your customer is synthesizing the research and creating generalized composites of specific types of customers.

Step 2: Map the Customer Journey

After you complete Step 1, you’ll have the insights needed to draft a vision of a future experience that will inspire customer love and trigger the desired thoughts, feelings, and behaviors. You can draft this vision in the form of a “customer journey map”—an infographic communicating the end-to-end customer experience you intend to create.

You’ll need to map your current state journey. This process visualizes the “real-world” experience customers and prospects encounter today as they try to purchase and utilize the products or services your company offers. This is important, because in most companies, nobody understands the whole customer experience. This helps you understand a) what’s good in your customer’s current journey (so you don’t “mess it up”) and b) those areas where customers are having to exert a lot of effort or are experiencing “pain” in their current journeys.

Then, you’ll need to compose your future state journey. Future state journey maps document the vision you want to move toward—a “North Star” ambition of the way the future customer should experience your brand through all the stages of your journey lifecycle. Customer journeys are tools for storytelling, and this is your chance to write the story the way it should be.

Step 3: Build the Future

Once you have the overall customer journey defined, it’s time to start driving the transformation necessary to build the future.

You’ll need to implement transformation of four supporting elements to achieve an excellent customer experience: technical architecture, robust and secure data, business operations, and the organization’s economic business model.

Use Design Thinking 2.0 to build the future. Next, it’s time to embark on a more detailed product development process so you can document their exact features and interfaces with enough detail to implement them. In this updated version of Design Thinking, you’ll build upon the existing framework of the process by incorporating new steps that will take your customer journey map and make it a reality.

Step 4: Optimize the Short Term

Building the future can take quite a while. But there are usually some areas where you are currently “letting the customer down” that you can fix quickly. By focusing on “low-hanging fruit,” you can get quick results within your current reality—no matter how far along you are within your overall transformation.

Doing this work gives you quick, measurable, sustainable financial benefits that can help fund larger transformation as well as demonstrate to key executives that they have a “reason to believe” that your overall transformation program is capable of driving tangible business impact. Second, you improve your customer’s experience, which improves brand perception and demonstrates progress.

Step 5: Lead the Change

Perhaps most importantly, digital transformation requires bold, courageous, and determined leadership. Here are the steps transformational leaders can do:

1. Overcome enterprise resistance to change. Most people actively resist change, often to their detriment. Leaders of transformation need to become experts at the various flavors of “resistance to change” and tactics to overcome them. To achieve this, you can create a burning platform for change, define clear goals and celebrate signs of success, sustain conviction even when things go wrong, and much more.
2. Assemble transformational leaders and teams. Begin by finding your “innovation hero,” someone who has the vision and tenacity to make it their personal 24/7 mission to drag their enterprise toward digital excellence no matter how challenging or how much resistance they face. (This will be the person with the “superpowers” of super vision, courage and strength, speed, time travel, and other qualities you’ll learn more about in Winning Digital Customers.) But no superhero does it alone. As a leader, a key part of your job is assembling a leadership team of superheroes, all of whom embody core characteristics, but each of whom brings a special area of strength to the team. Some of the types of specialization you’ll need include: the business leader, the product leader, the user experience leader, the technical leader, and more.
3. Look to the road ahead. Choosing where to start depends on your situation. The good news is that there are many “right” answers. You might start by assembling an informal digital transformation leadership team. Or start by commissioning research to map out the current customer journey and use that to start building your platform for change. Or start with a specific new product that needs innovation and apply the principles of Design Thinking 2.0 to prove that it can work. Starting any place is better than waiting.

“If you’re a legacy brand, you already have the talent, assets, and history you need to thrive, but lack the customer love. These steps will set you on the path to adapting to meet your customers’ modern needs and stay relevant in the Digital Age.

This isn’t your father’s customer base. It takes more than tweaks to meet their needs; it takes a complete overhaul. A new book Winning Digital Customers, lays out six big reasons why you need to transform — starting yesterday.

The world is changing rapidly, and once-loved “legacy” brands are falling out of favor. The reason is painfully simple. At one time these brands exceeded customers’ needs and stood for something they cared about. (That’s how you earn love.) But today’s customers are different. Very different. The vast majority are living a lifestyle that has digital at the center…and many companies haven’t transformed to meet them there.

To deliver ‘digital’ at the increasingly elegant level today’s customers expect, most of today’s large companies need to reinvent themselves in a variety of ways, and quickly. Unfortunately, many aren’t designed for this kind of rapid change. They might lack an aligned vision, or encounter resistance, or have the wrong technology. Maybe they’re entrenched in a way of thinking that just isn’t customer-centric. And so despite their best efforts, they fail.

Let’s say your organization is already using digital for marketing and e-commerce, but you are not truly “digitally driven.” Maybe you provide customers with a good app—but it’s really just an add-on. You’re not aggressively creating products and experiences that take full advantage of the potential of digital. You can’t honestly say you’re digital at the core. If this describes you, is it truly necessary to change? 

Most likely yes. Here are just a few reasons why.

REASON 1: You Need to Remain Relevant to the Customer

Customers today demand a superior digital experience. A Salesforce study found that 80 percent of customers view “the experience” a company provides as equally important as its products and services. But across industries, most experiences offered today are simply not up to customers’ expectations. PwC found that 49 percent of U.S. consumers say that companies are providing a “good” customer experience today. 

Brands also spent a lot of energy on online content about their brand and products. But market research shows that consumers today have massive cynicism today about what brands “say” about themselves. As Trinity Mirror and Ipsos Connect found in a study, almost half of consumers have a general distrust of brand and 69 percent specifically distrust their advertising. 

So how do consumers evaluate your brand and products if they assume most of what you say is a lie? Mostly, from their own digital experiences. If your website is confusing and disorganized, that is the message people will take away. If your signup process is cumbersome, they assume that your product will be as well.

REASON 2: You Need to Gain the Efficiencies to Be Cost-Competitive

Companies that are winning in the digital economy are delivering a dramatically improved value proposition—offering customers more for less. It helps to have investors who are patient about whether the company operates at a profit. But more long-term, these companies are able to operate in a different way—harnessing tools like crowdsourcing, AI, and process automation. 

If you don’t have access to these types of opportunities to increase efficiency, it’s difficult or even impossible to be price-competitive with those that do.

REASON 3: You Need to Attract and Retain Talent in the Organization

Millennials want to be a part of companies that are digitally savvy. This might be the most important reason of all to ensure that your company has a high level of digital effectiveness.

A study by the market research firm Penn, Schoen, & Berland found that 82 percent of millennials can be swayed in their career decisions by a digitally equipped office, while 42 percent would leave a company due to “substandard technology.” Similarly, Microsoft found in a study that 93 percent of millennials polled cited modern and up-to-date technology as one of the most important aspects of a workplace. 

REASON 4: Digitally Driven Companies Have Greater Revenue Growth 

A study by the Aberdeen Group found that the top 20 percent of companies as measured by their “quality of digital customer experience” enjoyed an average year-over-year increase in revenue of over 35 percent, compared to a 7.7 percent average for the rest. 

“Digitally advanced” companies create 9 percent more revenue than their industry competitors, as reported in a study conducted by MIT. And digitally “mature” companies are almost three times likelier than lower-maturity organizations to report annual revenue growth significantly greater than their industry average, according to yet another study, this one by Deloitte. 

REASON 5: Digitally Driven Companies Have Better Profit Margins

Despite the investments they need to make to transform, studies show that digitally driven companies deliver better returns. A Harvard Business School study found that the three-year average profit for “digitally centric companies” was 5 percent more than that of those companies “behind the curve.” A different study at MIT concluded that “digitally mature companies” are 26 percent more profitable than competitors. 

What’s more, digitally effective companies tend to be highly customer-centric. A KPMG study showed that “customer-centric” companies saw a projected profit growth rate that was 3.6 percent greater than “non-customer-centric” companies. 

REASON 6: Digitally Driven Companies Have Higher Valuations

Lastly, and perhaps most importantly, digitally driven companies have consistently higher valuations. According to MIT, more digitally “mature” companies achieve market valuations 12 percent higher than competitors. Forrester calculated that in recent years, the stock price of “leaders in digital customer experience” grew by nearly 30 percent more than that of lagging brands. 

Bottom line? It’s a new era. There have been many periods of time when businesses could operate in more or less the same manner for decades, updating their advertising campaign periodically, creating marginally “new and improved” products every few years, and making small incremental changes to keep cutting costs and drive profits higher. 

Whether your business is window washing, restaurant supplies, maritime navigation, or podiatry, your customers’ expectations are digital. Your competitors are leveraging digital to drive better customer experiences and increased operational efficiencies—enabling them to offer more compelling value propositions to customers. If you aren’t doing the same, it’s going to be tough to remain relevant and price competitive.