I remember when I got my first digital watch in 1982, a Casio with an LED screen and a little light button so you could see the time in the dark, and I thought everything analog would be replaced by digital. Maybe within the year, maybe sooner. Change was imminent.
Yet I still had analog records, cassettes, and VHS tapes for years.
Eventually, digital did come — CDs, DVDs, PCs, digital satellite receivers, and mobile phones — but it didn’t happen overnight. Such is the case with the digital transformation that so many companies are faced with today. It took decades to go from the first digital offerings to where we are now, still somewhere in the early part of the Digital Age.
Why has it taken so long? And why are there brands still out there who haven’t even begun to transform?
Turns out there are lots of reasons, even though digital is undeniably our present and future reality. This post explores why digital matters, why it can still be challenging, and how to go about the transformation in a way that’s best for your brand.
What Exactly Is Digital Transformation?
To make sure we’re all talking about the same thing, digital transformation today is about a brand moving into digital channels (everything except direct mail and in-store) by using technology to do something better than the traditional means.
Usually this means automation. It might mean machine learning, but while digital transformation does depend on technology, the result might seem counterintuitive: You’ll lean on technology to take care of time-consuming manual tasks so that your marketing team can devote quality energy and attention to big-picture strategy and the creative elements of marketing.
Why Is Digital Transformation So Critical?
You’ve got a website. You’ve got a newsletter that goes out every Monday. Maybe you’ve got a mobile app, and you’ve got all this data. You’re digitally transformed, right?
Sadly, no. Having some data and a couple channels is not a complete digital transformation when your marketers are still manually segmenting customers and painstakingly building campaigns. You might not even have your data in order, or what data you have gives you a great view of email performance but nothing on offline or mobile purchases.
So, for those of you who still aren’t sure why we should be talking about digital transformation, here are some powerful reasons you’ve got to begin the shape-shift.
Consumers Choose Digital
Over the past 10 years, consumers have overwhelmingly voted for digital, usually with their smartphones, and as mobile technology has gotten better, consumers are forcing brands to meet them on the mobile website. Clearly customers trust the tech, and now brands have to respond or fall behind.
Competitors Are Racing to Get There First
The competition in the digital customer experience arena is fierce. An Altimeter report shows that 41% of brands are transforming due to mounting competitive pressure. While early adopters are at the head of the pack, a growing number of brands from a variety of industries are somewhere in the process of digital transformation, and whoever can leverage that to provide the best customer experience wins.
Technology Makes Scaling Possible
This is perhaps one of the most intimidating prospects in digital transformation: Understanding what you want to do and then choosing the tech that will make that possible. But marketers generally aren’t data scientists or IT experts, nor do they need to be. The best martech doesn’t require technical knowledge, yet that still doesn’t stop companies from avoiding the hunt for a solution that can scale omnichannel campaigns.
The Transformation Barriers
True digital transformation is not a simple or quick process, and that alone can cause brands to drag their feet. While there are hundreds of examples of well-planned and well-executed transformations, many companies still fear the change necessary to serve customers today and in the future.
One of the biggest reasons a brand resists digital transformation is that they can’t fathom how their tech stack will change and yet still function during implementation, let alone deliver all the KPIs they’d hoped for. It can also be hard to trust a partner — one you might not know very well — to guide you through every integration and get you back to your normal day-to-day workflow.
Time to Value
When decision makers evaluate new marketing software and platforms, it’s not always easy to calculate how long it’s going to take for the new setup to not only work but bring in additional revenue. They fear that they’ll invest in tools and a platform that show no significant improvements in the first few months — or worse, an entire year.
Tech Myopia Over Big-Picture Objectives
Another obstacle during the initial stages of transformation is that company objectives, like increasing revenue or retention, aren’t always where brands start building their transformation roadmap. Instead, they become preoccupied with all the software they’re evaluating. But if you’re not starting with company objectives and working your way through strategies and on down to proven tactics, you may very well have a much larger tech stack than you actually need, which can make transformation an overwhelming task.
The Best Approaches to Transformation
The most successful digital transformations focus on a few core areas. The platform has to perform quickly, all of a brand’s data — the stuff that allows them to customize every interaction with customers — has to be accessed easily, and campaigns have to run more efficiently. But every decision you make should be backed up with data and address company-wide objectives.
Here are a few of the strategic and operational concerns to focus on:
- Change your brand’s point of view about digital. Continuing to do something the way you’ve always done it will never quite work as well as it used to. The first critical step is to open yourself up to the idea that doing things differently (digitally) might be better for the brand.
- Answer the why question about digital transformation first. What is your company’s primary goal? What is the promise to your customers that you want to keep? Once you have these goals at the core of your transformation strategy, map every change along the way to those big-picture objectives.
- Small teams (including IT and marketing) are more agile and move faster than large departments, which can delay transformation.
- Cloud architecture is key to transformational speed.
- Apply machine learning to your data so you can constantly improve the whole process.
Salah Zalatimo, Chief Digital Officer at Forbes, describes the challenge well, “When you talk about transforming an organization, it’s about changing a culture. That takes a long time. I would say a minimum of three years for an organization of serious scale. So we did it slowly and took baby steps that helped to not rock the boat too much.”
A Solid Data Solution
Data is the fuel for everything you do to engage and satisfy your customers. It’s also the primary fuel of your digital transformation, but getting data into the right format so you can use it is a far more prevalent problem than you might think. Everyone talks about the single unified customer profile, but actually building that profile depends on lots of good, clean data. That’s why you should carefully evaluate platforms and make sure your data will be accessible and updated frequently.
Choose the Best Platform
Your platform is the junction between your data and the marketing tools you’ll use to connect with your customers. This is the most important decision in the early stages of transformation, and if you go with a single platform that has all the omnichannel tools you need, you will reduce your tech stack and benefit from vendor consolidation.
Email as Channel #1
Once data and the platform have been taken care of, the first channel most brands transform is email, usually with great success. Email is still the #1 revenue-generating channel, and when you apply martech to your email campaigns, you can relatively quickly give your customers that 1:1 personalization we all dream of. Then once you digitally transform your email, you’re ready for the next channel, be it the web, mobile, or CRM.
Brands Winning at Transforming
Yes, many companies are still trailing behind. However, e-commerce is a necessity, and the brands who have successfully navigated their way through various stages of transformation can show us the important points to pay attention to.
Outdoor grill brand Char-Broil wanted to increase engagement in their e-commerce business by using more detailed personalization, but the email platform they’d been using was so cumbersome and hard to use that despite having a ton of tools, Char-Broil never got to use them.
Leandi McMurphy, Senior Manager of Marketing at Char-Broil, sums up the experience: “It took almost three months’ worth of training just to get up to speed on that tool and be able to send one email out.”
Char-Broil was at a crossroads. They’d barely scratched the surface of digital transformation, and now they needed to right their course as fast as possible and find the tech that would allow them to scale email and automate campaigns in a trackable way.
Fortunately, their email and eCRM agency of record, BrightWave, recommended that they leave their previous ESP and migrate to a feature-rich, marketer-friendly platform that had won over the agency in previous partnerships. One of the first improvements Char-Broil saw was that an email campaign that used to take most of a week to manually segment, create, and send out was now taking one person a couple of hours.
Equally important, Char-Broil could now store all of their customer data in one place and use that data to strengthen their campaigns and get to know what their customers want in detail.
As Denmark’s largest retailer with more than 1,500 stores in four countries, Salling Group had millions of customers and sat atop a mountain of data, but like many companies who have been around for decades (100 years in this case), it wasn’t always easy to execute on that data, not when it might be spread out across siloed platforms.
Charged with delivering sustainable growth, Jens Pytlich, Salling Group’s Digital Marketing Manager, led his team through their digital transformation and focused on identifying the right partner and the right technology for the job. Pytlich had a strategy, new business opportunities, and a ton of data on 2M+ customers, and that’s when the brand hit an obstacle. They had not sorted out the execution part of the transformation.
Pytlich wasn’t afraid of a stumble along the way (they’re the norm) or having to think fast. In short order — and after he switched partners one last time — he fully automated his email program and customized messages for each customer. Now he could track performance and feed that back into the platform to further hone personalization, earning Salling Group +20%-30% in open rates.
Quickly, the brand saw success in one channel and moved on to the next, from the web on to Google and Facebook ads, and then on to incentives and recommendations (which increased revenue 35% in the first five weeks of sending one email). Salling Group are now working on feeding all their relational data from offline channels into the platform which will give them an incredibly detailed view of every customer.
- +35% in revenue from a single email
- +20%-30% in email open rates
- One of Salling Group’s companies, pure player Wupti, rolled out a new marketplace and went from selling 30K products online to 600K products.
As a supplier of collectibles, silverware, and china, Replacements, Ltd. had a loyal customer base and an incredible shopping experience whether it was in their vast warehouse or through their customer service line.
In analog channels, Replacements ruled with outstanding customer service, and they wanted to take that attention to detail and use it to develop an e-commerce strategy. They knew the transformation would have to be plotted out carefully, beginning with choosing the best customer data platform for their needs. They’d built their own email and CRM systems, but they were limited to batch-and-blast campaigns with no segmentation and no automation.
However, once they organized their data and chose a platform that would best house it all, the brand quickly saw how well automated campaigns (something they had never done before) engaged their customers. All the analytics gained from those campaigns went back into the platform to tweak communication through any channel the customer might come through. As the personalized emails went out, Replacements saw their revenue and ROI rise — and not a year later, but within months of implementation.
- +100% ROI within weeks of implementation
- $101K in abandoned cart revenue in the first four months after implementation, with a 13.9% conversion rate
- $26,000 in browse abandonment revenue in the first three months after implementation
It’s no coincidence that companies have directors and VPs with “Digital Transformation” in their titles. And digital’s not going anywhere – only the planet dying could stop it. However, there are lots of things that can slow transformation down.
One of the biggest challenges – and one you can do something about – is trust and confidence. Humans don’t trust anything new until they see how it improves their lives in some way, and it takes a preponderance of evidence, not just one or two stories about how something made life better.
That evidence has arrived, in the form of tangible increases in revenue and customer retention, but we’re also seeing ease of use and efficiency improving marketer’s day-to-day lives.
So, the moral of the story is that yes, it can take a long time to complete the entire digital transformation, but there are many things you can do now today to get started or to go a little further down the transformation path.
According to AppDirect, 8 in 10 U.S. companies are digitally transforming. That means 20% of U.S. brands haven’t even started. Time’s growing short, but it’s not too late. ◾