Digital marketing leverages business performance

Digital marketing leverages business performance

Currently, digital marketing is a common strategy in our business world. Several research reveals that digital marketing can leverage business performance. Their performances depend on the way their deploy a sound digital marketing strategy. So, the big question is how business owners design digital marketing strategies.

Before designing a digital marketing strategy, businesses need to determine in advance the market segment, target market, and effective market position. The selection of market segments and target markets specifically plays an important role in determining strategies to communicate value to consumers as a proposition of products and services or so-called Online Value Proposition (OVP).

OVP is the ability of business owners to provide an impression of the online experience through content, visual design, interaction, presentation of information, the use of diverse media, and the relevance (conformity) between consumer expectations of online offerings and actual conditions received by consumers. The profile of market segments and target markets can be determined based on geographical, demographic, psychographic, and consumer behavior conditions.

After determining the market segment and target market, business owners can design digital marketing planning based on the SOSTEC (Situation Analysis-Objectives-Strategy-Tactics-Action-Control) framework.  SOSTEC is a framework used to plan digital marketing and business.  Here is an explanation of each stage of SOSTEC:

1. Situation Analysis

At this stage, business owners need to look inward at the current picture of the company’s condition, namely by evaluating the achievement of the company’s goals reviewed from the previously mentioned 5S’s (Sell, Serve, Speak, Save, Sizzle). The company’s current internal situation is a benchmark for designing new strategies to achieve the next business goal. In addition to 5S’s analysis, companies can also utilize big data information to analyze current market tastes and trends (consumer insights), conduct SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to measure the company’s competitive advantage in the industry sphere, as well as analyze consumer perception of brand/company awareness and image. Some of these analyses are carried out so that the company gets information about market expectations, which is then used to predict and answer future business challenges.

2. Company Objectives (Objectives)

Based on the analysis of the situation conducted, the company next sets the company’s next goals based on 5S’s, namely what the expected sales rate is, how the company seeks to improve services, communicate products and services to the target audience, set efficiency, and integrate the entire digital service to improve the consumer’s online experience. The determination of 5S’s in this case must be clearly measured in accordance with the principles of SMART (Specific, Measurable, Attainable, Relevant, Timely).

  • Specifically, meaning that the goals presented in 5S’s must be clear about who will be involved, what to do to achieve it, where digital marketing will be done, when to start digital marketing, why to choose the digital channel, and how digital marketing will be done.
  • Measurable, that the achievement of 5S’s must be measurable, for example through online tracking, online review, online rating, or online traffic.
  • Attainable, which is about the certainty that the company’s goals can be achieved. This means that the company’s goals set are not below or far above the company’s achievement ability standards.
  • Relevant, that the goals set are indeed things that are really needed to increase the competitiveness of the company. In addition, the currently set goals are still aligned (relevant) with previous goals, even with the company’s long-term goals.
  • Timely, that the goals set must be measurable in the perspective of time. This means that every achievement has a time limit that must be achieved. It is considered that every goal has urgency, and the business world is dynamic.

In the 5S’s concept if it implements SMART, then the company’s goals will reflect the following.

  • Sell – a picture of expected sales growth between times.
  • Serve – a picture of added value provided to consumers.
  • Speak – a picture of a company doing relationship marketing (relationship marketing) that is built with consumers or brand campaigns.
  • Save – an overview of the cost and time savings that can be achieved through digital marketing.
  • Sizzle – an overview of the company’s ability to do brand extention, cross selling, up selling, and so on.

3. Strategy

Strategy is something visionary to explain the way the company achieves its long-term goals. Strategy is a plan that can provide direction for business executors to carry out tactics. The strategy must be able to answer the challenges faced by the company in achieving the company’s goals.

Before establishing a strategy, the company can use the results of SWOT analysis or competitor analysis (Porter’s 5 Forces). Through SWOT analysis, companies can analyze the competitiveness of businesses within the scope of the industry. Namely about how the company’s ability to identify business strengths and weaknesses internally, and how the company is able to capture opportunities that exist and face threats from the external side of the business. Meanwhile, through Porter’s 5 Forces analysis, companies can assess the competitiveness and attractiveness of products and services in the business environment based on the ability of the business to control suppliers, control customers, counter the threat of competitors, and the ability of business to dispel the presence of competitors who offer substitution products or services.

4. Tactics

In contrast to strategy, tactics are more practical that describe the steps taken by business implementers every day. For example, about scheduling to post marketing content on digital media, sending electronic messages to customers, updating information on the website, collecting and managing customer databases, responding to customer inquiries and complaints, and so on.

5. Action

At this stage, the business executor will actualize and execute the strategies and tactics that have been prepared previously. The actualization of these strategies and tactics can be one of them can be the determination of the marketing mix, namely by executing about how the product or service is packaged, what pricing techniques will be assigned to customers, what distribution channels and digital media will be used, what promotional efforts will be used, or an overview of how business processes offer added value,  Human resources involved in the digital marketing process are able to provide excellent services, as well as how digital platform visualization is able to provide attractiveness for consumers.

In addition to determining the marketing mix as a form of strategy implementation, here are some digital marketing media options that are the choice of business implementers, namely owned media, share media, paid media, and earned media.

  • Owned media, which is a medium designed to be built by business owners, so that business owners have authorization to manage it themselves according to their domain, such as a website.
  • Shared media refers to media that is not fully the authority of the business owner, because it shares with other account owners and under the auspices of certain digital platforms, such as social media or marketplaces. Where each social media and marketplace has its own policies, has the uniqueness and characteristics of different content and campaigns.
  • Earned media, is a medium obtained based on relationships established with other parties, such as when a blogger or influencer offers to publish a brand or business, or link building where the other party lists a link of a business in his business media, or also when a customer recommends a brand or business to his social environment (word-of-mouth).
  • Paid media is a paid media owned by business owners as a strategy to reach a specific target goal, with a certain amount, and with measurable controls to review the number of visits and responses to marketing content. Examples such as social media advertising, paid publishing, fan acquisition, sponsored content, or boosted content.

6. Control

In the last stage of SOSTEC, control where everything that has been planned and executed must be measurable performance. Measurement of performance in the implementation of digital marketing strategies can be done through the design of Key Performance Indicators (KPI).  A KPIs are a matrix used to evaluate the execution of tactics. Some of the benchmarks for successful implementation of digital marketing strategies are reviewed from reach, act, convert, and engage.

Here is a description of the control of the implementation of a digital marketing strategy:

  • Reach (achievement), which is how the company’s achievements in achieving the 5S’s that have been established at the beginning of planning and implemented through the marketing mix. In addition, how much impact the use of digital media in stimulating the number of visits and consumer response.
  • Act (action), which is about how the ability of companies to bind consumers. This is related to how the company is able to build good relationships with customers and campaign for the brand it has.
  •  Convert, in digital marketing, conversion is a purchase. Related to evaluating the company’s ability to increase the number of sales to convert promotional costs that have been incurred before into profit.
  • Engage (strengthen customer relationships). At this stage, the evaluation is to measure the company’s ability to increase customer loyalty, even build emotional bonds that are in the form of customer involvement in recommending brands to their social environment.

From the above explanation of digital marketing strategies with the SOSTEC model, it is expected that digital businesspeople can take into account every plan built and implemented to always be evaluated and improved in the preparation of the next strategy. As is known that digital business is experiencing rapid growth with business dynamics that require the special ability of the perpetrator to always be agile to change.  The phenomenon that start-up businesspeople in Indonesia are easy to grow, but also easily collapsed because they failed to survive in the midst of the dispute that occurred. Even large conventional businesses can collapse when they mis-establish strategies in digital marketing.

Eduprenerer is a blog platform for sharing information on entrepreneurship, digital business, and start-up in universities or colleges environment.

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