You’re a business owner or executive looking for ways to grow your business. How do you come up with an effective marketing strategy? What is the role of advertising as part of your marketing strategy? Should it be traditional marketing? Should it be online, digital marketing? Or should it be some combination of the two?
The Modern Customer Purchase Funnel
The purpose of marketing is to enable and drive sales. In my many years of experience as a marketing executive, I believe effective marketing starts with an understanding of your target customer’s buying behavior. Market research and feedback helps you to refine this. But there are some useful customer purchase models to help organize your thinking and idenitify where you may need to gather further information or do testing. A classic customer purchase model was the AIDA one:
But the Internet has changed that. It is no longer sufficient. A modern customer purchase model that I find useful is:
- Research and familiarity
- Opinion and Shortlist
- Champion/Repurchase OR Defect/Detract
Think about this with regard to your own buying behavior for different products and services. For example, I am planning to build a house and need kitchen appliances. I have some general awareness of appliance brands, but I have become aware of newer ones through ads and web sites and store visits. I started to research the brands and how they will meet our needs. I asked people in stores. They offered a little insight, but I found a lot more insight and information on the Web. This is a major purchase that we will live with for a long time so I want to make sure we get it right. On the Web, I can also see customer reviews and lab tests of products to understand what other people have experienced. I can see video demos of the products being used. We have formed some opinions and narrowed down the list of brands we are interested in. Now we’re drilling down on those two brands to consider features, pricing, reliability, style, etc. to decide which ones we will purchase. Once we purchase and begin to use those products, we will either be satisfied customers who will champion them to others online and offline and eventually repurchase OR we will be dissatisfied customers who will make that known and detract from the brand.
Traditional vs. Digital Marketing
Customer buying behavior has shifted and so should your marketing mix. Should it be all traditional or all online? It depends on your business and your customers. For many businesses the answer may be somewhere in the middle. But the 4 Ps (product, price, place, promotion) are no longer sufficient.
What are the advantages of online, digital marketing strategy over traditional marketing?
- Lower costs –Traditional marketing is expensive. It takes a lot of people, lead time, and materials. Trade shows, direct mail, TV or radio ads are all costly. Digital marketing is much less expensive. The cost to create and maintain a web site is much lower. The cost to write a blog or send an email newsletter is minimal. The cost to run PPC ads on Google or Facebook is much less. The cost to make changes is dramatically less.
- Target your message – Your targeting is limited with traditional marketing. Many of your tools are broadcast to a wide audience rather than narrowcast to someone getting ready to make a purchase decision. You can target the right message to the right person and based on where they are in the customer purchase decision process.
- Measure ROI – In traditional marketing you are often guessing which marketing elements contributed to return on investment because it would cost too much to find out. With digital marketing feedback is immediate and measurable. Analytics give us data on the performance and conversions associated by different online marketing activities.
- Change or refine strategy easily – It’s difficult and time consuming to make changes to traditional marketing elements. Re-designing and re-printing a brochure takes time. Re-shooting a television ad takes time. Digital marketing is much faster to test and refine. You can do A/B testing and get immediate feedback. You can see where you are spending money with results and without results. You can stop and/or change things with less effort and shorter lead times. Real-time feedback and analytics tell you when and how to change your strategy.
- Engage prospects longer – Nobody reads a long brochure. A TV or radio ad is usually 30 seconds. A trade show may yield a brief conversation. But online marketing can grab and hold attention. It can help to start building a relationship with a prospect or reinforce a relationship with an existing customer. Online, digital marketing is informative. It is not just PPC ads. It is educating and informing your audience so they can take the next step in their purchase decision process. They can interact with your business via text, images, video, chat. They can see what others have experienced with your business. They can learn more about the values of your business or how you work behind the scenes.
- Be available 24/7 – If I wake up in the middle of the night I can still engage with your business as part of my purchase decision process. I don’t have to wait for a store to open or a sales person to call. And the content is long lasting. A blog post I write this year may be just as valuable to new prospects next year. Or it can easily be updated to be always accessible over time.
- Be less intrusive – Most of us don’t want to be sold on something. We want to come to our own conclusions. We value advice and a small set of alternatives that are tailored to our particular needs and wants. But we don’t like people pushing something to us based on features and functions that we may or may not need. Online, digital marketing is available when I want it. It is informative. It helps me move through my decision process at my pace.
On the island of Kauai we have many businesses that are targeted to visitors. One of those businesses is selling activities to enjoy while on vacation (ziplines, fishing trips, snorkeling, etc.) It used to be that visitors almost always arrived and then met in person with a concierge at a hotel or a shop to be told what the offers and recommendations are and to make their purchase decisions. But that business model has been shifting rapidly. Now a large proportion of visitors arrive on the island having already researched activities online, reviewed customer reviews, shopped for discounts and promotions, and made a purchase before they ever got here.
Is the answer today all traditional marketing or all digital marketing? For a startup business in particular industries all digital may be the right answer. For some more traditional industries, traditional marketing may still dominate overall marketing investment. But for many businesses the shift is occurring between the two. You may still need traditional elements for that face to face connection via trade shows and an outside sales force. It depends on your product/service and your target customers’ buying behaviors. But chances are your marketing mix will need to shift increasingly toward online, digital marketing.
What do you think? Have you shifted your marketing mix or is it all traditional or all digital? Have you seen customer buying behavior changing in your business? Please share for the benefit of others working on their marketing strategies.