What is a Digital Marketing Plan? Align Digitalisation to Your Pricing Models
Can a digital marketing plan disrupt your pricing model? How will it increase the value and brand of your company? Learn with us in our brief Digital Marketing Strategy 101.
Here’s something to think about: more than half of the Fortune 500 companies have either gone out of business or absorbed into another company since 2000. Why?
Much of the blame goes to the introduction of digital business transformation. Companies that have resisted the change are no longer doing business or operating at a limited capacity. It’s not a question of “if the switch is worth it” but “when and how?” Think of Kodak who had to change its target market as the world became more digitalised. Before the advancement of technology, TV, radio, magazines, and newspapers were the most common advertising platforms.
Did you know that in the last decade, according to the most recent DataReportal statistics, the number of internet users increased from 2.8 billion to 4.66 billion?
With the advent of the internet and mobile phones, more and more people spend time online. So, it doesn’t only make sense to boost your traffic through the digital world, but it is pivotal to stay competitive.
A company’s reluctance to go digital isn’t about a lack of resources but its aversion to risks. When an innovative method to do business is introduced, companies should adopt it immediately.
At first, there may be failures as expected, but those mistakes will be a learning opportunity to achieve set objectives the second time around. Continuous experimentation requires using different methods all at once and focusing on what works best. So, creating a digital marketing plan pricing is a great place to start with.
Companies can hurdle these risks by motivating and engaging employees to participate in innovation ideas and find new ways to increase company value. Don’t fear failure when transforming a company – be it digital, structural, or process on business performance. Sometimes, you need a real challenge to improve your business and yourself as a leader to thrive.
The Impact of a Digital Marketing Plan Pricing for Online Businesses
The pricing strategy for online business has entirely disrupted pricing and revenue models that were common even just 2-3 years ago. Your customers are more informed nowadays; tech-savvy, have more choices, and the ability to compare, thanks to the internet.
These days, businesses have no choice but to transform their pricing models to digital marketing plan pricing to maintain market and value positioning. It’s a sink or swim situation. Using the old methods may not be the best way to charge customers right now. To know if you are pricing correctly, you need to explore the most current pricing techniques.
The best online pricing strategies in today’s digital world are far from traditional finance-driven, fixed pricing strategies – like cost-plus or margin-based pricing. It’s also no longer acceptable to review prices annually. The best companies are monitoring their prices daily – and even several times a day if appropriate (this is not applicable to all businesses.)
Dynamic Pricing as part of a Digital Marketing Plan
As platform businesses continue to take share from the more traditional businesses, online pricing strategies and tactics have been introduced to drive profitability. A dynamic pricing approach is agile and pays close attention to the needs of customers using micro-segmentation principles.
Not only does this new pricing system track and monitor competitors’ price differentials. It tracks real-time data and insights on consumer purchasing behaviour throughout their buying journey. These prices can be adjusted in ways that customers feel satisfied to buy more frequently. For example, setting up a “buy now, pay later” arrangement will often work in new target markets or products.
Dynamic pricing is one of the preferred approaches for businesses to maximise margins as they start their digital marketing plan pricing journey. It looks at a range of variables – both internal business financials and indicators and external influences – to set the optimal prices and increase unit sales.
Very often, businesses are moving to cloud-based pricing software to analyse a series of inputs: wholesale pricing, consumer behaviour, and competitive prices to help AI figure out optimal price points. Then, the prices are recommended for each product, be it online or on retail shelves.
AI pricing is a machine learning pricing algorithm that operates non-stop or at specific hourly, daily, or weekly intervals. When applied effectively, the dynamic pricing algorithm adjusts product prices according to the company’s goals for maximum profits or market share gains.
Four factors that transform a company’s core business proposition:
A higher-purpose mission
A noble vision within the brand and value positioning by giving back to the people through “helping the environment” removes the stigma that a company is simply after profits. Sometimes, the right company can make a difference and an impact while remaining mission-conscious and profitable.
Digitalised marketing should reflect the current environment, customer anxieties, and buying behaviour. Also, developing new products during a crisis to keep up with the changing times and customer needs falls into two categories. They’re either essential services or discretionary purchases.
Realigning core identity to venture into new field markets
Being the top industry leader gives advantages to enter new markets. With its assets like brand name, customer relationships, distribution, and other functions, diversification and expansion can go smoothly. As a top industry leader that offers the best quality services or products, brand recognition builds customer trust in the new field and target market.
Taking the initiative to go digital
Companies that took bold steps into the unknown realm of the digital market are rewarded with great profits and revenues. Firms like Amazon and Alibaba did not hesitate to go beyond traditional business operations. For example, Argos in the UK probably could have become as huge as Amazon! Going digital means making use of cross channel promotion through your website, e-commerce platform, social media presence, and video content.
Heartland Seniors Finance, formerly Australian Seniors Finance, worked with digital agency Webbuzz and launched its digital marketing plan in 2016. Just three months after, HSF saw an increase of 873% in website visits, 20% more visitors, and 13% greater visibility which all resulted in a 17% increase in generating leads. For its full-year data analysis, HSF’s digital content increased:
– 29.5% in page views
– 25.38% new visitors
– 81.2% in returning visitors
– 19.94% in conversion rate
Let go of the past
Companies that have become complacent in their current business state are afraid to let go, thinking that venturing into the unknown would ruin them. Eventually, these companies have a greater potential to become extinct. Sometimes, taking a risk is vital for business growth and success. Companies that have been around for while become very risk-averse compared to the entrepreneurial aspect of startups!
Nowadays, using social media, videos, and podcast as marketing platforms make your brand stand out. Did you know that about 5 billion videos are viewed everyday? This can boost traffic by as much as 80% but the content has to be relevant and interesting (informational or humorous) apart from great sound and visual quality. Digitalised marketing guides your customers and prospects on how to use current and new services or products.
Digital Marketing Strategy 101: Some of the biggest business transformations
- Netflix – from online DVD rental to an online movie streaming service. The company believed the future was in the streaming business. Not only does it stream previously released movies, but Netflix also produces original movies and TV series.
When Netflix introduced its Qwikster DVD pricing to subscribers in 2011, it was a total disaster. As many as 800,000 subscribers left Netflix in one day. Another pricing change came in 2017, and this time it was a resounding success! They positioned the price increase on value-based pricing. They listened to their customers and produced a wide selection of new films for the audiences to watch.
- Once upon a time, Fujifilm was in the same precarious situation as Eastman Kodak. With the advent of digital photos, photographic films became obsolete. The firms almost went extinct but luckily, medical films especially x-ray films are still in demand. So, Fujifilm invested in medical films and transitioned into pharmaceutical companies and healthcare services as their clients. They also ventured into cosmetics. Fujifilm follows the demand-oriented pricing strategy whether the demand is high or low, determines its price – be it the cameras, films, or healthcare facilities.
Other digital businesses that transformed
- Adobe started out as a video, document, and creative graphics software company to digital experience, marketing, commerce platform, and analytics while packaging their software to cloud storage and subscription service at the same time.
- Alibaba transformed itself from a retail company to a technology business. With the launch of the A100 program, it became a one-stop-shop for all the sellers of brand products. In the Alibaba Operating System, it features all of its technology services Logistics, Payments, Marketing Services, Cloud computing and meta-market businesses. They also expanded into entertainment, payment gateway, mobile data, and gaming market.
- Microsoft has always been synonymous with computer operating systems. They pioneered the operating software of most computers in the world use today. But due to other operating systems that offer open-source apps, Microsoft has to rethink its business core.
Starting out as a software company selling licensed software, computer products, and devices, it became a successful transformation into a cloud-based platform-as-a-service business. Therefore, it is a cloud computing program in which an outside provider delivers hardware and software tools to app developers on the internet. The SaaS just provides the infrastructure to conduct the transactions. Basically, Microsoft uses a value-based pricing strategy to entice the buyers to engage in the price that they think is fair.
Amazon’s Dynamic Pricing in a Digital Marketing Plan Framework
Amazon has become one of the excellent examples of a successful digital business transformation. It started out as an online marketplace for books that later expanded to sell apparel, food, furniture, toys, jewellery, video games, electronics, and software. Amazon has become one of the four largest players in technology companies along with Google, Apple, and Facebook.
Amazon is not exactly an actual store. They don’t have warehouses that store all the items that they sell. Their strategy is to change prices which averages about 80 million price changes daily. Amazon is using an innovative pricing algorithm that predicts prices set by the competitors. Then, it anticipates what customers will buy through the data of previous buying behaviours.
They are constantly experimenting to stay ahead of the competition. Such dynamic pricing has no rival as Amazon keeps finding new ways of digital marketing plan pricing strategies. The closest rival that they’ve ever had is China’s Alibaba. The huge metadata available for Amazon ensures they can crunch data to optimise and make offers more suitable to individual consumers.
Their secret weapons are customer convenience and anticipating the next price adjustment. Shopping online has become more convenient for customers eliminating the need to go outside. Anticipating the next price change from the rivals is what keeps Amazon ahead of the game. They use dynamic pricing in which prices constantly change to compete with other online retailers. Then, they use third-party resellers for their products.
Not bad for a company that survived the first tech .com crash in the early 2000s which now offers everything from deliveries to online entertainment like Amazon Prime.
- Business transformation can be a huge risk for companies. Without proper pricing and execution, it is expected to fail from the start. That is why pricing and pricing strategy needs to be the core of a successful business transformation.
- Venturing into a new world requires detailed research and the proper pricing strategy. Test out one thing at a time to find out which pricing methods work best.
- Pricing teams must adapt to dynamic pricing to compete in the digital marketplace. Because market trends change very quickly, it’s best to let go of old habits that don’t work in order to move forward as a business.
- Reinventing the company’s business core can save them from a declining market. A pivot may be required if technology completely disrupts an industry. This is the case of Blockbuster when pricing changes could not rescue the business, a complete pivot would have turned the company around.
- Expanding a company into new field markets can attract more customers and increase value.
- Being an incumbent has great advantages – such as brand and financing. It is much easier for an incumbent name to sell – than for a new startup. The issue is that existing businesses often do not want to accept that the world has changed.
- Agility is vital – and major businesses are often more like slow-moving cruise ships – where swiftness is often required.
If you’re going through a business transformation at the moment and want to know if your pricing team has the skills, style and capability to monetise the full value of your business model, then download our free pricing guide or e-book now.
Or, feel free to call me on (2) 91994523.
Alternatively, subscribe to Taylor Wells pricing channel now and get an update as soon as a new video is released.
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Are you a business in need of help to align your pricing strategy, people and operations to deliver an immediate impact on profit?
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