Articles - Connecting with Customers: Economist 2nd Annual Marketing Roundtable Remarks - 360 - Jack Morton Worldwide's Experiential Marketing Blog

April 01, 2004
Connecting with Customers: Economist 2nd Annual Marketing Roundtable Remarks
By Josh McCall, CEO

It's an honor to be in the company of such a distinguished group of marketing leaders. As a speaker, I can't think of a more difficult task than trying to follow this morning's terrific presentations. So I'd like to spend just a few minutes focusing on the one key question we're here to address: How can we really connect with customers?

What we're hearing is that there are no simple solutions. And there are big challenges. Challenges like trying to connect with customers whose attention is being grabbed in a thousand different directions from a thousand different media sources. Trying to connect with customers who are chronic multi-taskers. The old stand-bys just aren't as effective any longer. Something like 60 million US households are on the Do Not Call Registry; 54% of online households have spam blockers; 20% have ad blockers; and 59% of ads are skipped by personal video recorders.

Again there are no simple solutions. But there are alternatives. One powerful alternative is: to literally meet your customers, face-to-face. To connect with your customers where they work, shop and play. To create experiences where you can interact with your customers live, one-on-one. Some people call it event marketing. Some people call it experiential marketing. Whatever you call it, it's an increasingly effective way to boost sales, capture customer data, generate trial, introduce a product, service or brand, and foster retail relationships.

Marketers are buying into it. They're also spending more on it. Trade publications estimate that spending ranged from $132 to $150 billion in 2003, growing 15 to 20% in 2004.

So marketers are spending more and more on experiential marketing as a strategy to connect with customers. But what are they getting out of it? What's the impact on customers? What do customers have to say?

The experiential marketing agency I lead, Jack Morton Worldwide, wanted to be able to help our clients answer these questions. So recently we invested in a survey of 800 consumers in the U.S., which we've published in a white paper titled the Experiential Marketing Survey. We wanted to provide benchmarks for three core questions: First, how does experiential marketing compare to other marketing media as a way to connect with customers? Second, are certain customer demographics especially responsive to experiential? Third, what best practices can help marketers create an experience that will drive a more effective connection with a customer?

Let me share just a few key highlights from Jack Morton's research.

The number one insight: experiential marketing drives fast results. Of the consumers we surveyed, 43% of women said experiential marketing is the medium most likely to cause them to purchase a product or service; 40% of Generation Y respondents rated experiential marketing the medium most likely to drive quick purchase response.These results confirm what many marketers know intuitively: experiential marketing is best suited to motivate a target audience to action. It's a critical strategy for marketers that need to drive short-term sales or inspire immediate action.

Another critical insight of Jack Morton's research: experiential marketing increases return on other marketing investments. Almost nine out of ten consumers say experiential marketing would make them more receptive to advertising. There's tremendous potential in integrating branded experiences as part of a broader mix of advertising, public relations and direct marketing. Few brands are doing a great job -- but there's a lot to gain.

We also found that experiential marketing enhances brand perception. 53% of all consumers say it is extremely/very influential on brand perception. That number rises to 61% among Generation Y consumers.

We did find that certain customer demographics are more responsive to experiential marketing. Not surprisingly, it skews towards younger consumers, who are typically more open to innovation. Since today's Gen Y consumers will only increase in purchase power, experiential marketing should become an increasingly important tool for marketers over the next ten to 20 years. Interestingly, we also found that experiential marketing resonates with women -- 43% of women say it is most likely to drive quick purchase response. Since women are big influencers of purchase decisions -- again, experiential marketing should become increasingly important.

The research also provides many insights into best practices: ways to design experiences that represent more effective connections with customers. I'll highlight just a few of the most important insights.

The first flies in the face of how many people still perceive experiential marketing: as sampling or sales promotion. Certainly, the opportunity to put a product in the customer's hands, to let them touch and feel it, is a critical way to increase retention and drive purchase. However, we found that by adding entertainment to sampling, results improve dramatically. 61% of the consumers we talked to would prefer to try a product as part of an experience integrating entertainment. That's consistent with a recent study by Coke contrasting just giving samples away versus giving samples away as part of a full marketing experience that involved music and branding. "Across the board, unprompted brand recall one month [after the experience] for those who had experienced the full experiential activity was 94%, compared with 77% who had only sampled. And consumption rose by 80% among those who had the full experience, whereas only 47% of those who had sampled went on to buy."

Another key insight into experiential marketing best practices: when we asked consumers what's most important to them in making a marketing experience interesting to them, they said, the number one factor is the presence of an on-site representative I can talk to about the brand or product.

That's interesting for many reasons. First and foremost, it highlights the need to put the same level of brand and sales training into the people who staff your experiential marketing programs as you would for your other front-line employees. Also, of course, it's ironic: customers truly value interacting face-to-face more and more, even as our world becomes increasingly wired. Indeed the headline of a recent study by Arnold Worldwide reads: "Americans still seek out human contact when looking for service of all sorts, and they are willing to pay for it."

That's a good way of getting back to what we're here to talk about today: connecting with customers. The research dramatizes, in so many ways, how much our customers want to meet brands face-to-face, and ultimately, how much can be gained from investing in marketing strategies that make that possible.

Josh McCall is CEO of Jack Morton Worldwide. He can be contacted in its Boston office (617-585-7000) or via e-mail (josh_mccall@jackmorton.com).

Sources: Experiential Marketing Survey, Campaign.