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Going Big With Profitability on the Web: Driving Digital Strategy With Digital Analytics

If your company exists without a digital strategy, you definitely need a digital strategy that is result oriented and measurable! You do not have be Amazon.com, Facebook, Tencent, RenRen, Twitter, Weibo or even VKontakte. Neither do you have to be a search engine like Google, Bing, Yahoo, Yandex, Baidu or even Sogou nor be totally dependent on the internet traffics like eBay, Priceline, Alibaba, Vipshop Holdings or Dangdang Inc. before digital strategy has to be one of the foremost strategies that takes your company to the next level in your respective industry.

If you have a digital strategy that is just a strategy and not implemented or implemented but you cannot quantify the value to the bottom line or you just cannot figure out whether it is doing what it supposed to do, then you need to go back to the drawing table and improve or redesign the digital strategy so that when implemented, it will add value to your bottom line - That simple!

 

If you are asking why the digital strategy must add value to your bottom-line? Why would you waste your time, resources and invest in something that will not add value but it is only for show or just to convince your investors and employees that you are now in digital age?

 

The activities taking place on web are enormous. As shown in the slides below by Domo.com, sohu.com and GO-Globe.com, sixty seconds of activities on the web provide tremendous opportunities that a company that seeks to averagely leverage the opportunities will perform better that a company that struggle to understand the benefits of the web. These enormous activities represent enormous sale opportunities as shown “in 60 seconds v2” by GO-Globe.com.

From Social Activities on the Web to Topline Sales on the Web in 60 Seconds

Source: Social Activities  from Domo.com

Source: Topline Sales from GO-Globe.com

From Big Data to Digital Analytics Questions

The tremendous information as mentioned by Domo.com, sohu.com and GO-Globe.com represent part of what constitutes the big data.

A company with digital strategy will be interested in the information mentioned above and with this information, digital analytics can provide the measurement, validation, monitoring and reporting of the outcome of the strategy. Leveraging the above numbers to enhance revenue and profitability are where digital analytics can add value in big ways.

  • A company that uses Digital Analytics can begin to ask the analytically oriented questions: Out of the 204 million email messages that are being sent out every minute as pointed out by Domo.com in 2014, how many of these emails will have impacts on:

    • The opportunities the company can leverage from the current and potential/future customers who are part of those that are sending emails

    • Current and future product and services offerings including:

      • Core product concepts

      • Products features/benefits (functional, aesthetic)

      • Product engineering/design

      • Product packaging

      • Product brand names

      • Product lines(styles, features, price)

    • Current and future activities in brand development and deletion decisions

    • Current and future pricing decisions in terms of:

      • Pricing decisions

      • Overall prices

      • Price margins

      • Pricing structures

      • Price promotions

    • Current and future marketing communication decisions including but not limited to:

      • Messaging including types of messaging

      • Message goals

      • Creativity

      • Media

      • Advertising

      • Sales promotion

      • Effectiveness measures

  • What are the consequences of Google search queries on:

    • Market performance

    • Sales level

    • Market penetration

    • Profitability

    • Corporate stature

    • Financial health

    • Production capacity

    • Industry performance

    • Competitive climate

    • Environmental factors and development

  • For Restaurants, Shopping Networks, Nightlife Clubs, Entertainment Centers and other Services, the 26,380 reviews posted every sixty seconds on Yelp.com as noted by Domo.com in 2014 pose analytical maze on how to handle questions that include:

    • How will the customers’ behavior change?

    • How will the cost structure change?

    • How will the segmentation be affected?

    • How will the competitors redefine their activities?

    • How will the competitors’ functional strategies change?

    • How will the competitors change their investment strategies?

    • How will the product technologies change within the industry?

    • How will the process technologies change within the industry and the competitive landscape?

    • How will the financial performance be affected?

What Can Advanced Digital Analytics Do For You in Your Business?!

With the advancement in new technologies that include being able to handle complex and unstructured data, parallel processing and in-memory processing, Digital Analytics is positioned to:

  • Leverage the big data through the application of sophisticated analytic tools, catalogs, applications and methods to provide insights that management can use to proactively manage critical digital business issues.

  • Analyze the big data to understand the patterns, trend and “what is next”, "where will it happen next" which customers segment to go after next" and "why does the company's leadership need to change for what will happen next".

  • Create quantitative environment that allows for objective identification and measurement of drivers that can be influenced if there is the need to change the current course of action(s).

  • Provide inputs into strategic planning, refining and enriching decision making processes to help validate, sustain, drive new digital marketing orientations which include the:

    • Changing Needs and Wants of the customers

      • Integrated efforts between the company and the customers in such a way that the company should seek to satisfy the customers' preferences that will contribute to corporate strategic goals.

    • Designing of products and services to meet the needs of the customers:

      • Combining products and services groups into aligned or related divisions to provide broad offerings to market served

      • Focusing the sales efforts on markets and customers with a shift from product and services coverages

      • Expanding market analytics to include more information on the end users within the context of digital strategy, customer segments, buying behaviour and brand funnel.

        • This includes the evaluation of the digital strategy as applied to the customers from the point of the customers getting attention, connecting with the customers, inspiring and informing the customers, persuading, converting and retaining the customers

        • On the customer segmentation, there is the opportunity to analyze the browsers, the prospects, the leads, the persuades, the customers and the customers that become the loyal customers

        • With digital analytics in integrating psycho-analytics, there is the capturing of the behaviour of the buyers in terms of the drivers in forming opinion, when do the customers generate the short lists, when do they take action, buy and what drivers keep them coming back

        • Digital analytics in brand funnel dives deep into the awareness, familiarity, likeability, consideration, purchase and finalize with ownership

    • Assessment of market attractiveness that:

      • Involves the identification of the contributing factors in any given situation

      • Determines and form  the relationships among the contributing factors

      • Weights the contributing factors in any composite measure of “attractiveness” or “position” depending on their relevance to issues under discussion

      • Focuses on identifying and satisfying needs and wants of customers

      • Considers the short- and long-term effects of actions on customers and on society

      • Re-orients planning techniques and processes with competitive marketing strategy as the driving force through the assessment of the company’s market positions

    • Use of digital marketing matrix to improve strategic and tactical digital marketing in such areas that cover general strategic issues in products, services, customers, pricing, sales, advertising, promotion, distribution and customer services to take advantages of :

      • Development of sound forecasts in areas of sales, market share and profitability assuming there is not going to be major changes in company’s competitive actions, marketing activities and other external and internal conditions

      • Development of conditional (alternative) forecasts in areas of sales, market share and profitability assuming there is going to be major changes in company’s competitive actions, marketing activities and other external and internal conditions.

        • These forecasts should be able to:

          • Help management adapt to changing environments - actual, potential and latent

          • Monitor the customer group dimension (who is being served), the customer function dimension (what needs are being satisfied) and the technological dimension (how customer functions are being satisfied).

  • Alignment of digital analytics as integral part of digital marketing strategy underlining productive adaptation of all corporate resources to new opportunities in the marketplace through:

    • Situation analyses which include:

      • Customer analysis

      • Market analysis

      • Market trends

      • Buyer behavior

      • Competitive analysis

      • Opportunity analysis

    • Contingency analysis – “What if” the digital market does not evolve as expected

      • Monitoring and control

      • Performance analysis

      • Customer feedback

    • Identifying the drivers to aid in creating reservoir of goodwill on the web through:

      • eListening to the market

        • Using Chat

      • Be responsive to inquiries, complaints and comments etc.

Performance Measurement: Key Performance Indicators (KPIs) in Digital Marketing

Out of these analyses are the needs for performance measurements to provide the measurement, monitoring and reporting of the outcome of the strategic changes to answer the questions that include how is the online business performing?

 

Performance Measurements step in in terms of Performance Metrics which focus on identification, refining and monitoring core performance metrics or “measures that matter” in alignment with the progress towards the achievement of business strategic goals.

The performance measurements provide a common language to communicate business results across an organization. It also provides both short and long-term targets to ensure continuous and breakthrough improvements that focus on:

  • Sales statistics or metrics which include:

    • Customer statistics

    • Performance against forecasts

    • Marketing cycles

    • Pricing effects

    • Product packaging

  • Need to know marketing statistics or metrics which include:

    • Advertising

    • Promotions

    • Product costs

    • Competitive environment

    • Marketing data

  • Sensors

    • Develop and maintain integrated and algorithm based combination of Performance Metrics that allow or automate interventions to better manage operational workflows that can guarantee the paths toward revenue and profit.

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