Why Companies Really Fail On Digital

February 8, 2016

Many companies switch to digital media in order to reduce costs as it is perceived as a cost effective solution to market and run your business.

However, the real cost of digital depends on many factors and not every program or solution is suitable for a business. It depends on the digital maturity of the company; which basically means on the readiness to implement certain digital assets or marketing strategies.

Today, companies are confronted with a vast digital landscape and multiple buzzwords such as big data, the internet of things, wearable tech, omnichannel, mobile first and so forth. In reality many business struggle to implement a digital strategy program that really works for them, not because they implement it wrong, but because they implement it at the wrong time.

When we talk to clients about digital maturity we are looking at 5 key stages of digital development:

Stage 1: Basic

This means your business has a basic offering which may include a web presence and social media outlets. This stage is all about building an online presence where your company has a platform for customers to get information and start a basic interaction with your brand. The focus will be on driving more traffic and spreading your name through search engines, email campaigns and paid media. This is the first stage and your digital investments will mainly go into buying traffic to your online properties. While there are many ways to do this more effectively, by using remarking and setting up campaigns that are optimized for higher conversion rates, you will have to invest more, to get more.

Stage 2: Tactical

In this stage your digital platforms become more integrated. You have an existing online presence, but you start integrating it with other systems for example your customer database. This means your communication can become more targeted and segmented and thus lead to higher conversion rates. You want to start aligning your tactics with your monthly targets and measure their impact carefully. Customer segmentation and the creation of personas would be an example on how you'd create tailored marketing messages that increase your response rate. You will of course continue the efforts of stage 1 and drive more traffic to your online presence through paid media, social and offline campaigns.

Stage 3: Optimized

In this stage your business processes and products become integrated part of your digital offering. Website, apps and other online tools can now be created to streamline your operations. If its client on-boarding, support functions, after sales or other means of interactions with customers you will try to offload as much of these functions towards your digital platform in order to make your business more efficient, gain access to more valuable data and reduce your operational costs. Due to the data that you will collect you will also be enabled to personalize your marketing messages even more based on rules and triggers which will further increase your conversion rates and can reduce overall marketing costs too.

Stage 4: Automated

At this stage things become more complicated. Automated sounds exciting, but the set-up of automated processes is a complex exercise and requires your digital offering to be fully integrated in order to work. Your online, offline and internal systems need to be connected to exchange data freely for you to get the information you need to enable automation. New tools need to be setup that profile & segment users across various channels. Your marketing team needs to be setup to create a multitude of communications for each customer type and your sales team needs to be ready to nurture your leads while they move through your sales funnel. A strong content strategy is required for this stage, together with the right traffic drivers and tools to convert leads into customers. Your systems will focus on nurturing leads, up-selling to existing clients and tuning your conversion rates to the max.

Stage 5: Engaged

The final stage is the creation of an omnichannel experience that allows you to create a one-on-one customer engagement platform that, almost, automatically handles the journeys and experiences of your customers, one at a time. This stage, if perfected will result in advocacy and positive affinity and your monthly target will be creating more and more happy customers.

Completing all these steps may sound very difficult and something that is only accessible to large companies with big budgets. However, in many cases the truth is that smaller businesses reach a higher digital maturity earlier compared to larger organizations. The reason is that large corporations move much slower, and to their defense, have to work much harder at times to get their systems in place in order to support things such as marketing automation, system integrations and exchange of data. There are more people and departments involved and things can get complicated quickly.

Of course the desire to have the latest technology solutions is there and that's why we see many companies implement new digital solutions before they have optimized the performance of their existing digital assets. You could try and blame it on the lack of experience or knowledge, but that is not the real reason as expertise can be bought at any time. The real reason is the misconception of digital being cost effective and easy to measure. Yes, digital can give you as much data as you want in a short amount of time, but what you do with this data is a different question altogether. Data needs to be measured, understood and be actionable in order to give any benefit at all.

If you are running banner campaigns today and you know your click through rate (CTR), which is the number of people that click your ad vs the number that saw it. Then this number can indicate that your campaign is performing better or worse from month to month. But unless you have a plan set in place that will allow you to effectively act upon such changes you are only looking at numbers.

Another famous example is the number of fans you have on your social media. If this number grows every month that may be a sign that your activities work, but if you have no plan to act on those numbers and tie them to an actual business objective you are just collecting friends online.

The solution to the problem is to set up what is called a 'measurement plan'. A measurement plan will allow you to not only know how to measure your digital performance, but also tell you where you need to look when the numbers change. Such a plan will tell you in detail what the numbers mean and what you should be doing next.

Here is an example: Let's assume you are collecting new leads through your website. Every month you are getting 50 new enquiries through your site. If all of a sudden this number drops to half the leads you need to know why, because your business may be dependent on those 50 leads. Your measurement plan will give you the right answer and maybe expose that your website leads come from various traffic sources such as your email marketing, online search, ads etc. It will tell you how to evaluate each of these channels and find the one that is underperforming. Maybe your search engine ranking dropped for a certain keyword or your emails landed in the spam folder of your contacts.While this sounds logical it is important to see that the numbers you are measuring only have a meaning if you know how they are generated in the first place.

How does this relate to your digital maturity?

If you don't have a measurement plan set in place for your basic digital presence you cannot know how you are performing which means you cannot act more tactical, optimize or automate what you are doing without, in fact, just gambling.

Written by
Alexander Rauser
Alexander Rauser


Alexander Rauser is the author of Boardroom Guide to Digital Accountability and Digital Strategy: A Guide to Digital Business Transformation, and creator of the DSX Program, a digital strategy and transformation program for Enterprises.

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