A strategic approach to Internet marketing

To realize the benefits of Internet marketing that we have described, an organization needs to develop a planned, structured approach. As we will see in Chapter 4, which covers Internet marketing strategy, there are many risks if an ad-hoc rather than strategic approach to managing online channels is used.

Figure 1.9 A generic Internet marketing strategy development process

Some of the problems that we have commonly seen in organizations are:

• Unclear responsibilities for the many different Internet marketing activities shown in Figure i;
• No specific objectives are set for Internet marketing;
• Insufficient budget is allocated for Internet marketing as customer demand for online services is underestimated and competitors potentially gain market share through superior online activities;
• Budget is wasted as different parts of an organization experiment with using different tools or suppliers without achieving economies of scale;
• New online value propositions for customers are not developed since the Internet is treated as ‘just another channel to market’ without review of opportunities to offer improved, differentiated online services;
• Results from digital marketing are not measured or reviewed adequately, so actions cannot be taken to improve effectiveness;
• An experimental rather than planned approach, is taken to using e-communications with poor integration between online and offline marketing communications.

Consequently, this book defines a strategic approach to Internet marketing which is intended to manage these risks and deliver the opportunities available from online channels. In Figure 1.9 we suggest a process for developing and implementing an Internet marketing which is based on our experience of strategy definition in a wide range of companies. This diagram highlights the key activities and their dependencies which are involved for creation of a typical Internet marketing. The purpose of strategic Internet marketing activities and the main point at which these topics are covered in this book are as follows:

A. Defining the Opportunity

Setting objectives to define the potential is the core of this phase of strategy development. Key activities are:

1. Set E-marketing Objectives (Chapter 4): Companies need to set specific numerical objectives for their online channels and then resource to deliver these objectives. These objectives should be informed by and influence the business objectives and also the following activities:

1a. Evaluate E-marketing Performance (Chapters 4 and 9): Applying web analytics tools to measure the contribution of leads, sales and brand involvement currently delivered by online communications such as search engine marketing, online advertising and E-mail marketing in conjunction with the web site.

1b. Assess Online Marketplace (Chapters 2, 3 and 4): Situation analysis reviewing the micro-environment (customers, competitors, intermediaries, suppliers and internal capabilities/ resources) and the broader macro-environment which influences strategy such as legal requirements and technology innovation.

B. Selecting the Strategic Approach

2. Define E-marketing Strategy (Chapter 4): Select appropriate strategies to achieve the objectives set at stage 1.

2a. Define customer value proposition (Chapters 4 to7): Define the value proposition available through the online channel and how it relates to the core proposition delivered by the company. Reviewing the marketing mix and brand values to evaluate how they can be improved online.

2b. Define E-communications mix (Chapters 4 and 8): Selecting the offline and online communications tools to encourage usage of an organization’s online services and to generate leads and sales. Developing new outbound communications and event-triggered touch strategies to support customers through their relationship with the company.

C. Delivering Results Online

3. Implement E-marketing plan (Part 3): This details the implementation of the strategy.

3a. Implement customer experience (Chapter 7): Build the web site and create the E-mail marketing communications which form the online interactions customers make with a company. Create online customer relationship management capabilities to understand customers characteristics, needs and behaviours and to deliver targeted, personalized value (Chapter 6).

3b. Execute E-communications (Chapter 8): Managing the continuous online marketing communications such as search engine marketing, partnerships, sponsorships and affiliate arrangements and campaign-based E-marketing communications such as Online advertising, E-mail marketing and microsites to encourage usage of the online service and to support customer acquisition and retention campaigns.

1. Customer profiling (Chapter 6), Monitor and improve online activities and maintaining the online activities (Chapter 9): Capturing profile and behavioral data on customer interactions with the company and summarizing and disseminating reports and alerts about performance compared with objectives in order to drive performance improvement.

You will see that in the process diagram, many double-headed arrows are used, since the activities are often not sequential, rather they inform each other, so activity 1, Set Objectives is informed by the activities around it, but may also influence them. Similarly. Activity 4. Performance management is informed by the execution of online activities, but there should be a feedback loop to update the tactics and strategies used.