Craig Binkley: Digital Transformation and Impact on Value Chains and Routes to Market

LS International

Guest Article by Craig Binkley, BINKTHINK Strategy Group (Bio below)

It’s impossible to ignore the way that smartphones have become the centerpiece of many consumer’s lives.  They are now the hub of much of our daily activity.  We engage with our mobile phones through apps more than we even make phone calls. We navigate to avoid traffic as we drive, or we might call up a ride-share service and not even drive at all. So much for what our mothers taught us about getting into cars with strangers! We check in for our flights and hotels, scan our boarding passes, and even go directly to our room using only our phone.  We bank, shop, compare products, read reviews, choose to buy, and even pay automatically in many cases with no exchange of cash or card or even a fingerprint.

But what about how we look at our own business models as business leaders?  Are we thinking of that same level of seamless integration and behavioral reorientation on our business structures?  Studies by many thought leaders suggest that most companies and business leaders are not ready.  But modern leaders know that it’s time to fundamentally rethink what the digital revolution and new capabilities mean for the value chain of every business and our routes to market and customers.

We’re not talking here about the black swans and extreme disrupters enabled by new sharing platforms that enabled Uber, Lyft and Airbnb to exist.  We are focused more on the type of shifts that impact existing business models and can be driven within the fundamentals of your business.  One of the things we do is to help business leaders navigate all the new tools and techniques with the language and systems of business that have been learned over years.  We can rely on enduring rules to help understand how to apply new tools.

While there are many factors involved in a full digital transformation, there are four major things that can get companies moving and leading digital success vs. following or being pulled to the inevitable future:


  1. Redefine what digital means in your organization. This transformation is not simply about digital marketing or new technology systems and point solutions from the IT department.
  2. Put the customer at the center of your full business strategy and re-imagine how you can best serve your customer along the full value chain of the business with new capabilities.
  3. Get excited about the possibilities of new data and the insights they can create.
  4. Drive organizational change in how you approach both internal and external collaboration as you develop a broader eco-system of partnerships along your value chain.


Redefine What Digital Means in Your Organization

One of the biggest problems with digital strategies is that people focus on the massive number of mobile devices in the world – 20 billion by 2025, the pervasiveness of digital marketing, and rapid changes in Information Technology enabled by something called the cloud.  And the cloud for a lot of people is known simply as a place somewhere out there where all our pictures and lives are stored and that we only think about when we hear about hacks or find out we need to pay for a bigger cloud to hold all our selfies or that new Taylor Swift album.  Or we are amazed by Amazon’s augmented reality that now allows us to try out furniture in our own home before we buy it.  These are the fancy things that dominate the digital innovation landscape.

I’ve spent a lot of time looking at digital marketing and assessing companies in the AdTech and MarTech space, where marketers are adjusting to the consumer’s demands for Control, Choice, Customization and Communication.   But I want to focus here on the bigger picture of business transformation.

We need to define digital transformation more broadly as fundamentally new models and tools that can be applied to the simple relationship between a brand, product or service and its customers.  That relationship has always required companies to develop points of Connection with customers, the proper Content for those Connections, and to do that in a way that leads to profitable and efficient Commerce.  While the fundamental model remains true, companies need to take a much more holistic view to understand how all the elements of that value chain are or can be disrupted by new digital capabilities.


Put the Customer at the Center of Your Full Business Strategy & Re-Imagine Your Value Chain

Every company needs to put the customer at the center of their thinking.  I don’t mean simply talking about being customer-focused or driving up your Net Promoter Score.  I’m also not talking about the easy transition of moving to a marketing approach that centers on people and not the media channels they use.  Those are hygiene factors that companies should have been using all along.

I’m talking about taking a simple new look at the work that must be done across the full value chain between your brand, product or service – and the points of Connection, Content and Commerce with your customer.  Here’s where you think about legacy systems of a manufacturer, a distributor, a broker, an agent, a merchandiser, a retailer, a service company, etc. – and the roles that each one plays.  Most industries have a legacy system in place where the roles along the value chain have been established and often have uniquely skilled players that specialize in each step of the chain.  This set of relationships must be challenged – companies need to reimagine their business model based on the capabilities of today instead of the capabilities that built the current models.

Instead of working within a legacy route to market, what if Campbell’s soup simply had a direct relationship with the 20% of households that make up 80% of their volume?  They could send them the soup they want, when they want it, directly.  Instead of engaging in all the retail sales and merchandising activity and increased trade spending that potentially sells soup below the cost of making it, to people who really might not want soup but can’t pass up the appeal of a buy 1, get 1 free deal.

Leesa mattress is a great example of fundamentally re-imagining the existing value chain and route to market for a legacy industry.  Travel agents, insurance agents and other intermediaries along the route to the customer have been totally value-shifted by digital technology and re-imagined relationships with customers.  All companies should fully reconsider the value-added of each step in their route-to-market process and re-imagine and develop what can be done more efficiently to provide the same or even greater service or value to customers.

Another key consideration in this area is that it’s not an ‘either/or’ proposition.  You must renovate your business as you innovate your business.  To really put customers at the center, companies must realize that there are different customer journeys, and you must continue to add value to each journey.  For Manheim Auto Auctions, they still must renovate the physical auction experience for customers by adding self-serve kiosks and digital tools for the live auction, while they also innovate for a fully-virtual customer, where they look to bring the energy and excitement of the physical auction to the virtual, online auction.  Similarly, banks must continue to enhance the physical in-branch experience with technology for those who use branches, even though millennials may never go into a branch their entire lives.  This new bimodal innovation is a major change that companies should adapt in their digital re-imagination.


Get Excited About the Possibilities of Big Data

Big Data is Big Scary for a lot of people.  If we throw Artificial Intelligence into the data equation it gets even more machine-like and further from the human business experience.  Hardly any company says that they’re ready for the data deluge, or that they’re taking advantage of the massive new data that’s being generated.  But it’s creating an ability to drive massive efficiency and customer value and we cannot ignore the opportunity it brings to business.

We’re all aware of how Amazon uses data to look at shopping patterns to know us as a shopper and to make recommendations based on our shopping patterns and other people with similar shopping patterns.  But there are many other examples of data driving fundamental business efficiencies across the value chain.

Just think about the changes along the route to market that were created with the UPC code decades ago, when retailers and CPG manufacturers could see store-level and SKU-level sales.  That created a fundamentally new conversation on sales, inventory management and purchase frequency that impacted the entire value chain.  Retailers gained new power through the knowledge in that data, and manufacturers had to start playing by new rules.

Today companies like Manhattan Associates are connecting omni-channel customer experience and shopping with network-wide inventory visibility and enabling the most efficient order-fulfillment.  So, when you buy a pair of shoes online and have them shipped to your home, the technology decides whether the most efficient way to get those shoes to you is from a local distribution center or from the inventory at a local store, based on that’s stores inventory levels of your style, size and color.  All that efficiency and customer service is enabled by a holistic set of connected data turned from scary into success.


Drive Organization Change on Collaboration

While great businesses have always cultivated collaboration both internally and with their business partnerships, the digital transformation requires an even more open view of collaboration.  Traditional models of business strategy and partnership must evolve as companies open themselves up to new models of “organization”.  Our teams have helped many C-Suite leaders understand that “marketing is too important to be left to the marketing department”.  That’s because we see marketing as covering the full value chain and “selling more stuff to more people more often for more money more efficiently”, not as simply an advertising and promotion function.  The same is true for digital – it’s too important to be left to the “digital experts”. Companies must build an even more collaborative and integrated internal business team that can look at the impact of digital transformation on a holistic basis across the value chain and route-to-market.  It also includes looking beyond the company walls at the full eco-system of partnerships that are available to serve the customer/consumer better and more efficiently.


Summary Thoughts

So again, it’s important to remember that we can’t be intimidated by all the newness of the Digital Transformation as business leaders, and we can’t be passive.  We simply must think aggressively and holistically about our business, re-think our value chain and route to market using a combination of the things we’ve learned over time with a future-leaning embrace of the new capabilities that are becoming available to us due to the digital transformation.


To check out our follow up Podcast with Craig where he answers questions from our network, click here!


Craig Binkley is a successful global business leader and senior marketing executive who drives transformational marketing and growth strategies for his clients with Speed, Clarity and Impact. He has successfully built upon almost two decades of client-side success running marketing organizations to become a sought-after consulting partner to clients ranging from Fortune 500 CEOs and CMOs to small business entrepreneurs. Craig specializes in developing pragmatic, fact-based, and customer-focused growth strategies that blend his hands-on operating experience with a wealth of knowledge and business patterns garnered across industries to help illuminate new thinking and clear solutions.
Craig is currently founder and CEO of Binkthink Strategy Group. The core principles and approaches of Binkthink are the culmination of Craig’s 35 years driving business growth, global brand and marketing excellence, and leadership success across a wide range of industries and geographies. His portfolio of work now includes well-known brands and companies such as MillerCoors, ConAgra Foods, Pepsi, Kimberly-Clark, Microsoft, Dell, Accenture, Expedia, Pfizer, Johnson & Johnson, Novartis, sanofi-aventis, Gannett, Vodafone, Arla Foods, Dow Chemical, Alcoa, Cintas, Nationwide Insurance, Safeco, TPG-owned companies, Citi, GE, Cox Automotive, the National Football League, Tumi, Kate Spade, and many others.
Prior to launching Binkthink, Craig spent four years as CEO of Northstar – a global, multi-award-winning, full service market research agency. Northstar is trusted by a wide range of blue-chip global clients to provide insights and solutions for business, marketing and brand challenges, executing work in over sixty countries from offices in New York, Toronto, London and Jakarta.
Prior to taking the reins as CEO of Northstar, Craig served as EVP of Strategy for MDC Partners, one of the fastest-growing and most influential marketing and communications networks in the world. MDC’s agency partners leverage creativity, technology, data analytics, insights, and strategic consulting solutions to drive measurable results and return on marketing investment for over 1,700 clients worldwide – continuing to evolve approaches as the digital transformation, AdTech and MarTech disrupt traditional marketing models and customer connections.
Craig entered the MDC Partners network in 2005 when it purchased Zyman Group, a successful global strategy consulting firm launched by renowned marketer Sergio Zyman on the back of his best-selling book The End of Marketing As We Know It. Craig was a founding partner and Chief Consulting Officer at Zyman Group, working with a broad range of clients across industries, and leading a team of almost 100 strategy consultants in offices in Atlanta, Chicago, Miami, Mexico City and London.
Before entering the professional services arena to help clients grow through better business and marketing strategies, Craig was a successful leader on the client side for seventeen years at The Coca-Cola Company. He was Vice President of Marketing for Coca-Cola Mexico, driving profitable growth and brand portfolio strength for the company’s second-largest division. He also drove growth as Worldwide Director of Marketing for Diet Coke & Coca-Cola light, and the Minute Maid brand of juices and drinks. Craig has extensive international experience through his global work with The Coca-Cola Company, Zyman Group and Northstar, and has great Latin America depth due to his Spanish language skills developed from living in Mexico and working extensively throughout Latin America.
Craig graduated from Davidson College in North Carolina and completed postgraduate work at Harvard Business School’s Program for Management Development.