achieving digital excellence

ACHIEVING DIGITAL EXCELLENCEWhy Smart Strategy Matters Even More in the Digital Age

THE DIGITALCONSULTANCY

INTRODUCTIONOver the course of more than two decades, digital has become central to our lives. Yet many companies still struggle to make digital central to their business.

Achieving Digital Excellence

This begs the question: Why?

In our work with top executives at some of the world’s largest enterprises, we have found that the struggle to achieve digital transformation stems not from an inability to see the change as it happens outside the business. Instead, the struggle stems from an insufficient focus on formulating the right strategy to drive digital forward inside the business.

In fact, according to research we conducted this year, 78% of Chief Marketing Officers report that they do not have a company-wide digital strategy1. This is a sobering statistic that we see echoed in a recent Forrester study, in which 79% of respondents reported that their CEOs have failed to set a clear vision for digital2. As a result of patterns like these, far too many corporations find themselves “trapped in tactics”, conducting a disjointed array of

digital experiments that aren’t always aligned to key growth drivers and often don’t achieve key business objectives in a meaningful way.

In an age when 87% of CMOs are under increasing pressure to deliver a positive return on every investment3, this isn’t good enough.

However, our aim here is not to point out shortcomings but to lead the way toward success. A clear digital strategy empowers marketers to…

Know their customers. When 93%4 of organisations don’t know their customers’ digital habits, an evidence-based digital strategy provides a clear understanding of how your customers use digital today.

Make smarter choices. At a time when 73%5 of marketers believe they have too many digital assets, and a majority struggle to manage them and fail to recognise their current value. The right digital strategy allows you to focus your efforts on the assets that create the most value for your customers and capture the most value for your company.

Do what works.In a market where only 40%6 of brand leaders believe their marketing is effective, an effective digital strategy creates marketing confidence through accountability and measurable results.

Achieve more for less. A global digital strategy helps organisations eliminate the duplication of effort and expenditure that comes from scattershot tactical execution, delivering upwards of 38%7 in global savings.

With this report, we will arm you with a clear and compelling case for strategy in the digital age. Then, we will help you take your first, confident steps toward digital excellence by bringing focus to four strategic imperatives that are practical, actionable and – most importantly – achievable for businesses of just about any type.

78% of Chief Marketing Officers

report that they do not have a company-wide digital strategy1



A CASE FOR STRATEGY IN THE DIGITAL AGEA look at even a small handful of the many ways in which digital is shifting the balance, paints a vivid picture of an utterly transformed business environment.

Billions are hyper-connected through technology. As the result of a digital revolution, already more than 20 years in the making, the web, social media, mobile, cloud computing and big data analytics (not to mention the new and next waves of wearables and the Internet of Things), billions of people are more connected to each other, to content and information, and to the “companies they keep” wherever, whenever and however they wish.

Empowered buyers demand more. ‘Always-on’ access to information, has shifted control to consumers and customers, allowing them to consider more options and make smarter choices. They expect the companies they choose to be hyper-connected too, rewarding (with their hard earned money) those who match marketing promise with the always-on requirements of their customers. If buyers demand more, sellers need to respond accordingly.

Traditional competitive advantages have been rendered obsolete.Industrial advantages derived from scale are giving way to digital era advantages like agility, innovation, collaboration and true customer- centricity. Where once the big ate the small, in the digital age it is the fast that eat the slow.

Kodak once led their sector but were driven into bankruptcy by their inability to respond to not just one, but three successive changes in their industry: digital cameras supplanting traditional film cameras (despite having registered one of the first patents for digital camera technology decades before the first digital camera was introduced by a competitor), the growing prevalence of digital photo storage over photo printing, and the popularity of online photo sharing.

Blockbuster passed on several early opportunities to acquire Netflix, viewing the company as a decidedly niche play. Today, Blockbuster is out of business, while Netflix continues to reinvent its business to keep pace with changing media consumption habits and boasts a multi-billion dollar valuation.

The New York Times, who have struggled to replace “traditional dollars with digital dimes”, continues to lean too heavily on a 100-year heritage that has grown less and less relevant to the next generation of media consumers. In a dense 90+ page report leaked to the media in April 2014, the Times’ team provides ample evidence of its digital problems but recommends little more than the formation of a task force to explore solutions – their transformation is just getting started. Meanwhile, the new generation of infojunkies have already abandoned newspapers in favor of “quick hit” digital media powerhouses like Huffington Post and Buzzfeed and instant peer-to-peer knowledge networks like Twitter.

For companies slow to adapt to this new normal, the penalties are severe.


For businesses that embrace digital fully – not simply from a technology standpoint; not merely as a new way to market; but as a new way of doing business across every area of the enterprise – the benefits are positive, tangible, and impressive.


This holds true not only for digital native businesses like Amazon, Apple and Google, but also for traditional enterprises as diverse as Burberry, Ford and Asian Paints (India’s largest coatings manufacturer).

9%

More Revenue from their Physical Assets

26%

More Profitablility

12.8%

Higher Market Valuations8

The signals are clear.In order to thrive in the digital age, you must formulate and execute a sound digital strategy – one that spans all areas of your business, one that is embraced at the top of the organisation, one that aligns the entire organisation around efficient execution, and one that recognises that digital strategy is not simply a matter of technology, nor merely a mode of marketing, but an entirely new way of being in business.

Your company wins when you have the right business answers to the most fundamental digital questions: How must our business evolve to thrive in an environment that is increasingly digital, social and mobile?

How must it evolve to meet the needs of digital consumers and customers who are hyper-connected, always on, and more demanding than ever before?

These are big questions, for sure – and their implications on your business can be massive. It’s not surprising that digital transformation has made its way onto the boardroom agenda, even as CEOs struggle to set the vision and CMOs worry that their strategy isn’t solid. But even in a game with such high stakes, we believe that action comes from distilling strategy down to its most fundamental components.




THE FOUR IMPERATIVES OF GOOD DIGITAL STRATEGY

Strategy – whether business or marketing, digital or otherwise – is all about making informed choices among the many options available to you. You don’t need to do everything (even if your competition does). Remember, 73% of marketers believe they’re doing too much and achieving too little. Their agency partners and media vendors aren’t making matters any better, as they bring forward a dizzying array of tactical ideas without the backing of proper diligence. That’s hardly strategic.

Instead, you need to do the right things – for your business, and for your customers – and you need to do them consistently, efficiently and effectively across your entire organisation, in order to get the best possible results. This is the essence of good strategy.

Done correctly, a digital strategy provides you with a clear, high-level plan for achieving your most important goals, even under constantly changing market conditions. By defining a clear strategy for doing business and engaging customers in the digital age, you establish a set of rules that focus everyone in your organisation on the right digital activities to achieve a single, powerful set of overarching business outcomes.

While no two strategies are the same – and in a constantly shifting business environment, no single strategy is set-and-forget – our work with clients has shown that all good digital strategies share the following four imperatives:


1 Data-driven

decision-making

2A clear roadmap of

activities, deliverables and goals

3The right metrics

for success

4A consistent

focus for all internal and external stakeholders


DATA-DRIVEN DECISION-MAKING1.

Know your customers. When 93%9 of organisations don’t know their customers’ digital habits, an evidence-based digital strategy provides a clear understanding of how your customers use digital today.

It’s not that most brands don’t use any data to make key digital decisions; it’s that they may not be using the right data.

Digital is descended from a mass marketing legacy that places a high premium on scale – the ability to reach the largest possible audience, not knowing what portion of that audience might be interested at any given moment in time and sometimes not knowing if they’re even the right audience at all. As early 20th century

retail mogul John Wanamaker famously said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half”.

While the primacy of the popular carries over to digital – marketers invest heavily in the largest web portals, place their bets with only the largest global social networks, and measure their effectiveness by likes, followers and viral views – the truth may be even more dire than in Wanamaker’s day. Far more than half the money spent in digital is wasted. We knowbecause we struggle with sub-1% response rates.

If that’s the bad news, the good news is that data not only tells us what isn’t working but gives us insight about what will. Smart strategy is built upon a keen understanding of our consumers, their behaviors and their needs.

Consider: • How do your best customers and target consumers spend their time online?

• Where do they go and how do they behave when they’re there?

• In what ways do they interact with businesses and what are their expectations for how those businesses will interact with them?

• What information do they want, what information do they need, as they make important decisions?

• Where are they most likely to go online to find that information – and who is most likely to provide it?

• How can brands provide that information through content, utilities, real-time support, and more?

To a large extent, you can understand digital consumers by observing their behavior – the websites they visit, the brands they like and follow, the content they share and the online conversations they have. But sometimes, the best way to gain insight into their true needs (and what they need from your company specifically) is to ask the question directly.

In the end, it is through deep understanding of the consumer that brands are armed with the insights they need to make smart choices about how to build their digital roadmap.

93%of organisations don’t know their customers’

digital habits9



A CLEAR ROADMAP OF ACTIVITIES, DELIVERABLES & GOALS2.

Make smarter choices. At a time when 73%10 of marketers believe they have too many digital assets, and a majority struggle to manage them and fail to recognise their current value, the right digital strategy allows you to focus your efforts on the assets that create the most value for your customers and capture the most value for your company.

In a recent TDC review of the top 100 global brands, we found that the average company maintains 14 different digital platforms – from their website and mobile applications, to social networks like Facebook, Twitter and Instagram. And that’s even before breaking it down further to account for product and campaign microsites or multiple profiles on any single network. We’ve worked with some brands that have 18 Facebook pages alone – often where one would do the job just fine.

What’s worse, these digital assets are often not managed as a single, integrated ecosystem of presences but instead suffer from a notable lack of coordination, significant inconsistencies in level of activity or engagement, and even substantial duplication at the product or regional levels.

Yet, for every instance of a brand doing too much, we can find instances where brands are doing too little. For example, 87% of the marketers we surveyed do not invest in search marketing to drive audiences to their properties and, when they do, 63% do nothing more than point traffic to their main page (even where other, more targeted pages exist online11).

A focused digital strategy should be manageable, integrated with your core business and marketing strategies, easy to understand and implement by all stakeholders. Most importantly, it should translate data-driven insights into a clear and justifiable set of recommendations that make sense for your company and your consumer.

• A well-coordinated system of prioritised digital channels, each with its own defined role in conveying your brand’s value proposition and delivering benefit to your consumers.

• A balance between long-term commitments that result in greater loyalty and advocacy among your most passionate customers and quick win campaigns that deliver near-term results and valuable learning.

• Clear criteria for evaluating any new opportunity or idea, allowing for innovation but protecting against shiny object syndrome.

• A basis for establishing and managing the right resources – financial, human and otherwise – to sustain the planned programs and activities.

• And finally, the basis for measuring success and optimising for performance.



THE RIGHT METRICS FOR SUCCESS3.

Do what works. In a market where only 40%12 of brand leaders believe their marketing is effective, an effective digital strategy creates marketing confidence through accountability and measurable results.

There is a popular business adage that goes, “Cheap, fast, or good. Pick any two”. Although this saying originated in project management circles, it happens to highlight some common misconceptions about what matters most when measuring digital success:

• That digital marketing is (and should be) cheap

• That the only digital results that matter are the ones you get fast (even immediate)

Naturally, it’s “good” that often gets lost in the shuffle. After all, what good is a “like” if it doesn’t contribute to a deeper, more meaningful relationship between a brand and its customer? What good is a click if your back-end systems can’t track that user through to the sale?

A robust digital strategy is insight-driven and validated by data. It allows your business to measure and analyse every digital action – the ones you take and the ones your audiences make – against the right set of measures. But

even where results rule, there is increased evidence to prove that digital builds brand value over the long term. It’s not that cost efficiencies and short-term gains don’t matter anymore; it’s that they are merely two viable measures among a range of metrics that (depending on your business objectives) might include digital’s contribution to:

• Overall brand awareness and perception (brand value)

• Lead generation (for subsequent conversion)

• Attribution and/or lifts to response rates for other marketing channels

• Sales and cost-per-sale

• Relationship management

• Retention

• Loyalty

• Advocacy (increased positive word-of-mouth)

A proper measurement plan balances cost per impression (or cost per engagement) efficiencies and simple click data with a richer, more nuanced set of key performance indicators in order to paint a more vivid picture of how digital contributes to the strength of the business overall.

More importantly, proper measurement gives you the data you need to optimise the performance of your digital programs, and the proof you can use to demonstrate the value that digital provides to your organisation as a whole – not to mention to each and every stakeholder, both inside and outside your walls.


“Cheap, fast, or good. Pick any two”

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ALIGNMENT OF ALL INTERNAL & EXTERNAL STAKEHOLDERS4.

Achieve more for less. A global digital strategy helps organisations eliminate the duplication of effort and expenditure that comes from scattershot tactical execution, delivering upwards of 38%13 in global savings.

Even the best strategy is worthless if it can’t be executed by the organisation. As companies invest more budget into digital – by some estimates, as much as 75%14 of marketing money may be allocated to digital within the next five years – it becomes vital that organisations excel in four key areas of execution:

Clear internal communication of the strategy, so that there is organisational alignment around actions and accountabilities.As digital strategies become more robust and investments more significant, it is critical that your strategy can not only be explained but also understood in every department and at every level of the organisation.

Alignment of external partners such as agencies, technical vendors and media partners.Smart strategy results in flawless execution when you have the tools to brief, challenge and evaluate external stakeholders and the approaches they take to deliver upon strategic mandates. Reviewing outside work against an evidence-based strategy is more objective, while creating clear guardrails within which creative and innovation can thrive.

Consistency across all programs and de-duplication of efforts between teams and regions. In our work, we’ve seen instances where online brand consistency is as low as 13%15 when viewed across campaigns and markets. As various stakeholders inside and outside the company, and across multiple regions, execute similar programs in absence of a unified strategy to steer them or governance to guide them. This not only results in wasted time, effort and money – but also in confusion among consumers who often can’t distinguish between new messages and old.

Digital competency-building that ensures the organisation has the right skills to deliver on the digital strategy. In our recent Marketing Survey, only 48% of marketers said they feel “highly proficient” in digital marketing and only 56% do not believe they have the skills to implement agency recommendations16. Rather than putting digital in the hands of a few carefully recruited “experts”, we’d suggest that enterprises infuse digital thinking and skill sets throughout the entire organisation – ensuring commitment at the highest levels of leadership and involvement across every business function.


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Online Brand consistency is as low as 13% when viewed across campaigns and markets

CHALLENGES OPPORTUNITIES STRATEGIC IMPERATIVES

93% of companies don’t know their customers’

digital habitsKnow your customers Conduct data-driven

decision-making

73% of marketers believe they have too many digital assets

Make smarter choices

Create a clear roadmap of activities, deliverables

and goals

Only 40% of marketing leaders believe their digital marketing

is effectiveDo what works Establish and measure the

right metrics for success

Duplication and misalignment

Achieve more for less / 38% in global savings

Align all internal and external stakeholders around flawless

execution


ACHIEVE DIGITAL EXCELLENCE

Business success today requires a customer-focused digital strategy that is focused, actionable, and results-oriented. An effective strategy is built upon a solid foundation of data-driven decision-making, a clear roadmap, the right metrics, and stakeholder alignment. In this report, we’ve shown you why digital strategy matters and we’ve given you a high level framework for thinking about digital strategy in your organisation.

In Stepping Up To The Challenge 2014, IBM17 reported that 63% of top executives turn to their Chief Marketing Officer for strategic input on digital strategy. Similarly, according to Altimeter Group’s latest report on The State of Digital Transformation, 54% of the business leaders surveyed expect the CMO to champion their company’s digital transformation initiatives18.

We’d say the next step is yours – if digital creates challenges for your enterprise, it also creates opportunities for marketing leaders who are ready, willing and able to push their companies to the forefront of digital excellence.


1. Does your organisation have a single, global digital strategy?

2. Is that strategy clear and simple enough to be understood by every member of your team and all your outside partners (e.g., agencies, media partners, technology vendors)?

3. Do you feel that your digital strategy is being executed consistently by all team members and outside partners?

4. Have you researched and documented your customers’ digital consumer journey as a basis for data-driven decision making?

5. Can you gauge how well your current digital activities meet the most important needs of your customers and prospects?

6. Have you audited your current digital assets to ensure global consistency, minimal duplication or efforts, and adherence to quality standards?

7. Can you articulate the specific role each digital asset plays in your overall marketing mix, and do you understand how effective that asset is in achieving its purpose?

8. Are you measuring success consistently – with a robust measurement framework and routine reporting – then optimising your digital efforts to drive both near- and long term results?

9. Do you feel your organisation, as it stands today, has all necessary skills to implement your digital strategy?

10. Do you feel your outside partners – especially your agencies – have the necessary skills to provide you with strategic guidance and implement your digital strategy efficiently, effectively, and with minimum duplication of effort?


You don't need the word 'digital' in your job description to be a digital strategy leader. Given what you know about the state of digital inside your organisation, use this simple 10-question self-assessment to gauge how well your strategy meets the four imperatives we've outlined in this report. What actions can you take to guide your business toward digital excellence?


ARE YOU READY TO BE A DIGITAL STRATEGY LEADER?

Digital Strategy Self-Assessment


Strategy. Our recommendations are always analytics-driven with clear, actionable next steps and timings. We use proven methodologies and tools that add value to the business, create true consumer understanding around audiences and customers and ensure the right strategic framework is in place to be able to gain collective understanding and adherence to the agreed strategy.

Capabilities. Without the right capabilities in place across an organisation the strategy will be difficult to land effectively. Our capabilities team assesses existing and future capability needs and develops the right training tools, which are tailored to the needs of global or regional management boards and local marketing and sales teams.

Engagement. In order to embed the digital strategy, we work with our clients to effectively engage the right stakeholders across geographies and functions. By ensuring they buy in to the strategy, we help create the right environment to ensure the agreed company approach is understood, embraced and exploited.

ABOUT THE DIGITAL CONSULTANCY

The Digital Consultancy enables senior management to understand and exploit digital strategy as a key driver of brand value and business growth. Objective Strategic Digital Expertise is at the heart of our business; every engagement is different and as such we tailor every assignment to provide a bespoke approach and recommendation. Our proven experience and expertise encompasses three main areas:

For additional information please contact:

UK

Andrew Phillips Tel: +44 (0)20 7902 0664Mobile: +44 (0)7970 840063Email: [email protected]

US

Greg VerdinoTel: +1 631 543 1910Email: [email protected]


END NOTES

1. The Strategy Review. The Digital Consultancy, 2014

2. State of Digital Business. Forrester Research, 2014



5. Marketing Survey. The Digital Consultancy, 2014



8. The Digital Advantage: How Digital Leaders Outperform Their Peers in Every Industry. Capgemini Consulting and MIT Sloan School of Management, 2013









17. Stepping up to the challenge. IBM, 2014

18. The State of Digital Transformation. Altimeter Group, 2014

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