May 13, 2016
Why Does Digital Strategy Matter?
Digital Strategy although critical to a business’ execution of digital marketing, can be a quite a challenging area to understand and define for your business.This article aims to shed some light on the details and outline exactly what it is and isn’t, why it is important and what it can do for businesses.
So what is Digital Strategy?
To begin with, it’s worth noting that ‘Strategy’ would have to be one of the most misused words in the business and marketing space. You’ll have come across a few of these I’m sure as often the terms strategy, tactic and plan are used interchangeably although having different meanings and purposes. They all relate achieving a goal of sorts, but are on a sliding scale in terms of the degree of detail, starting at the top-level thinking that’s attached to strategy before getting to more specific steps in the plans.
At the top, a strategy is “the way in which you achieve a set of goals and the ‘why’ behind that approach”. Strategies need a goal/objective as the foundation and will then often reference the tactics they expect to employ as one integrated set of choices. A Digital Strategy follows this definition but attached to how digital forms will be engaged to achieve the goal/objective.
For example, an objective for a business may be to launch an entirely new type of software online. The Digital Strategy may then be to ensure the digital infrastructure is in place before entering the market via a test phase, whereby digital efforts will be targeted to markets X, Y and Z across a range of relevant channels for those markets. Thereby reducing risk and gathering data on a smaller scale to inform large-scale long-term efforts.
Tactics are then the efforts you will engage in when carrying out the strategy.
If we continue with the example of the test phase strategy, the tactics would be the individual channels that were recommended for testing and the specific approach to each channel that will be used during the test plan. For example, a tactic within the test phase strategy may be to split test the use of email marketing during the test phase to uncover those with the highest performance. Or to trial a mix of paid search options to see which attracts the most qualified leads/ or conversions.
Then there is a plan which is, of course, the list of steps surrounding each tactic that will be executed, by when and by whom. This provides a clear set of directions to follow to execute the tactics and achieve the overarching strategy.
For example, the plan may detail out the specific steps to split testing the use of email marketing. E.g. define test parameters, define a list of recipients, compile materials of the control and variation(s) etc.
Hence, a strategy is bigger than a plan and a tactic. Strategy tackles the question of ‘why? ‘.This is why you always need a strategy to come first before fleshing out the tactics and the plan. Those stages are critical to implementation which is often why Reload Consulting’s strategies come with the part two implementation plan.
Why is it important?
Digital Strategy matters as it is the key to ensuring your use of digital has a clear focus to be consistent, targeted and efficient. Without strategic thought behind your use of digital, you run the risk of having each of your channels working in silos and missing the opportunity to gain the efficiency that comes from looking at your approach as a whole and defining specific digital channel roles. As it is incredibly difficult to look at lead/sale attribution all the way back to the original strategy, it can seem intangible. However, when looking at the overall performance you can see some key impacts in companies that have a digital strategy. These impacts include:
- Direction– Digital Strategy provides direction and clarity for what you are aiming for with your marketing efforts. If you imagine each channel that’s been engaged as people on a playing field, it’s the difference between a team that’s trained together and know a clear gameplay, and a team that’s not aware of how the others work or exactly how they are going to get the ball down the field to score. The team with the gameplay and an understanding of the background are going to be more likely to have a polished game and score those goals. It’s the same for a company with a Digital Strategy.
- Ties Objectives to Action– It provides the creative and considered glue between an objective and the actual digital execution. Digital Strategy allows business to have a way of evaluating new ideas or initiatives that often come up. It’s the criteria to check whether the new idea is aligned with the strategy and therefore an effective use of time that will be contributing towards the end goal. When there are hundreds of digital marketing options available to businesses, a strategy can offer some boundaries and ensure you are only engaging in relevant activities.
- Birdseye View for Greater Visibility of Opportunities– Having a Digital Strategy reduces the ad hoc nature of your digital efforts – leading to greater identification of opportunities in advance. It provides bigger picture thinking which helps you to review the use of digital channels and initiatives as a whole, as opposed to in silos which helps with efficiency and ensuring each channel fulfils a specific role. A Digital Strategy ensures there is consistency in what you are doing and saying. Moreover, it allows you to see where some areas may be lacking or underperforming and leveraging other channels to fill the gaps.
But why doesn’t everyone have one?
SmartInsights found that only around 50% of digital marketers have a Digital Strategy to drive their efforts. That’s digital marketers, let alone the wider business community without in-house digital teams. This is a shocking figure when we know the benefits, but what we have seen in the last 6-8 months is that more businesses are becoming aware of the benefits of having a Digital Strategy and employing one for their business. However, we know there are also many that can see its value but are coming up against some challenges. From our experience, we’ve observed these challenges to be less about budget, as you have a grand strategy or a paired back strategy, but more often involve people challenges. The top four challenges that we have observed include:
- Lack of Internal Buy-in From Management and the Team- For digital to be used strategically you often need the strategic drivers of the company (senior level management) to understand the importance of digital and the need for big-picture thinking (as opposed to focusing purely on tactics and short-term gains) so they can be on board for strategic use of budget, but also to lead from the front for the rest of the business when it comes to maintaining the strategy. It can be difficult to sell this idea when strategy can’t be as closely tracked for ROI, but often once you present on the opportunities of digital strategy and define the potential increase in revenue with even a slight increase in digital performance, you start speaking the same business language as those in senior positions and can attach value to the digital strategy that is relevant to managers. At Reload Consulting, we often help out with this in terms of discovery meetings and education sessions. We have also seen examples where a digital strategy either hasn’t gone ahead or hasn’t gotten off the ground as the heads of the company weren’t involved from the start. It’s critical to get this leadership on a Digital Strategy.
Digital also needs to be encouraged by the rest of the team, this is as it crosses over into a lot of other departments such as IT, Communications, Finance etc. Everyone needs to understand the role digital will play in the business and its value to their specific department/role in order to make the necessary collaboration run smoothly. This can be facilitated by internal workshops to get input and buy-in across the business and keeping the wider company up to date.
- Limitations When it Comes to Understanding the Target Audience- Customer-centricity is certainly a key theme for Digital Strategy. Often there is hesitation to set the strategy when there no or limited knowledge of the customer to base the direction on. The customer understanding really is key here and although it can add time and sometimes cost, it’s absolutely critical to know as much as you can about your customer before defining how you are going to reach them. When working with our own clients that don’t have this understanding, we mostly employ customer research via surveys, focus groups or depth interviews to get information directly from ‘the horse’s mouth’ so to speak. However, if budgets or timelines don’t allow, we’ll also hold workshops with key members of the team that have frequent touch points with the market and can share their historical experience or review the database to pull out any key trends. This is a good place for you to start as well.
- Time and Effort- Essentially, compiling a well-considered Digital Strategy doesn’t take a few hours. To develop a strategy that is sound and can be trusted by your organisation moving forward, you need to do the hard yards in researching the customer and the approach that may be right for your market, industry, business, operational structure, etc. Many are put off by the idea of a Digital Strategy as there may not be time. For this, you can either seek the assistance of a professional, or you can break up the digital strategy into more manageable pieces and enlist the help of key people in the business with one champion to assess and bring it all together. Then there is the time and effort of implementation and any additional infrastructure needed to collect the data. For this, it’s vital to note, you don’t have to start executing all of your strategy’s tactics on day one. We highly recommend phasing it out so you can implement as you become confident that the systems are in place to ensure your efforts are streamlined and accurate.
- Hesitation to Change How it’s Always Been Done- This largely comes down to human nature and knowing that by setting a new Digital Strategy, it will often mean that you need to move away from your current path and head in a direction that may be uncertain. To encourage change as a positive thing, this also needs to be reiterated from the top. The positive long-term effects need to be articulated to show that in the short-term, people will be supported to expand out of their comfort zone, and in the long-term, the efforts will be more efficient for the same or better results.
What goes into one?
A strategy can only be developed effectively if it is based on sound information and then creatively compiled to identify the best path forward on the basis of that information. You, therefore, need to cover some bases before you go directly to the strategy and tactics. To do this, follow these steps:
- Define where you are coming from (current state)– If you’re trying to find out where you’re going, you need to know where you’re starting from. This is essentially where you take a look in your business, marketing and digital ‘basket’ and lay out everything out on the table. This may include how the business is currently performing, what you are currently saying in your messaging, how your competitors are doing, what marketing activities you are carrying out offline and online, how they went. If you haven’t been carrying any out, then you’re starting from a fresh canvas but can still have a look at why you haven’t engaged in digital before. You’re then looking at everything you’ve got so many strengths are leveraged and any weaknesses are considered or ideally addressed. This assessment can then not only provide some clarity on how you’ve done in the past but also acts the benchmark for assessing a strategy’s effectiveness in future.
An example of this is a business who‘s defined that they are currently in a situation where they have been using social media, email marketing, remarketing and some on and off radio. They’ve found the approach to be ad hoc and aren’t getting the consistency across their efforts. They’ve got quite a few competitors in the space that are starting to get more advanced in digital and can see their sales are beginning to decline. They’ve got a marketing plan, but there wasn’t a particular focus on strategy or digital. Internally, they have just the one resource that can dedicate time to focus on digital and therefore need their approach to be targeted and efficient. They have a great relationship with their web developer but no other key suppliers.
- Define where you want to get to (objectives)- You’ll mostly already be aware of the importance of objectives as without a clear end goal it’s almost impossible to guide your efforts and end up achieving it. It’s like starting a road trip without knowing your destination. For this, we recommend you start with your business objectives – where your business is going or what you want to achieve, to then outline how marketing plays a role in that and your key marketing objectives, from there you can define how digital plays a role in that to reach your digital objectives.
- Define why you want to get there (business logic)-The business logic behind your objectives should be in place from following the business > marketing > digital process. However, it’s always a good idea to temperature check your objectives to ensure they are attached to some sound business reasoning – aka how will this objective help your business to win business. To test this, we highly recommend Why Why Why Analysis It’s an incredibly simple tool that allows you to get to the heart of a problem, solution or objective. You simply state your objective and ask why. You write the answer to this and then ask why again, write the answer down and then why again. Typically by the third why you are at the root cause. Here’s an example:
Objective: Increase engagement across our social channels, why? To increase the reach of our content, why? To better engage with our target market? Why? To develop a relationship with them beyond a transactional one, you can even go one further – why? As we know relationships with clients lead to loyalty and positive word of mouth.
- Define who your audience is and what they need (target market) – You really need to know your audiences. I use the plural here, as you’ll often have a core focal market and then secondary audiences that are still of high value to the business and mustn’t be alienated. Without knowing who these people are and the characteristics of their segments it’s near impossible to know if you’re sending them the right message. As mentioned earlier, the starting point for this can be having the conversations with your customer service team members who deal with clients frequently. You can also look at your customer database to see if there are any trends in the demographics or buying behaviour. But really, the best data comes from research with the actual customer via surveys, focus groups or interviews. Surveys are much more affordable now being online and you can attach an incentive to complete the survey with a discount that encourages them back to your business. Get in touch if you would like to know more about customer research.
- Define what you’ve got to do to achieve those objectives with that market and current state – What you’re going to do.. this can be the most daunting piece and does require some creativity in assessing all the information in the previous steps to then define where you’re going to go. It’s often easiest to start with the five key areas of strategy – your arenas (where you’ll compete), the vehicles you’ll use to get you there (e.g. channels), the source of differentiation in your approach (how you’ll do things differently to suit your specific need and market), in what stages you’ll carry it out, and finally what is the economic logic (why are you doing this and how will it help your business).
- Decide on your tactics – This is where you can get tactical to list and plan out the vehicles for your strategy. You need to define the tactics that will contribute towards achieving the strategy and attach a clear purpose to each tactic so that it can be measured against this in future.
How do you integrate your digital efforts?
To achieve the best results, it is imperative to integrate your online efforts with those done offline. Now, how do you ensure your efforts are integrated? Here are a few ideas:
- Keep your bird’s eye perspective- Ensure there is a core strategy and each individual tactic has a clear role to play in contributing towards the objectives.
- Teamwork between tactics- Assess each tactic and specifically outline the required tactical cooperation.
- Streamline connection opportunities- Define the connection in terms of crossover and data transfer for efficiency and automation opportunities.
- Keep the lines of communication open- Consistency is key in communication between teams – channel based, offline/online, marketing and IT.
- Don’t forget offline! Customers don’t see the difference between online and offline, hence neither should marketers. It is all marketing and needs to be promoting a consistent message and approach.
How do you measure and maintain your strategy?
There will always be individual channel metrics, however, these aren’t a measure of the overarching strategy. You must ensure the tactics are measured against the core role they play within the wider strategy as opposed to the channel’s individual KPIs. Another way to measure this is by using strategy wide performance tracking, whereby each quarter the entire suite of tactics are reviewed and assessed against the original strategy to determine how much progress has been made towards the objectives.
Digital Strategy is maintained through flexibility. It should always be developed in a way that is intended to adjust with the data and environment. We recommend reviewing your strategy every 90 days and communicate any ideas, problems or solutions with our team. Ensure it is fluid but is set up following best practice for an easy transition at a later date.
More and more businesses are taking their promotional activities online but only half have a digital strategy to driver their efforts. Without strategic thought behind your use of digital, you run the risk of having each of your channels working in silos and missing the opportunity to gain the efficiency that comes from looking at your approach as a whole and defining specific digital channel roles. When developing your Digital Strategy, keep the tips outlined above in mind or get in touch with us if you need professional assistance.
Recently, Reload Consulting hosted a webinar on Digital Strategy. Watch the full episode below.