In my time as a consultant I have heard the term “digital transformation” become filled with a lot of different content. For my part, digital transformation is simply a consequence of fundamental supply and demand theory. Through digitalisation, we can connect supply and demand in smarter, simpler, and less expensive ways, more effectively. Through digitalisation, we can streamline value chains and cut transaction costs. The market likes this.
The last couple of decades have seen the creation of digital giants such as Tesla, Amazon, Google, Facebook, AirBnB, Uber and Apple. The last-named has singularly changed the mobile phone industry, photo industry, music industry and games industry; soon it will also dominate the “Smart House” industry. And no matter what you do, you scratch your head and wonder how your company could be compared with what they are doing. However, these companies have not succeeded primarily because they are built on a digital platform. They have succeeded because they have a close relationship with their customers.
The Internet of Things, IoT, is a separate ecosystem, not a technological question
The technology is just a support. Ultimately, the new super internet may help to ensure that global climate change doesn’t produce several billion climate refugees in the coming years. The super internet occurs when the “communications internet”, the “digitalised energy internet” and the “transport and logistics internet” are seen in context.
Digitalisation has resulted in the greatest sociological change in centuries. As late as 25 years ago, we lived in a physical world. We now live in both the physical and the virtual world. In our virtual lives we give away seven times as much personal data. The IoT, in combination with “interconnectivity”, enables us to streamline/increase productivity in society so that we leave an ecological footprint. Many people actually believe this will give us the chance to transform from a carbon-based civilisation to a renewable and sustainable civilisation. Nothing less.
So, which strategies do we actually need?
An increasingly automated, data-driven, super-connected digital world still needs human contact. When you get right down to it, your customers are only interested in themselves and their experiences. Then it is up to you to make yourself relevant, valuable and accessible. Only then will you be a part of the customer’s own experience. You cannot be something for everyone, but you can actually be perceived as vital to some. You must therefore dare to make a stand; dare to expose your brand. Your brand is simply how people talk about you when you are not present. This conversation can be influenced.
Harvard has identified what it is that characterises businesses that succeed
The world-famous university has conducted research at companies in 20 different industries and has identified three common denominators amongst the 250 most successful companies. The three common denominators are “unique identity”, “credible storytelling” and a clear corporate culture”. Companies that are aware of and clearly communicate where they are from, why they are here and, not least, where they are heading, manage to build a culture and, equally importantly, external supporters who make them attractive to both customers and prospective skilled employees.
To succeed digitally is about prioritising genuine customer insight
Place the customer completely at the centre when you develop your business. Start with the actual customer experience and work backwards to the technology. Not the other way around. Don’t be scared of failing. Experiment. “Get out into the market quickly and let real customers try the product or service. “Fail quickly to learn fast”. If you don’t manage this, you will quickly become a victim of digital Darwinism, i.e. consumer behaviour will change more quickly than the company's ability to utilise the technology. To achieve this and really understand the customer, it is crucial to focus on the entire customer journey, not just specific points of contact between the company and the customer.
The digital customer journey is more complex and seamless than ever
The goal is to follow the digital customer journey all the way to the physical purchase in the supermarket. Our ultimate goal is to be customer responsive in the micro-moment. What if you have a marketing budget of NOK 10 million? Which brand strategies could help you reach the customer in real time with personal and relevant communication on a mobile screen? A new generation of marketeers is emerging. They don’t work in the traditional agencies. They work in exciting hybrid companies in which marketing and technology fuse together, and data analysis and statistical calculations support the customers’ marketing strategy. The company’s costs relating to creativity and media purchases are reduced, while the relationship to users becomes the crucial core skill. Company owners should ask themselves whether they are capable of tracking the digital customer journey, understanding data, optimising on the basis of new insight and preparing an effective strategy.
If you want to succeed in a digital world, this is therefore your strategy
- Really get to know your customers. This requires genuine customer insight, not just assumed or experienced customer insight, but actual customer insight.
- Put your story in place. Ensure that your identity, storytelling and corporate culture become part of your most important resources.
- Come up with new ideas. Ideas that connect supply and demand in smarter, simpler, and less expensive ways, more effectively.
One thing is certain. Digitalisation will continue to wipe out everyone who responds to it with ignorance, while it will reward the curious – those who dare to think innovatively and differently. In other words – it’s time to get excited!