ESOMAR
Online Conference, Montreal, June 2005
/www.esomar.org
Beyond online advertising - lessons about the power of brand websites to build and expand brands
Laurent Flores, CEO, CRMMetrix, Inc., France and United States
Harald Eltvedt, CRMMetrix, Inc., United States
“Over 85% of the traffic to leading branded websites consists of medium to high value customers.”
“On average purchase intent sees a double digit increase after someone has been to a site more than once.”
OVERVIEW AND OBJECTIVES
The overall objective of this paper is to share the results of over five years long analysis of leading consumer websites that demonstrates how many leading brands have underutilized the marketing capacity of their websites. Through actual metrics the paper shows that the majority of traffic to branded websites consists mostly of high value customers. The paper also provides discussions on how websites have proven effective in building brand, increasing purchase intent, and streamlining marketing initiatives.
Our paper shows solid findings to support the notion that websites are indeed transitioning from a mere spoke in the marketing wheel to the hub itself. With the website at the center of marketing strategy, firms can track effectiveness, centralize branding, experience operational efficiencies and efficiently develop ongoing conversations with their most profitable customer segments.
The paper closes with seven specific, actionable strategies that can be used by leading marketers to tap into the true potential of their site to serve as the catalyst for customer relationship enhancement and increased customer lifetime values. These strategic recommendations are backed by case studies and normative databases from both the United States and Europe collected from over three million online interviews run through the CRMMetrix SiteCRM solution.
INTRODUCTION
Marketing and advertising more specifically is a never-ending contest for consumer's attention. Advertising to consumers, in its interrupting model, simply does not work as well as it used to:
· in part because there's so much of it:
o On average a consumer will see or hear one million marketing messages every year – that's almost 3,000 per day.
· in part because people have learned to ignore it. The biggest problem with mass-market advertising is that it fights for people's attention by interrupting them:
o A TV spot interrupts the movie someone is watching.
o A telemarketing call interrupts one's dinner.
o A print ad interrupts an article one is reading.
o A banner is interrupting one's website experience.
· in part because the rise of the Internet means that companies can go beyond it
Interruption marketing is giving way to a new model that many call permission marketing.
The main challenge for companies is to persuade consumers to volunteer their attention, and turn attention into permission, permission into learning on both ends, and learning into trust and leadership.
You tell consumers a little something about your company and its products, they tell you a little something about themselves, you tell them a little more, they tell you a little more – and over time, you create a mutually beneficial learning relationship.
Permission marketing plays the relationship role by convincing strangers to become friends, friends to loyal customers, and loyal customers to brand evangelists that will act as your company's sales force.
If interruption marketing is vital to let people know about who you are and about what you do, it is key to engage these people into a relationship from the first point of contact you have with them: the website, being not only the most natural point of contact with your customers, but also the best place to converse and interact with them.
This philosophy is at the heart of the development of the SiteCRM marketing application that was developed five years ago and provides businesses with an ability to go beyond seeing simply “what” visitors are doing to developing an understanding of “why” they are doing it. As such, empowered by a relationship approach to exchange and growth, we think that online marketers may go beyond interruption models of advertising to a more permissive model of Idea Exchange that in turn grows consumer relationship with their brands. Rather than forcing people to pay attention we should use strategies and tactics that push them to engage their attention themselves, opening the door to a more relationship-based model of advertising. This relationship-based model maybe put in place right away by the brand from its brand website that offers unrivaled opportunities to move from interruption marketing to permission based marketing.
Through presenting actual findings discovered by clients using CRMMetrix's flagship product SiteCRM, we will explain how changing our mental model of advertising may expand and change the way marketers may move from interruptive advertising to relationship messaging. These key findings are in fact captured in seven key lessons that any brand marketer should look at to change and grow their brands.
1. From “Counting” (Quantity of Traffic) to Measuring (Quality of Traffic): Identifying and Reaching Out Key Consumers.
A brand website cannot in any case replace a TV ad, mainly because the reach is not comparable. A TV ad will potentially reach 30 to 50 times more people than a brand website. However, when looking at the value of the reach, the brand website in many ways surpasses the TV ad. Specifically, we are talking about the higher-quality traffic that brand sites receive from valued customers, vs. a standard media buy.
According to our database, depending on the industry and on the brand, 85% to 99% of traffic to brand websites consists of medium-to-high-value customers – the customers who not only buy the most from you, but also praise your brand to their friends, and are highly and emotionally involved to often be the first ones to try your new products, or at least are the highest spenders in your category.
Contrast that with millions of ad impressions wasted on consumers who are not even in the market for your product or not in the mood to listen, and it becomes evident why it is crucial for advertisers to exploit the most powerful marketing tool they own – the brand website. (See Figure 1)
Through your website you have the opportunity to deepen relationships with those consumers that generate the majority of your profitable business. Your repeat site visitors are also, most often, members of another lucrative segment – opinion leaders.
On average brand websites attract 30% of Opinion Leaders of the category, creating an amazing opportunity to reach out these valuable consumers. If we take into consideration that only one consumer out of ten is an opinion leader within the USA population, the brand website is the most effective recruiting channel for this segment.
Opinion Leaders exert a major social influence on their immediate circle either directly by word-of-mouth or indirectly by people imitating their behavior. Within the framework of inter-personal communications conveyed by word of mouth, their circle seeks advice before or after buying a product or service.
They also pay a great role in Innovation Diffusion, bridging the gap between the 'Innovators' and the 'Early Majority' (Rogers Curve of Innovation Diffusion).
It remains clear that given the global and unlimited network offered by the Internet, the Web offers unrivaled opportunities to tap into the power of these opinion leaders and influencers. (See Table 1)
The table shows opinion leadership scores across different product categories among websites' visitors indexed by the average score for each category in the overall population.
The higher the index, the more opinion leaders of the category websites compared to the general population.
By measuring visitors' value from an economic, brand and product category standpoint, rather than just counting hits, visits, visitors or impressions, website managers can become more accountable for their budgets, as they suddenly have the ability to deploy a web-centered marketing approach that represents an accurate way to associate 'company-wide ROI' (cROI) with website development.
Based on our analysis, it now becomes clear that the website has to become the hub to any other media activity, even though the initial reach maybe limited. It is of common knowledge that the message should be as synergic as possible between the different media, but the website provides unprecedented capabilities to inform and engage with your customers, once they have been exposed to other elements of your media-mix.
Where the TV ad has a direct impact in positive cases, the website enables to create a relationship over time. It is not enough, therefore, to push people to a site if you do not move the hurdle of leveraging the value and efforts set in traditional advertising if nothing beyond a simple web page is posted on the Internet. The following paragraphs further highlight how the brand website builds and expands consumer relationship with their preferred brands.
2. Engage With Your Visitors, by Satisfying Them in Order to Decrease Churn and Generate Repeat Visits and Positive Word of Mouth that will Lead to Profitable Relationships.
We are all familiar with a few facts: it costs more money to acquire a new customer than it does to retain an existing one (sometimes up to ten times). The same is true for a website visitor.
Now, consider the incremental cost of advertising. Each new exposure has a dollar figure associated with it. The incremental cost of exposure to content on a website is limited to the value of the content and of course the time spent finding the content.
According to our database, customer value increases as site visits increase: by encouraging your visitors to come back more often to your website, you will begin the relationship game.
By educating them, you will become a source of information and start building your customers sales force. If they know more about you, they will be able to speak in better and more accurate terms to their social network. (See Table 2)
The better the customer experience, the better the brand experience and the power to change customer opinion.
At first glance, this may seem obvious. However, considering how new the web is compared to traditional media, we still need to show clearly that the website has a positive impact on consumers' opinion of the brand. There is a clear relationship between satisfaction and change in brand opinion. As satisfaction levels increase, consumers feel much better about the brand. We have seen this occur consistently throughout the three million-plus interviews conducted across brand websites internationally, for both first-time and repeat visitors.
Clearly, the ROI associated with encouraging repeat visits, and engaging them in a membership program, via for example a newsletter, also has a significant impact on short-term and long-term sales (where the TV ad is limited to the first one), as shown in Figure 2.
Beyond having a direct impact on a consumer's own experience and relationship to the brand, the positive Word of Mouth that the visit to the site may generate will maximize the brand reach beyond actual people coming to the site to the people that will be pushed to come as recommended by their peers, friends or colleagues. At a time when the world is dominated by an overload of information, people rely more and more on their peers to make decisions and buy products. Beyond providing an ability to maintain and entertain a relationship with your best existing customers, the brand website happens to be a great value way to generate positive word of mouth around the brand that may in turn lead to increased visits and sales.
Our work with leading CPG firms in this area confirmed the above hypothesis, The linkage of brand online communities with offsite research panels shows that consumers exposed to an online program spent two to seven times more for the brand than an average consumer not involved into the online relationship program. The more consumers had been interacting with the brand website and the relationship program overall, the more they spent on the brand products.
Now that we know the brand website is of great value the question is, how do you keep people coming back to a site, moving the site from a simple contact to destination and relationship platform?
3. Value of the Customer Experience is Critical to Repeat Visits: in Turn, the Quality of Site Experience should Feature the Right Balance between Educational Content and Usability
A quality site experience is vital: data from both first-time visitors and repeat visitors of brand sites confirm that the number one trigger of site revisits is the quality of site experience, measured by satisfaction: the higher the satisfaction, the higher the willingness to revisit.
On average 72% of visitors who were satisfied with a website experience said they would be very likely to return to a website.
One of the most important factors of a quality site experience is how content and functionality are presented. There is strong positive correlation of satisfaction to the site content with the overall satisfaction with the website (close to 0.7); the second stronger dimension being the site functionality (with a correlation score of 0.6). It is hence vital to maintain a healthy balance between these two.