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Digital has undoubtedly become one of the most important channels of choice during the pandemic. A 2020 global COVID-19 Digital Sentiment Insights Survey conducted by McKinsey showed that 71% of users, both first-time and regularly, intend to use digital channels to the same extent or more after the pandemic. A quarter of those surveyed stated that they would increase their use of digital channels in the long term.

In ASEAN, McKinsey found that during and after the COVID-19 pandemic, more consumers made some of their purchases online than before. In Indonesia, for example, up to 60% of consumers said they wanted to spend more money after the pandemic. According to McKinsey, digital marketing can help companies increase sales by 5 to 8% in 12 to 18 months by driving more online traffic and effectively targeting more consumers.

With the digital marketing trend not slowing down, it is imperative for brands to keep improving their digital marketing strategy. Here are five ways brands can do this, according to McKinsey.

1. Double performance marketing

Performance marketing is critical to increasing the customer experience, especially with lower funnel interventions like digitizing interactions and having a customer service response team that responds within an hour. It is also important for brands to focus on the most valuable customer metrics in performance marketing. According to McKinsey, companies often enjoy vanity metrics such as share of voice or traffic or even invest money in marketing to “buy” customers.

High performers often identify a “star metric” that best indicates the success of their business.

Using the example of an Indonesian telecommunications company, McKinsey said that it had recognized that the daily number of new customers through referrals was the key metric for the success of its new business. The telecommunications company prioritized its customer referral program based on this metric. Within a month, his referrals had more than 20% of all new daily customers. According to McKinsey, by comparing success with this metric, the telecommunications company was able to “drastically reduce” the average cost of acquisition per customer and also made it possible to meet its 12-month customer target within seven months.

2. Move “pragmatically” into a modern martech stack

There are three essential skills required in a modern martech stack and data structure.

a) Campaign execution: Automate and personalize campaigns and communication via your own and paid media channels.

b) Target group management: Segment customers based on offline data data and online data and share this segmentation with different marketing channels. Offline data is defined as customer relationship management, while online data is defined as digital asset behavior.

c) Data analysis and performance: Capture and register customer behavior for target group creation and tracking of campaign performance and provide a platform for analysis.

This also gives rise to the importance of the Customer Data Platform (CDP) within a Martech stack. McKinsey stated that the CDP is more than just a data aggregator. In fact, it also divides customers into segments and presents the results in an easily digestible and visual way.

3. Agile operating model for marketing and engineering teams

The marketing and tech teams need to work hand in hand and optimize the customer journey for the digital marketing strategy to be successful. McKinsey said executives need to put digital marketing on the CEO’s agenda in order to get the required executive approval and generate momentum. You also need to be transparent about the ROI of existing marketing activities and stop efforts that fall below a certain ROI threshold.

One of the best ways to achieve this, according to McKinsey, was to leverage existing high-performing talent to create two to three agile marketing and technology teams to target key performance levers. These people should have experience in growth marketing, SEO, UX design, HTML development, attribution analysis, copywriting, and broader campaign management. You should also work together to define, prioritize, and implement research, product, marketing, data, and technology backlogs.

4. Balance the distribution of expenses across the channels

It is normal for companies to still struggle with the division of online and offline spending. To solve this, according to McKinsey, spending should be allocated at the level of the individual micro-markets and based on the characteristics of the micro-market. Businesses should also consider how much they are spending on each subchannel.

According to McKinsey, organizations often have a “last click” bias when assessing digital ROI, which can lead to “over-focus” on some channels. Multi-touch attribution is an underutilized approach that can also be useful for brands as it focuses on the entire customer journey to understand the impact and ROI for each channel.

5. Implement responsible first-party data management

The imminent discontinuation of third-party cookies and new data protection regulations make it imperative for companies to be responsible owners of first-party data. Privacy issues form the core of trust between the customer and the brand. As a result, organizations need to consider how first-party data can be scaled while maintaining customer trust and privacy. As regulations change, companies also need to be proactive and clear that they are taking privacy seriously. It is critical to be transparent about how data is being used and to implement employee training and measures to prevent data theft.

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