The Importance of Digital Marketing (Why Is It Important For Businesses)
Digital marketing is an imperative step for businesses looking to connect with their prospective leads online. Digital marketing refers to any form of marketing that takes place in a digital setting and the fundamental idea behind the concept is for marketers to embrace revenue responsibility and optimize their efforts at every stage of the buyer journey.
The goal of digital marketing is meant to tie marketing efforts directly into revenue you are already earning. Successful marketers should proactively manage and measure their departments as a profit center for their organization. It does not matter where you are in the funnel, nor does it matter if you only have a few leads.
Digital marketing is not a new initiative that you are going to add to your existing marketing plans. It IS your new marketing plan. It is also not inbound marketing, lead generation, content strategy, or sales and marketing alignment. These are all essential pieces to growth marketing, but the concept in and of itself is much more comprehensive than a single element.
60% of small business owners do not know how to track ROI from social media marketing. 43% of marketers state that proving the ROI of their marketing is the biggest challenge they face. Only 22% of businesses are satisfied with their conversion rates. In fact, for every $92 spent acquiring customers, only $1 is spent converting them.
Once you generate a lead, what are your next steps? Do sales follow up with that lead? How is that lead converted into a customer? Once they are a customer, how do you prove that the dollars they spend with your company are attributed to whatever marketing pieces they downloaded originally when they became a lead? Alternatively, after you have a lead, how do you keep that person involved and engaged?
Do you focus on retaining them, selling new products to existing customers? Do you focus your efforts on selling new products to new leads? What is the conversion rate for this?
Digital marketing has re-defined marketing goals over the last few years. It has changed the way marketers think about demand and customers. The purpose is to attract more engaged customers. Traditional marketing focuses on the top of the funnel, but you want to be focused on the entire funnel.
“For meaningful growth, startups must completely change the rules of traditional channels or innovate outside of those growth channels. They are too desperate and disadvantaged to adapt to the old rules of marketing. They have to dig deep creatively, and relentlessly test new ideas. If they don’t figure it out quickly, they will go out of business.”
Sean Ellis, Founder & CEO, GrowthHackers.com
With digital marketing, you remove the boundaries of marketing to make sure every aspect of the customer experience focuses on attracting engaged people. You want to be involved throughout the lead generation process, the acquisition process, and the revenue that customers bring in. You want growth, not just marketing. Retention is the single most important growth strategy your business can use. You should care more about getting users who stay. There are no shortcuts here. There is only hard work. Moreover, it is a team effort. Marketers will remain focused on the best ways to get new customers, but the chance will influence how this is done.
Who is doing it well?
In 2014, Microsoft, Intel, LinkedIn, and Twitter had marketing budgets which were greater than 14% of their revenue, and some spent as much as 50% on marketing and sales. Doing so gave them year-over-year growth.
Need an example?
Marketer Mary writes a blog post and pushes it live on her website. In it, she pushes customers to learn more by downloading a free eBook, something they get after they sign up for newsletter emails. She follows up with people who downloaded the book and submitted an email with newsletters. In those newsletters are linked to videos and other products for sale. Once they buy, those leads become customers who have a clear interest in what Mary has to offer.
Now, your organization might have more barriers than Marketing Mary’s but the goal is to take yourself from one stage to the next. If you bring in leads but you do not know what to do next, we can talk about how to turn those leads into customers. If you already have customers but do not know how to keep them, we can talk about that too.
The point is this: whatever you are doing, you can always push it a step further. And this playbook will help you make it happen.
To reach your marketing goals, you need a sound strategy that resonates with your target audience and a great website.
Retention is Key
Generating leads is the biggest challenge for many businesses. With digital marketing, you can get better leads, improved data, and this begets long-term customers. Why does retention matter? Because it is the cornerstone of digital marketing efforts. Successful digital marketing should not just be about acquiring new customers. It should be about acquiring customers who stick around long term. If your business acquires new customers regularly, but they all leave shortly thereafter, then you don’t really have any growth to celebrate.
You should focus on long-term retention now more than ever before. Most small businesses lose between 2 and 3% of their new customers every month. This means they have to grow their company between 27-43% every year just to compensate for those losses and keep the same revenue stream as before. This does not mean any new income is being generated.
But retention with digital marketing can reduce those losses and increase revenue. Increasing retention by 5% across the board can improve profits up 95% long-term. The more long-term customers you can nab through digital means, the better your lead generation will achieve its goal. Lead generation alone misses the key components of retention; existing customers will try a new product 31% of the time and that 31% is not a number you can ignore.
So how do you achieve better retention? Pull away marketing efforts from the digital channels which are not as effective. Figure out where there are bottlenecks and where you can do better. You should aim for 3 main digital channels, rather than trying to spread yourself too thin across all the possible digital channels out there.
Creating a digital marketing plan
Almost every marketing tool can be used for growth marketing. However, to be successful, you must map your tools and strategies to the different stages of the funnel, and ensure they’re all working well together. A modern marketer should look at this image and start thinking about a growth marketing plan as something which is really full-funnel marketing based.
You probably know that full-funnel marketing starts by dividing the funnel into two parts: the upper funnel where you reach your target audience and the lower funnel where you nurture your prospects. Traditional marketers focus on email to nurture, but new technologies help change the way this is done. Part of the reason this is necessary is that prospects spend 23 hours per week on email, social media, and texting.
For that reason, prospects are influenced by personal recommendations, social content, display and search advertisements, and online reviews. Capitalizing upon this change is imperative but so is the need to flesh out a plan to achieve growth marketing.
Some of the primary elements of growth marketing include market definition, audience analysis, market, lead/demand generation and sales enablement. In order to strategically cover these elements, a modern marketer should rely on key tools like public relations, website strategy, social media, advertising (traditional/digital), inbound marketing, marketing automation, and sales collateral development.
Think back to the full funnel marketing idea…
You need to focus on understanding the key objectives that you have to hit at each stage of the funnel, and pine down the right metrics for measuring your progress as you deploy effective programs.
How is it done?
Consider this: online display advertising, for example, is not only a top funnel strategy. It has been proven effective when used at every stage of the funnel. Display ads can increase search conversion. Both display and search ads can improve ROI with time.
On a similar note, content marketing is something you should use at every stage of the funnel. In the upper part of the funnel, LinkedIn sponsored Updates combined with leadership blog posts can establish a company brand as helpful, reputable, and knowledgeable. For the lower part of the funnel, videos can work well with whitepapers to educate and engage potential prospects. Businesses can drive leads and sales with webinars or product-focused content.
Developing a full funnel digital marketing strategy
Achieving all of the elements of growth marketing means a fine balance between those goals and the key tools needed to reach those goals.
- Elements of Digital Marketing
- Market definition; audience analysis
- Lead/demand generation; sales enablement
- Key Tools
- Public relations; website strategy; social media
- Advertising (traditional/digital)
- Inbound marketing; marketing automation; sales collateral development
So, before you set out to launch your program, figure out how your programs will reach prospects at each stage of the funnel. Start from the beginning and work your way from one phase to the next until the end.
Look first at the top of the funnel. Your goal here is to increase brand awareness and exposure, reaching as many people as you can within your target audience. Brand building activities, therefore, should be a mixture of online and offline strategies. Use public relations who can help you get better media coverage and enhance your company credibility.
Craft engaging content and social media to introduce your brand to new audiences. Fill your company blog with helpful posts about your industry to increase brand awareness. Expand your blog post reach by promoting your content on your social media pages too or LinkedIn Sponsored Updates.
Focus here on giving people resources within your industry. This will paint your company as an industry leader, both reputable and thoughtful.
Display advertising can help reach prospects here too. However, make sure you invest carefully and avoid wasting your money on unqualified prospects. Use business demographic targeting. When you are at this stage, focus on crafting display and social media advertising that is memorable. You want prospects to become familiar with your brand and what your company can give them.
Understand that click-through rates are not an accurate reflection of your success. Lots of prospects will not convert yet, but that does not mean your methods were unsuccessful at leaving an impact that might provoke action later.
Now, look at the lower part of the funnel. Your goal here is to educate prospects about what you can offer them, to encourage them to engage with you through social channels or your website. Educational content coupled with outreach is imperative at this stage. Prospects often interact with your marketing content dozens of times before they finally give over their email address.
Craft engaging content like whitepapers, webinars, or a corporate blog to draw top funnel prospects into the lower funnel. Encourage prospects to get this content via free downloads in exchange for contact details. With their contact details, you can start marketing them directly.
Advertise with social media too. Short text ads with calls to action complement other engaging content if you post the targeted ads for that relevant content on your social media sites. Use this time to invest in keyword search ads too which are related to your industry or your brand.
Again, display advertising helps you develop targeted calls to action which force prospects to download content or access videos closely aligned with your company and their business needs.
You will find that once prospects are familiar with your brand and they have educated themselves about how you can help them, they might convert without you needing to take any further action. And those who do not convert immediately might only need a few more techniques to guide them toward a purchase.
Overall, by integrating all of these components you can turn leads into customers, and long-term ones at that when you integrate a digital marketing strategy for your business.