There is no one-size-fits-all format for a Digital Strategy.

After tons of online research I haven’t been able to find a clear and thorough guide to creating one!

The purpose of this post is to gather many of the most current planning approaches and share them in as much detail as possible so that you can be confident about your digital recommendations and get a strong return on effort out of your planning phase. 

Is this a digital business strategy or a digital marketing strategy?

The distinction between digital strategy and digital marketing strategy still seems to be up for debate in the digital community. Seeing as both of these terms are relatively new (the term “digital strategist” doesn’t show up on Google trends until 2010) the definitions are rather subjective. The profession is also evolving so quickly that it lacks regulatory standards, which makes finding an authority on the definitions difficult.

Here’s my best shot based on my research.

DIGITAL BUSINESS STRATEGY: A strategic framework for creating and optimizing the digital business model.

As the writers of the digital strategy conference blog aptly point out, Digital Strategy is the process of identifying, articulating and executing on digital opportunities that will increase your organization’s competitive advantage.

Here’s a great example from Adrian Rodriguez of Adisar Consulting that I found through the Digital Strategy group on LinkedIn. 

“The digital strategy is the strategic analysis (external environment, internal resources), strategic objectives (vision, mission and objectives), strategic definition (platform, market, business model) and strategic implementation of the digital business. For example, to decide to implement an online store to sell top fashion shoes in the UK through Magento with drop-shipping inventory.”

So, a Digital Business Strategy addresses topics like: 

• Can I digitally optimize the business model? If so, how?
• How does Digital impact different business practices (sales, marketing, HR, production, etc)?
• Identifying and prioritizing strategic initiatives like creating enterprise apps to help mobilize the workforce, or optimizing the website to increase lead generation.

DIGITAL MARKETING STRATEGY: A tactical plan for engaging with customers in digital environments.

Often the process of creating a digital strategy and a digital marketing strategy can come simultaneously. The marketing piece addresses how you will engage your audience.

Again, Adrian Rodriguez,

“Digital marketing strategy is to define and implement a plan for marketing your business or website online through tactics (SEO, SM, PR, SEM, content marketing) to get visits, convert into customers and engage them.”

Digital Marketing Strategy addresses topics like:

• How can digital marketing improve the business marketing function?
• What are the digital marketing channels we should use? 
• What models of customer engagement will we leverage?
• What digital marketing programs / campaigns can be implemented?
• How do they relate to current marketing programs?
• How can we market the product in the Digital space?
• Identify KPI’s like increasing consumer reach, brand equity, sales, community size, community engagement %, etc.

Who owns the digital strategy?

So, if digital strategy is about the business model and digital marketing is about customer engagement, who owns the high-level digital plan? Who’s paying for it, and who’s accountable for the results?

As you may have guessed, the answer varies depending on the industry, the company size, and the overall needs of the organization. Some companies have gone as far as hiring for roles like “Director of Digital”, “Chief Digital Officer” or “Vice President of Digital Media”. Others are using their IT departments to drive the digital agenda. However, according to McKinsey, the firms that are making the most progress have the chief executive personally involved. It’s especially common to see heavy CEO involvement in markets where digital disruption causes do-or-die situations.

The case and current landscape of Digital (that executives will want to know)

We digital people often find ourselves having to make a case for investing in digital. This is becoming less of a necessity in some industries – especially when it comes to customer-facing technology. According to IBM, 75% of Fortune 500 companies are taking steps to deploy HTML 5 mobile apps. Having to invest in digital is not much of a surprise to most CEO’s and over half of all enterprises plan to increase digital spending this year.

The digital landscape is presenting some hefty business challenges in the near future, so the case for increasing your digital spend is easily compelling.

The 3 biggest digital challenges Enterprises are facing

1. Customer expectations

Customer expectations are extremely high, even in B2B markets. Even if your company is selling to industrial buyers, they still have the technology expectations of any consumer. Kenyans spend 6 hours a day on their smartphones, which means they’re getting daily exposure to world class B2C customer experiences. They expect their banks to offer mobile deposits, their service providers to have online help desks, and real-time production analytics on their B2B manufacturing orders.

Source; Ventures Africa

In the next few years we’ll see a large push to improve the customer experience in industrial B2B markets like manufacturing, oil & gas, high-tech and construction — all driven by customer expectations. 

Source: McKinsey | Principles for Competing in the Digital Age

2. Start-ups are bringing pain to big business

Companies who haven’t gone digital / mobile yet are nearing the danger zone. As you know, Digital is blurring the lines between industries and market sectors, placing fresh demands on leadership and organizational strategy. McKinsey director, Paul Willmott, is directing incumbent companies to ask themselves “are we even in the right industry anymore”! Silicon Valley startups are delivering on value propositions and cost structures that are difficult for incumbents to match. As Willmott puts it,

“A large incumbent in an industry that’s undergoing digital disruption can feel like a whale attacked by piranhas.”

McKinsey |  The Digital Enterprise

In the past, you may have only been concerned about one or two new entrants in your space. Now there may be dozens – each causing pain, with none individually fatal. PayPal, for example, is taking slices of payment businesses, and Amazon is eating into small-business lending.

Digital-first start-ups often spark these new trends and are much faster and more agile than large incumbents with their legacy systems. To established companies, these new entrants aren’t clear adversaries. It’s more like guerrilla warfare with multiple militia – none of which appear to be direct competitors. Their business model may often look very different than yours, but for your customer they can quickly become substitutes. Watch what happens in The Valley — their armies are swiftly encroaching on the mountains.

McKinsey | The Digital Enterprise

3. Gaps in data security are preventing mobile initiatives

Just ask Target or Home Depot about critical issues in data security. 77% of CIO’s are saying that data security and user privacy concerns are the biggest challenges they face when they build and implement a mobility strategy. Additionally, when asked about the main barriers preventing mobility initiatives, 38% of companies lack security controls for new devices and clients. When creating a digital strategy you may find yourself underestimating the complexities of securing your mobile data, especially if you’re not close to the day-to-day operations of your enterprise systems. Keep your eyes wide open to these concerns.

Approaches and priorities to know about before you start

In light of the 3 major digital concerns above, there are several approaches that companies have started to take to combat these rapid changes.

1. Architecting end-to-end customer experiences

Companies are continuing to invest in customer-facing technology to create end-to-end experiences, especially through mobile apps. 18% of overall marketing budgets are spent on improving customer experience, and that number continues to grow. This approach seems to be working seeing as 45.8% of customers feel that branded mobile apps cause them to visit the stores, buy more of the products and services (40.4%), spread the word about their experience (35.8%), and even encourage friends to visit the store (30.8%). Powerful stuff.

2. Reducing Costs Through Mobile Enterprise Solutions and Apps

Surprisingly enough, using technology for cost reduction might actually be more valuable than customer-facing experiences when it comes to bottom-line impact. Just take a look at this staggering stat: 

These numbers are according to a year-long study by McKinsey stretching across ten industries. Is that blowing your mind like it blew mine? We spend so much of our digital time generating revenue and growing our brand — but using Digital for cost efficiencies actually makes a bigger impact on profit!

These types of internal cost-saving applications commonly include:

• internal social networks
• mobile business intelligence
• mobile CRM
• enterprise content management systems
• production analytics

Many of these enterprise apps are used as an avenue to bypass the user interface on a legacy system and move straight to a mobile or tablet experience. Not only does this make your workforce more mobile, but it also allows you to manipulate and display old data in new ways — not to mention the improvement in employee morale.

This movement toward internal mobility is just beginning and is far from over. Fifty-five percent of companies in an Appcelerator survey ranked mobility at the top or near the top of their priorities list, and 66 percent plan to create employee-facing mobile applications.

Because this trend is still evolving and the information is often proprietary, the internet seems to be lacking in case studies and examples.

3. Shifts in Business Models

Due to the growing threats from digital-first businesses, many companies are forced to revisit their business and operating models – especially in customer-facing capacities. For example, Xiaomi (a Chinese consumer electronics company) uses crowdsourcing to discover the best new features for its mobile phones instead of investing heavily in R&D. Similarly, Telstra (Australia’s largest telecommunications and media company) reduces cost and improves customer satisfaction by crowdsourcing their customer service. Users can help each other solve basic problems free of charge [McKinsey]. As you write your digital business strategy, consider the full impact of digital on the entire organization. 

Structuring The Master Plan

Your Digital Strategy should consist of 4 main parts.

1. Insights and Analysis: understanding the needs and priorities of the people who are at the core of your digital revolution including your customers, stakeholders, employees and executives. Analyze internal performance and sales data to understand where the biggest value is.

• External Digital Analysis
• Customer Experience Mapping
• Digital Value Chain Analysis

2. Digital Framework: creating a framework that allows the company to addresses digital goals and objectives.

• The Iteration Model
• Big Idea / Mission / Vision
• Digital Objectives
• UVP

3. The Digital Scope: addressing the company’s approach to key areas of Digital and outlining the purpose, objectives and key initiatives and challenges of each channel.

• Website(s)
• Online Content
• Digital Advertising / SEM / SEO
• CRM
• Social
• Mobile
• ERP

4. Execution & Governance: Prioritizing the plan, taking into account which needs are the most urgent and important as well as current resources, timelines and budgets.

• Project priorities
• Project team(s)
• Accountability and Progress Reporting / KPI’s

This is certainly not a quick little powerpoint presentation that you show your boss but it’s also not as far-reaching as a traditional business plan. The truth is, as digital business models become more agile we’re forced to create plans that are iterative. Unlike traditional business planning, looking 3-5 years ahead is rarely realistic and accurate budgeting can be nearly impossible.

Your digital strategy should resemble a framework more than a business plan and should focus on people, policies and priorities, as digital strategist, Paul Boag, points out in his article on Smashing Magazine.

“A digital strategy needs to focus more on creating policies, priorities and people.”

The reason you’re investing in digital innovation starts with people, which is why the best digital plans are a healthy blend of empathy for the customer paired with technical chops.

Keep in mind that this process can apply to smaller business units within an enterprise. Depending on the size of your company this may or may not be a company-wide strategy. If you’re a marketing director, you may not be too concerned with the ERP. If you’re the technology officer, you might not be interested in online content. That’s okay.

Also note that this is a process as well as a presentation. After we walk through each phase of the process we’ll talk about how to craft your deck.

Phase 1: Insights & Analysis

Oh, how often we find just how wrong our assumptions are. Just when you think you know your stakeholders, research gives your petty opinions a good kick in the ass.

Research is time-consuming and expensive, but it’s nothing compared to the cost of a project that failed due to lack of diligence.

a) External Analysis (the Digital Way)

Since your digital strategy is about examining the business model as a whole, I recommend starting with an external analysis like Porter’s 5 Forces. If you’re reading this, chances are you’re a business geek which means you may remember this model from school. The exercise allows you to thoroughly consider and evaluate the digital threats and opportunities that could come from outside the business.

To keep the exercise focused, only analyze the 5 Forces as they relate to the digital business model. Here’s a breakdown of how it works. 

Rivalry Among Existing Firms

These are your direct competitors. Understand and capture the things they’re doing in their digital programs today. Are your competitors building apps, acquiring start-up technologies or leveraging new software? Identify the threats and opportunities.

Threat of New-Entrants

Think about the start-ups and companies that could become threats. This is where you would identify those pira?as we talked about earlier — the many small companies and technologies that could potentially ruin you at scale.

Threat of Substitutes

What companies, products and services are typically substitutes to you in the marketplace? This is like identifying your version of the cheap knock-off Ray-Ban sunglasses made in China. Is digital changing the substitutes game? Be on the lookout for new business models here. For example, instead of hiring your research firm, companies might be paying a monthly subscription to survey monkey and DIY’ing it.

Determinants of Supplier Power

For the digital world, supplier power could mean a few things. I could mean that you consider what your suppliers are doing digitally but it could also mean that you’re considering the power that your digital suppliers have over you. For example, if you’re locked in to a longterm hosting and maintenance retainer with your website provider, that supplier may have too much power in the relationship with little accountability for results. This could cause you to consider building internal web maintenance capabilities to reduce that supplier power.

Determinants of Buyer Power

This factor is especially relevant to small to mid-size business units whose buyers are larger than they are. In the digital world, one common power the buyer has is the ability to compare prices and switch vendors without much consequence. Consider the power your digital buyer has and how you can mitigate your risk in the customer relationship.

b) Customer Experience Mapping

Designing your customer’s experience starts with understanding and empathizing with their pain. Hopefully, you already have customer / user personas that represent your key targets. These personas shouldn’t just be in a folder on your desktop — I recommend having them printed and on your wall so they’re always top-of-mind.

Here’s an example of persona profile;

If you’re not confident that the persona’s you have today are accurate or up-to-date, take some time to work on them — then map their journey.

You can use Journey Mapping to outline the high-level experience of the customer lifecycle, then break it down into smaller pieces and layer in other components like sales activity, brand touch-points, and user experience for your website or app.

Here’s an example of a journey map that demonstrates the sales process, the brand’s touch-points and the corresponding digital tasks that the team will need to complete in their CRM and project management software.

Journey mapping is an essential part of your digital strategy because it forces you to empathize with all of your users and stakeholders both internal and external. It also reduces confusion by making the process crystal clear.

c) Digital Value Chain Analysis

Let’s call on our good friend, Michael Porter, to guide us through a traditional internal analysis of the value chain. Like the external analysis, we’ll put a digital twist on it. Again, keep in mind that this analysis may require an internal team, an outside consultant, or both.  

Forrester’s report “Six Steps to Becoming a Digital Business” has some great examples of how companies are digitally transforming their value chain. I’ve included a few in this exercise. 

Also keep in mind that this does apply to service businesses just as much as products. Language like “inbound logistics” suggests that we’re only talking about a product business – but truthfully the process is just the same.

Starting with primary activities, take each business unit and break down its strengths and weaknesses.

Inbound Logistics

Analyze the digital process of procuring goods from suppliers in the value-chain. Where are the digital strengths and weaknesses? Do you have insight into your order status? Is the overall process as efficient as it could be?

Embrace dynamic ecosystems, and you can connect your company and your suppliers together to rapidly and automatically respond to changing conditions. Bosch, for example, is leading a consortium of German manufacturers to define a standard for dynamic, automated manufacturing that it calls Industry 4.0. Bosch aims to create Internet-connected, self-optimizing factories that can automatically adjust to machine downtime or changes in supply of materials or order demand. This digital ecosystem creates a dynamic supply chain, all the way from raw materials providers to end consumers.  – Forrester

If you’re a service business, think about the functions that make your deliverables possible. What are the things you need before you can start creating value for your customers? For example, a Corporate Litigation Firm needs its attorneys to stay in touch with the latest legal research and continued education. Evaluate the digital aspects on the front-end of your value chain.

Operations

Again, strengths and weaknesses. Is your operations team happy with their software? Do you have an accurate read on inventory? A great example:

Mobile operators Telefónica and Telenor created a value ecosystem called BlueVia to connect ecosystem partners like Electronic Arts, Facebook, Google, Microsoft, and Samsung. BlueVia opens up the combined data of 460 million subscribers to allow developers to build new services for consumers and to use Telefónica’s billing platform to take payments.  – Forrester

Outbound Logistics

Evaluate the technology you use in your distribution processes. How are your products and services delivered to your buyers? Could you make this process easier or more pleasant for them through the use of technology?

FedEx SenseAware exposes data about a package’s environment to customers via an app, allowing them to track the condition of sensitive packages in real time. Extending products and services with digital technologies makes it possible to take greater mindshare within a customer’s ecosystem of value.  – Forrester

Marketing & Sales

A big consideration here is customer data. Marketing and Sales often need to leverage many online platforms for CRM, Content Management, E-Commerce, Business Intelligence, Lead Nurturing and much more. The Big Data movement is hitting these customer-facing units hard and the way you leverage your customer data should be regularly evaluated. So, strengths — what’s going well in marketing and sales. Weaknesses – what are you not able to do today. What data do you not have visibility or easy access to. What technological barriers are keeping you from segmenting, engaging and listening to your customers? What can be automated? 

Service

This part of the exercise should focus on what happens after the purchase. What is the customer’s service relationship with the brand long term. If they need help, can they get it digitally? Service is all about your people — are you empowering your people with the digital tools they need? For example, Target is always one of the easiest places to return merchandise because customers never need to bring their receipt or hassle with store credit. The funds go straight back to the card you used for your purchase. 

Phase 2: Digital Framework

Creating a framework that allows the company to addresses digital goals and objectives.

Now that we understand the current state of things, it’s time to cast an overall vision for what digital will be doing for your company. This includes one big idea and your digital objectives.

a) Create Your Iteration Model

Like I mentioned before, Digital transformation is an evolutionary process — not a traditional business plan where we plan then execute over long periods of time. In fact, most digital work should happen in 6-week sprints where you focus all of your energy on one important short-term goal.

When thinking about the overall process you need to create a framework for how the company will handle projects and expectations. We’ll touch on this more during the section on Governance, but for now just understand that companies commonly use a process like the one in this graphic:

b) Distilled to One Big Idea

By this point, you should have a pretty good idea of what your digital framework will look like. Since this initiative has such a big impact on the entire enterprise (or business unit), it’s just as much of a sales pitch as it is a plan. Since your digital strategy is all about people, you need people to believe in your ideas and adopt them as their own. You’re much more likely to succeed if you distill your entire plan to one big idea that everyone can remember and believe in. Try to sum it up in 5-7 words.

Examples:

We are…

— turning visitors into customers

— going from “great” to “irreplaceable”

— becoming our customers’ favorite company

This phrase is boiling the plan down to what matters most. It’s the idea that everyone wants to see happen. When your technology or marketing team is in the weeds, this big idea should remind everyone why their work matters. Imagine yourself saying this to a project manager or a marketing coordinator who’s feeling burnt out or overwhelmed. Is it inspiring and genuinely encouraging? Does it matter?

If it’s not coming to you now – give it some time. Chances are it will come to you while you’re in the shower or on a long walk with your dog. You can also circle back to this exercise at the end of your process.

c) Digital Base: Your Goals and Objectives

At a very high level, this is what you want your digital program to do for you. You describe both the goal and the objectives that will be used to complete it. As with any goal setting exercise, the more specific the better.

Here are our definitions for the purpose of this exercise:

Digital Goal: This crystalizes the thing that stakeholders want most. When you hear the C-suite saying things like “We just want to know if our sales people are actually following up with their leads,” that’s an indicator of a broader goal like “increase high-level visibility into the sales pipeline and activity”. Your immediate tendency is going to be to get more detailed by going into all of the things that people want to see. I implore you — hold off. There will be a time for getting into the weeds, but the written product of this exercise needs to stay high-level.

Example:

Goal 1: Increase mobility for national sales force and account managers, giving them visibility into the sales pipeline, account activity and company performance.

Objectives:

Seek and implement a CRM platform that is accompanied by a mobile app to capture and view lead data on the road

Find or create a mobile tablet app for account managers that gives mobile visibility to current account data in our inventory management and payment processing systems.

You’re using this exercise to knock out the big buckets. This is the high-level punch list that big stakeholders like the C-Suite and the Board of Directors will be interested in. This is the “digital strategy” that everyone will know and refer to, so be careful about what you put here. People will come to think of it as gospel. Be sure to remind everyone that sees this that your strategy is a living/breathing document. It’s not the 10 commandments — it’s more like the Bill of Rights. Sometimes plans need to change. In the digital world, pivoting is the key. This is the plan for now.

3. Digital Scope

Addressing the company’s approach to key areas of digital and outline the purpose, key initiatives and challenges of each objective.

This is where things start to get a little hairy (and potentially exhausting for some audiences). In your digital scope, you’ll take a deeper look at each objective you have outlined in your  Digital Base.

I can’t tell you exactly what to put in your Digital Scope, so instead I’ll try to provide some insights on the most common objectives and channels.

a) Website(s)

65% of African consumers still say that branded websites are a huge factor in their buying decisions. Companies are going through website redesigns all the time and chances are you have one on your list. Having led several large redesigns myself over the last few years, here are some of the highlights to keep in mind.

• Start with content strategy and information architecture before planning technology
• Use a plug-and-play model whenever possible
• Have a blog engine inside of the site
• Don’t over-design: stick to the core principles of good design instead of getting caught up in the latest design trends
• Don’t overbuild. Produce a minimum viable product, then test.
• Create wireframes with unmistakable clarity and functional requirements

b) Online Content

If blogging is done strategically it can produce astounding results like more leads, larger email lists, and better search traffic. Here are my best tips on doing content the right way.

• Start with an editorial calendar that is informed by keyword research so you get the most out of every piece of content. 
• Create long-form articles that add very significant value to the user — not just short tips. Your content needs to be better than every common 500-800 word blog post out there. Hubspot’s blog is a great example of this.
• If you’re serious about your content program you should consider content marketing software like Hubspot, Contently, Adobe Experience Manager or Kapost. A robust content program is hard to manage without them.
• Don’t create content without a CTA. The purpose of your content should be to help grow your business. You do want your reader to take some sort of action like signing up for a webinar or requesting an e-book or white paper. Blogging loses its value without these supplemental pieces of content. 
• Hire the right person for this. Someone with deep knowledge in the industry accompanied by digital marketing chops. Pay them well and they’ll produce great results.

c) Digital Advertising / SEM / SEO

Between Google algorithm updates and Facebook UI changes, this area of digital feels like it changes daily. Here are the highlights:

Facebook and Google have ad programs specifically designed for mobile apps. You can target very specific users and the links actually go straight to the app store.

Google is working hard to make the best search engine in the world, which means that they’re creating a machine that is trying to search like a person would search. What are the things a person searches for when looking for information? Well, things like:

• credible sources
• recommended by others
• informative
• relevant
• visually educational
• organized
• appropriate
• accompanied by a good user experience

Create blog posts and web pages that accomplish these things and you’ll generally be fine.

d) Customer Relationship Management (CRM)

The beautiful thing about CRM is that it forces process on both the sales side and the marketing side. For businesses small and large, it’s obvious that you can’t survive long without an integrated CRM solution and plays nicely with your sales process and lead nurturing programs. When you customize your CRM use that customer journey mapping example that I shared above. By mapping out the entire sales process, you ensure that you’re leveraging your CRM to the max. 

e) Social

Social business is certainly a must-have in today’s climate, but the truth is, social rarely impacts the bottom line or drives sales. It’s important to understand what role social business plays in your organization and sales funnel.

There was a point when you could earn followers by just posting interesting content from others, but the internet is so crowded today that just posting doesn’t cut it. The new path to success in Social is to integrate social into your other channels and customer experiences – both online and offline. Create opportunities for your customer to share.

Execution & Governance

Prioritizing the plan, taking into account which needs are the most urgent and important  as well as current resources, timelines and budgets.

Prioritizing your projects

There will be a lot of projects that you want to accomplish in your Digital Scope. When you move into execution, it’s critical to have lazar-like focus on just a handful of projects (usually 3-5) instead of overwhelming yourself with all of them.

To decide which projects go first, consider the impact each initiative will have on the following factors:

• Bottom-line
• Employee morale
• Productivity
• Brand Equity
• Customer Experience

You could even survey your teams on the impact that your Digital Scope will have on this list if you want to get buy-in from several departments. Choose the handful of projects that will make the biggest impact and commit the time, money and resources to get it done.

Iterative Governance Models

Toward the end of the strategy phase you’ll want to decide on a framework for how your digital project teams should function.

If you’ve read the signs, you know that we’re moving toward a more project-based economy. By the year 2040, 34% of the Global workforce is doing freelance work and that number is growing every year. The traditional product launches of corporate America are becoming outdated with their loads of hierarchy and meeting-heavy cultures.

Target recently learned this while internally creating their Cartwheel App. Target is known for trying to accomplish big projects with large teams and lots of time. With over 300 product managers inserting their ideas and opinions, the app may have never seen the light of day. Target’s Amber Reimer and her colleagues convinced leadership to adapt to a leaner governance model inspired by the “Lean Startup Methodology” made famous by Eric Ries.

By creating a small leadership team exclusively for the project they were able to make decisions significantly faster and more intelligently than they could with a larger group of decision makers.

The lesson here is to think of your big digital projects like a startup inside of your corporation and treat the board / c-suite like investors. Empower your teams to make critical decisions as a high-functioning business unit, not a traditional department silo.

What would you add?

Are there other models and frameworks that you’ve been successful with? I would love to hear about them in the comments below. Thanks for sharing!

Credits: Harrison James & Mckinsey