10 reasons why brands fail in their digital (business) strategy

10 reasons why brands fail intheir Digital (business) strategy? January 2012

iVentures Consulting iVentures Consulting is a Management Consulting firm dedicated to Digital Strategy in Luxury, Transport & Travel, Media, Entertainment and Utilities sectors. Founded in December 2005 and based in Paris and San Francisco, iVentures Consulting works with Fortune 100, startups and VCs.2

1. Disconnect the Digital strategy and activity ofthe brand to its real world life 3

1. Disconnect the Digital strategy and activity of thebrand to its real world lifeContext   Many companies have a Digital strategy and presence that is disconnected from their real world strategy and presence.   Customers will notice a strong discrepancy between the company’s physical and online presence through the brand’s positioning, universe, level of services, products and even human resources …   This disconnect can generate questioning and mistrust in the company’s brand.4

1. Disconnect the Digital strategy and activity of thebrand to its real world lifeRecommendations   Do not separate the Digital strategy from the Company’s strategy: the Digital strategy of the company should be the reflection of its global strategy.   Strategy definition should include for both clear business objectives, a business plan and easy-to-measure KPIs that integrate customer and prospect reach, level of online sales (direct and indirect), quantity and quality of interactions, etc…5

2. Define the Digital strategy as an action plan withoutfirst defining the brand’s business objectivesContext   Digital Managers and Digital agencies define, implement and take actions. Most of the time, a Digital action plan is done without defining at first the brand’s top Digital business objectives.  Example: « This year, we plan to recruit XX followers/ fans on Twitter and Facebook, to be closer to our clients through an original concept of viral campaign about … In this case, the strategy seems to be more a list of actions rather then being made of business priorities and objectives, declined through an action plan.7

2. Define the Digital strategy as an action plan withoutfirst defining the brand’s business objectivesRecommendations   Define and estimate at first business objectives for a better definition of means and actions:   Quantitative objectives (Examples: The online incomes should represent X% of total incomes, reduce my Customer care cost of X% etc…).   Qualitative objectives (Examples: increase brand awareness, increase Customer loyalty etc…).   Target objectives: geography, audience profile, prospects vs clients, etc…8

3. Top Executive Management is not sufficientlyinvolved in the Digital strategy 9

3. Top Executive Management is not sufficiently involvedin the Digital strategyContext   The Digital strategy is often defined by the Digital Manager with her/his manager (VP Marketing or Communication) assisted by a Digital agency and validated at the end by the COO or the CEO of the company.   Once the new website or service is launched, everybody within the company discovers it and sometimes, departments (Retail, Customer services, Finance etc…) that were not involved in the project, start to complain and want to make changes. This will result in a delay in the launch of the website and/or increase in its overall cost.10

3. Top Executive Management is not sufficiently involved in the Digital strategy Recommendations   Involve the Executive Committee (Top Management and its Heads of department such as Communication, Marketing, Retail, Technologies, Customer Services, Finance, HR) at least for:   The company Digital business objectives definition   The Digital strategy validation   Quarterly Digital Committee dedicated to result presentation, new initiatives validation etc…   Digital strategy implementation will be successful only if the Executive Committee stays involved, following the results regularly and validating the launch of corrective actions to strengthen the strategy.11

4. The company’s Digital activity is not driven by the business12

4. The company’s Digital activity is not driven by thebusinessContext   Business plans and leaderboards are still rare to follow the overall Digital strategy of a company and plan its Digital growth.   The main management tools used by Brand Digital Managers are the annual budget (based on previous experiences and needs) and a monthly report of analytics (generated automatically by an analytics tool). These tools are more focusing on day-to-day management than on Digital strategy implementation.13

4. The company’s Digital activity is not driven by thebusinessRecommendations   Make and update a Digital business plan for the next 1 to 3 years including all the Digital activities (Corporate site, eCommerce, Social media etc…) allowing to plan and estimate investments and results (traffic, incomes etc…) related to Brand’s objectives.   Define, set up and follow up key monthly KPIs within a leaderboard to adjust brand’s strategy and actions. KPIs should be determined in Digital business plan.14

5. A complicated customer journey creates abad user experience 15

5. A complicated customer journey creates a bad userexperienceContext   Brands make a complicated galaxy of sites and initiatives such as a corporate site, product mini sites, eCommerce site(s), initiatives on social platforms without links and relevant journeys for customers and prospects. As a result, customers experience is inconsistent and dissatisfying across interaction points with the company.16

5. A complicated customer journey creates a bad userexperienceRecommendations   In the physical world, everything is designed to make customer’s life as simple and easy as possible. It should be the same in the Digital world, where the customer journey should be directly influenced by the Digital objectives and strategy of the Company.   Make the architecture, customer journeys and user interfaces easier for the main targeted populations with a 1 one stop site (that can includes corporate presentation, products, eCommerce, company’s events and news etc…) as well as simple and relevant customer journeys and links to and from the company’s social initiatives (blogs, Facebook, Twitter, etc…).17

6. Think of social media just as media18

6. Think of social media just as mediaContext   Too many brands still think Social Media is just a media and let the communication department manage the company’s social activities thus excluding key departments.   As a consequence, social media platforms are used as a PR and communication tool and massive investments are made in campaigns with the singular objective of gaining more and more fans and followers without plan or knowledge of how to utilize them.19

6. Think Social media just as mediaRecommendations   Social Media should be part of the global Digital strategy as a new lever to share and interact with customers and prospects, engage them, generate traffic in stores or online etc … As a real channel, Social Media impacts the overall Company, including Communication/ PR but also Marketing, Sales and CRM.   Social media should be managed by the Digital Manager and conducted through a regular Social Media Committee. This Committee should include at least people from Communication / PR, Marketing, Sales, CRM, the Digital Manager and the Community Manager.   Brands can’t really measure the value of their brands by their number of fans or followers. Any prospect or client has a different value depending on her/his level of brand affinity and/ or customer lifetime value. Brands should focus on how to engage their prospects and clients. Moreover, companies should refine their analytics through key performance metrics related to engagement such as views, plays, comments/ feedbacks, clicks/ downloads, duration of visits, conversion etc…20

7. No Digital skills development program for Executives and Top management21

7. No Digital skills development program forExecutives and Top managementContext   Training focused on Digital skill development is rare, and seldom are they a part of an overall skillset development. Moreover, no digital trainings are given to populations such as Executives, Top management and people working regularly with digital experts (Retail, Communication, Finance controlling etc…).22

7. No Digital skills development program for Executivesand Top managementRecommendations   Identify training and skillset needs for the Digital teams, Executives,Top management and people working regularly with Digital experts.   Define and set up a 2 or 3 years Digital skillset development program that includes Digital experts and Executives, non Digital experts and Executives working with Digital experts, Top Executives etc…. This program includes training sessions, learning trips, internships, mentoring …23

8. No or very limited dedicated humanresources for Digital24

8. No or very limited dedicated human resources forDigitalContext   In the Digital world, it is unfortunately not rare to see brands with only one Digital Manager to take care of all the Internet projects (Corporate, eCommerce, Intranet, Social Media, eCRM …).   Worse, without a dedicated Digital Manager, some companies entrust several people from the Communication or Marketing department (available punctually) to manage their Digital projects.   Even worse, some companies entrust an intern to manage the Social Media activities.25

8. No or very limited dedicated human resources forDigitalRecommendations  Let’s ask ourself a simple question: would a brand entrust an Intern or a manager alone in a physical retail store to talk about the brand and its products to customers?   Ensure there is at least a dedicated Digital Manager and progressively a Digital team as activity grows.   Do not let interns manage Social Media and other strategic activities.26

9. Separate eCRM from CRM and mix up clients and prospects27

9. Separate eCRM from CRM and mix up clients andprospectsContext   eCRM actions are still too often managed alone by the Digital Manager without brand global CRM approach.   Clients and prospects are targeted without segmentation with the same actions.28

9. Separate eCRM from CRM and mix up clients andprospectsRecommendations   Merge eCRM and CRM databases and define a global CRM strategy with a unique and global (offline and online) action plan when possible.   Segment your targets in several groups and differentiate clients and prospects to address them with specific messages.   Measure the reactions of your segments to the messages / offers sent, and use these results to re-segment your customer and prospect databases.   Do not forget to communicate the results of your CRM online and offline actions to the marketing, sales and communication people within your company.29

10. Be dependent on a Digital agency30

10. Be dependent on a Digital agency Context   Brands become dependent on their Digital agency by accepting to use the agency proprietary tools such as eCommerce Platform, Content Management System, eReputation tool etc….   In such a situation, if brands want to change agency, the overall Digital galaxy of the brand must be rebuilt with new tools, resulting in high investment cost that might discourage the brand to leave its Digital supplier.31

10. Be dependent on a Digital agency Recommendations   Companies must work with agencies that propose to implement market leading tools to manage the site, eCommerce, etc…   At contract signature, companies and their agencies should define the conditions in case parties decide to stop working together: ie. obligation of maintenance from the agency, ownership of tools and datas, etc…32

Contacts WEB   Site: http://www.iventures-consulting.com   Blog: http://iventures-consulting.tumblr.com PARIS OFFICE SAN FRANCISCO OFFICE Christophe Biget Aurelia Ammour Partner Partner @cbiget @ammour +33 01 70 08 06 60 + 1 415 794 8447 christopheb@iventures- aureliaa@iventures- consulting.com consulting.com © Analysis: iVentures Consulting – Photos: iStockphoto33

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10 reasons why brands fail in their digital (business) strategy

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