As an active and vocal proponent of internet based marketing to Australian mature age consumers, I am often questioned on the financial benefits of an increased emphasis on online, versus offline, marketing activities.
What is the targeted Return on Investment (RoI) that will justify the proposed expenditure on our website, or writing blogs, or other social networking?
The inference in that question is that the recommended online expenditure will be additional to current spending for offline marketing and sales activities, but in reality that is rarely the case. Almost without exception, the expenditure allocated to online activities will be redirected from current offline spending, with demonstrable improvement in achieving marketing and sales KPI's.
One significant benefit of online activity is access to an array of "same-day statistics", such as Google Analytics, to evaluate results.
While the remainder of this post will cite scenarios relating to the developers and marketers of Retirement Village and Aged Care facilities ("purpose built aged housing" to quote Prof. Andrew Beer), the takeaway is equally appropriate for all businesses that target Australian mature age consumers.
The challenge to correctly predict the Return on Investment, even if the outlay is substituted for existing expenditure, depends on the balance of demand and supply in the operation, or specific facility, in question.
The RoI justification is simplest where supply exceeds demand; in other words where stock is available for sale, or where resales are taking an unacceptable time to achieve settlement. In this case the proposed expenditure on a website rejuvenation, including basic Search Engine Optimisation (SEO), will result in a financially viable increase in the quantity and quality of enquiries to feed your Sales Process.
Even assuming your closing ratios of enquiry : registration of interest : contract : settlement do not improve on the rates achieved from offline enquiry, and that is an improbable worst case, the incremental settlements generated by online activity will more than justify the investment required to establish and maintain a "traffic attracting" online presence.
From a quantity of enquiries viewpoint, it is significantly more cost-effective to increase the flow of enquiries via online activity than traditional offline marketing, and there is a quality of enquiry consideration, which can be equally beneficial.
This is achieved, firstly, because the online enquiry can be more tightly targeted than offline marketing, utilising what we know about the prospective residents we most want to attract - the area they currently live in, their financial status, their affinities and characteristics.
The next scenario in degree of difficulty to justify online marketing expenditure is where demand and supply are reasonably balanced.
The assumption in this case is, say, a well established Retirement Village with a small number of recently completed units available for initial sale, with ongoing resale turnaround timing at an acceptable level. To achieve this balance of demand and supply, we assume necessitates "industry average" expenditure in offline marketing such as press advertising, printed brochures and marketing collateral, and printed newsletters to your database.
Industry experience in this scenario confirms there is potential for a significant reduction in the "cost per enquiry" - in some cases from an average offline cost per enquiry in excess of $1000 to less than $100 online. This online cost assumes some expenditure for an external consultant and web designer to facilitate the website rejuvenation and to maximise "organic" search results, and limited expenditure on Pay-Per-Click online advertising.
If this post achieves nothing more than encouraging operators of Retirement Village and Aged Care facilities to collate and compare their cost per enquiry for each source of prospective residents (press ads, radio, newsletters, online directories, referrals etc), then it will be a success.
In addition to the potential to vastly reduce your cost per enquiry, there are other significant opportunities to reduce offline marketing costs. The printing and mailing of brochures, newsletters and other marketing collateral will reduce every time a prospective resident goes online to view, and possibly download, the information they are seeking.
The scenario in which it is most difficult to justify directing marketing dollars to online activities, is one where demand significantly exceeds supply, and there is virtually nothing spent on offline marketing.
The justification in this case is based on reducing the time investment of sales resources into prospecting activities, and the average time taken to execute the steps in your Sales Process.
The world's best salesperson cannot match the prospecting effectiveness of Google. The monthly average number of Google searches in Australia for terms including "Retirement Village" is currently around 70,000 and for "Aged Care" is 450,000.
To get your share of the search traffic in your geographic area, your business must have an effective online presence.
The internet has caused major change in most aspects of how today's business is carried out, and within the sales arena, none more significant than the change in the balance of knowledge between buyer and seller. Before the internet's emergence, buyers had very little choice other than approaching the providers of the products or services they were seeking, and gathering the information they needed to take their purchasing decision via face-to-face or telephone conversations with the sales representatives of the competing providers.
Today's buyers are able to evaluate the competing providers, and to gather most of the information they need, before disclosing their interest to anyone. This is achieved via the websites of the potential providers, and increasingly through online forums, blogs and interest groups, where commercial reputations are enhanced, or destroyed, on a daily basis.
Previously the initial contact point, the receptionist or sales representative, was in the "make or break" position of determining whether a sales enquiry would proceed to the next step. Today that initial contact point, with a rapidly reducing number of exceptions, is your internet presence.
The potential saving in this scenario relates to the time required to execute the steps of your sales process. The prospective resident starts the Sales Process with a significant knowledge advantage relative to their equivalents of 5, or even 2 years ago.
There is a huge caveat is this fact.
The need to reverse the seller orientation in the early steps of your Sales Process, in favour of genuine buyer orientation, has never been more important, or more urgent.
But that's for another post to pursue.
My final point is one I hope will be my most provocative.
If you believe the emphasis on online marketing activities is appropriate for other industries, but not yet relevant for the buyer demographic in the Retirement Village and Aged Care markets, you are perpetuating a very expensive strategic error, from which your enlightened peers are enjoying a compelling competitive advantage.
