There are risks involved in being online, some of which are hard to foresee and manage. However, it’s not a question of absolute risk; it’s a question of how the relative risk that comes with change is managed, and what the risk-benefit ratio looks like, discusses Versio2 Managing Partner Stephan Burckhardt.
With the need for change comes fear of the risks that it may bring. Switzerland is a risk-averse market and effective risk management is a key success factor for most companies doing business in and out of the country. Large institutions in the highly regulated financial services market, such as UBS, are starting to engage in social media, which gives a significant signal to the market that risks can not only be managed but that the risk-reward equation is increasingly favouring the reward side.
One of the most attractive aspects of online marketing is that it is performance-based. Not only are results measurable, but the risks of being online and conducting marketing activities can be successfully managed. One of the most widely used techniques is email marketing, which is now mostly conducted on what is called a double-opt-in permission basis. By following the related EU regulations (Directive on Privacy and Electronic Communications), potential customers (leads) can be generated, identified and communicated with directly while risks from harmful market exposure are effectively managed. Careful social media guidelines and professional community management can also mitigate and minimise brand risks.
“There’s a lot of fear-mongering about ‘losing control’ of your brand online, when, in fact, you’ve got control over as much as you always have: how you present your business and how you act.”
Online campaigns can be pre-tested, and touchy areas that may expose a company to risk can be tried out and optimised before they are released to the market. It is inexpensive and easy to maximize campaign quality with so-called A/B testing (comparing the results of two alternatives in an real-world, iterative process). This is becoming a standard methodology by which online activities can not only be evaluated for risk, but also tested for effectiveness in order to gain a maximum ROMI.
Another important aspect of risk management is that, with the appropriate tools in place, extensive data can readily be made available (the marketing equivalent of the old MIS system) enabling sophisticated and useful data analysis to track the performance of your marketing programme.
The world is changing so rapidly around us that successful change management has become part of a survival strategy for many businesses that have embraced change rather than fighting it. Aligning with the new online consumer paradigm should be an integral part of such a process for most firms. Download Lean Marketing – A Guide for Executives to read more on risk management in online, and find answers to other important questions about the effectiveness of internet marketing within a lean business context.