Last week, Econsultancy published a new report in association with digital consultancy Blue Latitude, The Impact of Digital Beyond Sales and Marketing: How Digital is Transforming Organisations. The report examines the impact of digital across the business and, consequently, how companies are managing organisational change as a result of changing trends in technology and customer behaviour.
It is absolutely crucial for all business functions to understand this rapidly evolving environment, and with that in mind, this post summarises and explores the impact of digital channels across a range of business functions.
We will soon enter an era when marketing will be thought of as being digital by definition. The current split between “traditional” and digital marketing will disappear, and businesses will no longer think of online and offline marketing channels separately.
One of the major developments in marketing has been the move away from the broadcast, top-down approach advertising to a more dialogue-based approach. Although major brands will continue to spend money on television commercials and other traditional types of advertising, they are also putting more emphasis on “earned media” and publicity which is spread virally through social media.
Sales and e-commerce
The internet has revolutionised the shopping experience through the ability to purchase products at any time from the comfort of your own home. Now, through mobile, consumers can purchase at any time, at any location.
The internet has made a wealth of information about products and services available to ordinary consumers, and this means the average customer typically does more research before finally converting. The ability to check prices using price comparison sites has changed the way customers shop, and the mobile channel will further change customer behaviour. Customers are already checking prices on their mobile in-store to see if products are cheaper elsewhere.
As ratings and reviews have influenced customer decision making in the past, this will be extended further through the ability to garner reviews and recommendations from a personal network of friends and family members through social networks. Personal reviews will become more prevalent through Facebook’s “Like” button, and in general, social channels will continue to foster the environment of openness and transparency about purchases.
The rise of social media is playing an important part in the evolution of customer service. Companies can now listen and respond to their customers in real-time at the point or place where the conversation is occurring.
The digital era has enabled companies to empower their customers to help themselves. Technology can also help to improve internal efficiencies which can ultimately help improve levels of service. At its most evolved stage, customers are becoming staff or ambassadors for the organisation or brand, responding to queries from other customers or potential customers, and even developing and selling products on the organisation’s behalf.
As well as having a presence on social media, it is also about getting messaging right and being open, transparent and honest to build a stronger relationship with customers. This has shown to result in higher retention levels and repeat purchases, effective in the long-term since the cost of retaining a customer is far less than the cost of acquiring a new one.
Human resources and recruitment
The digital age is changing the way companies think about human resources because of the way that information can flow more freely inside and outside of organisations both to their advantage and disadvantage.
There is a higher expectation that the graduates of today will use social networking sites as a primary source of information. Sites such as LinkedIn and Twitter can be used as a recruitment tool to find potential candidates quickly and effectively, while paid search ads are commonly used to advertise jobs online.
Having a “digital footprint” also has an important implication for HR. In a culture of greater openness and transparency, and with individuals having a presence on a vast range of social networks, companies need to think about additional sources of information they have available to them. It is no longer uncommon for HR managers to search for the names potential employees on search engines before opting to hire them.
One of the main problems for HR departments in the information age is the increased danger of damaging information about companies and brands being shared between employees and leaking outside the organisation. Companies need to have appropriate policies in place, particularly around managing employees who post negative commentary about the company or customers on third-party sites and to what extent they control this.
There is no shortage of case studies showing how things went wrong, including the rogue employees at DSGi group (owner of Dixons and PC World) who set up a Facebook group where they posted negative comments about customers.
There is more information about this issue in Econsultancy’s free trends briefing, which explores various issues, ideas and developments between the complex relationship of HR and digital.
Market research, product development and innovation
Digital has changed the way that both client-side organisations and traditional market research companies collect and analyse both quantitative and qualitative data. From a brand perspective, online communities are a useful alternative to surveys and research, as companies can use their pool of customers to garner customer insights that can be used to improve product and services.
In contrast to the traditional focus group to market research, the rise of blogs, forums, review sites and social networks offer customers accessible platforms to express their thoughts, helping companies to develop their products and services in an innovative and customer-friendly way.
Since the feedback derived from social media consists of authentic comments written in the voice of the customer, they often provide deep insight into customer attitude and sentiment. Monitoring sentiment online has grown immeasurably in the last few years, with a number of free tools making this easier.
The rise of online communities, the phenomenon of crowd-sourcing and open technology standards have all helped to democratise product development. The unprecedented opportunity to generate ideas is a key advantage of the digital environment, and something which companies such as Dell and Starbucks have embraced by creating online communities where customers are invited to make suggestions.
These companies benefit from a pool of fresh ideas and innovation, but still maintain control over the product since they decide which ideas they will accept and improve. This also creates closer ties with customers and sends positive branding messages. The customers themselves feel empowered that the company is listening and taking on board their ideas and feedback.
PR and communications
Digital has fundamentally changed corporate PR and communications, as the organisation now has less control over messaging. The growth of new online communications channels has radically changed the way that companies can engage and communicate.
There has been a blurring of lines in terms of who the key influencers in the media are. Journalists now use Twitter, blogs, and social networking sites to break stories online, and broadcast is becoming less influential for certain products and services. Blogger outreach is now an essential component of the online PR campaign.
Crisis management is an increasingly important challenge for businesses. It is essential for companies to have a presence on social media channels in order to deal with negative commentary, misconceptions and customer service issues. Those companies that do not have a presence here will not be able to respond in real-time at the point of conversation. This can be a mistake with long-term consequences in the form of reduced trust and customer advocacy.
It is also important to consider the after-effects of an internet firestorm in terms of search engine results. While in the traditional press, controversies “blow over” and are forgotten, the nature of the internet means that a permanent footprint in terms of search engines results pages may longer on after the event. It is important to monitor search engine results pages for brand name terms and key phrases.
It's clear that beyond just marketing alone, digital has impacted every function within the organisation. It is encouraging to see more companies adopting a cross-functional approach, and it is essential for organisations to recognise the importance of a joined-up, multichannel approach to digital, instead of working across silos, or business functions.