How to build a digitally-led strategy?

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by Paul Coetzer, Strategic Director at Platinum Seed

According to the PwC Entertainment and Media Outlook 2016-
2020
, total advertising revenue is forecast to increase from R43.3 billion in 2015
to R52.9 billion in 2020, a compound annual growth rate (CAGR) of 4.1%.

During this period, newspapers will fall 2.6% while the Internet will experience a
CAGR of 16.9%.

Radio, Cinema and TV will grow by 4%, 6.4% and 4.1% respectively, while other
segments such as out-of-home, magazines and B2B will grow marginally, in the low
single digits.

While television is likely to retain at least a third of the overall pie, online ad spend
growth, coming off a historically low base, is accelerating. By 2020, online’s share will
grow to surpass that of B2B, cinema, magazines, newspapers, out-of-home and radio.

The Internet is already transforming how people plan and live their lives, from their
travel, to their education, shopping and business. Industries such as retail, that
previously thrived in purely brick-and-mortar spaces, will find it ever more difficult to
compete without a strong e-commerce offering.

This became apparent when South Africa’s oldest retail chain, Stuttafords, shut its
doors this year. While some observers say the 159-year-old retailer was merely a
victim of an economic slump, others point to its failure to implement a strong digital
business strategy, among other things, as a contributing factor.

Bridging the gap

Large gaps in digital investment exist between various sectors, and between different
companies within the same sector.

However, digital “investment’ is only the beginning – there are also huge gaps in
terms of the level to which organisations use their existing digital assets and data to
optimise transactions and interactions with customers, streamline business processes,
and help employees work more efficiently.

Key sectors

It is difficult to find a sector that would not benefit from implementing a digitally-led
strategy. However, comprehensive digital solutions are best suited for sectors where
technology can drive efficiencies through automation or optimisation of business
processes, or where data can give insights into customer behaviour and preference.

A study published in the Harvard Business Review in April 2016
scrutinised 27 key indicators of digitisation across industries in the US.
The study found that the IT sector (naturally) led the way in terms of digital
investment and usage. Knowledge-intensive sectors such as media, professional
services (engineering, legal, health) and finance/insurance are also proving highly
innovative.

In these sectors data can offer insights into optimising business processes or
customer behaviour and preference:

• Knowledge-intensive sectors (traditionally “professional’ sectors such as law,
architecture, engineering, accounting, health) can use content marketing in the form
of blogs and online articles to attract new customers. Here, specialists write helpful
content pieces on specific topics for users to search and read.

• Sectors that benefit from customising the marketing experience for different
segments (retailers, cell phone companies, and the automotive industry) can use
customer data to recommend relevant solutions to different customers.

• Companies using online channels to facilitate purchases, including online
retailers and airlines, can use “remarketing’ techniques to influence purchase
decisions.

• Brands operating in legislatively restrictive sectors (e.g. alcoholic beverages or
pharmaceuticals) can use social media channels to have direct conversations with
customers.

• FMCG companies and retailers can incentivise purchases to drive customers in
store by offering discounts deployed through mobile vouchering.

• Sectors that enjoy long term relationships with customers (such as financial
institutions) can make use of specialised CRM software to organise, automate, and
synchronise customer interaction, and customised digital CRM tools to measure
consumers’ influence.

What is a digital-led strategy?

Developing a successful digital strategy takes more than knowing which technology to
use. Whether it’s a business, customer relations or marketing strategy, a digital-led
strategy is focused on integrating digital technologies (web, social, mobile, and
analytics) to transform how the business works, how it reaches its customers, and
how it takes its products and services to market.

Organisations that embrace digital technology, develop and implement digital-led
strategies with the objective of transforming the entire business. The focus is less on
the actual technology and more on how the technology can create better efficiency
using a range of tools.

At the very least, organisations that might be more resistant to digital change could
use individual channels and technologies to fulfill specific strategies that are more
operationally focused.

A successful digital-led strategy should be considered from the outset and fully
integrated into the overall strategy. It isn’t added as an overlay to an existing
strategy or translated from traditional strategy – it is the strategy.

Driven by data, a successful digital-led strategy is ever evolving and allows for
investment and efforts to be adjusted and moved around to maximize ROI.

Leadership buy-in

A vital success factor is that the strategy be driven from the top, with buy-in at the
highest levels of the organisation – a single person or group must lead the effort.

This person or group is not necessarily a digital specialist, but should be empowered
and able to clearly articulate the value of digital technologies in the organisation’s
success.

Ensuring that technology and digital specialists are represented at board level creates
the right business culture for innovation to thrive.

Stick to fundamentals

There are no hard and fast rules in terms of when to lead with a digital strategy, or
where implementing a digitally-led strategy will work best.

The same variables one would look at when formulating a “traditional’ strategy need
to be considered. For instance, the organisation’s mission statement, business
objectives, budgets, target market preference, and route to market all need to be
considered in relation to what technology can facilitate.

There is no longer a difference between a marketing strategy, customer strategy,
communication strategy and a digital strategy. Business strategy and digital strategy
are the same thing – and organisations are doomed to fail without them.

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