1. Session 2 The Digital Consumer
Digital Marketing
Session 2 The Digital Consumer

2. Learning Outcomes
At the end of this session, students should be able to;
Demonstrate the increasing importance of customer focus for effective digital marketing strategy
State the reasons for the rise in online consumer power
Assess the changes in online customer behaviour as a result of the dynamic digital environment.
Syllabus references: 1.4, 2.1 and 2.3
Our focus for this session is on the customer and how their needs are changing in light of changing digital technologies. We’ll look how the buying process can be impacted by digital technologies and marketing as well as different online behavior that consumers may exhibit. We’ll then consider how digital is increasing and changing customer power and the demands the digital customer now has.
Digital changes rapidly and especially with technology applications. The best resources available to support your learning for this session will be found online and provided by professional organisations or individuals. We’ve provided you with links to relevant articles as well as videos, webinars and podcasts, we would encourage you to further reading around these topics online and via the Digital Knowledge Bank.
We’d also recommend you consult Chapters 4 in the Chaffey & Smith recommended text as well as Chapter 1 in Ryan & Jones recommended text.

3. The Customer Lifecycle & Digital Marketing
Acquisition
Conversion
Retention
Generate awareness of product/service/brand and encouraging trial
Converting the consumer to a customer and to on site outcomes
Encouraging customer loyalty and product/service/brand advocacy
This slide looks at a simple customer lifecycle and the potential role of digital channels within it.
Search Engine Marketing
Banner advertising
Digital PR
Partnerships/Affiliates
Online sales promotions
Social media
Reviews
Social media
Sales promotions

4. Brassington and Pettit, 2008
Generic Buying Processes
Customers go through a decision making process when buying a product
Unawareness – no idea the product exists or have no need
Awareness – customers become aware of a need
Interest – customers start to think that a product or service may benefit them
Information Search – start to seek alternative providers or products
Decision Making – decide what they want to buy and how
When a consumer looks to purchase a product or service, they are likely to go through the stages outlined in the slide
The awareness stage can also be defined as ‘problem recognition’, where the consumer becomes aware that there is a difference between desired state and the actual condition – thirst, hunger, or even a need for a fast car! Sometimes a person has a problem but is unaware of it – marketers use advertising and promotions and packaging to help trigger such a need.
The information search can involve an internal search where the buyer searches his or her memory for information about products, as well as external search. This involves a search that focuses on information not available from consumer memory (internet, experts, adverts, WOM)
During decision-making, the buyer establishes criteria for comparing the products, a level of importance is then attached to each criterion. The buyer then proceeds to purchase the goods or services.
During the post-purchase stage the buyer begins evaluating the product to check actual performance meets expected levels – the outcome determines whether consumer is satisfied or dissatisfied.
Purchase – they actually buy the product and start using it
Post Purchase – like or dislike it, will influence future decisions
Brassington and Pettit, 2008

5. Impact of the Internet on the Buying Process (Chaffey & Ellis-Chadwick, 2012)
Stage in buying process
Communication Objectives
Internet Marketing Techniques
Search engine marketing (SEO & PPC), Affiliate marketing
Aware of product need, develop specification
Position features, benefits & brand
Lead generation (from range of customers)
Aggregators, directories and other intermediaries
Supplier Search
Assist purchase decision
Detailed product info, user review and ratings, content marketing
Evaluate and Select
This slide summarises how the internet and digital marketing techniques can be used to support the different stages in the buying process
Automated reminders, one-page payments, offline options
Facilitate purchase
Purchase
Personalised website content and interaction
Post-purchase evaluation & Feedback
Support use & retain business

6. The Importance of Different Information Sources
84% of consumer trust peer recommendations
68% trust online recommendations from strangers
Look at the level of trust attributed to other more traditional media
This slide show some interesting research from Nielsen that shows the level of importance that consumers attached to different sources of information. Notice the top two information sources are from other consumers and consumer reviews – this underlines the importance of businesses providing good customer service and encouraging past customers to leave reviews about their products and services.
You can read more about this research here:
Source: Nielsen.com, 2013

7. How Site Content can Support The Buying Process
This slide summarises how content on a website can support the buying process.
What content does your organisation (or one you know well) use currently on their website to support the customer decision-making process?

8. The Online Customer Journey
Today’s consumers are ‘always on’, relaying on a variety of devices to stay connected. It’s essential for organisations to therefore understand what stages a customer takes from search to point of conversion in order for the organisation to optimise its marketing spend fully.
The diagram above shows a consumer using a desktop device; however, research from IMRG (2014), shows that half of UK households now own at least three connected devices and consumers increasingly expect to be offered a seamless brand experience across multi channels and devices. Therefore, organisations also need to consider the role of these devices in the customer’s online journey.
The diagram highlights the different media touch points and websites that a consumer may consider as part of their journey to a decision or conversion.
This article provides some examples of customer journey mapping:
Experian, 2013

9. The Roles Different Channels Play in Customer Journey
This diagram shows the roles that different channels can play in the customer journey to online purchase. You can view this here:
The customer journey has grown more complex and before making an online purchase decision, a customer may engage with a brand through many different media channels over several days or even weeks. The diagram highlights which channels assist interaction, so those that help increase awareness in the brand/product/service as well as consideration and intent. It also highlights those channels that act as the last point of contact before purchase.
It underlines the need for an organisation to understand not only the customer journey but also the roles various channels can play in developing effective digital marketing campaigns.
ThinkwithGoogle.com, 2014

10. Online User Behaviour
Lewis & Lewis, 1997 (cited Chaffey & Ellis Chadwick, 2012) suggested there are 5 main types of web users:
Directed Information Seekers
Undirected Information Seekers
Directed buyers
Bargain hunters
Entertainment seekers
Marketers need to be aware of different types of online behaviour that can be exhibited by consumers as this can guide their digital marketing efforts.
This slide provides some traditional approaches to analysing online behaviour.
Lewis and Lewis outlined 5 types of web users that are still valid today:
Directed Information Seekers - Looking for information online, but not typically planning on buying. Know what they are looking for generally.
Undirected Information Seekers - ‘surfers’ who browse and change sites by following different links (looking at information but not really knowing what they are looking for!)
Directed buyers - these are consumers who are online to purchase specific products
Bargain hunters - sometimes known as ‘compers’ and what to find any offers available, such as sales promotions or competitions
Entertainment seekers - users looking to interact with the web for enjoyment
Through understanding the types of online behaviour a user may exhibit, an organisation can develop suitable segments and tactics for designed for their needs.

11. Key Characteristics of Digital Consumers
Digital consumers are increasingly comfortable with the medium – using more efficiently and effectively
They want it all, and they want it now – information on demand from multiple sources, ‘scanability’
They’re in control – marketing needs to be user-centric, elective or permission-based and offer a real value proposition
They’re fickle – transparency and immediacy can erode brand loyalty
They’re vocal – online consumers talk to each other through various mediums about positive and negative experiences.

12. Changing Consumer Demands
As digital capabilities multiply, consumer demands have risen in four areas:
Now: Consumers will want to interact anywhere at any time.
Can I: They will want to do truly new things as disparate kinds of information (from financial accounts to data on physical activity) are deployed more effectively in ways that create value for them.
For me: They will expect all data stored about them to be targeted precisely to their needs or used to personalise what they experience.
Simply: They will expect all interactions to be easy.
The article quoted by McKinsey suggests that marketing is changing, building on the increase in consumer power bought by the digital age. It’s moving beyond being ‘always on’ to being on demand, therefore; being more relevant and responsive.
You can read more about this in the article here:
McKinsey.com, 2013

13. The Customer Engagement Economy
In order to remain competitive, organisations need to provide more than a positive customer experience
Companies need to evolve to become more customer-obsessed enterprises.
This is taken from an interesting infographic from Bluewolf, a management consultancy company. You can see more of the infographic here:
It’s simply underlining the power the customer now has and that organisations need to move beyond providing a great customer experience, they need to focus on being innovative in differentiating the customer experience – and ultimately ensuring they are now ‘customer obsessed’.
Bluewolf.com, 2014

14. Customer Engagement Customer engagement has four parts:
Involvement – this includes website visits, time spent, social media fans/followers
Interaction – contribution to comments on blogs, social media and also reviews
Intimacy – sentiment tracking through third-party sites (i.e. review sites) and social media
Influence – advocacy indicated by measures such as likelihood to recommend and brand affinity
Customer engagement is now a key metric for marketers given increasing online media fragmentation and the increase in customer choice, which impacts on customers engaging with brands.
Engagement refers to ‘the to the long-term ability of a brand to gain a customers’ attention on an on-going basis, whether the engagement occurs on site, third-party sites, social networks or in or traditional direct communications’. (Chaffey and Ellis-Chadwick, 2012)
The slide suggest the four aspects to customer engagement, which can be measured both online and offline. The challenge for organisations is how to engage with customer in the longer term and how digital technologies and marketing techniques can assist them in doing this. For example, how can an organisation encourage more customer interaction through their social channels – so increasing replies, re-tweets, comments etc.? How can the organisation then measure the impact of their digital marketing efforts and operations by tracking customer sentiment through social networks?
Read this article here about organisations can drive customer engagement:

15. Online Customer Loyalty
Loyalty variables that are unique to online consumer markets:
Customisation
personalised, tailored content
Contact interactivity
dynamic nature of the buyer/seller relationship, ability for two-way communications
Cultivation
relevance of online content
Care
attention paid to customer needs
Community
online interaction between purchasing community
Choice
expectation of greater choice online
Convenience
ease of access to required information and/or transaction interface
Character
website design, online band image.
Why does a business want loyal customers?
Can charge more money
Expect greater share of wallet in product category
Reduce administration costs
Reduce marketing expense
Reduce fixed costs as a % of sales
Expect more referrals, and……
Increase the value over a ‘lifetime’ of the customers we have worked so hard to acquire.
This slide considers the various factors that can drive customer loyalty in the online environment and examples of these.
Chaffey and Ellis-Chadwick, 2012

16. Ladder Of Customer Engagement
Moving customers up the ladder of engagement creates brand loyalty – it can also help create a competitive advantage as the customers become more engaged and more loyal to the brand.
The lower half of the ladder encourages customers to engage via product ratings, reviews and discussion (such as those discussion on social media). The upper half of the ladder is higher-level user-generated content (UGC), which encourages customers to become co-creators of content, products and services, through crowdsourcing and co-creation that we discussed in the previous session.
A great example of UGC as part of a digital campaign was Three mobile ‘Dance Pony Dance’. The advert produced went viral but they also produced an app which enabled users to engage with the brand further and create their own version of the ad (which Three subsequently used as TV adverts). Read more about this here:
Smith & Zook, 2011 cited in Chaffey & Smith, 2012

17. Relationship Marketing on the Web
Four main assets that are essential in building successful customer relationships online
Identify consumer details such as their habits and interests by the regular capture of information
Differentiate the site content, by tailoring it to the needs of different users
Interact with customers by various methods, such as the ability to track orders or write reviews
Customise the product or service to meet the customer’s exact requirements.
So how can organisations build relationships with customers online and therefore, build loyalty?
This slides suggests that there are four main assets that are essential for organisations to build successful customer relationships in the online environment.

18. Building Customer Relationships Online
eCRM uses digital communications technologies to maximise sales to existing customers and continued usage of online services
Benefits of eCRM:
Targeting more cost effectively
Achieve mass customisation of marketing messages
Increase depth and breadth and improve the nature of the relationship
A learning relationship can be achieved using different tools throughout the customer lifecycle
Lower cost
ECRM involves creating strategies and plans for how digital technology and digital data can support CRM (customer relationship management).
ECRM includes aspects such as:
Managing customer profile information
Managing customer contact points (through mobile, social media, etc.)
Data mining to improve targeting
Providing personalisation, or mass customisation, of the buying experience – think about how Amazon recommend other products to you and personlaise your shopping experience as soon as you log in to your account.
Providing online customer service facilities.

19. Altimeter, cited in Chaffey & Ellis-Chadwick, 2012
Social CRM
Social CRM considers how social media can be applied to develop customer relationships and customer value. Chaffey & Ellis-Chadwick (2012) define it as: ‘the process of managing customer-to-customer conversations to engage existing customers, prospects and other stakeholders with a brand and so to enhance customer relationship management’.
The slides shows the scope of social CRM – so how social media can be used to help build and maintain customer relationships online
Marketing: monitoring and analysing customer conversations through social listening tools (Hootsuite, Social Bakers etc.) – by listening, an organisation can then better deliver customer value and satisfaction.
Sales: Understanding where customers are discussing products and services offered by the organisation and determining the best way to get involved with the conversation to generate sales and leads
Service and support: customer self-help through forums and social media – how can an organisation use this to enhance customer relationships.
Innovation: using social media conversations to foster new product or service development – again, using information to better meet the needs of customers
Collaboration: How can technology and software be used to encourage collaboration between organisations and their customers.
Customer experience: using social CRM to enhance the customer experience and add brand value.
Altimeter, cited in Chaffey & Ellis-Chadwick, 2012

20. Marketing Automation: Definition
“Marketing automation is a platform that supports a marketing business process which enables marketers to manage and measure the marketing funnel, driving more qualified leads to sales, driving revenue growth and improving marketing accountability. Marketing automation is to marketing as CRM is to sales.” (Doran, 2013, cited in Econsultancy, 2013)
It’s important to discuss marketing automation as part of any discussion on building online customer relationships and CRM. Marketing automation uses technology to streamline and automate marketing tasks to not only increase efficiency and conversions but also to provide a form of mass customisation of communications.

21. What Is Marketing Automation?
Marketing automation technology streamlines and automates marketing tasks, helping organisations to increase operational efficiency.
It enables marketers to adopt an integrated approach to generating, nurturing and converting leads into customers by automating various marketing techniques and processes
Marketing automation encompasses some of the following techniques:
Demand generation / lead acquisition
Segmentation
Lead nurturing and scoring
Relationship marketing
Cross-sell and up-sell
Retention
Triggered communications
Marketing automation is a set of steps that is mapped out to strategically provide the next piece of communication – be it content, contact or offer – that will move the buyer towards purchase. Marketing automation technology allows an organisation to use software to automate touch points so it can be a repeatable consistent experience. It can provide key measurement information, tasks and workflows so that over time the organisation can make better marketing decisions. It used to be that large companies were the only users of marketing automation technology but today the software is more affordable for small businesses to use.
You can look at some useful introductions to marketing automation here:
(requires registration)

22. What Marketing Automation Does
Nurtures relationships with leads that aren’t ready to buy – enables the development of qualified leads until they are sale-ready
Retains and extends customer relationships – through developing relationships further, cross and up-selling as well as driving loyalty
Build alignment with sales – developing ‘behavioural lead scoring’ system to identify hot prospects
Improve marketing ROI – provides insights as to which marketing programmes are working and which are not
A lead is a consumer who may be interesting in buying a product or service but has not purchased as yet. A lead could be in the form of an enquiry.
‘Nurturing’ leads is where an organisation builds relationships with potential customers even if they are not currently looking to buy a product or service. Lead nurturing is intended to raise a company’s profile in the potential customer’s eyes, so when they are ready to purchase, they choose the organisation’s product or service. Marketing automation supports this process through a series of automated steps. This could be through the provision of content (e-books, articles, whitepapers etc.) delivered via or simple through sending a series of s to remind the consumer about the organisation and their offering.

23. Marketing Automation Software
Some marketing automation processes are possible at small volumes without software, but technology becomes essential with any scale. In particular, these processes all require:
A central marketing database..
A relationship marketing engine.
An analytics engine.
Marketing automation software offers the ability to not only hold a customer database and segment it but also manage the automated process and analyse the results.
Marketing automation software provides:
A central marketing database. A place for all the marketing data, including detailed prospect and customer interactions and behaviours, in order to segment and target the right message to each customer.
A relationship marketing engine. An environment for the creation, management and automation of marketing processes and conversations across online and offline channels.
An analytics engine. A way to test, measure, and optimize marketing ROI and impact on revenue.

24. Features of Marketing Automation Platforms and Software
Lead Generation – via forms, landing pages, integration to social media
Segmentation – via database (CRM integration)
Lead nurturing and scoring – ranking leads by criteria
Relationship marketing – communicating over time ( marketing and social media marketing)
Cross sell and up-sell – presenting choices along the buyer’s journey
Retention – communication and offers (campaign management)
Measurement and ROI – measuring via criteria (marketing Analytics)

25. Benefits of Marketing Automation
Marketing groups that implement a marketing automation system enjoy many advantages, including:
The opportunity to integrate the touch points to the customer and make their journey purposeful
Cost and time efficiencies
Increased ability to manage lead flow and process leads
A faster and more predictable revenue cycle
Increased conversion rates
Increased profitability
Stronger alignment with sales
Full revenue accountability

26. Test Your Understanding
For an organisation of your choice, map the stages in the buying process for one of their products or services, using the model introduced at the start of this session.
Describe how the digital marketing techniques undertaken by the organisation impact at each stage of the buying process.

27. Bibliography
Chaffey, D and Ellis-Chadwick, F (2012) “Digital Marketing: Strategy, Implementation and Practice”, Fifth Edition, Prentice Hall.
Google (2014). Customer Journey to Online Purchase. [ONLINE] Available at: . [Last Accessed 2 May 2014].
Nielsen (2013). Global Trust in Advertising and Brand Messages. [ONLINE] Available at: . [Last Accessed 2 May 2014].
Bluewolf.com (2014). Infographic: The Emerging Customer Engagement Economy. [ONLINE] Available at: . [Last Accessed 2 May 2014].
Experian (2013). The Online Customer Journey. [ONLINE] Available at: [Last Accessed 2 May 2014].
McKinsey & Company The coming era of ‘on-demand’ marketing. [ONLINE] Available at: [Accessed 26 May 14].