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Effective Marketing

5 Trends in eCommerce Marketing in 2011 from Top Retailers US

Three weeks ago on March 15, 2012, I gave a speech at eCommerce Search and Sales event in Sao Paulo on trendsetters in eCommerce marketing in the US and Europe.

Over the last year, I observed through my research from 3rd party industry publications, sessions attended at various search marketing events and personal experience what leading retailers do. I singled out 5 key patterns, which cover natural search, conversion optimization and leveraging new traffic sources or emerging shopping channels. Most US retailers that enjoy steady growth do:

  1. Grow organic search visibility, to enjoy free traffic
  2. Reduce noise and steps pre-checkout, to boost conversion
  3. Tap into impulse buys of “on the go” last minute markets, to leverage emerging shopping situations and trends to bring new sources of traffic or to expand shopping experience for loyal customers (multi-channel)
  4. Tap into discovery buys to capture leisure, commute shoppers
  5. Cater to local needs, but deliver by local means, while expanding global coverage, yet capturing one country at a time.

I am going to expand on each strategy, the rationale behind it and implementation examples (download the deck to follow the takeaways.)

1. Grow organic search visibility

It is a no brainer what good SEO can do for your bottom line, at times at a fraction of cost of paid search. Natural search if done right and from the beginning is there for you to perform consistently and will not run out due to budget overspend. For new, small, upcoming merchants, natural search helps to level the field while competing with big guys. And for large retailers it can provide tons of savings and healthy ROIs and a potential for world domination in search rankings.

It is no wonder that smart retailers, big or small enjoy healthy shares of traffic from natural search. And when, I say healthy, I mean more than 25 % of total traffic. And when I think about organic search, I think of Google as a real estate broker for marketing of your goods & services free of charge as long as it is of value. For good value, you get customers or share of traffic, for sloppy job you get nothing. Natural search is free traffic, but you still have to work for it, especially in lieu of ongoing algo updates. Just for the last 12 months, only Google had about 11 Pandas, 1 freshness major update and many more, while for last month of March, it went through 50 search quality changes! A load full of stuff to consider! Yet, those changes are opportunities to spot, not mere changes to deal with.

To do be present in search engines effectively and even diversify your traffic sources, trendsetters leverage new emerging and current evolving opportunities: rich snippets, universal search, integrating social behavior into site experience, producing fresh, unique content that is worth a share, or a pin or a tweet and making site mobile friendly, all of those are key drivers of micro conversions, which ultimately result in more buys.

Rich snippets are an amazing way to increase click through rates by drawing attention to your listing. It is a low hanging fruit too. Google and Bing support product, prices, events, persons, and recipes.

  • For example, Best Buy implemented rich snippets mid last year and enjoyed 30 % CTR from Google within the a few weeks. Others, as shared at SMX 2012 in San Jose, implemented rel=author & rel= publisher tags, and enjoyed 5-10 % traffic lift within the first 2 weeks, while aggregating 15-30 % total. Though, rich snippets are not a novel idea, not everyone in ecommerce leverages them.
  • For universal and blended search, Advance Auto Parts comes to mind with its videos (product and how-to’s) on product pages, YouTube, Facebook, beautiful video map, as it enjoyed increased conversions for product pages, especially for 1st time visitors, and extended its reach & sound sharing engagement of how-to-videos. I am sure these efforts considerably reduced their costs per leads. You can even scale it up to enterprise level with video publishing platforms available in the market.
  • Or a small retailer, Oyster.com launched its business with SEO and quality content as key ingredients of its product strategy. It has a solid site architecture, quality, original, engaging content, creative copy and great linking & social media integration. Just look at their traffic, which is 50 % free. Brilliant!
  • Fab.com, though behind the subscription site, has a beautiful integration of social into the experience, incentivizing its customers to share and get cash within 2 clicks as simple and as smooth as part of the shopping experience. No wonder, Fab.com enjoys 61 % traffic from Facebook vs. 6 % from Google. It also leverages well its blogs, and has lots of viral links. 40 % are actively engaged with their favorite brands via Facebook and say they are actively shopping on the social network. Bing also favors twitter links and authority signals quite a bit in its algorithm, so tweeting links up, makes a difference.

Differentiating your current content through rich snippets on SERPs, leveraging universal search & making your content worth sharing or part of social discovery allows capturing more traffic into the store. While, making your site SEO friendly and focusing on fundamentals can potentially double your total traffic within a few months; going the advanced route in resonance with algo changes from SEs might bring opportunities to dial up the effectiveness of other traffic sources: direct, social and mobile and even boost your other demand generation initiatives.

2. Reduce noise and steps pre-checkout

Once you got all that traffic to your pages, you want to waste no time to get them buy. Reducing noise and steps pre-checkout is the second best practice that distinguishes top performers and results in more orders.

The speed and simplicity of how you go about your funnels makes a difference. The less steps you have, before the checkout and within, the more captured traffic is to be converted. So remove extra steps, pages and clicks.

When shoppers landed on your pages, chances are very likely they know what they want to buy and now dealing with “which” one to choose dilemma. Your job to reduce the steps & thinking process for this part and provide enough information upfront as needed.

As needed is key here, that you will want to test, while “as much as possible” can overwhelm people and even concern search engines. Studies have been done that proved too many choices thrown at the customer slow the decision making process.

Some SEOs in the industry, also claimed that reducing the number of search results/product options might boost search results pages quality in terms of traffic and visibility.

  • Evo.com found that customers have to compare products while still in search for a perfect item, hence high abandonment of shopping carts. So they added a compare tool and color swatches right in the search result pages, which both increased conversions and sales.
  • Shopstyle.com, a lead generation site, converts people within 2 clicks on their category and search results pages. Implementation via the vertical slider is awesome from the user experience and friendly for SEO. It also addresses well pagination and duplicate content issue. Moreover, it has no product pages. You convert through the quick-look hoover. Love it.

Simplicity drives the highest profits. It also delivers joy while shopping. Polish your funnels, check if you have too much info and too many links, and streamline those as well for bots so that they do not waist time either. Go many times through your funnels to understand how much time it takes to buy. The less time users and bots spend on your pages, the more cash your estore generates, working like a money making machine.

3. Tap into impulse buys of “on the go” markets

Once you have customers flying through your funnels and placing orders or sharing deals on your site, don’t you wish to have them literally fly and shop at the same time?

With 49 % of all smartphone users researching and actually buying on smartphones, going mobile is necessary not to lose even the sales of loyal customers. It is also a great channel for new users and opportunity to steal competitor traffic:

  • 51% more likely to purchase from a retailer when it was mobile friendly,
  • 40% would visit a competitor’s site instead due to a disappointing mobile experience.

Yet, smart retailers study even deeper what mobile shopping can be all about. Travel category sites dominate mobile. 85 % of frequent flyers use smartphones and adopt mobile shopping, per Internet Retailer.

Mobile shopping loves travel. It thrives on the conditions occurring in travel situations; we might have to make last minute reservations, change of plans, experience airplane delays.

Mobile also syncs well with a spontaneous shopper, who happens to get free time or wanting something right there and now, thus playing up on the instant gratification we all are used to.

And, lastly, retailers that have been active in this channel early on, also saw some synergies among the channels, or marketing initiatives.

It is also noted that email coupled with mobile works like magic. It triggers the attention of shoppers on the go to act on the impulse to take care of that. A beautiful pairing.

  • Hotels.com, which I am a good customer of, doubled their mobile bookings in 2011. They also tapped into the specific segment that only shops last minute on the go. So, now, they feature deals that are exclusively available on mobile app in situations when minutes matter. Last week I was in New York, and got plenty of emails, 4-5 on last minute deals during my stay, just in case. Noteworthy, if we look at the email marketing effectiveness for Hotels.com on Compete, we can confirm the high growth rates from 71% up to 255%, and stellar performance in driving traffic.
  • Last minute booking is highly desirable and growing segment, in such a way that entire app businesses is showing up. Example, here with HotelsTonight, providing deals on that given night only and yet, you still get a deal. Isn’t that great, you are stuck in a city and do not want to pay high rates at the hotel you stayed in or go wherever the airline that messed up sent you? You have a place where offers bid for your business right here, right now.
  • Fandango, a movie reseller site, benefited from a single feature on its app, “Go Now” that allows to make a decision to watch a movie within mins if you happen to have an urge and the time, nearby.

Mobile and last minute offers exemplify the reality that lots online shoppers became very savvy in finding deals, comparing prices and will not settle for less. Mobile, plus instant consumption also reflect the reality of on the go lifestyle. So, if you keep waiting on how far those trends go, without engaging today, you will potentially miss on a new kind of a shopper or even lose a bunch of loyal customers that happen to add mobile to their options to shop for your brand.

4. Tap into discovery buys

Discovery buys are usually the opposite experience with users, shopping in a cozy place vs. on the go. They are also not planned, known; yet if you can engage the user fully in the experience and provide proper tools and merchandising, you can cash in and draw a significant share of all purchases.

Discovery buys emerge in situations when customers cannot engage into searching for the right item as it might be new to them or hard to do, like shopping for art. Or they have to defer the process of buying it, given its high price tag. Or they simply have no time, but have a general idea what would be best and would act on it if matched per expectations.

Tapping into discovery buys requires creativity and it allows finding new ways to shop for your audience, discovery buys can lead to marginal adds-ons to sales.  Some retailers already doing that by exploring curated merchandizing, also known as breaking their inventory into collections, themes, or make me a match site features, and also exploring coach commerce, or tablet shopping, with about 63 % of US retailers planning site redesigns to benefit from the trend, as eMarketer claims.

  • Art.com launched “Inspire my discovery” and “Find my image” visual search feature, and noticed that customers that use those, spend 2X more and convert 75 % faster.
  • Wine.com gets 6 % of all traffic from iPad and enjoyed increased spends from tablet shopper and even 20 % of revenue on the last day of Xmas.

Other retailers start paying attention to a common 50 % share of iPad in relation to all mobile traffic, a growth worth cultivating.

Tapping into discovery shopping experience is an ongoing trend, with ample room for creativity from the user experience and art of merchandising. Tablet shoppers are enthusiastic and happy about shopping.  With the number of tablet owners expected to skyrocket over the next few years, these shoppers are among the most important market segments to merchandize for.

5. Cater to local needs, deliver by local means

In a situation when you conquered your home base and ready to cast a wider net at international markets, you better be ready to spend lots on infrastructure to build it for each country. That is what top retailers from US do when they have their sights on shoppers of Europe.  You have to be an early entrant there to succeed. You also have to look deeper, segment by country.

There are specific needs and conditions for each country that must be met to be relevant there. Trendsetters focus on a hot category around a very specific niche and take over, or win over one country at a time, building custom marketing, merchandising, and fulfillment.  They also understand that the time and investment needed to build trust and break adoption barriers, because the payoff eventually will be much bigger due to the 1st comer benefit.

  • I was in Toronto, Canada in February and was amazed how condensed the city is and how many people are in the downtown. No one drives in the city and it gets rather crowded, there are thousands of great restaurants, you do not need to cook. I could live with that! Yet, it is perfect for grocery delivery business or restaurant delivery, Justeat.ca. UK, especially, London is also displaying the same conditions. In fact, Tesco, a UK retailer already dominates that hot category and is expanding it to Eastern Europe.
  • Easter Lauder also targets by country, yet providing global inventory, yet it still markets differently and is honoring country specific payment options to foster adoption.

In the past, some retailers tried to scale and approached Europe as one whole market, quickly learning that only country specific segmentation; country specific demand and shopping preference by category will work with all that fragmented infrastructure. And once you are in and accepted, you are there to rip the benefits of expansion.

So, to do effective eCommerce marketing, you can leverage natural search, new traffic sources and new shopping behavior trends & conditions by:

1. Investing into content production of items, worthy sharing every day

2. Reducing noise, barriers to buy

3. Feeding impulse buys, convert the always connected shopper: on the go, coach, in transit

4. Tapping into discovery buys, make your shoppers a match in heaven

5. If expanding markets (segments, countries), thinking and delivering local (as Romans do).

The list of strategies identified is not exhaustive; yet, some retailers only focus on 1-2 and make a difference. Imagine if you get all five strategies on the roadmap within your team!

Bonus:

Fix Error Messages Or Make Them Work For You

Error messages may run havoc on your customer engagement strategy whether you are running an ecommerce site or launching online promotions. You can lose leads and sales easily if you do not account for them. You can also try to improve your site performance or promotions’ numbers if you plan for the event of errors in advance. Or you can find ways to make them work for you by closely watching their occurrence and customer behavior that follows. 

There are 3 approaches that you can take to alleviate error message/sale loss ratio for your business:

1) Make user-induced error messages based on business rules clear and self-explanatory. Even if your audience is tech savvy and mostly has a high percentage of engineering degrees, error messages stating “Generic Error 407. Must be 77888888″ can puzzle anyone. Try to explain the reason of this message in a human language and communicate it succinctly. In all events, “Your account information and password do not match our records. Please do…[whatever you want them to do]..” sounds better than a numeric code that only a math genius in “Numbers” TV show can solve. Sometimes, I think those error messages were hastily cut and pasted by programming folks versus a UI/UX professional.  No offense to either, but the saved costs on making sure your error messages are clear in your application or on your site – are basically passed to future sales onto the customer base. 

Also, consider the context in which your customers will be incurring them: their attention span, possible stage of buying process, etc. One example of this error type, is an online shopper filling out a shipping address and payment information to only find out the error at the end after submitting the ” erroneous form” and having to retype all info again. I know I would give up at that point. Thus, construct your forms and functional errors accordingly – by making them appear inline with the filling out process, or adding interactive elements when possible. Linda Bustos, has a great post on inline validation within the shopping carts. Luke Wroblewski shared his insights on the same topic on his blog and even published a book.

2) Save the sale by tracking to who your errors were exposed to and follow up with compensation. You might not only save a customer, but delight him/her with a special attention that is capable to turn them into your product/brand evangelists. This happened to me a month ago. DSW ran an online promotion “Get Lucky. Participate in a draw of XYZ and win 50% off your next purchase by visiting this promo page.”  With sheer excitement, my mouse rushed to click on the link and the error message occurred “Site is unavailable” to my utter discouragement and quickly vanishing anticipation to make a purchase. But! DSW email marketing folks appeared to have planned for this contingency. After 2 days, I got a follow up email stating” Our apologies and $10 off. How lucky can you get if the site is down?” I was pleasantly surprised as a customer! My clicking the promo was acknowledged, my shopping decision was saved as if it were in a real store. I was happy to continue shopping at DSW and share the story with my friends. So, follow the DSW example of using web analytics to track your potential errors, especially if you know the limitations of your systems. Bravo, DSW!

3) Collect free feedback from the unpredicted error messages or 404, 500 types. Sometimes, it is what it is and you might not know all possible scenarios when your site or application starts “misbehaving”. Instead of simply accepting this reality, try to add a feedback link or box to the generic error page and your customers might feel compelled to share what happened. That way you will start discovering the reasons and causes of those mishaps. You will also make your customers feel listened to, heard and valued.  And, of course, you will actually gain something from those error messages. They will pay you with feedback! 

“Mistakes, obviously, show us what needs improving. Without mistakes, how would we know what we had to work on?” -Peter McWilliams.  So, do not fret if you find a few in your current app. Look at the ways to make them work for you and be the one with “an unequalled gift…of squeezing big mistakes into small opportunities,” Henry James.

10 Commandments of Quality Shopping Cart and Its Checkout

When tasked with optimizing ecommerce site, many of efforts will be included in the entire project. At the same time, if we start with the main objective of the site, which is to sell, it pays off to start with laying the foundation – optimizing the shopping cart and checkout flow. So what are the basics to adhere to or run a diagnostics on?

While sifting through abundant expert advice available online, these 10 principles stuck in my mind and became a valuable framework:

1. Shopping cart as an icon - must be visible at all times to help users go smoothly throughout the shopping experience. It should provide the customers with options to make a decision at any moment they are ready, at a search page, at a product page and more.

2. Action to add to cart – must be visible too. But make sure that action will not send your customer away from the current page (be that search or other), you want them be “on the same journey”. Usually, AJAX allows that to happen. It also helps to somehow visibly note that the addition just took place and it was successful. The more the experience resembles in-store shopping the better your users’ online shopping experience.

3. Always disclose costs – as those are the key information a shopper needs throughout the evaluation process of other items to add. If not shown, you cart might trigger confusion and proclivity to be abandoned. You do not want that, do you? This one especially relates to shipping costs and tax details that might very much change the shoppers’ desire to have the item.

4. Provide control to your online shoppers, with tools for “save for later”, “wishlist”, “email a friend”, “share’ and “print” to prevent the abandonment caused by the total high price or unexpected shipping costs (# 1 reason of abandonment) or some other reason. You can even add options of color change, functionality upgrade right at that moment. It would also pay off if you enable them with multiple shipping and billing functions, email the order confirmation themselves, split the order into multiple shipment groups and on.

5. Show any loyalty programs benefits and build the relationship. Re-assure your shoppers on the future benefits they will get while buying from you. Who would ever want to leave your cart after that?

6. Make customer help obvious, prominent, and usable – if you have a “click to chat” option – make sure it works flawlessly and there is someone there to be for the customer 24/7. Show other alternatives to answer last minute questions that could be so minor, but so influential to contribute to your sale. Explain within the UI (ability to hover over as an example) the shipping charges and return policies. Be generous with service and information upfront.

7. Throughout the checkout experience, make sure your customers know at all times where they are – make sure the visual cues are consistent in the main navigation and in the checkout pages. Imagine yourself in the real store, where top signs say “Bedding” and you find yourself clearly in the “Cleaning Supplies” aisle.

8. Provide “smart” links, popups with clear messaging on free shipping, gift cards, coupons and ways to save before shoppers confirm the order. Make the online experience thrilling and enjoyable when users see that they can save and get a deal. Promotions are highly effective in driving order completion. Place those properly at various points. Make them easily visible (above the fold).  Make sure that users can also go back and change the coupon codes. Do not deactivate that option once they added one coupon and it appeared incorrect. This pet peeve of mine sent me away from the sale so many times!

9. Use conventional user-friendly icons and nomenclature – make it easy for us to shop. Do not teach us a new way of online shopping even if you have the coolest site built on the latest technology.

10. Welcome new users without getting personal upfront – if you able to fulfill the sales without registration, please do so. First time and casual shoppers will be more inclined to complete a sale if you make it fast and low commitment for them right there. You can still capture their email (openly) by communicating future incentives if the cart was abandoned.

Wish to go beyond the top 10? Check out these great publications “eCommerce Roadmap” by Palmer Web Marketing and “20 Surefire Ways to Increase Sales Using Zen Cart” by Eric Leuenberger. Both are very worthwhile reads!

Top 3 Online Marketing Channels That Influenced My Purchase Decisions This Month

Usually, I write about ideas and experiences from the 3rd party perspective, but this month was very much consumed by my own online shopping, searching and finding the basic necessities of an urban lifestyle, driven by my recent move from Seattle, WA to Dallas, TX. Thus, my only observations of what got me sold in ecommerce are derived straight from the source – my own experience as a customer. So, what drove my purchasing decisions and resulted in my smooth transition from NW to SW?

1. Retargeting (re-messaging) online display ads that appeared “miraculously” on various online destinations that I went afterwards – Facebook, Google Maps, Reader, email, news sites – kept my attention sharp on the items I wanted and got me to buy them within a week from the point of initial search to a purchase. Granted, I did abandon the cart a few times (intentionally and not), but it was followed up with  coupon discount offers in emails and re-messaging ads, thus overstock.com managed to win my business.  To get the fundamentals of its effectiveness, see my prior post -“Why Should You Care About Retargeting“.

2. Online reviews for apartments, furniture and local area services and neighborhood amenities very much influenced my choice of the zip code to live, an apartment complex to choose to shortlist and large furniture items to consider.  Shopping for something like your new place to live without visiting is almost comparable to getting married before going on a blind date. It is all good and fancy on the perfect website – the pictures are stellar, the web copy is all flattery and a price seems to be within the range. But, I still have a cold feet feeling.  So, I asked for the photos of the actual products – in this case, an apartment unit available. And, I did have to ask for those twice, because on my first request, I got the same photos I had seen on all websites where this product was shown. The lesson was to remain beware and careful. So, I went digging and searched for reviews, not just on those sites – but everywhere online. And, this is where the bits of true customer experiences started to come out, warning me about some features that I would not even think of or confirming my prior research. Thus, online reviews influenced roughly 80 % of my buys, which is pretty much close to the standard rate of online reviews reliance by US customers, according to the study (April 2009) by Opinion Research Corporation [”The survey revealed 84 percent of Americans say online customer evaluations have an influence on their decision to purchase a product or service..”].

3) Social networks – namely Facebook, allowed me to bounce back my shopping and searching questions through my friends in Seattle, who knew people in Dallas, who I trust! It always intrigues me how our social affiliations and friendships influence our purchasing behavior. But, it would be not wise not to utilize this time and experience-tested well of information.  I asked and I got my questions resolved.  Imagine of there were an app that would advise my friends on the things in Dallas I would be interested in – as a fresh local? Could some piece be triggered in Facebook settings that noticed the change from Seattle to Dallas and prompted my friends on either side to recommend new places, granted that most people enjoy giving recommendations? As we know, the core enjoyment of being social derives from those mini information trades!  Still psyched about Facebook and all it has to offer?  Then, check “Facebook Marketing Bible” by Justin Smith or a comprehensive list of “300 Social Media Marketing Case Studies” by Wendy Tarr.

In sum, I had limited time, resources and attention like any other average consumer. But, my needs were destined to be met after a through mix of intelligent personalized advertising that I did not mind (as my brain was set to pay attention to the items in demand), availability of online “usage stats and opinions, aka reviews” and referrals from my social capital.  Overall, my shopping process resembles a pretty mainstream buyer behavior pattern that is easy to utilize these days. So, what are you waiting for? Go ahead and replicate!

A Marketer Tribute to Online Videos

If you are constrained with time and resources, but need to create a compelling piece of marketing collateral that serves its purpose naturally, instantly and with ease of engagement, what would you choose – a one page guide, a white paper, a site or a video? My recent observations on the effectiveness of marketing content pushed out to the masses, (or seeded towards, be those targeted or not), compel me to pay a tribute, or to confess in love, as you will, to online videos that meet all our secret marketing needs!

Why videos? Well, let’s see.  If we start with 5 common sense reasons why online videos are effective in engaging your target viewer, we will find:

1) Ease of use – it is so easy to view a video versus to read an article – so much less effort and attention needed to decipher the message.

2) Entertaining factor – for long, we have been primed to be entertained by TV ads, movies, TV programs, etc. that it becomes a second nature to get into that state of expecting a show worth of our attention.  No wonder why all the mentioned media strive to entertain us first to utilize that captivated attention.  Hence, when it comes to video content, we are more likely to engage into viewership on the premise of the anticipated “show”.

3) Message interpretation accuracy – “even though visual communication is a less direct way of communicating, most people rely on this form of communication and wouldn’t trade it for anything in the world! Visual communication adds another layer of information in our communication with each other, and perhaps that is why we cherish our vision so much.” Numerous studies, books, articles emphasize the importance of body language or visual memory in communications. The referenced article by Debbie Jensen explains why visual memory precedes all others – a simple reflex or function of our mind to organize information beyond one point – the law of continuation. So if we see the message, we are better off comprehending it.

4) Longer life in audience memory – people remember better in pictures than words. How many times you recalled something faster because it had an association with the name of your home town or some other event? How many times you were able to achieve something because you visualized it? You simply gave a command to execute the vision to your mind. Imagine what it can do for your call to action – it can be easily presented in action to your audience.  In other words, videos are visualized messages that you can more effectively plant into your customers’ memories!

5) Wide range of channels to place those wonderful “communication machines” for free – isn’t that something? Usually, you do not need to worry about media placement costs, run of time and on and on…the key “details” that rank up your marketing spend when it comes to TV ads, or product placements.  Plus, a myriad of “audience-heavy” user-generated sites from YouTube to MySpace provides you with various options on where to seed your videos.  So, go and use them…wisely!

On the other hand, if we browse the latest industry trends on online video usage, we will support the above 5 reasons with the following facts:

1) Overall, the average US online video viewer watched 327 minutes of video in March, nearly 5.5 hours - according to emarketer, online video ad spending in the US will pass the $1 billion mark in 2011. Go and capture your audience right there, right now, when it browses YouTube or its online newspaper sites.  A good video marketing strategy can produce stellar results for your brand!

2) In total, 138 million Americans – approximately three in four US Internet users – viewed online video – according to comScore. And that was measured in November 2007 – imagine what it is now (or conservatively stay within the same data point) and use it to support your marketing web strategy rationale to invest in video production.

3) Private studies show that awareness and purchase intent grow significantly as a result of online video views – according to AdAge author Kevin Nalty. Though, there is no reference to study results, the statement makes sense even from the personal shopping experience – yes, I will more than likely buy an item that I saw in action in a video.  Moreover, if that video was shared by my respected Facebook friend, I am to invest more thought into the buying process.

So, are you convinced to produce some “kick-ass” videos? Your marketing strategy might get a well-deserved lift!

Intensify Customer Experience by Interruptions – But Do It Right.

“Interruptions? “- you say. “How come? Aren’t we supposed to provide a seamless and consistent experience? “Yes, you are, but add some “time away” for the consumer to start missing that pleasure.”

In two new studies, researchers who study consumer behavior argue that interrupting an experience, whether dreary or pleasant, can make it significantly more intense,” – says New York Times, Research columnist, Benedict Carey. The cause is rooted in the necessary opposing duality of our experiences that help us sharpen and distinguish among our perceptions. In other words, if you always lived in luxury, you might see it as a norm that gets boring and so “everyday”. Examples, would be occupational choices of people, who grew up wealthy, to pursue the lives of pioneers in underdeveloped countries or people who grew up in small towns, striving to live in “megapolislike” cities.

The concept is as old as the world, but why do we forget about it so often? Because, as marketers, we are so focused on listening to our customers, “who actually do not know what makes them happy most of the times”, and let our own thinking guard disregard the basics of consumer behavior and psychology.  Even here, the balance is the key, psychology findings and consumer insights must be “interrupted” & “diluted” by each other’s informational value that we can use in our marketing efforts.

 “Over the years, psychological research has found that people are not always so clear on what makes them happy. When reporting on their own well-being, they exhibit a kind of equilibrium: After a loss (divorce, say) or a gain (a promotion), they typically return in time to about the same happiness level as before. Humans habituate quickly, to hardship and prosperity, to war and peace. Yet even modest pleasures — a cup of coffee in the morning, an afternoon walk, a Scotch before bed — seem to follow a law of diminishing returns.”

 So if it is natural for us humans to ride the waves of ups and downs, as consumers we would be so happy to follow the pattern.  Though, this research is primarily focused on commercials and TV programs as products “to miss” – try to reflect this concept against the general consumption of your product or service. 

What are the product management strategies available to play on that evolutionary phenomenon?

- Launching “exclusive” editions to make the supply very much demanded. But, do as you say – do not make exclusive editions available for all – otherwise, the tactic will not work.

- Adding novel experiences to the product use, or purchase experience. Start selling your service online or make it available on mobile phones. Integrate it in some other product.

- Setting “usage levels” to basic, professional and advanced accounts, with features and benefits exponentially increasing in accordance to product price.

What are the marketing strategies available to play on that evolutionary phenomenon?

- Changing the advertising themes & channels – mix it up, change colors, a spokesperson and music to your ads.

- Use “pulse” schedule for your product message publishing – it will add the excitement and even save your advertising/publishing dollars.

- Frame your product usage message around an opposing life event – use the contrast to enhance the value perception of your brand.

There could be a limitless number of ideas generated if you dwell on this concept for a while and see what you are doing today for your product and service and how you can evolve it in the future. Make it a part of your marketing and product management reviews and you will keep your customers in a delighted state much longer.

All in all, take your customer’s wish at a grain of salt, especially when they say “I just wish I never had to watch a commercial.”

P.S. If you want more detail on this study, find this paper in the Journal of Consumer Research, Vol. 36, August 2009.

Brilliant Marketing Gets Born When You “Become a Unicorn In a Balloon Factory”

How was your week? Really? Did you happen to create what you planned? Did you manage to create the reality you want? Or was it “just fine”? Or did you happen to hold tight to the status quo you worked for years and the work that you have done? Do you spend more time defending your projects versus creating them? If so, think again.

Creativity is an ultimate aphrodisiac of life. It is an ultimate catalyst for success in what you do. You know it. You experienced it before. Remember the time when you took over that pet project of yours that you grew faith for? Remember how fun it was to spend hours to make it happen? Remember the tribe of followers you created once the project got materialized more and more into something beautiful? You felt like an artist and you loved every minute of it?

Oddly enough, this very “seem-to-be-general” idea of finding happiness in what you do is also explored by Seth Godin in his new book “Tribes“. What I did not expect to see in the new book of a marketing genius of our times – such a simple, but yet, very prominent thought – “Create your own reality, take initiative and make things happen the way you see them, and success will follow”.

I grabbed the book with an expectation to brush up on the next “hot” marketing techniques and to my utter surprise, I find the similar idea that has been feeding my curiosity over the possibilities of life over the past few months. Seth points out that brilliant marketing happens when you lead, not just manage. I loved that!

In other words, if you ever felt like “a unicorn in a balloon factory“, or you feel like one today – in your organization – you might have opportunities for something spectacular to produce! Go and dare to make it happen! Do not ask for permission, take charge and show us what you can! We are all looking forward to your new masterpiece!

Good Marketing Leads to Profit. Skip it and You Are Stuck with Loss.

Marketing, as a business activity or profession, has a bad reputation. Most people think that anyone can do marketing and there is no need for professional training. From my personal experience in large and small companies, there are dozens of people who think they are good marketers. But, alas, they are not. Like in any industry, there is a certain percentage of people whose work is effective and worthwhile emulating. The rest are poor examples or attempts to mock something like it (“marketing”) in haste.

If we think of the best practices, successful product launches would illustrate the idea behind the quality of good marketing. It goes without saying that a product should be of value to the customers too, but its benefits must be communicated and marketed aggressively to succeed. The best products will not sell themselves, but a strong marketing effort, a well-targeted approach and efficient after-sales service will do the magic. This is where marketing planning comes into play: well-integrated, properly-targeted, proficiently-resourced and well-executed.

So, what is good quality marketing?

The top four qualities include:
1. Good marketing starts with a development of a marketing plan as an integral part of the new project or product process.

2. Good marketing means planning early and properly, identifying all the potential risks and opportunities before the execution of a campaign or a start of product development. Design cannot be started before its requirements are established, the target market is identified and positioning strategy is finalized.

3. Good marketing is only possible if you define its objectives clearly and early before execution. What do you want to achieve with your efforts? How does success look like? How are you going to track it? Measure, measure and measure your marketing to bring profitable results.

4. Good marketing is only as good as the market intelligence you have access to. You need that crucial information to build your game plan. Skipping on it – is going to cost you.

According to the studies by Robert Cooper, as listed in his book “Winning at New Products”, one of the persistent themes when it comes to problems and pitfalls of products that fail – is “that many marketing activities are seriously deficient….Many key activities are simply left out altogether”, especially the commonly critical ones like market research studies, trial sells, detailed business and financial analysis. Lack of market information remains the number one cause of product failures! Another trend showcases that marketing spend is only justified at the end (launch stage), when the product is designed. But this is where you are wasting the dollars if your assumptions are subjective and not supported by good marketing. This is where pieces of bad reputation are assigned to marketing as a discipline.

Learn on the mistakes other people made, do your homework first! Do your marketing planning first and you will reap profits from every dollar you spend.

Creative Brand Awareness Campaign for a Good Product

When an existing product is revived by a new use case – miracles happen! Tide-To-Go exemplifies a stellar product already – it cleans the spots when you need it – right at the moment when they happen.  The product has been in the market for approximately two years if not more (according to my own discovery of it in 2006). However, it is only now that its powerful benefit will be known to the masses!

The new campaign – “Silence the Stain” illustrates good quality, creative marketing. It surely brings the product benefits to life in a humorous yet persuasive manner: a dirty spot becomes so distractive as it almost comes to life.  Brilliant theme and consistent messaging of this campaign are the standards to adopt while practicing the power of marketing! Check the ads for yourself and see which one speaks to you. My favorite – is the job interview clip.

Silence the Stain – Job Interview

Or the the marriage proposal:

or the date:

next one is a stop by police:

Measure Your Marketing with These Handy Metrics

Measuring your marketing expenditures and re-evaluating what you have accomplished can be rather daunting and rewarding at the same time. But the most crucial benefit is how your actions are to be affected based on your findings. It is not the news that measuring your actions is followed by better decisions, however it is so common that most of us (marketers) are mostly 99% focused on just launching our campaigns, accomplishing the laundry lists of the pre-planned roadmap and creating new one before we can catch a breath and take a minute to look back. Metrics can help us maximize our effectiveness and identify our strengths and weaknesses on both strategy and execution. And of course, there are no perfect models to assess our actions. However, when I was reviewing my recent readings on marketing metrics by Paul W. Farris et al, I chose the following top eighteen (because ten is not enough) to adopt into the arsenal.

From the category of shares (hearts, minds and markets)
Loyalty – measures future revenue streams. Usually, includes a combination of share of requirements (a.k.a share of wallet, a given brand’s share of purchases in its category), willingness to pay premium, willingness to search.
Top of Mind – I love this one = The 1st brand that comes into a customer’s mind when he or she is asked about a category. The percentage of the customers who the given brand came out on top can be measured.
Willingness to Search - implies the likelihood that customers will settle for a second-choice product if their first choice is not available. ( I know I do that for my dining experiences).
Willingness to Recommend – includes a percentage of customers surveyed, who indicated that they will recommend a brand to their friends.
Sole Usage Percentage – measures the proportion of a brand’s customers who use only the given brand’s products and do not buy from the competitors in relation to total brand customers.

From the category of margins and profits
Marketing Spending – includes total expenditure on marketing activities (advertising and non-price related promotions, can include sales spending). Very useful metric. It is advised to have 2 formulas for it: fixed and variable marketing spending. Fixed marketing spending includes sales force salaries and support, major advertising campaigns, marketing staff (our salaries!), sales promotion materials and cooperative advertising allowances. Variable marketing costs comprise of sales commissions, sales bonuses, bill -backs for local campaigns, rebates, early payment terms expenses. To calculate the latter, you should use your revenue number multiplied by the percentage of variable selling cost. Total marketing costs is a basic sum of both.

From the category of product and portfolio management
Brand Equity Metrics – helps to monitor health of the brand. This is the hardest metric and has a number of models, true moneymaker for the agencies and consultants. Interbrand and Young & Rubicam are the leaders in evaluating brand monetary values. The Y&R evaluates a given brand based on the perceived differentiation on the market, relevance to consumer lifestyles, the esteem the consumers hold due to the brand and the perceived knowledge about the brand those consumers possess. Strong brands show higher degrees across all four values. Growing brands illustrate high levels of differentiation and relevance. Declining brands show relatively higher degrees of esteem and knowledge. Personally, I like the Brand Equity Methodology (a.k.a Moran), that calculates brand equity based on the multiplication of effective market share, relative price and loyalty index. Loyalty index can be calculated by a percentage of brand customers that will repurchase the brand in the next year.

From the category of customer profitability
Customer Lifetime Value considers the present value of the future cash flows attributed to the customer relationship, allows to budget acquisition and retention initiatives. Very useful metric for contractual customer relationships, where you have a projected timeline, average usage/purchase number, price, retention and frequency values. If margins and retention rates are constant, you can calculate the CLV as follows: multiply margin into the retention rate divided by a difference of (1+ discount rate) and retention rate. Valuable metric to identify the limit on acquisition spending.
Acquisition vs. Retention Spending -the former represents the average cost to acquire a customer and is the total acquisition spending divided by the number of new customers. The latter illustrates the cost of retaining a customer (your retention spending and number of the “saved” customers).

From the category of sales force and channel management
Direct Product Profitability includes the adjusted gross margin of products, less direct product costs.

From the category of the pricing strategy
Price Premium implies the percentage by which the price of a brand exceeds a benchmark price.
Reservation Price means the maximum amount an individual is willing to pay for a product. It is a key metric to predict the demand for your product.

From the category of promotion
Average Deal Depth – comprises of sales via coupons divided by total sales. Quick and easy metric to see brand dependence on promotional efforts.

From the category of advertising media and web metrics
Cost per Thousand Impressions (CPM) Rates is our standard advertising basics- is calculated as cost of advertising divided by impressions generated. My only concern and eternal question – how much is the noise or extra in the total impressions number and how much is the actual working range?
Share of Voice quantifies the advertising presence of a brand, in relation to total advertising in a given market. Helps to evaluate the strength of the advertising program.
Visitors – implies the number of unique web site viewers in a given period. I still trust only this web metric, love it for its ability to measure the reach of the website, identify its loyal visitors and content effectiveness during the time you were testing your messaging.

From the category of marketing and finance
Return on Marketing Investment is different from the common return on investment due to the fact that we take a risk and expense our initiatives in the current period. The formula suggested: (incremental revenue attributed to marketing multiplied by contribution % minus marketing spending) divided by marketing spending. In other words, you have to attempt to identify the revenue piece you brought divided by total invested marketing resources.
Project Metrics: Payback, NPV, IRR are our favorites from the finance departments. I mostly prefer the payback and NPV as applicable models to justify your spending.

To sum it up, various measuring models might evolve over time: some will be rejected, some will be re-established, and some will be invented. However, the more you are aware of various metrics, the better you are in your decision-making process, the more accuracy and tangible benefit you will receive for your marketing programs. It is just a challenge at times not to forget to apply them. However, imagine the benefits of testing various metrics and seeing through practice what makes sense and what does not?

P.S. Forrester Research folks have recently posted a video on marketing metrics. There are more metrics discussed outside the above list, like customer advocacy related to customer-centric marketing. Check it out for your listening pleasure yourself!

What’s in the Name? Naming New Products and Re-branding

Coming up with a new product name, creating new packaging and staying loyal to the master brand could be quite a challenge, especially when multiple stakeholders are involved. So, what helps us go through this creative process? What can we already apply for our benefit that was tested and lived through? – Provided that we look at every product launch as a truly unique experience (which it is), here are some nuggets from my research to share on the subject:

I. The branding signals beyond the name
II. The necessity to change names and logos when strategies change
III. The beauty of the unique names

Firstly, Allen Adamson in his book “BrandSimple: How the Best Brands Keep it Simple and Succeed” points out the concept of bringing brand signals beyond the name. In other words, there should be some sort of a unique customer experience that reinforces your product name and transfers its meaning even further: instant perceptions of a product experience. This information can be of great value when you are to change the name of the service, product or even a corporate name. He calls these experiences – “power signals”. Examples of those signals could be:

1. People behind the brand – like FedEx employees delivering “reliability”. Before its expansion into the global markets, the brand had a name of “Federal Express”. It served well for a while till the company moved into a broader service scope both functionally and geographically. Federal Express became too limiting and not succinct in expressing the brand power and did not allow “capitalizing on what became a positive fact of life. “FedEx became a ubiquitous term everyone used for an overnight delivery. In 1996, FedEx was formally adopted as a brand name which followed the logo change as well. Moreover, FedEx is a fast, confident and super-efficient brand, so its employees! You have to deliver on the promise you have in your brand name –already!

2. Exclusive product placement –like Gatorade, can be another power signal. Its placement into the football game –“dunking of the winning coach” – almost became a very recognizable association. The trick though not just in the right placement at the right media and the right place – it truly evolves around the authenticity of the product benefit – it is created for the athletes and it does improve performance. So, it just makes sense to be endorsed in the football game placements.

3. The speed at which the brand is recognized – the power of the icon, can be very effective to communicate your meaning. KFC managed to get the attention of folks speeding at the interstate by using its recognizable icons. Originally, it used to be fully spelled out as Kentucky Fried Chicken with a pretty sizable image of Colonel Sanders. When the brand team had a re-design challenge, they first shortened the name to KFC AND increased the speed of service. Then, they reduced the size of the image to the postage stamp. What happened later is very interesting: customers perceived the change in the name (shortened version) as sensible, but interpreted the loss of sizable image as the indicator that the meal is no longer home-cooked quality. They wanted the image back. Colonel’s face was equal to Micky Mouse ears – highly recognizable.

4. The power of the first impression or a first mover – Genworth – (a spin off of the GE) – can be effective. The company utilized the parent cache of the GE brand and solved the challenge of getting to the market fast by differentiating itself through the parent company heritage (excellent management and credibility), leaving the GE in the name and by coming up with the “generation- worth-assets” meaning – Genworth.

5. Advertising – could rule? Couldn’t it? Yes, it could. The U.S. Department of Transportation had a success campaign “Friends Don’t Tell Friends Drive Drunk” utilizing the four fundamental principles of effective advertising: grab a viewer’s attention, communicate to the right audience, persuade and stimulate the action and be effective overtime to build the recognition. This was a vivid example of that.

6. WOM – Word of Mouth – was utilized by Blackberry to develop a community and a cult movement of Type A personalities: people who make things happen in the professional world. The functionality this communication tool provided directly appealed to the emotional need of those professionals to stay in touch –always! If your product integrates well into your customers’ lifestyle – you might use this power signal very effectively. Just launch a community campaign, make it interactive and integrative of the customer experience with the product.

7. PR – used by Dove – capitalizing on the simple benefit and an authentic statement (providing soap which consists of ¼ of a cleansing cream). Testimonials became the strongest part of the branding campaign: there was evidence to its claim to make women beautiful every day. However, the most effective research fact the company used is expanding the definition of beauty for its customers – that made more women feel beautiful! It showed variations of beauty in its ads further on, thus increasing the 2 % of confidence to potential 10%! Brilliant!

8. Experience, as was implied before in the previous items, can be quite differentiating: Ann Taylor maximized the retail space to provide a unique experience to the professional busy women: it always provided high quality, high coordination items – thus appealing to a broader demographic. It is like a friend who will always give you a sound advice on clothing! If you go there next time, pay attention to the fact how well the retail space is designed to make it a fast and efficient shopping experience when a busy woman can run there at lunch and have a perfect outfit in 15 mins due to its consistent layout.
Sephora did the same by redefining the experience of make up shopping by brining it to customers for play!

Secondly, Joan Schneider in her book “New Product Launch: 10 Proven Strategies” shares her extensive expertise and experience with the new product launch strategies. This is a great guide to the topic with solid cases. The ones, I particularly liked referred to Compaq and British Petroleum. The former used to be a 1000-dollar mini computer brand that expanded into other markets. It had a perfect name for its initial products, but failed to see the need for image change when it brought other products through acquisition. The old brand (name, logo, etc) did not coexist well with the new strategies, thus bringing confusion. Eventually, Compaq was bought by HP.

British Petroleum on the other hand, had a success story when the need for re-branding occurred. It already moved strategically into global markets and it did expand on the energy offerings beyond oil. Leveraging the brand cache of BP (initial letters) and integrating the “beyond petroleum” strategy, BP had an effective repositioning. Perhaps, it is a synergy between the senior management support and true marketers.

To the third point, Seth Godin proposes to use the strategy of making the names up as opposing to turn to the benefit-description techniques. He points out that the unique name not only moves you forward in the differentiation game, but also develop its secondary meaning in a short period of time –initially internally and later externally. “The entire point of “secondary meaning” is that the first meaning doesn’t matter at all (especially since you picked a name with no meaning to begin with). Over time, a surprisingly short time, your unique word, especially if it sounds right, will soon be the one and only word.”

And this is just a tiny glimpse into the magic of brand perceptions world! A combination of art, psychology and common business sense!

Summing it up:

1) It is imperative for you to understand that bold moves pay off if you set them right with solid strategic planning.

2) It is important to look at the entire initiative as a “gestalt” or a “whole” integrative movement (like in a chess game): where all your communication pieces are in play: logo, product name, brand cache, and power signals embedded in the product experience. This allows you to choose a wining strategy based on the wealth of available product launch and re-branding knowledge that is still highly focused on your unique brand case.

Three Useful Models for Web Copywriting

Three Useful Models for Web Copywriting

Writing a web copy? It has been a while since you did any highly visible writing? Or do you simply wish to refresh your copywriting skills and use those for quality check review of your contracted writers? Maria Veloso, a 27-year expert in copywriting and direct marketing, shares her experience in the book “Web Copy That Sells”- a highly recommended reference that is worth taking a place in your marketing library. Here are three useful models to shape up and sharpen the web writing skills:

I. Conceptual Web Copy Blueprint
II. Five Guidelines to Make Your Copy Sell
III. Priceless Techniques to Use While Constructing Web Copy

So, you have a vision for your site and you think that you have the content necessary to deploy for the copy. Well, the truth is that your content is not your web copy. All the information that you compiled while talking to various groups within your company is just information. You still have a job to translate it into a “sellable” web copy – a copy that delivers – empathizes with your customers, persuades them and generates sales. Thus, the initial step for you as a writer would be to step into the shoes of your audience and get their perspective on the user experience that they would have while visiting your site. What would they do and what path would you lead them to? The five key questions to answer while going through this exercise is:

1. What is the Problem?
(Diagnose the problem or pain point for your audience. Sometimes, they do not even know that they have a problem – educate them.)
2. Why Hasn’t the Problem Been Solved?
(Check the history of the solutions that failed or succeeded).
3. What is Possible?
(Use “possibility thinking” and paint a picture for your audience of what is possible for them to do and enjoy while the problem is solved (by your service/product.))
4. What is Different Now?
(Explain how your product can help them and what is different about it.)
5. What Should I Do Now?
(State clearly what you want your prospects to do.)

This is your conceptual blueprint!
What do you do to make your copy live and actionable? Sprinkle your blueprint with the basic design and psychology guidelines:

1. Inject Emotion
2. Add Bullet Points, Bonuses, Guarantee and Close
3. Add Credibility-Building Elements
4. Add Psychological Devices
5. Replace Rational Words with Emotional

This is your five guidelines to follow while writing the copy!

What are the priceless techniques to keep for reference in the process of writing the copy?

• Use AIDA Principle (Capture audience’s attention, get its interest, build desire and induce action).
• State The Unique Selling Proposition (competitive advantage of your product).
• Make the Impression in the First Paragraph
• Write the Offer You Cannot Refuse
• Use Testimonials: “It Can Happen to You”
• Use Your Headline to Sell
• Introduce the Price Through (Daily-Cost Technique and Minor-Purchase Technique)
• Keep On Selling: Craft The Order Form Thoroughly
• Infuse Your Copy with a Money-Back Guarantee: Make a Deal
• Plan the Close For Potential Sale
– Provide a Free Gift
– Use a Time Limit Offer Technique
– Use a Limited Supply Technique
• Spell Out Your Call To Action
• Use an Opt-In Mechanism
• Use Attention-Grabbing Words
• Avoid Jargon and Corporate Speak
• Use Multiple Pricing/Benefits Offers

This is a good checklist to have while crafting the copy.

Another good source of short articles on effective web copy is available at excess voice site.
The third source for web copy intelligence that I would recommend to subscribe to for weekly updates – is Brian Clark’ blog – Copyblogger.

What are your best sources, tips and examples of effective copywriting?

Relevancy Marketing, Takeaways from the Marketing Profs B2B MKTG Virtual Conference

It was quite a convenient experience to attend a virtual conference set up by Marketing Profs on B2B Marketing Wednesday this week. At the same time, the most valuable parts of the arrangement is the ability to download presentations right away and the ability to listen the recorded sessions afterwards! Great value! Saves time, provides flexibility and shares content freely at no charge. More about a similar positive “user experience”, check Jeremiah’s post.

The session on B2B Marketing by Google’s folks: Benjamin Chung and Mark Martel was of most interest. The term of Relevancy Marketing peaked my attention. The idea is simple of putting your ads and products in the right context -where your users are and where their behavior illustrated obvious interest in those products. Sometimes, Relevancy Marketing is called Contextual Marketing that has a power of effective influence over one billion people online today. Its key benefits are: being transparent and flexible for adjustments in real-time. Also, online sources of information become very influential today for B2B segments. Niche content grows significantly attracting the involved end-users. Hence, B2B advertisers move online as well. The top three tips to remember are:

1) To focus on the customer
2) To profit from fragmentation
3) To measure, learn and optimize.

(See the link below to access the details and narration for the session.)

According to eMarketers’ article on “The Behaviorally Targeted Ad Audience” :

In a May 2007 consumer study by JupiterResearch and AOL, revealed:

1. 74% of frequent ad viewers stated they would pay more attention to a contextual ad vs. 89% who would pay more attention to behavioral ads

2. 63% of online consumers say they pay more attention to ads that fit their specific interests vs. 49% who pay more attention to ads that are directly related to their current online activity; that data could be interpreted as more attention for contextual (specific interests) than behavioral (current online activity)

3. 67% of online shoppers — defined as those who research and/or purchase online — notice behaviorally targeted ads vs. 53% who notice contextual targeted ads

Personalize the content, do you “research” or use your research and I will spare a minute to pay attention. Relevancy marketing translates into more effective marketing communications and eventually a greater awareness about the product offerings by the target audience.

Other sessions at the virtual conference included:

- Keynote: B2B Marketers Need An Interactive Makeover by Laura Ramos
– Customer Reference Programs and the Social Media Revolution by Bill Lee and Jeremiah Owyang
– Email Marketer Seeks Customer for Long-Term Relationship by Brian Ellefritz and Scott Barnett
– Is Thing On? Social Media for B2B Marketers by Greg Verdino
– Using Sustainable Word-of-Mouth Marketing in Growing B2B Business by Greg Spangler

P.S. Here is the link to the recorded sessions – check them out – time well spent.

Interactivity and Engagement Grab Attention, Build Connection and Make Us Buy

People do not like to be sold, but we like to buy. Thus, it just makes sense that conventional commercials bombarding, be it a TV ad or a sales speech, does not work very well. Interactivity aspect became the key ingredient for making a connection to customers’ hearts and wallets. Touching customers at the moments of their experience while enjoying their passion, hobby or interest works wonders. It creates a connection that is weaved into already positive experience. That is why ad placements work best: be it traditional movies or games or mobile communications. According to the e-marketers recent article, “Advergames like the 3.2 million units sold at Burger King over the holidays have been a success, and in-game placements have music labels competing for exposure in the latest sports games. But it is online gaming that holds the best promise for targeting during specific time slots, as is possible through XBox Live and other game ad networks.”

Another way to look at it is through the lenses of experience design field, where cognitive psychology and consumer behavior are taken into the account. David Armano shares a very compact foil set, illustrating this concept on his blog. Experience design requires more “thinking” energy and planning though. With product placements, you are simply rewarded by doing your homework and using the info on where your customers “hang out, lounge and mingle”. With experience design applications, be it an event or a product, it has to do more with a new creation where prior knowledge is practiced. It could be more challenging and time-consuming as production and testing takes time. At the same time, what can be more rewarding than creating a new experience that your audience will definitely engage into and be able to enjoy the connections it builds with your product? The greatest part here is not about the product, but a user, consumer, as he/she is thought of, cared for and catered to!

What I Love About Marketing: My Definition of Marketing

One of my favorite questions to ask is “What is your passion?” The answer allows me to learn about a person so much more…It allows to learn about the object of passion (a professional occupation or interest), so much more. At the same time, I was numerously asked as well: Why Marketing? Why not Finance or something else? So, it would be only fair to share my own definition of it.

Marketing for me is not a matter of pure message crafting and information repackaging. It is not about creative eye-pleasing presentation…It is not about selling and convincing people into a purchasing decision. I say that without discounting the monetary value this function brings to the bottom line. There is no question that marketing initiatives have to be accountable and measurable, add value and contribute to ROI. But, the true motivation is not of dollar value.

Mainly, for me, marketing is connecting with people and understanding what makes their hearts and minds resonate. It has to do with the emotional aspect of social interaction that brings change or moves forward even the most logical planning and strategy. You need emotion to bring change to life. You need emotion to instigate progress.

As an occupation, marketing is:

- Flexible: it allows adjustments in the flow of events; it is applicable across industries, geographies and cultures! You practice and transfer it anywhere in the world! People will consume and trade as long as we exist!
– Dynamic: it is never boring! Constant change what can be better?!
– Broad: the scope of jobs to do, projects to accomplish and specialties to immerse into is as large as the ocean, enough for a life time!
– Deep: one can find 3-5 specialties and become very knowledgeable about them and still enjoy the challenge of change.

On the other hand, being a marketer allows playing so many roles! When I was little, I was dreaming to be an actress (so typical). Being a marketer provides so many opportunities to act and I love it every time I learn something new (play a new role)!

My favorites are:

- When I do market research, I become a detective, a CIA agent, “sometimes under cover”, trying to understand what makes those foreign species (new target market or user) tick…what makes them happy? What connects them? What drives them? What makes them laugh? What makes them “them”?

- When I do competitive assessment and strategy, I become a warrior, General with an army to lead and ability to predict the next steps of the contender.

- When I engage in writing and planning ads or event management, I become a producer, an entertainer and even a magician depending on the mystery level the audience craves for. Mystery does not necessarily exclude clarity and simplicity.

- When I engage in business development, I become a connector, a merchant that fuels the trade of information, opportunities and people.

- When I develop promotions, I exercise my creative mind and imagine myself being a painter that aims to draw a well-balanced masterpiece that brings harmony and evokes a following. Or, I could be an alchemist that works hard on the new recipe of the multiplying substance that has the ability to grow exponentially…

Thirdly, the challenge to curb this trade (marketing) and make it more intelligent, accountable and measurable provides lots of room for thought, experimentation and testing. Marketing can be and should be intelligent. Marketing should be supported not only by emotion, but logic (data, information).

Marketing is the driving force for change in consumer behavior. It is not a self-serving influence and persuasion; it is effective communication that drives our actions through emotion, connectedness or affiliation with the other humans and places our market choices based on common sense.

My Lifetime Value (LTV) as a Customer for Amazon


 

Last three weeks of the MBA…cannot wait till I am done and ready to pursue my next adventures! However, I promised to share my recent learning on calculation of lifetime value in the database marketing class. My individual project required the calculation of my LTV to a service I have an extended relationship with. Amazon was my choice.

Relationship and Frequency Data:
– Length of active relationship = 9 months
– Average purchase over 6 months is $ 36.57
– Average frequency: 1.5 per month
– Average order: 3 books
– 99% of orders are books

Assumptions:
– Acquisition costs = $ 25
– Variable costs = 18 %
– Retention rates: 95.9% for first 6 months, 97% for the next 6 months, 98% for the next 24

There are 4 levels of customer engagement:

Level 1: Beginner (Free Super Saver)
Level 2: Purchase Patterns Captured (Buy 4, Get 1 Free)
Level 3: Heavy User, Hooked (Amazon Prime)
Level 4: Heavy User is Rewarded by Savings (Amazon Visa Card)

Each level of marketing programs reinforces continuous purchasing behavior, increases frequency and average purchase value that are paramount for increasing overall LTV.

Presently, I am a consumer on Level 3, as Amazon Prime Buyer. With the assumption of 3 years as my projected life experience with Amazon, the LTV amounts to $634. My switching costs are quite significant at this point and comprise of $79 of annual fee, ease of use, loss of automated purchase process, brand equity, security and trust that the service of the competitor might or might not be delivered.

As far as the effectiveness of this program, it did increase my frequency by eliminating time and quantity restrictions. I purchase twice as much on demand, increasing my total spending by 50 %. Simultaneously, it ensures committed 11-12 orders per year based on the annual fee that is a pre-paid shipping expense, thus increasing overall probability of purchase.

Retrospectively, I made a smooth transition from the prior 2 levels:

- Level 1 (Free Super Savor) made me buy in triplets manner which drove consistent purchase order to be roughly $28. At this stage, my LTV amounted to $348 over 3 year period.
– Level 2 (Buy 3 Get 1 Free) made me buy more books, increasing the level of frequency and ensuring that average order always amounts to $ 49. At that stage, my LTV was $ 507.
– Level 3 (Amazon Prime) increased my LTV to $ 634.
– Level 4 implies getting Amazon credit card. This could be a significant step transferring a heavy user, like me into a lifelong customer, however, the one time savings of $30 and the hassle of having another credit card is not enticing enough.

 


The 4 level approach works well while acquiring new users and transferring them into heavy users and ultimately into loyal customers.

Frequency of purchase, volume and average purchase value play a major role while affecting LTV, thus the following initiatives are advisable to expand into:

- Cross-selling is optimal to generate higher frequencies of purchase. Bundle packaging and offerings could be considered as alternative offerings based on the search data.
– Branding initiatives could help to seed awareness and repeat the message that online you can find it at Amazon: all the goods, ranked, recommended, traded – already pursuing community engagement
– Utilizing referral campaigns to potentially eliminate acquisition costs and carry the branding message (though the latter are quite low)
– Developing an alternative to the level 4 program (Amazon credit card), perhaps just a points card for customers that are not responsive to getting another credit card. It can still provide the same data, but alleviate the commitment factor implied in the financial decision of signing up for a credit card.
– Not sure how I missed it, but Amazon does a good job utilizing social media and web widgets to generate more interaction and customer involvement. Brian Oberkirsh has a great post on it here. I wish the design and usability of Amazon could be better and user friendly..too busy and too much going on for me when I sign up.

P.S. Just ran into a good chart on Bnet brought by iProspect on the Purchasing Power of Web Sites. Clearly, Amazon tops the score. (Added on May 15, 2007)
Purchasing Power of Web Sites (IProspect)

Why We Marketers Should Adopt Another Segmentation Tool – Personas from User Experience Design

The best discovery from last week was stumbling upon Steve Mudler’s session at Webvisions on personas . It almost feels like the more I learn, the more is out there still awaiting for discovery. Two weeks ago, I was rambling on the database marketing and its behavioristic approach to segmenting. I was thrilled and motivated to learn as much as I can about it. Last week, my attention radar caught the concept from the user design (scenario design) field – creating “personas” to segment potential customers and be able to communicate better with them, while resonating with their specific challenges. “Personas”, as a market segmentation tool does bring: focus, empathy, consensus, better designs and communications.

If I narrow down to the two major benefits of this technique, I would mention its flexibility and applicability to real life situations we marketers face and its fundamental psychological truth about discrepancies of people’s words and actions.

The greatest part about creating “personas” is that it allows segmenting your market while you engage into the limited market research initiatives. Let’s face it – most of the time, we (marketers) have limited budget and resources (people and time) and there is so much that we could do but we cannot afford….How do you find out what your potential customers will want and to what they would respond to if you only have 4 weeks, 4 people and no budget? You can only interview a small number of people, you can do so much as opposing to engaging in the ideal long and steady market research process that we learnt from the books or that is feasible if a specialized agency does it for us for a good sum.

Well, we have “personas”! Steve Mudler actually shares his expertise on it in his book ” The User is Always Right”, As an example, creating personas becomes a good segmentation alternative in the real life situation where you are developing a channel for a newly developed product or a “newly-is-still-in-development- product-that-is-has-to-sell-in-6-months”. There are three primary approaches, based on the type of research, scope and analysis performed:

• Qualitative personas (based on interviews, as an example)
• Qualitative personas with quantitative validation (interviews and surveys)
• Quantitative personas (surveys, data from the CRM systems, etc.)

Thus, it allows you to apply this technique to any scope of research that you are doing. Flexibility makes it a good model.

Another useful disclaimer that all of us – marketers performing research should always keep in mind is that what people say is not what they necessarily do. What they say is important as it reflects their goals and attitudes as well as perceptions and aspirations of being seen in a certain light. What people do is just as important, since actual behavior can reveal more about people than what they say. Behavior reveals patterns around which you can design your product or communication strategy. Again, the perfect combination of promise and action, if those are consistent – you got your answer and you are on the right track, if those are conflicting, you have to test your hypothesis again or change it completely.

Why Some Loyalty Programs Work and Others Don’t?

Three week intensive course of CRM class uncovered the basics of customer loyalty aspect: loyal customers add more lifetime value (LTV) and we marketers should be focused on it and court them as they are less expensive (they are knowledgeable about your service and product and thus take less time and money to service, they might even educate your prospects and refer). Well, it all makes sense and this week we discovered the opposite! According to Werner Reinartz and V. Kumar article on “The Mismanagement of Customer Loyalty“, customer loyalty focus only can be a big mistake.

Studies show that loyal customers could be rather demanding and not willing to upgrade, buy more or pay a premium. How about the obvious resentment in some consumer industries that loyal customers experience when they are hogged or bombarded with upsell messages? I might buy the product more frequently, but why should I pay a premium or extra as I know exactly what the product value is. Why do I want to spend $70 a year just for 2 day free shipping if I can continue buying my books on Amazon in triplets to use a free shipping option of purchase order that exceeds $ 30? It works well, why change? Thus, loyal customers can be quite price-sensitive.

In business-to-business industries, loyal customers can be expensive to serve: as they buy in large volumes and dictate the terms. A closer look should be taken at the relationship between the loyalty and profitability. One of the solutions provided is time-driven activity-based costing. It allows to uncover the costs of business activities and all the time spent on them.

What about endorsement? Supposedly, loyal customers are your product evangelists. But, looking just at the purchase behavior is not enough. It is a combination of attitude and consumption that makes an average heavy user an endorser.

The bottom line is that the link between loyalty and lower costs = profitability is industry specific. Consistency in purchasing behavior and attitude/emotional connection to the product make the best referral agents from your customers. To choose an appropriate loyalty strategy, segment your customers by longevity and profitability.

Attending Workshops at Web 2.0 expo – Community Evangelism

I started my Sunday morning with a workshop at Web 2.0 expo on Community Evangelism with Deborah Schultz and Anil Dash. I thought I can get away without much effort of focus on a Sunday morning and I did not bring my laptop. Well, once you see Jeremiah Owyang running around with a camera video-streaming live the event and Mario Sudhar liveblogging, one cannot get away from the energy those folks generate.

What are the takeaways from this workshop? Why should we care about community evangelism? Here are the ideas that Deborah and Anil shared with us.
Community Evangelism is an ideal customer referral program made feasible to execute via various web technologies like blogs, forums, podcasts and other social sites. It allows companies reaching their customers and transform transactional customers into loyal ones through building the relationship, making an emotional, personal connection.

Persistence and awareness are the key to maintain relationships online. If you ventured a blog for your company, you engage into a social contract, a sort of committment to ongoing conversation with your customers. This implies a continuous sharing of value content. You expand your relationship with a customer into a more enriching experience.  Continuity of a two-way communication process provides for creating meaningful life moments that your customer records in his/her memory. A good example would be books, CDs, movies that we buy or get as gifts from other people and might never read, watch but keep being attached to them as they connect to someone we care about. Connectedness, continuity and non-disposability = all due to the value of a relationship that carries it through.

Awareness is not just about notification. Providing your customers with a control to chose how they get information about the product and services – this makes your communications effective. Why? Think about products people absolutely love: iPod, TiVo, Wii. They empower consumers to be in control when to consume content, service, product. So, do the same with your marketing communications to make them more effective – provide those in RSS, blogs or other format that your customer can choose to control both in the reception phase and content scope.

What’s Evangelist? He/she is a

  • customer advocate
  • educator
  • among the people interacting with the community where they live
  • human face of the company
  • cross-functional, not just a marketer
  • a foil for the company

Human skills needed to be successful as a community evangelist:

  • listener
  • connector
  • catalyst
  • critic
  • partial geek
  • detective
  • diplomat
  • juggler
  • driven by relationships
  • approachable
  • intuitive
  • inquisitive

Pursue evangelism with passion, be present where your customers are mentally and physically. Use what you got and have fun!

P.S. I just found out how messed up my blog looks like in Firefox! Tried to contact technical support and it is temporary closed! What do I do? I have to fix it, otherwise it is simply embarrassing.

The 24 Essential Techniques of Database Marketing

While, immersing myself into the knowledge of CRM and Database Marketing, I wanted to share a great checklist Arthur Hughes provides in his Strategic Database Marketing book.  This list will help visualize the breadth and scope of this approach. At the same time, it will allow you to serve as a great keyword framework while you are building your informational library about the subject.

  1. LTV (Customer Lifetime Value) = Net worth of your customers, almost like ABC marketing segmentation
  2. RFM (Recency, Frequency, Monetary Analysis) = allows to predict the success of your promotional efforts
  3. Customer Communications = personalized customer communications based on the data, love this part!
  4. Appended Data = all the demographics, psyschographic data we get from “zip code profiles” providers
  5. Predictive Models = one can build based on item 4 and communications, helps to increase response rate and decrease attrition rate
  6. Relational Databases = form of the database that allows instant useful info to make marketing decisions, something you have to have set up right from the start!
  7. Caller ID = helps CRMs to do their magic = boding experience via instant info and response
  8. Web sites = helps your customers to experience your product/service, bond with it and provide their behavior pattern data for good purposes obviously, allows engage into conversations. Jeremiah has loads of nuggets in this area.
  9. Email = allows effective communication, leads to retention and increased sales. Allows to reach your customers, still does!
  10. Tests and Controls = use test groups to see the effectiveness of your customer loyalty programs
  11. Loyalty Programs = customers are delighted to participate in those! Airlines are a good example
  12. Business Intelligence Software = allows you to have “hands on” your marketing activities before, during and after, well – anytime
  13. Web Access = for your relational database for all functions within your company (management, CRS, sales, marketing, operations, etc.)
  14. Rented Lists = allows to get direct response (mail) data easily than you think
  15. Campaign Management Software = speeds up your execution phase from the planning to doing
  16. Address Correction Services = made modern database marketing possible
  17. Profitability Analysis = allows you to change your pricing and marketing strategies to increase your profits
  18. Customer Segmentation = allows to create useful segments based on demographics and behavior based on the actual data, helps to create targeting communications!
  19. Status Levels = allows to provide special services for special customers (Platinum, Gold, Silver)
  20. Multichannel Marketing = more sales wherever your customers show up
  21. Treating Customers Differently = profits come from retaining the Gold customers and encouraging others to move up the higher status levels
  22. NBP (Next Best Product) = powerful tool to determine why one group of your customers buys and the other does not. Sales people and CRM will appreciate the info
  23. Penetration Analysis = helps to direct sales force and make them more effective
  24. Cluster Coding = helps to identify who is buying and who is not, creative tool that allows to improve both marketing and sales!

Behavior-Based Segmentation and Customer Lifetime Value

Shopping lately at Amazon and getting into Database Marketing class, my last term, made me rethink the whole notion of segmentation analysis. For decades, and just personally for me, for the last 5 years, I categorized target markets/customers by psychographic and demographic data.  While, people watching and further character studying always amused me with identifying their behavior patterns and action tendencies. At the same time, it never occurred to me how the two can be well-connected in the behavior-based segmentation process.

CRM (Customer Relationship Management, Customer Equity Management) concept is not a novelty, but today I started getting excited about the idea and its application. For the last 6 months, I have been buying books on things of interest for myself at Amazon in a “triplets” manner to use free shipping service. Oddly enough (not so oddly), now I get promotional messages to buy 3 with 1 free = total 4. And guess what, I started looking for the next 4 that I want to read. It works on me and everybody else! It changes my behavior and increases my usage. “Books that might interest you” feature is not even mentioned as we all are so used to it! I wish all my online clothing shopping experience got me personalized style advice based on my purchasing behavior!

What I most looking forward to is to actually being able to calculate my lifetime value to Amazon as a customer by the end of this class…and to other services that I might reconsider! Stay tuned…

How To Communicate the Idea To Inspire Action and To Actually Have Things Done

Teamwork, group projects and things that need to be done moved me to revisit the basics of how to get some action out of group communication process. I found a very useful framework of natural planning techniques from David Allen’s book (Getting Things Done) that I would like to share. It is a 5 phase process:

1) Purpose – never hurts to ask the question “why we are doing it”, helps to focus, define sucess, align resources, motivate and expand options.

2) Principles – “a great way to think of principles is to complete the following sentence” – “I would give others totally free rein to do that as long as ….” , thus they provide guidelines on the packaging or points of reference.

3) Vision (Outcome)…how would success would look like, feel like, sound? I really liked the qoute ” You often need to make it up in your mind before you can make it happen in your life”, very powerful and I know I can do that!

4) Organizing – get all the ideas OUT OF YOUR HEAD – in front of your eyes – thus patterns and relationships emerge from the “invisible world”! Sort those out by components, sequences and priorities.

5) Action – Next Steps. Clarify what can be done today, who should be doing what, what you will be waiting for.

The idea is to walk your team through this process and the project should be implemented with ease or at least save time in the preparation stage. The trick is to walk yourself through the same process first, utilizing “the outside your head tracking system”. The work of the “communicator” is never done!

The Power Of The Story

I had a chance to listen to the speech of Scott McCain, the author of the book “What Your Customers Really Want”.  Very engaging speaker. He expressed a great point that I wanted to share. We all hear about the elevator speech and short story that we need to tell our customers (I even blogged on it here). However, we sometimes forget about the “High Concept” of the story structure. If we think of our business story as a movie we are going to shoot, it makes it easier to construct a powerful piece. Just 3 simple things can help us communicate better with our audience and thus be more successful in our demand generation efforts:

Act One: Introduce the characters and the conflict.
Act Two: Tell about the various ways those characters try to solve the above-mentioned conflict.
Act Three: Provide the heroic resolution.

The three basic steps that can help us create a compelling story are good to keep in mind. Just imagine, you are shooting a new blockbuster movie about your product/service/program. What would you do, how the plot will unwide?

The more I learn, the more simplified versions of the same concepts I value!

Missed Oscar’s Night Ads? Catch up with the NYT Article

I am catching up on the Oscar night, watching E!, doing research and simply catching up on the Google Reader that simply serves a role of a TiVo for me. No matter if I got busy with the offline = real life, I can always catch stuff later. The most enjoyable item was the article from NYT on the ads shown on Oscar’s night. Go and feed your great ads cravings, especially when the presentation is so appropriate, in Oscar’s style! And of course, cannot get enough of Fergie’s song! Turn it on every morning to start a day with a smile!

Ads that Make a Difference

With the whole Super Bowl fever, which is a greatest time to see all the good work of advertisers, I went to old videos and some of them were funny, some were histerical, and some were truly thought – provoking and awakening. One of those was “Children see. Children do.” Very true, even though I do not have my own kids yet, it made me pause and think. All of us do not choose our parents, but we can choose what kind of parents we can be for our children. Seeing this type of ad is a good exercise to be able to understand other people around us.

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