Digital has no doubt become one of the main channels of choice during the pandemic. A 2020 Global COVID-19 Digital Sentiment Insights Survey by McKinsey showed that 71% of users, both first time and regular, intend to continue using digital channels to the same extent or more after the pandemic. A quarter of respondents said they will increase the long-term use of digital channels.
In ASEAN, McKinsey found that more consumers made a portion of their purchases online during and after the COVID-19 pandemic compared to before. In Indonesia, for example, up to 60% of consumers indicated an increase in intent to spend money online post-pandemic. According to McKinsey, digital marketing has the ability to help companies amass a 5% to 8% revenue increase over 12 to 18 months by acquiring more online traffic and effectively engaging with more consumers.
With the trend of digital marketing not slowing down, it is imperative for brands to continue beefing up their digital marketing strategy. Here are five ways brands can do so, according to McKinsey.
1. Double down on performance marketing
Performance marketing is crucial in driving customer experience, especially at the lower-funnel interventions such as digitising interactions and having a customer service response team that responds within an hour. It is also important for brands to focus on the most valuable customer metrics in performance marketing. According to McKinsey, companies often get excited about vanity metrics such as share of voice or traffic or even invest money into marketing to "buy" customers.
High performers often identify a 'star metric' that best suggests success for their business.
Citing an Indonesian telco as an example, McKinsey said it realised that the daily number of new customers from referrals was the key metric for the success of its new business. Zooming in on that metric, the telco prioritised its customer-referral programme. Within a month, its referrals had more than 20% of all new daily customers. According to McKinsey, by benchmarking success against this metric, the telco was able to "drastically reduce" the average cost of acquisition per customer and has also enabled it to hit its 12-month customer goal within seven months.
2. Move "pragmatically" into a modern martech stack
Three essential capabilities are required in a modern martech stack and data set up.
a) Campaign execution: Automate and personalise campaigns and communications across owned- and paid media channels.
b) Audience management: Segment customers based on offline data and online data, and share this segmentation with various marketing channels. Offline data is defined as customer relationship management while online data is defined as digital-asset behaviour.
c) Data analytics and performance: Collect and register customer behaviour for audience-creation and campaign-performance tracking and offer a platform for analytics.
This also brings about the importance of the customer data platform (CDP) within a martech stack. McKinsey explained that the CDP is more than just a data aggregator. In fact, it also allocates customers into segments and presents results in an easily digestible and visual manner.
3. Agile operating model for marketing and tech teams
The marketing and tech teams need to work hand in hand and optimise the customer journey for the digital marketing strategy to succeed. McKinsey said leaders need to push digital marketing onto the CEO's agenda to obtain the necessary executive buy-in and generate momentum. They also need to establish transparency of existing marketing activity ROI and halt efforts that fall below a certain ROI threshold.
One of the best ways to accomplish this, McKinsey said, was to tap on high-performing existing talent to form two to three agile marketing and tech teams to target key performance levers. These individuals should have experience in growth marketing, SEO, UX design, HTML development, attribution analytics, copywriting, and broader campaign management. They should also collaborate to define, prioritise, and execute against research, product, marketing, data and tech backlogs.
4. Balance spend allocation among channels
It is a norm for companies to still struggle with the allocation of online and offline spend. To solve this, McKinsey said spend allocation should occur at the individual micromarket level and be guided by the characteristics of the micromarket. Companies should also consider how much to spend in each subchannel.
According to McKinsey, organisations often have a "last click wins" bias in digital ROI assessment, which can result in "excessive focus" on some channels. Multitouch attribution is an underutilised approach that can also be useful for brands, since it focuses on the full customer journey to understand the impact and ROI for each channel.
5. Ensure responsible first-party data management
The impending deprecation of third-party cookies and new privacy regulations makes it an imperative for companies to be responsible holders of first-party data. Privacy issues form the crux of the trust between the customer and the brand. Hence, companies need to consider how first-party data can be scaled while maintaining customer confidence and protecting privacy. As regulations change, companies also need to be proactive and clear that they take data privacy seriously. It is critical to be transparent on how data will be used and implement staff training as well as measures to prevent data theft.
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