The two step method is a simplistic (but very useful) way of looking at Digital Strategy for businesses.
The first step is about ‘positioning’ which is broadly the design, development and functionality of all of our digital assets including but not limited to our websites, our mobile applications and our social media profiles.
The second step concerns ‘marketing’ – search marketing (SEO and SEM), content marketing, social media marketing, management reporting, data analysis and strategy feedback planning, doing all the things necessary to drive potential customers to our website and other digital assets from where they can be converted
It’s all about more new sales from more new customers
The 2-step method makes one key assumption that is;
It assumes that a main objective of our digital strategy program is to make more sales by communicating more effectively with more customers.
Given this assumption there are two key levers that a business can utilise in order to improve the effectiveness of their digital marketing strategy, the levers can be pulled in two steps – positioning and marketing.
Step 1 – Positioning
Website Positioning. Convert a higher percentage of potential customers (digital marketing communication recipients or website visitors) into actual paying customers (sales). This is primarily achieved through website (and other relevant infrastructure) planning, design and development.
Step 2 – Marketing
Digital Marketing. Get more potential customers (website visitors) to our website (to connect with our digital communications).
A Worked Example of the 2-Step Method in Action
Before the 2-step-approach
A legal services business has a good website that achieves 1000 unique visitors per/month. It receives approximately 10 email and/or telephone enquiries from visitors to the website. It turns 5 of these 10 enquiries into a sale. The annual value of an average customer is $20k.
Visitor to Enquiry Conversion rate = 1000/10 = 1%
Enquiry to Customer Conversion rate = 10/5 = 50%
Visitor to Customer Conversion rate = 1000/5 = 0.5%
Therefore, the ‘annual new revenue’ value of new customers from digital marketing could be described as:
12-months x 5 new customers x $20k average per year = $1,200,000
The Lifetime Value of a client should also be factored into the calculation, which, depending on the business could raise the figure of ‘annual value added’ by circa 3x the figure above.
After the 2-step-approach
The same legal services business hires a digital agency to improve the website design with the aim of increasing the visitor to customer conversion rate and hires the same agency to increase the number of relevant visitors arriving at the website (digital marketing communication recipients). The agency is successful and manages after 1-year to double the conversion rate and double the average number of monthly visitors.
The results of this work are;
The business now has 2000 unique visitors per/month. With its increased conversion rate it now receives approximately 40 email and/or telephone enquiries from visitors to the website. It continues to turn half of these enquiries into sales at the same average annual value.
Having pulled it’s ‘positioning’ and ‘marketing’ levers effectively, 1 year later the same business now shows the following results:
12-months x 20 new customers x $20k average per year = $4,800,000
As you can see, a doubling of effectiveness of a website and a doubling of visitors results in a 4x increase in annual sales (derived from digital marketing activity) of the business.