The No 1 Reason Why Australian Businesses are Failing Online



October 22nd, 2015 / Aidan Johnson

Find out why businesses have a terrible time online, and the three simple questions that let you identify if it is your problem.

The internet is everywhere, which is great news for companies of all shapes and sizes. Whether you want to sell knick-knacks of varying quality, sell car insurance, or even just produce high quality journalism, the internet can give your business first access to customers entering the market.

“40% of Australians now start their buying process online”

But it’s hard working online. Every year, hundreds (maybe even thousands) of medium and even large businesses fail because they have not embraced the new Order, and retain antiquated business paradigms. And whilst there can be other contributors to any business decline, this one continues unabated in Australia.

The No 1 Reason Why Australian Businesses are Failing Online

Firstly Success

There are plenty of businesses that have successfully mastered their digital presence. Corporations such as News Corp, Spark (telecom NZ) in NZ, Tabcorp, Sensis, and Coles have adopted the leading global model which proves that they are 21st Century companies.

The best examples are where the Company Board has approved a digital transformation – then they appoint a Digital Director or CDO. All major Australian Banks are also configured this way.

“The Board mindset must be that Digital is much more than just another channel or just another marketing tool” – ASX Top 20 CEO

Quite often companies create separate Digital business divisions – which they one day hope will canal the legacy.

telstra tabcorp logos

Companies such as these – especially those that have embraced a digital transformation – have managed to, or are at least attempting to, shed the old business mindset that dismisses digital as just a gimmick or marketing tool. They have accepted that digital is likely their most important lead generator when obtaining new customers.

These are businesses that have realised that in order to succeed and truly make a difference, as well as to effectively increase that bottom line, they need to adapt and have a dedicated focus on digital. This enables them to improve efficiency, productivity, customer connection and most importantly the bottom line.

They have solved that one problem that is plaguing so many Australian businesses.

That problem is that digital needs to be recognized as a stand-alone part of your business. It needs a dedicated focus with measurable KPI’s not treated as a marketing tool.

The key ingredient to success that News Corp., Spark (telecom NZ) in NZ, Tabcorp, Sensis, and Coles have in common is that the Head of Digital and the Head of Marketing sit side by side.

The no 1 cause of businesses failing online is that they make the head of their Digital department subordinate to the head of the Marketing department.

In other words, the inability of most businesses to understand or act upon the significance of the digital department – with the attitude leading to digital being treated as a marketing tool – is the key ingredient to businesses failing online.

proper digital marketing hierarchy

What?

Yes, it sounds odd doesn’t it? How does an internal hierarchy issue impact on how your business operates?

Well, by having your digital department existing as a component of another department (marketing) which specializes in above the line advertising, you are at the very least subconsciously devaluing the work the digital department does. Practically as well they do not always complement each other and often there are competitive tensions. However probably the key aspect is that a failure to prioritise digital, and the lead does not intrinsically understands digital means accountability and KPI’s are not properly set. This leads to a dismissive attitude towards an integral section of your company which, besides B2B provides the lowest cost of customer acquisition to business.

Search Engine Optimization, aside from business to business sales, is the cheapest form of customer capture in the world. (Search Engine Journal)

Furthermore, people in the digital and marketing departments don’t always have transferable skills. Honestly, why would someone who has spent the last twenty years of their career and life dedicated to television or newspaper ads (or even just management) be properly equipped be expected to master the most dynamic and fast moving component of the business? You wouldn’t ask your HR manager to file the company tax returns – so why expect your head of marketing to look after something that is moving at a pace that specialists have the necessary skills for?

The Solution

If you can, separate the digital and marketing departments. Give each department their own budgets, their own dashboards, KPI’s and their own reporting chain to the CEO. This will give each head of department focus, goals, and a means of drilling down into outputs. This freeing up of resources will allow your specialists to specialize, increase efficiency, lower the cost of customer capture and ultimately properly arm your business for the digital world. Competitive tensions between Marketing and Digital will be fleshed out and resolved in the best interest of the business.

Furthermore, it is an excellent idea to make each of these newly separated departments accountable directly to the CEO or COO, without a middle-department getting in the way. That way, when it comes down to presenting findings to the board, or to shareholders, each department can use their own findings, with their own metrics, to highlight their performance and output. This will increase accountability for Digital and the overall business.

If, however, it is impossible to separate the two departments, then your head of marketing (or at least you) must be at a minimum competent in understanding the digital side of things. In fact, understanding the barest basics should enable you to answer these three questions:

“When was the last technical website Audit?”

“What is the difference between a Follow Link and a No Follow link?”

“What is the page loading speed of your website”

Conclusion

So, now you know the problem that causes online businesses to fail, or at the very least be less efficient: subordinating the digital department to marketing. This is both a cause and a symptom that is holding back your business from reaching its true potential.

You know the questions and even some answers – now you have to implement a practical solution that suits your business.




ABOUT THIS ARTICLE

Find out why businesses have a terrible time online, and the three simple questions that let you identify if it is your problem.


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*Predikkta has sourced several external independent global tools to analyze websites.These tools do not reflect on occasion the internal website analytics, but are recognised global tools and provide accurate comparative results for measurement against competitors.

**The views in this article are those of the author