Without a doubt, digital has become one of the main channels of choice during the pandemic. A 2020 Global COVID-19 Digital Sentiment Insights Survey conducted by McKinsey showed that 71% of users, both first-time and regular users, intend to continue using digital channels to the same extent or more after the pandemic. A quarter of those surveyed said long-term use of digital channels will increase.
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 intention to spend money online after the pandemic. According to McKinsey, digital marketing has the ability to help companies accumulate a revenue increase of 5% to 8% in a period of 12 to 18 months by acquiring more online traffic and the effective participation of more consumers.
Since the trend of digital marketing is not slowing down, it is imperative that brands continue to strengthen their digital marketing strategy. Here are five ways brands can do it, according to McKinsey.
1. Double your marketing performance
Performance marketing is crucial to driving the customer experience, especially in lower funnel interventions such as digitizing interactions and having a customer service response team that responds within an hour. It’s 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, like voice engagement or traffic, or even spend money on marketing to “buy” customers.
High-performing companies often identify a ‘star metric’ that best suggests the success of their business.
Citing an Indonesian telecommunications company as an example, McKinsey said he realized that the daily number of new customers from referrals was the key metric for the success of his new business. Approaching that metric, the telco prioritizes its customer referral program. In one month, your referrals had more than 20% of all new daily customers. According to McKinsey, by comparing success with this metric, the telco was able to “dramatically lower” the average cost of acquisition per customer and also allowed it to reach its customer goal of 12 months in seven months.
2. Move “pragmatically” to a modern martech stack
Three essential capabilities are required in a Martech stack and a modern data setup.
a) Campaign execution: Automate and personalize campaigns and communications through your own media channels and payments.
b) Audience management: segment customers based on offline 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 behavior.
c) Performance and data analytics – Collect and record customer behavior for audience building and campaign performance tracking and provide a platform for analytics.
This also brings with it 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 by segment and presents the results in a visual and easily digestible way.
3. Agile operating model for marketing and technology teams
Marketing and technology teams must work hand in hand and optimize the customer journey for the digital marketing strategy to be successful. McKinsey said leaders must push digital marketing onto the CEO’s agenda to gain the necessary executive participation and build momentum. They must also establish the transparency of the ROI of existing marketing activity and stop efforts that fall below a certain ROI threshold.
One of the best ways to accomplish this, McKinsey said, was to leverage existing high-performing talent to form two or three agile marketing and technology teams to target key performance levers. These people should have experience in growth marketing, SEO, UX design, HTML development, attribution analysis, copywriting, and general campaign management. They must also collaborate to define, prioritize, and execute based on research, product, marketing, data, and technology lags.
4. Balance the allocation of expenses between channels
It is a norm that companies continue to struggle with the allocation of spending online and offline. To solve this, McKinsey said spending allocation must occur at the individual micro-market level and be guided by the characteristics of the micro-market. Businesses must also consider how much to spend on each sub-channel.
According to McKinsey, organizations often have a “last click wins” bias in evaluating digital ROI, which can result in “over-focus” on some channels. Multi-touch attribution is an underused approach that can also be helpful for brands as it focuses on the entire customer journey to understand the impact and ROI of each channel.
5. Guarantee a responsible management of data of origin
The impending disapproval of third-party cookies and new privacy regulations make it imperative for companies to be responsible owners of source data. Privacy issues form the crux of trust between the customer and the brand. Therefore, companies must consider how source data can be scaled while maintaining customer trust and protecting privacy. As regulations change, companies must also be proactive and clear that they take data privacy seriously. It is critical to be transparent about how data will be used and implement staff training as well as measures to prevent data theft.
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