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Private equity firms are in the business of being extremely financially savvy. That’s how investors get big returns. To apply the same focus to running an omnichannel digital marketing program, you need to be as clear as possible through data and experience to benchmark and build your digital growth roadmap, then understand revenue and costs. Continued steps must be taken to increase and drive profitable growth. Efficiency.
For online businesses with serious ambitions, we recommend approaching growth in a way that resonates most with private equity clients. This means having a digital marketing business case and a good “strategic partner” for your marketing efforts. Approaching digital marketing with a private equity mindset allows companies to make informed decisions and maximize their chances of success. It starts with the right basics.
The importance of the digital marketing business case
We started a digital marketing consulting firm by providing services to private equity firms. The concept of a digital marketing business case was developed within the larger scope of digital due diligence to inform the business plan and align with all stakeholders. As a result, we now develop these business cases with all of our clients before spending large budgets. To maintain focus amid platform changes and fast-paced disruptive innovation, we regularly update our platform to align with initiatives, product launches, or market changes.
Simply put, a digital marketing business case is a commercial forecast of revenue opportunities and a clear mapping of the resources needed to achieve them as the basis for a meaningful digital strategy. This aligns a leader’s top-down strategic vision and business objectives with what is actually achievable from the bottom-up based on the practical realities of each digital channel. A good business case aligns all key stakeholders with a company’s digital activities and establishes a clear foundation for revenue growth. Building business cases for our clients has helped them understand the impact and required resources of proposed initiatives, saving them tens of millions of dollars.
Related: 7 things you need to know about digital marketing
How to build a business case for digital marketing
Every company with a meaningful budget needs to create a digital business case. It’s easier to eat small portions than whole elephants, so set multiple options for your time frame, budget, and goals. Work on and prioritize quick wins. This often provides funding for the next stage and increases stakeholder confidence. Once stakeholders agree on the business case, you can set a project timeframe and complete the associated digital strategy before campaign rollout.
Specifically, digital marketing businesses must address the following considerations:
- Calculate opportunities in dollars: Use channel-specific analysis (and understanding channel synergies) to identify gaps between the revenue achievable with specific digital channels and where your business is currently.
- Know your buyers: If you try to talk to everyone, you won’t connect with anyone. With a clear understanding of your audience (their needs, pain points, motivations, interests, media consumption patterns, and stages in the buying journey), you can predict volume and conversion rates for each channel and determine their roles and KPIs.
- Reverse engineer the competitive environment:
Competitors who lead in one channel are often different from leaders in another channel. Find the leader of each channel and determine what it takes to defeat them. The devil is in the details. Ask questions like:- What kind of users are your competitors targeting and what is working for them (e.g. which ads are running the longest)?
- What is their core value proposition and message?
- What can I learn from their creative assets when implementing my own (landing pages, ads, etc.)?
- What can we learn from customer reviews?
- Calculate effort:
Understand the project, budget, schedule, and expertise of internal resources (e.g., developers, internal marketing team members) and external resources (e.g., agency costs and media spend) needed to capture the opportunity.
Related: 5 important considerations when choosing a digital marketing agency for your business
Defining Strategic Partnerships and How to Find Winners
Every agency and consulting firm may claim to be a strategic partner, but few have the skills, mindset, and behaviors needed to earn this title. The partnership between a company and its digital agency should resemble the consigliere in The Godfather. A Consigliere is a trusted advisor with the commercial experience and technical know-how to help clients exceed sales goals and stay within budget. They consult with owners at the P&L level to ensure that all marketing resources (internal and external) are strategically and practically aligned to achieve key objectives.
To find a true strategic partner and validate their claims, ask for evidence.
- Do they have the battle-scarred wisdom of running all the relevant channels to great success (and learning from their failures)?
- Have they mastered the trifecta of commercial priorities (i.e. revenue generation), advanced technical capabilities, and thoroughgoing creative messaging?
- Are they agnostic about their choice of digital marketing channels and are they transparent about their pricing?
- Do they have a firm grasp on innovation momentum?
Related: 10 Effective Strategies to Increase Your Visibility on LinkedIn
Innovation and disruption are inevitable and must be at the heart of strategic partnerships to stay ahead of the curve. Reduce the risk of these changes through a signaling system. What activities would you stop, continue, and start now? For example, Google’s plan to bring Generative AI to search results in early 2024 will shake up the digital marketing world. Generated results can take up a large portion of the real estate on the first page of a Google search, which can have a significant negative impact on Google’s traditional organic listings.
Doing nothing will hurt your online business, but overreacting too quickly can be a waste of resources. A good strategic partner will know best practices and risk mitigation strategies that can be implemented early. Both will defend against these changes and take advantage of windows of opportunity while they remain open. Many companies prefer the ostrich approach of staying silent until something happens, but it’s clear that this is not a winning strategy. The evolving opportunities in digital marketing are both exciting and confusing. But with a solid business case and a proven strategic partner, online businesses can be in a great position to make the most of them.
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