By: John Evan Frook

October 15, 2001, Business and Industry

Interactive marketing has moved from the experimental stage to core strategy at Nextel Communications Inc.

The Reston, Va.-based wireless telecommunications company started its interactive effort by e-mailing offers to potential customers. When the terrorist attacks on the World Trade Center and Pentagon occurred in September, it found that the self-service nature of e-mail was one of the best-equipped channels to handle surging demand.

Fully recognizing the power of the Internet, the company now plans to step up its database marketing. It is working with its interactive advertising agency One to One Interactive Inc., Boston, to develop Internet multimedia presentations based on commercial presentation technology from Unicast.

Need for metrics

Currently, Nextel measures, analyzes and makes adjustments on a weekly basis using DoubleClick Inc.'s Dart technology to make sure its messages generate sales, said Larry Everling, Nextel's director-Web sales.

''Nextel had a hiccup in sales activity during those couple of days [following the attacks], but the Web site and interactive have done very well,'' Everling said. ''Demand for cellular phones and direct connections has increased.''

Establishing tools for measuring customer response has been critical to Nextel's strategy, Everling said.

For instance, the company has learned that Internet advertising on such networks as B2BWorks Inc. and such sites as ESPN.com, MSNBC.com, CNet.com and NHL.com is more valuable than ever, because it allows Nextel to enter into an e-mail dialogue with a customer. Those leads are often converted into self-serve sales, which are cheaper than sales through stores or direct sales forces.

''We've got this down to a science,'' Everling said.

In using its messaging to foster online conversion, Nextel will have to monitor how its store presence and direct sales force contribute to Internet marketing and sales, said Mohan Sawhney, a professor of e-commerce and technology at Northwestern University's Kellogg School of Management in Evanston, Ill.

''The question marketers like Nextel need to ask is why a disproportionate number of customers would address an electronic channel,'' Sawhney said.

It could be that field sales and retail stores are doing an exceptional job of demonstrating wares but aren't as effective as the Internet when it comes to transactions. If that's the case, companies have to decide whether they are going to compensate retail stores and direct sales channels for educating an audience toward an Internet sale, Sawhney said.

''The first, best practice for all b-to-b marketers is to have an integrated strategy for all direct channels whether phone, Internet or mediated by a human,'' Sawhney said. ''You need to deal with them seamlessly.''

Exceeding expectations

Jeremi Karnell, partner with One to One Interactive, said Nextel is getting as close as any business in covering the seams between interactive and real-world channels.

Nextel exceeded lead expectations by 15% in the first quarter. Second-quarter results were up 35% from the first quarter. At the same time, costs per lead stayed within objectives, Karnell said. Neither Nextel nor One to One would be more specific about costs.

An integrated strategy was key to Nextel's success, Karnell said. Nextel tailored more than 30 interactive advertisements-banners, e-mails and site placements-for individual audiences. It also coordinated among print, broadcast, direct sales and call center messaging.

''Our goal for Nextel is to optimize interactive marketing above and beyond current results by another 10% to 15%,'' Karnell said.