Build Your Digital Command Canter Part 1

The popularity of Star Trek is based, in part, upon our fascination with advanced technology. We're excited when Captain Picardorders his crew to take The Enterprise to another galaxy with the simple command "Make it so." In the distant future, it seems, we'll be able to entertain our merest whim by pushing a button or by telling a computer what we want done. Powerful machines will do the rest.

To succeed at digital marketing, you need to build your own version of The Starship Enterprise. You need to develop a digital command center in your company to communicate on a day-by-day basis with your customers and prospects. Unlike a traditional marketing department — often far removed from direct contact with customers — a digital marketing department must be hardwired to Customers. E-mail messages, for example, must be read and replied to Within hours, if not minutes, and your Web site content may need to be updated and changed daily. In addition, your customer database should be constantly churning with new information uploaded from your salespeople, your customer service representatives, and your customers.

Integration in the Digital Economy

To gather, store, process, and distribute digital information, you need to integrate your company into the digital economy. In the next three to five years, you will need the following capabilities in your company.

• Every computer is connected over a network using highspeed cable. This network includes an internal e-mail system that allows for the sending and receiving of Internet e-mail messages.
• Everyone involved in your company — employees, customers, and suppliers — are able to communicate by e-mail with everyone else in your company. As bandwidth becomes greater, you can upgrade your e-mail capability to include video-mail and live video-conferencing.
• Employees and contract workers are able to work at home, or at satellite offices, as easily as if they were in the office. Note: In the digital world, you may not have an office; your entire operation may run over a central server that electronically connects your organization.
• Your internal computer network is connected directly to the Internet over high-speed telephone or cable lines. This means every computer on your network is connected to the Internet at all times. In fact, it means your computer network is actually part of the Internet.
• You have security measures in place which restrict access to private corporate information on your network. One solution is to set up an Internet fire wall.
• Your marketing presentations, internal communications, and training courses exist in a multimedia format which combines text, graphics, sound, and video. You have software that allows for the easy development of multimedia content.
• You have one or many different types of online servers running on your network. This includes one or more Web servers, a BBS network server, and online database servers. Each of these servers are available to selected people within your organization over an Intranet, or outside your organization by way of the Internet.
• As an alternative to internal online servers, you can lease space with service bureaus. For example, you can rent space on a Web site that is halfway around the world. You can update its content as if the server was in your office. You may use a service bureau to set up and run your online BBS system. Remember, you don't need to buy expensive digital equipment in order to use it — you can rent it as well.
• Your customers access information about your business using a variety of digital communications tools including the telephone, fax, e-mail, the World Wide Web, interactive kiosks, and CD-ROM, and perhaps also through some sort of virtual reality (VR) device. Ideally, your customers are able to purchase your products and services electronically.
• You have an extensive database on all your customers and prospects. This database is relational in structure. All your digital communications and your digital marketing promotions are aimed at increasing the size, quality, and complexity of this database.
• All your computer systems are compatible. In the computer industry, this is known as "Open Systems Architecture." This means all your corporate information is accessible, no matter what type of computer is used. As well, your information should be accessible through all digital devices, not just computer-related ones.
• Your employees are fully fluent in the ways of basic digital technology. Everyone in your organization knows how to use the three major types of software programs: word processing, spreadsheet, and database. They are comfortable creating _and viewing multimedia content. They understand the basic concepts of the Internet, and can find the information they need on it.

In order to succeed at digital marketing over the long term, you need to set up this type of infrastructure within your company. However, man didn't get to the moon in one day. So take it one step at a time. Here's an explanation of how to take the first steps:

Outline marketing plan for Asuk Creative Limited a B2B provider of Internet services continue...

Objectives

The objectives are each built around the SMART criteria (specific, measurable, actionable, realistic and timed).

• Increase market share. ASUK Creative Limited currently holds 2 per cent (200 servers) of the UK dedicated server market (approx immediately 10,000 dedicated servers). ASUK should plan to increase this steadily to 16.7 per cent after four years. Since the market share has risen from 0 to 2 per cent in one year without increased marketing, this is a realistic target.
• Streamline ordering processes. The new web site called DediPower.com should incorporate online facilities for order processing, upgrades and support. The development of these features can continue over time but a fully featured site should be ready for launch.
• Increase brand awareness/brand building. By launching a new site, ASUK can take advantage of a fresh start but still use all the advantages of an established company. A brand image of power and quality, yet competitive prices should be established through intensive marketing and excellent CRM. The company plans to have a powerful brand name within six months of launching the site.
• 
• Create self-contained entity for possible initial public offering (IPO) or trade sale.
• ASUK can aim for an IPO within three years, being sold either to a competitor or to a diversifying larger company. The sell value is currently £300,000. A target should be set to have this at £1 5 million within three years.
• Expansion into international markets. The launch of DediPower means that foreign clients will become more accessible. The improved site will have support for international sales.
• Improve CRM and customer support. By improving these fundamentals, ASUK aims to sell additional products to its current clients. Currently, 25 per cent of clients have bought additional services, and the aim is to increase this to 55 per cent within a year.

Strategies by target markets

• Current customers. By rebranding, enforce customer loyalty and improve service level. Also provide an easier product upgrade path. Better support and customer self-service should also be provided.

• Domestic. Build brand as a high-quality service with lower-value pricing. Offer three core incentives to show confidence in the product: thirty-day money back guarantee, UK price matching initiative, no minimumcontract. ASUK will be the first company in the UK industry to offer all these incentives together in a genuine fashion.

• International. Key strengths to marketing include sustainability and experience. The product will be positioned in the market as a high-end service, offering good performance for companies that have interests across Europe.

The marketing mix

• Price. Although prices should be offered on a price match guarantee within the UK, they should be based around a product-line pricing strategy; that is, each customer can start with a basic product and build layers on top to create their custom product.
• Product. The product is to be sold individually, but a discount should be offered for multiple sales and/or prepayment packages. Customer loyalty could be rewarded with additional free services.
• Promotion. ASUK should base the promotion around an online marketing strategy, using online targeted banners and search engines, complemented by increased exposure on the major Web hosting guides. Publication to online and offline trade magazines of press releases and adverts will reinforce the respectability of the brand.

Evaluation and control

• Monitor market share and company growth rate. Frequently obtain market share statistics. An estimate can be made by obtaining the total number of dedicated in the market segment and calculating the percentage of them that ASUK holds.
• Occasional customer surveys to ensure support satisfaction is increasing. ASUK already has the facility to conduct customer surveys online. These should be conducted half-yearly to ensure that satisfaction objectives are met.

• Demographic analysis of buyers and potential buyers. To determine whether ASUK is penetrating all potential markets sufficiently, customer account details should be collated and analysed to produce maps of customer distribution.

Online Retail Trends to Watch

The future is difficult to predict. But the following trends are in progress and will continue to pick up steam as time progresses. Some, like CRM, will become a condition of doing business in the future rather than a trend.

1. One-to-One Marketing/Loyalty Programs

One-to-one marketing programs or customer-relationship management programs (CRM) are the latest trend in retailing, web-based marketing, cataloging, and manufacturer relationships. Retailers have jumped on the bandwagon, looking for new ways to create connections with individuals.

One goal of CRM programs is to provide singular insight of all customers and every interaction they have with a retailer. The main goal, however, is to act with this information in mind every time a customer visits a store or makes a transaction. That will be the major transformation in retailing in the future. Any loyalty strategy, of course, will need to employ offline and online marketing. In the future, customers most likely will refuse to provide their information to more than one agent in the same company. This will force businesses to integrate customer information.

2. Customized Programs and Services

As an adjunct to their CRM programs, retailers will be adding customized programs and services, and manufacturers will be creating customized products. As a result, retailers will have to modify their supply-chain processes to meet the demand. Logistics and warehousing will need to evolve to remain competitive.

The demand for customized products will result in shorter product lifecycles and smaller production output. Because it will require more flexibility, retailers will need to respond as well. The cycles for resetting the stores may need to move from the traditional fixed dates and seasonal planning to responsive, just-in-time planning. The store of the future will have to be very different to accommodate real-time consumer demands.

3. Aggressive Differentiation

In the past 20 years, retailers were very aggressive in expanding their chains through the building of new stores and consolidating with other companies to become larger and more powerful. In their haste to build new stores, some stores have almost become clones of one another. Warehouse-type superstores, for instance, all tend to look like one another. Other "big box" formats and club stores are hard to tell apart as well.

Now retailers realize they must close some of the stores they built so quickly and differentiate the rest of the stores in their chains. They will be adding more interactivity and special services. In order to be successful, retailers will need to help the consumer associate a unique benefit with their stores that is different from their competition.

In the future, customers will want to be able to experiment in the store, enjoy face-to-face interaction with a variety of demonstrations, and participate in entertainment. Retailing will need to become more active than passive. Stores will incorporate interactive technologies and offer instant training rather than classes. Of course, retailers will have to conduct research to determine which technologies customers prefer. Some shoppers dislike using a handheld scanner that tells them which product matches their personal profile. But the same shoppers would like handheld scanners to conduct price checks, verify sizes, or place orders. Just because a tool is electronic does not guarantee its acceptance.

Increased differentiation will include these new tools and new techniques. But the main emphasis will be on building brands to gain recognition of store value and service.

4. Channel Blurring

Channels aren't as distinct as they once were. Drug stores sell milk, and grocery stores have pharmacies. More than 40,000 products are now sold in supermarkets. Consumers just want convenience and shopping speed. Retailers know that if they are able to satisfy most consumer needs in one shopping trip, there will be less need for the consumer to shop at another store. Retailers would like to capture as many of the day's shopping dollars as possible.

Watch for this channel blurring to continue. While consumers today favor European-type shopping, being able to purchase fresh foods daily or satisfy other needs without pre-planning, retailers may replicate the hypermarket concept to provide all needs under one store roof.

Customers are also moving toward using more than one channel to make their purchases. While online sales are just a fraction of traditional retail sales, the web complements all sales by providing supporting information for purchase decisions. Retailers will increasingly rely on the web to learn more about their customers and offer specialized services and promotions. It's important that the customer has a consistent experience across all of the channels.

Channel blurring has extended to the Internet as retailers have pushed customers online with web-specific promotions. Many companies still pursue web sales for the immediate cash return and low overhead dollars, rather than building the channel or contributing to a brand. The Internet customer relationship in the future will be perceived as a long-term asset, not a short- term sale.

One retailer can span channels within its own organization. Kroger owns chain drug stores, convenience stores, supermarkets, and mass merchandisers. Wal-Mart has its conventional mass stores, supercenters, Sam's clubs, and Neighborhood Store supermarkets. The future may include more blending among these.

5. Security/Trust Focus

Over the past several years, there has been an increasing issue with security and trust of both merchants and manufacturers. When appliances break before their time, when services cost more but provide less, or when fashion designers force new fads on the public without alternatives, the retailer is often the one to take the blame.

Cybercrime is also rising. An unprecedented number of websites have been infected with some type of computer virus. Other attacks have ranged from defacement of a site to disabling a site entirely. Victims include e-merchants, manufacturers, and financial institutions.

Higher costs, more self-service, and crowded checkout counters don't contribute to furthering trust. Retailers are trying to re-establish themselves as trusted advisors and service providers. Both resellers and manufacturers have dedicated resources to ensure that the products they sell and the environments in which they sell them are safe and secure. This trend will become more critical to conducting business.

6. Problem Solving Programs

Home discount centers used to be merely warehouses stocked with remodeling materials like countertops, sinks, and faucets. Now these companies provide a consultant to work with the consumer not only to select these products but also to recommend entire remodeling services. In addition to the products, home discount centers offer contracting services to install the new kitchen fixtures.

Retail solution centers will increase in virtually every store. Instead of staffing with sales associates, retailers may add category experts to their stores in major metropolitan areas. The trend will extrapolate to virtually every type of business.

7. Category Expansion

Over time, categories tend to divide as more specialized products are developed. The paper category used to consist of writing paper and typing paper. Then the advent of the computer created the need for printing paper. Now, the category has expanded to include specialty printing paper as well—glossy, resume, and brochure paper to name a few.

While companies are merging and integrating, they may mistakenly believe they have gained synergies in categories. The opposite is true. More categories are being offered in each store, and more categories are being created as they divide and multiply.

The result—for traditional as well as online stores—is the ultimate capping of product assortment. Offering too many types of products only confuses the consumer. The retailer will have to carefully prioritize even more in the future.

8. Store Expansion/Remodeling

Stores are running out of room. It is always a struggle for the retailer to determine which products go on the shelf due to space constraints. There are now more than 50 versions of Crest toothpaste, and other brands offer nearly as many. Only consumer-preferred variations will be placed on the shelf.

But store expansion is limited and not merely focused on making more space for more products. Retailers are updating their stores to create meal solution services and interactivity. Grocers feature more prepared foods and have expanded the perimeter—the most popular area of the store—to focus on high-profit, interesting products and services.