Perhaps your business is ready to tap into the online market, or maybe you need to provide a report for your boss. Whatever your position, the questions remain the same: how do I prepare my business for the digital economy? Which digital marketing models can my business use? Ironically, you may have uncovered too much information online. This article is a digestible and practical guide to four digital marketing models businesses can leverage to capture their online audience.

From Marketing to Digital Marketing

Much of the confusion surrounding digital marketing (also called online, internet or web marketing) can be attributed to its increasing popularity to reach customers faster and cheaper.

Marketing has existed for decades and evolved from production to product to selling to customer orientation. Its current focus is holism (or the view that everything matters), and so you can see how the concept of ‘digital’ sits nicely within this orientation. Digital marketing involves marketing goods and services via digital means (e.g. the internet and mobile).

Traditional marketing focused on frameworks like the ‘7Ps of the marketing mix’ or a ‘SWOT analysis’. While these frameworks are still useful, you will need to add digital marketing models to your arsenal to focus on how and what your business will be doing online.

In 2014, Strategy& (formerly Booz & Co) released a report titled How to Choose the Right Digital Marketing Model which outlined four key digital marketing models:

  1. Digital Branders;
  2. Customer Experience Designers;
  3. Demand Generators; and
  4. Product Innovators.

These four digital marketing models capture almost all businesses, and we will discuss these in detail below.

1. The Branding Model

Businesses that opt for the branding model are usually in the consumer product or retail space. The goal is to increase retention and drive engagement through building the brand equity. These brands focus on an array of digital touchpoints, which open up different avenues to connect with the brand. Businesses that fall into this category focus less on traditional push tactics or direct advertising, such as paid advertisements like Google Adwords and direct sales.

A perfect example of a ‘Digital Brander’ is energy drink company, Red Bull. Their target markets are thrill-seeking teens and young adults, and Red Bull’s brand strategy is to become a household name within this demographic. Red Bull identifies and subsequently creates digital experiences around what the target segment cares about. They create a community of engaged users who are encouraged to share and interact with this content.

For example, consider various Red Bull sponsorships (such as the Grand Prix and BMX racing). It becomes easy for consumers to share videos and clips of these adventurous events.

What Can You Do?

Businesses that align with this digital marketing model need to focus on:

  • Targeting based on customer personas;
  • Curating personalised content;
  • Providing an omnichannel experience; and
  • Emphasising social influence.

Branding is more than just ‘getting your name out there’. You need to get your product or service in front of the right people with the right message.

There are lots of ways to do this. You could consider engaging a social influencer for an influencer marketing campaign. Alternatively, you might want to hire a public relations agency. You could even house events with profiled speakers.

Whichever your method, make sure you do it with your target audience in mind, and make sure you do it within the confines of the law – misleading or deceptive advertising could tarnish your brand for years to come.

2. The Customer Experience Model

This model is built around delivering superior customer service at multiple touchpoints consumers may have with the business. This end-to-end experience creates a loyal customer base who not only return to the business but are also inclined and willing to refer the business to others. Naturally, these ‘Customer Experience Designers’ are serviced-based industries (such as hotels, airlines and retailers).

Airlines employ this model seamlessly, from the moment you purchase a ticket until your flight has ended. They identify your needs and pain points and to create a customised experience – hotel deals, food and drinks, entertainment and concierge services. You can order your ticket online, on your phone, through their app, or by calling the airline. Airlines are also renowned for having extensive staff training programs, with the focus on creating a culture of customer service.

What Can You Do?

If you want your business to be a ‘Customer Experience Designer’, you’ll need to focus on:

  • Creating a seamless omnichannel experience;
  • Segmenting your customer base;
  • Analysing consumer behaviour; and
  • Innovation.

‘Customer Experience Designers’ need to manage the expectations of their clients. As different customer personas will have different expectations, you will need to segment your audience to understand their needs and concerns. After you identify your potential customers and what they expect from your business, you must exceed those expectations.

You’ll need to innovate to continue delivering that seamless experience. For example, as technology develops, customers may want new and easier ways of booking your business. You may also consider using technology as a way for your clients to refer you more business.

3. The Lead Generation Model

Businesses engaged in using a lead generation model play the numbers game – concentrating their efforts on filling the top of their funnel with lead generation tactics. The concept is to bring in as much traffic and leads to their business across all their channels. They recognise that only a percentage of the volume they generate will turn into paying customers and that this volume will drive their efficiency. ‘Demand Generators’ put comparatively less effort into curating emotional ties and experiences.

Retailers commonly use this digital marketing model. For example, in Australia, Woolworth’s liquor chain Dan Murphy’s accounts for 46% of the online liquor market and is the number one liquor site for traffic and sales in Australia. Their online offering includes everything from the website to their app and to the social media properties which are all geared to pushing sales. These are in conjunction with their click-and-collect option.

What Can You Do?

A strong lead generation business will have a few common themes, including:

  • An emphasis on measuring data;
  • Using data to make quick and agile tests;
  • Targeting based on customer personas; and
  • Providing an omnichannel experience.

If you think your business fits the lead generation model, you need to take data seriously. What platform is driving you the most traffic? Did you do anything differently between two advertisements? Was the spike in traffic due to a particular time of day?

You should aim to track anything that can give you valuable information. You should use this information to drive future decisions, while always having the customer at the front of your mind.

There are multiple different lead generation tactics you can put in place to generate traffic, including:

  • Search engine optimisation;
  • Google Adwords;
  • Paid social advertising (Facebook, Instagram, LinkedIn);
  • Display advertising; and
  • Content marketing.

4. The Innovation Model

Although the least common of the four, the Innovation Model is equally as successful. It uses digital marketing as a method of gathering consumer insights and turning these insights into developed products and services. Digital marketing is used to increase the revenue, product and service offerings, and ultimately the value of the business in the long run.

Dating app Tinder is an uncanny example of a company that successfully used the Innovation Model to their advantage. Tinder became famous for its user-friendly, swipe-right and swipe-left feature. Previously, you were only able to swipe right to someone once if you ‘liked’ them. This feature was to the dismay of many users.

By gathering user data through app reviews, Tinder was able to roll out a monetisation model called Tinder Plus which allowed users to re-swipe or go back a swipe to a particular person they fancied.

What Can You Do?

To be a ‘Product Innovator’, you need to put your energy into:

  • Innovation;
  • Measuring data; and
  • Segmenting your customer base.

Innovation and measuring data go hand in hand. You should aim to monitor your social profiles, reviews, feedbacks and surveys to see what insights your consumers are commonly giving you. Along with improving the product lines and service offerings, this data can also be used to enhance user experience.

Are These Digital Marketing Models Mutually Exclusive?

When considering mutual exclusivity, you might be thinking one of two things:

  1. Are the digital marketing models industry-specific?
  2. Can I use only one digital marketing model for my business?

In short, whichever digital marketing models you choose is entirely up to your circumstances. They are not industry specific, nor are you limited to one – it’s possible for an entire industry to have different digital marketing models in place. The Strategy& report identified the US telecommunications industry as a particular example, finding that:

  • Vodafone fit the branding model;
  • Verizon aligned with the customer experience model;
  • KPM/E-Plus functioned as a lead generator; and
  • Orange was a product innovator.

It is also difficult to see how a retail business, which might have lead generation as its focus, could completely discount customer experience. It is possible to have elements of multiple digital marketing models engrained in the businesses processes.

That being said, it may be prudent for businesses with limited resources (such as human capital or budget) to focus on the digital marketing model which best fits their circumstances.

Key Takeaways

Successful digital marketing campaigns will provide the user with relevant, timely and valuable messages. Whether that message is brand related, customer-service centric, innovative or simply to play the numbers game is entirely up to what best suits your needs.

However, you will need to consider the impact the decision will have on your business. Understanding your business capabilities is vital to a successful digital marketing campaign. For example, will your business have the human resources to manage your social media profiles? Will your business have the staff to handle the influx of booking requests? Does your business have the budget to pay for advertisements?

There’s no single digital roadmap to success. But how you manage and think critically about your business and consumers make success more imminent.

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What do you think about the future of digital marketing? Let us know your thoughts on LegalVision’s Twitter page.

Stephen Yoon

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