How to align your digital strategy with your business strategy, If there is one message to take away from this it is that your digital strategy must not and cannot be built independently of your business strategy if it is to truly succeed. We are in the technology age and this brings new opportunities for the digital marketer every month. This means that every digital strategy evolves at pace (we will examine real-time planning in Chapter 4) and so the temptation to move your digital strategy forward independently of the restrictions that your wider organization brings can be too much to resist. In this chapter we look at how aligning to your broader business strategy is important and so this temptation must be resisted. We examine some of the areas to consider when ensuring that your strategy is aligned with your business.
Customer centricity
Many organizations claim to be customer centric, many of those include customer centricity in their values, but not all of these businesses truly make their key decisions with a customer-first mentality. So what? Why does it matter that some do and some don’t? In short, it doesn’t. We are not looking to define what your business strategy should be – the important consideration here is that you are honest about what your values are, as that means you can truly work towards achieving your goals.
Being customer centric, in its purest form, means making your decisions around what is best for your customers. This might mean making some financial sacrifices, reducing profits or creating work that does not directly benefit the organization. If your business claims to be customer centric then a good question to ask yourself is whether you really are putting the customer decisions ahead of the financial decisions. This is not to say that putting your financial decisions ahead of your customer decisions is a bad thing. There are circumstances where this is entirely appropriate. For example, your shareholders may demand a profit or sales target that you are not likely to achieve without increasing your prices, or you may not be able to afford the improvements that the customer demands without compromising the financial performance of the business.
According to research by Deloitte Consulting and Deloitte & Touche, customer-centric organizations are 60 per cent more profitable than those that are not and they have lower operating costs (Deloitte, 2014). This may motivate your business to take this strategy seriously but the most important thing is to ensure that your organization is open and honest about its true motivations, as this will dictate your strategy. Building a strategy that is customer centric in order to fit with the business values will create serious problems if these values are not truly lived. For example, a customer-centric strategy may involve setting up a dedicated social service team to ensure a fast turnaround to customer messages. It may involve purchasing CRM software to enable deep personalization and could also include spending money on paid search to ensure customers find the relevant pages, even if they have no commercial goals. If, however, the organization is not actually customer centric then these initiatives may well come under scrutiny for not generating financial value, but it would be too late to remove the people who had been recruited and so your strategy may gain a poor reputation amongst your stakeholders.
It is worth ensuring that your strategy is truly aligned with your genuine level of customer centricity. We will look at how to convince you stakeholders to invest in digital marketing in Chapter 15.
Business model
Your business model could be one of many and ensuring your digital strategy fits into this is crucial. Creating an aggressive e-commerce strategy for a relationship-based B2B business would not be a good fit. Likewise, leading with a pure content and social media strategy for a sales-focused retailer is highly unlikely to deliver the sales volumes you need to achieve. It is vital that you therefore fit your strategy to your business model. There are many different definitions of business model and within those there are many models. Below is a list of three common business models, some of their qualities and how they apply to your digital marketing strategy.
Mass market B2C
This model includes organizations that sell products that appeal to a broad range of consumers at an affordable price. An example of this type of business is fast-moving consumer goods (FMCG) companies. Selling a large number of products such as food, clothing or toys involves being able to attract a high volume of customers to your website and stores. This means creating awareness through above-the-line advertising, acquiring visitors and converting them into customers. This would also require a robust customer service process. Therefore all digital channels are relevant here.
Niche B2C
This model is a direct-to-consumer business that has a highly targeted service. This could include products for people living with a specific disability or products to ultra-high-net-worth individuals. Whilst this model also appeals directly to consumers, it works with a specific niche such as those in a specialist trade or ultra-high-net-worth individuals. Using broadcast media is not relevant in most of these scenarios as the majority of the viewers will not be potential customers. Creating trust and advocacy is essential, however, so a deep content strategy and first-class experience are crucial to success.
B2B
The B2B model includes organizations such as wholesalers or technology resellers that are selling directly to other businesses. Here you are dealing with other business people rather than end consumers. These business people are of course still individuals and it is important not to forget that human psychology still applies. They do, however, have very different expectations. You may be seen less as a brand and more as a supplier, which creates a very different relationship. Your customers may be more cynical or aggressive than B2C customers as they have specific objectives and goals to achieve. You may find that traditional marketing messages and sales techniques are less well received. Therefore, the focus should be more on relationships through CRM, content and direct value-added discussions rather than through advertising. It is still important, however, for these customers to be able to find your site and the information they need to get to.
Within these broader business models there are of course many specific models. A B2B IT company may be a hardware product provider or a service support provider. The service model would require more of a focus on screen sharing and CRM whilst the product model would require more of an acquisition and conversion focus. A B2C model may be simply to sell products at a significant margin or simply to gain traffic in order to make advertising revenue.
Freemium
One interesting trend in business models in recent years is the freemium model. This model has grown in popularity and is essentially the method of attracting users by giving a percentage of your product or service for free and offering a more interesting, deeper experience for a price. A good example of this is the music-streaming industry with businesses such as Spotify and Deezer employing this technique. One other point here is that business models can shift and shape over time. There are many examples of this such as IBM, but there are also some more recent changes in the digital space.
Changing business models
Facebook is a great example of a business model that has had to adapt quickly. I would imagine that even Mark Zuckerberg was surprised by the speed at which Facebook grew from being one of many colleges social networks to the leading global hub for a significant percentage of the world to share their lives on. The initial model of providing a network for college students had to develop a broader appeal once the growth became inevitable. As this growth took hold it was clear that costs would also accelerate and, with no obvious income, something had to be done and so the business pages and advertising models had to be developed. These shifts in the way that the business has had to change to deal with its own growth have been both significant and impressive in their speed and success. This is an excellent example of how adapting your strategy to meet the changing needs of your consumers and the evolution of your business is vital. Facebook has had to do this through the above changes to their website and user experience.
It is hard to believe that Google spent a long time with no real income channel. The initial business model was successful by creating the best search engine in terms of accuracy and simplicity. Google became a verb as people realized that googling something would give better results than using another engine. However, a source of income needed to be developed. This is why Adwords was introduced in 2003 and that has gone on to become the foundation of the growth of every other arm of the Google we know today – a business with an incredibly diverse and profitable range of services. This has led to Google having to closely manage its brand and how it is perceived, which it has done with significant success.
Their digital marketing strategy has been a minimalist approach. They promote their service and products such as Adwords and Chrome through display advertising and CRM but they do not broadcast as much as most organizations of a similar size. This is because much of their success is through word of mouth. This networking approach has been encouraged by supporting businesses that use their products, through strong and personalized customer service, networking and learning events and training materials. This personalized and deep-content digital marketing has ensured that people have trust, belief and understanding of their products, which further encourages word of mouth