Digital Business Planning Review
So far I’ve been trying to make the following points:
- The digital / social media planner and strategist role must have a very strong business component (metrics, analytics, and general business model understanding).
- Any strategy must support a business objective with clear KPIs
- Plan for one business objective at a time
- The above KPIs must result from a business case
- The execution of a business objective is subject to a series of prerequisite strategic programs
Business Objective -> Business Case -> KPIs / Metrics -> Program Maturity Model -> Prerequisite Programs -> Planning
From the previous example:
Increase the Customer Recommendations by 20% in the next 12 months.
Customer base: 600 000
Customer annual value: $1 000 (Annual revenue $600 000 000)
Customer annual net profit: $200 (Annual profit $120 000 000) (20%)
Customer annual churn: 30%
Current recommendation rate: 20%
Recommendation conversion rate: 50%
On average a customer recommends 2 people.
A 20% increase in recommendations (from 20% to 24%) = 4% increase in total recommendations at a 30% churn rate, both cumulative over 3 years = 53.5K customer years
So the increase program will generate in net profit of $10.7M over 3 years.
Determine a budget based on previous programs. Say $1.7M over one year.
KPI / Metrics
Increase by 24K new consumer recommendations for a $1.7M budget.
Program Maturity Model
Determine the maturity level by assessing the quality of current digital programs.
Let’s assume the client program review reveals the following programs maturity:
Digital business model and objectives – Level Advanced (needed Advanced)
Digital analytics & monitoring – Level Basic (needed Advanced)
Digital and social media framework strategy and implementation – Level Advanced (needed Advanced)
Social media policies & governance – Level Advanced (needed Advanced)
Community building and engagement – Level Basic 8% (needed Advanced 12-15%)
Social CRM – Level None (needed Basic)
Based on previous analysis here are the necessary programs needed to execute the business objective in a single strategy.
- Implement a more advanced digital analytics & monitoring solution
- Increase the community engagement from 8% to 12%.
- Implement a Social CRM
Now you’re ready to do the planning. And you have 3 new programs to implement…. And only $1.7M… Get ready to build more business cases and negotiate.
You cannot commit to the required business objective with deficient prerequisite programs.
More soon. Would love to hear from you, does this make sense to you?