Digital transformation has the ability to scale service delivery, evolve the business offering, and open up new markets. It makes business sense for companies to rush and catch this wave. Businesses that decide to shelf such interventions till the organisation is “more ready” and has “spare resources” risk being left behind.
In our last post, we briefly discussed what exactly is digital transformation. Now, let’s discuss how we can go about it. There are three steps.
Clarify your digital business case
As with any business divergence, you need to rearticulate your business proposition and the value it brings to the table. How can your business offering change with technology, and how can you amplify that for success?
Here are some useful questions to start you off:
- With a new digital focus, will your business model, proposition or offering change?
- What is the digital value proposition — how does technology add value internally and externally? Can technology remove intermediaries or bridge accessibility? Can technology personalise solutions without human intervention?
- How can a digital positioning allow the business to grow laterally? Can a digital platform open new markets or increase opportunities for rapid dissemination?
- Does my revenue model change with a digital service? Can I consider a subscription or ‘freemium’ model?
Take for example, Adobe Creative Cloud. In 2011, the company shifted its Master Collection, which was marketed at a premium USD$2,500, to a subscription model at just USD$50 a month. While this might seem like a huge, immediate drop in profit, the potential of the new model overshot the legacy model by 2014. Adobe finally broke its overall profit stalemate!
Hitching on cloud technology and embracing a new pricing model opened up new markets for Adobe, allowing them to reach out to new crowds with different intrinsic motivations. The Adobe suite used to be largely exclusive to professionals. But with the new pricing model, it is within reach for students, freelancers and start-ups. This expanded their potential customer pool by at least six times!
Another classic case study is financial giant, Goldman Sachs. Similar businesses typically fight for the same customers. But when Goldman Sachs explored digital transformation, the company did not just build up an e-store to better their competitors. Instead, they pieced together an entire e-marketplace and invited their competitors onboard.
With that, they brought themselves up as the second largest structured growth distributor in an efficient span of three years.
It is no longer wise to simply cordon off your competitors and isolate your customer base. We need to start asking what are the accompanying services, businesses and players that can help drive growth and transformation to the whole industry, and how that will play out online.
Reinvent the digital core
Online marketing is not based on a traditional ‘funnel’ approach. Online purchases can be impulsive and unpredictable. A customer can come in at any point of your marketing funnel, and leave too. Are your martech infrastructure and marketing approaches and systems geared for that?
Every implicit and explicit action potential customers perform on your website or digital platforms means something. When one clicks on something, it indicates their intent, interests and preferences. When one does not click on something, it also reveals something else.
Here are three tips on how you can start tracking all these indications in a structured manner for your business:
1. Look at how your customers interact with your website and think about how they can be segmented into strangers, visitors, leads and customers. How can their interactions indicate their level of interest or readiness to purchase? How can your team tailor the marketing messages to cater to those levels of engagement?
So, how do you start tracking?
2. Start with these three products:
- Google Optimise allows you to present different information sets to different audiences, and find out which engages them best
- Google Tag Manager helps you manage and track all the differentiated URLs, and sort where the audiences are coming in from — including name cards, commercials, social media or offline collaterals.
These three free products would help you start collecting valuable data, regardless of what stage your business is in. Need more data?
3. You do not have to own all data or capture them on your own. There are many data providers that can tell you information you need to make informed decisions. This includes the human traffic of a particular pathway every Sunday morning or the purchase patterns among young adults 22-34 years old in Switzerland. Combining these different data sets will allow you to form a wider, more informed analysis and strategy at a prudent spend.
The biggest issue with digital transformation is often overcoming people’s fear and unwillingness to sustain the use of company internal processes and martech stacks, rather than implementing the technology itself. Remember, digital technology is only a tool for transformation, and it can only augment the effect of sales and marketers. It can automate, but it cannot replace. A successful transformation strategy is contingent on the entire company’s involvement and excitement over it.
Know your customers
Though easily the most tired advice of any business consultancy, being customer-centric could not be more relevant for digital transformation. They are the largest stakeholders in this shift and their buy-in — before, during and after transformation — is critical to its success.
What would digital transformation spell for your target audiences, and does it change who they are? Before you can engage them, you need to first establish their motivations, fears and needs, and how your new business proposition would be relevant to them.
Written by Hanson Ng