We live in an age of digital transformation where software is the foundational tool businesses use to do nearly everything. The rate at which digital change is happening is only accelerating, meaning organizations of every type need to accelerate their ability to keep up.
The need for digital enablement across the organization is vital to its sustainability, yet its ever-evolving nature and scope can seem nebulous and feel intimidating. As soon as one new system or capability is in place, it's already outdated and the next iteration is ready to roll out.
So how do we become active participants in the process instead of passive recipients? Is our current marketing technology stack staying abreast of the shifting demands of the digital customer? How will my role be affected by the digital shift within the organization? Do we have the right digital and marketing technology skills within our department? The sheer complexity of the digital and technology landscape can generate immense anxiety for marketers.
Digital Transformation initiatives can be daunting for sure, but with them comes enormous enablement opportunities that could lead to greater marketing efficacy and new ways to reach customers. The first step is to understand what digital transformation is, its impact on marketing, and how marketers can effectively navigate this change.
What Is Digital Transformation?
Digital transformation is fundamentally about understanding the capabilities offered by digital tools and services and finding innovative ways to drive value for the organization with them. That could be through new products or services, new ways of delivering those products or services, or new ways of connecting with existing and potential customers.
But why is this so important? Organizations are so focused on digital transformation today because they need systems that enable them to function in our digital-first world.
One of the most important things to appreciate about digital transformation is that it does not have a concrete endpoint. Digital change is always happening. Market shifts, the threat of disruption, or left-field market entrants are a constant for any organization. Unexpected events like the COVID-19 pandemic can dramatically upend well-established processes and force organizational change.
As the rate of technological change accelerates, companies need to constantly renew and improve their technology backbone leading to what feels like relentless internal change. The reality is that there is no end date or end state. There might be initiatives or system implementations that have a set project duration, but the nature of transformation is continuous and requires relentless improvement. Digital Transformation is a work in progress. It requires an open mind, curiosity, and resilience in the face of constant change.
Digital Transformation Through DANCE
One way to better understand digital transformation is through the DANCE acronym.
All of these factors are deeply interconnected.
Take a company like Uber as an example. Exponential technology enables users to use a phone to send a pick-up request from their actual location. Cloud servers provide the huge amount of processing power needed to handle data feeds coming from riders and drivers, and huge amounts of data enable the algorithms to determine the most appropriate driver to recommend.
For Uber, DANCE enabled a new way to offer a taxi service. That’s digital transformation in action because DANCE opened up new ways to serve customers. For marketing, it also opened up new ways of interacting with customers: directly through smartphone apps leveraging new types of data.
The Value of Digital Transformations for Marketers
It should already be clear that digital transformation opens up a wide range of possibilities for marketers.
The flip side is that it does the same for your competitors.
It’s important to keep in mind that competitors - known and unknown - are also focusing on digital and technological enablement, unlocking new capabilities and ways of engaging with customers regardless of your organization's strategy. You may not have control over your competitor's strategy, but you do have control over yours. Actively embracing and exploring the opportunities that come with digital transformation can move your team and your marketing efforts forward.
Done right, digital transformation enables marketers to become far more effective by automating routine or manual processes allowing marketers to focus on the kind of creative marketing that really moves the needle. It opens up new channels and sources of data, allowing marketers the opportunity to test and experiment with ideas and approaches that drive better outcomes.
The 4 Stages of Digital Transformation
At this stage, you may be confused because we already made it clear that digital transformations don’t have an endpoint. So how can there be 4 stages?
In reality, these stages are more of a continuous cycle. You’re always going to be planning, implementing new tools, measuring, improving, etc. You may even be doing several at the same time.
It’s important to understand these stages so you can better appreciate why certain things are happening and to generally make the digital transformation process feel more concrete.
Stage 1: Planning
The foundations of planning in a digital transformation are built around scope and timeline. This begins with understanding where you are now, how your industry is changing (and therefore how you need to adapt to meet those changes), what goals you think are practical, and how all of this will affect the customer experience.
All of this may be propelled by industry changes or other economic factors, but the results of this step will be visible in strategic planning and goals.
Just note that this will usually take place at the executive level, so marketers may not be directly involved in the planning stage but may be included in the scoping and implementation of digital tools as a valued business partner and an internal voice of the customer. But it’s still valuable to understand what goes into this step so you can better appreciate the steps that follow. For example, marketers also may see a shift in budgeting towards digital tools and technologies during this stage.
Stage 2: Implementation
This is the step where actual concrete plans are created and where the first problems often occur as leadership strives to move the strategic vision from the planning stage into a concrete set of steps to implement.
That’s one reason that many organizations will begin with a pilot project instead of starting with an organization-wide implementation. A pilot enables you to learn tough lessons while minimizing risk. As a result, once the pilot is completed, you can evaluate those lessons and use them to build support and alignment across the organization.
At this point in the process, you can start implementing your ongoing digital transformation plan. While there won’t be a specific end time, this work may stretch out over 3-5 years. During that time, as a marketer, you’ll likely see further shifts in tools and processes. For example, you may implement multi-factor authentication, experiment with AI or other algorithms to analyze data, experiment with marketing automation, or streamline processes.
Stage 3: Acceleration
Once planning is complete, a pilot has been run, and you’ve begun to implement your plan, you’ll start to see an acceleration of that transformation. This might be pushed by forces like new industry entrants or shifts in customer behavior/expectations that will accelerate the rate of change within your organization.
Overall, this stage is about remaining Agile, adapting to the problems you uncover along the way, and figuring out how to address them.
The pandemic is a great example of a driver of digital transformation acceleration. Marketers needed to adapt to fast-changing consumer behaviors and needs. Online shopping and delivery options became a necessity for many retailers and opened up opportunities for mobile services from traditionally non-mobile service providers like hairdressers.
Suddenly, if you didn’t have an online/mobile presence, you were in trouble - many retailers moved very quickly to ensure they were digitally enabled. Smart entrepreneurs took the opportunity to launch new services and online portals, and many companies partnered to increase their digital reach. Companies that were already digitally enabled could move much faster as they had a strong technology backbone.
Stage 4: Measurement
While measurement should be happening at all stages, this last stage is a reminder to look at the metrics you’re tracking and let them drive your decisions going forward. This is the time to ask questions about whether your digital transformation is achieving its goals, whether you’re meeting the needs of your customers, saving money through digital processes, and generally building a set of processes and capabilities that can drive ongoing improvement.
Keep asking what your transformation is enabling. But you also want to make sure this data is available, so you want to enable data to drive decision-making (which would again spur more planning, restarting the cycle). This helps you see what you should be working on next.
Obviously, this all ties directly back to marketing who will be expected to use more data in decision making, measuring the efficacy of the tools/tech we’re using to support and reach customers.
Common Digital Transformation Challenges
One of the main digital transformation challenges faced by marketers is the result of outdated views around the value and role of Marketing Operations. Because so much of the impact a transformation has for marketing happens around Marketing Operations, it’s important for marketers to work with Operations to better integrate digital tools into marketing processes.
Another major challenge is a lack of the kinds of skills digital transformations require. This might be data and analytics skills, or simply a lack of experience using MarTech tools. In response, marketers need to be proactive in upskilling themselves to meet the challenges they can expect to face during the transformation.
As a digital transformation progresses, shifting customer demands, a lack of a clear strategy, competing priorities, budget cuts, and cultural mismatch are all common challenges.
Effectively addressing these challenges begins with having a clear overall strategy everyone can align around. Be sure to work with leadership if necessary and actively tie marketing’s activities to that strategy so it’s clear to everyone how the two are linked.
It can also be helpful to bring in a digital transformation expert. The complexity of these processes is such that there’s never going to be a one-size-fits-all solution and working with people who have seen many organizations face their unique challenges will bring valuable insights.
Of course, the most effective overall strategy to alleviate any of these challenges is agility. Building Agile mindsets and capabilities within the organization will make it far easier to gather feedback, adjust as you go, and generally respond to any new challenges that arise.
How Digital Transformations Affect Marketers
Far too often, marketers assume digital transformation will only affect IT. The reality is that while IT enables the infrastructure component of digital transformation, there’s also a digitization of processes that has an enormous impact on how marketers do their work.
For example, marketing may begin to use algorithms to operate their PPC campaigns instead of having a human do so manually. This both mitigates risk by reducing human error and reduces the need for manual work, enabling greater efficiencies.
There will also likely be a substantial change to how marketing operations function, with digital tools providing them with more data about how marketing is performing. Armed with that data, they are better equipped to identify areas where software or process changes can improve outcomes through marketing automation.
Then there’s how digital transformation will affect culture. Marketers will need to become more customer-centric and data-driven, integrating technology into their processes and developing agility to more effectively empower individual team members.
Marketers will also need to adapt to the explosion of new channels through which they can connect to their target audience while innovating on value-enhancing approaches to use those channels. Consider how you can use all the components of DANCE to connect with customers at the most opportune time, provide the most contextual and personalized message, and track the effectiveness of your approach, uncovering and better understanding your customer's needs.
What Will Be Expected of You as a Marketer
Besides just knowing what kind of changes you can expect, it’s useful to understand the specifics of what you as a marketer will need to do during a digital transformation.
First, you will be expected to focus more on using technology and digital tools to improve processes and better serve your customers. MarTech is a part of this because you want to digitally enable the greater use of data and analytics, taking that information and using it to experiment and learn faster.
During a digital transformation, you may want to develop your skills around AI, data, and analytics (because you can’t manage what you don’t measure), Martech tools your organization intends to use, and Agile ways of working. Soft skills are also worth investing in, particularly those around being customer-centric, communicating effectively, etc.
Agility is particularly important because it enables you to respond more quickly and effectively to all the changes a digital transformation brings. That could be changing customer needs, industry disruptions caused by new entrants, or the arrival of new marketing channels.
Throughout the process, you’ll need to be proactive, challenging outdated paradigms where needed. All the while, marketing should be developing a clear North Star strategy and communicating it clearly.
Ultimately, digital transformation can either disrupt or enable you as a marketer because it disrupts your traditional way of working where you do many more things manually. Some work will become obsolete as a part of digital transformation, but there are also opportunities. But to take advantage of those you need to hone your skill set in the right way.
Before diving into several exciting digital transformation examples, why don't you take a second to get our checklist for optimizing marketing processes?
Digital Transformation Examples
To better understand what all of this looks like in practice, let’s look at 3 major success stories.
Domino’s Pizza
The fact that the first example is from a pizza restaurant should tell you something: digital transformation is relevant to every industry. The company decided to invest heavily in digital tools for pizza delivery, making it far easier for customers to order through their website or smartphone app.
This enabled customers to interact with the company in new ways, ordering pizzas through tweets or emojis. But it also gave marketers far more data about customer behavior as well as new ways to interact with customers about new products, promotions, and services.
The results have been astounding, with the company’s stock price going from $3 in 2008 to $211 just ten years later.
Capital One
While the finance sector is generally more forward-thinking when it comes to technology compared to the restaurant industry, Capital One’s story is still a standout. By investing early in a powerful mobile app that integrated greater security measures like Touch ID and eventually Face ID, Capital One transformed how its customers interacted with them.
Knowing the app was more secure enabled the company and its users to rely on it more heavily. This enabled new functionality and, like with Domino’s, new ways for marketers to learn about and interact with customers.
Your Next Steps
The good news here is that by reading this article you’ve already taken a major step towards thriving in a digital transformation. From here, your best course of action is to build the skills needed to thrive during that transformation. One easy way to do just that is through microlearning.
We’ve built a wide range of courses designed to teach you the kinds of Agile skills that will help you successfully adapt and succeed in this new environment. It’s called The Ropes and in it, you’ll find dozens of lessons on things like customer-centricity, Agile fundamentals, capacity planning and estimation, and much more.
Before moving on, don't forget to download our free Agile Marketing Transformation Checklist.
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