Interactive Marketing Return on Investment

Is interactive marketing worth the return on investment (roi)?

Since so much marketing activity is occuring on the internet, how do you measure interactive marketing roi, especially when you compare it to direct mail and traditional advertising?

While return on investment is measured in terms of dollars spent and dollars that come in, then it's important to point out that interactive marketing also allows advertisers to target - or "go after" - specific target customers and, at the same time, gives them a chance to pull them in using search engine marketing strategies.

Here's an outline I wrote of reasons to use interactive marketing versus only traditional direct mail.

I. High Rate of Return on Investment
A. Email - Highest return for every dollar spent compared to all other channels:
According to a new Power of Direct economic impact study from the Direct Marketing Association, return on investment from email marketing keeps surpassing other channels.For 2008:- Email marketing’s ROI will be $45.06 for every dollar spent on it- Non-email internet marketing delivers $19.94 for every dollar invested- Catalog marketing generates $7.28 return - Non-catalog direct marketing’s ROI will be $15.55 for every dollar spent

B. Email Open Rates and Click Through Rates
1. Industry Standard: Numbers vary based on relationship between sender and receiver. But, typical open rates may reach 30% while click through rates may reach 10%.

2. An interactive agency, Rhythm Interactive, improved a client’s click-through rate by 200% when improving the content
II. Budget-smart cost per lead
Cost per lead is $ 30 for one client that Rhythm Interactive is introducing to a new program for Personal Web sites

III. Ability to Target Specific Audiences, Track Behaviors
Rhythm Interactive’s work with the State of Connecticut Dept of Tourism resulted in more than 24,000 sweepstakes participants in a 12-week period. More than 72% requested vacation guides. Other details available upon request

IV. Digital – Personal URLs
This gives companies the chance to attract specific clients who fit particular profiles. Companies may have more than one niche to attract and developing personal urls is one way to create a personalized experience. This integrates effectively with direct mail, person-to-person and telephone follow-up.

Let me say, I'm also a believer in using a marketing mix such as direct mail to reach customers where they are. Not everyone is online all the time so strategies that employ direct mail combined with interactive online marketing can be quite successful.

By the way, here's a great article on interactive marketing that I found on Bnet from 1991. It talks about delivering a message on floppy discs!

Your Most Important Marketing Tool

What's the most important marketing tool you can use?

Web site? No.

Twitter? No.

Direct Mail? No.

Personal Networking? No.

Answer: Your reputation!

I believe your reputation for providing quality service or a quality product at a fair price will generate the most valuable form of marketing and advertising: word-of-mouth.

Other forms of advertising and marketing are still useful. They can distribute your reputation faster, farther and to more of your target market.

If you have a good reputation then word-of-mouth multiples in effectiveness. If you have a bad reputation then positive marketing will get more expensive.

Reputations take time to build. Be patient. If you're new in business - like less than three years old - then make sure you've got success stories and satisfied customers who want to spread the word.

Paying for marketing help and advertising does offer strategic benefits, though.

I've considered calling this "Reputation Marketing."

What you're really trying to do is market your positive reputation and your strengths.

I've thought about this after working with Barbera Properties, a professionally run apartment rental company operating in Pasadena, South Pasadena, Monrovia and other nearby cities. They even have a video on their management philosophy.

Barbera Properties has a management philosophy that focuses on treating the tenant, or customer, as a partner. This means when a tenant has a service request the Barbera Properties maintenance team responds quickly instead of investigating to see if the tenant is actually telling the truth.

Certainly there are tenants who'll take advantage of the service and complain when it's not warranted.

But the response also results in good will and earns customer respect and greatly increases the chance to benefit from word-of-mouth marketing.

So the first rule of reputation marketing: provide excellent customer service.

Reverse Business Networking: Reduce Pressure

How much do you enjoy business networking?

Some people love it and thrive on walking into a room, ready to chat and exchange business cards. I've met professionals in the legal profession or financial planning profession who know how to ask the right questions in a conversation, give a card and determine within 30-seconds if they're going to keep speaking with the person they've just met or if they'll walk on . . . !

Can you do that? And is that really effective business networking?

That approach works for some but it makes the palms sweat for others.

Try "reverse networking" or connecting with a power partner.

I just heard the term reverse networking from a friend and actor, Brian Vermiere, who develops tools to help other actors and other performers stay organized as they build their careers.

The idea is you don't walk into a room filled with people and see them as your potential clients and think immediately "how can I get them to do business with me!"

Instead, be prepared to ask about their business, their client and listen to what they have to say.

This means you have to listen, listen, listen. This goes to my post about asking assessment questions. But it doesn't mean you have to take a lot of time. It may only take seconds.

Here is how Brian Vermiere used "reverse networking."

He went to an audition, stood in front of the camera and got ready to deliver his lines. I believe it was for a commercial audition. In this situation, an actor usually has no more than a minute or two to say their name, their lines -- maybe do a second take -- and thank the associate as they walk out the door.

The casting associate who was operating the camera was in a grumpy mood so Brian asked him an innocent question and found out he was worried about his cat. Brian kept the information in mind and jotted it down in his toolkit.

Brian got a callback on the audition - which means he was asked to come back and do a second reading to be considered for the role.

He asked the casting associate about the health of his cat and the man acted surprised. Then Brian said when he was in for the first reading, the man talked about his cat, etc.

Brian wound up booking the role!

Now, he also had to have the talent in order to book the role and the information itself didn't secure the part for him. But it did help create a relationship and it could likely have given him an edge.

Taking the moments to ask someone else about their business, their needs and their clientele can provide much greater rewards than dumping them if they can't immediately help you.