Goals and cohesion with the business
Article 2 of 5 in the series "The management's 5 steps to digital transformation"
Remember the online manager's barriers from article 1 about digital placement in the organisation? Online managers find that two of the biggest barriers in the way of creating progress and results are:
- A lack of defined direction or goals for the channel
- Initiatives in the online channel don't always support the business strategy
Many companies still don't have defined goals for their digital activities. And of the companies that have set up goals for their channel, we tend to find that only a few have managed to connect the channel's goal to the overall strategy and goals of the business.
Once again, this is typically linked to putting the online channel in Marketing, and thus expecting Marketing to deal with it. If your job is to provide a support function for the company's other business areas and their goals, then you typically won't have your own defined goals. And if the belief is that Marketing, and thereby also the online channel, doesn't have a direct impact on revenues, it is unlikely that the channel's goals will have been directly linked to the overall business goals.
How will the digital activities support our business goals?
That's the first and most important question to ask yourselves. But avoid giving the easy answer: Traffic and awareness.
Start with the KPIs, so the results goals you need to reach for the channel to have really contributed to your overall business goals. One example could be "number of sales" or "turnover" in the channel.
Only then can you define the PIs, so the effort you need to put in to make the KPIs succeed. Here traffic to the site is relevant, so "number of visits" and "visits to key pages", "conversion rates, "sign-ups to newsletter" (so that you can continue working on the visitors who are not ready to convert yet) and similar.
How to find the right KPIs for your online channel
Think of your goals as a KPI hierarchy. At the top of the hierarchy are your overall business goals. Directly below are the online channel's KPIs (results goals), which should contribute as directly as possible to the overall business goals.
Find your KPIs by asking:
- What do we as an organisation want to achieve from our target groups? What do we want them to do? (buy, rebuy, invest, sign up for a course, donate money...)
- How close to this action or end goal can we bring the target group in the online channel?
Most companies are here to sell a product or a service to their target group. For most BtC companies the customer can do all of this online. If this is the case in your company, then the KPI for the online channel is Sales, or at least this is one of the KPIs.
In BtB companies, it can be harder to achieve sales online. But the channel can serve as a great tool for attracting leads, preparing them and working on them until you have a motivated lead who is ready to contact or be contacted by the sales team. Sales then takes the lead the last part of the journey and closes the deal. If this is the case for your business, then one of your KPI's for the online channel is Leads.
At the bottom of the KPI hierarchy are your PIs (performance indicators), which should be pushing you towards your KPI's.
Indicators are the key to focus - and focus equals performance
Only once you have defined the channel's KPIs can you begin to work effectively with the channel's performance. And only once you have connected the channel's goals to the overall goals of the business, can you prioritise the digital measures according to where they bring the greatest value to the business.
Without goals you risk having personal or silo-focused preferences running the channel's direction. Instead it should be the overall strategy and business goals that define the direction and results in the channel.
Step 2 to success with digital transformation
If you want to succeed with your digital transformation, it's essential that those responsible for your digital transformation know exactly what results they need digitalisation to generate for the company.
Next, my advice would be to follow up, evaluate and adjust regularly.
- Define KPIs for all your digital initiatives
- Align the KPIs as closely as possible to your business goals, so that they support the desired results
- Set clear budget targets for each KPI and PI
- Break the indicators down on a daily basis, so that those responsible for the KPIs don't suddenly find themselves falling behind
- Follow the results as often as possible
- And react with a Sense of Urgency, so that measures that aren't performing as planned are either adjusted or replaced as quickly as possible.
As soon as you start working with KPIs that contribute directly to the business goals, you will start to see the channel becoming profitable rather than a cost (read about the cost-mindset in article 1).
Next article - The purpose of your digital transformation
Article 3 of 5 in the series "Management's 5 steps to digital transformation".
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