Why this idea means business : We dig into digital transformation and explore why it’s past its sell-by date. Learn the real role digital should play for customers and in your business. Read this to learn why it’s time to move on from digital transformation.
How much is this idea worth?
Idea : To take a more pragmatic approach to using digital to grow your brand. Based on our standard business case assumptions, the value of this idea is :-
- Source of business – More customers
- Skill area – Marketing
- Commercial hypothesis :-
- # customers = 1,000
- Spend/month = $100
- Est. new customers = +45 (+4.5%)
- Est. sales increase = +$4.5k (monthly) | +$54k (annual)
The idea of digital transformation has been around for a long time. But it only really took off as a business approach from around 2015. Interestingly, Covid seems to have flattened its growth, if search trends from 2020 to date are anything to go by.
Weirdly, the shape of digital transformation searches looks like the shape of the marketing product life cycle. Slow to get going. Then rapid growth. And then flat, ongoing maturity. If it follows the pattern, decline is coming soon. And that’d be a good thing.
Digital transformation - abused and misused
It’s not that we’re anti-digital. Far from it. We see big opportunities in the online and technology space.
Nor are we against the idea of transformation. We’re always open to driving improvements.
No, we believe digital transformation is past its sell-by date because of how it’s been so abused and misused as a business idea.
What it’s become isn’t what it was meant to be.
Clearly, digital has transformed how we interact with the world, and with each other. You wouldn’t be reading this if it hadn’t.
And for businesses, it presents a new challenge. Customer lifestyles and expectations have changed.
Digital transformation should be about companies changing to handle this new reality. Serving customers better in this new digitally enhanced world. But in reality, that’s rarely what it delivers.
Where digital transformation should fit in
It’s not like it’s hard to work this out. As per our digital business model guide, there are 3 main strategic areas to making your business more “digital” i.e. what you should be doing with digital.
First, there’s the external analysis and objectives which focus on customers.
How you reach them with digital media. How you engage them with customer experiences. And how you convert those into selling via e-Commerce to grow your business.
Then, there are the internal capabilities to support these.
Choosing the right marketing technology. Your data and analysis skills to better understand customers and convert digital insights into better customer experiences. And all the resources (e.g. people, time and budget) needed to do digital well.
Lastly, there’s the change plan to get from where you are now, to where you need to be in digital. That plan is what digital transformation should be. But, it’s usually where it all goes wrong.
The time and effort of digital transformation
Let’s be fair. Change is never easy. We’re genetically programmed to be wary of it.
It takes time and effort to force ourselves to change. Whether it’s a new exercise regime, updating our passwords, or learning a new skill, change is long, hard work. That’s especially true with digital transformation and all its new skills.
Learning how to gather and use digital insights.
How to use social media to connect with customers. And how to set up your own online store, so you can sell direct to those customers. Lots of time. Lots of effort.
Where it mostly goes wrong is the time element. Business leaders find time is their scarcest resource. There’s never enough of it.
They flit from meeting to meeting, never getting a chance to think deeply.
They rely on soundbites and summaries to scramble through their day, trying to make decisions which won’t get them fired or laughed at.
Seeing digital transformation mentioned so often makes them fear they’re being left behind. That they’re missing out. So the feel pressured to do something about digital transformation.
Vulnerable to the digital sharks
This means they’re vulnerable to the management consultant and agency sharks out there who promise easy, quick paths to digital transformation.
Many companies try to “do” digital transformation by hiring these expensive digital gurus to run workshops. But digital transformation doesn’t happen in a day or two. It takes time and effort, remember?
In these workshops, the consultants show lots of fancy PowerPoint slides and funky videos.
There are breakout sessions and discussions, using the ironically non-digital medium of Post-it notes.
Afterwards, the consultants circulate a list of key actions and a roadmap to digital transformation. And that sounds OK. Until you look at what happens next. Because, usually it’s very little. That’s because the leaders who attend those workshops aren’t the right audience. They’re not the ones who’ll be doing digital.
For a start, they don’t really get what digital is. They don’t have the right skills and expertise to deliver it. Plus, they didn’t get into their leadership roles by being good at digital. So they’re not motivated to get into the details of how to do it now. They’ll never admit it, but it kinda scares them.
So, they farm the actions out to their team, who weren’t at the workshop. Then, they go back to their cycle of (non-digital) meetings and whatever else it is they spend their day doing. At some point, maybe 6-12 months later, someone asks how the whole digital transformation thing’s going. And all they can say is they’re still working on it.
A big consultant bill for an almost non-existent transformation.
People drive change and transformation
The key part missed in these workshops is usually how important people are to digital transformation. It’s people who drive the culture in the business. Without people, nothing happens.
But here’s the thing. People generally don’t want to be transformed.
Most people are happy doing what they’re doing. Maybe a promotion at some point? A pay rise would be good. Oh, and if they could stop Derek from Finance heating his fish curry leftovers in the office microwave at lunchtime, that’d be great.
But nobody goes to work wanting to be transformed.
This is what many businesses get wrong. All that digital “stuff” like digital media, technology and e-Commerce are just the tools you need to do digital. But, they’ll sit there uselessly until you motivate and train someone to use them. To show them what it’s for, and how it helps them do their job better. These are mostly small, incremental changes to make life better. Life-changing breakthrough transformations in digital are actually few and far between.
Big digital transformations are few and far between
There aren’t many upsides to the pandemic. But it did force many businesses to think more radically about what digital could do for them. Businesses that weren’t already using online had to get there and get there fast.
But with your 2023 hat on, what’s really that different in digital terms from 2020?
If you screen out all the flavour-of-the-month technology breakthroughs (Chat GPT, Web 3, the Metaverse and so on), none of which have stuck, it’s not that different.
Look back over the last 30 years and big life-changing digital breakthroughs are very spread out.
It kicked off with the public launch of the World Wide Web in 1993. Then, you had the start of search and e-Commerce, with companies like Netscape, Yahoo and Amazon all starting in 1994.
But then it’s all boom, bust and blah until you get the next big trend which stuck, which was social media from the mid-2000s. Early runner MySpace started in 2003 but was soon crushed by the still-dominant Facebook which launched a year later.
Then, you’ve got some big technology leaps, mainly led by Apple with the iPhone in 2007 and the iPad in 2010. Touchscreens changed how we interact with the online world.
But since then, it feels like the big leap forwards have all slowed down.
Nothing so breakthrough. Everything’s just a slightly better version of what came before.
A slightly better version of what came before
For example, the iWatch is basically a small iPhone with a wristband.
Video calls were around in the late 2000s (Skype started in 2003), but it’s only in the last few years, that the bandwidth’s improved enough to make them more reliable. However, there’s still an opportunity to make them more enjoyable.
Ditto with TV streaming, which Netflix first offered in 2007. But that’s only really become the norm in the last few years.
And yes, we now have more reliable choices in e-Commerce. Getting booze delivered in 30 minutes (see our online alcohol article), or those funky new Converse shoes delivered the next day (see our online fashion article) is good.
But, are these all that life-changing? Aren’t they just saving us from the time spent going to the store? Time we’ll probably spend flicking through more shopping sites on our phones.
What we’ve seen though is a boom in unfiltered content. Social media means anyone can put anything and everything in front of you, the customer. Badly thought-out, poorly edited junk clogs up our social feeds all day. While you try to clear the worst of it by blocking, deleting or complaining about anything inappropriate, it’s exhausting to avoid drowning in this tsunami of terrible content.
And that’s where digital transformation needs to be something different to what it is now.
Digital transformation asks the key question the wrong way round
Digital transformation goes wrong in most businesses because it asks the wrong question.
Or to be more exact, it asks the question the wrong way round.
It’s not about how to use digital to transform your business. It’s how your business needs to transform, and then if and how digital helps you do that.
You have to decide the change you need first. And while digital is almost always part of that, it may not be all of the change.
This is key. Digital is part of your transformation, but it’s rarely all of it.
So you go through your basic strategy process.
You do your external analysis, looking at the market and your customer insights. Part of that is looking at what digital means to them. How they use it. What needs it helps them meet. You look for opportunities to meet those needs with digital services and experiences. But if digital doesn’t fully meet those needs, you’ll need non-digital activities in your change plan too.
Then it’s your internal review. Your capabilities and your culture. Your people, leadership, systems and resources. You work out if you have the right business set-up to meet the digital opportunity. If you don’t, you work out what has to change to make it happen.
That’s your digital transformation.
It’s this change in approach which has to run through the whole business. It’s not just the low-level workers who need to transform. The team at the top need to lead by example and commit to using digital to get closer to the customer too.
Digital transformation should bring you closer to the customer
Digital transformation should bring you closer to the customer. Sounds obvious when you say it. But it’s hard to do.
It’s back to that time and effort commitment.
You have to get past all the distractions. See through the detail of all the digital data and technology to see the real people behind the numbers.
Digital distracts marketers with charts and spreadsheets, jargon and buzzwords.
It makes them forget there are real flesh and blood customers out there whose needs have to be met.
If you were really all about the customer, you’d question much of what digital transformation has done. Much of what it’s done is make life harder and more annoying
Retargeting, ReCaptcha and Recommendations
Take retargeting media, for example. The numbers show it increases sales by a few per cent. Great. But they don’t show the annoyance levels of customers who looked at your website once and now have to see your advert on Facebook 3 times a day for the next 3 weeks.
Recaptcha is another. Great that it stops automated bots and helps with picture recognition. But those 5 seconds it takes everyone to identify traffic lights or taxis, soon add up. Especially if you think about the time of everyone in the world who has to click on those stupid boxes. Who’s it really helping, because it’s not helping customers, is it?
And then there’s all those helpful recommendations you get on e-Commerce stores. Other customers who looked at this also bought this other random object you’ve no interest in. Again, it’s another digital transformation activity which may convert a few extra sales. But it distracts and annoys most other customers with unwanted invitations to buy more crap they don’t need.
Getting closer to the customer should be easier with all that data. But it seems like many brands have no idea how to use it.
If digital transformation is going to survive much longer, that ability to use it to do useful stuff for customers is about the only reason you can justify not letting it decline and die.
Conclusion - time for digital transformation to decline and die
As we said at the start, we’re not anti-digital. We’re not anti-transformation. We are anti using digital transformation as a way to deliver experiences which are bad for customers, though.
If you want to transform your business, it has to start with customers. What they think, feel and do, what they need, and how you can help them.
If you know how to use it properly, digital and technology can open up so many amazing opportunities to meet customers’ needs.
It drives us crazy how many businesses fail to grasp what’s right there in front of them. Led astray by overpromising and underdelivering consultants and agencies.
Digital transformation should be part of your business planning, but has to support what you do for customers. There’s no single best way to transform. Everyone starts from a different place and has a different context. Your digital endgame comes down to what’s best for you and your customers. The customer focus is the real transformation. Digital is only a tool to help you get there.
Check out our digital business model guide for more on this. Or get in touch if you’d like to discuss what digital transformation should really mean for your business.
Photo credits
Angry face : Photo by Andre Hunter on Unsplash
Man crying : Photo by Tom Pumford on Unsplash
Clock : Photo by Agê Barros on Unsplash
Hands : Photo by Clay Banks on Unsplash
The Journey is on : Photo by Clemens van Lay on Unsplash
Social media and facebook : Photo by William Iven on Unsplash
Netflix : Photo by Kon Karampelas on Unsplash
Question mark sign : Photo by Emily Morter on Unsplash
Customer Experience Coffee Shop : Photo by Patrick Tomasso on Unsplash
Interesting perspective! While digital transformation has been a key focus, I agree that it’s important for businesses to reassess and ensure it’s truly adding value. What do you think will be the next big trend for marketers in the coming years?
Thanks for commenting. For us, the next big trend is already here with Artificial Intelligence. However, we see signs that it’s leading to an overwhelming safeness and sameness in marketing thinking and execution. AI content is easy to spot and ignore, and this only benefits existing market leaders. So we’d foresee the rise of more obviously people-originated and distinctive brands standing out from the copycat emotionless AI-driven ones. AI (and digital) is just a tool – it still takes real people to know how to use it well. Do you agree or do you think there’s another big trend we’ve missed here?