Digital Identity Fueling Brand Growth in 2018
Posted January 18, 2018
In 2018, business growth may come down to a single rule: The one gaining the most “digital share” wins. And digital identity just may be the key.
In a recent study published in Harvard Business Review, certain digital metrics turn out to be excellent predictors of revenue growth and share price for brands of every kind, in a wide array of categories.
According to researchers, “your company’s digital share is its magnitude divided by the sum of the magnitude of its competitive set.” If your digital share is larger than your company’s actual market share, you’re in excellent position for growth. If it’s lower, you’d better get with the program fast.
Citing Southwest Airlines (15 percent market share vs. 30 percent digital share), researchers point out that the revenue of companies in the top tier of digital strength grew 9.6 percent the following year, while those in the bottom tier fell by 8.2 percent—a 20-point difference within a single year.
But if digital is central to growth, how do you boost digital share in the face of increasing competition?
Fast—or Forget About It
The nature of your digital offering is critically important to your success, obviously.
But so is the digital customer experience. In today’s on-demand world, customers want what they’re after, instantly. Up to 50 percent will bail on a transaction after just 10 seconds of friction—and the cost of that friction adds up fast. In 2018, an estimated $1.6 trillion will change hands as consumers flock from one brand to another due to poor digital customer experiences.
So, is the answer to erase every last trace of friction out of digital transactions?
Not exactly. The real trick is to squeeze out as much transactional friction as possible without sacrificing security. With worldwide losses from cybercrime now topping $3 trillion, any gains in digital share without defenses against an ever-expanding array of cyber-threats may be nothing more than an empty, costly and short-term victory.
Instead, many brands are reporting success using digital identity-based user identification and assessment solutions to grow profitably via online channels without opening themselves to undue risk.
At its most essential, digital identity works differently than traditional authentication by going beyond static identity credentials, such as usernames and passwords, and passively assessing an individual’s “Digital DNA.”
This passive assessment establishes a baseline for user behavior, device, event and transaction details that becomes richer and more accurate with each new transaction. Deviations to the baseline can be weighted to generate a risk score for each transaction. And those that raise red flags can be blocked or reviewed.
Over time, this cognitive, real-time “digital identity intelligence” can recognize who is, and who is not, a legitimate customer based on a myriad of continuously changing variables.
That means in the same way someone wearing a ski mask in a crowded plaza at the height of summer might not seem legit, neither does someone using credentials belonging a customer known to live in New Rochelle, attempting to login on a device that appears to be running on iOS but has a Linux-based backend—all while shielding their location from a proxy IP address in Rybinsk. Digital identity can recognize these and many other kinds of disconnects, assess risk and, if needed, block the login.
Likewise, digital identity intelligence can help ease and accelerate authentication for legitimate users, enabling the kind of friction-free digital experiences today’s consumers demand.
Pursuing the Growth Imperative
Is HBR’s “digital strength” metric for real? The year ahead should give us a clear view.
But it’s worth noting that this concept also jives with other recent studies showing that businesses with revenue growth of 11 percent or more also tend to lead in digital channels compared to laggards.
Likewise, Forrester estimates that while 30 percent of businesses will fail to adopt a digital identity-centric approach to fast, secure customer experience will see a net loss in growth, those that succeed will position themselves well in 2018.
Maybe “digital strength” will give us all a powerful new way to measure that.
To learn more about digital identity intelligence, check out The Definitive Guide to Digital Identity, an online resource designed to further the understanding of digital identity and how it can help businesses grow profitably and securely online.