January 31st, 2006

The FULL Value of Internet Marketing

Here at SRB, we work with organizations all of sizes — as is probably evident by some of our earlier blog posts.

This, I believe, has lead to a wide variety of expectations from prospective clients regarding the value of Internet marketing in general, and of our services in particular.

Some of these prospective clients want instant ROI. “We’ll do a test for a month and, if it makes money, we’ll continue — otherwise not.” When we clarify, it ends up they want direct sales results that immediately makes them a profit. That’s instant ROI! Doesn’t that make Wall Street types, who go by the quarter, seem like paragons of patience?

God bless ‘em, wouldn’t that be a no-brainer! And we can actually do that for some clients. But, can you imagine applying for a job at a company and your prospective employer tells you that you have a month to bring in more value than your salary, benefits, and overhead combined?!

Other organizations are less in a rush. They may realize that building a relationship, obtaining ROI on their marketing investment a few months or more later (gasp!), and realizing increasing ROI over time are both more realistic and potentially more lucrative in the end.

Still, even many of the later types of marketers don’t realize what I call here the FULL value of their Internet marketing efforts and budget. In order to derive the FULL value of such efforts, most marketers should consider at least the following 3 additional benefits:

1. The lifetime value of the new customers brought in. When you acquire a new customer who initially spends X dollars, will they spend 2X-3X dollars over the next year? Five X or more over the course of time as your customer? Look at your data and find out from your previously recurring customers what this value averages!
2. The higher volumes reached online than in other media for the same or lower price. Branding is something many smaller companies won’t pay for, but should always be considered all things being equal — e.g., if you can reach over 1 million people online for the same price and space as a print ad to 200,000 people, isn’t that worth more? Studies have confirmed it is — that more people will recall your brand, even with puny search ads (not to mention email blasts and other, more “robust” ads).
3. The value of other online and offline behavior driven by the online efforts — phone calls, catalog requests, newsletter or list sign-ups, bricks-and-mortar sales, greater wholesale results, word-of-mouth referrals, etc.

These benefits aren’t always easily quantifiable, but shouldn’t you give it your best effort? Your online marketing investment may be paying off more than you think. Maybe even much more.