Now more than ever, business owners are thinking about digital marketing. COVID-19 has disrupted previous ways of selling and made getting products and services to customers online more critical to success. However, many struggle to integrate digital into their overall marketing strategy. In fact, 45% of businesses entered 2021 without creating a digital marketing strategy.
Without a clear understanding of your target audience, a tactical plan to drive leads through your sales funnels, and ways to measure success, you’re not planning to succeed: you’re just hoping to succeed. We’re here to help. Here is why you need a digital marketing strategy and 5 ways having one can improve your business’s results.
Traditional (Offline) Strategies Aren’t Enough
Creating a digital marketing strategy is similar to a general marketing strategy, but is focused on the online channels and tactics you’ll use to meet your business goals. As with all activities that don’t directly generate revenue, the challenge is convincing senior management that having a strategy is essential to success. That’s where this blog can help: by providing you with the ammunition you need to persuade your boss or owner.
The questions CEOs or managers often ask us when we pitch a marketing strategy are usually, in order:
- Ok, so how much does this cost?
- When will we see results?
- How can you prove a positive ROI?
To answer those questions, you need to talk the language of the C-suite; namely, acquisition costs, funnels, and lifetime value:
- Cost Per Acquisition (CPA): This metric provides visibility into the dollars you are spending to acquire a new customer and ultimately leads you to obtain the total ROI. Start with how many clients you brought in last year and how much you spent to obtain them. That’s your baseline CPA and can help frame expectations for 2021.
- Sales & Marketing as Percentage of Customer Acquisition Cost (CAC): The CAC is normally calculated with the total sales and marketing expenses but it’s important to break-out the marketing spend, specifically. This way, we don’t even need the digital strategy to be an incremental cost: if it allows you to save time or money later in the year, it pays for itself.
- Ratio of Customer Lifetime Value (LTV) to CAC (LTV/CAC): With your CAC and LTV figures, you can get a handle on ROI for the initiative. If having a digital marketing strategy can improve performance by just 5%, it will usually pay for itself.
The fact that marketing has shifted to a results-driven approach is hard to digest for some traditional marketers. They will now be accountable for every dollar they spend. We should be embracing it as we become a more relevant piece of the puzzle by actually measuring what we do.
Five Benefits From Creating a Digital Marketing Strategy
Now that you’ve gotten the green light to proceed with the strategy, what can you expect to gain? While the former looked at quantitatively showing how the expense was justified, the latter question addresses more qualitative benefits for your sales & marketing efforts. Here are five key ones:
1. You Develop a Digital Value Proposition. A digital value proposition will help you differentiate yourself with current and future clients. You need to stand out from the crowd in cluttered digital spaces: differentiating your brand will help you attract the right customers. This means lower cost-per-acquisition and a higher close rate. In the end, spending a little money now to develop a digital value proposition will help you save a lot of money later since you can target more effectively.2. Your Customer Personas Refine Targeting. Stop being all things to all people! You have to drill down and discern what is the core audience your business aims to serve. It may be a role, an industry, or a service — it might even be some combination of all three. A marketing strategy will help you get there by creating your customer personas. Knowing those personas will help you focus on a narrow niche and get to know it better than anyone else in your market. That will lend credibility to your offering and allow you to earn a better profit for your services (see below). Here is a previous article to help get you started on writing to target personas.
3. Your Budgeting Aligns With Outcomes. Having the resources is not enough. You need to allocate your resources for maximum success. A digital marketing strategy will help you spend money in the right places. For example, COVID-19 has accelerated two major marketing shifts: the move to digital and a renewed focus on customer retention and growth. Time spent on strategic planning will help you identify that the best way to integrate and leverage both shifts is via social media marketing. If you don’t have a chunk of your digital spend dedicated to social media in 2021, you probably need to take a second look.
4. You Can Optimize Throughout the Year. Measured by KPIs, a digital strategy will give you direction to constantly optimize and create a continuous environment for improvement. The ability to measure nearly every facet of marketing campaigns and websites is nothing new. While much of this data is indeed important, only a small selection of them does a good job of gauging the impact of marketing and advertising effectiveness. Proper planning will help you separate the wheat from the chaff to get at what really matters to meet your goals.
5. You Can Calculate Total Marketing ROI. Being able to measure every marketing action ensures a cost-effective strategy because it’s the only way to fully capture everything you’re doing and everything you’re getting. Without a strategy, things fall through the cracks and it’s hard to know what efforts are profitable and what aren’t. A comprehensive digital marketing strategy will keep you organized, orient your team throughout the year, and guarantee that you’re able to pivot into 2022 and beyond.
In the new normal, digital marketing is simply too integral to most companies’ success to be an afterthought or an add-on to traditional marketing. You need to dedicate the time and resources to develop a formal, standalone plan to drive results online.
Where Do You Go From Here?
While these benefits don’t represent a complete list, they’re a great place to start for understanding the importance of creating a digital marketing strategy. Taken in concert, most CMO’s and marketing managers could more efficiently allocate resources and generate better results by having a coherent digital strategy that integrates with offline marketing plans.
Want a more detailed and tailored approach to propel your business forward in 2021?