Individual Academic Report 1 Contents Introduction .................................................................................................................................................. 3 Creating a Customer Persona ...................................................................................................................... 3 Customer Journey Map ................................................................................................................................. 6 RACE Model .................................................................................................................................................. 8 REACH ................................................................................................................................................... 9 ACT ........................................................................................................................................................ 9 CONVERT ............................................................................................................................................. 10 ENGAGE ............................................................................................................................................... 10 Monitoring and Measuring Key Objectives ................................................................................................ 10 Conclusion ................................................................................................................................................... 12 References .................................................................................................................................................. 13 2 Introduction The influx of the internet and online shopping has made a rapid change in customers' interaction with businesses and vice versa (Kalbaska et al., 2017). This shift is also reflected in the beauty industry. Through Social media platforms like Instagram, Twitter, YouTube Big brands have benefited from their strong digital presence. There are many mobile Apps for brands hence the product can be easily accessed by the public. This has turned these mobile platforms and applications into a major form of marketing and sales through digital advertising, PR, and organic reach (Kalbaska et al., 2017). Sephora is a multinational cosmetics and beauty brand based in France. It has 2,700 retail stores in 35 countries (Sephora, 2021). The early adaptation of digital marketing strategies and other digital initiatives has made Sephora a market leader in the highly competitive cosmetics and beauty industry. The digital adaptation of Sephora includes an e-commerce website, mobile app, social media sites, and digital initiatives like Color IQ, skincare IQ, etc. In this report, we analyse the digital marketing attributes by creating a customer persona for the brand ‘Sephora’ and critically analyse it against a digital marketing strategy based on the RACE model. Creating a Customer Persona In marketing, it is important to better understand your customers how they make purchasing decisions because it is important that the product produced by the company attract people from different backgrounds. To this end, we can create a fictitious buyer based on the main segments and use their information to make marketing decisions. According to Solomon (2019), based on available data and market research, the customer's personality is used to represent the company's main customers. The first step made by Neck and Murray in the year 2018 was to collect real-world data that focus on customer segmentation and key customer demographics. The Marketing strategies implemented by these people have greater influence and better promote products to reach target audiences. Social media analytics, online surveys, google analytics, company online and offline customer database, etc., are some of the methods to 3 collect data. A specific group of customers is identified based on the customer segmentation model. The main customer segmentation models are: Demographic Segmentation: Includes attributes such as age, gender, region, income, educational level, and occupation. For example, a person’s income will give you a better understanding of what products that person will buy. Psychological segmentation: It is mainly composed of customer's personality characteristics, such as attitudes, beliefs, and lifestyles. Geographical segmentation: This segmentation groups customers based on their geographic location. It can be defined by country, region, city, etc. Behavioral segmentation: Data collected through customer engagement on websites, blogs, and mobile applications. From these data, we can identify customers' buying habits, consumption habits, brand loyalty, and brand interactions. Transaction segmentation: Gain Insights from existing customer relationships with specific brands, such as past purchase history. Based on the data collected from online and offline customer behavior data and the above information, we can create a suitable customer profile, which also includes the customer journey from product discovery to purchase. The main finding is that Sephora’s main customer base is 15-35-year-old women, which is our target market. The key model to consider when establishing customer personnel is the AIO's interests and opinions, namely activities. On this basis, a customer personality that reflects ideal customers is formed. 4 Background Name: Alice Lifestyle Recently employed Age: 24 Single Profession: Junior Sales Executive Shops online frequently Don't mind spending money on clothes and beaty products Education: MBA Lives in central London Goes on weekend trips frequently Challenges Her new job doen't allow her to shop directly in retail stores Internet Usage Have good knowledge in technology and internet Prefer Online shoppping over shopping directly through stores Earns good salary but London is expensive Active Social media user From the insights we can gather from the customer persona ‘Alice’, we can understand how the customer makes a purchase decision. Since Alice prefers shopping online and because she is an avid user of social media we can use targeted marketing strategies to draw her towards Sephora and convert her into a valuable customer. Using social media marketing, online advertisements, and search engine optimization, Alice discovered the brand Sephora. She found the website and mobile application of Sephora. The application was user-friendly and easy to navigate as per Chakravarty and Dutta (2019). She found that shopping online using Sephora’s Skin IQ and Color IQ tools was more convenient than trying different products directly at the store. All of these factors helped to turn Lucy into a potential customer. From this data we can identify each digital touchpoints she interacted with during the whole customer lifecycle. We can represent this information using a customer journey map. 5 Customer Journey Map A customer journey map can be defined as a visual representation of a customer journey when making a purchase decision, as said by Vannucci and Pantano (2019). It shows step by step how they interact with the company through various touchpoints. Digital touchpoints are online touchpoints, such as search engines, commercial websites, mobile applications, and other services that customers interact with digitally. For developing better marketing methods, understanding the customer journey is important. Our customer personality Lucy’s customer journey can be represented as outlined in the content matrix. The customer journey map can be divided into four stages: awareness, consideration, buying, after-sales service, and building loyalty. 6 Discovery Research •Online Ads •Social Media posts •Paid Marketing Content •Search Engine •Landing Page •Blogs •Third part websites •ColorIQ and Skin IQ •Company Website •Mobile Application Purchase Post Sales Services •Newsletter subscription •Community and Socials •Email and Instant messengers •Post sales surveys The first stage is Discovery. At this stage, the customer determines the needs. You learned about Sephora through various digital touchpoints, such as online advertising, spam, and social media. Social Networks: It is the easiest and most profitable way to reach a large target audience. Hence it is the main digital point of contact. Online Advertising: This is a great way to generate traffic on a brand website. These paid ads will be displayed on most websites visited by customers. 7 Paid digital marketing content: It including paid articles, blog posts, promotional videos, etc. published to promote the brand. Stage two is a consideration. At this stage, customers search for specific products online. Use search engines, blogs, and other third-party websites to compare and review products. Stage three is the purchase stage. Here, customers visit the company's website or mobile application to order products. Stage four is the after-sales service and customer loyalty stage: At this stage, thank you emails are sent to customers, and they are added to the mailing list for future offers and discounts. You can also get in touch with the brand through their social media and built-in chatbots on the website. RACE Model According to Chaffey (2021), the RACE model is a marketing strategy framework to plan, create and execute targeted marketing strategies. It can be used for online as well as offline marketing. RACE model covers various stages of a customer life cycle so we can individually target each phase of the customer purchasing decisions. The phases in the RACE model are divided as Reach, Act, Convert, and Engage. The primary stage in the RACE framework is the planning stage. In this stage, a clear marketing plan is created based on the target customers and the available date. Objectives for each digital touchpoint are highlighted. 8 PLAN •Search Engine •Social Media •Blogs Reach Act Convert •Company Website •Mobile Application •Skin IQ •Color IQ •Online Shopping •Promotions and Discounts •Customer Advocacy Engage REACH The main objective of this phase is to promote the product to reach the targeted audience. This is done via various methods such as Social media advertising, Paid content on websites and blogs, online advertisements, etc. Multiple methods are combined to gain more reach (Chaffey, 2021). ACT The act is the short form for ‘React’. The objective of act is to push the customer who has discovered the product into taking the next step. It persuades the people by converting them into potential leads for purchasing via various means. The different methods are search engine optimization, third-party websites, Color IQ, Skin IQ, etc. (Chaffey, 2021). 9 CONVERT The objective of this stage is to convert the visitor who is the potential lead to make the purchase. This step is completed once the purchase is confirmed on the website or mobile application and the amount is paid (Chaffey, 2021). ENGAGE The objective of this step is to build customer loyalty and convert the one-time customer into a recurring customer. This focuses on the post-sales experience. This includes E-mail newsletters, Surveys, Customer engagement on social media and website, and more. This helps to build a long-term commitment to the brand (Chaffey, 2021). Monitoring and Measuring Key Objectives The RACE digital marketing strategy is targeted at our key customer base based on information acquired through different data sources. These sources include Google Analytics, Facebook Analytics, data from the company website, and mobile application. Is digital touchpoint the customer interacts with is measured and monitored using different metrics and indicators. This is mainly turn using the help of key performance indicators and critical success factors. We can identify key performance indicators at each stage of the RACE strategy. KPI's in the Reach stage Unique Visitors: Unique visitors can be defined by the number of visitor traffic in a fixed time frame. This metric helps to track and analyze the audience visits and target marketing according to the increase or decrease in user traffic (google analytics, 2021). Bounce rate: It is a session where the user does not interact with the website further and exit without making any other server requests. Revenue per visit: This metric helps to understand the revenue gained from each website visitor. It is calculated by dividing the total income of the website in a specific period by the number of visitors in that time frame (Brebion, 2021). 10 KPI's in Act stage Lead conversion rate: Lead conversion is defined as the conversion of a potential user to a sale. Lead conversion rate is the rate of lead converted to sale to the total number of leads according to Calvello (2020). Time on site: This is used to monitor the duration a visitor spends on the website. Goal value per visit: This can be defined by the user in google analytics. Later the realtime data can be analysed by setting the user-defined value as the goal to be reached. KPIs in Convert stage: Number of sales: This metric is used to monitor the total number of completed sales on the website. Revenue: This indicator defines the total revenue obtained via sales on the website. Average value per Order: Average value per order is an indicator used to analyse the average amount spent per order by users on purchase. KPIs in Engage Stage: Repeat purchase: This metric is used to identify the repurchases of the same product made by a user. This indicator shows customer loyalty towards the brand. Brand mentions: This analytical tool is used to monitor the mentions of the brands on various mediums. This includes social media, blog posts, customer reviews, YouTube videos, etc. The higher number of brands mention, the farther reach it gets. Hurdle rate: This is a key indicator in long-term loyalty building with a customer. Hurdle rate is the rate of the user’s who sign up for the brand’s community or email newsletters. 11 These key performance indicators help to measure and monitor the primary objectives set in each stage of the RACE framework defined for the company. Conclusion More than half of the sales generated in the beauty industry are currently through online mediums. Therefore focusing on the online user base is essential for the success of a beauty product company. Sephora started integrating a good digital marketing strategy as well as integrating more services like ‘COLOR IQ’ and ‘SKIN IQ’ into their website and mobile application and thereby creating a smoother experience for the online customers. In this report we created a customer persona called Alice, who reflects the major customer base of Sephora, that is women in the age group 15-35. We mapped the whole customer life cycle in a customer journey map which also highlighted the major digital touchpoints the customer interacts with. Then we used RACE digital marketing framework to define appropriate objectives linked with the digital touchpoints mentioned previously. The important metrics and indicators used to monitor the progress of these objectives were also elaborated in detail. From the report, we can conclude that a well-defined digital marketing strategy is vital for any company in the internet era to be profitable. 12 References Brebion, A., 2021. Revenue Per Visitor: Definition, Formula & Best Practices. [online] AB Tasty. Available at: <https://www.abtasty.com/blog/revenue-per-visitor/> [Accessed 4 August 2021]. Chaffey, D., 2021. RACE marketing model definition - What is? | Digital marketing Glossary. [online] Dr Dave Chaffey : Digital Insights. Available at: <https://www.davechaffey.com/digital-marketingglossary/race-marketing-planning-model/> [Accessed 3 August 2021]. Chakravarty, S. and Dutta, S., 2019. Sephora's Digital Journey - The Case Centre. [online] The Case Centre. Available at: <https://casecent.re/p/162703> [Accessed 3 August 2021]. Fontanella, C., 2019. 20 Customer Touchpoints That Will Optimize Your Customer Journey. [online] Blog.hubspot.com. Available at: <https://blog.hubspot.com/service/customer- touchpoints?__cf_chl_captcha_tk__=pmd_9a0c927fa7a10a229391422cb7b18d4437f0eda81628000279-0-gqNtZGzNAs2jcnBszQiO> [Accessed 3 August 2021]. Kalbaska, N., & Cantoni, L. (2017, April). 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