Not good enough to get something online simply because "our competitor has" or to throw thousands of dollars at the Web so as not to "get left behind."
Now we have new departments and staff positions with the word "online" in them. A budget for annual online advertising. Servers in-house. Auto responders at the ready. Online ordering up and running.
And, best of all, we have experts and consultants with modeling programs and flowcharts and what-if tables showing us how to make sure that for every dollar spent by our shiny new online marketing department, we earn at least two. "Return on investment" has become the new mantra.
There is nothing wrong with thinking about ROI, but ROI, like so many other off-line concepts, does not fit the Web in some key ways. There are many online marketing activities crucial to your company's success for which ROI cannot be measured.
While you may be able to quantify banner advertising all the way down to cost per action and thus make a definitive ROI calculation, if you try to force a dollar-value ROI in other areas, you are being, well, foolish at best. Online, not all ROI should be measured in dollars.
For example, a medium-size distributor of fresh seafood from Florida puts up a Web site and takes orders online -- red snapper, lobster or any other fish packed in ice and delivered to any restaurant or person in the country in less than 24 hours.
The company spent $75,000 building the site and $25,000 so far advertising it. In year 2, the online endeavor is now starting to turn a profit for the company.
So far, ROI is easy to figure. But the CEO is hesitant to spend more because more competitors are now online, the future is uncertain and he hasn't seen enough to convince him it will be worth spending more for online marketing. He wants a projected ROI value for any new online expenditure. Nothing wrong with that, right?
By doing a little online research, I discovered something his online staff has never done but could do, and for which no accurate formula exists to determine a dollar ROI.
I found three discussion lists for restaurant professionals, one of which was for procurement issues. These private discussion lists are an arena for sharing ideas; talking about the restaurant industry, trends, vendors and jobs; and networking with each other.
It turns out that about 375 people from across the country are on these lists. No advertising is accepted, and the list cannot be sponsored for a fee, but people who work for vendors are welcome to join the list for discussion.
While this may look like a dead end from an ROI calculation standpoint, it is anything but that. The seafood company needs to have a person participating regularly in this discussion list, becoming a trusted source of information on seafood questions and discussion threads.
What is the ROI for such activity? It might be a year before a new customer comes from it, if ever. Regardless whether a traceable lead comes from this, participation could lead to many untraceable sources of new revenue or other non-revenue benefits.
What's the NetSense in all this?
I understand the logic behind ROI and can easily see how these ideas could get shot down in the Web marketing staff meeting. After all, they offer little tangible short-term ROI to take back to the boss in the form of a nice, neat chart.
I'll make you a bet, though. If two seafood distributors operate online stores and one does these non-ROI activities and the other does not, in a couple of years the one that does not will be selling less seafood than the one that does.
Eric Ward is a consultant, speaker and writer who launched the Web's first awareness-building service for Web sites in 1994. Reach him at [email protected].