Two Key Steps Towards Digital Transformation (Thinks Out Loud Episode 295)
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Two Key Steps Towards Digital Transformation (Thinks Out Loud Episode 295) — Headlines and Show Notes
We’re living through tough times. You didn’t need me to tell you that. What you do need are some tips on what you can do about that fact. And, in last week’s episode, I talked about a "first step" that you can do right now to help your business. As a follow-up, here are to more key steps towards digital transformation.
Why is digital transformation particularly important right now? Because no one can go outside. Not your salespeople. Not your team. And, most important, not your customers. You need digital to do the heavy lifting for your brand and your business if you plan to have a brand and a business on the other side of this mess.
How do you do that? The latest episode of Thinks Out Loud gives you two key steps towards digital transformation so your business can benefit.
Want to learn more? Here are the show notes for you:
Relevant Links — Two Key Steps Towards Digital Transformation (Thinks Out Loud Episode 295)
- DIGITAL TRANSFORMATION | The Conference Board
- Consumer Confidence Index® | The Conference Board
- A look back in IPO: Facebook’s trailing profit and mobile intrigue | TechCrunch
- A Digital Transformation First Step: What You Can Do Right Now (Thinks Out Loud Episode 294)
- Windows Phone was a glorious failure – The Verge
- Chris Walton (@OmniTalk) / Twitter
- Lululemon’s Mirror Acquisition Is Next Level Omnichannel Retailing At Its Finest
- E-commerce Data Suggests Some Physical Retail Stores May Be A Luxury Consumers No Longer Need
- Uber to acquire Postmates for $2.65 billion after Grubhub fell through
- Grubhub spurns Uber and will merge with Europe’s Just Eat Takeaway – The Verge
- How to Compete With Amazon (and Expedia and Google and…) (Thinks Out Loud Episode 221)
- Digital tools help answer guests’ post-COVID questions — Hotel News Now
- Deal With It: Digital Makes Marketing Easier for Everyone, Which Makes Marketing Harder For Everyone (Thinks Out Loud Episode 213)
- The Lessons You Should Learn from Expedia’s Recent Troubles (Thinks Out Loud Episode 268)
- The Five Drivers of E-commerce and Digital Transformation for Your Business (Thinks Out Loud Episode 293)
- Digital Transformation of You: The Skills You Need to Compete (Thinks Out Loud Episode 296)
Thinks Out Loud is sponsored by SoloSegment: SoloSegment increases large-enterprise, B2B website conversion with easy-to-install software that automatically connects website visitors to the content they need to see to achieve their goals. SoloSegment does this using anonymous data and machine learning ensuring privacy compliance, addressing the many anonymous visitors, and improving the efficiency of marketing teams. Visit SoloSegment.com.
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Past Insights from Tim Peter Thinks
You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:
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Well, hello again, everyone. And welcome back to Thinks Out Loud, your source for all the digital marketing expertise your business needs. My name is Tim Peter. This is episode 295 of the big show. And thank you so much for tuning in. I very, very much appreciate it. I think we have a really, really cool show for you today.
I wanted to follow up on what we were talking about last week, which were the first steps in digital transformation. You know, something you could do right now, something you could get your hands around and say, we’re going to make this happen, we’re going to start to rethink our business.
And there was this really cool report from The Conference Board. Now you may know The Conference Board, but if you don’t, they produce the Consumer Confidence Index and a fair bit of economic research for businesses all over the world. I mean, they’re really, really fascinating organization that help largely Fortune 500 companies and Fortune 100 companies understand
where the world is going, you know, understand where the economy is headed, understand larger trends. They do a lot of work around human capital, around, you know, what the work force of the future is going to look like, how people will work in the future, how you source your personnel, how you build your business. Very cool organization.
Full disclosure, I do work with them on their Digital Transformation Council and on their Digital Marketing Strategy Council. So I do have a best interest in saying good things about them. But the reality is they’re really, really cool organization. They do some really spectacular research and they have a new report where they talk about how digital transformation is really going to work and, and how companies that are transforming their business are doing so successfully. That’s really the question, right? How do you do this successfully? How do you do this effectively?
And there are three really key findings that come from this report. In particular, I’m going to drill into two of them a little bit in today’s episode
- One of those is that digital transformation has to be integrated into your business strategy.
- And the second is that your digital transformation produces the greatest results for your business when it leads to business model innovation, when it leverages the opportunities that digital introduces. In other words, don’t half-ass it, right? What’s the old quote from "Parks and Rec?" It is better to do one thing, whole-assed than a whole bunch of stuff, half-assed right now.
I’ll come back to this in a minute, but this is really key and really crucial. And I think gets to this idea of why digital transformation is so important. This makes total sense in everything I’ve seen with the companies I work with.
So first. I take issue with the idea that it must be integrated within the business strategy, though I suspect this is something of a semantic point. And I’m gonna explain what I mean by that.
The working definition of digital digital transformation that I use is actually quite simple. When you look at Google, if you look at Facebook, if you look at Amazon, if you look at Expedia, Airbnb, Uber, folks like that, they don’t have a digital transformation problem. They’ve grown up in a world where digital always existed. So for you as a company, you have to ask yourself, what would your company look like if you were starting your business from scratch today and then making that happen? So to me, it’s not question of integrating your digital transformation or your digital strategy into your business strategy. It’s that they’re the same thing. They are fundamentally one and the same. Google Facebook, Amazon Expedia, Airbnb, Uber, all those guys take it for granted that digital exists and their business depends on that. If you were going to start your business today, knowing that digital exists, what would you do differently?
So, yes, that’s definitely saying it’s integrated within the business strategy. But it often means that they are moving entirely in lockstep.
Now I do want to say, when I talk about Google or Facebook or Amazon or Expedia or Airbnb or Uber, and I say that they don’t have a digital transformation problem, if we’re being completely honest, that’s not a hundred percent true. As digital has shifted, as what we mean by "digital" has shifted — and you can think mobile or voice or AR or VR or work from home, which is big right now — each of those companies has faced challenges either because customer behavior has also shifted or because new entrance have come into play, you know, Slack, GrubHub, whomever; Airbnb, in the case of Expedia.
If you think about when Facebook went public — and I will link to all this in the show notes — you may remember that they had quote-unquote "difficulties adapting to mobile." Now, this may seem like a long time ago. And in fact it really is roughly eight years ago since they went public Facebook and they were getting absolutely hammered in the press because they didn’t have an effective plan for monetizing mobile traffic for making money for mobile, which is how most people were using Facebook even eight years ago.
Microsoft also had the same problem with mobile. Think about all the number of failed business models that they tried: Windows CE, Windows Mobile, etc. to try to capture business and they failed. Expedia, and to a lesser extent Booking.com, has had a huge problem with Google — and again, to a lesser extent, with Airbnb — kicking its rear end, at least up until this current recession when hotels have come running back to Expedia and Booking.com because they need the help.
But the fundamental point remains digital existed for all of these companies in some form or other the entire time they’ve been around as companies. They didn’t need to adapt to digital. They didn’t need to transform. They built themselves up with digital, at least in the form it existed when they started, as a given. Their digital strategy and their business strategy have always gone hand in hand. They’ve always asked how do we, how do they find and help customers? How do customers look for help in the first place?
So given that let’s look at an example where somebody is doing this right now that’s really cool. Chris Walton, who goes by the handle @OmniTalk on Twitter, had a really cool piece over at Forbes that looked at Lululemon’s recent acquisition of Mirror. Mirror is this smart exercise video panel that you put on your wall and sums it up perfectly. Lululemon makes athleisure wear, right? Athletic wear that you wear for leisure and the like. And a lot of their businesses tied to fitness and, and also tied to retail. And as Walton says, they — Lululemon — are really envisioning a future where retail stores don’t exist. If you look at what’s going on right now with the growth of e-commerce, and if you look at what’s going on right now with people not being able to go into stores, and if you look at what’s going on right now with retail stores, even before the pandemic getting pummeled them, they’re saying if all of those trends exist, how do we continue to engage with customers, sell our products and make money? And so they’re focusing on being a brand that’s all about fitness. And Oh, by the way, here’s a digital platform through which we can a sell you content, which is Mirror’s current business model, and sell your products directly because you’re putting the product right in your home. It’s sort of their version of an Amazon Echo.
Now none of this means that retailers or stores won’t exist. What they’re doing is they’re hedging their bets and asking the question of what their business would look like If retail were to go away and working to ensure their future, if that actually does happen. That is, as my friends in Boston say, "wicked smaht." Like that’s a really good idea and a really good approach.
Will it work? Well, of course it’s too soon to tell. But they’re thinking about it the right way, of what would it look like if digital was the only way we talk to our customers and how can we own that experience?
Now I talked a couple of weeks ago in an episode about the fact that we’ve seen two years of digital transformation in two months. And this is kind of why what Lululemon is saying is great. "How do we become that company?"
Now, as I talked about last week, your customers expect you to help them. They’re stuck at home. They have expectations. They have needs. They’re looking to see who are the companies who are the businesses, who are the people who will help them, who will address those needs will make their lives better, where they are right now. And this is your opportunity, right?
So there are two things you have to do right at the beginning. One I talked about last week, which is to listen to your customers and understand their needs. And the other is to decide where you end up.
Now, in the last episode, I focused more on listening to your customers and understanding their needs. Even though that’s actually the second most important one. I did that because I wanted to give you something you could work on right now. You also really need to be clear on where you want to go as a company. I’d mentioned in last week’s episode, not to chase random ideas that aren’t good for your business.
If you decide where you want your business to be in 90 days, six months, a year, three years, five years, that’s how you ensure you don’t just chase random ideas. Because you will focus on the things or ideally you should focus, on the things that help you move towards those end states you’re looking for now. As you develop a strong understanding of where you want to be and what your customers need, then you’ve got a lot of options available to you.
You can buy capabilities like Lululemon is doing. And there’s loads of examples of that. We’ve got another one just this past week where Uber bought Postmates. They originally wanted GrubHub, but they lost that deal, which is "bad" because they want to get more into not just taking people from place to place, but taking things to people. This may actually work in Uber’s favor since Postmates, even though it’s a lot smaller than GrubHub, has a much broader base of the products that they deliver beyond just food. So this might be one where buying the capability that they were able to pick up is better for them than buying the capability that they originally shot for.
We’ll see how it plays out, but it’s, it’s pretty smart. It’s a way to go about it.
You can also look to own the customer relationship. And I’ve talked many times about how even small businesses can compete with Google or Facebook or Amazon or Expedia or whomever. And the way you do that is by bypassing these larger gatekeepers, by going direct to your customers. Digital allows you to do that.
I’ve also talked lots of times on the show that there are two ways you win on digital one is get big. And one is get niche and yes, there is such a thing as big niche. Think Lululemon with its focus on fitness or Etsy or Reverb — which Etsy owns — with their respective focuses on handcrafted goods or musical instruments and accessories.
Now, focusing on the niche, it’s an outstanding way to own the customer particularly if you can use digital in new or innovative ways to address those needs, which is one of the two things that this Conference Board report said you have to do. And what I’ve seen in the real world that you actually have to do. By the way, I want to be fair, my friend Mark Schaefer rightly points out that you never "own the customer." Notice I’m talking about how you want to "own the customer experience," not own the customer. All you can do in practice is connect with customers successfully enough to where they want to continue coming back to you to solve their problems. You don’t really own the customer. You just create experiences that they want to have again. And again. And again.
So what you want to think about and take away is that when we’re talking about digital transformation is it really is tightly integrated with your business strategy. In many cases, it is going to be a core component and a key driver of your business strategy. Just like I talked about a couple of weeks back in terms of what are the things driving e-commerce the fact that your customers need to work with you this way, and that is going to produce great results for you when you can innovate your business model, giving, given these opportunities.
How do you do that? You decide where you want to be six months, a year, three years, five years from now, and listen to your customers to understand their needs like I talked about last week so that you can connect those two things together. How do we get where we want to go by helping our customers and using digital to do it.
And as you take the steps to do that, that’s how you begin to transform your business. Digital is the driver. But at a fundamental level, this is not about "digital transformation." It’s about "business transformation." And increasingly it’s, about business survival.
Now looking at the clock on the wall, we are out of time for this week. I want to remind you that you can find the show notes for today’s episode, as well as an archive of all past episodes by heading to TimPeter.com/podcast. Again, that’s TimPeter.com/podcast. Just look for episode 295.
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With that. I just want to say thanks so much for tuning in once again. I very much appreciate you listening. I know I say it every week and I hope it doesn’t ever come off like I’m just reading from a script because I’m not. I very much appreciate the fact that you will listen to the show every single week.
I very much enjoy getting a chance to speak with you. And I appreciate the time you take to listen. So with that said, I hope you have a great rest of the week. I hope you have a wonderful weekend ahead. And I’m looking forward to speaking with you here on Thinks Out Loud next time. Until then, please — especially with all this going on in the world — please be well, be safe and as ever take care, everybody.