Defining Digital Strategy
What is a digital strategy and why is it important?
As we continue to talk with clients and colleagues about the meaning of “digital” and Centric’s digital solutions, we’ve learned some interesting lessons. For one, the majority of companies today have very different views about the meaning of digital. Is digital a set of tools? A marketing tactic? More than that?
For me, digital is less about a specific technology or channel such as mobile or portal. Rather, it’s a behavior and should now be part of a company’s cultural DNA. I boil it down to three main points:
Digital requires a mind shift in company culture and process. Now that nearly everything we do is online, it’s essential that companies reevaluate how employees work and how engagement with customers happens. Thinking with a digital mindset involves taking a hard look at the customer journey, building new products and services with partners, and rethinking go-to-market strategies.
Digital means developing a cohesive strategy for all layers of customer engagement. Business and IT leaders are increasingly overwhelmed by a perceived need to create a mobile strategy, cloud strategy, social media strategy, big data strategy, etc. Rather, companies need a comprehensive business strategy and operating model that is designed for a digital world.
Digital involves avoiding the temptation to silo it into a single function such as marketing. Digital is not (only) about marketing, it requires us to think deeply about all the touch points and moments of truth in the customer journey, which includes acquisition, end-to-end engagement and service to existing customers.
Why do companies need a digital strategy?
The challenges companies face in the digital world are complex. Customers expect intuitive, personalized, omnichannel experiences across multiple screens and touchpoints: mobile, web, sensors, social media and even call centers. Partners and suppliers are adjusting their business processes. Competitors are increasingly exploiting the opportunities that digital offers. And employees are using their own digital devices and apps for work.
Digital is not a fad – your customers and, in some cases, your workforce, have already embraced the digital mind shift. If your organization isn’t quite ready, it is essential to understand why investing in a digital strategy is important. Here are just a few reasons:
1. Developing a digital strategy helps to better prepare for the disruptive effects that digital is driving across multiple industries.
- Uber is disrupting the transportation industry by changing the way customers get from point A to point B.
- AirBnB and Hotel Tonight are disrupting the hotel and lodging industry with unique booking options and last-minute deals.
- Better and Mayo Clinic are disrupting the delivery of healthcare by allowing patients to take more personal control of their health and healthcare options.
- StockSpot and FutureAdvisor are disrupting wealth management and financial services by providing diverse options for investment management.
2. A digital strategy helps your company understand the value chain implications and operational cost savings at stake.
- McKinsey & Company estimates that digital transformation will yield a 20-percent reduction in operating costs for industries such as retail banking and property-and-casualty insurance.
3. A digital strategy provides the ability to acquire new customers through online channels.
- Use digital marketing, websites, portals, social media and analytics to increase awareness of products and services.
- Augment and improve non-digital channels by applying insights from digital.
4. A digital strategy helps to improve the customer experience for existing customers.
- Provide straight-through transaction processing and end-to-end automation on any Internet-connected device.
- Provide customer self-service and administration.
Developing a solid digital strategy requires much thought, collaboration and an open mind. Read my next post that offers some tips for getting started – Developing a Digital Strategy: Journey Mapping.