Consumer behavior is constantly evolving. According to a 2014 Altimeter Group report, mobile, social, and real-time technology trends (or what venture capitalist Fred Wilson refers to as the “Golden Triangle of Disruption”) are changing the way consumers engage and discover information. And as consumers change, companies must evolve to survive.
The result is digital transformation.
Digital transformation, according to the research and advisory firm, is “the realignment of, or new investment in, technology and business models to more effectively engage digital customers at every touchpoint in the customer experience lifecycle.” Companies that invest in digital transformation, according to the report, experience numerous benefits, such as improved customer journeys, greater competitive advantages, and increased conversion and loyalty rates.
“We have to look at what the customer experience is and what it could be,” Brian Solis, author and principal analyst for Altimeter Group, said during a keynote presentation at the ONE Teradata Marketing Festival in Las Vegas.
However, not all businesses are able to recognize or keep up with these societal and technological shifts. The result is what Altimeter Group refers to as “Digital Darwinism.” Put simply, those who adapt live and those who don’t die.
Consider the following two examples Solis cited during his keynote presentation: Movie rental company Blockbuster had the opportunity to purchase streaming service Netflix back in 2000 but passed on the opportunity due to its own popularity. Fast forwarded to 2010: Blockbuster files for bankruptcy while Netflix experiences a 43,101% sales boost since 1999, according to Solis. Likewise, he said that Amazon bankrupted what was formerly the number two bookseller, Borders, in less than a decade.
“You can see that moment when consumers have changed so much that [they’ve] split off in an entirely different direction,” he said.
Of course, using disruptive technologies to enhance the digital customer experience isn’t easy. According to a 2013 survey conducted by MIT Sloan Management Review and Capgemini Consulting, 63% of nearly 1,600 executives and managers said that the pace of technology change within their organization was slow. What’s more, an Altimeter Group survey found that 88% of executives and digital strategists said that their company was undergoing a formal digital transformation effort in 2014; however, only a quarter of them had mapped out their customers’ digital journeys.
Still, bettering customers’ experiences through digital transformation is important. So here are eight tips from Solis’ presentation that marketers should consider when creating their own digital transformation efforts.
1. Always ask why: Just because a company does something one way doesn’t mean that it’s the right way. Marketers should always question their actions and assumptions and look for opportunities to make experiences, products, and processes better and more efficient.
“We should be asking ‘why’ because that prompts ‘what if’ and ‘what if’ always prompts ‘what’s next?’” Solis said.
2. Build a culture that rewards people for trying new things: So often in life, failure is considered a negative; however, Solis argued that it’s really just the opportunity to learn from experimentation.
“That’s why it’s called innovation, not iteration,” he said.
3. Identify your purpose: Technology plays a major role in digital transformation and innovation, but only if it provides a purpose, Solis said.
“Ideas can start with anything,” he noted, “but they can all be driven by a higher purpose.”
4. See something for what it could be: Digital transformation isn’t about reinventing the wheel; it’s about improving an experience. For instance, Steve Jobs didn’t invent the mouse or the MP3 player; he just made the user experience better.
“That takes seeing the world in a different perspective because we’re making decisions today [based on] life as we know it,” Solis said.
5. Think like a customer: To help gain a different perspective, marketers should ask themselves what they can do differently and what would their customers do, Solis said.
“Connected customers always see the world differently,” he added.
6. Remember, innovation isn’t just born out of technology: It also comes from people who are passionate about doing something better than the way they are today, Solis said. And marketers don’t need to have a C-suite title to initiate change within their organizations.
“Change doesn’t always have to come from the top,” he said. “If there’s one thing I’ve learned, leadership rarely comes from the top; leadership comes from the middle.”
7. Imagine what your brand would be like if you had to start over: Digital transformation can be difficult for companies built on a legacy. So Solis advised marketers to re-imagine their companies if they launched digitally today. What would be different, he asked, and what would your customers value?
8. Understand that you can learn how to be innovative: Innovation doesn’t always come naturally to people, and that’s OK.
“Innovating isn’t something that you have to be born with,” Solis said. “You can learn it. It’s like developing a skill, and we have to master it.”