Covid-19 accelerated tech adoption and digital transformation efforts that were already underway, but businesses and organizations still lack the full scope of product impact—how does this product demonstrate value to our customers? How does it drive our business?
I spoke with Spenser Skates, CEO and co-founder of Amplitude, to dive into the technical elements that are streamlining the digitization process in a reopened economy. The company recently launched its Digital Optimization System—designed to help brands like Calm, GoFundMe, Ford and others understand the impact their products have and drive customer-centricity—and is gaining momentum, having just raised an additional $150 million in funding and is now valued at $4 billion.
Gary Drenik: Covid-19 shortened the timeline for businesses’ digital transformation efforts, whether adopting emerging technologies or inventing new methods of customer engagement. What are the main challenges faced when navigating an all-digital economy? Where should businesses place their investments?
Spenser Skates: Covid-19 created this big push to accelerate ongoing digitization efforts. Every business had to go digital to accommodate the new economy, shifting products, services, and customer experiences from in-person to online – especially mobile. According to a recent Prosper Insights & Analytics survey, 41.3% of adults currently working from home say their smartphone has become their lifeline due to the pandemic.
Transforming the way success and impact are measured is critical. An estimated 6.8 trillion dollars are spent on siloed tools like web reporting and net promoter scores, all designed to measure product success almost entirely on ad clicks, site traffic and survey feedback. Teams need to make the connection between product value and optimal business outcomes by using customer behavior as their source of truth. To maximize digital investments, businesses need to pay more attention to tools that measure impact using customer behavioral data.
Drenik: Which technologies have been key drivers in keeping businesses afloat while modernizing digital strategy? How will these tech adoptions evolve to accommodate a post-Covid-19 economy?
Skates: The pandemic forced businesses to rely almost entirely on data to keep up with the influx of digital customers and stay ahead of competitors. If we’ve learned anything this last year, it’s that data and analytics help us learn what we don’t know. They give us concrete insights into things like consumer behavior to better gauge how a product or experience resonates with customers and meets business objectives. Coupled with artificial intelligence and machine learning, brands can pinpoint which parts of their digital products impact their customers most and drive business.
The new normal we’re expecting is a hybrid of in-person and digital interactions. According to the same Prosper Insights & Analytics survey, 45.2% of adults are confident that changes made to their shopping behaviors (i.e. swapping in-store checkout lines for mobile ones) will become lasting habits. That’s proof that data-driven tools are necessary to maintain a deep understanding of what resonates with customers in terms of product value and brand engagement long after storefronts reopen.
Gary Drenik: ‘Digital transformation’ has been everywhere in the news – is ‘digital optimization’ different? Why is ‘digital optimization’ something businesses need to pay closer attention to in their transformation strategies?
Skates: When we talk about digital transformation, we’re discussing the shift from in-person experiences and operations to mobile or digital. Digital optimization refers to the use of technology to improve the customer experiences currently being delivered.
Practically every brand has expanded its digital presence. Now, teams need to evaluate how digital investments are contributing to their bottom line. Are the tools they have all necessary to keep business going? Or are they splurging on the newest technologies without fully understanding how this feeds business objectives?
While organizations should keep a pulse on emerging technologies that streamline their digital business, they also need to be strategic about where they’re placing investments and how to tie it back to their bottom line.
Gary Drenik: How does Amplitude’s new Digital Optimization System work? How does it leverage the technologies mentioned earlier to streamline the creation of customer-centric products that maximize business value?
Skates: The Digital Optimization System (DOS) unites the data, analytics, and infrastructure needed to pinpoint which consumer interactions within a digital product lead to optimal business outcomes and personalize experiences accordingly.
Machine learning algorithms see and predict patterns in customer behavior to figure out things like the odds of a customer churning or coming back. These data points are given to different teams within an organization in real-time, and so are our predictions for what behaviors will follow. Full visibility into these insights allow experiences to be improved and tailored to individual user experiences and business goals such as retention—like Calm’s Reminders feature nudging its meditators to keep pace with their goals, or Rosetta Stone improving in-app translation abilities to revamp digital learning for the modern, technically-inclined user.
Data and analytics—with a boost from machine learning—make the core of this product so digital brands can achieve customer centricity.
Gary Drenik: Amplitude also announced the Amplitude Partner Ecosystem — how does this program, along with the Digital Optimization System, transform every business into a digital operation and accelerate the customer-first economy?
Skates: It’s great for teams to have the technical tools under their belts to advance their business goals, but it’s also essential to source insights from the people behind the curtain.
The Amplitude DOS gives our customers access to a network of over 40 founding partners like Slalom, WWT Digital and Bottle Rocket for support with digital transformation, optimization and discovering new avenues for product innovation. They can also access tech integrations that enhance the creation of customer engagement and marketing platforms, including Braze, AppsFlyer, Segment and more.
Both the DOS and the partner ecosystem were designed to make customer behavior more accessible and easier to interpret. Some companies are still behind in their digitization timeline, so these resources provide them with additional resources to expedite digitization while incorporating the customer throughout the process.
Drenik: How has Covid-19 redefined ‘customer-first’ and what role does Amplitude play in powering the next generation of customer experiences and products?
Skates: Customer behavior has been the North Star for many businesses and organizations navigating this time of uncertainty. The elimination of most in-person and physical operations forced teams to concoct new ways of understanding customers and maintaining those relationships.
Now, customer-first is more than a smile at checkout—it’s about anticipating customer needs and making meaningful brand experiences, online and in real life. We draw the connection between product value and business goals by letting the customer guide the next iteration of a product or experience.
A favorite example is our work with Jersey Mike’s: Customer data-driven growth goals gave them deeper insight into what customers love so they can act on that information in real-time, like sending Chipotle Chicken fans a coupon for their favorite cheesesteak or launching new delivery options like curbside drop-off. We’re always finding new ways to harness the power of customer behavior to build successful digital brands.
Drenik: Thanks for taking the time to unpack this with me, Spenser. There’s no doubt that Amplitude is leading the way for businesses to achieve customer-centricity. I’m excited to see where the company is headed, and which brands it will bring to life next.