Monthly Archive for February, 2007

Key Rules for Online Retailers

Published
by
David Thiel
on February 28, 2007
in ECommerce Strategy and Service and Support
. 1 Comment

Surprisingly, there’s not much in the way of a mature strategic framework for online retailers out there on the web, so I’ll provide some of the key concepts we share with our customers. Since it’s online (and it’s retail) it’s important to remember that these thoughts and practices are constantly evolving in response to consumer needs and trends, but I hope to abstract them enough here that they’ll remain in fashion for at least a little while.

Build a Solid Store: Seems obvious, right? Well, in practice, a solid store is (apparently) an elusive concept for many online retailers. Ever experience an eight-click checkout? We all have. Cover the basics well and you’re already ahead of the curve.

Create Qualified Traffic: No kidding, there are three key concepts in this item. “Create” means just that: you can’t find new customers from behind your desk while running Excel regressions… you have to get out there.

“Qualified” is another seemingly obvious concept which is oft-forgotten. The use of tools like Wordtracker can go a long way towards improving search results, but you’d be surprised just how few organizations use them.

“Traffic” is a key concept simply for the fact that most retailers think they’re buying conversions from Google and Overture. You’re not buying conversions. You’re buying traffic. Only your store can convert. Think about it.

Lastly, it’s important to realize that most of the shiny concepts and products used to optimize return on PPC are not remotely as effective as good copy in your ads. Free, new, special, etc. still hold power. David Ogilvy is still the king of copy.

Service the Customer by Servicing the Order: Offline retailers get a big break: customers drive by their store every day or so. For online retailers, no such constant reminder exists — indeed, the web is constantly serving up new storefronts and purchase options to your customers. For web customers, the memory of the last order is the most important reminder of their experience with your store, the strongest prompt of a re-order or referral, and the ultimate reason why you will win or lose their business. Offline retailers get return visits even from irate customers — their customer base victimized by “convenience geography.” For online retailers, the landscape is less influential in customer retention.

Servicing the order is information, logistics, partners, packins, and packaging. It’s responsiveness, courtesy, and anticipation. And (save strategic planning) it’s the hardest part of online retailing, make no mistake.

Manage the Customer Life-Cycle: You need to realize that many people will never shop in your store, introduce your product to those who will, promote conversion (and reconversion), build customer/brand loyalty, and develop evangelists. Focus on the ones that will. Focus on cultivating them through each of these customer lifecycle stages.

Now, the bad news: customers move continuously between these five “stages” in terms of their needs.

Many organizations view their customers’ lifecycle (funnel stage) as static: move the customer up one level and they’ll stay there. Baloney. Customer’s CONSTANTLY move from one lifecycle stage to another — backsliding when the experience is bad, and jumping quickly to evangelism (for a day) when things go better than expected.* Every interaction is an opportunity to move the customer up the ladder to evangelism — or to drive them happily to your competitor.

Other Things: There are several other directives which I’ll save for a future post:

  • Don’t Stop at the Website.. Think Warehouse.
  • Use Pricing as a Tool
  • Choose Products for your Catalog Wisely
  • Join the Gift Market
  • If You’re a Multi-Channel, Use It
  • Be a Leader

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* My wife actually sent out an email today to her friends list to share her excitement over the Mr. Clean Magic Eraser. It easily removed crayon from some playroom furniture. Many replies ensued and it was the talk of her group. Tomorrow she’ll put the product back in the cabinet… and forget about it forever.

Customer Synchronicity Requires Interaction

Published
by
David Thiel
on February 11, 2007
in ECommerce Strategy
. 1 Comment

Finding your Brand Evangelists
Every product has its fans. Feedback and enthusiasm from people who have used a product/service is what changes a hobby into a business. But today you are a 200 person organization with a sophisticated ecommerce website; your biggest fan is not Uncle Bob anymore. You have 100,000 customers who buy in different ways, some buy more, some buy less, some buy often and others buy only once a year. But who is who?

If you’re a grocery store, you can clearly see which customers are not buying toilet paper. We all hope they are buying it somewhere else. Or do we? For products with such clear utility as toilet paper, it’s easy to see which of your weekly grocery customers is making that quarterly trip to the wholesale club. Your lost sales (and competitive risk) are apparent. But for other products and businesses, it’s not as easy to identify the possible defectors and lost sales.

Asking the Right Questions (About Toilet Paper)
While intuition and supposition have created lots of brands and brought many a start up to stability, businesses of any size (or with any future :-) must rely on answering the right questions about their target market, and that starts with asking the right questions about the target audience. In some cases, like toilet paper, the questions are obvious. In other cases…. Not so much.

Do you know which customers are true members of your brand? Who are your evangelists? Who’s there because you provided a discount? Who would still show up if you doubled your prices? Not knowing these questions should drive you crazy.

The right questions come from observations of customer behavior. (“They must be buying toilet paper somewhere, right?”) But you don’t have the opportunity to see who’s buying toilet paper – or not – if you don’t interact with the customer.


The Answer: Online Retailers Should Host Church Picnics
Unlike Starbucks where the average customer visits 17 times a month, most retailers struggle with is how to create opportunities for interaction when their average customer visits only 5 times a year. Like holiday-only-churchgoers, these customers are waiting to see the light. One way to enlighten them is to spend a lot of money on traditional advertising – telling them “how great it will be” if they would only believe. The other way is to use the web to create meaningful interactions with the customer – interactions that both build their affinity to your brand AND provide you with meaningful behavioral information from which you can adjust your offering to remain in synchronicity with the customer.

Talk to your customers about things that they truly care about. There are many benefits to gaining the trust of customers, use your ecommerce platform to:

  • Continuously “re-convert” your customers into new buyers/tryers. What they buy and what they don’t will tell you a great deal about their needs.
  • Build brand-focused experiences which drive loyalty and affinity, but which don’t necessarily ask for the sale: events, surveys, contests, and discussions are excellent ways to interact with customers because they reveal customers opinion of your brand simultaneous to demonstrating your commitment to alter your offering in response to customer needs..
  • Leverage customer information to promote and cross sell. Everybody likes a deal, but everybody loves a deal that is relevant.
  • Gain new customers by modeling what does and doesn’t work for current customers (the loyal, frequent, high margin customers you want) and targeting prospects who behave in similar fashion
  • Foster Evangelism by providing a voice and outlet to brand evangelists. Bulletin boards, blogs, and product comments provide a voice to just those customers you want heard..

If you aren’t interacting with your customer regularly, chances are they’re going to find an alternative place to buy. Why is that a foregone conclusion? Because both customer needs and your company’s offerings are in constant motion, so you you either grow together, or you grow apart. The only way to know how customer needs are changing (and therefore change your offering in response) is to interact with your customer. And even for multi-channel retailers, online interactions are far less costly to initiate and measure. Find a way.

No Parking, East of the Mississippi

Published
by
David Thiel
on February 7, 2007
in Site Building
. 0 Comments

A slight tangent, but a good example.   “South of Here” places some pretty tall constraints on this No Parking sign. (Not to mention that because its a separate sign, it’s not clear whether it’s part of the other communication or some other indicator.)

Which way is South? This point of reference is a difficult one for the user to interpret (without a compass) and creates a fair amount of skepticism in the sign. Side effects include disbelief (is this sign a joke? or simply invalid?) as well as stunned confusion at what do do next. Lastly, I’ve never seen a sign like this before (or since) which further calls its validity (or verity) into question.

Online stores do this to users all the time.  Why?  Because they often don’t test their sites on anyone other than their own CEO.

Decisions, notifications, and decorations are made on web sites all the time — and many only confuse the user and confound the purpose of the site and the process of selling.  The cost of confusion is too high..  Make a user feel stupid, and their sure to never come back.

Make your points of reference relevant to the customer and they’ll find you an easy partner for their purchasing.