What does ‘Interactive Marketing’ mean?

April 2nd, 2010 by Lowell D'Souza Leave a reply »

Ladies and Gentlemen! The newest term in prominence – “Interactive Marketing”. Everyone today is an expert on interactive marketing and yet, when I queried a couple of folks on what interactive marketing was, I received a couple of weak responses like “ Ummm, it’s about online marketing” or “It’s a new form of web marketing to customers” .

What twaddle!

A business professor from Harvard, John Deighton defined interactive marketing as the ability to address the customer, remember what the customer says and address the customer again in a way that illustrates that we remember what the customer has told us. Well put, Prof. Deighton! The Wikipedia entry for interactive marketing clarifies that this function is not synonymous with web marketing even though interactive marketing processes are facilitated by web technologies. So, how do we humble marketing folk use interactive marketing to get closer to our customers? Well, here’s how (with some caveats) :

Some examples of interactive marketing :

1. Social networks : It’s possible to create clusters of customers based on their preferences for a certain product, celebrity, cause, rant, point of pain and then send them messages propagating your brand. The problem with this is that Facebook might be jumping the shark and users are having to deal with application spam along with group invitations and notifications spam. MySpace is already passe and the other networks have yet to catch up in terms of membership and sophistication. Make sure that your communication is consistent and strong value-added else you’ll lose your credibility with your target.

2. The art of conversation emails : This is probably the easiest and probably the best form of interactive marketing that businesses can leverage to best effect and in a short period of time. It’s kind of like the Gmail concept. Imagine a string of conversations with a customer where you get an insight into the interests of the customers (i.e. which products did he click on within your email or which content did he read). Once you identify interest, ensure that you have a follow-up in place and keep the conversation going till a transaction takes place. Of course, you can capture the success of this initiative by using good analytics.

3. Website visits : Amazon does a great job of capturing the preferences of customers including their browsing history and showcasing products that match those preferences. Yahoo does that too with the weather and the local news feed. If you’re able to create a website that is able to tailor the customer experience to suit a customer’s likes and dislikes, you’re on your way.

4. Mobile marketing : Another interesting way to get interactive with your customer and perhaps SMS a product promotion. If a customer responds, you have a hot lead. I’d err on the side of caution and not use this mechanism as much since the spam tolerance factor of a cell phone user is much lower for his cell phone than say his email account.

Interactive marketing is getting to the point where one-on-one marketing will be essential trend to get higher conversions for businesses on the web. What would you rather do ? Target the mass market where you could get say, ten thousand visits from people all over the US resulting in a conversion rate of 0.1% or target multiple clusters of customers totaling about a thousand (say 10 clusters) or so probably resulting in a higher conversion rate (Assume that your budget for the two activities is the same but you’ll need to spend at least twice the time in terms of effort to make this work). Statistics have shown advertisers that traffic from social networks always comes with a cost and that’s high bounce rates.

The problem is that we’re used to having high traffic numbers as one of a website’s KPIs. Granted that conversion metrics are important, visitor traffic is still a key metric. Give me a low traffic number of highly relevant traffic to my business rather than a high traffic number of mixed unidentifiable traffic to my website. Benefits of highly relevant traffic are low exit rates, higher conversion rates, better understanding of customer behavior and better predictability. I’ll take this any day.

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