Nov 08 Idmdipdigmmodule23davechaffey 1227004728951672 9
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  • Activities : 1. Intro - Problems if strategy poorly defined. 2. Situation analysis – Benchmarking for 4/5 different types of company 3. Objectives – Objectives for different types of company 4. Strategy – Read Tesco case study Videos – strategic agility, ASOS

Nov 08 Idmdipdigmmodule23davechaffey 1227004728951672 9 Nov 08 Idmdipdigmmodule23davechaffey 1227004728951672 9 Presentation Transcript

  • Diploma in Digital Marketing Module 2: Understanding the online marketplace Module 3: Digital marketing strategy development Dr Dave Chaffey www.davechaffey.com/presentations
  • Purpose of today
    • Give you:
      • A process to follow for developing a long-term digital marketing strategy
      • Principles can also be applied to e-campaigns
      • Tools / URLs for analysis / best practice
    • Help you:
      • Assignments
      • Exams
      • Work - practical
  • About You
    • Agency-side
    • Client - Main focus of site
      • 1. Transactional E-commerce
        • Retail, Travel, Financial Service, ISP, Telecoms, Energy
      • 2. Relationship-building (lead-building)
        • Business-to-business services, automotive brands
      • 3. Brand-site
        • FMCG – Beverage, Food, Commodities
      • 4. Media site / publisher / social network
        • Sun, Guardian, E-consultancy, Facebook
  • About Me Clients include 3M, BP, Euroffice, HSBC, IDM, Intel, Mercedes-Benz, Tektronix and CIM. Researcher / analyst at www.econsultancy.com . E-marketing consultant at www.cScape.com . E-marketing trainer and consultant
    • Cranfield School of Management E-commerce
    • Warwick (E-business) 2
    • Leeds University Business School
    • Previously Birmingham, Derby
    Visiting lecturer at leading UK business schools
    • Internet Marketing / E-marketing Excellence
    • E-business and e-commerce Mgt
    • SEO, PPC, Web Design, Email Best Practice Guides
    Author of 6 best-selling business books and Best Practice Guides Recognised by the CIM as one of 50 people who have ‘shaped the future of marketing’ and by DTI as a key contributor to the development of UK E-commerce in the last 10 years An e-marketing “guru”! www.davechaffey.com/blog
  • What is marketing strategy?
      • “ Defines how we will meet our objectives”
      • “ Sets allocation of resources to meet goals”
      • “ Selects preferred strategic options to compete within a market”
      • “ Provides a long-term plan or direction for the development of the organisation”
  • What is Digital marketing strategy?
    • Elements of digital strategy: www.wordle.net
    • Digital marketing strategy is a channel strategy
    • Objectives for online contribution % should drive our strategy
    • Digital marketing strategy defines how we should:
        • Hit our channel leads & sales targets
          • Budgets for Acquisition, Conversion, Retention, Service
        • Communicate benefits of using this channel – enhance brand
        • Prioritise products available through channel
        • Prioritise audiences targeted through channel
    • Channel strategy thrives on differentials
    • BUT, need to manage channel integration
  • The scope of digital channel strategy! Source: Chaffey (2009) Internet Marketing: Strategy Implementation and Practice (4 th edition)
  • Digital strategy = “Cause and Effect” Levers Success factor mapping Or undesired effect!
  •  
  • Is there a detailed e-marketing plan for the business? Source: E-consultancy (2005, 2008) UK Research (n=85)
  • What goes wrong when there isn’t a coherent E-marketing strategy?
  •  
  • Diploma in Digital Marketing Module 2: Understanding the online marketplace (Micro and macro environment analysis)
  • Today’s case study
  • http://trends.google.com/trends?q=asos.com%2Cnext.co.uk&geo=all&date=all&sort=0
  • Activity - How to benchmark competitors
    • Select an organisation from:
      • Transactional E-commerce
      • Relationship-building
      • Brand-building
      • Portal or social network
    • 1. Create a cause and effect diagram to assess factors impacting their website communications effectiveness against a competitor. Present on flipchart.
    • 2. Present organisation and competitors main strengths and weaknesses on-screen using this framework . Identify presenter(s) and driver. Pick 2-3 aspects only.
  • Situation analysis: How effectively are we competing? Organisation E-marketing Efficiency Organisation E-marketing Marketplace Effectiveness
  • DEEPLIST for macro-environment Which are most important for digital?
    • Demographic : percentage of each population online can be analysed in terms of age, household size and type, income, gender, ethnicity, employment status, work patterns mobility etc.
    • Economics : taxation controls, monetary and competition policies, fiscal policies.
    • Environment : country specific attitudes towards physical environmental issues, for example energy consumption, spatial distribution of populations.
    • Political : power and influence of Government agencies and regulatory bodies, public opinion, pressure groups, Internet governance.
    • Legal : trading laws and restrictions, advertising standards and controls, taxation laws.
    • Information : Availability of consumer / company data and information, access to this type of data and how it is used, information control.
    • Social : needs and wants of target communities, extent of social exclusion, individual levels of trust and perceptions of security, social discrimination.
    • Technology : Access to technology, innovation, adoption rates, applications of technology.
  •  
  • Microenvironment – situation analysis
    • My 8 suggested steps:
    • 1. E-marketplace mapping
    • 2. Internet-specific SWOT
    • 3. Audience segments
    • 4. Audience behaviours
    • 5. Internal audience insight – communications effectiveness
    • 6. Intermediaries and partnering opportunities
    • 7. Benchmark your proposition (OVP) against competitor capabilities
    • 8. Assess internal capabilities to compete
  • Step 1. Produce an e-marketplace map
  •  
  • Use digital marketing intelligence sources + Government sources: www.statistics.gov.uk and www.ofcom.org.uk http://www.google.co.uk/search?&q=+site:weblogs.hitwise.com+hitwise+blog+%2Basos 8. IMRG ( www.imrg.org ) 7. IAB (US: www.iab.net , UK: www.iab.uk.net , Europe: www.iabeurope.eu ), 6. Forrester ( www.forrester.com ad http:// blogs.forrester.com )) 5. ABCE Database ( www.abce.org.uk ) Free tool. (Choose ABCE Database). 4. Comscore ( www.comscore.com ) . Paid tool. Background quotes in Press releases. 3. Netratings ( www.netratings.com ). Paid tool. 2. Hitwise ( www.hitwise.com ). Paid tool, but free research available at http:// weblogs.hitwise.com . 1. Google Tools – www.davechaffey.com/seo-keyword-tools Service
  • Step 2 Create an Internet-specific SWOT
  • Example digital strategies
    • When reviewing SWOT, pay particular attention to: Acquisition communications (e.g. role of Google and other intermediaries, mix)
    • Conversion (experience) Proposition
    • Retention and customer development (contact strategies, targeting)
    • Partner potential
  • Step 3. Understand & segment audience for targeting Communicate with customers according to their tastes inferred from demographics or behaviour. 7. Tone and style preference Assess customers by current and future value potential 2. Customer value Target customer groupings according to their characteristics & motivations 1. Classic profile-based demographic segmentation Communicate with customer in their preferred media (and according to value) 6. Channel preference Method Targeting approaches Use “sense and respond” behavioual targeting based on RFM 5. Purchase and response behaviour Target messages according to length of time using online services 4. Customer lifecycle Target 2-10 typical customer journeys 3. Web design personas
  • Forrester Research on “site design personas”
    • Ethnographic researchers averaged
      • 21 i/views per project for 4 personas, $47K
      • $10K to 100 i/views for 8 personas, $500K
    • Examples:
      • Ford uses 3 buyer personas at Ford.com
        • Primary persona ‘Marie’ – just beginning car shopping process, hasn’t settled on brand, doesn’t know about cars, needs Help!
      • Staples.com has 7 for shoppers
      • Microsoft had 7 for Windows XP
    • Segment on key characteristics/behaviours
      • “ Seeks high quality”, “Seeks low cost”
      • “ Starting evaluation”, “Final decision”
      • Occasional visitor, frequent visitor
  •  
    • For each persona define preferences for:
    • Platforms (web, email, mobile)
    • Platform usage (hours)
    • Content consumption:
    • General site types &
    • category-specific
    • Social media - content
    • creation & participation
    • Search behaviour
    • Trusted brands
  • Step 4. Assess consumer behaviour Problems with model? Main challenges?
  • What influences brand perception? Source: www.eiaa.net
  • What influences trust?
  • Should you risk reviews and ratings?
  • Step 5. Assess communications effectiveness against goals
  • Reverse-engineering search strategy Brand search Generic terms Niche terms Use “Google Keyword tool” to identify categories/volume of searches
  • Step 6. Understand intermediaries Based on an approach used by Digital Marketing Strategy Consultants Blue Latitude Network ( www.bluelatitude.net )
  • Step 7. Benchmark competitors against your web/email propostion Awareness Evaluation Search Decision Purchase Support Rewards EVALUATION  Online product guides  Product selectors, configurators  Detailed Infosheets  Product picture  Price, availability, delivery info AWARENESS  Search engines  Portals  Featured products  On site banner ads  Opt-in e-mail SEARCH modes  Keyword  Product code  Browse DECISION  Security guarantee  Service promise  Discounts  Store locator  Call to action PURCHASE  Personalised  Re-buys  1-click  Gifting SUPPORT  E-mail notification  FAQs  Order history  Knowledge base  Diagnostics tools REWARDS  e-Newsletters  Competitions  Reminder service  Loyalty schemes  Extranet
  • Step 8. Assess capability to deliver against competitor features - The 7 Ss Figure 1.9 The McKinsey 7S framework See Module 10 See: E-consultancy 2008 Managing Digital Channels Report: http://bit.ly/1HA5 See: McKinsey 7S Model – p197 in Internet Marketing text or http://snipurl.com/24v1j
    • Key drivers for strategic agility:
    • Customer Insight
    • Web analytics and MI
    • Improvement culture: e.g. PIR, AB, MVT
    • Channel governance: structure and integration, skills, responsibilities
  • Diploma in Digital Marketing Module 3: Digital marketing strategy development Part A. Goal Setting S = M = A = R = T =
  • Activity - How objectives vary by market
    • For your organisation:
      • Transactional E-commerce
      • Relationship-building
      • Brand-building
      • Portal or social network
    • Select SMART examples of specific goals for digital acquisition, conversion, retention to incorporate into a digital marketing strategy
  • Is your digital marketing efficient AND effective?
    • Efficiency:
      • “ Doing the thing right ”
      • Minimising cost
      • Maximising conversion
      • Reducing attrition
    • Effectiveness:
      • “ Doing the right thing ”
      • Supporting business objectives
      • Target marketing
  • per Visitor
  • Using the right measures + Bounce rates Allowable
  • Using the right measures – ad example
  •  
  • Practical Tip. What is your bounce rate?
    • “ Percentage of visitors who enter the site and who then immediately exit ”
    • Should benchmark for different:
      • 1. Digital channels (Search, ads, direct, email)
      • 2. Different sites, placements or search terms
      • 3. Creative
      • 4. Different landing pages
    20% = Great 40% = OK 60% = Spam Practical Tip : Do use web analytics to check bounce rates for your content
  •  
  •  
  •  
  • ASOS.com KPIs – what’s missing?
  • Example SMART objectives 1
    • Digital channel contribution objective . Achieve 10 % online revenue contribution within
    • two years.
    • Acquisition objective . Acquire 50,000 new online customers this financial year at an average
    • cost per acquisition (CPA) of £30 with an average profitability of £5.
    • Acquisition or conversion objective . Migrate 40%of existing customers to using online ‘paperless’
    • bill payment services within 3 years (for example for a bank or utilities company).
    • Acquisition objective . Increase by 20 % within one year the number of sales arising from a
    • certain target market, e.g. 18–25-year-olds.
    • Conversion objective . Increase the average order value of online sales to £42 per customer.
    • Conversion objective . Increase site conversion rate to 3.2% (would be based on model of
    • new and existing customers in different categories).
    • Conversion objective . Increase percentage of online service enquiries fulfilled online by ‘web self-service’ from 85% to 90%.
  • Example SMART objectives 2
    • Retention objective . Increase annual repeat new customer conversion rate by 20%.
    • Retention objective . Increase percentage active users of service transacting (purchasing or
    • using other electronic services) within a 180-day period from 20% to 25%.
    • Retention objective . Increase customer satisfaction rating for channel from 70 to 80%.
    • Growth objective . Increase new prospects recommended by friends (viral marketing or
    • ‘ member get member’) by 10,000 per annum.
    • Growth objective . Increase propensity to recommend online service from 60 to 70%.
    • Penetration objective . Achieve first or second position in category penetration in the countries
    • within which the company operates (this is effectively online audience or market
    • share and can be measured through visitor rankings such as Hitwise or Netratings
    • (Chapter 2) or, better, by online revenue share).
    • Cost objective . Achieve a cost reduction of 10% in marketing communications within two
    • years.
  • Diploma in Digital Marketing Module 3: Digital marketing strategy development Part B. Strategy and Planning
  •  
  •  
  • Categories of digital strategies and their performance drivers
    • 1. Customer proposition (Product, Price)
    • 2. Customer acquisition strategic initiatives
    • 3. Customer conversion and customer experience strategic initiatives
    • 4. Customer development and growth strategic initiatives
    • 5. Enhance marketing capabilities through site infrastructure improvements
  • Integrate Goals: Strategies: Tactics
  • Aligning objectives, strategies and tactics
    • Example 1. Acquisition.
    • Objective
      • Acquisition objective . Acquire 50,000 new online customers this financial year at an average cost per acquisition (CPA) of £30 with an average profitability of 5%,
    • Informed by
      • Based on growth forecast based on current sales of 40,000 sales per year, but with incremental sales arising from new affiliate programme and SEO development
    • Strategies to achieve goal
      • Start affiliate marketing programme and improve SEO.
      • Refine existing media mix based on Pay Per Click and display advertising supported by offline media.
    • Key performance indicators or success factors
      • Overall CPA for online sales.
      • Incremental number and % of sales from affiliate marketing programme
      • Number of strategic keywords ranked for in top positions in natural search results page.
  • Aligning objectives, strategies and tactics
    • Example 2. Conversion objective.
    • Objective
      • Increase site conversion rate to 3.2% (alternative is increase AOV to £42)
    • Informed by
      • Model showing separate increase in conversion for new and existing customers based on strategies shown right.
    • Strategies to achieve goal
      • Combination of tactics:
        • Incentivised email follow-up on checkout abandonments for new customers.
        • Introduction of more competitive pricing strategy on best sellers.
        • AB and multivariate messaging improvement of landing pages
        • Refinement to quality of traffic purchased through Pay Per Click programme
    • Key performance indicators or success factors
      • Variations in conversion rates for new and existing customers in different product categories.
  • Aligning objectives, strategies and tactics
    • Example 3. Retention objective.
    • Objective
      • Retention objective. Increase annual repeat new customer conversion rate by 20%.
    • Informed by
      • Business case based on limited personalization of offers to encourage repeat purchases via Email.
    • Strategies to achieve goal
      • Delivery of personalized product offers by Email
      • 5% second purchase discount voucher.
      • Direct mail to high repeat sale propensity customers
    • Key performance indicators or success factors
      • Increased conversion rate of retention email contact and direct mail programme
      • Conversion to sale for second purchase discount campaigns
  • Decision 1: Market and product development strategies. Chaffey, Internet Marketing , 3 rd Edition © Pearson Education Limited 2007
  • Decision 2: Business and revenue model strategies. Who most relevant for?
  • Decision 3: Target market strategy.
  • Common digital channels targeting options
      • By media usage:
        • Difficult to reach using other media
        • Heavy / Savvy users of online media
      • By Loyalty:
        • Brand loyalists – provide a home
        • Not brand loyal – encourage trial
      • By profitability:
        • Most profitable – deepen relationships – add value
        • Least profitable – serve at a lower cost
      • By company type and individual:
        • Larger companies (B2B)
        • Smaller companies(B2B)
        • Key members of the buying unit (B2B)
  • Targeting options Communicate with customers according to their tastes inferred from demographics or behaviour. 7. Tone and style preference Assess customers by current and future value potential 2. Customer value Target customer groupings according to their characteristics & motivations 1. Classic profile-based demographic segmentation Communicate with customer in their preferred media (and according to value) 6. Channel preference Method Targeting approaches Use “sense and respond” behavioual targeting based on RFM 5. Purchase and response behaviour Target messages according to length of time using online services 4. Customer lifecycle Target 2-10 typical customer journeys 3. Web design personas
  • Q. Which targeting factors give best response?
  • 1. Demographics Clinique use different styles and tones for girls and boys segments
  • 2. Targeting customers according to value Customer potential Customer quality high low low high One time shoppers with low potential Average customers Good customers Very good customers 15 % 15 % 60 % 10 % Indicators for customer quality Indicators for customer potential
    • Order value per received catalogue
    • Order value per season
    • Gross margin in % of net sales
    • Returns in % of order value
    • Last date of purchase
    • Number of active seasons
    • Channel usage score
    • Number of different product categories
    Source: Chris Poad, Otto, E-consultancy masterclass 2006
  • Source: E-consultancy (2005)
  • Using customer lifecycle targeting
    • Tesco.com
    • “ Logged-on”
    • “ Cautionary”
    • “ Developing”
    • “ Established”
    • “ Dedicated”
    • “ Logged-off”
  • Automated Email Campaigns that Build… Welcome Email Time-limited offer Offer Extension
  • Using RF targeting Source: Interactive Marketing journal – January to March 04 – SilverMinds music catalogue Scoring: Recency Low 1 = > 24months 2 = 19-24 months 3 = 13-18 months 4 = 7-12 months 5 = 0-6 months High Frequency Low 1 = One purchases 2 = Two purchases 3 = Three 4 = Four 5 = Five High
  • Decision 4 Positioning and differentiation
    • OVP - Online Value Proposition
    • Objectives:
      • Provide value to encourage initial and continued usage of online channels
    • Tactics
      • Reinforces core brand proposition (marketing mix) and credibility, but shows:
      • What can a visitor get from your online brand that…
        • They can’t get from you offline?
        • They can’t get from competitors?
      • Communicate message forcefully: online and offline
    • Examples:
        • ‘ Compare. Buy. Save ’. Kelkoo ( www.kelkoo.com )
        • ‘ Earth’s biggest selection ’. Amazon ( www.amazon.com )
        • ‘ Search the largest inventory of cars and trucks on the Internet. More than 1.5 million listings, updated daily’ ( www.autotrader.com )
  • How can we deliver value online? Product Price Place Promotion People Process Physical evidence VALUE FROM CUSTOMERS VALUE FROM COMPANY
    • Cost
    • I want the best deal
    • Be cheaper to own
    • Convenience
    • Save me time
    • Be faster & simpler
    • Content
    • Help me decide
    • Make my life easier
    • Customisation
    • Tailor it for me
    • Personalise my recommendations
    • Choice
    • Fit my unique needs
    • Making the right choice
    • Community
    • I want to belong
    • Cost
    • I want the best deal
    • Be cheaper to own
    • Convenience
    • Save me time
    • Be faster & simpler
    • Content
    • Help me decide
    • Make my life easier
    • Customisation
    • Tailor it for me
    • Personalise my recommendations
    • Choice
    • Fit my unique needs
    • Making the right choice
    • Community
    • I want to belong
    • Sell
    • Reach during buy-mode
    • Sense and Respond to increase lifetime value
    • Speak
    • Research needs
    • Inform and build relationships through e-mail
    • Serve
    • Provide online content and services
    • Save
    • Sell and service more efficiently
    • Sizzle
    • Differentiate our brand
  • Dell Premier B2B OVP
    • Content
    • Customisation
    • Community
    • Convenience
    • Choice
    • Cost-reduction
  • BA Have You Clicked Yet? Print ad copy: Your computer is now the airport. Check in online, Print your own boarding pass, choose your seat, change your booking card and even find hire cars and hotels. Simple. OVP=Online Value Proposition=Unique benefits of online service
  • Decision 5: Multi-channel distribution strategy
    • For e-retailers – a review of approach used to distribute products to market through online intermediaries:
      • Disintermediation
      • Re-intermediation
      • Countermediation
    • For others, a review of strategic online partners to extend reach online
    See earlier section on intermediaries
  • Decision 6: Multi-channel communications strategy
    • Assesses how online channels integrate with traditional channels to convert customers to sale and service customers
      • In-bound sales-related enquiries (Customer acquisition or conversion strategy)
      • In-bound customer-support enquiries (Customer service strategy)
      • Outbound contact strategy (customer retention and development strategy)
  • Decision 7: Online communications mix and budget – See Objectives section
    • You need to know:
    • Advantages
    • Disadvantages
    • When to use
    • When not use
    • Justification
  • Creating budget models for online marketing See http://www.davechaffey.com/Spreadsheets/
  • What should we determine investment in digital channels?
    • Response rates = CTR  Conversion to lead  Conversion to sale
    • Value = CPC  CPA  LTV
    • Branding effects = Awareness, Interest, Desire, Action (on or offline)
    • Reach = Availability of impressions in different channels e.g. Maxing out on searches, targeted inventory, Increasing frequency
    • Media multiplier / halo effect
    • Risk diversification
      • All eggs in one basket?
    • Opportunities to test and learn
    See http://snipurl.com/24v5k [www_iab_net]
  • Decision 7. Online CRM strategies
    • Objective:
      • Use online channels to support customer lifecycle
    • Tactics:
      • Acquisition – influencing new sales online
        • Permission marketing – incentives and customer knowledge - list building / profiling. Touch strategy. Triggered e-mail.
      • Retention – keeping customers using online channels
        • E-mail touch strategy. Understanding customer loyalty drivers - why customers continue to use online services, or why they stop. Inbound contact strategy.
      • Growth – encouraging use/purchase of additional services
        • E-mail touch strategy. Online prompts. Triggered E-mail.
      • Reactivation / Winback – encouraging lapsed online users
        • Event-triggered e-mails to reactivate.
  • Integrate Email + Direct mail (or phone contacts) Combined response from e-mail and direct mail is 125% better than no e-mail. Response increases, 100% for direct mail piece. Source: E-consultancy Masterclass 2005 - BCA Pre-mail, with online response Teaser e-mail. No online response Direct Mail Direct Mail
  • Decision 8: Organisational capabilities (7S)
    • See Module 10
  • Thank you!
    • Any questions, do e-mail me:
      • [email_address]
    • Follow me on Twitter:
      • www.twitter.com/DaveChaffey
    • Presentations
      • davechaffey.com /presentations
    • Spreadsheets
      • davechaffey.com /Spreadsheets
    • SEM tools
      • davechaffey.com/seo -keyword-tools