It seems like everything in our world is going digital, from our televisions to our refrigerators. While newer businesses are often built on digital technology from the ground up, older organizations often struggle to switch from legacy systems to newer, more effective digital solutions.
A digital transformation may provide a competitive edge if your business struggles to compete with other businesses or is failing to grow.
Today, digital tools and processes can streamline complex processes, improve data analytics, and even automate tasks to free your team to focus on more critical tasks. However, switching to digital solutions often feels overwhelming.
Are you struggling to know where to start with your digital transformation? Marketing metrics may offer the key to prioritizing your digital transformation. By tracking and reporting marketing metrics, your team can discover whether your company can benefit from a digital transformation and identify which shifts to start with.
What is Digital Transformation?
Digital transformation is the process of adopting digital technologies in all business areas, including marketing, sales, payroll, and human resources. Many businesses start the process slowly by implementing new digital solutions in areas likely to see the largest impact.
Examples of digital transformation include:
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Moving from direct mail to email marketing
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Switching from a loyalty punch card to a rewards app
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Moving lead generation from a manual process to an automatic one
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Leveraging AI to streamline payroll onboarding
Marketing teams, in particular, can benefit from digital transformation. Access to more data, the ability to track customers across the customer journey, and the power of digital marketing are just a few reasons marketing teams often spearhead the switch to digital.
If you’re considering a digital transformation, using data to back up your decision can increase buy-in from leadership and provide access to the resources needed for success. It can also help you prioritize the most effective areas to switch to digital.
5 Marketing Metrics That Signal It’s Time for a Digital Transformation
A number of factors can impact marketing metrics. A new strategy, a new product launch, or even changes in social media or search engine algorithms can impact your marketing metrics.
However, marketing metrics can also indicate it’s time for a change. Here are five metrics that may mean it’s time to switch. We’ll provide several practical situations for each metric and suggest tools to make the process easier.
1. Channel return on investment (ROI) is dropping
If the marketing channels you’ve used for years no longer deliver results, the issue may not be your strategy. It could be the lack of data, change in consumer preferences, or even the rise of new marketing channels you aren’t leveraging.
For example, imagine this scenario. Your company has bought print advertising for the last eight years. ROI was incredibly high for the first few years, so you invested more resources. Over the last few years, however, ROI dropped. You’ve tried adjusting ad location, copy, and even started offering discounts — but ROI continues to fall. If that situation sounds familiar, it may be time to switch to digital channels, such as social media or paid search ads that target and reach users where they spend the most time — on the internet.
Maybe you’re already using digital marketing channels but noticed paid social ads and conversions are down. If you’re relying on manual processes for tracking data or gathering information about your audience, it may be time to switch to an integrated tracking program or a customer data platform, which provides deeper insights into your audience.
2. Overall marketing conversion rates keep falling
It can be hard to nail the cause of falling conversion rates, so make sure to focus on marketing conversion rates when making a case for digital transformation. If conversion rates for paid ads, social, and even organic search are falling, your business may benefit from a digital transformation in marketing channels.
While many digital solutions address falling conversion rates, the right solution depends on the cause of the issue. Many factors can cause falling conversion rates, including:
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Little to no advertising or marketing data due to using outdated or manual processes
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Inability to track users across channels
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Leveraging the wrong marketing channels
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Lack of ability to target your audience successfully
Once you understand the cause of falling conversion rates, it’s time to implement a solution. For example, if you cannot accurately track users who click on email links and purchase via a device, consider Urchin Tracking Module (UTM) code, integrated customer relationship management (CRM) technology, or visitor tracking software. If analytics is the issue, consider using Google Data Studio, or upgrading to a more robust CRM.
3. Churn rate is high despite efforts to bring it down
A high churn rate indicates your organization is attracting customers but struggles to retain them. The results may include falling revenue, higher marketing costs, and the inability to grow.
Like conversion rates, finding the cause of churn is key to choosing a digital solution. For example, if your marketing message and sales process don’t match, your business may have higher churn.
Other causes of churn may include:
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Attracting the wrong customers
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Poor onboarding process
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Failure to integrate customer support across channels (resulting in frustrated users)
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Inability to host customer surveys or difficulty putting customer data to use
Consider investing in these digital tools to solve a churn issue: a CRM to spot struggling customers, an automated onboarding email sequence, lead qualification tools, or a dunning email automation tool.
4. Leads move through the sales funnel too quickly
Sales and marketing alignment is crucial to long-term growth. Without digital tools to share data and improve collaboration, it can be difficult to ensure sales and marketing are on the same page.
Signs of misalignment include high marketing conversion rates but low sales conversion rates, which often indicate marketing qualified leads (MQL) and sales qualified leads (SQL) don’t match. Essentially, marketing is bringing in leads that sales can’t convert.
Digital transformation ensures sales and marketing are in alignment. For example, you can track leads from first contact to close if both teams work within the same CRM. Consider investing in other tools to aid in sales and marketing alignment such as automation tools like Pardot, task management platforms, and communication platforms like Slack.
5. User engagement keeps dropping
User engagement refers to how much users interact with your brand on your website, social media platforms, apps, etc. Falling engagement rates mean your organization is not delivering the experience users expect.
User engagement KPIs include social media likes and comments, website page views, time on page, session duration, bounce rate, and app engagement. If these metrics continue to fall, digital transformation can help.
Like many of the metrics we’ve covered, the solution to falling engagement depends upon the cause. Digital transformation can help track the user experience to improve it, increase on-page optimization and site speed, and “see” where users get lost in the funnel. Consider investing in tools such as heat map tracking tools that show user behavior, UX testing tools, and on-page optimization tools.
Conclusion
Traditionally, marketing teams had little input into an organization’s tech stack. However, marketing ROI increasingly relies on data and analytics, so many marketers and chief marketing officers are leading the charge for digital transformation.
Your business will do well to keep an eye on one final metric: a lack of metrics. If you don’t have access to the data you need to build and scale campaigns, it may be time to consider digital transformation.
