March 24, 2016
Experiential makes sense from a marketing strategy standpoint and a consumer engagement standpoint. It also makes good financial sense.
Experiential marketing campaigns offer an enormous payoff compared to traditional marketing. Studies show great return on investment as well as excellent return on engagement for event marketing campaigns done right. Here are three reasons experiential marketing makes good financial sense.
Events make people significantly more likely to buy – and buy again
Every year the Event Marketing Institute and experiential marketing agency Mosaic sponsor a survey called EventTrack. It’s the largest (and pretty much only) experiential marketing research done on an annual basis. The results provide helpful insights into the effectiveness of experiential marketing.
A whopping 98 percent of 2015 EventTrack survey respondents said that if they were thinking about purchasing a product anyway, seeing it or trying it at an experiential marketing event made them more likely to buy it. Sixty-five percent of people ended up buying a product or service at an experiential marketing event.
Part of the reason consumers are more likely to buy products during or after experiential marketing events is that they receive coupons or other discounts (49 percent of people surveyed said that was the case). But more often, people said they brought products or services because they sampled or saw a product demoed and liked it (80 percent) or they gained a better understanding of the product/service because of the event (57 percent).
All of this is fantastic news for brands looking to peddle more of their products – and the good news doesn’t stop there. Eighty-seven percent of people bought the product or service again after their initial purchase. Seventy percent became regular customers. Experiential marketing is an investment that makes sense over the long term as well as the short term.
Why is experiential marketing so great for finding and keeping customers? When consumers interact with and get to know the people and values behind a brand, they develop an attachment to it. That means they’re more likely to stay loyal to the brand. Even if an experiential marketing event doesn’t directly sell a product or service, or introduce consumers to employees, it can still be effective. As long as an event creates a positive association between a company and a consumer, it’s done its job.
Return on investment is high
The EventTrack survey shows that 49 percent of brands realize an ROI of between 3:1 and 5:1. Twenty-nine percent say their ROI is 10:1 and 12 percent say their ROI is 20:1. Sixty-five percent of brands see a direct link between sales and experiential marketing campaigns. That’s probably why 79 percent of brands expect to do more with experiential marketing this year, and the average increase in live event marketing budgets is six percent.
These figures don’t even take into account the return on engagement (or ROE) companies see from experiential marketing campaigns. ROE is the measure of how well brands build relationships with customers (as opposed to how much money they’re making from their purchases). Companies are taking a closer look at ROE because they recognize that building trust, relationships and brand loyalty has a huge impact on their bottom lines – even if they don’t see the return right away.
In some ways ROI and ROE are easier to measure through experiential marketing than, say, print or radio advertising campaigns because they happen during a defined period. There’s direct interaction between brand ambassadors and consumers, so they can track ROI as they go along. There are definable activities (such as social media followers, website views and comments) that demonstrate ROE that take place in the days after an activation takes place.
Make sure you decide on your ROI and ROE measurements before your activation starts, and that you have all the tools and information you need to track that data. Then sit back and watch the results pour in.
It’s more effective than advertising
The 2014 version of the EventTrack survey reports that 93 percent of consumers says live events are more effective than television advertising. The reason is clear from the 89 percent of people who say live events give them a better understanding of a brand’s product or service than a television, print, banner or radio ad.
If people have experience with a company’s goods, and have experienced them with all their senses, they’re much more likely to purchase them. There’s a lower possibility of buyer’s remorse or other feelings that may taint a consumer’s thoughts about a company and their products. There’s a great appreciation for what the brand creates and stands for. All of these feelings will help brands sell more over the life of their relationship with a consumer.
Is your company looking to increase your ROI or ROE at experiential marketing events? Or are you looking to try event marketing for the first time? Let Factory 360 be your guide. We understand the importance of creating activations that are meaningful for consumers and meet your brand’s goals. We’re also sticklers for keeping events on budget, measuring their outcomes and helping you determine things like ROI and ROE. Contact us today for more information about how we can help.