10 Inspiring Case Studies of Digital Transformation

Hi everybody. Welcome to today's Biznology Digital Marketing Webinar. I'm Mike Moran, founder of Biznology and a senior strategist at Converzion Revealed Context and Solo Segment. I'm the co-author of Search Engine Marketing, Inc. and Outside-In Marketing, and sole author of Do It Wrong Quickly. I'm a veteran of IBM, managing groups in IBM for 8 years and retiring from IBM in 2008 as a distinguished engineer. Today, you'll be hearing from Rob Peterson, who will be— present 10 inspiring case studies of digital transformation. But before we start, we need to recognize our sponsors. Barnraisers, a full-service digital and social media solutions company that builds brands using proven relationship principles and ROI. GagaLamp empowers companies to amplify their social media content by leveraging employees, partners, and resellers. Try GagaLamp for free today. GerisCorp, a full-service digital strategy firm that reaches deeper into the conversation than any other agency anywhere. Mountaintop Data, a a B2B marketing intelligence company providing marketing lists as well as data cleaning, data appending, and data maintenance services. SoloSegment, your one-stop shop for targeted B2B content marketing techniques, including website search and website personalization. As we wait for more attendees to join, let me review the format of our webinar. Our Biznology webinars last just 30 minutes, so you can easily fit them into your busy schedule. We record each webinar and we'll email you that link later this week. During our speaker's presentation, you can use BigMarker to chat with your fellow attendees. Just type in the chat feature there. You can also see tweets about our webinar. Feel free to tweet with the hashtag #BizKnowWebinar. If you have a question to ask our speaker, click the Q&A tab. I'll select a few questions at the end of our webinar and and pose them to Rob. Lastly, in the Hangouts tab, you can find a PDF of today's presentation. Thanks again to all of you for spending 30 minutes with us. We know how valuable your time is, so let's introduce today's speaker. Rob Peterson is president of BarnRaisers, a digital marketing solutions company using social media, the power of community, and the proven principles of relationship marketing to build brands. He's also on the MBA faculty of Rutgers Business School where he teaches courses in web analytics, SEO, and social media measurement and ROI. Rob has been recognized by the American Marketing Association for building billion-dollar businesses multiple times. So if you've ever struggled with digital transformation, this is the webinar for you. Rob, welcome and take it away.

Thank you, Mike, and welcome to everybody who's listening. Today's topic is digital transformation, as Mike said. And let's, you know, as the name would imply, a digital transformation is an undertaking. It's going to involve time and investment and corporate commitment. So let's all get— begin by being grounded on just what digital transformation is defined as. And I'm taking this definition from Brian Solis because it's a good one. And he describes it as the realignment or new investments into technology and business models that effectively engage customers at every touchpoint in their experience lifecycle. And this definition by Brian, I want to point out, you know, has a couple of words in it that you usually see associated with a digital transformation, words like technology, innovation, new business models. But at the center of every digital transformation is a deeper understanding of your customers and their— and the customer journey and how you can interact with them at every possible touchpoint to delight them and have a better customer experience with them that builds your business and your brand and your bottom line. A couple of stats on digital transformation and what it means to companies now. And these stats come from a variety of sources, Forrester, PricewaterhouseCoopers, Altimeter, but basically what they say is that almost 90% of companies think that a digital transformation needs to occur at their company because it's a competitive advantage. And they give themselves 2 years generally to have this digital transformation occur, and if it doesn't, they believe that they haven't made a digital transformation they'll be behind their competitors. Almost 2/3 of all global CEOs believe that digital transformation is a cornerstone of their corporate strategy in 2018. But an equal number, and here's an interesting point of friction, of companies and people at companies say that, you know, their organization is in denial about digital transformation. They might not need it. They've gotten along fine without it. So there is this kind of conflict that occurs in every company that really requires leadership and commitment to make this happen, as well as obviously what's listed here is a good amount of time. And another point of friction is that only 27% of companies say that the executives at their company have really the skills to make this happen. So how do— what's— how does success happen for digital transformation? And, you know, what can we learn from it, and how can we apply that? And so in studying this, What I found is that companies that are successful at digital transformation, usually you'll see words like technology and innovation and customer experience as kind of staples that they require. But really what happens with a successful digital transformation is it really is the ultimate demonstration of change management in a company. So it's really a big deal to pull off a digital transformation because it really says not only how much more effectively the company can operate, but just what the company is capable of. In studying this, I found that there are basically 10 characteristics, traits, that companies who are successful at digital marketing have that enable them to be successful. And I'm not going to read these traits to you from the slide. Rather, what I'm going to do is present some case studies of companies that really excel in each of these. And as a result of excelling in each of these, you can see that this was why they were successful at a digital transformation. And the idea here is to show by example just what a digital transformation is, what success looks like, what companies that have done it do. And so as you look at this, you know, you think about yourself. If you're thinking, if your company's thinking about it, does your company possess the traits? Do you need to learn them? Are they latent and just need to be brought out? But we're going to go through each of these 10 characteristics that result in success for digital transformation in companies that have applied these characteristics. And so here we go with our 10 inspiring case studies of digital transformation. Case study number 1, Burberry. We're probably all familiar with Burberry. I would imagine people who are on the phone right now actually have had a Burberry coat. You know, we think of them, they're beige, they have a plaid interior, very, very high quality. But probably we don't have too many Burberry products. Maybe we purchased one once or one was given to us for an important career achievement. And Burberry, which is basically known for trench coats, you know, really decided that they needed to bring themselves into the digital age and let people know just what they were all about. So what they did was totally revamp their online and offline premise. They totally redid their website with a much more human and accessible feel, so their customer-facing was much more about, you know, was much, much more accessible. They used customers as models, showing a broad range of what they made. They made sure that they had a very robust e-commerce catalog, and even since many people go to a Burberry store ultimately to buy a product, they made sure that there was great inventory online and offline, and the people could always get what they wanted. And even offline, applied digital by putting RFID tags into all their products so they would know digitally if they were ever out of stock on something. A second characteristic of successful digital transformations is that companies have a customer obsession. And probably a great example of a company that's totally customer obsessed is Zappos. Zappos, if you don't know, if you're doing business with Zappos and they're out of stock on a certain product, they'll actually go to their competitors and buy it for you because they know that almost 90% of people will pay more for a better customer experience and come back to doing business with them. And the same number of people will probably start doing— a percentage of people will probably start doing business with a competitor if they have a poor customer experience. And they know that to their business, customer obsession has a real strong reward, because 75% of Zappos buyers are repeat customers who do business with them digitally. A 3rd characteristic of successful digital transformations is that companies who go through a digital transformation start by knowing what their annual customer value is. So Amazon probably transforms itself more often than most companies. They've transformed themselves with bringing out Prime, with bringing out Kindle. And each time they do this, they know that they're bringing their current customers to spend more with them. The average Prime customer spends over $1,300 a year on Prime. A Kindle customer spends over $1,200. That's 50% and almost 100% more than the average Amazon customer like me spends, you know, maybe buying some Christmas presents and books and a computer at the end of the year. But people who sign up for some of their other programs and subscriptions that present a new level of innovation for Amazon end up reaping them more and more in return. Another characteristic and case study of a digital transformation is that companies that are successful at digital transformation are social media adept. And McDonald's is a good example about that. It was actually by listening to social media and that being an important cornerstone of their digital transformation that they found out that their, that their that they brought out their all-day breakfast all the time. First, they had it as breakfast, then they had it after midnight, but they found out by listening to social media that their customers were saying, hey, all-day breakfast is the next big thing. They found that there were over 300,000 tweets that were mentioning that McDonald's should have all-day breakfast. What McDonald's did to make that successful was not only listen, but they found the most engageable Twitter accounts, and they started sending, when they launched this, Twitter accounts customized messages to these people, letting them know that they were listening to them and they were responding, and it resulted in All-Day Breakfast being a huge success and a strong platform for digital transformation for McDonald's. Another company and another characteristic is that a company that is going through a digital transformation is quick and always listening to the data. US Express is a freight company. They— cars, vans, trucks, as you can see here, is how they transport everything that they do. But they found out through digital that they were spending a huge amount of money in fuel consumption with vehicles just lying idle, and while they were waiting, while their people were delivering products. And they did this by basically equipping their vehicles with sensors and navigation devices to find out where this was occurring. And this insight provided kind of a game-changing cornerstone part of their digital transformation, which resulted in them saving $20 million in fuel consumption in just one year.

One of the—

whenever you— a company does a digital transformation, there's usually some sort of portal that they have for their customers or that is important to make sure that it's updated and it's operating efficiently and it's most state-of-the-art in terms of its digital technology. And a company that really did this and paid attention to their infrastructure and prepared it properly in an almost do-or-die way was General Motors. At the end of the— the first decade, when we were in the midst of a bad recession and General Motors was facing bankruptcy, they decided to do something very, very bold. They closed 23 of their data centers worldwide because they just weren't producing the way they should. They were taking up a huge amount of cost and unnecessary resources, and they took all that capacity and they built 2 new data centers right near their corporate headquarters in Michigan. And as a result of this, what they did was kind of get rid of waste and reduce the distance for their data to travel, which resulted in a huge saving. They saved on networking costs, their responsiveness was greater, and actually now operates much more efficiently and saves them much more operating costs because they operate on cost— on clouds instead of the servers that they used to operate on. A 7th of 10 examples that we'll use here is that companies that are good at digital transformation know their metrics. At P&G, they actually have an analytics portal for their employees called the P&G Decision Cockpit. It's an analytics portal that any employee can go into and see the critical information about their brand for any of their products, for any of their offices all around the world. But the thing that P&G does here that I think is really, really smart is that these metrics and these dashboards and this whole decision cockpit has been set up with a deep understanding of what are the metrics that manage— that matter most to the management at P&G. So in any way, shape, or time, anybody can get a real quick, up-to-date, real-time understanding of how their business is doing to the CEOs and the division heads that they report to. Probably the brand that has the most robust— has created the most robust digital ecosystem of any brand that's gone through a digital transformation is Starbucks. Now, an ecosystem is described as living things interacting with their environment, and that's just what happens in the digital world between your customers and your brand. And Starbucks has really done this in a huge way. They brought their— their mobile platform is unparalleled in terms of its sophistication and its value and the revenue it brings in. Starbucks has over 12 million people enrolled in Starbucks Rewards programs, and that's up as of today 18% above a year ago. They have 8 million people that are paying for Starbucks coffee with mobile payment cards, and they have $6 billion loaded into prepaid Starbucks codes in North America alone just in the past year. So Starbucks has really sort of understood and created a deep understanding of the customer journey and every possible touchpoint that they can get outside the store in a way to make sure that they're really maximizing that whole customer experience and delighting their customers at every touchpoint. An important point, and it is for any successful company, a digital transformation, is that the right leadership is in place. And this is a tough one, you know, because digital transformation usually takes place in big companies, and so what's more important, people who really understand corporate culture or people who really understand the digital space and how to make activity happen? And I guess in the research that we've done, it seems more apparent that even in large companies, you know, C-suite people want digital leaders who've had real experience growing digital businesses, people even if they're, you know, that may be mavericks or entrepreneurs or people who've really had a taste of what it takes to really run a digital business successfully. And lastly, digital businesses that are successful time and time again show how this transformation is producing new revenue and helping the bottom line. For Starbucks, a third of the digital innovation that the company pursues right now is all centered around how do they create more operating efficiencies, better functionality, and bring in more revenue, you know, outside the retail space, because at the end of the day, there's an awful long line of people in a brick-and-mortar situation just paying $2 to $5 to buy a cup of coffee, and Starbucks has set up this whole elaborate, fantastic digital ecosystem mobile. And so how can they bring in and make that happen so that their online and digital business is producing a third more to the company every year? And as well, P&G, who, as you know, at the end of the day still works with areas of just kind of making soaps and paper products and all sorts of things that we find in our house, uses digital to maximize the operating efficiencies of their laboratories and their plants, so that they operate longer, and more effectively, and more cost efficiently. So, that's it, an overview on digital transformation with real examples that I hope brings out more about just what the topic is, and through these studies that we've shown, and these stories that I've told, kind of inspires you if you're going through it at your company, or thinking about it, to really be successful. So, thank you for your time, and I'm gonna turn it back to Mike now.

Thanks, Rob. Great stuff. I'm sure attendees have a much stronger idea of how to handle digital transformation, but you didn't answer every question. I've got several good questions queued up for you, and I'd like to remind our audience that it's not too late to ask your own question by typing it into the Q&A tab. So if your website can improve your ROI, but you don't know where to start, You might want to start with website search. SoloSegment has a special offer just for listeners to this webinar. The first 3 listeners to contact info@solosegment.com will receive 50% off the keyword scorecard for their website for 6 months. You can immediately start tracking search metrics, plus you can give your team access to a knowledge base that tells them exactly what to do to improve those metrics. Email info@solo-segment.com and tell them you were at the Biznology webinar to get your half-price discount while it lasts. If you're too late to be one of the top 3, you can still get 20% off by mentioning the webinar. We're about to start firing questions at Rob, but we need to thank our sponsors once again. BarnRaisers, a full-service digital and social media solutions company that builds brands using proven relationship principles and ROI. GagaLamp empowers companies to amplify their social media content by leveraging employees, partners, and resellers. Try GagaLamp for free today. Geris Corp, a full-service digital strategy firm that reaches deeper into the conversation than any other agency anywhere. Mountaintop Data is a B2B marketing intelligence company providing marketing lists as well as data cleaning, data appending, and data maintenance services. And SoloSegment, your one-stop shop for targeted B2B content marketing techniques. including website search and website personalization. Now on to your questions. Our first question, Rob, it's a little bit long, got to read it. Our company has a highly regulated history and needs to transform in so many ways. We're not digital, we're not customer-oriented, and we're not data-driven. Can we do all of those things under the umbrella of digital transformation? Or should we more realistically take them on one at a time?

The answer to that question is it depends on what your goals are and when you want to see results. This wouldn't be the first time I've seen a question like that. In fact, believe it or not, I get this type of a question more often than I get a company like Starbucks, you know, is ready to come out and take their digital ecosystem to the next level. So the important thing is to ground— is to set expectations. How— what are the most important things to do first, and how long will they take, and what's going to be involved? And importantly, for companies like this, is to also probably identify, you know, what is the— how do you bring the company into this so that they feel like they're a part of it? You know, this is probably a good example of a company that's living in denial about the need to do digital transformation. So it's a combination of just a very clear roadmap that clearly identifies time and cost, resources involved, and how you will bring the company along so that they see the success happening, and so they feel a part of it. And the ultimate demonstration— and the change management part of this, which is critical, you know, in any digital transformation, also takes place.

That sounds great. I thought you're— especially the point you made about them feeling involved. And rather than being in denial, because it— I agree with you, it sounds like the company feels like digital transformation is happening to them rather than they're actually the ones who are engaging in making it happen. And I think that's exactly right, that a part of it— when you see a company that has that many problems, one of the things that you— that, as you point out, you need to think about is how you're going to get them to kind of own the problem and say, we're going to do something about it. Great answer, Rod. And just—

I'll add one more thing.

Sure.

Is, you know, another thing is really knowing your competition. You know, usually in these cases for companies like this, if it's a motivation, there is a company and it may be an indirect company. Amazon, for example, you know, now has a whole B2B platform that's really taking a lot of B2B traditional companies that have warehouses and things like this and really becoming their biggest competitive threat because a B2B customer can just enroll in it and get whatever they want delivered to their door probably for less. than they might be paying now. So it's important for these to create some sense of urgency, and that statistic that, you know, you'll be left behind, it's important to maybe identify a role model of somebody who is doing it well and maybe a significant threat if something doesn't start to happen.

Very cool. Yeah, I think people are often more fear-based and motivated by fear than by opportunity, so that's really good advice. So let me get to our next question. Do we have to do this transformation with our own IT team, or can marketers engage directly with vendors to transform? What are the pros and cons?

Okay, that's a good question. It really depends. So the answer is you could do it either way. But, you know, this goes back to, and this is why we really did research these, you know, 10 areas. If you're going to go the vendor route, which could be very effective, but, you know, you're going to be a trade-off with— it's not, as we just indicated, bringing it into the company culture that much. You know, it's really important that whoever is the leader of this transformation really be somebody who can pull it off. And, you know, if there is a reason to do it because the transformation happens and outside vendors would be better to do it with and probably maybe even cheaper than doing it with the resources of the company, you know, it's important that that leader has the leadership presence to make that happen so that again, you know, this is change management in its ultimate demonstration happening at a company. And so it's important that, you know, that, that person has that type of persona within the company that they can do it that way. But either way, it's— and many companies do— again, all these questions are great questions. Many companies don't feel like you're the only one that has this problem. Actually, these are exactly the types of questions that get asked over and over again Terrific.

Well, here's another one if you like those. What if my company has none of the great characteristics that you listed? We still have to transform. What do we do?

I think, you know, you have— again, you have to start at the beginning. Take one step at a time, and take the ultimate— and manage the expectations of your companies with near- and far-term results. And it's really, you know, everything was kind of laid out with a starting point and an endpoint, and you have to manage that. And characteristics to get there. And to be honest, I can't believe that any company that's successful can't look at those 10 characteristics and start to sort of say, you know, well, let's look at them. You know, maybe we are operating. I mean, a company— some of these are very basic things. Every company should know their annual customer value. And if they don't, it's pretty easy to determine. You know, just take the amount of revenue, the number of customers you serve. I mean, there's just, you know, Everybody should be able to pull this list apart and put it together in a way that starts to say, okay, if we— this one we probably could do.

Terrific. Last question. My execs aren't willing to invest in this. How can I convince them to start doing something, even if it's a small start?

That's why we did this webinar, Mike. We really wanted to make it clear companies that succeed in this and why. And I think the companies that we've selected here are companies that would be role models to any company. Also, again, as we've talked about with some of the other questions, any company that's considering this, the stats that we presented is, you know, that is, is that most people believe that in 2 years if they don't— 90% of companies believe in 2 years if they haven't made progress in this area, they're going to be left behind and at a significant disadvantage versus their competition. So, you know, there's a number of ways into this discussion. You know, and we just tried to start with inspiring you.

Great.

with case studies that do this and hopefully explain what this is all about so that you could explain it to somebody in simple common language that would also get them excited.

That's great, Rob. Great stuff today. Really appreciate your time. Unfortunately, that's all the time we have for today. Thanks to Rob for these great ideas, and thanks especially to our audience for your participation and your questions. If any of you had questions that we didn't have time to answer, you can email your questions to Eileen, E-I-L-E-E-N, at mikemoran.com, and she'll be sure to get them to Rob for the answer. Later this week, we'll send you all a link to the recording of this webinar to listen to again and to share with others. We'll also invite you to mark your calendars for our next Biznology webinar, A Tech Journalist on the 5 Best and Worst Practices of B2B PR with Paul Gillen, scheduled for 11:00 AM US Eastern Time on May 2nd. We hope to see everyone back then. Bye, everybody.

Thank you.