According to a study by Accenture Consulting, 94% of businesses aren’t profiting from digital. And these are companies that are actually trying. Another 60% took a stab at digital but aren’t really taking it seriously. Former giants like Kodak, Nokia, and Blockbuster failed to make the digital shift and paid with their lives. And we see what’s happening with the taxi and hotel industry, but nobody seems to be doing anything about it.
So what can we learn from companies who successfully made the shift and how to avoid the fate of those who didn’t?
What is Going Digital?
Going digital is about leveraging technology to make your business operate more efficiently and improve the customer experience.
Today going digital is as easy as ever. You no longer have to pay tens of thousands to get your business online. You can easily get set up on WordPress or Squarespace or have an app developed for your brand by a child in India. ou no longer need a million dollar budget to compete on TV, you can purchase ads on YouTube or Facebook that are 10 times more effective.
You no longer need a million dollar budget to compete on TV, you can purchase ads on YouTube or Facebook that are 10 times as effective.
Trying new things can seem difficult, but the cost of doing nothing is great. We’ve seen what happened to companies like Blackberry and Myspace.
Modernized organizations are leveraging their digital assets in order to save money and scale. Humans and hardware are being replaced by software and machines. This may sound scary, but technology will never replace humans. We’ll never make them that smart. But technology does give us the ability to do our jobs better and faster. We’ve put away the chisels and pens and have fired up Microsoft Word. Technology is nothing to fear. We just have to find ways to make it work for us.
What should be scary, however, is the 67% of millennials who use search to limit their brand selections. Or the 80% of consumers using smartphones while a computer is present. This happens because technology makes it easier for people to do what they want to do. So as a brand, if you make it easier for people to get your products, you will sell more and work less.
How many times have you been frustrated because a brand made things harder than it had to be? Imagine if Facebook performed like AOL… It would drive you nuts. And where is AOL?
Companies that missed the Digital Bus
Kodak is the company that invented digital photography, but when it took off they failed to make the shift. So where did they go wrong? Since most of their revenue was tied to physical products like print and film, they were afraid to give it up. What’s even more surprising, is that Kodaks CEO conducted a report assessing that they had 10 years to adjust. Knowing this, they still failed to make a move.
Nokia made a similar mistake. Once a giant in the mobile industry, they first lost to Apple’s touchscreen technology. Later they took an even bigger hit when they bought Navteq to compete with Google Maps. Navteq is an in-road traffic sensor company that accumulates real-time location data. This is now useful for delivering ads based on user location. In contrast, Google bought Waze, a traffic sensor company that was an app, no physical hardware was necessary. Waze grew exponentially and is now 10 times larger than Navteq.
Blockbuster also doomed itself by not making the digital transition. After closing down many of their stores, they attempted to install kiosks around the country. Netflix would have also collapsed if it continued to focus on physical DVD’s opposed to the streaming service they now provide. In 1997, 97% of Netflix’s revenue came from DVD sales. But the founders decided to abandon that model and focus on online rentals.
Break up with your industry and marry your customers
When you’re married to your product or service it’s easy to overlook consumer needs. It’s like a real marriage. People change over time and so do their preferences. So it’s important to be able to shift once the market shifts.
This means if your customers expect to interact with your business on mobile, you should have an app or mobile-friendly site. If they’re looking for directions they shouldn’t have to type in your number or address, all these things should be clickable.
Yahoo recently sold to Verizon because they were unable to make the shift. Instead of building data algorithms that handled search queries, they continued to use human curators to return search results. They were married to their product when customers didn’t care how information was retrieved as long as they got the search results they were looking for. This put Yahoo at a disadvantage, and by the time they figured it out, it was too late. Even when everything started shifting mobile, Yahoo continued to cater to desktop users, causing them to lose ground to Google and Facebook.
And this will happen to more and more companies unless they can embrace the new. The lodging industry has been dealt a blow by an app [Air BnB], and Uber has inflicted wounds on the transportation industry. Now we’re just waiting to see what happens with the restaurant and service industry.
But whatever industry you are in, you have to find a way to leverage technology. As I said in the opening, 94% of companies aren’t profiting from digital. And if you’re not, it may be time to make a change. The potential is great. If we take advantage of technologies we can thrive like never before, otherwise, we’re killing ourselves.