Five Truths In Building An Effective Digital Marketing And E Commerce Strategy
Five Truths in Building an Effective DigitalPowering Out of the Curve Marketing and e-commerce Strategy Business Services >> Industrial Products >> Healthcare >> Technology >> Financial Services Consumer companies are fighting to grow profitable revenue in fields that are foreign to manyBlue Ridge Partners is the of their senior executives. Ever changing customer-facing technologies - web, mobile or socialmost experienced, impactful based - and an emerging, broadening set of competitors have quickly become mainstreamand respected firm exclusively agenda items in the boardroom.focused on helping companies These companies are confronted with the additional challenge of redefining their customer.improve the performance of Are their customers the “Big Box retailers” where they have enjoyed revenue growth and pre-their “revenue engine”. dictability in the past? Are they the up-and-coming “online retailers” with the highest recent sales growth rates? Is it the end consumer who chooses to buy direct from the consumer website or mobile app? Or is it a complex combination of all three?Locations: How can consumer companies manage the inherent conflict that exists between digital and • Boston e-commerce technologies and more traditional channels? Where should they place their bets • Chicago and with what mix? What is the optimal pricing strategy across these different channels? There • Dallas is a lot at stake and the available expense and capital for digital marketing and e-commerce • Denver has been scarce. • London M • New York Five Truths • San Francisco In our work with companycompanies we have identified five truths related to digital market- ost consumer leadership teams spent the last several years • Washington, DC ing and e-commerce: into the curve”—cutting costs, streamlining “braking operations, conserving cash and managing their credit facilities. The brakefundamentally changedfor this portionpurchase journey and buy- 1. Technology has was the proper pedal the consumer’s of the track. ing behavior. At each stage of the Consumer Purchase Journey numerous online and But how should leadership teams maneuver how consumers the apex offline “touch points” come into play affecting as they reach browse, evaluate, compare and buy products online. Technology has enabled rapid and efficient engagement with of the curve—the critical point at which braking is no longer the right brands like never before. technique and gears need to be shifted to increase speed and power out • Digital touch points can be a brand’s friend or foe. They need to be introduced to of the curve? consumers as a component of the overall go-to-market strategy and not in isola- tion. essential. If you let up on the brake too soon, you might still hit the wall. If you let up too late, competitors will pass be “valued” and measured for the impact • Additionally, the touch points need to you. each has at each stage of the path to purchase leading to increased online revenue But more troubling– brand awareness, customer acquisition, and conversion. growth. e.g. than the question of timing is whether your revenue engine will respond and stages of the Consumer Purchase Journey can create a significant • Touch points when you round the corner and try to accelerate. competitive advantage as part of an omni-channel strategy across all media types If your engine sputters, top-line growth will be sluggish, market and points of purchase. share will be lost to better prepared competitors and investors will be disappointed. Ps” of traditional marketing (people, price, product, promotion, placement, • The “7 process, physical environment) are still applicable but digital marketing and e- HEADQUARTERS commerce adds a new and broader set of considerations. 1350 Beverly Road, Suite 115 Companies should begin now to determine how their revenue engine McLean, Virginia 22101 may• Consumers consider and evaluate productswill require precious respond. Improvements and adjustments based on “Likes”, “Tweets”, blog post- ings, web advertisements, etc. They then purchase, provide feedback, exhibit INFORMATION time to complete. The next pages provide insights to help you loyalty, and advocate for a brand through similar channels. www.blueridgepartners.com ensure your revenue engine responds when your time comes for email@example.com • Digital Marketing allows consumer companies to build brand awareness and eq- phone 703-448-1881 powering out of the curve. of the consumer purchase journey and e-commerce allows uity at the early stages these companies to acquire customers and earn loyalty at the later stages.
Some Revenue Engines Were Weak Even Consumer Purchase Journey Worse, Your Customers Have To Make Things Before the “Braking” Began Likely Changed in the Last 12 Months Old weaknesses in your revenue engine didn’t get fixed It seems reasonable to assumeExhibit customers Provide that your during the slowdown. These weaknesses are hibernatingPurchase differently than they did a year ago. Their Advocate Consider Evaluate think Feedback Loyalty world has and waiting to become failure points when your revenue changed dramatically, just like yours. When you try to Digital Marketing: e-Commerce: engine starts to rev up again. awareness and equity Build brand Here are a few examples we power out of the curve, you need to understand what’s Consumer acquisition, conversion, loyalty have seen recently: the same and what’s different in your primary customer Search • Keywords • Search rank • Clicks u Sales and marketing believe they know why they win/ markets. lose but their beliefs are inconsistent with what new u Are all customers more price sensitive or just certain Display • Impressions • Clicks • Conversion customers and lost prospects tell us segments? • Likes • Tweets • Blog Posts uSocial The sales force sells features(name/contact) not business • Prospects and functions u Have buying preferences and decision factors • Likes • Tweets • Blog Posts solutions and business value (ROI) changed? Are customers expecting a different value Mobile • Impressions • Clicks • Conversion u Customer segmentation is very rudimentary and proposition?Conversion Rate • Messages • Sales • therefore not helpful in optimizing resource allocation • Impressions • Read • Clicks u Have buying decisions for your products/services been E-Mail • Conversion • Messages or making the best pricing decisions elevated to a more senior buyer within your customer’s u Websales pipeline is full of oldPage views •low probability The • Unique visitors • leads and Time organization? • Sales • Conversion Rate • Messages leads—the pipeline is unusable for revenue forecasting u Has the ROI horizon contracted? Print • Impressions or evaluating the true condition of customer demand u Do customers have a different willingness to spend or Legend: u The bottom 25%Impressions •forceolacksathe skill, the Direct Mail • of the sales Resp nse r te different investment agenda? • Conversion will or both to be successful On-line Media u Has the perception of your company • Sample Metrics changed? Broadcast partners are not adequately supported with u Channel • Impressions The perception of Traditional Media competitors? • Sample Metrics tools and messaging to optimize their performance u Have competitors changed their messages, tactics, Proprietary and Confidential products, pricing? Is this resonating with customers? 12. Former concepts of customer definition, segmentation, targeting, conversion, a company tell if its revenue longer suf- So, how can customer service and loyalty are no ficient. Previous methods of gathering consumer and market data and insights do not provide the factual depth and timing required to respond to changing demand and/or shopping behavior. engine is ready to go when the time comes to power out of the curve? • Consumer demographics, personas, price sensitivities and channel preferences need to be understood to effectively target con- sumers for specific categories and products. Based on our work with nearly 200 companies, Blue Ridge Partners has prepared the following checklist • Monitoring and responding to social conversations and postings is critical to developing, growing and maintaining brand equity. for making sure you are ready. • Forecasting online growth must be thought of in terms of online addressable market size, segmentation, cost and time to acquire new consumers, trends and competitive threats. • Consumer companies need to develop actionable insights about their target market in a rigorous and ongoing way to effectively keep their hand on the pulse of changing consumer trends and behavior3. Many consumer companies have transformed themselves from straightforward B2B business models to a much more complex B2B and B2C combination. This change has also opened up more complex channel relationships requiring different financial and incentive arrangements than earlier models. • Consumer companies now have the potential to sell not only through traditional distributors but also directly to consumers, but they struggle to create online scale and manage channel conflict. • New omni-channel marketing models offer a huge opportunity to create an end-to-end consumer experience. Integrating invest- ments across offline and online media can improve efficiency of spend, conversion rates and consumer loyalty. • Retailers are threatened by brands and e-tailers going direct to consumers. e-tailers have significant on-line scale and an ability to leverage analytic capabilities to mine consumer data for better targeting. • Competition is no longer limited by geography thereby creating margin pressure.
Digital enables, for the first time, closed loop analytics and rapid, the first time, closed loop Digital enables, for response-driven adjustments Marketers are accelerating the use of marketing analytics to allocate media investments analytics and rapid, response-driven adjustments Some Revenue Engines Were Weak Even based To Make Things Worse, Your Customers Have across traditional and digital channels upon each channel’s demonstrated ability Before the “Braking” Began to influence consumer decision-making at each stage Changed in the Marketers are accelerating the use of marketing analytics to allocate mediaLast 12 Months Likelyalong the Consumer Purchase Journey. investments across traditional and digital channels based upon each channelÕ s demonstrated ability to Old weaknessesinfluence consumer decision-making at each stage along the Consumer Purchase Journey in your revenue engine didn’t get fixed It seems reasonable to assume that your customers during the slowdown. These weaknesses are hibernating think differentlyConsumers did a year ago. Their world has than they Target Consumers Analyze Results • Who are my best consumers? Target and waiting to become failure points when your revenue • Closed loop marketing changed dramatically,best consumers? When you try to • Who are my Ijust more yours. like them? like • Where do nd consumers engine starts to rev uptoagain. Here are a few examples we Analyze Results measure analytics power out • Wherecurve, you need to understand what’s of•the do I Ifind more consumers like them? How do reach them? • Closed loop against performance have seen recently: marketing • How do I reach the same and what’s they them? in your primary customer different objectives • How they respond? • How do do respond? analytics to measure • How manyagainst Who? leads? u Sales andperformance believe they know why they win/ marketing • What are the best channels / methods / markets. • What are the best channels / methods / Which channels? objectives messages to to drive the desired behavior? messages drive the desired behavior? • How many are inconsistent with what new ConsumersAre all customers more price sensitive or just certain lose but their beliefscustomers? u Target Consumers Target • How many leads? Who? Who? What did they customers and lost prospects tell us Which channels? did they purchase? How segments? Plan Campaign Plan Campaign • How many customers? Who? functions not business u Have buying preferences and decision factors purchase? How much did u The sales force spend? sells features and The image cannot be displayed. • What my desired, • What are are my desired, measurable Your computer may not have enough memory to open the image, they What did they purchase? or the image may have been corrupted. Restart your computer, solutionsHow didmanypurchase? (ROI) and business value changed? Are customers objectives for thedifferent value measurable expecting a objectives for the campaign? and then open the ﬁle again. If the • How they customers red x still appears, you may have to delete the image and then insert it again. repurchased? Which How much did they spend? AnalyzeResults Analyze Results • How do campaign? I best achieve these proposition? • How do I best achieve these Plan Campaign u Customer segmentationmuch did rudimentary and Plan Campaign • How many customer is very customers? How objectives? objectives? they spend? How much thereforerepurchased? Whichoptimizing resource allocation not helpfulmade from profit have I in u Have buying decisions for your products/services been or making the customer?muchdid customers? How much this best pricing decisions they spend? How elevated to a more senior buyer within your customer’s • t have I made from on proWhat was my return old leads and low probability this organization? Execute Campaign u The sales pipeline is full of marketing investment? • Deliver campaign messages / offers to customer? Execute Campaign • What was my is unusable for revenue forecasting u Has thetargeted consumers leads—the pipelinereturn on Execute Campaign the ROI horizon contracted? or evaluating the true condition of customer demand Campaign Do customers have a different willingness to spend or marketing investment? Execute u • Deliver campaign messages / o ers to the4. FewThe bottom capturethe sales force lacks the skill,the level of detail and frequency toagenda? real-time “campaign level” u companies 25% of online performance data at the different investment allow near targeted consumers Proprietary and Confidential 2 course correctionsbe maximize ROI. will or both to Confidential Proprietary and to successful u Has the perception of your company changed? 2 •u Channel partners are not adequately supported with to understanding onlineof competitors? profitability. This would Capturing the right data at the right frequency is essential The perception performance and include: marketing costs, customer acquisition and conversionu Have competitors changed their messages, tactics, time on tools and messaging to optimize their performance costs and rates, repeat buy/loyalty, site visits, page views, site, purchase frequency, online reviews/consumer sentiment, margin, etc. products, pricing? Is this resonating with customers? • To maximize revenue growth and profitability consumer companies will need to draw insights from performance data through best-in-class tools, data capture strategies, and comprehensive analytics at speeds never before attempted. So, how can a company tell if its revenue • Digital marketing data capture strategy enables closed loop analytics and quick, response-driven adjustments for the first time. engine is ready to go when the time comes to Delivery of actionable insights to key decision makers in a rapid and ongoing process can mean the difference between efficient online growth and costly stagnation power out of the curve? Based on our work with nearly 200 companies,5. Dramatically different skills, organizational models and partnerships are essential has prepared the following checklist Blue Ridge Partners to grow profitably in the digital market- place. for making sure you are ready. • Successful e-commerce businesses manage change quickly and make innovation a priority. The profile of team members who can thrive in this environment needs to be clearly understood and nurtured. • Making good in-house versus outsourcing decisions can significantly affect revenue and profitability. Deciding what skills are required in-house, where they can be sourced and how they should be developed is a critical component of any online business sourcing strategy. • Collaboration with channel partners to achieve synergistic and risk-mitigated growth is key. Leveraging partners strengths and resources can be a cost effective way to drive innovation and differentiation for both organizations and mitigate risk. Our ApproachEach of these interrelated truths represents a challenge to consumer leaders. Our approach to helping clients meet these challenges Digital Growth Roadmap:involves fact gathering, analysis and insights to answer questions is a series of six steps, each building on answers from previous steps, to How do we help our clients grow online share?develop new competitive models for digital marketing and e-commerce that drive accelerated revenue growth. Diagnose Identify Develop Define Priorities Plan Define Success Performance & Customer Digital & Funding Implementation Measures & Benchmark Segments Strategy Sources & Org. Training Key Metrics How is my Who are my What strategy should I How will I fund this How should I be How do I measure organization consumers? employ, channels and path to achieve organized and what success? performing in the • Demographics? tools should I use, maximum results? skills do I need to • Yearly, quarterly,
Increasing Revenuecritical questions in at Over 150 Hotels (cont.)We help our clients answer Performance each of the six steps including: Diagnose Company Performance and Benchmark Against Competition –Tools we the company performing in the digital marketplace today? How is used to improve their revenue growth • Relative to overall market share? • Growth? u Behaviors of High Performing Revenue En- 100 u Nine Voices of the Market™ to gather data on • Relative to competition? • Profitability? gines™ as the basis for measuring sales perfor- actual sales personnel performance • Quantitatively? • Consumer experience? mance and identifying gaps between current and • performance (see below) Qualitatively? u Comparative• Loyalty? charts to motivate performance desired improved performance (see below)u Performance standards and benchmarks to evalu- Identify Customer Segments – u Periodic reports to track performance trends ate absolute and relative performance within and Who are the customers and what are their values? over time across properties and brands • Demographics? • How do they consume content? • Likes and dislikes? • Shopping vs. buying? • Households? • Across brands? Online vs. mobile vs. social? Brand operator performance report • Personas? • Are they loyal? • What is their price sensitivity Develop a Digital Strategy – What are the possible scenarios to evaluate – channels and tools to use: partners to arrange; etc.? Selling the property Being available and • How can the scenarios be “pressure tested” for significance, attainability and risk? Providing a quality Handling schedule prospect’s needs Handling pricing Making the sale • How fast can, and should, the company proceed? on outstanding Undesrtanding professionally Following up • How can the company message and address potential channel conflict and threats with existing distributors/partners? responding objections proposals proposal conflicts How will the strategy change over time as the addressable consumer base grows? Determine Priorities and Funding Sources – Brand 1will the company fund this path to achieve maximum results? How Brand 2 Offline ad spend? • Brand 3 Optimize Trade spend? • Brand 4 Co-op dollars from partners to fund innovation that benefits both parties? • Brand 5 Plan for Implementation and Organizational Training – How should the company be organized relative to digital marketing and e-commerce and what skills are needed to maximize perfor- mance? Below Expectations Meets or Exceeds Expectations • Which should be in-house and what should be outsourced? • How relevant are the skills in house today? • Who and how should the company hold people/partners accountable? Examples of poor performance we identified Only 28% of properties were Model Performersu Define Measures of Success and Key Metrics – u Only 50% of the properties developed acceptable and 32% Iwere verysuccess? expectations How do measure far below proposalsu 25% ofBy media, brand, division, category, path to purchase, campaign? At • properties, it was difficult to even make u 50% of the properties failed to satisfactorily • By customer acquisition, traffic, page views, conversion, loyalty, consumer sentiment, margin, abandoned carts, referral rates, cost contact with a Group Sales representative follow-up on outstanding proposals - i.e., failed of acquisition, cost of conversion? to make a follow up phone call to the prospectiveu 50% of properties did not adequately handle pric- • When should data be captured (annually, quarterly, monthly, daily) to facilitate prompt action? customer ing objectionsBy following our six step approach, we help clients identify pragmatic approaches and plans and then build world-class digital marketingand e-commerce operations to drive profitable revenue growth.If you aren’t seeing superior growth inlike assistance in successfully meeting the challenges of this Contact us if you would profitable revenue, contact us for an actionableevaluation of your company’s revenue engine. dynamic marketing and selling environment.1350 Beverly Road, Suite 115 • McLean, Virginia 22101 • www.blueridgepartners.com • firstname.lastname@example.org • phone 703-448-1881