Digital Goods Market: Service with a Smile

When you see someone listening intently through a pair of ear buds or visually enthralled with their tablet, chances are they’re consuming digital goods. According to Webopedia, digital goods is a general phrase used in e-commerce to describe any goods that are stored, delivered, and used in their electronic format. 

From iTunes and Audible to Netflix and Tinder, digital goods represent one of the most diverse and thriving consumer segments. But, not every digital good that launches will become the next Tinder. In fact, 95 percent of new products launched each year will fail, according to research from Harvard Business School. 

We live in a world where the line between what’s digital and linear seems increasingly blurred. So, what’s the best way for digital goods to get in front of consumers’ eyes and ensure they’re deemed a match — and not swiped left?

SurveyMonkey’s newest digital campaign — entitled “Shoulda Used SurveyMonkey” —
uses humor to grab the attention of its B-to-B targets. It’s succeeded in breaking
through the online marketing clutter to drive leads for the company.

Digital Directions

“Digital goods are traditional businesses that are all moving toward being where the customer is,” says Lakshmi Hari, head of integrated marketing for SurveyMonkey, an online survey company based in San Mateo, Calif.There are inherently certain factors that make digital goods succeed. If I’m able to take a physical product benefit, but make it easier, more convenient, and more affordable in some way, those are the categories that have been really successful — whether it’s software or photographs. For us, we see SurveyMonkey as disrupting how market research has been done traditionally,” 

Many of today’s digital goods have found success by starting their marketing efforts online and then moving into offline media like TV, radio, and out-of-home (OOH). However, digital goods are typically channel agnostic depending on a number of marketing factors.

“I think it’s really more about the marketing goal you’re trying to go after, and then choosing the channel and tactic that delivers that goal in the most effective and efficient way,” says Hari. 

SurveyMonkey recently partnered with Los Angeles-based advertising agency Bullpen Integrated Marketing to create a B-to-B digital ad campaign titled, “Shoulda Used SurveyMonkey.” The campaign humorously shines light on what can happen when a company fails to ask its customers or employees about whether an idea is sound before putting it out into the world. It launched in the U.S. with two digital videos on social media platforms. 

“Part of the strength in digital advertising is the ease for consumers to click and transact in a quick, easy, and linear fashion,” says John Ludwig, Bullpen Integrated Marketing’s senior vice president of marketing. “With offline media, there is a lag between the time someone sees the ad and then has to go online or to a store to transact. For a digital goods company like SurveyMonkey, the logical place to start a campaign that aims to drive new leads is in the digital space. The key to success though in this space is delivering creative that’s entertaining and worth watching because the downside of digital advertising is how easy it is to click away or ignore a message that we don’t deem relevant.” 

According to a CNBC small business survey conducted in second-quarter 2017, 62 percent of small business owners say they never conduct surveys of their customers. Bullpen used this staggering disconnect as part of its inspiration for the SurveyMonkey creative.

“Your marketing lives and dies based on the content you produce and share. To succeed at marketing, your content has to be exceptional. And, without some form of research to understand why and for whom you are creating content for in the first place, you’re flying blind,” says Ricky Mintz, Bullpen Integrated Marketing’s CEO. 

Customer support is a crucial facet of any marketer’s overall campaign,
but perhaps even more important in the digital goods space. For instance,
Wix.com offers its customers video tutorials (above), user forums, and
other online tools to maximize the quality of their Wix sites.

Catching consumers’ attention is the first piece of the puzzle, but getting them to take action is the ultimate solve. For Wix.com — a cloud-based Web development platform based in Tel Aviv, Israel — the digital goods end game is obviously online. 

“As a digital company we need to make sure that we lead consumers through a path to purchase cycle that will ultimately take them online,” says Vivian Hernandez, Wix.com’s Bay Area-based head of PR and communications for Latin America. “While we are online focused, our offline campaigns — such as the Super Bowl spots — always include an integrated online component. That could be through video content, social, or digital advertising.” 

Much like SurveyMonkey’s decision to focus its recent campaign efforts to a more-targeted digital demographic, Wix.com has currently moved its marketing mix away from its prominent Super Bowl TV advertising and back to digital.

“We have decided to focus on digital campaigns and working with influencers to reach different audiences,” Hernandez says. “We adjusted our marketing strategy to create a more tailored approach to reach distinct audiences, such as designers and developers. With the launch of Wix Code, a product that is geared toward more advanced web designers and developers, we need to make sure that we reach them where they are and through the relevant channels.”

And of course, many digital goods utilize online and offline marketing simultaneously.

“It’s about understanding your various customer user stories and positioning offline marketing accordingly to compel a consumer to engage with your online platform,” says Jim Phillips, a Chicago-based digital goods expert formerly with the taxi app Curb and now general manager of Ritual.co Chicago.

He describes Ritual.co in its simplest terms as digital local commerce. Think the Starbucks app, but for everywhere. “For Ritual, many customers learn about us through our partner merchants. We partner with quick-service restaurants and coffee shops to craft a custom message offline that compels interest to interact with Ritual online,” says Phillips.

But, regardless of where people see the content, what’s the key to marketing a product or service that consumers can’t actually touch or feel?

5 Most Profitable  Digital Products

Tantalizing Digital Goods

“The key to marketing anything is to understand the consumer and then communicate the product benefits in a way that makes the product relevant and intriguing to them,” Ludwig says. “In the case of SurveyMonkey, we’ve found that most consumers are aware of their service and understand some of the benefits of being able to quickly and easily run a survey, but the brand wanted to broaden its market to make people aware that SurveyMonkey is a valuable tool for businesses — not just for consumers.”

SurveyMonkey wanted a compelling way to engage its target demo in conversation about their products, which is the exact kind of thinking Bullpen applied with its creative approach. “Knowing we were creating digital video content, we had to step back and think about what works best for that format,” Mintz says. “If we want to get someone’s attention on a subject matter that could be perceived as boring — we’re talking about surveys — how do we make it a little bit more interesting and make people smile? We believed that comedy would break through the clutter and get people to share more.”

Furthermore, SurveyMonkey utilized various touch points beyond the videos to ensure the “Shoulda” campaign was successful.

“Can you tell a story, not just sell products and features, and can you do it in a way that is integrated and gives an experience?” asks Hari. “We thought about the user flow and what happens after they see the video. We wanted to drive them back into where they can experience products. So we created campaign-specific landing pages, a newsletter, blog content, and data to support the campaign, as well as resources that offer solutions on how to ask the right questions.”

For Wix, Hernandez finds that the key to marketing products consumers can’t actually touch or feel is localization and personalization. “It is imperative to understand what makes consumers tick, and fill in a gap that exists,” she says. “By being able to do so, we grow our ability to market to consumers while gaining their trust. It’s about showcasing how the product will add value, while delivering messaging through channels that they trust and engage with.”

Phillips enjoys digital marketing’s targeting and speed. “Digital campaigns enable a marketer to more efficiently track effectiveness in real time, measure cost of acquisition, and react quickly to optimize campaigns that generate positive lifetime value customers. Digital also enables us, through social mechanisms, to accelerate the natural word-of-mouth that customers engage in after a positive experience,” he says. 

However, digital goods marketing campaigns still have inherent challenges. “Often with a digital product, the difficulty is explaining what it is and why someone needs it,” says Ludwig. “You can face this same issue with a physical product, but with a digital product you have to come up with visual ways to often communicate something that’s not very visual.” 

He continues, “On the positive side, a digital product can be demonstrated anywhere you have an internet connection, so the ability for trial to happen at scale is much more efficient than a physical product. Also, the ability for instant gratification is highest with a digital product, as you can transact and start using the product right away.”  

ritual
Ritual is a mobile app that partners with local
restaurants and coffee shops in Chicago to
allow consumers to order, pay for, and — in
some cases, have delivered — their next meal. 

Filling Digital Ditches 

“Digital goods are dynamic products that are constantly evolving,” says Hernandez. “Through new features, production changes, and so forth, the process changes. Shipping dates are similar to a physical good, but then you have to account for new features and what that means. Also, when creating a marketing campaign, it’s important to think about when the messaging will get out — such as the difference between talking about a product that is in beta, the first version, or several years old.”

Digital goods marketers also have certain backend needs to ensure success, Hernandez contends. “While we are not manufacturing or shipping a physical product, there are costs for R&D and all the technical backend that support Wix,” she says. “Our products need to be developed, designed, and tested before they go to market. There is a shipping timeline that understands the importance of how a product will work in different markets.”

The amount of human support and investment that goes into maintaining digital goods can’t be understated. “SurveyMonkey’s platform needs to be maintained and it needs to be optimized to handle millions of simultaneous interactions,” Ludwig says. “Many of SurveyMonkey’s services also require expertise and customer interaction as well. So while the website or app we interact with seems to be infinitely scalable, it takes a ton of investment and human support behind it to make sure it delivers the quality experience both consumers and businesses expect and depend on.”

SurveyMonkey has a “Voice of Customer” team in place to make sure it delivers an awesome customer experience with its digital products. The current turnaround time for response is less than one hour. Moreover, business customers with paid accounts usually receive email responses within 15 minutes or so.

“We want to create delightful digital experiences for our customers, and we really focus on doing it through three ways,” Hari says. “One is speed, and really focusing on one of our products, SurveyMonkey Audience, which lets you go listen, survey, and test your ideas and get responses back in about two or three days anywhere across the globe. The second piece is scale: 270 people answer a SurveyMonkey question every second. Having the kind of infrastructure that can support that kind of scale is super critical for us. The last piece is expertise. We have expertise in survey science and we’ve built our own proprietary ways of leveraging and tapping into it.”

Thinking about the user experience is essential during the development, launch, and continued life of any digital good. “The common theme for all consumer businesses I’ve been a part of is that you must be laser focused on the user experience,” says Phillips. “It’s not rocket science, but it often gets overlooked once a company feels they’ve achieved product market fit. Word-of-mouth is the best way for a product to catch fire and it all starts with the experience and value you bring to the early adopters.” 

Digital Retail Therapy 

In the absence of an enjoyable brick-and-mortar aesthetic and experience, how do digital goods marketers compensate to ensure the online experience is gratifying and seamless?

“The common thought about moving a user experience from offline to online is that it loses its human element,” Phillips says. “However, digital platforms can empower merchants with more information about their customer. With Ritual, merchants can greet every customer by name as if every customer was a regular. Ultimately, the Ritual app enables enhanced human interactions and connections, we help merchants build better relationships with their customers and with one another.” 

Wix places strong emphasis on customer support. “Good customer support is key for any product company that is looking to provide a positive experience,” Hernandez says. “All of our users — regardless if they have a free or premium site — have access to a live customer representative on the phone. Customer support goes beyond just phone or email response; it includes the right online tools that empower users to find information quickly. It is why we invest a lot of time into our online knowledge bases and FAQs. We also make sure that we provide all the necessary information from video tutorials, forums, and in-language support.”

Many digital goods have automated or eliminated aspects of their physical retail counterparts. “The key to selling goods online is delivering all the information the consumer wants and needs in a way that makes it quick and easy to transact,” Ludwig says. “Amazon is, of course, the king of this with their ‘one-click’ ordering. Services like live chat can offset the need for a physical sales associate, but if a website is well designed with the consumer in mind from the start, I often don’t need any help from an associate to be convinced to buy — especially when, with a digital product, I can very often try it out for free.”

Digital Goods: Nielsen Rankings

Keep It Local, Make It Personal

As the digital goods market matures, localization and personalization stand out as two additional keys to success.

“Digital platforms can target customers much more accurately. One of the main marketing advantages of the Ritual platform for merchant partners is utilizing data to target new customers within the marketplace,” Phillips says. “For example, we know what customers are within a certain radius of a merchant and who has or hasn’t purchased at their store. We can segment those who haven’t and shoot them a notification — with a digital good attached — incentivizing them to make a purchase.”

SurveyMonkey is extremely focused on localizing its products so that businesses can have conversations with people in their local languages. For example, SurveyMonkey recently expanded the capabilities of its SurveyMonkey Audience platform to provide market-powered data with global panels in more than 100 countries.

“One of the biggest things for us, because of our global scale, is localization — and we take it very seriously,” says Hari. “Because we’re in the business of people-powered data, we really think that our platform should enable people to ask or seek things in their own language. Our SurveyMonkey core survey platform supports 16 languages and can deliver surveys in nearly 60 languages,” says Hari.

A consumer’s location affects distinct aspects of their marketing experience. “Earlier this year, we helped Snapchat develop a marketing campaign for their custom geofilters,” says Ludwig. “Who could have imagined even five years ago that people and businesses would be able to pay a small amount of money to create their own digital ‘photo frame’ that anyone can access — but only when they are in a certain location at specific time? The trend toward personalized products will only grow as the infrastructure, speed, and costs all scale and more and more people are introduced to them.”

Hernandez maintains that personalization has been one of the biggest advancements for digital goods. “The level of ad personalization is something that has moved so far ahead this past year,” she says. “We have savvier consumers, which means that brands and advertisers need to continuously evolve. Part of the reason we’re using so many influencers and direct partnerships is the ability to tailor campaigns directly to distinct audiences.”

This summer, SurveyMonkey undertook personalization with the launch of its People Powered Data platform that focused on making survey taking feel more like a conversation. In the U.S., 35 percent of SurveyMonkey surveys are taken on mobile phones. Outside the U.S., it’s almost 81 percent mobile, making it essential that all interactions are mobile-friendly.

SurveyMonkey introduced a mobile-first design, which makes it more likely for people to complete surveys, as well as integrations with the most popular messengers — like Facebook Messenger, Slack, and Microsoft Teams — where millions of people are already having their conversations.