Why Strategy Must Come First in Digital Marketing

An effective digital marketing program starts with a sound, customer-based strategy.

That’s one of the key findings of the Digital Marketing Initiative, a multipart research collaboration between Convenience Store News, sales and marketing firm Balvor LLC and industry consulting firm Brick Meets Click, which aims to better understand convenience store retailers’ views on and usage of marketing technologies, such as text messaging, mobile apps, geofencing, loyalty programs and other tools that enable more targeted communications than traditional television, radio, print and billboard advertising.

“While this sounds straightforward, many retailers have employed digital media without truly understanding its impact on the customer and company,” said David Bishop, managing partner of Barrington, Ill-based Balvor.

The importance of having a sound strategy was highlighted in the initial Digital Marketing Initiative summary, published in CSNews’ February 2016 issue. Only one in five c-store retailers surveyed (22 percent) have a sound, strategic framework guiding what the company and team members are doing. However, retailers have significantly stronger organizational alignment with category managers and vendor partners when a sound framework is present because it fosters collaboration, improves coordination and clarifies choices (see Fig. 1).

Establishing lines of authority and assigning accountability are other foundational components of a framework. Our research reveals that retailers who have a sound framework are dramatically more likely to have well-developed roles and responsibilities (73 percent vs. 33 percent), as well as planning and budgeting processes (68 percent vs. 21 percent). These specific aspects help to minimize conflict and ensure the appropriate allocation of resources.

Based on this work, Balvor developed the three C’s framework related to marketing communications (see Fig. 2). According to Bishop, it involves:

• Learning about your customer, how they want to engage with you, and ways in which digital can enhance the overall experience;
• Determining which capabilities to develop and/or strengthen based on their potential impact; and
• Executing compelling content that delivers against the brand’s promise in ways that are valued by your customers.

Where strategy is present, retailers are more likely to have stronger processes and/or a culture of leveraging and integrating customer insights (see Fig. 3). In addition, strategy enables retailers to focus on creating a stronger fit among various marketing activities and gives them better coordination across the organization (see Fig. 4).

“Best-in-class retailers are integrating digital media activities more effectively into their broader marketing plan,” Bishop explained.

One convenience store retailer acknowledged for being a leader in digital marketing is York, Pa.-based Rutter’s Farm Stores, which operates more than 60 stores. The framework for its digital marketing strategy started with the customer, according to Chief Customer Officer Derek Gaskins.

“We identified key customer segments that drive the business, then looked at key product categories they buy, and then looked at how these customers preferred to receive information. Over time, we allowed them to select their own preferences — they can opt to receive texts or emails, etc.,” Gaskins told CSNews, emphasizing that it all starts with aligning product categories with the right customer segments.

“One of the things I’m passionate about is clearing up the misperception that digital marketing should be treated differently than ‘marketing.’ Digital marketing is just the new media that reflects the times we are living in. It’s not limited to just young people,” Gaskins added.

C-store retailers realize there’s a new media model that is different from traditional media. Whereas traditional media pushes one-way messages during steps along the path to purchase — awareness, interest, desire and buy — the digital media model involves a circular, two-way interaction — elevate, evaluate, expend and engage, according Bishop, who developed the terms for the digital communications model (see Fig. 5).

“Retailers need to focus on the first two elements, elevate and evaluate, if they want to generate stronger results,” advised Bishop (see Fig. 6).

Pump N Pantry, a 17-store chain based in Montrose, Pa., is also relatively advanced for its size in using digital media. It utilizes text messaging, maintains a Facebook page and has a new mobile app.

Wade Robinson, a 17-year veteran of Pump N Pantry who started as a store manager and now supervises both foodservice and marketing, talks glowingly of the support to grow digital media efforts from both his immediate supervisor and the chain’s owner. But he acknowledges that having a strategy framework in place was key to getting its initiatives off the ground.

“Our corporate structure is very flat,” Robinson told CSNews. “Our vice president is very tech savvy and enjoys learning about technology. But to convince our owner to make the commitment to spend on digital marketing, we had to show him we have a plan in place.”

A strong strategy also addresses how storelevel people will support the new digital programs. Robinson admits that “getting team members on board is one of our biggest challenges.”

Similarly, Gaskins said Rutter’s is cognizant that these digital marketing initiatives can’t be solely owned by the marketing department. “We need cross-functional buy-in,” he noted. “The operations team may be more important than the marketing team.”

Store personnel should be considered internal customers. Both Gaskins and Robinson agreed team members should be given the chance to test new technology offerings before they are introduced to shoppers.

The most important thing to remember, according to Gaskins, is that marketing technology is always evolving. “The course changes along the way. Take mobile payment technology, for example. Three years ago, many of us thought it was going in a very different direction than where it is today. It’s all a journey.”