The role of online technology has evolved in such a way that it now supports all phases of the customer lifecycle, from customer acquisition to fostering long-term customer loyalty, according to Datamonitor.

Datamonitor argues that understanding how online channels are evolving, and how customer expectations are changing in tandem, is essential.

In a report, it highlights four key challenges that companies need to address at each stage of this continuum.

Firstly, it recommends that companies continue to leverage online channels as a key sales execution channel: firms need to be aggressive in traditional areas such as search engine optimisation, as well as emerging areas such as pay-per-call methods.

Nevertheless, companies should be vigilant to weight the pros and cons of issues such as sponsored advertising and the role of aggregators in the market, Datamonitor advises.

Secondly, viral and word-of-mouth marketing will play an increasingly important role in reaching consumers: driven by factors such as information overload, decreasing trust in mainstream media methods, and the prevalence of technologies to connect with friends and family (such as blogs), consumers are increasingly relying on interpersonal communications to influence their purchasing decisions.

Understanding the increasing level of influence that such networks exert should underpin any online market strategy, Datamonitor says.

Thirdly, companies are advised to employ superior online customer service, which requires a delicate balance between identifying and diagnosing problems, resolving the issue, and providing customers a reason to come back.

Finally, online channels are evolving into interactive, personalised tools for consumers, and Datamonitor envisages the next iteration of online channels to evolve much more rapidly into tools for consumers to leverage in various aspects of their lives.

Related Topics: General Marketing