Digital Transformation: Questions to Ask Before Getting Started

Hello and welcome to Women Conquer Business. I'm your host Jen McFarland. On this week's show, we talk about business digital transformations. How do you move your business or more parts of your business into the digital space? Many businesses are seeing this as a huge need now with COVID-19 and not knowing how long this pandemic could be going on. This episode is all about the key areas that you need to think about if you're moving from basically an analog into a digital space, how things are different for your customers, the data, things like that. And then we also talk about the key questions that you need to be asking yourself before you embark on a digitalization project. All that and more here on Women Conquer Business.

Welcome to Women Conquer Business. My name is Jen McFarland. This podcast is for smart, serious business owners tired of the senseless chatter about growing a business. If you don't want to hear any more get rich quick, too good to be true nonsense, you've come to the right place. You'll learn why mindset is everything, as well as strategies for sustainable business growth and how to implement it. Along with the secrets I learned leading large scale business projects that also apply to five and six figure businesses. Are you ready? Let's go forth and conquer. For more than 10 years now, I've helped businesses move all or part of their business processes into the digital space, whether through digital marketing or helping get something out of spreadsheets and into a viable app that they can push out online for customers. These are all different types of projects that really push a business to their limits sometimes and can either help or hurt a business moving forward.

What I wanted to do today is go through some of the different considerations that a business needs to look at before they move into digitizing a large part of their business, and then go over a few of the key questions and why these questions are important to ask before embarking on a project like this. The first part I wanted to talk a little bit about, some of the domains in the digital transformation space. There's a book that I really enjoy called The Digital Transformation Playbook: Rethink Your Business for the Digital Age, and it's by David L. Rogers. He talks about each one of these, he calls them strategic assumptions when you're moving your business into the digital space. The first domain is customers. It's a lot different when you have an in-person brick and mortar product or service, or maybe you just have a product that you're mailing out to somebody and you don't have a brick and mortar store at all. Customers are a mass market when you think about that, they are broadcast to as customers. There's not a lot of personalization and you're not really hearing back from your customers.

These are all the ways that it works now, this is all before something goes digital, right? As the firm, you're the key influencer and you're marketing to really persuade people to buy things. We're talking about economies of scale and also about the values of the company really just are impressed upon the customer and it's not really a two-way street. As soon as you move into a digital platform, a digital way of doing business, your relationship with your customers changes dramatically and you have to be really prepared for that. I think we've seen examples all over the place of when businesses are not ready for what comes with some of the digitalization process. Once customers and your business are moved into the digital space, customers become a lot more fluid and dynamic. They come and go. The communications are more-two way. Like if you put something out on social media, you're going to get a response. And if you get an overwhelming response that's negative, you better be prepared to handle it. Or remember your customers have cell phones, and so in the case of like an airline.

There's so many examples of airlines who have blown it and somebody had a cell phone and videoed what was going on and then there's a lot of blow back and communications and PR that has to be done and it's because these communications are two-way. The customers are viewed as the key influencer instead of the business. It means the more feedback you get, the more you need to do to work with people because the communication is a two-way street and customers can really influence the success or failure of your product, business or initiative. The marketing is more to inspire and to bring people on with loyalty and advocacy, and that's what Roger says and I tend to agree with it. Another book that I absolutely love is called Marketing Rebellion by Mark Schaefer, and what he talks about is how the most human company wins. So when you're marketing in the digital space in particular, it's about not only the values of the company, but also the values of the individuals that you're targeting. And in fact, their values sometimes matter more than the business values.

Businesses may have to adapt to who's responding to their products and their digital presence. They may have to respond to that way more than they anticipate. And then it's about economies of value. So if you are presenting things in an authentic way, you're reaching out to your customer, they're going to value you. They will be more loyal and they're more likely to follow you into the fire digitally and buy from you. But you have to be prepared for it, and that's the whole thing about the digital space is understanding that you're moving into a different place. So with that in mind, your competition also changes and that's the second domain that Rogers talks about. It's not as clearly defined, it's a lot more fluid in the digital space there. There are a lot of blurred distinctions because everybody is shopping for so many different things, your customers and your rivals might be moving in fluid directions based on the new customer relationships that they have with people. Competitors are also known to collaborate in key areas where it can really suit their businesses until the point that it does it suit their businesses anymore.

An example of that is Shopify and MailChimp in the digital marketing realm. They used to integrate really well with each other until the day that MailChimp purchased an eCommerce platform and then MailChimp had no desire to integrate with Shopify anymore because they were now seen as a competitor or rival. That's the fluidity of what we're talking about in the digital space, so you have to be aware of that and how all these things change. The other thing is that when you move into the digital space, there is a huge increase in data, in reliance on data and data is being generated everywhere. So it's no longer in your CRM or in your product database, it's everywhere and you're able to track it. When I work with customers on their digital marketing, we're laying a foundation so everything is being tracked so that then when they go into a more deeply engaged marketing space, they're able to leverage that data.

When they hire maybe a professional to work on ads or some different dimensions of Google analytics to get more response from a website or Google ads, we're laying the foundation to make sure that all of that data is being collected so that it can be analyzed. The problem with all of the data is making sure that it's valuable and using it for something valuable. So what you might be able to see here is how some of the people and the key players that you have around you might have to change. You might need to have more people who understand the digital space, or people who know about the data and know how to analyze it, someone who can build really dynamic relationships with competitors. It also changes your innovation. That's the fourth domain that Rogers talks about in his book. Decisions for innovation are based on testing and validation. Testing is pretty cheap, fast and easy. So what that means is you're able to spin something up much quicker.

You can spin up new ideas much quicker in the digital space because you have all this data and you can see a response in realtime and make decisions right away about whether or not a new initiative is working. Experiments can be going on all the time. If you're in the digital space, you can do all kinds of what are called AB tests, where you're testing one avenue and you're testing another avenue at the same time, and then you can just go and see which one people respond to better. And again, this is something that you can do relatively cheaply, relatively easily and on an ongoing basis. The other thing about innovation in the digital space is you're really just working toward a minimum viable product so that you're able to iterate and make changes after launch. Again, this is where something like the agile methodology, which is really about just developing these quick prototypes based on data, pushing them out, seeing how they go, changing on a dime. This is all really, really well positioned. It positions your company very well for this in the digital space.

And then the value is much different, value propositions in the old way versus the digital way. Value propositions are very much defined by your industry, you execute your value proposition and you're pushing it out to the customer. Again, it's much different than it is in the digital space. You're optimizing your business model for as long as possible. But in the digital space, your value proposition is changing based on customer needs. Remember when we're talking about your customers, they're constantly giving you feedback about how well things are going, how well they aren't going. One of the things that I work with people on in digital marketing is making sure that you're collecting that feedback from your customers as often as you can. Not just reviews and testimonials from the people who are super happy, but ongoing feedback as much as you can so that you can change and evolve your business as you're going along. So you remember your customers are more fluid and they care about your values as much as you care about theirs. It also comes into the value proposition that you're offering to people.

Your value proposition is defined by all of these changing customer needs. And then as you learn more about the values of your customers, then the next opportunity begins to emerge. This is not only an opportunity for innovation, but an opportunity for a different value that you are offering to your customers. So as you can tell, there are some really big differences between working in an analog, old way of marketing and work. In your brick and mortar person to person sending out products, that is a much different space than when you go out into the digital world and start promoting your products. One of the things that I've seen time and time again in my work is people like to digitize things. They like to automate processes, they like to take things online, get fewer hands on a process, they want tech to take over. And now we're starting to move into some of the key questions that you can be asking. The problem with adding tech for the sake of adding tech is technology can actually amplify issues in your existing processes and not solve problems, so tech alone will not solve problems.

The first key question that you have before you start embarking on a digitalization project for your business is, "What are our current strengths and weaknesses?" Meaning looking at the processes, the procedures, or interactions that you have with your customers, whether it's onboarding, or e-commerce, or one-to-one engagements that you have with your customers, what is going really well and what isn't? Analyze it, talk about it. Come up with different ways that you can actually resolve some of these issues in a person-to-person realm in the way that you're doing things now. Technology and digitalization work much, much better when you're working with a well oiled machine to start with and you're moving that into the digital space, instead of trying to triage and fix problems and use technology as a panacea for fixing everything. Because again, it really just doesn't work that way. It will expose your company and you to more issues than if you just take the extra time to do a little bit of analysis on how you're doing on things so far. The second question that I would say is really important is what problem are you trying to solve with digitalization?

What problem is most important that your business is trying to solve by taking this into the digital space by trying to go online? Now, the problems that you're trying to solve, they are both internal and external. Your internal solutions probably have something to do with generating more revenue and probably also streamlining, so streamlining some processes. Maybe you want fewer touch points on some products with your customers, maybe you have some processes that revolve around double and triple entry of data. Too much handling of things, moving things from person to person, that kind of thing. So the inner workings are things that certainly digitalization can do. Again, you can expect more revenue generation, but only if you're working with processes and procedures that are a well oiled machine. Otherwise, you can end up in a real rabbit hole. I can't underscore enough how important it is to really look at the strengths and weaknesses around how you're doing things now before embarking on a digitalization project. But the most important problem that you're trying to solve are external, and it's really coming down to "How does this make things better for my customers?

What is this digital project really going to do for them? How will their lives be made better? And am I prepared in all of the ways that we talked about before for this two-way street for them to really let me know their values? How prepared am I for what I think is going to make their lives better? And what am I going to do if it doesn't?" When you think about the problem that you're trying to solve, you really want to think about the outcomes for your customer, how this will make things better. And it might be really important to ask them. If you have an email list, if you have a customer list and you have people you're in contact with all the time, get their feedback ahead of time. It might be scary, but if you can get their feedback ahead of time and find out how the digital space would really help or how maybe it would help you reach new people, then you're going to be miles ahead than if you're just making a lot of assumptions about what would help your customers without really getting their feedback around that.

Because the goals for the customer might be different than what you think they are. Three, the third question to ask are ... it's actually two questions. How long and how much you? Have to get really clear before you get started on the costs, the budget and the planning. What is it going to take for me to do what I would like to do? Is what I would like to do even possible from a programming perspective? If you're working in a larger scale company, can I do whatever it is that I want to do? How long is it going to take me and what do I need to plan for in my budget? In terms of personnel, who do I have to hire? I can't underscore enough. If you've moved through the first two questions and you're onto like, "I just want to get started." You have to get everything on the table in terms of cost and budget and planning. Otherwise, you might end up having expectations around how much it's going to cost, and how long it'll be before you can launch.

And it might be completely out of whack with the people who are working on it. So get a working plan, get a project going, find out the timelines for all the people that you have and set some deadlines and some milestones that you can make sure that you can work through this process. And then some communication plans as well so that you know when people are moving through things and if they're moving through things in a way that makes sense and that will keep you on track for when you want to launch it. And that might take a little bit of time. None of these questions can be answered maybe just in a quick space. But they are key questions, these are the most important questions. And the last question is are there any alternatives? Are there alternatives? How else can I do this? Does this have to be done in the digital space? Because I can tell you if they ever existed, the time is now over for building a website and everybody coming. So you can't make an assumption that you know, "I'm here, I'm in the digital space."

And that it will be an immediate success. So sometimes there might be another way of doing it and it can't hurt to brainstorm and think about all of the different ways. Innovate, get curious, ask a lot of questions so that you can be thinking about some of the alternative ways that you can solve the same problem, answer the same questions, and maybe you can get that alternative going in the time that it will take you to also get your digitalization project off the ground. I hope that this has been helpful for you and I look forward to hearing more about what steps you have been taking to change up your processes and reach out to people in a more digital space. Thank you for listening to the Women Conquer Business podcast.

If you're wondering what's next, here are a few suggestions. If you love the show, be sure to subscribe. If you want to follow me on social media, you can find Women Conquer Business on Facebook, LinkedIn, and Pinterest. And finally, if the episode today brought something up for you and you need to talk, email me at hello@jenmcfarland.com. The Women Conquer Business podcast is written and produced by Jen McFarland and Foster Growth LLC in beautiful Southeast Portland, Oregon. Thanks again for listening.