Our Modern Marketing Manifesto makes the bold declaration that social media are changing business culture with the onus now on marketers to help create businesses that ‘have social in their DNA’.
For many organisations, attitudes within the boardroom towards social are a microcosm for ‘digital’ more broadly. An appetite for embracing social is often indicative of a C-suite understanding that changing consumer behaviour necessitates a focus on digital.
As Econsultancy CEO Ashley Friedlein explains in this post, digital stands for a focus on the customer experience, irrespective of channel, and a move towards a digital culture.
As part of our survey for our recently published Integrated Customer Experience Report, our friends at CACI, who sponsored this research, suggested that we included an initial survey question around the macro-level factors which have the greatest influence on business direction and strategy.
The chart below provides some valuable context around the broad range of issues and challenges facing organisations, many of whose CEOs probably don’t lose much sleep at night if a few customers are having a dig at them on Twitter.
There are some illuminating differences between what client-side and supply-side (mainly agency) respondents see as the most significant contextual factors impacting their businesses. Note that respondents could check up to two options.
Which macro-level factors have the biggest influence on your organisation’s (or your clients’) direction and strategy?
Source: Econsultancy / CACI Integrated Customer Experience Report; n=349 (company respondents) & 348 (agency); Respondents could check up to two options
Agency respondents are significantly more likely to view the greater empowerment of consumers, mobile technology and social media as drivers of an organisation’s direction and strategy.
In the case of social media, supply-side respondents are more than twice as likely to see this as influencing company direction and strategy. Is this naivety or wishful thinking?
It is worth noting that the supply-side sample contains a mixture of digital agency respondents (30%), integrated agencies (18%), independent consultants (11%) and other assorted types of tech and service provider.
What unites most of them is that they are Econsultancy users and therefore interested in digital and ecommerce, though the same can also be said of the client-side respondents taking part in this survey.
Although it could be argued that agency clients by definition might be more likely to ‘get’ the importance of digital, mobile and social, the more likely conclusion is that many of us helping clients with their digital strategies and tactics (including social) are overestimating how much boardroom executives within these organisations actually regard this as a top priority.
The more sobering verdict is that many of us are living in a digital bubble where we fail to recognise, for example, that a social media backlash or even a cyber attack for that matter may not even hit a company’s share price.
That said, we strongly believe that those organisations which don’t embrace digital for the twin goals of improving customer experience and improving business performance are facing decline and extinction.
Our latest Digital Transformation report, focused on Agility and Innovation, should be brought to the attention of nay-saying CEOs and CFOs who eschew meaningful innovation and change in favour of the status quo and a short-term focus on quarterly business results.
As pointed out in the report, research by Prof Richard Foster of Yale University found that the average lifespan of a company in the S&P 500 index has decreased from 61 years in 1958 to just 18 years today. His estimation at the current churn rate is that by 2027, more than three-quarters of the S&P 500 will be companies that we have not yet heard of.
Average company lifespan on S&P Index (in years)
Companies without question need to make sure they are innovating, as what is working for them now might not be a recipe for success in a few years' time. Innovation often means embracing digital but unfortunately, within many companies, the nay-sayers will bury their heads in the sand and keep asking for the business case for investment until it is too late.
So what if Burberry’s rampant success coincided with a major push towards digital and a focus on social which saw them attract more than 15 million Facebook fans? Show us the causal correlation, they will ask.
They will point to fact that Kodak has only just emerged from bankruptcy after its much lauded move towards a digital strategy away from traditional film failed to stop it sinking.
For those looking for the evidence around a business case for digital, research by Capgemini Consulting, also referenced in our Agility and Innovation report (written by Neil Perkin), shows that more digitally mature companies (the ‘digirati’) were, on average, 26% more profitable, had a 12% higher market capitalisation, and derived 9% more revenue from existing assets.
And if this doesn't sell you the need for a focus on digital, then try common-sense.