Tag Archives: CRM Marketing

Know what you want before embarking on BI projects

Businesses are facing more sophisticated competition in the market every day and the race is on to constantly deliver higher levels of customer service. Delivering better customer service first requires a greater insight into customers’ preferences and behaviours. Social media is a good source of additional behavioural data. This is a sound basis to develop a strategy for retaining those customers who are best suited to the organisation, while “incentivising” those customers not suited to the business, to switch to the competition.

While many organisations do not know where to start gathering information about their customers, others know exactly where this information resides- hidden in the company’s data and call centre stores and locked in sales and marketing databases, on social media sites and in back-end financial systems.

The irony is that while many organisations possess this information, it is often not usable. Companies that attempt to use this information in its ‘tangled’ format soon give up, pleading ‘data-overload’. Business intelligence (BI) gives organisations the ability to unravel the hidden knowledge in this knotted data and deliver actionable insights to the decision makers.

But implementing a strategy is not a simple task of acquiring some software, pointing it at the relevant stores of data and expecting answers to begin rolling out. In order to achieve success with a BI project a company needs to consider its key business goals and the actions that it needs to take to deliver on these objectives efficiently and effectively. BI provides the bridge between the goals and the performance. For example it delivers the insights required to enhance customer relationships through effective interactions with customers in terms of both content and medium, it streamlines the distribution of goods and services through demand forecasting, or it can reduce risk by predicting fraud or identifying consumer attacks on your brand.

With a clear understanding of how BI will underpin the business’ delivery goals over the long-term, an organisation must ensure that the supporting data has a high level of relevance and integrity and that it is intimately understood. This will ensure that it will be effectively and efficiently interrogated so as to deliver meaningful insights that can be actioned across the organisation, with the resultant outcomes being tracked and measured over time.

Best practise dictates that the company’s customer data is centralized into a single, accessible and useable repository and then analyse it. Sales data should be linked to marketing data and combined with all other data related to customer interaction, including data from back-end financial systems so that a customer centric-view of the customer can be created. This in itself is a huge advantage for the organisation, since it will identify the same customer in all his guises across the organisation’s data stores and present a consolidated view of the company’s transactions and interactions with each unique customer. To further enhance this data as a platform for analysis, it should also be enriched with relevant external market data, including key demographic variables and the like.

Having built the necessary data repository and ascertained the required insights from the analysis function to support the strategy of the business, the analysis should commence with five simple objectives in mind: who; what; why; when and where.

The ‘question’ or ‘end-goal’ could be, for example, to identify: who the ideal customers are after incorporating any hidden costs associated with servicing them. Then one can plan on incentivising or engaging with customers with these same characteristics to begin doing business with the company and encourage the non-ideal customers to move to competitors.

A good first step to this process is to analyse the company’s revenue streams and build an ideal client portfolio around each of those revenue streams, taking into consideration the fixed, variable and hidden costs associated with these revenue streams. It is imperative that the entire organisation is involved in this process.

Sales, social media behavioural data, marketing, manufacturing, procurement, delivery and management input is key to the successful implementation of a BI project and ensures that the results gained from a BI initiative are actionable across the organisation.

It is imperative that the company has the appetite to act on findings. It is pointless embarking on a fact finding mission, like that involved in a BI process, if the business is not prepared to respond to those findings by investing in or re-engineering business processes.

When it comes down to it, BI only presents real value to an organisation if the integrity of the underlying data is sound, the data is intimately understood and the organisation is prepared to action the findings. It is only after “actioning” these findings that the organisation will begin maximising the benefit from attracting and retaining ideal customers, reducing costs and ultimately becoming more profitable.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication and manage brand conversations with consumers.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za

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Filed under Business, Digital Communities, eMarketing, Enterprise 2.0, Facebook, Google, Internet, Web 2.0

Social Media Optimisation

A few weeks ago, in an article called Man verses the Machine, I wrote about the search algorithm (as used by search engines, for example Google) verses digital curatorship (whereby the people using social media like Facebook drive the information and content delivery, through posting, sharing and liking). Here are some more thoughts on the subject

Search engine optimisation (SEO) is a critical strategy for driving people to your website, but it is only one aspect of the modern digital strategy. With social media there are more meaningful and effective ways of bringing in audiences. The term for this is social media optimisation (SMO.)

SEO uses algorithms to rank top search results. SMO uses audience behaviour to determine what’s important. SMO differentiates and distinguishes individuals, making sense of their specific content wants and needs. Real people articulating real interests eliminates the algorithm as middleman.

The social network is starting to replace the search engine as the average web user spends more time on Facebook than Google. We need to reengineer our approach driving traffic to our content and building our digital brands. Here are some elements of an effective SMO programme.

Find out and evaluate what the audience wants

SEO is based on pandering to search engines to bring you more audiences, by using key words and metatags. But with social media, the new formula is to grab people’s attention in such a way that they will bring you more audiences.

The first step is winning the attention of the audience and knowing what it wants. The key question is, who are they, what do they want from you and when and how do they want it? Fortunately, this data is abundant. You can find it in your social media sites, analytics system, in customer research, in your competitors’ wins. The trick is to make use of that data and experiment to find these insights.

Knowing what the audience wants means asking and observing them and then delivering value that they want to be associated with. Then track what gets consumed when and by whom.

By asking the audience you also get people immediately engaged in the conversation.

Build your community

The tactics of SMO will change over time, in much the same way that social media will change. Today, Facebook and Twitter are the two significant social media platforms.

An effective SMO strategy is about getting the community started. Set up a marketing drive to bring your fans to your community page. Use Facebook’s advertising platform to help make potential friends aware of you. Use viral networking to get people to invite their friends. Build a base of influencers to a size that approaches critical mass, so that you are fully connected within the social network from the beginning, rather than sitting outside just looking in.

Create content worth spreading

Once you know what your audience wants, and you have a community to appeal to, now comes the part that great marketers are good at. Designing for sharing is much more than just designing for consumption. In some instances the practices that help marketers succeed in SEO are deadly in SMO. If you stuff a page full of keywords, match the URL to the keywords and keep the content readable by algorithms, you will that find a boring website which falls flat on your users and they will not distribute.

Instead, publish content that is worthy of being shared and wrap it in experiences that your users can’t wait to share with their friends — with pride — which is the emotional fuel that powers the “Like” button.

Package to get attention

These days you’re competing for attention in a Facebook feed or Twitter stream.

Facebook and Twitter are networks and so their value is to be found in quantity (the more there is the more value to each user) but for successful marketers it’s about quality. Standing out in the crowd puts the focus not just on what you say, but on how it’s said. What are the iconic images and headlines that appear in a Facebook feed?

Design for virality

Viral distribution is about much more than the content itself — it’s also about an experience that promotes sharing. Your site, your experience, and your Facebook page all need to be designed for virality. Turn content into interactive features with sharing. It starts by making sharing easy:

  • Include the familiar “like” and “share” icons;
  • Place them in obvious places next to the article you want them to share; and
  • Pull social conversations relevant to your content in as a live feed on your website. Let people see what other people are saying on your Facebook page and Twitter and let them participate in the conversations right from your site.

Previously I have written about The Porous Web where your audiences seamlessly osmosises from areas of low value to high value. Doing all of these things provides a tightly integrated social experience.

Engage and reward your audience

Get involved in the conversation to stimulate dialogue, talk alongside your users and ask them what they want. Engage your audience like a community member not a marketing executive.

Validation is all about appealing to people’s emotional desire to look and feel good. Rewards for these people are intrinsic to the sharing itself.

Measure and experiment

On every page measure how many people viewed it and shared it, and how many more people that brings. You can test and vary every element, from the tools that promote sharing, to the content itself. Test rigorously and learn what works for your website, community and your audience.

These are just some of ways that SMO can be effectively deployed. The most important thing right now is recognising that SEO is important but that social media is changing the rules.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication and manage brand conversations with consumers.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za

 

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Filed under Business, Digital Communities, eMarketing, Facebook, Google, Web 2.0, Web Marketing

Financial Ratios for Social Media

Much has been written about the benefits of Digital Media to business, not the least of which is that it is highly measurable. We can see how many hits we have on a website, how many clicks through on an advertisement, how many members in a community, how many employees are blogging, but are these actually numbers which indicate Return on investment of time, resources and money? Not necessarily. They are merely potential precursors of transactions. In other words they are indicators that there may be additional transaction and revenue. So if we can see the numbers, how do we determine what value these measurement’s have and how to use them to forecast future success, or analyse past opportunities?

If we are to truly unlock the business value of the web, we need to develop a series of indicators of digital success, similar to the financial ratios developed by DuPont for investors and management accountants.

Naturally these indicators are determined by the business objectives and different ratios are more appropriate for different scenarios. It is also critically important to understand that we need to define the ratios correctly by defining a causal link between what we measure and what is actually an indicator of success. Using the wrong ratios to manage the digital side of the business could have dire unintended consequences and be incredibly detrimental.

Here are some proposed digital ratios for a social media business;

  • Social Leverage Ratios

Social leverage ratios are similar to the financial concept of beta, because they relate to the amount of commercial leverage in a social network. The “network effect”, when it come s to social media relates to the fact that a network (of people, telephones, social media sites etc.) becomes more valuable to each member, the more users that are part of the network. One Social Leverage Ratio is the Viral Coefficient.

In his book, The Viral Effect (2009), Adam Penenberg talks about the viral coefficient which needs to have a value greater than one for the network to grow in value. The viral coefficient basically means that each individual member must invite more than one person i.e. replace himself in the membership of the network and add at least one more member. If each individual only invites one person and that individual invites one person, then the growth of the network will be linear. But say for example, each individual invites two people, and each of those individual’s invite two people, then the membership and hence the value to the members grows exponentially.

This has huge implications for the design of social media businesses and marketing campaigns. Although the focus is to get people to register and start using the services, an equal effort must be expended getting them to share and invite other people to join the network. This is called viral loop marketing, and is measured by calculating and comparing the viral coefficient of each social network activity.

Facebook’s new function, which suggests friends for you based on the number of friends you have in common, is an example of a social network activity which is aimed at increasing the number of people you link to and increasing the value of your personal network, to keep you on Facebook. The more active members who are Facebooking, the more Facebook can monetise their platform through advertising, and the more value to the Facebookers the more they will encourage non-Facebookers to join.

  • Collaboration Coefficients

There are similar ratios that can be used to calibrate Intranets, such as the collaboration coefficient which explores the depth and usefulness of employees as nodes in a network. High collaboration coefficients suggest that the business is deriving value from the way that employees are working together.

  • RODSI

Web sales ratios include the conversion ratio or the RODSI which is a measure of the Return On Direct Sales Investment, and is calculated by subtracting the sales and marketing costs directly related to a campaign from the revenue that the campaign attracts, and calculating it as a percentage. Businesses can then experiment with different techniques and tools to increase their RODSI, such as Leads Management, SEO, different advertising media etc.

Each of these ratios can be used as a measure of success and the future success of digital strategies, it is incumbent on us to work out what the best measures are, and if necessary to develop ratios that are particular to the project.

These Social Media Ratios start off by being experimental, but over time they should stabilise as we ratify the causal link between what we are measuring and the business objectives which are predicated on them. Once we have validated the ratios, they can be used to benchmark and compare the success of one social media activity over another.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication and manage brand conversations with consumers.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za

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Filed under Business, Digital Communities, eMarketing, Enterprise 2.0, HR Intranet, Interactive Intranets, Web 2.0

Digital Conversations – Science or Art?

One of the things that I find so fascinating about social media, is that it transcends the traditional artificial barriers that we have erected in business, letting us do things we never thought possible, or that in the past were more trouble than they were worth.

For example, an Interactive (web 2.0 enabled) Intranet means that now a marketing project can span the boundaries between HR, Marketing, Finance, Project Management and Operations, because they can all collaborate with each other on the success of the project, not just report to each other on their progress.

Social media also negates the barriers between organisations and employees. Employees are becoming an integral part of the corporate brand and customers are interacting more directly with the individuals in an organisation. I have direct relationships with many of my business partners and clients on Linked-In and we IM each other on Facebook, rather than going through the company switchboard.

Social media transcends the barriers between the public and private self; your private behaviour on-line is now part of your professional brand. When you Google someone you can find out a lot more about that person than his professional profile on the company website.

We can micro analyse niche groups and still have to contend with the “law of big numbers”, which means that mass community behaviour is not an aggregation of small communities of interest.

When communicating with our customers on-line, we can participate in their conversations. Their behaviour and personal networks are much more explicit than in the past. We can experiment with certain triggers to see what influence they have on consumer activity and we can analyse and detect quantifiable patterns and improve our product design based on what our customers are doing and saying on-line to whom etc.

But our ability to do things we have not done in the past brings about a requirement for a new type of skill, we have to become generalists, rather than specialists, both right and left brain thinkers. Although our ability to measure initiatives and behaviour on-line has greatly improved, because of the breaking down of barriers and the fact that our customers are dynamic and participating in the market on their own terms, we are going to have to find ways to skill ourselves up on understanding the intangibles, like behavioural drivers and the psychosomatics of our audience too.

Social media requires us to become both artists and scientists, an interesting challenge which I look forward to.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication and manage brand conversations with consumers.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za.

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Filed under Business, Digital Communities, eMarketing, Enterprise 2.0, HR Intranet, Interactive Intranets, Web 2.0, Web Marketing

The power of viral expansion loops when building robust social networks

When we build social networks we are gathering groups of like-minded people together for a reason. That reason may be that we want to monetise that social network by advertising to them, or to sell them widgets, applets or products on line. Another reason that we build social networks is to manage relationships with people around a common interest, this may be brand building for a motor vehicle brand, or employee relationship management for a large bank. Whatever the purpose, a social network will be most successful when we have the highest penetration of suitable members possible, active within the social network.

The concept of the “network effect” relates to the fact that the more members there are in a network, the more value that network has for the individual member. The quintessential example is the phone. If only two people have a phone, the phone has less value to you than if thousands of people have phones, because you can contact so many more people.

Online social networks are subject to the network effect, if there are too few people in the network it will not have any value to the individual member and they will abandon the network pretty quickly. Therefore when we build social networks, we want to populate them as rapidly as possible, so that people can derive value by networking, sharing, communicating, collaborating or conducting business.

Viral expansion is when the members of a community actively recruit new members and is an extremely effective and cost efficient way to build powerful social networks.

A “viral expansion loop” occurs when virality is incorporated into the function of the product, in other words a company grows because each user begets new users, just by using a product they spread it. This concept is explored in detail in a fantastic book by Adam Penenberg (2009), called “Viral Loop The power of pass it on”. In the book Penenberg says “What’s the sense of being on Facebook if nobody uses it?”. The value of the community is inherently incorporated in its size.

Tupperware was one of the first viral businesses. When one housewife hosted a Tupperware party for six of her friends, they were each given the opportunity to host a Tupperware party for another six friends and so on. This viral distribution network proved more effective and created more sales for Tupperware than any organised retail chain.

One of the ways to build robust social networks is to focus on the “viral coefficient”. The viral coefficient is the ratio with which community members attract new community members. In other words, on average, how many additional members does each network member recruit?

If the social network’s viral coefficient is less than one, it will be self contained and very soon will stop growing. For example if the viral coefficient is 0.5 and there are 20 people in the network, then they will invite an additional 10 people who themselves will invite another 5 people who themselves will invite 2 people who invite 1 person. We can see with a vital coefficient of less than one that the network plateaus very rapidly at 38 people.

If the viral coefficient equals one the, 20 people invite 20 people who invite 20 people and we see a linear growth pattern from 20 to 40 to 60 to 80 in total in round four.

The real secret to growing social networks is to cultivate a viral coefficient of greater than one. Let’s assume that the viral coefficient is two then 20 people invite 40 people who themselves invite 80 people who invite 160 and so forth. By the fourth round, we have 300 people on board. We see exponential growth in viral networks with viral coefficients higher than one, and the higher the coefficient the exponentially higher the growth. Just by doubling the viral coefficient from 2 to 4 we see that the social network grows by 80 to 320 to 1280 and in the fourth iteration we have 1700 members. In other words having a the viral coefficient is the equivalent of compound interest in the world of social networking.

So how do we increase our viral coefficient? Well there are basically three ways;

  • Make is useful for members to spread the message;
  • Make it easy for them to spread the message; and
  • Make them look good for spreading the message.

Making it useful for members to bring more members on board

Offline examples of this include multi-level marketing such as Amway, online you could create products where members actively encourage their friends to come on board in order for them to sell more. An example could be a charity whose members actively recruit more people to donate money to a good cause, or a political party raising funding for a campaign.

Making it easy for members to bring more members on board

There are a number of ways to do this, clearly an “invite friends” button which automatically eMails friends the link to the social network is easier than expecting the person to type in the URL.

At Digital Bridges we have a saying “The more virtual you are, the more real you need to be”. The same holds true for social networking. People still network socially in the real world, you could use a real world networking tool, such as a business card, to bring people into digital communities.

There is tool called a poken which does exactly that. It is a sort of electronic business card which looks like a memory stick with a receiver and transmitter built into it. When two pokens are touched together they exchange information which has been pre-populated onto the poken. This information includes the standard name address and contact details, but it also contains data pertaining to the social or business networks that people participate in. When the poken is plugged into a computer it automatically populates all contact details and links people within the various networks that they are members of.

Making the member look good for spreading the message

This should be the easiest part if you have bespoke special interest social networks. You need to create content and encourage your users to create content which appeals to like-minded people within the network and let them share it with their friends, peers and colleagues. So for a scientist social network you might post some provocative comments about the Hadron Collider which they can respond to and share with their friends. On a joke website they could forward the latest joke to potential members.

A word of caution

It is important to remember that particularly in South Africa, we don’t have sufficiently large, digitally literate communities to become self sustaining and that although we need to focus on maximising the digital coefficient in order to approximate saturation, we also need to have dedicated resources managing these social media networks to reduce churn at the same time as raising the viral coefficient.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za.

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Filed under Business, Digital Communities, eMarketing, Enterprise 2.0, Interactive Intranets, Web 2.0, Web Marketing

Forget Social Media for Social Media’s Sake – Your website is a strategic asset

There is much talk of how websites are moving away from being brochure sites, designed to communicate at the target audience, towards them being web applications for engaging with the audience. This is the natural logic which follows on from the interactive power of web 2.0, but perhaps the pendulum has swung too far.

Throughout the years companies have needed marketing collateral to position their brand to their best advantage, this includes brochureware, presentation folders, inserts, boilerplates on press releases, the website etc. and there is no reason why this should no longer be the case. Organisations need a strategically defined brand which acts as the fundamental backbone for all marketing and communication.

The website might be a manifestation of the brand because it contains the corporate messaging and the logos, but it is also a tool which the organisation can use to tell the audience where it thinks it is and what is important to the company. While the brand is a collection of experiences, we cannot expect our audiences to divine our purpose simply from their exposure to our employees, and as such, carefully written brochureware is a critical tool in the brand management arsenal. We also need to tell people what it is we think we are and why we think we are better and what better opportunity than through our marketing collateral?

At the same time, with the power of the modern interactive web and the advent of the knowledge worker, businesses are no longer about the buildings, logos and balance sheets etc. They are being perceived as a collection of individuals who provide services and ensure that operational requirements are met, whether they are legal financial, technical etc. As such, we expect to speak to people and feel justifiably aggrieved when we are forced to talk to a call centre operator or run up against obstinate individuals who hide behind company policies. It is at the touch points of an organisation that we experience the brand, whether through the sales process, service in fixing a problem, collection on payment or delivery on service.

Unfortunately with the world becoming obsessed with web 2.0 and using social media  to engage with audiences, we see a proliferation of unnecessary social media tools on so many websites. It’s as though people are adding Facebook and Twitter links for social media’s sake, without thinking about their strategic objectives; blogs stand sparsely populated, links are broken and wikis left unattended. Why do I want to become a “Fan” of some arbitrary photography shop on Facebook? What is the point of being a “Fan”, all I get is some self-serving drivel, or worse still a price list, from someone who is married to his business. There are no interesting conversations or people to meet, the owner merely has access to Facebook and thinks that web advertising is free.

The choice of the social media format that you select for your website is dependent of your organisational strategy, the types of employees, what your brand stands for, the depths of relationships that you need to form, and the investment that you are prepared to make, both financially and in terms of time and your business environment. There are a multitude of permutations, here are three examples.

  • Let’s say you are a night club and audience interaction will lead to more clubbers on a Friday night, then you do want your audience using the website as an interactive application for networking with each other and you. Your website could be developed as the point of engagement and the audience equipped with a range of social media tools such as blogs, posts, wiki’s along with the usual eMail addresses and telephone numbers with which to communicate or engage with you. They should be able to be a fan and post interesting comments about what happened last week from your site to Facebook.
  • On the other hand,  if you are a conservative bank which trades on its proud legacy of serving clients for one hundred and fifty years, you probably want to manage your engagement with the public in a more measured way, so your website would be a collateral site with certain mechanisms in place such as avatars and IM to manage communication and your online reputation. In this instance, you do not want every employee to have their own social profile as a representative of the organisation, although you most certainly want your executive to have a pretty robust digital footprint. Your website should be a piece of organisational collateral which everyone recognises as such, enhanced by some direct communication tools and the necessary individuals who make up the executive should build up their individual profiles using other social media tools such as Linked In, Facebook, industry forums etc.
  • If you are a Management Consultancy, an Executive Head-Hunter or a company that trades on the IP of the individuals who work there  then the website could be a hybrid where it becomes a repository for both the organisational collateral and the collective intellect and thought leadership within the organisation. Depending on what the user is looking for, he can choose to “find about us” XYZ Corporation, or he can “find out about me” Bryan Mole, Head of Performance Management Solutions at XYZ Corporation. The potential employee or client has the choice of how he manages the relationship by, for example, taking the conversations into cyberspace on Linked In, becoming part of the Bryan Mole’s network, or following him on Twitter.

Social media may well have changed our ability to communicate with our environment and the way we do business, but fundamentally, the rules of engagement and marketing have stayed the same; relationship management and brand building are still all about delivering on the organisational objectives and contributing to the bottom line and as such, the planning of our web presence requires an investment in strategic thought.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za.

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Filed under Business, Digital Communities, eMarketing, Enterprise 2.0, Web 2.0, Web Marketing

Digital Marketing Budgets

Internet marketing is concerned with creating a Digital Footprint which serves the organisation’s marketing needs. It consists four distinct elements

  • Providing information and education to the various stakeholders, whether they are potential customers, journalists, future employees etc. on the website;
  • Brand building through developing on-line communities, creating digital profiles etc;
  • Other on-line collateral to enhance “findability”; and
  • Direct response advertising.

Budgets need to be divided along the same lines for the best results.

Budgeting for a website

The budget for a website is normally informed by the website strategy as it translates from the organisational strategy. Most of us have built brochure websites in the past, and budgeting is relatively straight forward. The following components should be found in a website budget.

  • Scoping and specification in order to ensure that the site is fit for purpose and easy to use;
  • Design and development;
  • Hosting;
  • Software – there is some question of whether the software budget belongs with Marketing or IT. My suggestion is that if it is a discreet web based software that only relates to marketing, for example a bulk mailing app, then keep it in the marketing budget. However if it is an enterprise software like Microsoft’s’ SharePoint, budget for it in IT and reallocate the relevant portion to marketing, in that way marketing can quantify its returns more effectively;
  • Technical maintenance;
  • Content development and management – this is usually where most website’s fail, because this part of the budget is included in technical maintenance and allocated to the web company who it maintaining the site. Content generation and management is a marketing function, not a technical function and should be allocated to an internal marketing resource or an outsourced content management partner;
  • SEO – budget for the time for developing and tweaking the meta-data which is associated with the web page so that search engines can identify what your website is about and whether it is useful; and
  • Constant and never ending improvement, the modern website is in a constant state of flux and the organisation reacts or pro-actively engages with its environment. The website must be budgeted for in such a way that it can be dynamic and serve the organisation’s best interests.

Budgeting for Brand Building

On-line brand building is the use of social media to create communities, whether they are fans on Facebook, followers on Twitter or registered members of specialist communities such as the Pampers’ mums who blog and message each-other about all things baby.

These communities are used by marketers to create positive associations with the brand, to make the organisation more accessible to its target market as well as to educate them as to the brand attributes etc.

Brand building, while quantifiable is difficult to relate directly into sales generation and so we see fixed marketing budgets in this area. The budget can be determined as a percentage of sales or at the discretion of a pro-active marketer. Marketers do, however, need to understand that the investment is not only a Rand investment into design and development, but there is a far higher investment in terms of human resources. Maintaining healthy brand communities is a labour intensive activity and requires dedicated time to be allocated to the community. It is important to remember that on-line brand building creates a launch platform for enhancing the effectiveness of direct response marketing and increasing conversion rates, as such it is an essential part of the on-line marketing strategy.

Budgeting for “Findability”

A large part of creating a digital footprint is concerned with “Findability”, in other words, making sure that the brand is served up to the potential consumer on-line, at the point when they require the brand’s products or services.

The additional on-line marketing collateral that enhances findability includes blogs and thought leadership articles on specialist forums, the personal profiles of prominent employees on social media such as Linked-in, on-line press releases etc.

The budget for these activities is mainly concerned with the time that people spend on creating the content on the web which ensures that your organisation is found by the right people at the right time. There will be a direct financial implication if you outsource the management of any of these aspects to a professional content generation firm, in the same way as you can outsource your PR.

So far, the on-line budget has been very straight forward, it has included the financial aspects agreed to with the executive and the cost in terms of human resources who are allocated to these highly labour intensive marketing activities. But when it comes to budgeting for direct response advertising, we see an entirely new budgeting pattern starting to emerge.

Budgeting for Direct Response Advertising

The modern web offers numerous ways to create demonstrable and predictable ROI from direct response advertising activities. Well thought-out Internet advertising campaigns produce highly quantifiable results. The big opportunity for business is to recognise that a positive ROI from an advertising campaign means that profits should be maximised by investing more into the campaign.

Progressive marketers should not be constrained by limited budgets, rather, they should be accountable for revenues and net profits and any budget should be informed by the desired outcome. This is set to change the static, set-piece budget battles that marketers have had to fight with their financial counterparts in the boardroom.

In the past 5 years, advertising has been turned on its head by the rise of social media. This new media enables us to contextualise on-line brand messages and calls to action within our audience’s digital environment. According to Forrester Research, interactive marketing will represent 21 percent of all marketing spend by 2014. Those who understand and exploit the new marketing opportunities should not be constrained by a “percentage of sales” budget and be empowered to drive increased profits through marketing programmes that deliver predictable and demonstrable returns on marketing investments.

Advertising is becoming more complex and harder to execute. Audience fragmentation has accelerated making mass market targeting irrelevant to all but the largest brands. The democratisation of content in social media has replaced print, radio and TV as authoritative contexts where product advertising and endorsements drive sales and market share.

Direct response advertising is targeted and measurable. We can determine, with accuracy and predictability, the marketing ROI by campaign. It is the marketer’s job to quantify financial expectations and monitor the results very carefully. If you know you are going to make a profit from your campaign then the constraint is not a budget but the supply of profit drivers. On-line advertising enables CMOs to figuratively buy R100 notes for R50 each, by investing in on-line campaigns that create demonstrable profits at a predictable and repeatable rate.

Building marketing programmes with predictable and reliable profits is the original promise of Internet marketing. High performance marketers start with the premise that advertisers will reach the right customers (i.e., those who are in market with a demonstrable interest in the product or service). This enables advertisers to pay only for the action (click through, register, fill in the form etc.) that is positive proof that the potential customer is in the market and considering their particular offering.

In direct response marketing, the potential customer is interested in a product or service, the advertiser only pays for the click, proof that he is interested in the product or service. With the click, the conversation between advertiser and consumer begins. As long as an advertiser understands the profitability of each sale and the conversion rate from click to sale, he knows the value of each search click (Value of a click = profitability of sale X conversion rate of click to sale). As long as the advertiser is buying clicks from the likes of Google for less than the value of each click, he is guaranteeing a profit on his direct advertising spend. The new limits on marketing spend is no longer the budget, but rather how much can be spent while maintaining the conversion and sale values, or the capacity of the advertiser to deliver products and services.

While the principle is simple, execution is hard because online programmes have many key success factors. These include:

  • Managing a portfolio of multiple, evolving social media types with different conversion characteristics.
  • Purchasing the media so as to limit advertiser risk (e.g., CPA, CPC, CPL);
  • Targeting to ensure conversion rates and sale values stay satisfactory;
  • Developing creative for all consumer touch points (both advertising and user experience) that drive conversion;
  • Capturing, qualifying, and converting customer data. Advertisers need the right tools to transform customer information they gather into sales;
  • Responding rapidly to initial interest. According to an MIT study, responding to consumer interest within 5 minutes versus the following day increases conversion 100-fold!; and
  • Continuously optimising – Direct response advertising takes place in a dynamic marketplace, successful marketers will continuously optimise their media, creative, target segments and sales process to maximise profits.

For advertisers that understand well the value of a sale and how their advertising converts into sales, the marketing budget has been replaced with innovative, integrated marketing programmes that invest every Rand that drives a positive ROI possible.

The Internet has made marketing much more complex. But at the same time, it’s also much more measurable and accountable. Because CMOs can determine which parts of the marketing portfolio provide the greatest ROI, they can demand more from their marketing spend. Successful marketing is becoming less about bigger budgets and more about delivering ROI. Marketing requires being ruthlessly focused on delivering measurable profits.

Future winners in the on-line marketing space will understand that success means investing in continuous improvement that provide increasing and demonstrable profits.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication.

Digital Bridges is technology agnostic and partners with great technology companies in order to ensure that our solutions are fit for purpose and deliver on organisational strategy.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia. Her skills include innovation and growth through marketing, communication, collaboration, knowledge management, human capital, performance management, process engineering and BI.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za.

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