Over the past year, the COVID-19 pandemic has pushed consumers to shift their online behavior drastically. Purchases of goods and services occurring online have increased in most of M2 Ventures’ operating markets (ASEAN, Japan) in the TTM 2020-2021by an average of 22.6%, suggesting that the pandemic drove substantially higher rates of digital adoption than these markets were on track to register. Importantly, the gains are showing stickiness, and customers’ loyalty patterns have changed as consumer interaction with brands has become a multipronged journey.
With movement restricted, it’s no surprise that consumers were forced to change their behavior. McKinsey’s Global COVID-19 Digital Sentiment Insights Survey in 2021 shows that 71 percent of users (first-time and regular) plan to continue using digital channels to the same extent or more after the pandemic, with 25 percent of consumers saying they will increase long-term use of digital channels. As they adapt to remote working and studying, consumers’ consumption patterns will also change. In a similar manner, ASEAN surveys we conducted throughout the year found significantly more customers made a portion of their purchases online during—and after—the COVID-19 pandemic than before. In Indonesia, up to 60 percent of consumers reported an increase in intent to spend money online even after the pandemic.At the same time, surveys showed that the pandemic has affected customer loyalty, with, for instance, 68 percent of Thai consumers and 80 percent of Filipino consumers trying out new brands.Such brand-switching makes company efforts to retain existing customers and acquire new ones increasingly critical.
The space is growing ever more crowded, and both intelligent decision-making and speed are increasingly the sine qua non of success. And of you don’t get it right, you can lose market position and money very rapidly.
Companies who wish to 1) switch more of their transactions online 2) expand their geographies and customer bases, and 3) improve Marketing ROI, must double-down on five mission-critical areas of digital marketing in order to capture growing opportunities both in their domestic markets and abroad. In turn, the specialist knowledge in each of these 5 areas that is necessary to succeed argues strongly for adopting a partnering model as offered by M2 Ventures.
1) Shift focus to performance marketing with a goal to enhance customer experience
M2 Ventures defines Performance Marketing as : the focus on continually optimizing performance metrics along the customer-journey funnel by rapidly pulling quick-impact levers. Metrics themselves are diverse (activation, conversion, churn, cart abandonment rate) and have aspects that are product-specific (BOGO upsell, time to watch before purchase, basket size, referral rate, etc). The list is extensive, and always has a hierarchy. Understanding how these all work for your brands and products across all channels, successful Performance Marketing is the heart of understanding and evolving Customer Experience.
We advocate focusing on the most valuable customer metrics in Performance Marketing. Avoid vanity metrics such as share of voice or traffic – do you want 100 visits that don’t convert or 1 that does? High performing brands often identify a “star metrics set” that is most indicative of success for their businesses. Success against these metrics can reduce average cost of acquisition per customer or cost per conversion. Digital means you need to constantly look at and evaluate data that is being generated across the business.
2) Leverage the full marketing tech stack
The marketing-tech landscape can be confusing to navigate, in part because the number of solutions has grown so rapidly. There are more than 7,040 solutions in the market as of mid-2020, and many have little differentiation. As such, many organizations have fallen into the trap of investing in marketing tech solutions before carefully thinking through which are most suitable or how to use them, resulting in disappointingly low ROI.
A complete marketing tech stack and data setup needs to cover three essential capabilities Campaign execution. Automate and personalize campaigns and communications across owned- and paid-media channels. Audience management. Segment customers based on both their offline data (such as customer relationship management) and online data (such as digital-asset behavior), and share this segmentation with different marketing channels. Data analytics and performance. Collect and register customer behavior for audience-creation and campaign-performance tracking and provide a platform for analytics.
Within this nexus, the role of the customer data platform (CDP) is critical. A CDP unifies data from disparate sources to create a single, holistic view of each customer. But it’s much more than just a data aggregator; it also allocates customers into segments (which, in turn, determines which offers and content the customers see) and can present results in an easily digestible, possibly even visual, manner.
M2 Ventures deploys best-of-category means to segment customers and best tailor marketing campaigns and investment to address them, and maintains a culture of data analysis to drive decision-making with its partners.
3) Balance spend allocation between channels
Organizations continue to struggle with marketing mix – how much to spend online versus offline, and within online how to invest for Marketing ROI in different channels and measure channel effectiveness. Spend allocation should occur at the individual micromarket level and be guided by characteristics of the micromarket where granular geographical data, other forms of demographic, connectivity, behavioral, and income data can help drive the approach.
Organizations often display a “last click wins” bias in digital-ROI assessment, which can lead to an excessive focus on some channels. It’s important to remember that multitouch attribution, which looks at the full funnel from awareness to conversion / repeat purchase is necessary to understand 1) where to invest, 2) where there are bottlenecks in CX, and 3) where to focus operational and marketing effort, and to understand the impact and ROI for each channel.
M2 Ventures takes an explicit approach for its clients in conducting funnel analysis. We regularly analyze the top, middle and bottom of the funnel, advising where there are opportunities for improvement in CX and thus Marketing ROI, aligning on the ways to optimize online conversion and repeat buying. We do this within your own e-commerce instance as well as cross all the platforms we operate for our partners.
4) Ensure responsible first-party data management
While personalization in digital marketing is central to success, the increased scrutiny against third-party cookies and new privacy regulations means organizations must be responsible holders and managers of first-party data.
The heart of the trust between the customer and the brand are in 1) CX, and 2) privacy protection. All companies must now unlock their own understanding of how first-party data can be scaled while maintaining customer confidence and protecting privacy. Transparency with customers on how their data will be used is critical, and all companies need a culture of data sensitivity. In the end, getting customers to opt-in to trust and allowing use of their data is going to be the difference between winning and losing.
If you are a brand or maker which lacks a deep enough understanding of how this needs to evolve, work with a company like M2 Ventures that understands how to interact with customers in the digital space to build trust, integrate use of data into a more overall meaningful CX, and use it properly to help drive marketing investment, sales growth and retention.
5) Partner to Drive Your Overall Digital Strategy
For either a market entry or digital-marketing strategy to succeed, the product, marketing and technology elements of the business need to work in lockstep to continuously optimize the customer journey. This is not easy. Success requires specialized capabilities, and poor execution in any part of the daisy chain can crater the best of plans. Working with a specialist E-commerce enabler like M2 Ventures is one of the best ways to ensure you have the right talent, ideas and best practice at your disposal as the digital space rapidly enables new entrants and mints new winners and losers. These talents include expertise in growth marketing, search-engine optimization, user-experience design, channel design and execution, HTML development, attribution analytics, broader campaign management, and copy writing. They also include how to effectively operate on 3PP channels such as Amazon, Rakuten, Wowma, Bulakapak, Shopee, and WalMart. The rise in social commerce and customer self-directed discovery means that a professional level understanding of how to intelligently use content, influencers, and community-building media is likewise an increasingly necessary skill to deploy for e-commerce success.
