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Aligning Digital - E-commerce, Distribution, IT, Revenue Management, Sales, Operations and Marketing

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November 01, 2009
Digital Strategy
David Atkins - david@digitaldnainfusion.com

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© 2009 Hospitality Upgrade. No reproduction without written permission.

This article introduces concepts that can maximize your digital realities. This is the first in a series of articles aimed to align your digital plans and strategies with your business objectives.

Your business is rapidly and radically evolving, effective digital strategy is critical to thriving in difficult economic conditions.

Digital is at the heart much of this shift, yet some do not embrace this shift, there are still executives who use the terms, that’s Internet land or Web sites are e-commerce. The reality is that all of our channels, media, messages, teams and systems need to be aligned around a new digital reality, one that puts the customers in control of everything (even your brand). Organizations that limit access to various digital, Web or mobile platforms from work, limit their team’s ability to monitor, learn and act like a customer. Set up rules and enforce them but do not limit access. Digital is part of everyone’s job and is fundamental to sales, marketing, operations, customer service, revenue management and distribution.

E-commerce used to mean your Web site’s purchase path and managing the related parts. Today it can mean activities on Facebook, Twitter, Nabbr, Google, the OTAs, GDS, iPhones, your Web site, your brands’ sites, and the list goes on. How do you build and manage strategy that crosses many parts of your business and organization in a way that makes sense and generates metrics you want? E-commerce is a part of sales, distribution, IT, revenue management and marketing and thus a subset of digital. Solid analytics are critical to e-commerce.

How is your leadership with the OTAs, GDS, RevPAR, customer service, online marketing, onsite delivery, social media, Web site metrics, widgets and mobile platforms. The more comfortable your leadership is, the easier the alignment.
Alignment is getting all your stakeholders to believe or align behind a set of common goals, drivers, metrics or business realities. Gaining alignment is easier said then done. The more adept your culture is to jettison unnecessary legacy ideas, systems, thoughts, etc., the easier alignment is.

The digital world has many moving parts and concepts but it is business; it requires focus, attention and an understanding and alignment around metrics and analytics. Your leadership needs to be in tune with how to use metrics and when and where soft measurements apply.

You need cross discipline experts leading your business who share common objectives and who all understand digital, understand who your partners are and what they offer and where they are going.

How do we align e-commerce, customer service, distribution, revenue management, sales, operations and marketing? There is no single answer, there is a process that will help determine paths to success.  Here we have focused on how to develop the process; in the subsequent articles we will look at each phase in greater detail as well as the various drivers and impacts.

While discipline expertise has huge value, enterprise value is now in cross discipline knowledge and training.

Objective Eyes- Find someone who understands the digital environment to lead your digital planning. An outsider might be appropriate. It is often an iterative process.

Understanding digital at a strategic level is getting more complicated. It is no longer about a definable platform, Web site or delivery vehicle or system, the latest iteration of digital is distributed content/commerce on other platforms and businesses (think Apple’s iPhone apps or Facebook widgets) and the customer is in virtual control–you need to influence a desired action, brand, message, customer.

This area is evolving and will require executive attention for the foreseeable future. It also requires flexibility and a culture of calculated risk taking. Do not punish decisions that don’t work.  In several of the next articles we will discuss how to encourage calculated risk-taking in the digital arena.

Step 1 Know your customers and business. Are you a brand who franchises properties and services? An owner operator? A management company? An ownership group? Depending upon your businesses drivers the strategy, tactics and execution will look different. Businesses should routinely do this exercise, have dozens of questions, and then probe.

Step 2 Assessment of current state. Conduct a strategic assessment of your current state from a customer’s perspective. Empower your leader here to meet with your key executives and customers to ask questions. Look for customers’ points of friction, not business points of friction.

Step 3 Leadership alignment.  Do you have a concise customer-facing set of metrics that are by which you evaluate all of these various drivers? For example, do you know the cost of customer acquisition in your organization? Does your entire organization use the same metric measured the same way? In this series of articles we will discuss in greater detail picking the right metrics and aligning on them.

Step 4 Benchmarking. Find similar non-competitive businesses and see what they are doing. If you are a large multi flag brand CPG could be a benchmark and look at smaller retailers for single properties.

Step 5 Stakeholder Input and Transparency. Find out what the expectations and offerings are of each of your stakeholders and see what they will be in the next 12 months. Be sure to consider how decisions are made beyond, as in the evolution of digital anything after 12 months may be conjecture. Be transparent in your process to the entire organization. How do e-commerce, sales, revenue management, marketing, operations, IT, all work together today? An example of a common misalignment is a hotelier with different metrics for success for various stakeholders.

Step 6 Establish a set of common metrics. This is not an easy thing to do, but all groups need to focus on the same metric(s): top line revenue, RevPAR, occupancy, customer acquisition cost, reservations channel, onsite spend, loyalty (the list is quite long). The only way you can hope to align this diverse set of owners is to have metrics in place that speak to your business, your customer and your strategic plan. Test and measure everything you can down to the right metrics for your business.

Step 7 Establish long term cross training at all levels. Your leaders should be exposed to the various other disciplines within your business. The next level of your team should be required to spend significant time in other areas of your business. Your leader in marketing probably should also have spent some time in operations, revenue management and sales, and been exposed to e-commerce. Find and offer formalized training for staff in areas that may not directly be in their area of responsibility. Train your sales leadership in e-commerce usability or train your IT leadership in marketing. Hire, train and retain the best digital talent.

Step 8 Establish clear ownerships within your leadership. For example, who owns online marketing? Does it tie to brand efforts, distribution, social media, e-commerce behavioral, CRM, revenue management, operations or customer service? Is it direct response or more? This is the area where most companies in our industry break down and where we will focus during another segment in our series. Revenue management is in finance, e-commerce is in distribution, and online marketing is in marketing, then how do you align each of these without tectonic shifts to your business.

Step 9 Product and systems development. This must be transparent as to how priorities are set. Get a cross-functional leadership team to meet on a regular schedule (once a month is suggested) to approve rank/re-rank priorities, but have an open process where all members of your organization can submit ideas and projects. Make sure you have a flexible road map for your needs and that the various stakeholder/sponsors are bought in before work commences with objectives and metrics are agreed to. This is an area of opportunity for most businesses and where the digital rubber meets the road.

Step 10 Partner/Vendors/Agencies.  Pick partners who can enhance your strategy, support your business and participate in your success. A concept core that Ray Croc established decades ago for McDonald’s is partnering, and it has served the company for many decades and is as flexible as necessary. Partners are a point of differentiation in digital successes.

Step 11 Set up check points. Set up formal check points at specific time intervals. Use a post mortem process on every project, and evaluate the decision tree and the success/failure on the originally identified metrics. This is all about monitoring, testing and measuring everything you can.

Step 12 Empower, train and enable your team, then hold them accountable to uniform metrics cross disciplines.

Digital is becoming consensus driven from a consumer’s perspective. This will require more transparency from our industry.

David Atkins a principal @ Digital DNA Infusion. He was a founding shareholder at Expedia and is the incoming chair of HSMAI, a frequent speaker and consultant on digital and e-commerce strategies. He can be reached at david@digitaldnainfusion.com.

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