Digital communication and the stakeholders it reaches
Definition
Digital communication: the use of technology such as websites, email, social media, apps and video calls to send and receive messages between a business and its stakeholders.
- Customers: they now hear about prices, new lines and offers through a website, an app notification or a social media feed rather than through a posted catalogue or a newspaper advert.
- Employees: email, group messaging such as Microsoft Teams or WhatsApp, and shared online rotas let one message reach every shift at the same time instead of being pinned to a staffroom noticeboard.
- Suppliers: orders travel between linked computer systems, so a falling stock level can trigger a reorder without anyone making a phone call.
- Shareholders and the local community: results, announcements and job vacancies go straight onto the company website, so the same information reaches investors, neighbours and journalists at once.
Note
Who counts as a stakeholder and what each group wants from the business is covered in the stakeholders article; here the focus is on how digital technology changes the way they are reached.
The channels a business uses
- Choosing the channel matters. Each channel suits a different message, so a firm confirming a delivery time uses email or a text, while a firm launching a product uses social media.
- Most firms use several at once. Tesco runs a website, an email newsletter, a Clubcard app and staffed social media accounts, because different customers pay attention to different places.
Example
- Gymshark built its following through Instagram and TikTok posts by fitness influencers rather than through television advertising.
- Monzo has no branches, so customers ask questions through in-app chat instead of speaking to someone at a counter.
- The Greggs app sends a reward notification to a customer's phone, which is a message a poster in the window could never deliver.
What changes for customers
- Communication became two-way. A poster could only broadcast, whereas a social media post can be liked, shared, questioned and answered, so the customer talks back.
- Feedback arrives immediately and free of charge. Reviews and comments tell the firm within hours that a new recipe is disliked, information that once needed a paid market research survey.
- Messages can be targeted. Online advertising tools let a business show an advert only to chosen ages, interests or areas, so less money is spent on people who will never buy.
- A gym can pay to reach adults living within five miles, which wastes far less than posting leaflets to every house in the town.
- Complaints are now handled in public. A complaint that once arrived as a private letter is posted where everyone can read it, so the reply itself becomes part of the firm's reputation.
Common Mistake
Bad news travels as fast as good news: one angry post can be shared to thousands of people before the business has even seen it.
What changes for employees and suppliers
- Work can happen away from the workplace. Shared files and video calls allow remote and hybrid working, which lets a firm recruit from anywhere in the UK and cut the office space it rents.
- Meetings cost less. A video call between two sites replaces train fares, hotel bills and a day of lost working time, so decisions are taken sooner.
- Ordering from suppliers is automatic. Sales data passes straight to the supplier, so replacement stock is requested as it sells rather than after someone counts the shelves.
- Employees are contactable outside working hours. Messages arriving in the evening blur the line between work and home, which can raise stress and lower motivation if the firm does not set rules.
Example
- Barclays holds meetings by video between its London offices and its Glasgow campus, so staff in both places take part without travelling.
- The Nissan plant in Sunderland is linked electronically to its parts suppliers, so components are called forward as the production line needs them.
- Deliveroo sends jobs to riders through an app, which replaces a controller telephoning each one in turn.
Drawbacks the business has to manage
- It takes staff time and skill. Someone has to write posts, answer messages and keep prices on the website correct, so a small firm either trains an employee or pays an agency.
- It needs constant monitoring. Accounts have to be watched at weekends and evenings, because a problem left unanswered overnight has already spread by morning, and an account nobody replies to does more harm than having no account at all.
- Security and privacy carry a cost. Customer addresses and card details must be protected by law, so the firm pays for secure systems and for training staff who handle the data.
- Some stakeholders are left out. Customers with poor internet access or little confidence online still expect a telephone number, so digital channels rarely replace the old ones completely.
Note
Setting up an account is free, but running it is not, because the real cost is the paid time of whoever keeps it going.
Exam technique
- Name the exact channel and the stakeholder, because analyse how digital communication has changed the way this business communicates with its customers needs more than the word "internet".
- Say what the business used to do and what it does now, then give the effect on cost, speed or reach.
- Match the stakeholder to the channel, since suppliers are reached through linked ordering systems while the public is reached through social media.
- The usual slip is drifting into e-commerce; if your point is about taking payment and posting the order, you are answering a different question.
Self review
- What does digital communication mean?
- Name four digital channels and one stakeholder group each reaches.
- Why is social media described as two-way communication?
- Give two ways digital communication changes how a business works with its suppliers and employees.
- State two drawbacks a firm faces when it communicates digitally.
