Let’s do a quick exercise. Type “Digital transformation of marketing” in your search engine and check out the top few results. What you’ll get are articles on digital channels and digital media. That’s indicative of a broader problem in the industry.
There’s a tendency to assume Marketing’s digital role is on channels and media i.e. digital marketing. However, we know that our calling is to represent the customer.
In the digital era, that means delivering better customer experience and value than any of our competitors using digital tools i.e. digital transformation of marketing.
The difference between these two approaches represents an opportunity of historic proportions to marketers.
The root of the ambiguity in definitions is driven by the confusion on what digital transformation is. Most executives tend to relate it to technology i.e. using technology for more effective or efficient operations. That’s only the first stage of digital transformation.
True digital transformation is the rewiring of entire business models, work processes and people skills so that enterprises that are successful in the third industrial revolution are made ready to be successful in the fourth. Or said another way, it is to rewire people, processes and business models to understand the needs of the customer and meet it exponentially better, as in say, the successful transition from printed classified ads to Craigslist.
To better appreciate how marketers can seize this historic opportunity, we need to understand the context of the fourth industrial revolution, the stages of digital transformation, and how a full-fledged digital transformation is all about meeting customer needs exponentially better.
What is a digital transformation?
The context of industrial revolutions is foundational. The World Economic Forum has declared that we’re in the midst of the Fourth Industrial Revolution where digital technology is transforming and fusing together the physical, biological, chemical, and information worlds.
It’s affecting every area valued by society-from convenience (e.g., online shopping) and improved health (e.g., biotech) to personal security (e.g., digital homes), food security (e.g., agrotech), and so on. Only one thing is guaranteed: it will bring about dramatic change, just as the previous three industrial revolutions did.
The first three were caused by different technologies i.e. steam, electricity and the internet respectively, whereas the fourth is caused by digital. However, all four have one thing in common. Individuals and societies will be affected significantly, and companies will either transform or die. And the process of transforming from being a viable entity in the third to the fourth industrial revolution is digital transformation.
The stages of digital transformation
Although full-fledged digital transformation is about fully rewiring the business models, processes and organization capability, there’s no getting away from the fact that still mass confusion on the definition. Most executives mix it up with the run-of-the-mill digital technology project. The best way to frame the definition is to put it in the context of the five-stage digital transformation model.
Stage 1 is the Foundation. This is where enterprises are actively automating internal processes, such as marketing, selling, manufacturing, or finance. This is more automation (also called digitalization) than transformation, but it provides the digitalized foundation necessary for future transformation.
The next stage is called Siloed, where you might see individual functions or businesses start to use disruptive technologies to create new business models. So, for instance, this is what using digital channels for selling is. Additionally, this is what the transition to using digital media, and more precise targeting of customers using data is.
Stage 3 is Partially Synchronized transformation. The enterprise leader, owner, or CEO has recognized the disruptive power of digital technologies and defined a digital future state. At Stage 3, the organization has started rowing in the same direction.
Stage 4, or Fully Synchronized, marks the point where an enterprise-wide digital platform or new business model has fully taken root. However, it is a one-time transformation. It is still just one technology (or business model) change away from being disrupted.
Stage 5, or Living DNA, is the step where the transformation becomes perpetual. You maintain ongoing industry trend leadership because you are disciplined in constantly innovating and setting industry trends. You’re not just a market leader; you’re a disciplined innovator.
The context of the five-stage model helps define the gap between digital marketing (i.e. digital media and digital channels) and digital transformation of marketing (i.e. delivering exponentially better value to our customers). It’s the difference between Stage Two and Stage Five digital transformation.
How to seize the opportunity offered by digital transformation of marketing
To bridge the gap between leading digital marketing and leading digital transformation of marketing, we need to go beyond reaching customers better. We need to meet their needs better, and exponentially better at that. There are two additional roles that marketers need to play for that. One is in fulfilling their needs better and the other is to better own the 360-degree knowledge of the business.
Fulfilling customer needs better:
Digitizing the channel, media and customer targeting simply re-wires how we reach the customer. It does nothing to rewire the product or its fulfillment. The total customer experience is the sum of both reaching the customer as well as meeting their needs.
The implication of taking on a more active role in the enterprise on the product and its supply is that the marketer must extend their accountability to both digitally enabled products as well as exponentially improved product supply.
Examples of digitally enabled products abound – from smart toothbrushes to smart cars. And examples of dramatically improved fulfillment are common too – from Amazon’s super-efficient and effective delivery to incredibly shortened two-week fashion design to store delivery timelines of fast-fashion retailers like Zara.
Superior 360-degree knowledge of the business:
Execution is the only strategy that the customer sees. This means that to sustainably own the customer experience, the marketer must have a superior check on the pulse of the entire business operation. That includes finance, sales, human resources, supply chain and the ecosystem around the business. Therefore, digitizing all aspects of internal company operations is relevant to the marketer as well.
If we follow this train of thought, it becomes apparent that the marketer must play a role of not just digitizing the channel and the media, but pretty much all aspects of the company’s operations – from supply chain to human resources to finance.
That’s logical because to fully represent the customer’s interests exponentially better in the fourth industrial revolution, the marketer needs help meet their needs dramatically better too. And, that’s the opportunity of a lifetime for us. We can play a bigger ownership role in transforming how the entire enterprise operates to deliver the best possible customer experience.
About the Author: Tony Saldanha is president of Transformant, a consulting firm specializing in assisting organizations through digital transformations. During his twenty-seven-year career at Procter & Gamble, he ran both operations and digital transformation for P&G’s famed global business services and IT organization in every region of the world, ending up as Vice President of Global Business services, next Generation services. He is an advisor to boards and CEOs on digital transformation, a sought-after speaker, and a globally awarded industry thought leader. His new book is Why Digital Transformations Fail: The Surprising Disciplines of How to Take Off and Stay Ahead (Berrett-Koehler Publishers, July, 2019). Learn more at transformant.io.
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