Online Marketers Forgetting Offline Rules

In the race to capture Internet consumers and their dollars, companies are overlooking the simplest marketing remedies and the most profitable consumer sector by spending too much money on Web brand marketing and advertising, according to a study by Andersen Consulting and Online Insight.

The study, “Beyond the Blur: Correcting the Vision of Internet Brands,” found that companies could realize dramatic returns from online marketing efforts if they targeted their marketing to the 10 percent of the population that buys 70 percent of all products online. That 10 percent is primarily comprised of people 35 and older, and not the GenX segment that many marketers have been spending money to lure.

When all is said and done, the study found that the best ways to reach the online buying public are the same ways to reach the offline buying public: provide a rewarding customer experience (instead of launching a barrage of branding), and recognize who the customer really is then cater to them by steering clear of one-size-fits-all Web sites.

“When it comes to online marketing initiatives, companies are ignoring the basic marketing principles traditional businesses use — first choose your target more deliberately, and then focus marketing efforts to reach them,” said Stephen Dull, partner in Andersen Consulting’s eBranding practice. “Instead, many companies are spending a lot of money on sweeping Internet marketing initiatives and huge advertising buys that are not targeted. This study affirms that ‘Marketing 101’ applies in the Internet world. Success is not achieved by throwing around as much money as possible, but by inspiring customers to buy more.”

The study also found that nearly one-third of online consumers are not motivated by price. According to the study, these online consumers are more interested in Web site speed, ease of use, security, and overall brand selection.

“The secret to building brand equity is not so much in huge advertising buys, fancy logos, or constant price-slashing; it’s in fully understanding customers’ needs and providing them with an exceptional experience tailored to those needs,” Dull said.

The study was conducted among more than 2,000 online purchasers using B2C Web sites across 17 industries, including automotive, entertainment, communications, financial services, high tech, retail, travel, and healthcare. The participants were surveyed on a variety of issues regarding their Internet usage, brand awareness, knowledge awareness, knowledge of pricing and product information, and customer service.

“For many people, a brand conjures up thoughts of company logos, product packaging, or images and feeling associated with a particular product or company,” said Mark Wolfe, lead strategy partner in Andersen Consulting’s CRM service line. “Yet, a brand is so much more. This research shows that a brand should be defined as the sum of total of the customer’s experience with, and perceptions of, a product or service.”

– This story originally appeared on CyberAtlas, a sister site to Internet Advertising Report.

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