Digital Strategy is dead, long live the customer experience
In my 20+ years of digital consulting I have witnessed 4 major shifts. Digital started off as a technical challenge and then shifted to an innovation challenge to a design challenge to now – a strategic challenge. But the seeds of this last shift were planted nearly 10 years ago.
It was around 2007 that the big New York digital design companies wanted to become real agencies. My guess is that they looked over at Madison Avenue, with its storied past, and thought to themselves, “we’re big, we’re the future, we should be like them.” But to do that, the upstart digital agencies would need to start delivering services much more consultatively and figure out what digital strategy should be – which were no small tasks.
Truth is, today’s digital agencies are still struggling to deliver like consultants. It can be wildly inconsistent and too dependent on the individuals. But it was strategy that posed the biggest and most pressing challenge. Everyone knew that to be that real agency it would no longer be good enough to know how to build technically sound, innovative, beautiful digital things. To make the transition, these digital design companies would have to make sure that the campaigns, websites, and apps provide strategic value to the organization. And this is where it started to go off the rails.
Strategy initially amounted to one of two possibilities:
- The digital agency would sit down with their customers and “think strategically” and come up with best practices and a handful of more cool ideas to consider, or
- The digital agency would create a 100 page deck, almost designed to make the customer feel overwhelmed and stupid, thus making the agency seem smart.
But neither approach was truly strategic. Coming up with a handful of more cool ideas to consider only added to the customer’s core anxiety – what should I be doing? More options create more choice, more uncertainty, and more confusion. And the 100 page deck was so obviously flawed that it should have been dismissed out of hand. It was an indictment of the presenter because, as Einstein said, “If you can’t explain it simply, you don’t understand it well enough.”
Around this time I was hired by Schematic’s New York office to help transform that 300-person digital design company into a real agency and we were knee-deep in all of this. My immediate response was to shun the strategy. I didn’t like it, feel comfortable with it, or believe in it. I convinced myself that strategy wasn’t my concern and went about the task of improving delivery.
I told my team that there were about 3 people in my entire career that I would call “go-to guys”. People that I would take with me anywhere I go, if they were willing to come. Why? Because I could give them any project - no matter how difficult and they could handle it, they didn’t share the pain, yet they had the judgment to alert me of potential issues in plenty of time to react. I told my team that we wanted to be the” go-to agency” for our customers. And then we set about to change how we organized ourselves and behaved to achieve that. It was a huge success - in 2 years we generated $12 million in revenue at a 45% profit margin, working on the premier portfolio project for one of the world’s largest tech companies. There was never a shortage of work and it was a client that appreciated our value.
And when I first arrived in Rotterdam six months ago and I spoke to people about these ideas - they all asked me, “Have you heard of Coolblue? They cost more, but they’re worth it.” Then they proceeded to proudly tell me about this rare find of theirs - in essence, a company that can deliver value and make it delightful along the way: an organization that focuses on the customer experience.
After helping two more digital design companies become real agencies it became clear to me that focusing on the customer experience was the strategy that made the most sense. Leading an agency, I focus on the experience our clients have with us. But I also focus - and get our clients to focus - on the experience their customers have with them.
And now the customer experience is a strategy in full bloom. McKinsey, Bain, and PwC all have mature customer experience practices. Their research tells us what we already know - that organizations that focus on their customers’ experiences and successfully change to deliver a great customer experience, enjoy significant competitive advantages:
- Their customers will be willing to pay a premium
- Their customers will freely talk about them
- Their priorities will become clear
- They can put in place success measures
- And their employees will become more satisfied with their jobs, knowing exactly how their efforts contribute to the shared success
And that brings us to the latest serious attempt at strategy that agencies have tried - becoming “McKinsey light”. Trying in vain to convince themselves and their customers that they have the scale and expertise to deliver that level of consulting. But that never made sense to me either - because if a company really wants management consulting advice they will go to McKinsey. Nobody ever got fired for hiring McKinsey.
Which all begs the question - at the highest level, is digital strategy dead? Yes and no. Yes, those earlier versions are dead. It’s not thinking strategically and coming up with more ideas, nor creating confusing decks, nor McKinsey light. And no, it’s not dead, because without some organizing principle you end up with a whole variety of cool digital projects, but all very loosely tied together, if at all, and not really aligned to any other activities. And that lack of coordination is simply not strategic and results in a weakened position.
So strategy is more alive now than ever before. It is just not one-off customized strategies for every customer. It is the bet you make - and help your customers make - on which business strategy to ladder-up to and how best to align and design their digital efforts in support of that. At this point in time, I believe, that the business strategy is the customer experience and that the strategic shift has taken root. And, as with each shift that came before, it presents a moment of opportunity. I would recommend taking advantage of this moment - they don’t come around often or last too long.
Also published on MarketingFacts.nl