In my last blog I talked about Digital Transformation and Why It Will Future Proof Your Business. Once a business has made the decision to fully embrace digital technology to improve their offering, output and processes, however, how do they go about reaching that long term goal?
To share some of the best methods of how to do this I wanted to delve into my own experience of how this comes about and the specific areas that it can improve.
Finding the right partner
Firstly, businesses need to establish how they are going to adopt a more digital centric approach. Some businesses manage this internally, but in many cases they look externally to help them achieve their goals and thus begin the process of tendering for the right digital partner.
Onboarding a partner is usually a long process for both parties. There are often several layers including the submission of proposals and concepts, pitching and then additional rounds of interviews for the partner to prove they are the right people to help the client achieve their business goals.
Once a decision has been made and a contract awarded, it is essential that a strong bond is established between the client and partner quickly, to build trust and to enable the partner to understand how the business operates. Once this is in place the partner can successfully investigate exactly how to deliver the client's long term goals and aspirations.
So with a partner on board, what’s next? What’s needed to keep your business thriving and not succumbing to the difficulties others have?
Going beyond your technology comfort zone
Technology has played a part in business for a long time, as a tool to communicate, to assist operations and as a means to store data and information, but digital transformation is different.
Digital transformation is less about emails, PowerPoint and large server rooms and more about digital products - both internal and external - and how they can completely change and rejuvenate your business.
The list of late or non-adopters - as I mentioned in my last blog - is a long and painful read and it’s clear there are now too many examples of extinct businesses for CIOs, CMOs and CEOs not to take note. In the UK it’s easy to think of Comet, HMV and Phones 4U as recent examples of those who failed to transform, while in the US the long list is headed by camera giants Kodak and book retailers Borders.
With that, and showcasing the genuine importance of digital transformation, here are the four major areas where it can have a profound effect on your business:
1. Commercial Value
There are numerous examples of businesses who just knew that digital transformation was a very real and very important aspect of the future of business and more specifically, the future of their business and its bottom line.
Coffee brand Nespresso, for example, provides a great example of digital transformation executed almost to perfection. While their ultimate goal of serving customers with amazing coffee experiences hasn’t changed, their embrace of technology - principally to understand their customers better - has undoubtedly enabled the brand to significantly enrich that experience.
As a result they have achieved greater visibility while reaching many new customers and new markets. Such is the success of this approach that Nespresso grew revenue by 500% in the seven years between 2006 and 2013, despite the global downturn, while analysts are estimating revenue will hit a record high of US$5bn in 2015.
2. Customer Service
Customer service in the traditional sense is all about how well you speak with your customer, how empathetic you are to their needs or how good the journey around your store is - think Mr Selfridge.
Whilst at heart customer service now is actually no different to how its always been - because frankly nothing will ever replace doing whatever it takes to make a customer feel appreciated - digital has enabled a shift in how customer service works in practice. The digital age gives you the ability to provide the very best level of customer service, far surpassing what you could do in the past.
Customers visit your site and they should be well treated, you should know who they are, what they’ve done with you in the past and what they like and dislike. We know much more about customers as individuals now than we have ever done, and not in that creepy, intrusive way we’re all wary of.
Brands now routinely connect with customers across multiple devices and platforms, meaning shared data and opportunities for outstanding customer service across all touch points.
Personalisation is vital now. Technically, it’s moved forward very quickly and it is something customers now expect. They understand that their buying or browsing history is now being utilised for their benefit and convenience.
However, I still don’t see it implemented as well as it could be. This could be down partly to a confusion over ownership, with many people wondering whether personalisation is an IT function or a marketing tool.
In my opinion, the IT side of this is just the nuts and bolts. Where personalisation really comes alive is in the hands of the marketer, and what’s more it’s a full time job. It has great value to those wishing to segment their audience more intelligently - to understand their customers and their preferences more deeply - and therefore target campaigns more effectively as a consequence.
In addition, personalisation also allows the brand to take a more customer-centric approach, with the customer often valuing the ‘little touches’ personalisation can offer, such as remembering their favourite coffee or their local airport.
3. Brand Perception
This is one thing that is often overlooked, but every touch point an individual has with a brand affects their perception of it. If a brand isn’t moving with the times - simple mistakes like failing to have a mobile responsive website, for instance - then consumers quickly lose faith.
I often explain this challenge to clients as a sliding scale between +10 and -10. Anything above 0 is positive and obviously your aim is to keep customers in this zone. If they reach +10 they are brand ambassadors for you which is great news.
However, if you go below 0 you are clearly not reaching customer expectations. Hit -10 and you’ve lost that customer. At best you lose just the revenue from their custom. At worst, they tell others about the negative interaction they have had with your brand or business, which can spell disaster.
Of course, the key to this is working out how to effectively replicate your management of customers in both the positive and negative scenarios. Customers are individuals and as such what represents good service for one person might be completely different for someone else. Strong brand values, sensible customer service and online personalisation are all vital to achieving this.
4. Efficiency, Automation And Happiness
Businesses often only consider digital as being part of the consumer facing aspect of their operation. However, some of the most forward thinking businesses of today rely on vastly improved internal systems as a result of digital transformation.
Internal business applications can dramatically increase efficiency, with the simplest example being the transition from traditional, often manual methods to digital solutions. Two recent examples from clients of ours include:
- The move from a paper based, customer approach to a Leighton-built, digital alternative, which generates a yearly cost saving of £0.5m.
- The improved estimation of required fuel for business operations through the daily use of an iPad application, which generates a yearly cost saving of £2m.
Automation, efficiency and modern communication systems mean employees can do their jobs better which in turn leads to improved employee satisfaction. Crucially, your employees are all brand ambassadors, so the investment in this area is very much justified.
The adoption of a high quality digital strategy for your business has so many positive implications. From increased revenue and new sales opportunities to significant efficiency savings and a happier, more motivated workforce, the potential benefits are huge.
The key point for many businesses is whether they will grasp the digital transformation opportunity sooner than their competitors, because those who do will undoubtedly prosper.