If we were at the crossroads of digitalisation before Covid, then we have been thrust into the great digital acceleration. One of the greatest shortcomings of businesses in the past three years is that they were and remain ill-prepared to compete in a digital world.
‘Digital Modernisation’ is your business and team’s ability to locate and engage with a potential customer in a way that meets their digital expectations, not yours.
Businesses remain ill-prepared. The digital world has moved so rapidly that most business owners and executives have not kept pace. The most frequent avoidance excuse is because most businesses don’t know where to start and are often overwhelmed by the costs and their lack of knowledge.
So often, in business uncertainty, we are drawn to what we know and what is familiar and avoid what we are unsure about. It’s hardwired into human behaviour and is an action many of us only see in hindsight. But digitalisation can’t be avoided or skimped on because businesses are unsure and feel out of their depth. One client’s example stands out to take lessons from.
A manufacturer of consumer products was falling behind its major competitors in direct consumer sales. They were spending a 10th of the industry standard on their digital development and digital client engagement. We provided an audit of their digital position, reported on our findings and submitted a digital strategy that had the minimum costs associated across a 12-month trial.
The client came back proposing a cut to the budget, offering one-fifth of what we put forward. One month later, the same leadership group approved an upgrade of the production lines in the factory that was two years ahead of the necessary maintenance schedule. The worst part was, that it was 12 times the cost of the original digital budget they denied.
The leadership team and founder had overseen the building of the manufacturing facility and were all skilled in the practical production side of their business. This was within their comfort level. They saw value in the shiny new equipment, and as a collective, they saw the digital investment as intangible, hard to understand and difficult to measure value in. They were uncomfortable investing in what they didn’t understand.
Ignorance is not a strategy. The client’s online engagement with customers continued to fall behind the industry, as did their sales growth.
The lessons from this client are:
- Take responsibility for what you don’t understand and increase your knowledge of the importance and relevance of digitalisation in your industry. Whether we like it or not, there has been great digitalisation taking place, and this will only continue to gain momentum as we become more connected and advance in technology. We are moving into a new era of digital engagement, whether B2B or B2C.
- Complete an independent digital audit. This should come from an outside source and involve reviewing your current position against industry standards, taking into consideration how your core domestic and international competitors have responded.
- Build a realistic action plan of first steps. This does not need to cost the earth but should be acknowledged in your business plan and strategy. Build a feasible digital plan and engage all key stakeholders in the business around it. Each area of the company can gain from improving its digital capabilities.
- Invest. Your path to digitalisation must have a seat at your budget table like all your other core budget items alongside sales, marketing, infrastructure spending, product development, etc. Giving digital modernisation a separate budget outside of other vital departments or business requirements creates the focus and importance it must have. It’s far too easy to cut corners in this area if it’s not allocated and approved in its own right.
- Understand the omni-channel position of your industry. Omni-channel refers to taking a multichannel approach to sales that seeks to provide customers with a seamless purchase experience. Whether they’re engaging with you online from a desktop or mobile device, by telephone, via social media, in a brick-and-mortar store or your office – they’re all interdependent in a customer’s overall experience.
In any period of business transformation, a new development area does not replace the old approach. This is important to understand. Taking notice of the omni-channel trends in your industry is critical before making decisions, as digital engagement does not replace your existing client engagement channels. Again, one must take an omni-channel approach.
There is a manageable and affordable digital strategy for every business, but the longer you do not engage with one, the more it will cost your business.