Archive for September, 2010

The Power of Personalized Online Ads

My friend and colleague Andy Dunn was struck yesterday by the extreme personalization being done by Zappo’s, the now Amazon-owned shoe retailer. Andy had been checking out sneakers at Zappo’s and then left without buying.

Later, thanks to Zappo’s remarketing campaigns across a broad swath of third-party websites, Andy began seeing Zappo’s display ads everywhere — and the ads cycled dynamically through images of the very same products he’d been browsing at the Zappo’s site.

Dotomi, an ad platform, claims personalized remarketing campaigns like these can lift response 34% when compared to ordinary ads not customized to individual users. Dotomi and others have rolled out a slew of personalized products including direct text messaging, ads that address the shopper by name, and other tactics that might make George Orwell roll in his grave, but which many online merchants just love.

For merchants interested in learning more, the DMA is sponsoring a November 3 webinar entitled “The Future of Media Is Personal”, in which Dotomi COO and CMO Ken Treske will talk about the power of personalized remarketing ads and other media tailored to specific web users.

The Future of Media Is Personal

ROI of Online Chat and Click-to-Call

From the beginning, ecommerce changed the fundamental math of business. With a website, any merchant can scale rapidly without investing in bricks and mortar. He can ship anywhere, he can thinly (or virtually) stock an infinite inventory — and he can receive orders 24/7.

But online retailers long ago discovered that the passive and massively-scalable nature of the web carries with it some disadvantages, too. Chief among them is low conversion rate. Tens of thousands of shoppers anonymously hit your site day and night, but self-service shopping doesn’t work for everyone. Estimates of average ecommerce conversion rates vary widely, but let’s call it 3%.

Two other channels — telephone and online chat — offer much higher conversion rates. Telephone call centers, for instance, can convert 50% or more of callers to customers.

Can adding these features to your website help you close more sales?

To answer that question, Forrester research and ATG recently teamed up to measure the impact of adding Click-to-Call and Online Chat features to a website.

The 24-page study, entitled “The Total Economic Impact Of Click to Call And Click to Chat“, aggregates the results of six large online companies (three retailers and three leading airlines), to measure the cost and ROI of these contact methods.

Among the findings:

  • Orders associated with these two contact methods showed 19% to 23% higher average order value than self-service web orders, thanks to call-center and chat agents suggesting accessories and cross-sell items.
  • 88% of customers using these methods would have given up on their orders without help from an agent. 12% were “cannibalized,” i.e. they would have completed their orders online without help from an agent.

Click to Call

  • 0.4% of all visitors accept (proactive) or initiate (reactive) Click to Call.
  • 80% initiate the chats by clicking, while 20% accept a proactive invitation
  • Web conversion rate was 3%
  • Proactive click to call conversion rate was 27%
  • Reactive click to call conversion rate was 19%
  • Average order value increased 23%

Online Chat

 

  • 1% of all visitors accept (proactive) or initiate (reactive) Online Chat.
  • 70% initiate the calls by clicking, while 30% accept a proactive invitation
  • Web conversion rate was 3%
  • Proactive click to chat conversion rate was 40%
  • Reactive click to chat conversion rate was 22%
  • About 4% abandoned an online chat
  • Average order value increased 19%

For any organization considering these services, the Forrester/ATG report also does a nice job of modeling the start-up and ongoing costs, both for technology and staffing. Forrester projected an ROI of 334%, and a payback period of 1.1 years.

And it’s worthwhile to note that Forrester’s numbers are based on enterprise-class technology scaled for big companies. Here at Timberline, we know that small to mid-sized companies can speedily deploy affordable chat and call platforms like Instant Service and Live Person with little more effort than pasting some well-placed lines of Javascript. Our friends at The Scooter Store Online, for example, use Instant Service to great effect, to help convert leads for power mobility scooters and other mobility aids.

The cost of these customer-contact channels is attractively low, and now the ROI has been compellingly shown.

Timing is Everything

With the kids back in school and the leaves starting to turn, online merchants are obsessing about Holiday readiness. It’s the time of year when we carefully schedule all our email campaigns for the next three all-important months. Merchants are coordinating online and social-media campaigns, catalog drops, and in-store events. Time is of the essence.

But timing isn’t just a Q4 priority. In June I was lucky to speak alongside Steve Elkins, coowner of WEBS Yarn.com on an Internet Retailer panel. Steve spoke convincingly about the importance of being the first on Adwords, all year long, with each season’s product-specific yarns. They’re one of the country’s top sellers of knitting yarns, and it’s crazy long-tail search terms like “Viking of Norway Balder Chunky” (dude, I couldn’t make this stuff up!) which spike with high search volume and excellent conversion the very moment they’re released.

Also on our IR panel was Jeff Pape, owner of Wrestlinggear.com, who had another take on timing. WrestlingGear.com specializes in headgear, singlets, shoes and other stuff for high school and college wrestlers. Jeff studied the day-of-week and time-of-day reports for all his sales on Adwords, and found that a large portion of his transactions occur after normal business hours. That’s because many of his customers are kids waiting for after-dinner hour to get Mom and Dad’s permission — and credit card! — to snap up the latest cool custom shoes.

Jeff targeted some of his budget to those off-peak hours. Ironically, many of his rivals have already exhausted their daily spend by that time — so Jeff had the place to himself.

Dinn Brothers in West Springfield, Massacusetts is America’s largest maker of trophies and awards. A multi-generation family business, their focus changes with the sports seasons: In Fall, it’s all about football trophies and soccer trophies. When the season turns, it’s all about the current sports and activities. Even non-sports awards like academic plaques and debating trophies have their day.

Every retailer has her busy season: gardening seed and supply companies, gift companies, apparel retailers. The trick is to plan ahead for season-specific campaigns:

  • Website design and merchandise refreshes. Every site needs a “new” section!
  • SEO pushes: SEO is a slow-acting process, so DON’T take your out-of-season pages offline if you can avoid it! You want these to rank well and be ready ahead of time for seasonal searches when they emerge
  • Paid search campaigns: Don’t get caught with last-year’s bid when this season (and its inevitable click-price inflation) hits

Gatorade’s Social-Media Command Center

Gatorade Mission Control is a slick, glass-walled room glowing with the light of six huge, wall-mounted monitors. Other monitors and workstations cover a single curved desk, where as many as five marketing staffers keep their eyes glued to Gatorade’s place in the social media conversation, in real-time. One monitor charts tweets referencing the Gatorade brand and trending topics. Another shows several line charts tracking blog mentions of Gatorade as well as three rival brands.

The displays, custom designed for Gatorade parent company PepsiCo by IBM and Radian6, are visually impressive. But are they helping the company manage?

Gatorade’s Carla Hassan, senior marketing director for consumer & shopper engagement, answers an emphatic yes. For instance, she told Mashable’s Adam Ostrow that in monitoring response to its “Gatorade has evolved” campaign, Mission Control quickly saw heavy social media buzz developing around a song by rap artist David Banner. Within 24 hours, the company had worked with Banner to release a full-length version of the song, and distribute it to Gatorade followers and fans on Twitter and Facebook.

Gatorade’s tools are being used to tailor websites and landing pages to its top performing topics and videos, based on social media conversations. As a result, the company increased engagement with its videos by 250%, and reduced landing-page exit rate from 25% to 9%.

I’d also suggest that merely establishing a command center highlights the importance of social media within a business – making it more fun, more engrossing, and more likely to percolate into the culture of the company as a whole.

Hassan says the goal of Mission Control is to “take the largest sports brand in the world and turn it into largest participatory brand in the world.”

To that end, Gatorade isn’t just monitoring the conversation, but participating in it as well. The company hosts events on Ustream and Facebook in which a sports nutritionist answers questions from fans. During the 2010 Super Bowl, Gatorade invited fans to interact with some of its NFL stars through Ustream, as they tested the new Gatorade G Series Pro drink.

If successful, the Mission Control strategy is likely to spread to other businesses within PepsiCo, according to Bonin Bough, director of global social media at the company. “We believe what we’re building here is an example of a sandbox of tools and processes we can use across the organization.”

Check out this video of Mission Control in action. If you’re a social-media geek worth your salt, you, like me, will want one of your own!

 

5 Powerful Tactics for E-commerce

Okay, time for Tom Funk to take a deep breath. I’ve spent the better part of each day since September 8’s introduction of Google Instant, panicking, gnashing my teeth, tearing my hair, rending my garments and dodging chunks of falling sky.

Search is an important source of lifeblood to any commercial website. Until now, I’ve always felt Google did an exemplary job in letting relevant results, from little guys and big guys alike, bubble up to the surface of search.

Now, Google Instant and its predictions bias search against the long-tail, against the little guy. We now have less a web of discovery, and more a web of trend-following, big-name brands, and some repetition of your personal user history. Google Instant is the tyranny of the majority, where nobody finds anything without seeing a little eBay, Facebook, or Lady Gaga first.

But it’s time for me to look beyond Google Instant for a moment, and recognize what matters most to ecommerce marketers and site owners. There’s plenty of stuff we can control. Let’s stop fretting about what we can’t.

1. Brand positioning. Visitors coming to your site from whatever source must immediately “get” — both through the look-and-feel and from a clear “positioning statement” or slogan — who you are, what you do, and why that’s a benefit to them.

2. Guarantee. Offer a strong, unconditional guarantee, be conspicuous about it. Stand behind it. It’s a selling point, not some hidden legalese boilerplate.

3. Checkout optimization. Shop your own site with an eye toward removing roadblocks, eliminating unnecessary forms and fields, cleaning up the look, adding confidence-building logos of your security, shipping and credit card partners. And enable a friendly, low-key abandoned cart email program.

4. Testing. Use Google Website Optimizer to test any significant offer, merchandise selection, navigational or design element. You’ll not only prove that your ideas were awesome, you’ll quantify just how awesome they were. Or, as is often the case, you’ll prove some ideas just don’t move the needle. No worries. That’s valuable too. Imagine you find that a $10-off deal doesn’t lift conversion any better than a pitch that emphasizes five-star customer ratings, which doesn’t cost you a nickel. Cha-ching!

5. Customer retention. Far more important that how much search-engine traffic you can capture, is what do you do to convert visitors to customers — and to build a long-term relationship with those customers so they come back to buy again and again. Today’s best tool for retention is still a generous, creative, and smartly segmented email program. That’s been the case since the dawn of ecommerce, and some 89% of merchants still say email is their highest-ROI channel. But social media is fast becoming the new customer relationship channel. If you’re not active now on Twitter, Facebook, Foursquare, Groupon, and wherever else your customers are spending their online time, your customer retention efforts are behind the curve.

Full disclosure: I’m a Google shareholder. Yup, I have 10 bright, shiny Google shares. So I’ll totally be at the annual meeting in Mountain View, doing the secret handshake with Larry, Sergey, Eric, Matt, Marissa, and the rest of the gang.

But even with that massive financial conflict-of-interest, you can always count on me to be 100% objective in my assessment of Google.