Digital Transformation

Top 5 Digital Transformation Best Practices: 1. Gain Insight

shutterstock_335087594_350As the year closes, you start to think about what works and what doesn’t, especially in the context of the conversations you’ve had with real-life companies. There are a variety of best practices but I’ll pick my top five and start out with what some would consider the most obvious, gain insights and understand your customers.

Let me give you a real life example. I was speaking to a customer and they wanted us to tell them how to transform right there. It was like a test, “You’re so smart, tell us what projects we should prioritize.”  Our best answer was that we didn’t understand them, their strategy, or their customers well enough to make recommendations. The best start is ALWAYS to gain insights.  What insights do you ask? Well, there are a three main insights you should understand:

  1. Who is my customer and what do they really want?
  2. How digitally mature is my company?
  3. What are my direct competitors doing?

You could ask a lot more questions but it boils down to these three.

Understanding My Customer

You’d be surprised how often people have very little data on their customers, especially how they act or react in the digital world.  This seems like a basic piece of information but I’ve had conversations with companies who categorically state that their customers are poor so they won’t invest in mobile.  They start to change their minds when you show stats from other industries or across the board where the main computing device for that segment is a mobile phone.  It’s not a tablet. It’s definitely not a laptop or desktop.

Another client of ours who sells tools told us how their customers differ from market to market.  In the US, a strong Do It Yourself (DIY) ethic powers sales through megabox stores.  In Brazil, DIY doesn’t exist so sales to tradesman make up a lot of their customers.

You get the idea.   If you don’t understand who are your customers and what they want then any efforts or projects you start may be misguided.

Digital Maturity

Every company has different strengths and weaknesses.  Some may have strong customer service. Others rely more on self-service.  One company may have great digital marketing but almost no online community presence.  One may accept online payments, others struggle.  The starting for any transformation plan must include a self-assessment.  We call our version the Customer Experience IQ (CXIQ) but it’s not rocket science, just a well thought out approach by our CX expert David Stallsmith.  It includes 7 different areas:

  1. Customer insight
  2. Strategy
  3. Design process
  4. Enabling technologies
  5. Measurement
  6. Operations
  7. Culture

Rank yourself using an objective system. Identify where you are strongest and where you are weakest.  This will give you a good idea on where to start.

My Competitors

Forrester has identified a variety of industries and their propensity to be impacted by digital transformation.  Not surprisingly, the closer you get to online or knowledge industries, the more impact. Of course, it doesn’t mean that industries like distribution or warehousing won’t be impacted. It just means that they have a little more time than someone selling digital music.

Don’t kid yourself that your competitors aren’t making investments.  I’ve heard something similar to this a lot, “Our main buyers are old engineers who prefer to talk to a salesperson.”   Yet an engineer is by definition white collar and probably owns at least three electronic devices.  They would easily fall into the 70% of people IBM identified  who do online research before ever talking to a company.

One client of ours has a good product.  They have a good reputation in their industry and according to customer satisfaction scores, do a good job with their current clientele.  Yet their digital presence is almost non-existent. Yes, they have an ecommerce site. No, they don’t have much of anything else besides brochureware.  No one finds them on first or second google search pages for any search.  Their competition has done the following:

  1. A new online only business was spun off from a very well known brand.  These guys are digital from the start.
  2. An existing competitor spent millions on mobile apps and web sites. They also strengthened their integration layer to make it easier to get access to information and transactions.

End result: the new entrant and existing competitor grew market share and revenues to the detriment of this particular company.

Bottom line: understand what your competitors are doing and ensure you stay relevant.

Insight Is Important

So hopefully I’ve convinced you to spend some time gaining insight before diving into your digital transformation. It will be worth it when you devise the best go-forward strategy.

 

Other Parts to the series

Don’t forget the other parts of this series:

  1. Gain Insight
  2. Vision and Goals
  3. Culture

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Michael Porter

Mike Porter leads the Strategic Advisors team for Perficient. He has more than 21 years of experience helping organizations with technology and digital transformation, specifically around solving business problems related to CRM and data.

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