About business, planning, startups, digital marketing, management, futurism, and other braindrops by Octavian Mihai, marketing executive and entrepreneur, New York City
Some notes regarding digital strategic planning, data & tactics. Will detail them in the next posts. This might seem complicated. Strategy is about asking the right questions, having the right data and setting the right priorities. Those who take shortcuts on strategy are just lousy tacticians.
This is a post about the importance of numbers and data when doing strategic planning.
We’ll look into :
– How to Calculate the Investment in your Business Objective Based Marketing Program
– What data we need to gather in order to create a successful digital plan and strategy
– The Programs that could be associated with this business objective
A FICTIVE CASE STUDY
Say the board of a mobile company decides that one of the business objectives is to Increase the Customer Recommendations by 20% in the next 12 months.
Assume the we are talking about direct and influent recommendations (for instance as a response to a personal query “Do you like your phone? Should I buy one?”; a mere Facebook like won’t be considered a recommendation). Also this is not an exercise in online ads (ppc, etc.). We stay focused on the business objective.
SOME BASIC FICTIVE DATA
Gather all the necessary business data.
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%
Business objective recommendation rate: 24%
Recommendation conversion rate: 50%
On average a customer recommends 2 people.
4% increase in recommendations results in 2×2% increase in new clients (24K).
At a 30% churn rate over 3 years we end up with 24K+16.8K+11.8 = 52K
Calculate for the new Customer recommendations + respective churn, cca 1.5K
So the increase program will generate in net profit about 53.5K consumer years or $10.7M over 3 years.
Say invest 20% of the potential profitability. That will generate an additional investment of 1.7M/year in the Recommendation program for a $9M profit. (I would keep this number for now and adjust it once the exact operations are determined. see Programs).
KPIS
Determine the KPIs
20% increase, from 20% to 24%
12 000 more customers to recommend the product to an average of 2 people
24 000 new customers
Investment $1.7M
Estimated net profit: 9M.
Of course assuming that profitability, consumer churn, recommendation rate and conversion stay the same.
REVIEW
In conclusion:
We have 600K consumers
120K will already recommend the product
We need to get 12K more existing consumers to recommend and we have $1.7M ($142 per recommending customer or $71 per recommendation).
OWNED MEDIA CHANNELS
Gather more data by listing all the current owned eco-system.
Facebook page 100K fans (98% customers) with 8% engagement (8K fans interact every month)
Customer newsletter 20K subscribers with 20% open rate (4K customers)
400K print invoices / month + 200K electronic invoices
300K website visits from existing customers over the year (50% will come to the website)
50K Twitter followers with 2% engagement rate (1K)
40K have the mobile app
20K in store visit from existing customers.
EXISTING MARKETING CALENDAR
Analyse the existing marketing calendar and media plan.
Q1 & Q3 Digital & Social media engagement campaigns
Q2 Digital notoriety campaign
Q4 Global all platforms new product launch
Monthly social media contests / campaigns (by topics: Customer care, Client recommendations incentives, FB community building, etc)
IT’S ALL ABOUT DATA
Ask the right questions. Get more data.
Having the right data is crucial. Any answer the following questions has the power to change the digital strategy.
Do we know who are the customers who already recommend?
Do we know what the customers who make recommendations have in common? (product, service, customer experience?)
Do we know to whom they are recommending the product? (friends, family, etc?)
Are the customers who make recommendations proportionally represented over social media?
Can we assume that 20% of the 8K who interact on Facebook already made a recommendation? Or are they more around 40%?
STRATEGIC CONSIDERATIONS
Once the right data is gathered the strategy writes itself.
Understand the target audience (the consumers who haven’t recommended the product yet, but are very disposed to do so)?
On what channels are they most active?
Create the tools / mechanisms for them to quickly recommend should they want to
Develop a value proposition
Tailor a creative advertising solution
Determine the types of operations / campaigns
Integrate them in the existing marketing calendar
Set up a monitoring solution
Plan for at least one or two cycles (to have an opportunity for improvement)
Execute, monitor, optimize
PROGRAMS
Determine if you have all the prerequisite programs in place.
I have started the post by defining the business objective to Increase the Customer Recommendations by 20% in the next 12 months. Now we want to attach some of the previous programs to the business objective.
What are the prerequisite programs that the client needs to have in place before tackling this objective? It all depends on what digital properties will play a role. However some of them are pretty essential.
Digital business model and objectives 101 – having a digital business model, objectives, business cases Digital analytics & monitoring 101 – determine the reporting format, and the necessary data to collect and analyse Digital and social media framework strategy and implementation 101 – determine and implement the optimal digital eco-system Social media policies & governance – produce, legally approve and publicize the policies, terms and rules Community building and engagement 101 – develop monitoring, operations and content plans to build the social media community and its engagement
Social CRM 101 – have implemented a social CRM solution that along with the digital analytics and monitoring system will provide the proper strategic insights and support the campaigns
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This post went a bit too long and I hope you were able to follow. I have left out a bunch of small details and consideration, however I hope it was insightful. Looking forward to your comments.
This is the second set of note regarding the social media framework I’m building with Rock&Social.
In the previous post we have defined Business Objectives, now we want to define a set of digital and social media Programs that will be used to answer specific objectives. In a subsequent posts I will link specific business objective with a series of tracks, and later on detail each track from a planning perspective (timelines, budgets, strategic impact, etc.).
Following is a list of digital programs (in no particular order). The 201, is a more advanced version of the 101 and usually has several other programs as prerequisites. Essentially, the goal of this framework is to create an easy model of detecting digital planning solutions to business objectives.
See the programs as iterative projects (or operations), in need of regular monitoring and update in order to attain the business objectives.
DIGITAL AND SOCIAL MEDIA PROGRAMS
Digital business model and objectives 101, 201 Optimize the business model to include the digital and social opportunities. Determine the business objectives, metrics, success business cases and acquire business leaders’ approval. Approve the budget and the roadmap to attain the determined business objectives.
Social business culture 101, 201 Determine the roadmap for creating a social business culture
Digital planning and social operations 101 Determine how the digital and social objective will be accomplished – internal operations, external operations, budgets, planning, etc.
Social media policies & governance 101 Create the social media policies and regulations, legal approvals, determine the stakeholders, etc.
Digital analytics & monitoring 101 Get the right tools and procedures in place – determine the reporting format, create a crisis plan, stakeholder analysis
Digital and social media framework strategy and implementation 101, 201 Ensure all the digital is strategically connected and optimized
Sales funnel 101 Set up sales funnel strategy and tools, include the digital and social to the existing sales funnel.
Build community 101, 201 Determine the community platform (FB, forum, subreddit), community building tactics, promotional, newsletters, convert current consumers, community value proposition (push&pull)
Build community engagement 101, 201 Content planning, community management, tactics and metrics
Likeliness to recommend 101, 201 Determine the factors that influence the likeliness to recommend, implement the proper tools, and develop the communication program to increase L2R.
Social brand awareness building 101 Determine the factors that influence the brand awareness, benchmark against competition, monitor and implement the necessary advertising campaigns to build awareness.
Customer social support 101, 201 Build the customer support processes and implement a technological solution, provide a training program.
Social CRM 101 Create customer relationship objectives, procure and implement a technological solution, provide a training program.
Create a social media department Validate the business needs, plan, fund, build a social media department.
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The previous programs are examples meat to create a better understanding of what it takes to attain a specific business objective. More in the following post.
