Tom Lindmeier’s Blog @ MarketPlanB

Ecommerce marketers typically take a closer look at the promotion strategies of competitors during the 4th quarter holiday season because aggressive competitors may steal a substantial portion of business with the right offers. This is also true during economic downturns as marketers struggle to achieve revenue targets and are willing to give up margin to maintain market share and move inventory. Some will strive to take advantage of the downturn with the purpose of dealing fatal blows to weaker competitors.

The cruel reality for retailers is that unless you own a vertical market, you’ll need to get very aggressive and give up margin because that is exactly what the competition will do. Don’t delay because the competition is most likely eating your lunch right now. Or you can hunker down, lay off employees, cut expenses and hope things will turn around soon.

If you’re thinking about rolling out the free shipping offer again you may want to re-evaluate. It is typically the most expensive offer with the toughest ROI of your available options. Now is the time time to get creative by offering a diversity of awe-inspiring promotions and increasing your ad spend. You need to be different enough to separate your business from the competition and the standard free shipping offer may not do the job right now.

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This article is dedicated to all the entrepreneurs who direct the day-to-day projects required to build developing e-commerce businesses.

I know you may have a task list that goes from here to eternity and nowhere near the amount of resources available to realize your vision. But those who prioritize with strategic vision have a much better chance succeed. If your tactics are not guided by strategic vision you will fail. That’s why we need to go back to kindergarten every day and ask these very basic questions.

• Is your web presence truly different and inspired? Get different and stop following the herd. The trouble with consultants and “experts” in web design is that they can often guide everyone in the same direction. E-Commerce is still a relatively new channel that hasn’t fully matured and most sites lack an inspired branding component. Gain inspiration from mature channels such as print and television and adapt them to your site. Branding opportunities that offer true differentiation are still readily available in the web world.
• Is your site sticky enough to keep ‘em coming back? Your customer acquisition efforts are a waste of resources if you can’t convert with efficiency. Go back to to square one and get it right if acquisition marketing does not convert.
• If you are converting prospects, now may be the time to bring in the expert vendors to ramp-up. You’ll get traction sooner and you can bring it in-house later to gain efficiency.
• Don’t defer to the geeks. Just because they are tuned into technology and can make you feel inadequate is no reason to let them steal the show. They can push you towards tactics that direct you away from your strategic vision.

Here’s an important qualifier. The geeks are your best strategic partner if you ride them like a bucking bronco. Harnessing the power of geekdom can provide the ultimate insights in the development of your strategic vision.

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The process of ecommerce testing can be a very labor-intensive when you don’t possess the tools to automate the process. The marketplace has come to the rescue by providing the necessary resources and technologies. Optimost and SiteSpect are a few of the respected vendors. The Google Website Optimizer is a free tool for testing landing pages.
Direct marketers refined the science of A/B testing 50 years ago and we need to pay attention to lessons they have learned. Unless you are controlling the demographics of your samples, the absolute minimum sample size is 5M per segment with 20M to 25M being the standard. The reality is that unless you are a top 200 e-commerce site, you may not have enough page views to engage in statistically valid multivariate testing. The alternative is that you may have to run your tests for 6 months or a year or restrict testing to A/B.
My concern is that in the process increasing the universe of potential clients, some vendors are not accurately stating test sample minimums. Google states that you need 1M weekly page views to engage in multivariate testing. This is pure folly. If you test 1M page views and then retest, I can guarantee that you will get a different result. Also, if you have a seasonal business (most do), skewed results are compounded.
One can make the case that statistically invalid testing is better “guessing” to what drives e-commerce conversion improvements. If you see gains that are greater than 40%, you have a reason to pick a winner. However, a 10 or 15% gain will most likely not fall within the range of error.
The unfortunate truth is if you are a small or medium size e-commerce business, you do not have the capability to engage in a truly robust and prolific testing program. You are limited to fewer tests over longer time periods.

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Here’s a little food for thought on the power of a smile. I was tuned in to the subject by reading Smiles Really DO Boost Sales by Roger Dooley at NeuroscienceMarketing.

Offline retailers teach and encourage sales and service personnel to smile because of the conventional knowledge that it is effective. Advertisers have also leveraged this concept by portraying the smiling faces of happy people who celebrate life as the standard formula for creative development.
But with all these laughing people, it becomes difficult to differentiate your brand when everyone is happy and having a good time. This has resulted in some interesting developments when marketers attempt to raise the bar:

1. A proliferation of advertising that is nothing but a great joke with memorable visuals (gets noticed but there is a lack of brand recall).
2. Advertising that is positioned to be not happy or humorous so it can differentiate. This is typically used for upscale brands with imagery of beautiful people dressed in black who are exiting a Mazaratti before entering a seaside mansion. These people never smile except for an occasional upturn of one corner of the mouth when they are bemused.

This causes me to assert that there is a media generated perception of two types of people.

1. The common mass of humanity that whoops it up all the time.
2. The uncommon folk who are very cool, affluent and sophisticated. Snooty people are apparently not a happy lot but they don’t care because the masses are jealous of their affluence.

Online marketers don’t need to deal with this silliness because the bar is yet to raised in this channel. Most websites don’t smile at all (I performed a random check of 10 websites found 2 smiles) and are thus missing out on the easiest and most basic branding and conversion tool available. Unless you have a reason not to smile, I suggest you get cracking. Here are a few suggestions:

• Place a smiling photo and quote from your spokesperson or president on your home page.
• Incorporate models to demonstrate your widgets.
• Find opportunities to insert smiling imagery into your non-product pages.

By the way… Why do the photos and avatars of marketing bloggers lack a smiling face? Is it the perception that people who smile are not as sophisticated as those who don’t? I suggest that you get over yourself and post a a new photo with a smile.

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Once you make the decision to redesign your website, it seems that everybody in your organization wants to get involved and join the committee because this is fun stuff. This is both good and bad. Good because there is value to insights from different points of view, bad because the process of collaboration can muddy the waters and bring implementation to a grinding halt. It’s too easy to plan a redesign that goes far beyond the intended scale and consequently results in a blown budget and time line. Worse yet, poorly managed collaboration will prevent great results.
So how we do we collaborate, create a great website and not miss our deadline by 6 months?

1. Add 6 months to the schedule (just kidding). But if you’ve never gone through a redesign and you’re constructing a time line, build as much wiggle room as you can get away with. You need to plan for a fluid process that allows changes in direction.
2. Objectives are king. If tactical proposals interfere with the objectives, they are not considered unless an agreement is reached to change the objectives.
Here’s a sample list of objectives:

• Improve the depth of user experience while maintaining speed and ease of use
• Streamline the checkout process
• Enhance the user profile process for behavioral targeting
• Allow more comprehensive merchandising opportunities in the navigation and site search
• Improve the branding experience while maintaining speed and ease of use
• Build a more comprehensive administrative tool that frees the programmers from updating the site
• Complete on time and within budget

This is a simple concept that most managers understand, but there is a good deal of subjective decision-making that makes it all the more important to cite the “objectives are king” mantra and follow through. A good way to deal with tactics that fall outside of the objectives is to list them as enhancements to be considered at a later date so participants don’t feel inclined to sabotage the process.
3. Keep a core group of no more than 3 individuals to engage in the day-to-day decision-making and limit access to the remainder of the group while keeping them informed of progress on a week-to week-basis. The process of building wire-frames and design of the look-and-feel needs to remain within this small group. If the President and VP’s are part of your committee, you may want them to examine the design before it’s forwarded to the engineers to avoid blowing your budget. Seth Godin also addressed this issue with a different bent in his article How to Create a Great Website.
4. Go ahead and invite the committee, key vendors and experts outside your organization to participate. Just make sure they’re in the front-end of the process. Then they need to go away until the user testing phase.

5. Expect that user testing will expose an enormous list of problems and additional demands for more features. If you don’t have a thick skin, you’ll need to get one. The ability to manage criticism at this point will make or break you. Prioritize the list into 3 categories: 1) Must fix now, 2) Enhancements for later, 3) Sorry, we’re not going there. Do the must fix now and get on with implementation. You can come back always come back and tweak after you go live.

I invite you to share stories on site designs.

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Here’s the media center interview about the site redesign I developed at Junonia that was shot at Internet Retailer in San Jose. I think it went well except that I paused with an “ahh” about a million times. You’ll see the reference on the right navigation under Junonia and “Tod” Lindmeier (misspelling).
Follow this link: http://www.internetretailer.com/IR2007/media_center.asp This will not not open the video, you’ll need to select the link to view it.

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When I started to engage in behavioral targeting several years ago, I was quite wary because I had seen so many instances of bad execution. (This topic is in primarily reference to “on-site” targeting, not media buys). Customized messaging based on user activity metrics is a fantastic tool if you are providing value. If you are not providing value the negatives will irreparably damage your customer relationships.

So here’s my list of the three worst mistakes…

1. Collecting consumer information without permission is a sure-fire way to get trashed. You need to build an opt-in program and provide full disclosure of your privacy statement. Don’t even consider a program that is not permission-based.
2. The value of “You purchased this, therefore you may want to buy this” is dubious. Cross-sells and related items when users are on the site are highly effective. But if you return later with product recommendations you are likely out-of-context and therefore more likely to annoy rather than provide value. Case in point: I purchase textbooks for my daughter on Amazon.com. I have been receiving silly book recommendations related to her text books for some time now.
3. “Let me know when this item is on sale.” You need to focus on closing the sale now. If your merchants or product managers find out you’re doing this, they will kill you for degrading margin. Notification of sales and other promotions via RSS and email works, but don’t apply on-site targeting to individual items at the time the user is on your site.

The good news is that improvements in technology and best practices have made behavioral targeting a very lucrative tactic. Enormous co-op databases are waiting to be tapped. Depending on your product line, tactics that focus on 1st time visits, cart behavior, geographic, page views, time on site, and item back-in-stock will likely work for you.

My recommended vendor: Sitebrand.

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An article by Dori Molitor in The Reveries titled Ka Boom Ka Ching speaks to the power of the most powerful demographic: female boomers.

“Boomers are the largest, the wealthiest, the
highest spending, and the fastest growing segment
in the U.S. In the next ten years, the 50-plus segment
will grow by 96 percent, whereas the 18-49 age
segment will remain essentially flat.
In terms of sheer numbers, this 50-plus age segment
represents an opportunity. More importantly,
it controls all the money — 70 percent of U.S. net
worth, 50 percent of discretionary spending, and they
spend 2.5 times as much as younger consumers on a
per capita basis.
And yet, marketers are fixated on the traditional,
25-45 year-old head-of-household, with 1.2 children.
By and large, they see the 50-plus market as “old
geezers.” As a result, a generation of 80 million people
is under-served and misunderstood.
The overwhelming majority of boomer spending
power resides with women, who make 80 percent of
the purchasing decisions.”

Keeping this fact in mind, I did some research to determine if there is any quantitative research on the online purchasing behavior of female boomers and came up empty. This is very potent data that E-commerce marketers could use to drive conversion. My instincts tell me it’s much more powerful than the Yahoo study on “Passionistas”.

Note: I did find one study from Jupiter Research on European Baby Boomers, but it was not entirely relevant.

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There was a very intelligent discussion on Cord Silversteins blog titled Engage Your Customers or Die where he asks the question: “Is it a good thing for companies to try to engage their customers online? Does the good outweigh the possible repercussions that could come from it?”. The repercussions were defined as the big bad things that can happen if you do not handle every instance right.

If you read my previous post on the Invisible Visitor, I maintained that that the route to understanding our customers is engagement. Once they become visible, you are then positioned to make strategic decisions that result in major marketing breakthroughs. So the question is not “if” you should engage but rather “how”.

I struggle to understand why some businesses come to fear their customers. Any business with even the best service standards faces an onslaught of touches with customers who have problems. This constant exposure to negatives is the only reason I can come up with for this fear. Yet these same businesses understand that turning a negative into a positive is one of the best ways to to create a loyal customer. The dedication to pursue this strategy is no easy task and requires a major commitment. Maybe this fear is just a manifestation of the weariness that comes from accommodating customers with what may seem to be unrealistic expectations.

Here’s my list of engagement tactics ranked by the quality of actionable information:

1. Requests for email input on your home page and other locations in your site
2. Blog within your domain
3. Reviews
4. Online chat
5. Search and response to blogs and portals outside your domain
6. Post-transaction online surveys
7. Post-product delivery email and package insert surveys
8. General surveys to email customer base with and without incentives

Note that tactics that are “open invitations” receive the highest quality rating. General surveys are preferred by most businesses because it makes it simple to quantify data, but they are of questionable value because they do not capture fresh information. Also, users want to be in control and do not prefer to respond to your controlled format.

I have received the best quality information with the open invitation to email. Junonia.com does a wonderful job of this by posting an invitation to email the president right on the home page. This results in a large quantity of responses and it requires a lot of effort on her part to respond in a timely manner. There is also a good deal of effort that goes into distributing it throughout the organization. But the quality of this information is invaluable and because it gets you closer to understanding your customers than any other method.

The solution to building forums that work is to define the proper set of expectations that narrow the focus to product and refer users with transaction problems to customer service where issues may be resolved in a more timely manner. For instance if you build a blog, you’re much better off inviting users to engage in the product development process.

Does your experience differ from my assertion?

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In my previous article titled 3 Guaranteed Methods for Driving Conversion I highlighted the need to cover a wide variety of user preferences. Users gravitate to specific shopping methods and will not necessarily use the best or efficient means to complete a transaction. The list I provided was a list of basics that you need to get right before proceeding with other programs because the ROI is guaranteed.

Where do you go next? The next step is to classify user preferences that are unique to your business by examining paths to conversion in your analytics. Typical classifications may look like this:

• Efficiency shoppers– use navigation and search features to quickly process a transaction and may be receptive to more robust features.
• Browsers– have a tendency to click-thru many thumbnails and may be more receptive to suggestive selling.
• Investigators– have a tendency to click-thru many pages and need plenty of information to gain confidence for a purchase.
• Socializers– have a tendency to visit non-product content and use send-a-friend features, e-mail, reviews and blogs to share information (typical profile for drivers of user-generated content).
• Digiphobics– users who distrust ecommerce, have minimal computer skills and are more likely to complete a transaction over phone or fax.

By analyzing these types of segments, you will have a much better understanding of where to get bang for your buck when allocating your marketing investments. For instance, if your demographic has a high percentage of Digiphobics and you are pursuing a viral marketing program, you may want place more emphasis on off-line tactics rather that jump on the Web 2.0 bandwagon. You also need to keep in mind that you may need to approach this as an analysis of untapped segments because your analytics can only measure what exists on your site. In this case, a competitive analysis of user types is in order.

I’d like to compile comprehensive list of user preferences to share at a later date. Please comment and add to this list.

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