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PMG Deep Dive: What is digital strategy?

By January 7, 2020 No Comments

What is digital strategyDigital strategy has a straightforward definition, but it’s a concept with wide-ranging applications and benefits. In short, digital strategy is a strategic approach that focuses on leveraging technology to improve business performance. From developing new products to reimagining current processes for greater efficiency and functionality, digital strategy informs how an organization seeks to create new competitive advantages with digital tools. Digital strategy also encompasses the tactics a company deploys to create these advantages. 

The right digital strategy empowers bold, forward-thinking organizations to offer services that weren’t previously possible, effectively transforming their business models. This has led to radical and ongoing shifts in the competitive landscape, as established players grapple with more recent arrivals whose fully integrated digital business models give them a significant edge. 

As companies move farther along the path to full digital transformation, the line between business strategy and digital strategy is fast disappearing. For now, it still makes sense to use the term “digital strategy” for digital efforts to improve business performance, but keep in mind that the distinction is collapsing. 

Digital strategy vs. digital transformation

While we’re clarifying terms, it’s valuable to distinguish between digital strategy and digital transformation, two terms that are often conflated. Digital transformation drives change across business models, operational processes, and customer experience. Successful digital transformation requires the cooperation and buy-in of the entire organization, since it involves changes to business culture.

Digital strategy, in contrast, focuses on technology rather than culture. Organizations can leverage digital strategy to change their business models—to create the capabilities an organization needs to become a digital business. Establishing a digital strategy is vital to successful digital transformation, because it ensures that technology is deployed in the best way to support business objectives. 

Digital strategy vs. IT strategy

It’s also illuminating to compare digital strategy with IT strategy. IT strategy has historically been charged with deciding where to invest technology resources in line with the organization’s trajectory. Digital strategy, in contrast, is a holistic approach to transforming business models and operations by leveraging technology.

Digital strategists look first at the actions and processes that need to undergo transformation in order to deliver the best possible customer experience—which is increasingly the first priority of B2B companies. Using the customer experience as the end goal, digital strategy identifies the combination of tools and approaches to produce that optimal experience.

A changing competitive landscape

Rapidly evolving business models continue to change the competitive landscape in every industry. Digital technology has enabled businesses to succeed with a “plug and play” approach, in which companies attack specific links in the value chain without needing to own the whole thing, leveraging digital technology to knit together various services more quickly and less expensively than was traditionally possible. 

This leads to another factor changing the competitive outlook: the increasing affordability of high-end technical solutions. As McKinsey Digital points out, delivering highly functional technology that customers want to use is a much faster and cheaper process than it used to be, with results achieved in weeks and months rather than years. As a consequence, companies that are new, tiny, and/or budget-crunched can still be formidable market players.

Watch: Key Elements of a Solid B2B Digital Strategy

Elements of a successful digital strategy

The concept of “digital strategy” has become ubiquitous, but the essential ingredients for a winning digital strategy can prove elusive. At its core, digital strategy involves testing, reporting, and optimizing quantifiable metrics that provide insight into business performance and how to improve it. Drawing on our experience setting digital strategy for some of tech’s most recognized brands, here are some critical steps to create a solid digital strategy:

Develop an actionable roadmap

The aim of the digital strategy needs to be defined at the start of any digital marketing campaign. Goals are typically segmented into branding or lead-generation initiatives. The marketing goal will then be further refined into specific KPIs and ROI targets for the desired business outcome. 

Unlike offline marketing metrics, digital metrics are highly trackable and easily augmented for greater business results. Rather than conventional IT strategies with roadmaps and budget forecasts extending years into the future, digital strategies tend to rely on short-term roadmaps tied to action items and measurable objectives.

Your organization’s sales cycle can, and should, inform your digital strategy. Understanding how customers make their buying decisions helps digital strategists decide when and how to deploy their messaging. The best digital campaigns are crafted to take advantage of the customer sales cycle: when digital strategists have a full understanding of how leads move through the funnel, they can build a digital campaign that generates more initial traffic and nurtures leads more effectively.

This brings us to the next step.

Get organizational buy-in

Arguably the most important part of creating a digital strategy—the element without which even a solid strategy will fail—is enlisting organization-wide support. The teams and individuals you’ll need buy-in from will vary depending on your organization, but ultimately the more teams are on board, the better. 

While it’s not the norm, some CEOs choose to lead digital strategy implementations themselves, especially in industries encountering heavy disruption. The downside to delegating digital strategy to a single person or small team is that digital affects an organization across the board. And in disrupted industries where the right digital strategy can make or break an organization’s future, many CEOs are motivated to get personally involved.

The challenge for CEOs is, of course, finding the time. A winning digital strategy demands leadership capable of investing time and other resources towards its success. That’s why many organizations go with a team led by a Chief Digital Officer, but that person needs to have sufficient influence to make the necessary organization-wide changes.

A successful digital strategy requires not only buy-in from leadership, but also a cross-functional team dedicated to the success of the company’s digital goals. As Centric Digital observes, “A digital strategy depends on the skills of the entire team… it is inseparable from the efforts of the developers, designers, marketers, strategists, content writers and so on.” To maximize the benefits of a digital strategy, organizations must break down the silos between technical decision-makers and leaders of customer-facing teams to deliver a consistently excellent customer experience. 

The takeaway is that choosing the right leadership for your digital strategy will depend on company structure, organization, and priorities. It’s less important which job title leads the effort and more important that every team throws its weight behind the strategy.

Select an effective MarTech Stack

One common misstep for businesses looking to invest in digital strategy is considering the platforms they’ll need before establishing their goals, people, and processes. The best platforms to execute your digital strategy depend on your company’s goals, and might include content management systems, data analytics, AI tools, cloud services, or geo-based apps.

Once you’ve chosen a platform that aligns with your goals, you can identify the individual products that together comprise your digital strategy. These might be apps, responsive websites, smart products, and augmented reality experiences, to name a few.

From there, the question for digital strategists is how to connect those products with the people you want to have them. Depending on your strategy, your business model, and your goals, your delivery channels might be email, social media, networking events, websites, in-person shopping, and more. 

Future-proof your digital strategy 

The ultimate goal of any digital transformation strategy is to create a (better) foundation for business success. It’s about being agile enough to change with the needs of your customers and the natural evolution of the digital space. A visionary digital strategy can carry your organization through radical advances in technology, evolving customer needs and expectations, and changing marketplace conditions. 

When it comes to future-proofing, companies should be asking themselves: “What processes need to evolve?” and “How do we meet the needs of tomorrow’s buyers?”

These are not easy questions. But effective leadership in a fast-evolving market requires business leaders to consider everything—internal processes, business goals, marketing strategies, and customer experience—through the lens of the technologies that set their organizations apart in the eyes of buyers.

Want to learn more about how the intersection of marketing and technology can enhance your B2B brand? Contact PMG today.