What is Interactive Marketing and How Can Your Home Business Benefit

Increase Sales and Customer Satisfaction with Interactive Marketing

Interactive Marketing Defined
Be responsive to your customers through interactive marketing. Credit: Petar Chernaev | Getty Images

What is Interactive Marketing?

In a world in which consumers have come to expect increasing engagement from the companies they do business with, interactive marketing is one of several methods (social media is another) in which business owners can better meet their market's needs. 

Interactive marketing involves a marketing tactic that is in response to something a consumer does. Sometimes called trigger-based or event-based marketing, it relies completely on an action started by the consumer.

For example, "Do you want fries with that?" is a form of interactive marketing. It's usually asked if you order a hamburger, but not if you order a shake. The act of ordering a hamburger triggers the push towards adding another product.

Example of Interactive Marketing:

One of the biggest innovators in interactive marketing is Amazon.com. It collects and digests past visitor behavior, allowing it to show meaningful information in the present. Amazon offers “suggested reading” selections based off of previous book searches or purchases. This type of online environment makes for a very comfortable and personal shopping experience, leading to longer stays within a site (sometimes referred to as “site stickiness”) and more purchases (also referred to as conversions). 

Amazon not only tells you what others are browsing that are similar to your search, if you buy an item, Amazon will tell you what others who have bought that item also bought.

Amazon remembers your preferences and will send you emails or highlight online new similar and related items based on your browsing and buying history.

Benefits to Interactive Marketing:

The benefits to interactive marketing can be significant. For one, it makes the consumer feel like they're heard, understood, and receiving personal service.

Other benefits to interactive marketing include:

  1. Increase sales: Interactive marketing increases the odds that you'll deliver what the consumer needs thereby leading to a sale, as well as increase sales by recommending related items that result in the buyer tacking on other items that fit with their purchase. 
  2. Increase consumer satisfaction: Consumers like to buy things that most closely fit what they need. Since interactive marketing is based on triggers from actions by the consumer, you're more likely to match them with the right product/service.
  3. Lower marketing costs: Consumers like interactive marketing because they don't have to repeat themselves. It's like having a personal shopper. Happy customers not only stay with you, but will refer you. It's cheaper to keep a customer than get a new one.
  4. It can be automatic: No one sits at Amazon and watches what you do on its site. Computers track consumer actions and based on algorithms, they get recommendations. Even the statement, "Do you want fries with that?" is part of a system.

Drawbacks to Interactive Marketing:

Interactive marketing requires detailed planning and implementation. While a system can execute it, you have to set the system up to understand the triggers and what to deliver.

Other cons include:

  1. Some customers don't like it. Let's face it, to deliver recommendations, you have to track what consumers do, and for some, tracking their every move is a little creepy.
  2. Not everyone is alike. Interactive marketing works a great deal on probabilities. But just because 99 people out of 100 bought Y at the same time they bought X, doesn't mean that one guy also wants Y. He might prefer Z. When it goes wrong, it highlights that you don't know your customer.

How to Set Up Interactive Marketing:

If you'd like to use interactive marketing in your business, you'll need to spend time understanding your market, its wants and needs, as well as what actions can lead to results.

 

  1. Identify the triggers that can lead to an interactive marketing event. The best way to do this is through surveys and analyzing data. 
  2. Determine the marketing event for the trigger. When the consumer does X, what is the automatic response in your marketing system. Recommend Y? Ask if they want fries? 
  3. Set up your system. Online, this requires tech know-how to set up a program that will take the data input and delivers an output. Face-to-face, you can develop your "sales system" to include responses to certain questions or purchases your client/customer asks.
  4. Assess. Is it working? Is it leading to more sales? Are you getting complaints? Use the data to tweak your system.