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Digital business model

Why read this? : We show how to structure your digital plan using our RESTART digital business model. Learn where customer-facing activities like digital media, websites and online stores fit in. And how enablers like data, technology and resources support the model. Read this to learn what goes into a digital business model. 

Digital business model

How this guide raises your game :-

  1. Explore the 7 key components of a successful digital business model.
  2. Learn about digital reach, engagement and selling. 
  3. Understand how technology, data and resources transform your digital business model. 

‘Digital’ is a broad topic in business. In simple terms, it’s about using technology to achieve your objectives. But clearly there’s many ways ‘digital’ can do that.

Your digital business model helps you plan which activities you need. It helps you work out how the different parts of digital fit together.

This includes customer-facing activities. For example, your digital media to reach customers. Your website to engage with them. And of course how you’ll sell online. Do you go through online retailersSet up your own online store? Or use something in-between like marketplaces

You also need the right back-end set-up. For example, the right marketing technology. A system to capture digital data and analyse it to find digital insights. And the right resources in terms of people, budget and time. All these activities need to be planned. 

Set up your digital business model correctly and it transforms your business. In this guide, we’ll cover all the tools you need to achieve this.

Scrabble tiles spelling out Digital Marketing laid out on a wooden table

Ready to test your knowledge?

What’s your starting level of knowledge about digital business models?

Take the 2 minute, 5 question Three-Brains digital business model quiz and see how much you know about digital business models already.

RESTART model

Our RESTART model covers the 7 key elements you need in a digital business model. These are :-

  • Reach. 
  • Engage. 
  • Sell. 
  • Technology.
  • Analysis.
  • Resource. 
  • Transformation.

We’re sure you already spotted the initial letters of each element spells out RESTART. Digital gives you the chance to restart your business from where it is now. Plus, it makes an easy to remember acronym.

The Seven Steps of the RESTART digital business model - Reach, Engage, Sell, Technology, Analysis, Resource, Transform

This guide explores the basics of each element. Plus you’ll also find plenty of links to learn more. The main aim of this guide is to show how all the elements connect in a digital business model.

Reach

We’ll start with reach. As per our media planning guide, this has traditionally meant using channels like TV, radio, print, cinema and outdoor to put your message in front of customers. But digital media has increased the ways in which you can reach your target audience. It’s changed the way brands manage their media. 

You can now directly place media in front of customers on sites like Google and Facebook. These new channels give you unprecedented options and control over how your messages reach your audience. You just need to work out if digital media is right for reaching your customers.

Digital clearly reaches many people. For example, global average internet penetration is almost 60%. And higher in developed countries. In Australia, it’s at 86.5%. Plus, 60% of Australians use Facebook. And the average Australian spends 5+ hours online every day. Chances are your target audience will be online. And that’s an opportunity to reach them with your digital media

Digital media hasn’t replaced traditional media. There’s still ads on TV. On billboards. In magazines. But digital has changed the way customers experience media. They’re now exposed to media in new places, and it’s usually interactive.

Find out where your customers go online

Watch what people do when you’re out and about. What do you see people doing in cafes, on public transport and even (annoyingly) in the cinema?

Yep, they’re on their mobiles. But most of the time, they’re not on calls. They’re looking at things online. Cat videos. Instagram posts. Shopping sites. 

They connect to the wider world through their device. They expect quick answers and results just by touching their screens. Recent reports suggest over 60% of website visits are done on mobile. 

Young woman on train station platform looking at her mobile phone

Your digital business model has to help you meet these expectations. To understand where customers go online and what they want.

Researching where customers go online

Start by asking your customers what they do online. Either informally, or via qualitative market research. This is relatively simple, cheap and fast to do. 

Build a list of sites your target audience visits. For example, influencer sites they regularly visit. Educational or review sites.

You want to understand how many people visit those sites. And what they do on those sites. So, you can also do secondary research to look for more quantifiable data. Look online with tools like Google Trends. Use published reports and government websites. There’s loads of digital data sources when you start looking.    

Plus, digital media channels often share their traffic numbers and behavioural trends. They’ll publish them, or their sales team will share them with you. This is to encourage you to buy space on their platform.

If you’ve the budget (and time), you can also work with companies like Similar Web who collate online data. Or you can ask your customers directly with quantitative research to find out their favourite sites. 

The goal for reach

The goal for reach to put your messages in front of the right customers, at the right time, and in the right places. When and where they see your brand influences whether they notice you. 

This means smart digital media planning. You have to work out which channels and messages will best deliver your reach objectives.

It’s firstly about quantity. How many people you reach. But it’s also about quality. You want to reach high potential customers at moments which will be relevant for them. 

Mobile phone screen showing two alerts, one from Twitter and one from What's App

Your main options are usually SEO, social media and online display channels. Our digital media guide covers these in more detail. It also shows how they connect to your overall media planning.  

Engage

Next, you plan what you want customers to do after they see your advertising.

Your advert needs a clear call to action which tells them what you want them to do.

With digital advertising, you add a link to make the action immediate. The link takes the customer to your website, social media or online store.

This immediacy is one of the areas where digital media wins over traditional media. The action can happen right away.

Man holding a mobile phone reading a message notification with a desk and keyboard in the background

In traditional media, there’s a gap between seeing the advert and acting on it. Adverts can get forgotten in that gap. Something else catches the customer’s attention. Not so with digital. If the advert works, the customer acts right away.

Digital media platforms are set up to make this immediacy and interactivity easy for the customer. The call to action is only a touch of the screen away.

Facebook for example, currently offer 16 different call to action buttons. Which you choose depends on your advertising objective.

Take this Three-Brains advertising example. Our advertising objective was to drive brand awareness. And we wanted our target audience to learn more about us.

So, our call to action here was learn more. But if we were advertising products on our shop for example, it would’ve been shop now.

We could also have used contact us, download and subscribe if those were our objectives.

Call to action - website

Often, the action is to take customers to your website and a landing page. As part of their customer experience they’d do something on that page. Read an article. Watch a video. Request a demo or a quote.

It’s an important stage in the brand choice funnel. Because this engagement is a significant indicator of interest. It shows your brand has moved from awareness to consideration. 

On your website, you can use marketing technology to automatically handle the interaction. A newsletter sign up, for example. Done well, these interactions drive consideration and word of mouth. See our website strategy guide for more examples of this.

Of course, not every engagement drives a sale. But you often see a strong correlation between engagement and sales. Customers only engage with what interests them. And what interests them is often what they end up buying.

Call to action - social media

However, engagement also works in other channels. Customers can engage with you on social media channels, for example.

They watch a video on You Tube. Look at a cool image on Instagram. Or comment on a post on Facebook or Twitter.  

Monitor your social media pages regularly. Respond to comments and feedback in a timely and relevant way.

Use the opportunity to create stronger connections with customers. This makes them feel more positive about your brand. And of course, that makes them more likely to buy.

Other engagement opportunities

Finally, you can also look at developing apps to meet the customer needs of. These can help you educate or entertain your target audience. They’re designed to engage people. 

They can be a way to get customers to spend a lot of time with your brand. However, it’s also a cluttered area. You need something unique and relevant. Something with a lasting benefit. People have on average 60 to 90 apps on their phones. But 96% of the time is spent looking at only the top 10. 

These apps also now extend to increasingly popular voice-activated devices like Siri and Alexa. They’re another way for brands to engage. But they’re still fairly small in terms of how many people use them. Even in advanced markets like the US, voice is only used in around 1 in 3 homes according to the latest estimates. 

Sell

Engagement is great predictor of sales. But what pays the bills is when the customer buys something.

Digital needs to sell, and e-Commerce is how you do that. In fact, it’s never been easier or more convenient for customers to shop online. 

What businesses have to do though is work out how their reach and engagement activities link to e-Commerce in their digital business model. 

As per our e-Commerce strategy guide, there’s different options when it comes to selling online.

Person paying for an e-Commerce purchase as they hold a credit card up in front of a laptop

Bricks and clicks

If you already sell through traditional retails channels, those retailers will likely also have online stores. They’ll sell your products online via their store websites.

Customers already trust, know and use these bricks and clicks retailer. Selling to them gives you access to a pool of ready and willing shoppers. 

However, because it’s their site, you have little control over how your products are sold. You have to comply with their selling rules if you want them to sell your product. 

You put images and copy into their product information management system. That gives you some control over your product page. But the retailer controls the overall design, layout and the order to delivery system. 

You also have to pay to advertise on their sites. And you have to pay if you want your products to appear in prime positions where shoppers are most likely to see them.

Pure players

The same applies with pure player channels like Amazon, E-Bay and JD. Again, these online retailers control how and where your product appears. And they charge for advertising and use of their services.

Their competitive advantage is that they only do e-Commerce. This often means they’re faster at implementing new technology and processes.  They offer more personalised experiences for shoppers, for example. And they often offer faster and more convenient delivery options.

In the long-run, these services will continue to attract more online shoppers. So, as part of your digital business model, you need to include these pure players in your plan.

Samsung mobile phone with amazon logo on screen

Set up your own online store

Your final option is to set up your own online store. This direct-to-consumer or D2C digital business model, gives you the most control over the selling experience.

There’s no third parties involved in the selling. That’s good for your profit and loss. Your “sales in” is what the shopper pays, not what some retailer pays you. 

However, you also have to cover all the delivery costs. Plus connect systems and functions needed to run your own online store. That’s not easy. It takes time and skills to set up. It takes time to manage properly. 

See our setting up an online store guide for how to deal with these challenges. And check out our e-Commerce capabilities article for more on the skills and systems you need to succeed. 

Screengrab of Three-brains Shop - headline says "merchandise to raise your game"

Technology

Having planned your customer-facing activities, next you plan how you’ll do those things.

This is sometimes called the ‘back-end’ or ‘back of house’ of the digital business model.

This is because customers won’t see or be aware of these digital activities.

But without them, your online experience won’t work. 

The first of these enablers is marketing technology. Marketing technology has changed a lot in the last 10 years.

As the latest statistics show, there are now 7,000+ marketing technology suppliers to choose from. 10 years ago, it was less than 100.  

There are 4 marketing technology types to review as part of your digital business model.

Marketing technology - reach

First, there’s technology which supports your reach objectives. All your digital media channels are enabled by different software, technology, systems and processes.

Your digital business model needs to cover how you access these. Who manages the access? How do you maintain and improve these systems? You need people with the right skills to set these up and manage them. 

Marketing technology - engage and sell

Then, there are the technologies which support your engage and sell activities. For example, e-mail, CRM, online store websites and customer service systems.

It’s technology which handles the customer interaction. And it’s technology which triggers the next action in your system.

Automated welcome e-mails for newsletter sign-ups to drive engagement, for example. Automatic re-orders if you run a subscription service. These types of actions all have technology requirements.

Marketing technology - data and analysis

Next, there’s the technology which helps you capture and use digital data. Online forms, databases and reporting tools, for example.

You analyse these to look for insights so you can work out how to better meet customer needs.

Digital data is part of your overall market research plan. It’s another way to understand customers better.

The technology you use here helps you generate ideas which go into your marketing plan. When those ideas go live, the actions they drive create more customer interactions which creates even more data. Those feed your next round of ideas and activities.

Marketing technology - enable and optimise

Finally, marketing technology also shapes how you deliver your online experiences.

You use it to enable and optimise what you do.  For example, there’s how you create and organise your content with Content Management Systems (CMS). There’s how you manage approvals of content with approval systems. You can use this type of technology to work from different locations, schedule events to happen when you’re not there, and automate actions on your website.  

Which technology goes into your digital business model depends on your objectives and budget. But minimum requirements for most businesses usually cover websites and customer relationship management (CRM).

Analysis

While marketing technology helps you capture data, you still need to do something with it. That’s where analysis comes in. It’s about listening to customer feedback. About looking for trends and patterns in the data. 

Every piece of data you have comes directly or indirectly from a customer interaction. It’s crucial you can pull the data together and convert it into insights. These insights drive your decision-making and marketing planning. 

There’s normally 2 levels of data you analyse :-

  • aggregate data.
  • one-to-one data. 
Mobile phone showing Google, with the word "analytics" in the search bar

Aggregate data

Aggregate data covers groups or segments of customers. Most of your website data will be aggregated, for example. You see how many visitors came to your site on a specific day. Or how many visited a certain page. But you don’t know who individual visitors were. The data’s aggregated. You can analyse this type of data to plan activities and experiences at a broad level. 

For example, activities to reduce the number of people who bounce from your home page. Or who add to cart, but don’t complete a purchase. 

One-to-one data

However, in some situations, you know who the individual customer is. Customers who signed up for a CRM email newsletter for example. Or who order from your D2C store or join your subscription service. 

This one-to-one data is very valuable. You get more insights about specific types of customers. You use that to create more personalised experiences. Personalisation makes everything more relevant to specific customers. 

However, it does come with some challenges. Legally, you need to protect their privacy. You also need secure IT systems to make sure you set-up and manage the data properly. 

(See our digital data guide and digital insights article for more on these challenges. See also our B2B CRM article for how this impacts business-to-business customer interactions). 

Resource

Next step in the digital business model is to work out “who” is going to do all these activities. You also need to work out “how” you’ll make these things happen. Do you have the right e-Commerce capabilities in-house, for example? Or do you need to find an e-Commerce expert and/or marketing agency? 

Our customer experience guide shows all the key resources you need for each step of the customer’s journey. Someone has to make those things happen.

But resources aren’t just bums on seats. It’s also time and budget. How long will it take to do your digital activities? How much will it all cost? When will you see a return on this investment? 

These are the sort of resource questions you need to cover in your digital business model. (see also our how to be a better digital marketer guide for more on this).

Transformation

Finally, we get to the last piece of your digital business model. Now, it’s all about Digital Transformation.

You’ve probably heard people talking about it, right? It’s a favourite buzzword among leaders and consultants. 

But to turn it from being a buzzword into something real which makes a difference to your business, you need to dig into what it really means. 

In simple terms, you work out what a future version of your business looks like that’s taken full advantage of the digital opportunity. Then you put together your plans for reach, engage, sell, technology, analysis and resource to show how you’ll become that version of your business.

Neon sign showing the words The Journey is on

How what your business does online in the future is different to what you do now. How customers will experience you differently. It’s about what you’re going to do. 

But digital transformation takes time. It’s not a sudden ‘aha’ moment. It’s a process where you work out how to change your business over a period of time. 

Change management

During this change process, you focus relentlessly on the interactions between the brand and the customer. You work out how to bring new skills, systems and processes into your business, while keeping both customers and your team happy and engaged. It’s about driving change. 

If you look at the start and at the end, yes, businesses can be ‘transformed’. But, the underlying process is all around setting up your culture to be customer focussed. And having a clear ‘change management’ plan. 

To be honest, we’re not big fans of the word “transformation”. It overpromises and underdeliver. We prefer calling it “change”. But unfortunately the “C” from change doesn’t work in our RESTART acronym, while the “T” from transformation does.

Still, being flexible and adapting to the situation is a key part of change management. 

So, Transformation it is. 

Conclusion - digital business model

There’s no doubt digital marketing is a big opportunity area. New ways to reach, engage and sell to customers. New ways to be faster, more targeted and more interactive. You need to define your digital business model to work out how you’ll take advantage of these opportunities. 

But, it’s also a challenging area. It’s still relatively new. Best practice is regularly being updated. There’s no single best way to do it. 

So you gets lots of noise and wild opinions. See our article on the start-up stalkers, for example. You know, those ones who bombard your inbox and social feeds with sure-fire ways to drive success online. When of course, the only “sure” things is it’s going to take a lot of hard work to succeed. Hard work to raise your skills and put the customer first in your digital business model. 

Of course, digital marketing doesn’t operate in isolation. The core concepts of traditional marketing still apply. It’s just that digital adds something new to your marketing playlist

Your digital business model really only works when everything works in harmony. Our RESTART framework is designed to help you bring all the elements you need together to really make your digital activities sing.

Three-Brains and digital marketing

We’ve worked on many digital marketing projects. Our expertise and experience experience stretches across all aspects of digital marketing including digital business models. We know how to connect these back into driving your brand marketing and growing your sales. 

Email us, to learn more about how we can support your digital marketing to grow your business with our coaching and consulting services.

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