Digital Age to Improve Profits
Digitization is like re-writing competition rules. Existing companies can be at risk to stay behind if they don’t address strategic challenges delivered by this digital revolution. Social media and web strategies play a major role in companies being competitive. Additionally, it is also used to generate leads that have a higher probability to shatter goals in sales.
Some digital forces at work
Through experience and research of trends working for leading companies, it’s possible to redefine competition.
This may include the following:
Pressure on margins and prices that is new
Digital technology can create a transparency close to perfect. This is done by making product performance, price comparison, and service levels easily accessible. Consumers will be able to switch between digital services, retailers, and brands through a swipe of the finger, or a few clicks.
It’s a dynamic way to commoditize services and products when consumers have a demand, using simple interactions and features to compare. For instance, certain banks have now discovered how to simplify their products and make it easier to do purchases with mobile phones. This can contribute towards a convergence between what they offer and their competitor's mobile-friendly simplicity.
Competitors that emerge out of unexpected places
Often digital dynamics can undermine entry barriers and also cause long-standing product source separation. Service providers that are web-based for insurance or telecommunications, for instance, will now be able to tap into markets without the need of local agents and building networks of distribution offices. It’s possible for them to effectively compete using data mining to find customer’s preferences, their income, as well as assessing their risks.
Dynamics of winner-takes-all
Many digital businesses can reduce labor and transaction costs, thus, increasing their returns up to scale with collective data. Furthermore, they can enjoy increases of excellence from digital intellectual and talent properties, once the effects of networking kick in.
Cost benefits are important because retailers online could generate up to 3 times the revenue level than with employees, which is even higher as a top-performing discounter.
Compared advantages could rapidly materialize with these intensive information models, and it won’t be over the span of a multi-year like most businesses expect.
Usually, there are two ways to work effectiveness
Brand building is one way to promote your product or services. The main aim will be for creating memory patterns among customers that provide a good feeling about your brand. They might not actually buy immediately, but should return in the near future. Every exposure of brand building through a campaign can create lasting effects that may produce growth of sales over the long term.
With sales activation, which is not the same as brand building, it’s important to stimulate sales through identifying customers who would buy instantly and get them to purchase your product. This requires an approach that is specifically targeted with a budget that is smaller. If this strategy is properly done, it will result in sales that are high over a short period but can fade as time goes by.
To sum this up, brand building provides an effect over the long term, while sales activation will stimulate sales for a short term. A lot of marketers might feel that sales activation is the main key to effectiveness, which has become a dominant factor for digital activities. However, brand building is actually the leading drive. Although, as a fact, both approaches should work in balance together and it’s important to understand these factors in order to achieve proper effectiveness.
The importance of word of mouth
To get customers talking to colleagues, friends, and family about your services and products, you should provide them with something they can talk about. It’s important to create content which they will love and be eager to share with someone else. If that is not the case, all you can do is cross fingers and hope it might be discussed someday when they drink coffee together.
Look at the following to create extra buzz with word of mouth:
Do proactive marketing
You should publish awesome things relevant to targeted customers, these should also relate to your services and products. It must be content that will catch their attention and interest.
Make sure to e-mail them regularly.
Request from them, in a nice way, to spread the word to other people they know that might be interested in your services and products.
Increase your profits by lowering the costs
Profits won’t only be connected to your revenue, it’s also part of the expenses. Different ways can be used for leveraging marketing content that may actually decrease the expenses. It can include such as the time that is spent by customer and sales support teams.