Use Imagination to Grab Market ShareLast week our company's executive vice president of sales and marketing told me that a credit card marketer had tried advertising with us four times and failed miserably. He asked whether I thought that acquiring credit card applications might be something that simply could not be done cost effectively on the Internet.
We once had a similar discussion. A long-distance carrier had tried our e-mail newsletter ad network a few times and failed. I was asked whether long-distance carriers simply could not market effectively on the Internet. And then I was struck with a blinding insight ... either that or I was having a stroke.
Any real business that is marketed offline can migrate to the Internet. But, marketing campaigns and offers cannot simply migrate to the Internet and their success be assumed. Each advertising medium has a different personality, dynamics and mechanisms required to be successful.
You simply cannot mount a radio and television campaign using the same creative or offer. If you use free-standing inserts, this is a different audience and a different ad medium than a television spot. The Internet is a different medium, with a different audience that is more prone to deals, more prone to be skeptical. It is easy to just click and be gone.
An Internet marketing campaign needs to understand the audience and the interactive dynamic. Marketers need to ask different questions than they traditionally have asked. If you are failing in your marketing efforts online, you better start looking in the mirror.
Lack of imagination will never allow any serious seizing of market share. Market share dynamics shift as soon as one company can afford to spend three times more than its competitors do to acquire customers.
What AOL did five years ago comes to mind. At the time, if you wanted to get online you needed to request a disc by calling or mailing the ISP. The marketplace was filled with experienced, well-heeled marketers (AT&T and Microsoft to name just two). When AOL could not get enough people to call, it tried a different approach. Rather than initiate a request, it just carpet-bombed every known computer user with a disc.
If I were Sprint, AT&T or MCI and wanted to seize market share, I would ask what is needed to triple my customer acquisition allowable, especially when my competitors were busy trying to spend $30 to $50 to acquire a customer. In other words, if you can afford to spend $50 to acquire a customer, what is needed to raise an allowable without breaking the bank? One imaginative way is to look for horizontal partners that would help defray the cost of acquiring a customer.
If you cannot raise your acquisition costs to acquire a customer, then a lot more work needs to be done in improving advertising efficiency. Advertising rates are only one part of the efficiency equation. Lowering rates does not take much imagination, and now that media rates have been lowered to the point of pain for media owners, increasing conversion rates has become necessary.
So you must ask the following, "How can you increase conversion rates to become more efficient with media expenditures?" Trying to answer this question, our marketing lab began experimenting with several "involvement devices." Under controlled experimental procedures, order conversion rates have increased from 28 percent to 50 percent, depending upon which device has been used. The theory and then implementation of these online devices have been borrowed from offline sales techniques and applied to the online experience.
Each device had one thing in common: getting the surfer involved in an interactive process immediately before getting to the order page. In one test, simply having a plain screen requesting surfers to input their e-mail addresses on the way to the order page increased order conversion rates by 28 percent.