What Digital Transformation Means in 2020

Digital Transformation|11 Minute Read

What Digital Transformation Means in 2020

It’s 2010. Your C-suite asks you, an expert marketer, and your team to develop a “digital transformation strategy” that can help take your marketing to the next level (and fast).

You nod and say, “On it.” (Or something similarly reassuring).

Maybe you decide the best way amplify your marketing and business strategy, improve operational efficiency, and, in turn, transform digitally is to audit your martech stack.

After review, you decide you need a better customer database. Since it’s 2010 — the relative dawn of the Digital Age and an era with limited martech options — you research CRMs.

You and your colleagues build the case for the CRM of choice, fine-tune your presentation for leadership, and, ultimately, pitch your digital transformation “initiative” to them.

(In other words, you share features, reviews, and pricing info associated with the software).

In this situation, you likely would’ve been praised for providing such a solution, in both senses of the word, for your organization. Further digital innovations (i.e., better-informed marketing activities and sales follow-ups) would surely follow. (Maybe even a promotion.)

And corporate becomes convinced the software is the magic bullet it’s badly needed.

Fast forward a decade (the “Post-Digital Era,” if you will), and it’s laughable to think digital transformation was perceived by countless company leaders and top marketing minds as essentially bringing in martech for the sake of doing so and hoping for the best.

Driving digital transformation — truly successful, scalable transformation — is far more complex and nuanced than simply adding a new digital technology into the marketing mix.

What is digital transformation today?

Don’t get us wrong: Having the right martech matters. (A lot). But it’s just one of many digital transformation ingredients needed to reshape one’s marketing efforts entirely.

Modern transformation requires a high-level audit of the current business model: team structure, responsibilities assigned, and specific marketing technologies utilized.

It also demands a deeper analysis of what works and what doesn’t in all facets of the business and what can be improved in terms of processes, culture, and tech.

Ask 100 marketing executives for their digital transformation definition, and you’ll likely get 100 different answers. That’s because, by nature, digital transformation is a fluid concept.

As business consultant Ian Patterson stated, more often than not, those who offer their own distinct explanations “either fail miserably with their [digital transformation] definition or just confuse people even more,” given everyone has their own unique take on the practice.

Instead of offering our take (or listing many confounding ones), here’s how some industry insiders answer the age-old (well, decade-old) question: “What is digital transformation?”:

what is digital transformation

Notice a trend? The beating heart (and desired result) of all digital transformation strategies — from the early digital age to today — remains essentially the same for all brands:

Putting the customer and their needs at the forefront of your overall business strategy so you can achieve true customer centricity

Companies want to build customer-centric cultures through not only the adoption of critical technologies, like the customer data platform (CDP), but also refined business processes.

Half of execs cited “modernizing customer touch points” and “enabling infrastructure” to better understand buyers as the impetus behind their transformation, Altimeter found.

Realizing this customer centricity requires the right systems, protocols, and technology and digitally savvy stakeholders in key roles to “own” the transformation initiative.

As Forbes Technology Council’s Maurizio Canton noted, there are three specific components of successful digital transformation strategies for organizations today:

  • Clarification around all digital innovation goals across each and every department
  • Connectivity in one’s martech ecosystem (meaning the elimination of data silos)
  • Comprehension of customers’ changing behaviors, preferences, and interactions

Ensure all three elements are accounted for in your efforts, and you’ll not only continue to innovate as desired, but also vastly improve operational efficiency across the business.

digital transformation

Effective digital transformation strategies not always so simple for organizations

Many brands — from retailers to publishers — understand the importance of taking customers’ pain points and engagements into account with their digital transformation strategies. However, awareness doesn’t always translate into successful execution.

Other factors impact the outcome of a brand’s transformation. Just ask Home Depot:

  • The home improvement giant overhauled its digital presence to bolster B2C sales (its bread-and-butter audience) and better convert B2B customers, like contractors and landscapers, with whom it intended to develop stronger relationships with in the future.
  • While its intentions were good — “create a seamless experience for customers across its digital offerings and its 2,000-plus physical stores” and “break down internal data silos to get a clearer picture of customer activity” — the execution hit a bump in the road.
  • The company’s leadership realized it had a “legacy technology” problem. It wouldn’t specify the nature of these troubles. But it did note it hired 1,000 IT staffers to assist its digital business transformation — a risky move that required considerable resources.

That’s not to say thinking big like this can’t or won’t pay off. Home Depot’s digital transformation story isn’t over, after all. The brand could still reap rewards from its work.

Rather, it means every marketer and business — including you and yours — needs to carefully consider what digital transformation means to them specifically.

We also don’t mean to paint a picture that digital transformation is impossible.

It’s certainly more than possible for companies of all shapes and sizes to modify their business models around new digital initiatives, protocols, and technologies.

In fact, there have been many prominent organizations to experience top-to-bottom success with their business modernization and innovation strategies in the last few years.

what is customer data platform

A prime digital transformation example

Case in point: BlueConic customer Bob’s Discount Furniture is a great digital transformation example (and noteworthy success story) for brands of any niche to emulate today.

The renowned furniture retailer recently expanded its operations into new markets — the Midwest and West — in addition to its well-established Northeast operations.

With this aggressive business expansion moving along quickly, the brand recognized an immediate need for database technology to unify its first-party customer data.

Why? This would allow for efficient cross-channel activation, and afford its marketing team to easily track its buyers’ and prospects’ journeys across channels.

Speaking at our MarTech East 2018 session, Bob’s Discount Furniture VP of Customer Experience & Digital Innovation David Levin explained his CX-improvement approach:

“How do we, as a company, leverage digital technology to make that customer experience better and more seamless for our customers?”

The answer? Getting a CDP — ours — to aid the brand’s transformation efforts.

Specifically, Levin noted he picked one of “thousands” of use cases (“Do a better job at understanding and acquiring customers and activating them”) after onboarding the CDP to more effectively connect with leads and customers in its multi-channel efforts.

The results? A 5x increase in data growth in the six months after onboarding BlueConic.

This ambitious digital transformation isn’t done, of course. It’s really only just begun.

Rather, it’s an ongoing endeavor for Bob’s with no particular finish line. But securing martech that connected all of its once-disparate databases allowed Levin and his department to hit the ground running and achieve ROI in a fairly quick time frame.

digital transformation

Vital questions to answer about your unique digital transformation strategy

Levin and others at Bob’s, including the executive team, took many things into consideration before beginning their digital transformation strategy in earnest, ranging from investigating the aforementioned tech choices to discussions about new and altered business processes.

Want to see the kind of success Bob’s had (and continues to have)? Here are three fundamental questions to consider when building your very own transformation blueprint.

“Who should entirely own our digital transformation?”

This varies from one brand to the next. But marketing expert Michael Brenner makes a convincing case for one department to take lead on a digital transformation:

“Your marketing team is best placed to understand the customer journey … so your marketing department, led by your CMO, should be in charge of your overall transformation.”

That’s not to say other teams across your organization shouldn’t provide a helping hand in certain facets  to ensure the transformation process moves along smoothly.

The aforementioned 2019 Altimeter digital transformation strategy survey found CIOs are the most likely role to sponsor digital initiatives, while CEOs are the likeliest to (unsurprisingly) take on a leadership role in some form over these efforts.

Going back to Bob’s, Levin noted he and his staff explored ownership carefully, asking:

  • “Was [the digital transformation initiative] going to live as a standalone department?”
  • “Was it going to live inside the marketing group, which initially identified the need?”
  • “Or was it going to live within some other department [with] part of it in marketing?”

Invariably, other colleagues outside marketing will want a say in the logistics and setup of your transformation. But as with a CDP, it’s something marketing needs to own.

customer data platform

“What exactly are we trying to solve for and achieve?”

Predictably, different brands want different things from their digital transformations.

Some want to streamline supply chains and accelerate speed to market. Others want to enhance cloud computing capabilities to enhance project collaboration across teams.

From a pure marketing perspective, you need to consider the problems you want to mitigate (or outright eradicate) and goals you want to achieve with digital transformation.

No one can decide on these exact issues and objectives except you and your colleagues in charge of your transformation. But as noted, you’ll want to factor in your customer.

More specifically, you need to figure out how to better understand and serve customers.

To better understand your entire customer base, you have to consolidate your customer data from all your core systems and channels: CRM, DMP, ESP, and the like.

As business and technology experts Thomas H. Davenport and Andrew Spanyi, both of whom specialize in corporate innovation, wrote for MIT Sloan Management Review:

“[W]hen it comes to undertaking the tasks required to transform the customer experience, the independent silhouettes of silos stand out in high relief.”

data silos

As noted, tearing down data silos across your business isn’t optional today.

It’s essential to gaining the complete, 360-degree, constantly updated view of your customers and, in turn, informing every facet of your transformation and day-to-day.

To better serve your whole customer base, you need to activate that un-siloed audience data in both your long-term campaigns and real-time, lifecycle marketing.

Prospecting emails to leads, on-site dialogues for current visitors, personalized ads to past visitors: These are all cornerstone tactics for B2B and B2C brands alike.

But the only way they can succeed today, especially with the death of third-party cookies and data laws like CCPA, is to leverage your dynamically updated first-party data in your unified database and customize messaging for specific segments and individuals.

And only the CDP can provide you and your team this requisite single customer view.

The importance of a high-quality customer experience can’t be overstated enough today.

While digital transformation and CX aren’t one and the same, they are inextricably linked in that transformation must account for buyer personas, value propositions, and messaging around products and services offered — all of which tie back to your customers.

“What tech is absolutely essential for transformation?”

This should be addressed first and foremost by you and your leadership team, as choosing the right marketing and sales tech will impact every other part of your approach.

McKinsey researched the success rates for digital business transformation of various organizations. One takeaway from the firm’s analysis? Legacy tools still offer some value for these efforts — but emerging tech, like AI and machine learning, are also impactful today:

digital transformation mckinsey

Big data solutions including data lakes and warehouses remain popular tools for marketers.

However, the CDP is supplanting these resources as the go-to martech to facilitate, streamline, and expedite transformation plans for countless brands. And it’s easy to see why.

For instance, BlueConic offer a true single source of truth, easy data activation, and features the aforementioned technologies lack — like advanced AI marketing functionality:

In short, with our CDP, you don’t just get a unified customer database that can resolve countless data issues (and prevent headaches caused by siloed data).

You also get access to out-of-the-box machine learning models included. (In other words, ones that don’t require you to be digitally savvy to deploy and train).

With two in five business leaders noting artificial intelligence has positively impacted their bottom lines, according to TDWI, it’s evident the advanced technology can prove fruitful for brands looking to transform digitally and increase revenue.

“[I]f businesses are to take advantage of the explosion of data as the fuel powering digital transformation, they’re going to need to artificial intelligence and machine learning to help transform data effectively,” data scientist Melvin Greer wrote for Forbes.

Artificial intelligence technology is clearly just one component available to enterprise businesses that can help them execute successful digital transformation strategies.

Having said that, if you’ve yet to experiment with AI — or onboard emerging martech like the CDP — and want to transform your marketing efforts, now’s the time to invest.

Watch our webinar to discover common AI marketing use cases implemented by everyday marketers with a CDP — and without the need for technical savvy.

ai for marketing

See what BlueConic can do for you.

Whether you’re looking for operational efficiencies or improved marketing effectiveness through data activation, our customer data platform can help.