The internet is now more than 20 years old. It’s older than my kids, which is a scary thought. It’s older than Kendall Jenner. It’s older than Uber, Grey’s Anatomy and the iPhone. And so now, after more than two decades of software and e-commerce, it’s high time we take stock of where consumers really are today.
First, consumer expectations are shifting dramatically. The digital world has brought a whole host of changes in how people work, shop, interact and engage with businesses.
Second, the notion of brand loyalty has dissolved, shattered beyond recognition.
And, third, this utter lack and loss of loyalty puts companies at an insane disadvantage. We’re living with a “see you later” digital mindset, where it’s easy to say goodbye to something you know online for an opportunity with the newest, next-best thing.
All of this means that companies must deliver a constant stream of software that is fluid, flexible and competitive to gain and retain customers.
It also means that companies absolutely must understand how consumers weigh and determine product value today, because, quite clearly, buyers aren’t making product choices in the same ways anymore.
Indeed, 20 years ago, customers chose products based on product features. Today’s modern consumers are continuously looking for new products, embracing them and then discarding them for something even more new. In fact, the willingness to switch is so strong, according to Harris Interactive, that 86 percent of consumers quit doing business with a company because of a single bad experience. And 90 percent say they would be willing to pay more for the same product if they received a more positive purchasing experience.
This continuous process of discovery, adoption, discarding, discovery, adoption, discarding, discovery, adoption and discarding tells us—very loudly and unequivocally—that value isn’t in the actual product itself, but in our ability to continuously evolve the product.
Shifting Consumer Expectations Require a Continuous Approach to Business
If you can’t continuously transform the way you deploy your product, people and processes, there’s no way you can keep up with customers’ “see you later” mindset and their continuous discovering, adopting and discarding of products.
Two decades ago, for example, you chose a car based on ideal product characteristics (make, size, etc.) and how much you could afford to spend. Your choice would live with you while you paid it off or until you could justify changing it.
Now, software and the speed of innovation have allowed consumers the opportunity to make product choices at a greater frequency. Instead of only getting the newest features when you buy a new car every 10 years, car operating systems are updated wirelessly and provide the latest and greatest features to existing owners, without the need to buy a brand new vehicle. The car has become a software platform.
Even the physical choice of platform (the car itself) is beginning to change. For those who wish to change their car regularly, there are many services (such as Zip Car) that allow you to rent access to a car and return it when you’re done. Or even not to drive at all, with the advent of software companies such as Uber and Lyft.
Obviously, each product—software or otherwise—must have a set of threshold features, or else consumers won’t choose it. A car, for example, needs to be waterproof with airbags and ABS brakes. And a task app needs to allow you to add appointments and meetings to your calendar. But to be competitive today, products must now also include the ability to switch away from features and add new ones seamlessly.
Value is Driven by Option
This “optionality” drives product value in what has become the ‘continuous economy’ of 2016. Companies can deliver “optionality” only by eliminating barriers from their production processes.
Companies need to adopt product development processes that are lean and high velocity to provide customers with an ongoing series of new product features and choices. That’s why you need to continuously deliver and continuously change your software.
Keeping Pace with the Acceleration of the Continuous Economy
If you can’t—or won’t—continuously transform innovative software products and the way you produce them, you won’t be able to compete in today’s quicksilver-fast marketplace.
Or, to put it more broadly, software, as well as the organization and its people and processes, must be able to pivot with agility in what seems like a nanosecond to keep pace with the acceleration of the continuous economy.
This is all very different than what we’ve experienced in the past.
Two decades ago, an organization confronted a new competitor or change in the market, by developing and deploying new operations, organization adaptations or products to meet the challenge.
Today, software is the primary route to market, so companies must continuously develop and deploy new software as part of an always-transforming organizational culture. If you’re unable to develop and deploy on a sustained basis in today’s continuous economy—if you only transform on a selective basis—you won’t be in business very long.