Due to the health crisis, we are going through, consumption habits have changed, it may be temporary, but the truth is that many changes will be permanent. The confinement periods in some countries have led the population to seek digital solutions to their needs such as online training, remote working, at-home fitness activities, etc.
The limitation of human contact has affected the operations of many corporations, some of the business models are not working anymore forcing owners to re-think their strategies. While some owners are waiting for the storm to pass, others have accepted the reality of imminent closing. The ones that still existing are leading their efforts towards a business model transformation. However, it appeals to everyone that the answer is digital transformation.
Transform your traditional company into a digital business is not as simple as it looks. Some companies that provide the services of digital transformation do not take into consideration the core and business model of the existing company. By creating websites, opening e-commerce platforms, and developing new apps, they believe they are disrupting into the digital world, however, it is proof that those implementations are not enough when it comes to creating a successful digital business.
That is why you should consider certain aspects before taking your traditional business to digital:
- Back to the basis
- Market analysis with trustworthy data is vital
- Do not be blindsided, use your common sense.
- Be realistic
- Going digital is not the only solution
- Do the math
1. Back to the basis.
Before you consider any move, start by reevaluating your business strategy:
- Why you started the business in the first place?
- Do you have a profitable business?
- What your market is and has it changed?
- Does your business up do to date with the market?
- Is there room for improvement?
- Can you supply a greater market demand?
- Is diversifying your business something you are considering? Do you have the know-how?
- Do you have the financial possibility to grow your business?
Understanding where your business is today and where you want it to go, will help have a clear picture of the market, what options are available to you, and the amount of effort and investment you may require.
Think before you leap,
or in this case,
analyze before you go digital.
2. Market analysis with trustworthy data is vital.
Traditional market research is based on four types of techniques include interviews, focus groups, customer observation, and surveys that are usually carried by specialized agencies. This traditional approach to getting the most valuable data has become obsolete with the arrival of the internet. Through cloud search, data analysts can get all the information needed using specific software and techniques in a short amount of time.
Law of Supply and Demand also applies to the net.
Nowadays although some data can be found for free the demand for more advanced and specific data is a hot commodity. Getting the data is just the first step in the procedure. We then process it, analyze it looking for clue factors in the interpretation of the insights and trends. These procedures are time-consuming and require plenty of skilled people.
Knowledge is power!
3. Do not be blindsided, use your common sense.
Before embarking into a digital transformation adventure, traditional companies should have a minimum knowledge of how to become a digital business.
Here is a definition that describes how the digital transformation should be considered:
“For any given topic, there is a gap between
the supply of what we know and
the demand for what we feel we need to know.
Everything that fills this gap is bullsh*t.” unknown
Under the pressure to conquer the market through a digital transformation, many business owners and corporate executives get involved with the wrong digitalization consulting companies. Some of the companies that offer digital services are lack knowledge and experience, failing in the process of this transformation.
Digitizing or digitally transforming your business is like taking a business location or store to the web. The same way you pay for rent, set up decoration, do maintenance, have surveillance, and hire salespeople having a digital operation have their own costs such as domain fees, website design, software maintenance, and having an only marketing strategy. The cost of selling on the internet is variable. Nowadays, the competitors are spending a large amount of money on SEO and SEM strategies, paid to advertise the maintenance of software, and e-commerce platforms and website are high.
Thus, at some point digital presence could become as expensive as traditional media advertising, like TV.
4. Be realistic
Do not compare your company with big digital companies like Facebook or Amazon, they were pioneers at the time. Instead, focus your efforts to understand the market and your competitors to have a clear overview, spend time and resources to evaluate your business model and value proposition.
Facebook was created as a university project; with a simple design and great networking it became extremely popular in a short time. Today, to positioning a website, app or social network, a great structure is required combined with a design and user experience.
+ Success = ↑ Investment
5. Going digital is not the only solution
If create a digital business is not an option for your idea or organization, you must take it as an opportunity to analyze and evaluate different business model alternatives.
Ten years ago,
Setting up a network business was easier; it was like putting a shop on a commercial street having the entire control of the market for that specific product.
extremely competitive. Strategist spends more hours searching and understanding customer’s needs, and the implementation of these are more expensive. Today the internet is full of companies offering the same products and services, making the market
Digital business is cut-throat.
Are you up for the fight?
6. Do the math
Before taking any decision about your business model think the considerations above, we invite you to make a deeper analysis of your digital business plan, financial status, sources, and cost to develop a digital product or service. It is necessary to be aware of the investment risk that takes to start in a market you are not experienced about.
Before start think of:
- Investment risk
- Cost of the process from beginning to end
- Cost of the design, develop and maintenance of online platforms and software
- Cost of the marketing campaigns
In addition to the indicators required in a traditional business, consider necessary to comprehend and manage terms and concepts related to digital indicators. These will allow you to measure and monitor all the online strategy.
If you have not gone digital yet,
think well before investing the first dollar.
Do not make the cure worse than the disease
Adventuring into the digital world can be more costly and time-consuming than sticking to your current or adopting a different business strategy. The digital transformation requires knowledge, skills, support, and investment to work and to create a profitable business online.
If you do not have the minimum necessary,
choose an alternative business model.