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Measuring the Effectiveness of Digital Transformation

How do you measure digital transformation success? It's not so simple. Pursuing digital transformation translates into new ways of doing business. New ways of doing business means new data, new data sources, and new methods of correlating data into meaningful results.

My previous blog, "Thinking Through Digital Transformation," discussed three business areas that digital transformation projects could influence, including improvements in finances, operations, and customer experience. The customer experience impact touches everything from marketing and sales departments, to support and fulfillment processes. This blog focuses on the metrics used to measure digital transformation success specifically for customer experience.

What Are You Measuring Now?

What you are presently measuring is the way you do business today. When you change how you do business, you will also have to add new metrics into the mix. The metrics you have today are probably not telling you enough about the success of your existing business methods. Statistics about your website access, for example, are sometimes hard to translate into useful business information.

Additionally, the statistics you presently gather may not be correlated with other factors that emerge in digital transformation projects, so it becomes hard to determine what works and what doesn't. Receiving a lot of the "likes" on your enterprise's Facebook page does not mean that your organization has delivered the goals you have set.

Do not, however, assume that the measurements you collect today are useless. They may be useful but they need to be correlated and expanded through a series of new metrics that are available both internally and externally to your organization.

Digital Traction & Customer Experiences

Traction is defined as the momentum a business gains as it grows. Businesses rely on customer response and revenue as indicators of their success. Developing digital traction is how the business grows using digital initiatives while meeting specific business goals and objectives.

Elevated levels of digital traction benefit a business's performance in a number of ways. A high net promoter score (NPS) would mean that the cost of marketing declines significantly. In a peer-to-peer business model, service costs would also decline.

Digital traction enables businesses to increase their valuation. Digital businesses have more scalable, highly engaged customers than traditional, businesses. Take a look at the below table from World Economic Forum for an idea of what to measure to assess a business's success in the digital age:

Source: "How to Measure Success in the Digital Age," The World Economic Forum

Mining Social Media

You can waste a lot of time on social media. On the other hand, you might find ways to use social media help you develop more outlets for your business and discover more metrics that you can measure. If you are a high-tech company, social media gives you a presence that may not deliver in terms of customer engagement. On the other hand, if you're a charity organization that depends more heavily on relationships, social media may be more applicable.

One of the problems with social media is anything can be posted, whether or not it's accurate or informative. You must keep that in mind before you implement a social media initiative. If you choose to use social media and display the icons on your website, definitely track the activity. You may find that activity level is high, but when you correlate it with revenue production and customer experience you may find that has little value.

Social media is a way to find out what matters to your potential customers and perform research about the content that they see as valuable. Unfortunately many businesses pursue social media as a mechanism for mass marketing. Be careful. Don't try to be everywhere at once -- i.e. LinkedIn, Facebook, Google Plus, Twitter, Instagram, Snapchat, and all the others. It takes a lot of work. There are so many people on these sites, you can be easily diluted and not stand out.

Customer Experience Analytics

Website analytics tools are developed for tracking visitor behavior on your website. The tools turn your website into a heat map that highlights popular website regions. By contrast, these tools also display areas that are neglected and rarely visited. These tools can showcase your data in the form of charts, graphs, and tables. This avoids reading a long list of datasheets that are hard to interpret.

Google Analytics is free but it may be too complicated to use for some novices. And, of course, there are many other tools on the market. You may want to consider other tools because:

  • You want to use analytical tools to check one against the other for accuracy and redundancy
  • Google analytics doesn't seem to be providing all the metrics that you want
  • You may not trust Google and you are not comfortable with them have active access to your data

See "35 Amazing We Analytics Tools that Rival Google Analytics" for an extensive review of tools on the market.

Social Media Do's and Don'ts

The concept behind social media is to be sociable and engage people. Most people go to social media with little or no expectation of receiving something in return. Unfortunately, many businesses expect something in return from social media efforts. Businesses expect leads; they expect sales.

Here are some points to keep in mind:

  • A lot of followers on Twitter, Facebook, Instagram, and Snapchat do not translate into new or continued business. Understand that's really not why these platforms exist.
  • You can use social media to listen to the conversations about your products, services, and competitors.
  • Do not just post something on Twitter to remind the social member that you exist. These posts will eventually go ignored.
  • If your business and what you offer does not lend itself to pictures, then Instagram and Pinterest are probably not for you.
  • If you do not regularly produce good quality videos, then YouTube is probably not the place to be.
  • If you do not have regular podcasts to post, then avoid iTunes.
  • If you are using social media to generate relationships, then follow up on those relationships. If you leave the relationship dormant, then why did you try to create them in the first place?