by The Edge Malaysia
Jan 10, 2022
While companies have been going digital for some time now, the global pandemic over the past two years has changed it from being a choice into a matter of survival. In their rush to get online, many have made some common mistakes, owing to a lack of proper preparation combined with an inability to understand the space.
Having been in this space since 2016 and helped companies go online, here are some of the more common mistakes I have noticed.
Many bosses of conventional enterprises ask their marketing managers: “If I pay RM5,000 for an online ad campaign, how much sales can you generate?”
Digital ad budget allocation and online advertising strategies vary widely by business type, the brand’s online maturity and the existing online customer base.
For example, a new brand that just opened its online store needs to simply get the word out, generating awareness about the brand and its product offerings. Campaigns and ad media buy would depend heavily on the top funnel marketing initiatives. At the top funnel, your ad spend is used to educate customers and get them ready for the next visit. It rarely results in a quick purchase. You are a few steps away from actual sales conversion, and that only happens when you have given potential customers the best product-market-fit information.
The same goes for an existing brand with some offline customer groups. When you first go online, you need to make some effort to promote your online presence and persuade offline customers to go online while drawing new online traffic from the top funnel, most of which does not convert into sales either.
Time-To-Market. I mean, time to set a specific timeline to successfully meet your pre-set digital launch key performance indicator (KPI). For instance, a CEO should say that I want to see RM200,000 online sales per month four months after my new e-commerce store goes live. And it should go live three months from now.
Many companies miss setting up this road map at the beginning of their journey. They take their own sweet time without knowing that they are pressuring the current offline team who have to make things happen. In an attempt to be more hands-on, some bosses actually waste time learning how to set up a Facebook ad or a website.
Forget it! As a smart entrepreneur, just let “the right builder build”. Good CEOs will seek coaches and experienced talent to cut short their time-to-market and reduce the opportunity costs while training the team to increase their success rate.
Some bosses think they can save money by utilising the old non-digital savvy team, or dirtying their own hands by doing it themselves. This will result in a whole lot of problems and delay their launches. In addition, it creates a less-than-optimum online experience for customers.
Due to fast evolving marketing technology and the digital consumer touchpoints format, senior managers and entrepreneurs have lost their innovation capacity to capture new consumer engagement.
Instead, they use shortcuts, riding the convenience of acquiring quick sales via online marketplaces such as Lazada, Shopee and Zalora, which have widely available traffic.
But this strategy, while effective, is only good for the short term. The very convenience of these marketplaces works against them, as there is a bunch of competitors out there offering pretty much the same product, and indirectly creating a “red ocean” situation.
In fact, many enterprises actually end up not making money on these platforms because they need to keep having offers and cutting their prices to make sales.
An entrepreneur needs to think of two critical elements when designing a business model. The first is financial sustainability and the second, scalability. For instance, Amazon makes decisions quickly based on the scalability of a product.
I have seen many entrepreneurs making wrong decisions when going online for the first time because they lacked a team with the requisite knowledge to help them in their digital onboarding process. They make decisions that are heavily skewed towards one-time costs, while forgetting to factor in whether the system they are implementing is scalable.
Always remember that online is borderless, running 24/7, and ask yourself if your system can handle the traffic. Also, can it be easily integrated into another system? Can it catch up with the fast-moving technology changes?
Many online projects fail because the system implemented is not scalable. Remember this. You will lose to your competition if you try to save money at the beginning and opt for a system that will not allow you to grow.
When a company successfully digitalises its business today and is the first mover, I encourage them to continue to innovate, make the effort to keep building the digital team, engage with industry experts and not stop here.
Technology is fast changing and borderless. We used to have Facebook Advertising that had the digital consumer touchpoint. Now, we have TikTok ads. Have you learnt about it? Or is the one coming after you learning about this new touchpoint faster than you?
I find that many who have the first-mover advantage tend to become complacent. They get into a comfort zone and live on memories of their past winnings. Let me remind you that the game is still ongoing and, being online, your competition can come from anywhere on the globe. They may be behind you now, but they are catching up fast.