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Business model

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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 c…

Customer centricity

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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 d…

Customer lifetime value

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Customer lifetime value (CLTV or sometimes LTV) is quite simply the value or profit attributed to a customer for their entire customer lifecycle. This can be relatively simple to calculate in some businesses and incredibly complex in others. Either way, one thing is true: there are many factors that influence it and many levers that can be pulled to alter it. Cost per acquisition (CPA) has long been used as a key metric in marketing and especially so in digital marketing due to tracking technology and the transparency of data. However, this has certainly been criticized as too simplistic a view. For example, if you know that a customer spends $100 buying a product from you that has a margin of $50 and it costs you $40 to acquire that customer then you can be happy that you have acquired them profitably.  If that customer then leaves and never comes back then we have a simple model. If, however, the average customer comes back another 3.2 times and phones your call centre twice per pur…

Boston Consulting Group matrix

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According to Bruce Henderson, founder of the Boston Consulting Group, "To be successful, a company should have a portfolio of products with different growth rates and different market shares". This model is similar to the brand perceptual model in that it uses a matrix. However, the Boston Consulting Group (BCG) matrix is used for a very different purpose. The model categorizes products in a portfolio into stars, cash cows, dogs and question marks by looking at market share and market growth. This is why it is sometimes called the growth–share matrix. It is used primarily to maximize long-term value creation in a business by maximizing high-potential areas and minimizing poor performers. Cash cows – high market share in a slow-growth environment Cash cows are strong and safe products. They generate money steadily in a market that is not growing at any pace and, as such, do not require much investment. As a result they are highly profitable. Dogs – low market share in a slow-g…

Segmentation

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We will look at personalization, which is the ultimate goal of tailored communications and is far more possible than it was just 10 years ago. It is, however, still vitally important to understand segmentation as well.Consumers will always have similarities in their behaviours, demographics, buying patterns and other factors that enable you to group them into segments. This enables smarter, more appropriate targeting and messaging within your marketing communications. These groups will have different uses for products and varying perspectives on services. Their lifestyles will be inherently different as will be their needs, aspirations, opinions and much more. Five common forms of segmentation – geographic, demographic, behavioural, benefit and psychographic – are listed below, including the advantages and disadvantages of each alongside how businesses use these methods. GeographicPerhaps the simplest of all segmentation strategies, this is quite simply the location of the individuals …

History of Digital Marketing

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Digital Marketing first appeared as a term in the 1990s, but it was a different world then, Web 1.0 was primarily static content with very little interaction and no real communities. The first banner advertising started in 1993 and the first web crawler was created in 1994. This was the beginning of search engine optimization (SEO) as we know it. This may not seem a deep and distant past but when we consider that this was 4 years before Google launched, over 10 years before Youtube, and that social media was not even a dream at this point, it shows just how far we have come in a short time.
Once Google started to grow at pace and Blogger was launched in 1999 the modern internet age began. Blackberry, a brand not connected with innovation any more, launched mobile e-mail and MySpace appeared.MySpace was the true beginning of social media as we define it today, but it was not as successful as it could have been from a user experience perspective and ultimately that is what led to its dow…