Digital transformation. It’s the topic we’ve all been talking about for 10+ years - but there are good reasons for that.

First, it’s hard. There are a lot of complexities to digital transformation, whether it’s organizational hurdles, reallocated budgets, or uninspired stakeholders. For many brands, that can translate into a years- (or even decade-) long process for making significant progress.

Second, it’s important. Integrating digital technologies across all areas of the business is no longer a nice-to-have; it’s essential for brands who want to deliver connected experiences across the myriad places they engage with their customers.

That’s why it was one of the key areas of our recent Global CMO Report: CX Edition, and why we’re digging further into it today. Through a case study lens, we’re sharing three common scenarios we encounter with clients when it comes to their digital transformation efforts, along with ways to address them. Whether you see your brand reflected in one of these hypothetical ones or not, companies at every stage can take away nuggets to apply to their own digital transformation journeys.

Without further ado, let’s jump in.

Scenario 1

ACME Brand has spent the last several years investing in the latest technology. They’ve upgraded their CDP, implemented content and commerce management systems, and even dipped their toe into AI. However, they’re not yet seeing the gains they were expecting – if anything, it feels like all of these new technologies made their processes more complicated. Stakeholders are getting antsy to see a return on these significant costs.

This is a common situation we encounter with clients. Our data shows that just 36% of companies have optimized the use of their technology to maximize business outcomes.

With that, 30% of CMOs don’t plan to make major changes to their tech stack in the next 1 to 2 years and instead are focused on getting more value from their technology investments. While situations vary from company to company, there are several key areas we help brands address to get more out of their technology suite:

1. Alignment across technology and digital business leadership. Too often, technology and digital business teams, including marketing and eCommerce, operate in silos. As a result, technology organizations may invest in new software without defining clear use cases with the marketing team. Without that foundation, shiny new tech will go unused or fail to meet expectations because activation teams don’t know how, or why, to use it. We can help create strategic alignment and foster conversations across the organization to put tech into action. For more on the importance of marketing and technology teams, read our Customer Engagement Report.
2. Connectivity across systems. Not all technologies play nicely together. Understanding which systems are compatible and how best to connect them to avoid redundancies and inefficiencies can be challenging. Our breadth of expertise across the tech stack enables us to help brands’ systems talk to each other in a way that streamlines processes rather than complicating them. For our perspective on a modern technology estate, read the CX Tech Stack Guide.
3. The right data to fuel personalization. All the tech in the world won’t improve experiences unless you have the right underlying data to ‘activate’ what you’ve invested in. Brands must understand what data they have, where it’s stored, and how it can be used for better CX. Yet, only 43% of CMOs said they’ve successfully implemented an enterprise data strategy across all functions. We help brands with every aspect of their data strategy, from collection and storage to cleanliness and activation.

Scenario 2

GREAT Brand has been talking about digital transformation for years, and thought they had a strong plan in place. But then things changed: between soaring interest rates, an overwhelming technology landscape, and the rapid rise of generative AI, they’ve found themselves stagnated. Leadership wants to know how they can start to make meaningful progress.

Many brands find themselves experiencing transformation ‘change fatigue’ – they see a multi-year conversation that hasn’t translated into growth. That, combined with the very real distractions of the business environment, has led to major challenges executing a change agenda. 

Interestingly, most of the challenges don’t relate to technology itself: they relate to organizational hurdles, including common alignment on goals and strategy, funding limitations, and competing prioritization. Only 37% of CMOs say their technology and business teams are aligned on focus areas and driving toward the same goals – and this lack of alignment is cited as the most prominent major transformation challenge for companies.

Alignment matters across many areas, including defined audience segments for orchestration, common KPIs for success, and more. And as you can see below, there’s work to do in each area:

As neutral third parties, external partners can play a critical role in creating alignment. They’re not tied up in company politics and don’t have preconceived notions of what is and isn’t possible in the organization. That’s probably why 61% of CMOs intend to increase their use of consultancy partners like Merkle, who bring a wide range of experiences and targeted expertise to the table. Thirty-nine percent of CMOs will focus on specific projects and initiatives with their external consultancy partners, making it crucial to find transformation experts whose skillsets align with their gap areas.

Scenario 3

Widget Co. has spent the last several years figuring out how to future-proof their data strategy for third-party cookie deprecation. Building robust identities is still a work in progress for them, and as that moves forward, they’re looking for the channel strategy that will allow them to use their data to reach the right people at the right time. They’re looking for help to push all of these efforts across the finish line.

We love talking to brands who want to translate their data into better CX. Using data for customer value is critical – in fact, it’s one of our CX imperatives in the customer-focused edition of the report. Currently, just 43% of CMOs report that their brand is using an enterprise data strategy and are driving effective personalization with first- and third-party data. Another 46% list it as a high priority but have yet to achieve it.

Identity platforms, like Merkury, can help brands at any stage in their journey unite disparate customer data in a connected, privacy-safe environment for activation. Forty-nine percent of CMOs report that they’re pursuing strategies to enrich their first-party data with identity solutions to deliver more personalized experiences, making it the second-ranked strategy to deliver personalization in the face of privacy concerns.

But data infrastructure is only one piece of the puzzle – activating data in the right places is another. We’re seeing shifts in channel strategy from CMOs, with the largest one coming in social commerce. Nearly 90% of companies either list social commerce as core to their business strategy or as an area where they’re investing in pilots. Here’s how other digital commerce channels look:

CMOs are taking a “yes, and” approach to consumers who are increasingly borderless in their purchasing behavior. And what’s the best tool for engaging customers seamlessly across borders and platforms? Identity.

Conclusion

If there’s one thing to expect for the next few years, it’s that the curveballs will keep on coming. Generative AI will continue to shift the industry, and where the economy is headed is anyone’s best guess. But with the right foundational approaches to digital transformation – leveraging first-party data, collaborating across the business, and making thoughtful, holistic technology decisions – brands can build infrastructure that adapts to both a changing environment and evolving customer demands. And remember, if you need help, a trusted external partner can work with you on the roadmap to get you there. If you want to talk through your digital transformation successes and challenges, drop us a note.

*Note: No real companies were used in the making of this blog post. If you found yourself wondering, “are WE actually Widget Co.?”, don’t worry, you’re not – but please do reach out so we can chat.