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Wednesday, July 17, 2024

Understanding the ROI Game of Experiential Marketing ft. Arvind balan.


In this modern era of the digital age, experiential marketing continues to be one of the most intriguing buzzwords in the marketing industry. Many startups are entering this arena, and it’s clear that the industry is experiencing significant growth. However, one recurring challenge is that people often struggle to understand the ROI of experiential marketing. For every marketer, ROI is crucial to justify investments, but it’s important to recognize that experiential marketing operates on a different plane. It doesn’t follow the same formulas as other marketing avenues; it has its own unique methods, which is why brands are investing heavily in it.

 

I have seen that we typically associate ROI with quantifiable impacts on the business. Think numbers in sales, leads, increased customers, or a boost in website visitors. Experiential marketing, however, is a different beast altogether. When assessing the success of an experiential brand activation, it’s essential to understand the difference between ‘hard ROI’ and ‘soft ROI’ and what these terms mean for the success of your campaign and the profitability of your business.

 

In my opinion, Hard ROI is all about quantifiable results: sales figures, website visits, customer leads, and clicks. This type of return is immediate and can be easily tracked and attributed to a specific source. For instance, if you run a digital campaign that drives a 20% increase in sales or generates 500 new leads, that’s hard ROI in action.

 

Soft ROI, on the other hand, is more of a long-term player. It manifests later and is based on the effort you put into building positive connections between your customers and your brand. Examples of soft ROI include brand awareness, customer experience, and customer loyalty. These parameters are not always immediately measurable, but they should not be overlooked. In fact, soft ROI often directly feeds the success of the more tangible returns your business will experience in the future.

 

Sales might be the end goal of any business, but understanding the path to secure recurring business that generates the most lucrative forms of revenue is crucial. Success relies on creating tangible connections between consumers and your brand that evoke positivity and encourage further engagement. Experiential marketing is a powerful tool to achieve this.

 

For instance, consider the example of Red Bull. Their experiential marketing campaigns, such as the famous Red Bull Stratos, where Felix Baumgartner jumped from the edge of space, didn’t just aim for immediate sales boosts. Instead, it built a lasting brand image and created an emotional connection with audiences worldwide. This type of engagement fosters brand loyalty and, over time, translates into consistent sales and customer retention.

 

Experiential marketing enables you to shape the future success of your business. It’s about building trust and confidence in the consumer. Whether your campaign is measured by its immediate success or the achievement of future goals, the key is to convince the consumer of the greatness of your brand or product. Once you succeed in doing that, the rest will follow.

 

In the dynamic landscape of India, it’s crucial to leverage both soft and hard ROI to build your business effectively. India, with its diverse and vibrant consumer base, presents unique opportunities and challenges for experiential marketing. For example, Coca-Cola’s “Small World Machines” campaign in India and Pakistan aimed to connect people across the borders through an interactive vending machine. This campaign didn’t just boost sales but also created a positive brand image and a sense of unity and goodwill among consumers.

 

To wrap it up, the path to securing recurring business and achieving long-term success lies in creating strong, positive connections with your consumers. Experiential marketing, with its ability to evoke emotions and build lasting relationships, is a key strategy in this journey. Understanding and leveraging both hard and soft ROI is essential for any brand looking to thrive in today’s competitive market. By investing in experiential marketing, brands can not only achieve immediate results but also lay the groundwork for sustained future growth.


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