So it's 2016 and every consultancy and advisory firm out there has published stats regarding digital transformation.
Let me quickly share a few of my favorites:
- Forrester states that 74 percent of digital executives claim they have a digital strategy, but only 15 percent of those same executives feel they have the skills to execute on the strategy inside their business
- In another Forrester survey, 74 percent of business buyers reported they conduct more than half of their research online before making an offline purchase. This means that brands have a very small window in which to influence purchase decisions. So when they do get that chance, which is often via a digital channel (think mobile app), they had better perform well and provide a strong customer experience
With digital transformation so prevalent, we see a lot of metrics on how brands are measuring up. Unfortunately, there's not a lot of tactical advice on how to get digital transformation done.
Why is this?
Well, a. because it’s hard, and b. not a lot of brands even understand if they are a “true digital business” or just a “business that does digital marketing.”
A Digital First World
Where is your business with digital transformation? Here are some simple examples of how brands today can embrace digital transformation.
Ray Wang, the founder of Constellation Research and the author of Disrupting Digital Business: Create an Authentic Experience in the Peer-to-Peer Economy, has one of my favorite definitions of digital transformation:
Methodology in which organizations transform and create new business models and culture with digital technologies.
I like this definition because it is simple, yet encompassing. Brands should be thinking digital first in everything that they do — from the customer-facing portions of engagement, advertising, customer service and support, to the back-end processes of planning, operations, infrastructure and IT, to financial management.
Specifically from a customer engagement perspective — where should your brand be today? Let's put it into four categories: planning for customer engagement, analyzing how to best engage with customer segments, performing the actual engagement and measuring the return on your digital customer engagement efforts.
Let's look at the state of the union today:
Breaking Down Your Digital Engagements
When setting up and planning for digital marketing efforts, keep the customers' perspectives in mind. How will they feel about us pushing four emails a day to them? What if they can't reserve a seat via our mobile app, and instead need to visit the full website — does it dynamically render correctly on a mobile device?
Digital first means understanding and planning for all the twists and turns that the digital customer journey might take. Map them out in workflow format — from the initial interaction with your brand until after the purchase.
Take a hard look at what engaging with your brand looks like from the other side — and plan for when you do get that small window of opportunity to interact with customers. Will you be able to offer them the exact product or service that they request — or will you miss the opportunity because you haven't planned for the interaction?
Your brand should be at a point where this is documented and understood by all customer-facing departments.
A digital-first brand is prepared for those “digital moments of truth” when they present themselves. Moments of truth are those defining interactions between consumer and brand that either take loyalty to the next level or throw it out the window.
As consumers, we all know those moments: when you call your bank after being locked out of your account while traveling internationally; when you call your wireless provider after your phone had an unfortunate run-in with the spin cycle; when you call a travel organization attempting to make a last-minute ticket or reservation change. These interactions, and how brands respond to them, often make or break customer loyalty.
What analysis have you run against customer segments and individual customers to understand things like propensity for attrition, propensity to accept a next-best offer or action, or net promoter score? Can you combine this data with analysis from this current moment-of-truth interaction to make sure all the dealings with that customer result in a net positive experience versus one that leaves the customer feeling frustrated and alienated?
At this point, customer-facing employees should be able to pull up analytical information scores on customers in a matter of seconds to understand exactly how to best engage.
Understanding the engagement component involves understanding the digital experience across devices, channels and points in time.
For instance, how does your mobile app perform at peak times of the day or year? Does it fall over when you need it most? How about your website? Are page loads taking forever? Do customers get more “sorry, an error occurred” messages than they do “transaction complete?” How does your e-commerce and checkout functionality perform? Is it simple and easy to place an order?
As business models continue to evolve, we are seeing the most successful businesses in this new economy (Uber, Alibaba, Airbnb, Amazon, etc.) share some pretty common characteristics from a digital experience perspective. While these company's roots are all digital, they exhibit characteristics that brands undergoing digital transformation can surely replicate. Each meets a consumer need.
Uber gets you from point A to point B. The company makes it easy to do business, removing intermediaries that are useful to the consumer. Amazon allows customers to make a purchase in a single click, and scales nicely as needed. Both Airbnb and Uber are great examples of scalability, as their business models allow them to expand and retract as needed. And finally, they provide an exceptional customer experience. If the product or service was on point, but the experience lacked, they wouldn’t make it very far.
All brands should be thinking about how they can improve the engagement they have with their customers from a digital perspective while considering how new companies in this sharing economy are operating.
How do you measure the results of your digital transformation efforts?
Brands can measure in a variety of simple ways, such as increased visits to digital properties, increased e-commerce revenue or more social media engagement. But measuring digital transformation is definitely a top-down process.
Starting at the top of the organization, executives have to understand and embrace the fact that digital transformation is imperative to success from a margin, profit and revenue perspective. At this point in time, organizations should be transforming culture, success criteria and management objectives in order to account for digital transformation. Choose strategically where to place bets on digital initiatives, and account for both operational and customer-facing processes and how they can evolve.
I encourage brands to educate the entire organization on digital transformation and how each department can be involved. This participation, along with measuring the level of engagement and change from an operational and customer point of view, is critical.
Digital transformation is a subject that, while often very generalized and sometimes vague, is crucial to business success. Companies that aren’t willing to embrace digital transformation will most certainly get left behind.
After all, as Wang notes, 52 percent of the Fortune 500 have gone bankrupt, ceased to exist or dropped off the list since the year 2000. Much of this is due to digital transformation, or the lack thereof. Don’t let your brand be next.
Title image Manki Kim