69% of decision makers use social media for purchase decisions. 90% of buyers trust peer recommendations. 94% of B2B buyers conduct online research before making purchase. Companies including Amazon and Alibaba continue to raise the bar forcing every company to rethink their digital strategy. Companies such as Airbnb and VRBO continue to wreak havoc in the hotel industry and threaten to disintermediate additional industries. Uber and Lyft have transformed the taxi industry using powerful digital tools.
No wonder 89% of executive say digitization will disrupt their business this year. Yet less than 1/3 of these executives believe that their digital strategy is correct, and only 21% believe the right people are setting their digital strategy. What is causing this disconnect, and why are so many digital transformation projects underperforming or outright failing?
Based on my 34 years in the CRM industry working with many of the world’s best companies, I have concluded executives are not sure how best to tackle Digital Transformation, they do not have the right roadmap to drive Digital Transformation success, and they are falling short in one or more of these five Digital Transformation building blocks.
At the core of every successful Digital Transformation are holistic customer profiles that get leveraged at each step of the transformation. Most companies need to spend more time, money and effort to create truly holistic customer profiles that integrate transactional, CRM, and third-party data and that integrate both offline and online customer information using identity resolution tools. The shortfall is not the technology component: most CRM software vendors have the tools, including a surge in AI and process automation tools, to create these profiles. The shortfall is in leveraging a structured business process to create these profiles – i.e., what information really needs to be collected – and to keep these profiles clean and useful over time.
Data & Analytics
Data-driven decision making has become a requirement for effective Digital Transformation. Successful companies perpetually data mine their holistic customer profiles to gain customer insights. They also leverage Data & Analytics processes and tools to enhance customer profiling and segmentation, to achieve insights into customer lifecycles and journey maps, to target lead scoring and routing, to achieve better forecasting and cross-selling, to model customer behaviors for more effective marketing campaigns, and more.
Social Media Communities
Social Media Communities, especially private or ‘branded’ communities. Customers expect to be able to communicate with organizations digitally. They expect 24/7 customer support. Social Media Communities address these requirements head-on by helping to maintain and increase customer engagement and interaction that drives customer acquisition and retention. They provide members with an online, private platform with a corporate URL, accessible from work and available 24/7 that helps drive customer satisfaction. They reinforce product/industry leadership and expertise that creates long-term competitive advantage. They are a company’s best lead nurturing tool. Most importantly, Social Media Communities allow a company to listen to the ‘voice of the customer’, which is a key component of successful Digital Transformation.
Customer Engagement, especially cross-channel customer journey mapping, omni-channel management, customer experience management, and customer success programs. Effective customer engagement shortens sales cycles, increases customer spend, lowers customer churn, increases brand awareness, and secures higher customer loyalty and advocacy. To achieve these benefits and to secure digital customer engagement, companies increasingly are utilizing videos, content sharing, chatbots using conversational AI, and deploying robotics process automation tools in their Digital Transformation efforts.
While the emerging technologies list is long, I have these technologies on my radar screen: mobile apps/technology, identity resolution, virtual and augmented reality (AR), artificial intelligence (AI) and machine learning, personalized digital videos, digital portals, wearables, addressable TV, Internet of Things, and blockchain. These digital technologies provide new ways to capture customer knowledge and insight, enhance data integration and dissemination across channels, digitally connect and collaborate with customers, create better products and services, help shorten the sale cycle, drive down operational costs, and stay one step ahead of the competition. A sound Digital Transformation includes multiple, emerging technology pilots.
Every company’s Digital Transformation needs to be based on an integrated framework where individual projects connect and feed each other, e.g., leverage Data & Analytics as a foundational platform to analyze and provide insights used in Social Media Communities, CRM, and Customer Engagement; leverage customer Journey Mapping and Customer Experience surveys to feed the holistic customer profiles; and leverage Emerging Technologies like AI in CRM to provide “next action” step with individual clients.
The picture below pulls together the components of an effective Digital Transformation strategy. Successful companies tackle Digital Transformation by implementing these components in bite-size chunks, supported by a long-term roadmap that focuses as much on people and process issues as technology.