Executives expect digital to drive their business growth, despite investing less than 5% of their total spend
McKinsey has released a new report measuring C level executives views on the future of digital for their organisations. Having just sent my book Attracting Donors Online to the printers this week, I was well chuffed to see many of my views supported by this report.
In the book I outline the areas I believe non-profit organisations need to embrace if they are going to see financial success online. Some of these areas are:
- Supporter/ customer engagement via digital channels (69% of C level executives agree this is one of their top 3 priorities)
- Automation of systems and processes for efficiency and to meet the customers expectations (only 34% of executives have automation as a top 3 priority)
- Focus on the customer life-cycle or for non-profits the donor journey and utilising digital communication channels to facilitate the communications with, acquire, onboard and build a relationship with and upgrade the financial commitment of these customers and supporters faster (I was disappointed to see only 40% of C level executives believe this is a top 3 priority)
- Invest in tracking and reporting of digital channels to measure success and ROI against offline channels (only 4% of companies could confidently report high returns from digital programs. 40% of executives acknowledge that there is no accountability at all for digital programs against targets) – BUT when it came to investment focus and talent recruitment for the next 3 years, executives say that Analytics and Big Data will become a primary focus
- If digital is going to become a business priority, you need to “get your board, on board” – which this survey confirms as 2014 reports 69% of CEO’s either sponsoring or directly involved in digital initiatives for their company. 41% went so far as to say that they are responsible for the Digital Agenda for their company
- That mobile is the key. We all use our mobile to access emails, to buy things, to engage with friends and businesses alike. I’ve been shouting from the rooftops for a few years now that organisations need to make mobile the centre of their digital strategy and it seems the execs do agree as they have listed hiring talent with mobile skills as their #2 recruitment priority.
My book spends a lot of time talking about the need to educate senior executives and find a champion in the management team who understands the metrics and can sell the strategy to the Senior Management Team and Board. McKinsey’s report concurrs my sentiment again when executives acknowledge that the biggest issues they face when adopting digital are:
- a business structure that isn’t appropriate to digital
- inflexible business processes – meaning many opportunities are missed as they can’t move fast enough
- and an inability to adopt an experimental mindset.
This last one is the most important. While 69% of executives say they are spear-heading digital initiatives and that they expect these programs to deliver 15% of their company’s growth – their actions don’t match their intentions. In my work I engage with mid and senior level executives who say they want to invest in digital, but they’re very slow in actually committing to it. The decision making process is often 6-12 months long for fairly small size investment amounts and they let their lack of comfort in this space get in the way. I think the lack of adventure and experimentation mindset is a massive hurdle.
Depending on the area of business they’re talking about (competitive growth or new business), between 33% and 50%+ of executives expect digital programs to deliver at least 15% growth for their company – BUT despite this high expectation, only one in five executives are investing more than 5% of their total company spend into the digital areas of their business.
That’s slightly unrealistic don’t you think? They’re expecting 3 times the return on investment.
I’m not sure why I’m surprised, further into the survey these same executives, with such high expectations of their imminent digital growth, also admit that only 7% of them are actually measuring the impact that their digital initiatives have on their bottom line. That means 93% of these companies (of which 32% of them have revenues over $1 billion annually) are not measuring the success of digital at all. So how can they measure where the growth is coming from? And what’s driven it?
It’s just crazy.
I could go on forever, but I won’t. Because if you read this blog, or you buy my soon to be released book or you attend our 12-week online marketing course (The Digital Academy), where we spend time in each module going through how to measure the success of each digital strategy and channel, you would know that I have told you all of this before. But I’m very happy to have a reputable and well resourced company like McKinsey back me up. Thanks guys.