4 Digital Principles

The 4 Elements
The 4 Elements

Here are a couple basic digital principles I try implementing whenever I head a digital group.

1.  Strategy integration

This is a concentrated effort to involve digital at the brand strategy and messaging level. A simple multichannel plan detailing what the optimal channels are and messages to reach the target audience is usually enough to provide some perspective and understanding.

2. Marketing automation

We ask : how can we leverage technology and automated processes to build efficiencies and eliminate redundancies and errors? This might include project management softwares and reporting, campaign tracking or implementation of holistic technology frameworks.

3. Analytics and performance

This one is a no brainer. Most agencies have some sort of analytics and performance KPIs. The emphasis should be put on creating top level dashboards, finding direct causation between the low level analytics and business KPIs and, of course, in building process cycle that will allow agile optimizations.

4. Actionable Innovation

Innovation is one of those words that doesn’t mean anything anymore. Whenever talking about innovation we should always ask “So what?”. What will the business impact be? How much will it cost? What is the ROI? Is this really innovative? Does it generate a competitive edge?

In order for an agency to thrive and be innovative, a simple innovation framework is usually implemented.

i. opportunity identified
ii. alignment with brand objectives
iii. detailed landscape and technology assessment
iv. innovative opportunity business model
v. integration with client workstreams

These principles are usually used as a soundboard to ensure we’re always on the right track.

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The 1001 Meanings of Digital Strategy

Conquering the known world
Conquering the known world [From the awesome http://www.ancient.eu ]
We’ve heard it over and over again. Everybody and their brother is a strategist (the digital ones are the worst. just kidding, the social media ones are the worst :)).  Usually in the business world when one doesn’t understand a competency he or she will add “strategy” after it.

Digital strategy can be interpreted in a myriad of ways.  Taking it from the top we have the digital business strategy.

A business model is just a mechanism that defines how a business can live and thrive. When we’re considering digital as an element of that business model we’re dealing with digital business strategy (the IT function is usually very involved at this level).

Digital Business Strategy answers questions like:  Can we use digital and technologies to optimize the business model? How does digital impact different business practices (sales, marketing, hr, production, etc)? 
In terms of KPIs: increase in sales, decrease of marketing and HR costs, optimized production, etc.

Digital marketing / brand / product strategy is somewhere below this. The marketing function supports sales, business positioning, and other good things.

Digital marketing strategy answers questions like: How can digital marketing improve the business marketing function? Integration with the multichannel marketing? Consumer engagement models? What digital marketing programs can be implemented? How do they relate with current marketing programs? 
In terms of KPIs: increase in consumer reach, brand equity, sales, community size, community engagement %, etc. These should be tied into the digital business strategy KPIs. 

What about digital strategy?

At this level we find the most common usage of digital strategy. Often is it brand related and specific to a program, project or campaign.  Here, the brand/creative/multichannel strategies are already defined and/or planned. The remaining questions have to do with the digital execution of the multichannel plan and it is very tactic specific.
For instance we can ask: How can digital support the multichannel plan? What are the few principles that will drive our digital tactical planning? Which are the best platforms to leverage? How much weight should we give to specific digital channels?
The KPIs are pretty much the standard digital KPIs: reach, engagement, channel or platform usage, etc. The details of these KPIs are provided by the supporting tactics.

Hope this helps clarify some misconceptions.

And of course, no strategy is worth the paper it’s written on, unless it is supported by a consistent tactical planning that ties in its KPIs with the business and brand’s objectives.

Digital Business Strategy vs Digital Strategy

Hiding things
Hiding things

Here is a good Linkedin conversation about Digital Business Strategy and Digital Strategy.

My take on the issue: Digital Strategy is just a tactic of Digital Business Strategy.

Digital Business Strategy answers questions like:
Can, and how, Digital optimize the business model?
How does Digital impact different business practices (sales, marketing, hr, production, etc)?
In terms of KPIs: increase in sales, decrease of marketing and HR costs, optimized production, etc.

Digital Marketing Strategy answers questions like:
How can Digital marketing improve the business marketing function? What are the channels?
Consumer engagement models?
What digital marketing programs can be implemented?
How do they relate with current marketing programs?
How can we market the product on the Digital space? etc.
In terms of KPIs: increase in consumer reach, brand equity, sales, community size, community engagement %, etc.

Digital Business Planning, A Long and Smarter Road: From your Business Objective to a Tweet

Every Titanic has its iceberg
Every Titanic has her iceberg

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.

STRATEGIC PLANNING

  1. Determine the Business Objective
  2. Build a Business Case
  3. Identify the KPIs
  4. Identify the Necessary Programs
  5. Global Plan & Budget
  6. Strategic Creativity Alignment
  7. Determine the Tactics & Creativity Alignment
  8. Build the Conversion Funnel
  9. Specific Plan, Budget & Resources
  10. Execution, Metrics, Iterations
  11. Review

DATA

  • Program Maturity Audit
  • Media / Audience  / Touchpoint Ecosystem Audit (owned, earned, bought – analytics)
  • Competition Audit
  • Trend Analysis
  • Current Communication Portfolio
  • Social CRM
  • Conversion Funnels
  • Previous Campaigns Metrics & Lessons Learned

TACTICS

  • Contests
  • Email based
  • Display ads
  • SEO/ SEM
  • Blog
  • Social content
  • Microsites
  • Mobile apps / advertising
  • Social advertising
  • Facebook app
  • Point of sale (physical)
  • Event
  • Affiliate
  • PR
  • Stunt
  • Guerrilla
  • etc

A Case-Study in Building A Digital Strategy :: Business Objectives + Data & Insights + Programs

Saying it doesn't make it so. Results do.
Saying it doesn’t make it so. Results do.

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.