7 steps to digital marketing strategy

DIGITAL MARKETING
STRATEGY GUIDE
Your companion to creating or updating
your online channel strategy
Authors: Dr Dave Chaffey and Danyl Bosomworth

Managing digital
strategy
Understanding
your ecosystem
'H¿QHRXU Targeting Proposition
future
Getting new
customers
Keeping customers
loyal
Digital Marketing Strategy
Seven Steps to Success Guide
Contents
04 Introduction Convincing others you need a strategy
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19 Step 2 Understand your ecosystems
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40 Step 4 Strategy: Targeting
47 Step 5 Strategy: Proposition
56 Step 6 Strategy: Getting New Customers
72 Step 7 Strategy: Keeping customers engaged and loyal
7 Steps to Digital Marketing Strategy

© Smart Insights (Marketing Intelligence) Limited. Please go to www.smartinsights.com to feedback or access our other guides.

Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

3
About our 7 Steps digital marketing guides
How will the guides help me?
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pressure to get results, so they’re written to help you do just that. They take you through the ques-
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; Improve results$IRFXVRQJHWWLQJWKHEHVWUHVXOWVIURPRXUGLJLWDOPDUNHWLQJ
; Review your current approach$XQLTXHZRUNERRNIRUPDWKHOSVLGHQWLISULRULWLHV
; Apply analytics,QHJUDWHGDGYLFHRQXVLQJ*RRJOH$QDOWLFVWRLPSURYHSHUIRUPDQFH
; Learn best practice. Strategy recommendations and practical tips highlighted throughout.
Who are the guides written for?
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or campaigns like search, email or social media marketing. This is how our guides are designed to
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can invest in the approaches that matter. We help you set goals and put in place a system to
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; Digital marketing specialists:KHWKHURXZRUNRQVRFLDOPHGLDPDUNHWLQJ6(233
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you review and improve your approach.
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Guide features
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Tell us what you think
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email: support@smartinsights.comZLWKRXUFRPPHQWVJRRGRUEDG,QSDUWLFXODUZH¶UHLQWHUHVW
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Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

4
Introduction
Convincing others you need a strategy
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strategy at all. 0DQRUJDQLVDWLRQVDUHGRLQJGLJLWDOPDUNHWLQJEXWIHZKDYHDVWUDWHJ7KDW¶V
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Well, we’ve seen many companies, large and small who get this wrong. Rather than strategy,
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coherent plan.
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Strategy Recommendation 1 UHDWHDVSHFL¿FGLJLWDOPDUNHWLQJSODQ
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Strategy Recommendation 2 (QVXUHRXUSODQLVLQWHJUDWHG
Although you need a separate digital plan to help you create a strategy it’s important to
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Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

5
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plan:
Our top 10 reasons why you DO need a digital strategy
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: 1. You’re directionless. :H¿QGWKDWFRPSDQLHVZLWKRXWDGLJLWDOVWUDWHJDQGPDQ
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don’t have goals you likely don’t put enough resources to reach the goals and you don’t
evaluate through analytics whether you’re achieving those goals.
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enough resources to digital marketing or you’re using an ad-hoc approach with no clearly
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: 4. You don’t have a powerful online value proposition$FOHDUOGH¿QHGRQOLQH
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: 5. You don’t know your online customers well enough. ,W¶VRIWHQVDLGWKDWGLJLWDOLVWKH
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points and then address them.
: 6. You’re not integrated. ,W¶VDOOWRRFRPPRQIRUGLJLWDODFWLYLWLHVWREHFRPSOHWHGLQ
silos, whether that’s a specialist digital marketer, sitting in IT or a separate digital agency.
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traditional media and response channels.
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: 8. You’re wasting money and time through duplication. (YHQLIRXGRKDYHVXI¿FLHQW
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: 9. You’re not agile enough to catchup or stay ahead. ,IRXORRNDWWKHWRSRQOLQH
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approaches to gain or keep their online audiences.
: 10 You’re not optimising(YHUFRPSDQZLWKDZHEVLWHZLOOKDYHDQDOWLFVEXWPDQ
senior managers don’t ensure that their teams make or have the time to review and act

Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

6
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email and social media marketing.
What is a digital marketing strategy?
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Strategy Recommendation 3 'H¿QHWKHVFRSHDQGODEHOOLQJRIGLJLWDOVWUDWHJ
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online sales
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on improving internal processes and integrating with channel partners
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catalogue phone sales.
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services and content.
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online channels and other channels.
; Support integration between channels. Although you want to emphasise the

Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

7
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proposition apply.
What should go into a digital strategy?
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Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

8
Using this digital marketing strategy guide with other resources
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5HFRPPHQGHGUHVRXUFH Digital marketing strategy toolkit template
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Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

9
1
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create your strategy.
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interact with them.
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SOSTAC®LVDVWUDWHJLFSODQQLQJSURFHVVIUDPHZRUNWKDWJLYHVRXDFOHDUVWUXFWXUHWRZRUN
through to create and manage your plan.
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Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

10
1
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7KHHOHPHQWVRI6267$® planning to help develop digital marketing strategy are:
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setting in Step 3.
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in this guide.
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Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

11
1

Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

12
1
5HFRPPHQGHGUHVRXUFH 6267$Š±5$(UHYLHZWHPSODWH
The Smart Insights digital marketing toolkit contains a one page SOSTAC® Word template
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company, Perfect Lawn:HVXJJHVWRXDSSOWKHVHWHPSODWHVVSHFL¿FDOOWRWKHPRELOH
channel
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Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

13
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to strategies and KPIs:
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Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

14
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Key components of digital strategy
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Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

15
1
5HFRPPHQGHGUHVRXUFHWord Strategy planning template
The Smart Insights digital marketing toolkit contains a Word Strategy planning template.
This is a simple template using the SOSTAC® planning headings and prompts to help you
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A. Targeting and segmentation
ˆ A company’s online customers have different demographic characteristics, needs and
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lifecycle and behavioural personalisation.
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the customer sees immediately when they interact with you online.
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C. Proposition and the marketing mix
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through varying the 4Ps online through Product, Price, Promotion and Place and how
can you add value through service. And don’t forget what PR Smith calls the Eighth P of
“Partnering”
Particularly if you sell online, you will want to explain how you will modify the marketing mix.
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ˆ Product. Can you offer a different product range online. How can you add value to
products through additional content or online services?
ˆ Price. Review your pricing and consider differential pricing for online products or
services.
ˆ Place. Identify your online distribution issues and challenges. Should you create new
intermediaries or portals or partner with existing sites?
ˆ Promotion. Discuss the problems and opportunities of the online communications mix.

Managing digital
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Understanding
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Getting new
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Keeping customers
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These will be detailed in the acquisition and retention communications strategies. Review
approaches for online promotions and merchandising to increase sales. You may want to
include exclusive promotions to support the growth of different digital channels, i.e. email,
mobile, Facebook, Twitter.
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ˆ Processes. List the components of process and understand the need to integrate them
into a system.
ˆ Physical evidence. Identify the digital components that give ‘evidence’ to customers of
your credibility such as awards and testimonials
ˆ Partners. The eighth P. So much of marketing today is based on strategic partnerships,
marketing marriages and alliances that we have added this ‘P’ in as a vital ingredient in
today’s marketing mix.
D. Brand strategy
Gaining ‘street cred’ online is now paramount to success, how and where are you going to do
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to engage with your brand, why will people interact and recommend, or not? How will you
demonstrate credibility online
E. Online representation or presence
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smartradar) helps you prioritise your online presence to reach and engage your audience.
F. Content and engagement strategy
Ask which content will feature to gain initial interest, support the buying process (text and
rich media product content and tools) and stickiness and to promote return visits (blogs
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to it to create quality content which helps you compete. All effective online companies see
themselves as publishers!
G. Digital channel acquisition communications strategy
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Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

17
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H. Digital channel conversion strategy
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I. Digital channel retention communications strategy
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J. Data strategy
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what tools and value adds are you going to use? You might alternatively reference these in
the conversion strategy. Some of the practical implications here are covered in steps 6 and 7.
How do you improve the quality of your customer data across channels to help increase the
relevance of your messages through personalisation
K. Integration strategy
How you integrate traditional and digital channels should run through every section of your
strategy since it’s key to success. One way to structure this is to map customer journeys
across channels as channel chains.
L. Social media marketing strategy
We would argue that social media marketing is part of a broader customer engagement
strategy plus brand, acquisition, conversion and retention strategies, but many organisations
are grappling with how they get value from this, so it may help to develop an overall social
media marketing strategy.
M. Digital marketing governance strategy
In larger organisations how you manage digital marketing is a big challenge. Questions
that the governance strategy seeks to answer are how do we manage internal and external

Managing digital
strategy
Understanding
your ecosystem
future
Getting new
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Keeping customers
loyal

18
1
resources through changes to structures and skills needed for digital and multichannel
marketing.
Benchmarking your capabilities compared to your competitors
ˆ Q. Marketing capabilities scored and compared to competitors
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the plan.
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; Level 1. Unmanaged.
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more investment in digital marketing. These are:
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company in 6 key areas. More suited to larger organisations.
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Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
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5S: Sell – Set goals to grow sales?
ˆ Q. Sales goals set
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Managing digital
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Getting new
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28
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ˆ Q. Conversion model used to calculate realistic targets for goal volume
Strategy Recommendation 11 Develop conversion models to set
realistic online channel goals
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A conversion model helps set quantitative targets to hit. Use this spreadsheet we have
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ˆ Q. Options to extend reach reviewed
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RSSRUWXQLWLHV8VHEHQFKPDUNLQJDQGVHDUFKGHPDQGWRROVWRSURYHKRZLW¶VSRVVLEOHWR
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See:KWWSELWOVPDUWEHQFKPDUNLQJ and KWWSELWOVPDUWGHPDQG.
Review options to increase sales through conversion enhancements
ˆ Q. Options to increase conversion rate possible

Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

29
3
:HKDYHVDLGLW¶VZRUWKORRNLQJDWKRZWRDGGPRUHSURVSHFWVWRWKHWRSRIWKHIXQQHOEXW
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ˆ Q. 6HSDUDWHJRDOVDQGWUDFNLQJGH¿QHGIRUQHZDQGH[LVWLQJFXVWRPHUV
7RPDQDJHRQOLQHVDOHVLW¶VXVHIXOWRLVRODWHLQFUHPHQWDORQOLQHVDOHVDQGQHZVDOHV
Keeping incremental sales volume trending right is most important. You can use analytics or
ecommerce sales systems to deliver this insight.
Tracked goals through analytics
ˆ Q. *RDOWSHVDQGYDOXHGH¿QHGLQDQDOWLFV
:HKDYHDPRUHGHWDLOHGVHFWLRQH[SODLQLQJKRZWRGRWKLVLQRXUJXLGHWR*RRJOH$QDOWLFV
or online here2.
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6DOHVPLJKWEHGLUHFWLIWKHSURGXFWFDQEHVROGRQOLQHRULQGLUHFWZKHUHWKHDUHJHQHUDWHG
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Strategy Recommendation 12(QVXUHRXUJRDOVHWWLQJUHÀHFWVFKDQQHOVZLWFKLQJ
Users switch channels during the purchase process, so make sure you set goals,
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2 Smart Insights: Set goals in Google Analytics
3 *).5RSR9RGDIRQHPXOWLFKDQQHO5232VWXG

Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

30
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5S: Speak – Set goals to get closer to customers
ˆ Q. RPPXQLFDWLRQVJRDOVGH¿QHG
'LJLWDOFKDQQHOVDUHQRWRQOVDOHVFKDQQHOVWKHH[FHODVFRPPXQLFDWLRQVFKDQQHOVWR
engage your audience. We say engage since we don’t mean SHOUTING, we mean getting
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Managing digital
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Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

31
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5S: Service – Have we set goals to online customer service goals?
ˆ Q. Are goals set for customer care, service and satisfaction?
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customer service.
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VHUYLFHDQGWKHQLPSURYHLWIXUWKHU
*LYHFXVWRPHUVH[WUDEHQH¿WVRQOLQHDQGJXLGHQHZSURGXFWGHYHORSPHQWZLWKRQOLQH
GLDORJXHDQGIHHGEDFN7KHUHDUHORWVRIH[FHOOHQWWRROVZHOLVWDWKWWSELWOVPDUWIHHGEDFN.
Strategy Recommendation 14%XLOGLQIHHGEDFNPHFKDQLVPVWRRXUVLWHV
*HWIHHGEDFNRQRQOLQHH[SHULHQFHDQGH[SHULHQFHRIWKHEUDQGLQWRRXUVLWHDQGWKHQ
prioritise and improve.
5S: Save – Set cost-saving goals
ˆ Q. Goals set around cost savings?
/HVVJODPRURXVWKDQWKHVL]]OHRIEXLOGLQJRXUEUDQGDQGVRFLDOPHGLDHQJDJHPHQWEXWRX
can also show the value you gain through using online cost savings to reduce service costs
and save on traditional media like print and post.
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channels.
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¿QDQFHGLUHFWRURUEXGJHWKROGHUZLOOLPSURYHRXUFDXVH

Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

32
3
5S: Sizzle – Adding value to your brand online
ˆ Q. Goals set for brand engagement and advocacy
3XWWLQJWKHVL]]OHLQWRRXUGLJLWDOPDUNHWLQJZLOOUHDOOKHOSRXUVDOHVDQGVSHDNJRDOVEXW
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3URYLGHWRROVWRVXSSRUWDQGWUDFNYLUDOVKDULQJDQGUHFRPPHQGDWLRQVDERXWRXUEUDQG
You will also want to track positive and negative sentiment.
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marketing channels?
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Managing digital
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your ecosystem
future
Getting new
customers
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loyal

33
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You will also want to track positive and negative sentiment.
RX¶UHSUREDEOWKLQNLQJ‘we’ve already got a corporate mission statement that everyone
SRNHVIXQDWVRZKZRXOGZHZDQWWRGH¿QHDYLVLRQVWDWHPHQW¶RUµwhy should we bother?
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online channel as a whole and how online analytics will support it.
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; 6KRZKRZGLJLWDOPDUNHWLQJRU(EXVLQHVVFDQWUDQVIRUPRXURUJDQLVDWLRQLQWKHIXWXUHLI
you innovate and invest
; 6KRZZKHUHRXQHHGWRIRFXVRXUHIIRUW±LVLWFXVWRPHUH[SHULHQFHDQGVHUYLFHWREXLOG
ORDOWRUDUHRXDOVRORRNLQJWRH[SDQGRXUUHDFKLQWRQHZPDUNHWV
; (QHUJLVHFROOHDJXHVEVKRZLQJWKHIXWXUHSRWHQWLDORIGLJLWDOPDUNHWLQJDQG
communicating that it’s a strategic priority through a senior manager or director who is a
VSRQVRURIGLJLWDOPDUNHWLQJ
; Set top-level goals without going into detailed KPIs.
:H¶UHQRWWDONLQJDERXWPLVVLRQVWDWHPHQWVRIZKDWRXUFRPSDQFXUUHQWOLVLQVWHDGD
YLVLRQLVDQLQVSLULQJLGHDOIXWXUHVWDWH$YLVLRQLVDOPRVWFHUWDLQOQRWJRLQJWREH
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/HW¶VORRNDWVRPHH[DPSOHVRILQVSLULQJYLVLRQVWDWHPHQWVWDNHQIURPWKH866(¿OLQJVIRU
these companies:
; Amazon.com
Our vision is to be earth’s most customer centric company; to build a place where people
FDQFRPHWR¿QGDQGGLVFRYHUDQWKLQJWKHPLJKWZDQWWREXRQOLQH.
; Dell
Dell listens to customers and delivers innovative technology and services they trust and
value.
; eBay
eBay pioneers communities built on commerce, sustained by trust, and inspired by
opportunity. eBay brings together millions of people every day on a local, national and
international basis through an array of websites that focus on commerce, payments and
communications.
4 Smart Insights: Dell case study

Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

34
3
; Facebook
)DFHERRNLVDVRFLDOXWLOLWWKDWKHOSVSHRSOHFRPPXQLFDWHPRUHHI¿FLHQWOZLWKWKHLU
friends, family and coworkers. The company develops technologies that facilitate the
VKDULQJRILQIRUPDWLRQWKURXJKWKHVRFLDOJUDSKWKHGLJLWDOPDSSLQJRISHRSOH¶VUHDOZRUOG
social connections. Anyone can sign up for Facebook and interact with the people they
know in a trusted environment.
; Google
Google’s aim is to organize the world’s information and make it universally accessible and
useful.
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WKHVH7KHPLVVLRQLVZKDWRXUFRPSDQFXUUHQWOLVDYLVLRQLVDQLQVSLULQJLGHDOIXWXUH
state.
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goal-setting guide.
Some examples of vision statements for digital channels
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; [[
; /DUJHVWRQOLQHDXGLHQFHVKDUH1R

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WRDIULHQG
; LQFXVWRPHUVHUYLFHFRQWDFWVZLOOEHHOHFWURQLFE;;;;
Best Practice Tip 5 6HW%+$*³%LJ+DLU$XGDFLRXV*RDOV´
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mission statements.
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EXWHPSKDVLVHVWKHVWUDWHJLFIRFXV
³Our digital channels will make it easy for shoppers to ¿QG, compare and select products
using a structured approach to merchandising and improving conversion to produce an
experience rated as excellent by the majority of our customers.´
'LIIHUHQWDVSHFWVRIWKHYLVLRQVWDWHPHQWFDQWKHQEHH[SDQGHGXSRQZKHQGLVFXVVLQJZLWK
colleagues, e.g.
; Digital channels WKHZHEVLWHVXSSRUWHGEHPDLODQGPRELOHPHVVDJLQJ
; Find LPSURYHPHQWVWRVLWHVHDUFKIXQFWLRQDOLW
; Compare and select = Using detailed product descriptions, rich media and ratings
5 6PDUW,QVLJKWV%+$*H[DPSOHV

Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

35
3
; Merchandising and improving conversion 7KURXJKGHOLYHURIDXWRPDWHGPHUFKDQGLVLQJ
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$GGLWLRQDOOXVHRIVWUXFWXUHGWHVWLQJWHFKQLTXHVVXFKDV$%WHVWLQJDQGPXOWLYDULDWH
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site
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channel integration.
Best Practice Tip 6 'H¿QHDVLPSOHODEHOZKLFKWULJJHUVWKHIRFXVRQGLJLWDODPRQJVWRXU
colleagues
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; Digital by default
; Digital First
; Digital DNA
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improvement framework for digital marketing
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Strategy Recommendation 16'H¿QHWKHULJKWPHDVXUHPHQWIUDPHZRUNDQGGDVKERDUGV
RXFDQ¶WPHDVXUHHYHUWKLQJIDUIURPLW6RGH¿QHWKHPHDVXUHVDQG.3,VWKDWRX
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³If you have $100 to make smart decisions on the web, invest $10 in tools, spend $90 on
people. This is the 10/90 rule.´

Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

36
3
Strategy Recommendation 17,QYHVWVXI¿FLHQWWLPHLQWKHSHRSOHSURFHVVDQGWRROVWR
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ˆ Q. 7KHUHLVDGH¿QHGPHDVXUHPHQWIUDPHZRUNWRUHYLHZDQGWDNHDFWLRQ
ˆ Q. Our KPIs are aligned to business success
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ˆ Q. 2XUPHDVXUHPHQWIUDPHZRUNLQFOXGHVWKHULJKWHI¿FLHQFPHDVXUHV
ˆ Q. Our measurement framework includes the right effectiveness measures
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improve results.
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Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

39
3
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Managing digital
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your ecosystem
future
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customers
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40
4
Step 4
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communications you’re dead in the water.
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your audience:
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Managing digital
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your ecosystem
future
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customers
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41
4
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micro-targeting

Managing digital
strategy
Understanding
your ecosystem
future
Getting new
customers
Keeping customers
loyal

42
4
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7 steps to digital marketing strategy

7 steps to digital marketing strategy

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