Why online is a crucial element of your marketing mix

09 April 2003 by
Why online is a crucial element of your marketing mix

If your business has a website, and even if it doesn't, you may sometimes wonder how much value the internet really adds.

During a recession it's tempting to dismiss online marketing as unnecessary. But that could be a costly mistake. Here's why:

1. Your customers are online and they're looking for you

Latest estimates suggest that more than 34 million people are online in the UK, most of us e-mailing and searching. More than 70% of us go online to research products and services.

When it comes to online spending, travel, accommodation and entertainment are the most popular internet purchases.

Understanding how your customers use the internet is essential if you have a Web presence or are considering one. If people find your competitors first, you are lost. Ditto if your website fails to appear quickly, if your booking system is cumbersome, or the site poorly maintained.

You might think the worst consequence of a sloppy website is missed custom. But it's more critical than that - mistakes can harm your reputation and shake both customer and shareholder confidence.

So it's better to have no website than to have a bad one. But that means spending a lot of money, right? Not necessarily.

2. A website needn't cost the earth

The web is growing up fast - today's second-generation web developers have learnt from past mistakes. Businesses want websites that perform a business function, not just look good - and there are many suppliers able to deliver this at a competitive price. You can get far more for your money than even a year ago.

One of the biggest boom areas has been at the budget end of the market. A basic off-the-shelf website can be had for about £100, including hosting. For £500 you could be taking secure online bookings. Don't let anyone blind you with technology - it's easy to buy more than you need.

3. It's not what you spend that counts, it's how you spend it

Some of the biggest and best in the hospitality world have decidedly unimpressive Web presences, if any at all. On the other hand, with intelligent promotion of its simple website, a small guesthouse can reach the same size audience as a hotel turning over 20 times the revenue.

Many traditional advertising methods are "spray and pray". Online, however, there are many ways of getting the right people to your website, and it's relatively easy to gauge what has worked. This makes it cost-effective for the smaller player. Of course, they still have to turn website visitors into customers.

4. The web is perfect for wooing

The internet isn't just another promotional tool. It's perfect for customer retention and building loyalty. And you don't necessarily need a website.

For example, a Sussex restaurant operates an e-mail newsletter. In the first four months:

  • The list grew by 80-100 customers each month
  • An online survey drew more than 100 responses - the resulting customer insights helped shape key operational decisions
  • After just three newsletters the restaurant's monthly takings were 35% up year-on-year

The restaurant has since pulled its (more expensive) local press advertising and saved itself thousands of pounds.

It's worth remembering that acquiring a customer costs five to 10 times more than retaining one…and a 5% increase in retention can yield profit increases of 25% to 95%.

5. There is huge potential in e-mail - if used intelligently

Compared with traditional communications methods, e-mail is generally

  • Cheaper
  • Faster
  • Easier to measure
  • More effective
  • More personal
  • Easily customisable

Additionally, response rates can be about 60% higher for e-mail than for traditional direct mail.

But it's a minefield for the uninitiated. The tide of unsolicited commercial e-mail continues to rise: don't add to it. E-mail only works if customers have genuinely opted-in to receive it.

The Department of Trade and Industry gives guidance on this on its website. Also relevant are the Advertising Standards Association guidelines. Make no mistake - this is an area in which it pays to be squeaky clean.

If you have the resources and expertise to manage it in-house, e-mail marketing can cost as little as £20 a month. Otherwise, expect to pay a set-up fee of £400 upwards. There would also be a per-mailout cost, which can vary.

Marketing your business online: tips for doing it right

1. Have a business objective and rationale for every decision
2. View it as marketing with an IT element, not the other way round
3. Remember it's a two-way medium
4. Test everything
5. Measure what's important. Visitor numbers are interesting, knowing how many become customers is critical to your business
6. Budget for website promotion and maintenance
7. Integrate online into your marketing mix, don't just add it on
8. Be legal and ethical in your online activity

by Robin Houghton

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