According to the IAB report, ¾ of the advertising expenditures are forwarded to digital channels. The statistics were developed on the US market basis, although similar indicators also take place in Europe.
œConsidering the fact that 75% of marketing budgets are invested in digital, it is critical to set the right goals and track the results, so that every $100 invested provides the maximum benefit and ensures competition for the user’s attention.
The authors of the British platform for marketers called Smart Insights state that half of the companies do not have a clear digital marketing strategy, in spite of large marketing budgets. That is why the offered RACE framework is beneficial in tracking key performance indicators and building data-driven plans for different companies.
The RACE Framework Essence
The authors of the concept developed the framework to be applied to all types of companies, including B2B and B2C; small startups, mid-size enterprises, and large corporations.
The acronym RACE includes the key metrics that need to be tracked digitally.
Reach > Act > Convert > Engage
There are 4 stages of interaction with the brand throughout the entire customer journey.
Smart Insights emphasize the fact that the so-called “zero” phase, namely Plan, is also important. It refers to creating a strategy, setting goals, and developing a plan. This phase ensures that the brand’s digital communications are aligned with its business and marketing strategy. That is why this framework is sometimes called PRACE.
Source: Smart Insights
Let’s view all 4 stages of the framework in detail…
Experts believe that the main challenge in digital marketing is the conversion in the first targeted action, namely the beginning of the customer’s interaction with the brand and its transformation into a lead after the first contact. However, other steps are not less important.
The reach stage deals with increasing awareness of the brand and its products in all possible ways, such as using its social networks, blogs, microsites, media publications, traditional offline advertising, offline events, etc. The tactics are important for the maximum coverage of the target audience and the creation of many entry points for the acquaintance of the potential client with the brand.
It is necessary to note that “act” is a short form of “interact”. Motivating the target audience to the first online interaction with the brand is a considerable challenge. The stage refers to pushing website or social media visitors to take the next action in their customer journey. On the one hand, it is associated with lead generation, especially in the B2B sphere. On the other hand, the “act” stage deals with providing a customer with the opportunity to learn more about your company, search for a product, or convert to a blog post. A marketer needs to apply specific targeted actions depending on the niche characteristics.
At this stage, Google Analytics may be beneficial with the following actions: “View a product”, “Add to cart”, “Register” or “Subscribe to a newsletter”.
Eventually, the customer takes the next step which turns them into a profitable client. Conversion to sales can take place both online and offline.
Sometimes after seeing an online advertisement, clients come to buy this item at an offline store. And vice versa, traditional marketing can stimulate sales on the Internet. In such a way that 29% of revenue generated in traditional marketing is recorded in the online store. This is why keeping an effective balance between online and offline sales channels is essential.
The “engage” stage of the framework deals with the development of the long-term relationship of the customer with the brand, increased loyalty, and repeated purchases. A high engagement rate can be reached through constant communication via website, social media, email, or direct marketing tools used to increase the LTV (Lifetime Value).
Loyalty can be evaluated in the number of repeated sales, the UGC (user-generated content), as well as the communication character with clients on social networks. It’s also important to take into account the percentage of active readers of the newsletter. We have proved the effectiveness of the retention marketing tactics for the “engage” stage of the RACE framework working with the Red Park client that increased its revenue by 20%, due to the properly implemented email marketing. At the same time, the customer satisfaction rate can be evaluated using NPS, and feedback needs to be tracked in various channels to assess the “engage” stage effectiveness.
Which Metrics to Analyze
Marketers consider a data-driven approach to be the best one for digital marketing. Corporate goals and optimization plans must be based on reliable data that demonstrate the effectiveness of the applied marketing tactics.
Below is a table with key indicators that form a RACE dashboard. Brands should not only track these indicators but also identify the trends and changes during a selected period or season.
Source: Smart Insights
Google Analytics can provide data about various metrics, for example, goal value or revenue per visit. You need to use different tools for the rest of the metrics, like social media mentions. We often work with Google Alerts, SoMoBot, YouScan, etc.
Using the framework for a long period of time, you can determine YoY indicators, compare similar reporting periods, or contrast the situation in each channel: organic, paid traffic, email, and social networks.
If you want to develop your eCommerce business comprehensively, it’s better to do this with the support of professional specialists that possess considerable expertise and experience in various areas. Undoubtedly, hiring and maintaining such an in-house team is difficult, and a reason why we suggest that you ask for advice from Promodo.