I'm a firm believer in the value of ROMI (Return on Marketing
Investment), and during the '80s, I instituted computer-based
proforma systems for approving marketing expenditures (investments)
at both Republic Health and AMI - at that time, two of the five
largest for-profit hospital companies.
Calculating ROI for something like a hospital (with 3rd party payors,
doctors making admission decisions, etc.) is not easy, but it is
possible. Calculating ROI from a web presence can be much easier,
given a basic willingness to go with a few assumptions (necessary to
ANY ROI calculation).
I spoke with a potential advertiser to HealthWorld Online just
yesterday; he had an ROI question, and here's what we came up with
that works for him:
1. We can report direct sales of his product to him - that's the
clearest, easiest way of doing this, and a measure he readily agreed
to.
2. We can track customers through time, so even if they make
subsequent orders offline, they are "internet" customers. He also
bought into this.
3. We are putting in a retail locator system to help online
client/prospects find retail distributors for his products. He
agreed that, absent any other new marketing, he would ascribe any
positive "blip" in retail sales to his website; in the face of
multiple (known) other ongoing marketing initiatives, we would assign
a weight factor to each, crediting the Internet with a percent
increase. This was a bit fuzzier than 1 & 2, but he agreed that this
would work, especially with a conservative weight factor.
4. We took the same approach re: awarenss and overall growth. If
any component of his business took an unexpected, unprecedented,
unwarranted up-tick, he would ascribe that to the Internet; if other
factors were involved, we would agree on a weight (a conservative one
- I did NOT want to oversell HealthWorld's impact).
Finally, and this might really be helpful (it has been so to me), I
use the trade show analogy. Many prospective HealthWorld Online
client advertisers use trade shows to promote their products. I ask
them to consider the difference between having a "booth" just stuck
out on the street, hoping for interested walk-in traffic (like having
an independed, unlinked website just "out there"), and the impact of
having a booth in a well-promoted trade show (like being online with
a focused, heavily-promoted site like HealthWorld). They could
understand the analogy.
And they also understood that promotion (ours or theirs)
could bring them walk-by traffic - it was still up to them to SELL
the client. This is something too many overlook - they think an
on-it's-own website will work, and that ANY website will work -
you've got to ATTRACT prospects, and the site has to SELL them!
Hope this helps.
Ned Barnett
nkbarnet@accessnv.com
Marketing Director
HealthWorld Online
ned@healthworld.com
800-28104396
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