Archive for October, 2007
Toys ‘R’ Us Scares Away Customers, Giraffes
Remember those commercials from the 80’s (”I don’t wanna grow up, because if I did, I wouldn’t be a Toys ‘R’ Us kid”)? Well, a lot of those kids grew up to be parents — and the thrill, as they say, is gone.
In our upcoming 2007 Online Customer Focused Excellence Study, ToysRUs.com fared well below average. The study, which tracks 300+ online retailers, found several giraffe-sized disconnects in the customer experience; things that seem inexcusable for a click-and-mortar retailer with the budget and brand recognition of Toys ‘R’ Us. And with the holiday shopping season upon us, the company presents a feeling of doom for many parents who’ve come to rely on the store to pacify beloved, nagging children.
But they’re not just making things difficult online. Toys ‘R’ Us has a fundamental business problem. They’re scaring customers away — and not just because it’s Halloween. Joseph Jaffe explains the disconnect:
See, here’s the problem. Toys R Us spends all this money on silly 30-second spots with talking giraffes designed to “persuade” kids to nag their parents to take them to the store, but the stores themselves are largely warehouses, void of life, talking giraffes and any experiential quotient whatsoever. If you’ve ever set foot in a Toys R Us, you’d know exactly what I’m talking about.
[…] Here’s the scary part. From what I was told, this (customers returning toys without gift receipts) happens roughly 12 times a week and when it happens, it’s typically Dad doing the returning; it’s typically on a Saturday and it’s typically a shouting match that ends in frayed nerves, expletives and threats never to set foot in a Toys R Us store again.
Try and do the math. 12 x 52 = 624 x 836 (according to the number of stores in the US) = 521,664 unsatisfactory returns per year.
But wait, there’s more….
Now attempt to factor in “lost revenue” associated to a) frequency of transactions (conservative guesstimate of 4 x a year), b) dollar value of average transaction (let’s say $35) and c) word of mouth (let’s say an ultra-conservative pre-social media factor of 15), and you might just be looking at a number of $1.09bn which is either in play or at risk. fyi - Toys R Us’ 2005 revenue was $11.28bn, so my numbers aren’t exactly Monopoly (or Linden) equivalents.
The sad thing is that the staff at Toys R Us really wanted to help me, but “their hands were tied”. The real sad thing is that had a suit from Corporate been in the store (a sighting equivalent to Hailey’s Comet), they would have whipped out their “key” and saved the day on an ad-hoc and unscaleable basis.
Whether Jaffe’s math adds up is another story, but it doesn’t really matter. When you kick mothers out for breastfeeding, ruin kids bikes, let kids eat lead paint, and upset people by not letting them buy what you advertise, you’ve got a brand that clearly doesn’t wanna grow up.
Ahh, the good ol’ days…
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Written by:Robert Gorell
Warren Miller Loses His Edge Online
What if you had a business where you had a loyal and engaged community of fans, where people were dying to say good things about your brand, but you decided it wasn’t so important to cash in. How would this strategy work for your business? (Let me know how that works out for you.)
If you’re an avid skier who lives in North America, like me, you’ve probably seen a Warren Miller film. He was one of the first to harness ski culture enthusiasm for commercial purposes — way before the Internet.
For years, I’ve been a big fan. I hadn’t seen any advertising for this year’s Warren Miller film, but — knowing that it just wouldn’t be a ski season without one — I was proactive about not missing a second year in a row. I don’t watch much television and I rarely listen to the radio, so unless I’m lucky enough to see an ad for the film, it’s easy to forget. Luckily, I went online to see when and where his film would be featured and was able to buy my tickets directly from his site.
Warren Miller’s loyal fans are passionate about skiing and snowboarding. His crowd acts differently than most moviegoers. It’s a bonding experience between strangers who are all there for the same purpose; they’re looking for an adrenaline hit from powdery, snow-covered mountains. Everyone is very vocal and outwardly excited, sharing the experience that gets them stoked for the upcoming season.
Still, I’m left scratching my head. Why didn’t they collect my email address when I purchased my ticket online? Had they specifically told me that they’re collecting my information in order to inform me when next year’s film will be released, I would’ve been perfectly happy to cough up my email address. After all, I would rather not have to think about when the Warren Miller flick is playing next year. They would be doing me a favor by telling me when and where it’s playing in my area, and just letting me click to purchase directly from an email.
Something I found interesting at this year’s film was that the majority of attendees had pre-purchased their tickets. In fact, there was hardly anyone purchasing tickets at the box office. Each year, and at every screening, the audience receives a free (or discount) ski pass to the local resort. But this year, the tickets weren’t handed out at the event. Instead, the audience was given a piece of paper with a ticket number where they were asked to go online to redeem their free pass.
Wouldn’t this be the ideal opportunity for the Warren Miller team to collect email addresses with the sole purpose of nurturing their loyal customers?
By the way, the film rocked! It wasn’t the best year ever, but it definitely pumped me up for what’s ahead this winter. After seeing the flick last week, I purchased my season pass at my local ski resort. I may even want to purchase the DVD when it comes out. Too bad they didn’t collect my information. I’ll probably forget about the DVD and I probably won’t be proactive enough to buy it later on when I’m skiing (read: not just daydreaming about skiing). If I received an email about it when it comes out, chances are they would make another sale. This is why it’s often a good idea to ask for an email address after you’ve made the sale.
Oh well. Maybe they’ll catch on next year.
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Written by:Melissa Burdon
Dell Loses its Marketing Scents
What if you knew exactly what visitors were looking for when they came to your site. Say they’ve even told you the exact model they’re looking for. All they want is to get some details about this product and possibly make a purchase.
Pay-Per-Click (PPC) ads allow you to know the directions visitors are heading, and can help you plan and optimize the experience in order to guide them along their buying process. PPC gives you a great advantage by allowing you to bring the visitor directly the thing they’re looking for, bypassing obstacles that may prevent them from even finding a product directly from your homepage . The more you know about your customers’ needs, the easier it is to fulfill them. Although most e-commerce shops run PPC campaigns to some degree, most get hung up on the search and keyword element of it, and forget that this is really about eliminating steps for the customer. As a result, they end up losing out on a lot of revenue.
Being #1 is not enough…
If you think this isn’t just as much a problem for big-time e-tailers, with huge marketing budgets, think again. The paths that customers follow are called “scent trails,” and precious few online shops seem to know much about them. For instance, check out this search results page for the term “Bestbuy Sony dsc w80″.
Dell has cleverly bought a PPC ad for this term in hopes of intercepting a few sales from the competition. But take a look at where they bring you when you click the link (and, remember, they’re paying for this to be at the top of the page). The product that was searched for is nowhere to be found. They already know exactly which product the visitor is looking for. All they have to do is bring this person to the product page for the item — or at the very least, show the customer that they do in fact have this item by placing it clearly within the active window.
The landing page disconnect…
If you’re paying for PPC ads, you need to get your money’s worth by bringing the visitor as far as you can, given what you already know about their needs. With the right keywords, you already have some information about what they’re looking for; you might as well make it as easy as possible for them.
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Written by:Daniel McGuigan
“Do Consumers Care About Online Privacy?”
One might think that’s an obvious “yes,” but not necessarily, according to Advertising Age. In fact, there’s a good deal of confusion as to what online privacy actually means.
“Consumers fundamentally misunderstand the rules of the marketplace,” said Chris Hoofnagle, senior staff attorney at the Samuelson Clinic at UC-Berkley’s Boalt School of Law, addressing a perceived apathy toward the subject. He cites studies in which up to 75% of consumers think as long as a site has a privacy policy it means it won’t share data with third parties. “They equate the presence of the policy with substantive privacy rules.”
How does this apply to your business? First of all, make your privacy statement clear and concise, e.g., “We value your privacy,” “We will not share your personal information — ever.” It’s also important that the trustmarks you use actually mean something to the customer (Bryan recently showed BizRate as an example).
Still, the need for brands to inspire confidence online is as vital as ever. (You may have noticed we’ve been covering trust issues quite a bit lately.) The latest evidence: McAfee’s plan to acquire ScanAlert for $51 million in cash.
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Written by:Robert Gorell
How to Make a Billion Dollars in Your Underwear
A few months ago, we blogged about Markus Frind, a lone entrepreneur and founder of the popular dating site PlentyOfFish.com. On a panel interview with Guy Kawasaki (watch it here if you’ve got 30 minutes), Markus claimed that he was his only employee, and that he basically spends a couple hours each day maintaining the site — that’s it — in his underwear.
Fast forward to yesterday, when Read/Write Web’s Richard MacManus caught up with the entrepreneur, who’d just hired his first employee. Apparently, the site may now be worth a billion dollars — billions, maybe. (And hey, if Microsoft thinks Facebook’s worth $15 bills, why not?) Says MacManus:
Markus told me that per page view, Plentyoffish has 5-10 times the click through rate of Facebook. So by his calculations, POF’s 1.2 Billion page views per month is the same as 5-10 Billion Facebook page views per month. Facebook “only” generates 40 billion page views a month and yet it has a $15 Billion valuation. But the crux of Markus’ argument is that despite having about 33 times the monthly traffic of POF, Facebook’s poor click-through ads should bring the valuation models closer. Markus said that “over 40% of Facebook’s pageviews are image related, ads in bad positions and users just generally looking to waste time.” He said that “there are only a handful of sections on the site [Facebook] that will generate good click thru rates for advertisers.”
So getting down to nitty gritty metrics, Markus concluded that “Facebook is only able to generate 10 to 15 times as many clicks on ads as my site and it’s valued at 15 billion. Needless to say I’m watching ad supported business model valuations very closely.” What’s more, some of his direct competitors - e.g. Eharmony and match.com - are apparently valued in the billions.
Kind of amazing how a cheap-looking site with virtually no overhead, aside from server costs, can be worth billions.
Whether or not you believe in these fishy valuation schemes, it’s still pretty cool, isn’t it? Here’s a guy who’s only invested in the things his business requires. Oh, and he’s clearly more focused on ROI than his competitors.
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Written by:Robert Gorell
Unlocking Key Performance Indicators: Order Acquisition Ratio
Now that we’ve taken a look at Take Rate and Bounce Rate, it’s time to look at another very important metric: Order Acquisition Ratio. Simply put, this performance indicator is used to measure the effectiveness of your marketing.You’ll need three numbers to calculate your order acquisition ratio:
1.) Visits to your site
2.) Number of orders placed
3.) Total marketing expenditures (which can include fixed costs associated with maintaining the site, but let’s focus primarily on marketing expenses)*
With these variables in mind, we will get two contributing metrics with which to calculate order acquisition ratio.
Cost per Visit (CPV) = Marketing Expense / Visits
CPV measures how much you’re paying to attract each single visit to your site.
Cost per Order (CPO) = Marketing Expense / Number of Orders.
CPO tells you how much you’re paying in terms of marketing budget to get a visitor to your site who converts and becomes a customer. This is directly related to your Conversion Rate.
Order acquisition ratio is then calculated by taking the CPO and dividing it by the CPV.
Order Acquisition Ratio = (Marketing Expense/Number of Orders) / (Marketing Expense/Visits)
It should be a positive number (if not, you’re in trouble). The lower the ratio, the better your marketing budget is being used. Some of the best ways to lower OAR include:
- Boosting conversion! Increasing conversion lowers your CPO. Since conversion is the website’s primary goal, there are literally thousands of factors that affect conversion. (Conversion is so important to online health and wellness that improving is integral to everything we do for clients.)
- Improving organic search rankings with relevant content. When you spend the time and money to create relevant content, the CPV and CPO should both drop — and you’ll further lower CPO by converting more visitors.
- Targeting quality traffic sources. In your analytics, segment your site’s incoming traffic by source in order to identify where to put those marketing dollars. (Bounce Rate is a great starting point for this.)
- Optimizing PPC campaigns. With an effective PPC campaign, you’ll be able to convert more visitors. While this will increase your CPV, but when done correctly, it will yield a larger decrease in CPO by converting a higher percentage of traffic.**
Order Acquisition Ratio is based on more traditional bored boardroom metrics because it has a close relation to traditional financial statements. It has nothing to do with “Web 2.0,” “Web 1.0,” or Facebook. So, it’s great for sharing with your boss since it’s directly tied to the bottom line. There’s even a cousin to this metric; a non-ratio, cold-hard-cash version of the Order Acquisition Ratio known as the Order Acquisition Gap. To calculate it, simply subtract the CPO from the CPV to get a negative number. This number shows how much money you waste in marketing dollars on visitors that don’t convert.
Order Acquisition Gap = CPV - CPO
There are other close relatives in this family of metrics, all of which focus on costs associated with generating new customers. To calculate these similar metrics, you’ll need to be able to track the same figures discussed above — except they need to be further segmented. Track the following numbers, and you’ll also benefit from a few additional metrics (listed in the bullet points below):
- New visitors to the site.
- Number of orders placed by new customers.
- Total new customer marketing expenditures.
With these figures you can see the effectiveness of your new customer acquisition efforts:
- Customer Acquisition Cost = (New Customer Marketing Expense) / (Total New Customer Orders)
- New Customer Cost per Visit = (New Customer Marketing Expense) / (New Customer Visits)
- Customer Acquisition Gap = (New Customer Marketing Expense/New Customer Visits) - (New Customer Marketing Expense/Total New Customer Orders)
- Customer Acquisition Ratio = (New Customer Marketing Expense/Total New Customer Orders) / (New Customer Marketing Expense/New Customer Visits)
[*Regardless of the expenses you include, it’s crucial to set a standard and stick with it in order to accurately measure and account for the specific impact of such changes.]
[**When monitering your order acquisition ration, never tolerate any increase in the cost per visitor without an accompanying decrease in cost per order.]
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Written by:Ronald Patiro
“Action” Missing from Online Ads? Be like Nike
Fed up with the state of online advertising, Denny Hatch wants to know “What happened to the final ‘A’ in AIDA?” Referring to the classic sales formula (Attention, Interest, Desire, Action), Hatch pours through several recent examples of advertising campaigns that aren’t accountable to minor details like, say, revenue.
So how does one go from AIDA to ROI (return on investment) without action? And isn’t there another important element for the consumer? How about “satisfaction”? After all, that’s what keeps customers coming back — and telling their friends — isn’t it? Assuming Hatch is right about the action bit, it seems there are really two letters missing.
A.I.D.A.S. — not to be confused with Adidas — is what Nike (NIKE) hopes to achieve with its Nike+ campaign. And apparently, it’s working. Last week, The New York Times ran a piece about Nike’s novel approach to customer relevance. By teaming up with Apple (APPL) and it’s ever-popular iPod, the company engages runners directly, allowing consumers to meet running partners and track their own results online.
”It’s a very different way to connect with consumers,” says Trevor Edwards, Nike’s corporate vice president for global brand and category management. ”People are coming into it on average three times a week. So we’re not having to go to them.”
The success of Nike+ is bad news for the traditional media companies that have long made money from Nike’s television commercials and glossy magazine ads.
Last year, Nike spent just 33 percent of its $678 million United States advertising budget on ads with television networks and other traditional media companies. That’s down from 55 percent 10 years ago, according to the trade publication Advertising Age.
”We’re not in the business of keeping the media companies alive,” Mr. Edwards says he tells many media executives. ”We’re in the business of connecting with consumers.”
Responding to the Times article, The Copywriting Underground’s Tom Chandler has some great advice on how to borrow some of Nike’s mojo and apply it to your own web copy. Maybe you can’t use “Just do it!” for your own campaign, but if you’re looking for a multi-channel role model, it may not hurt to be like Nike.
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Written by:Robert Gorell
Online Copywriting 101: The Ultimate Cheat Sheet
Blues icon B.B. King was once asked how he found his heart-warming, bone-chilling sound. “It’s simple,” he said. “I only steal from the best.”
After publishing more than 2 million words — online and print — we’re convinced that King was right. To become a good writer, one must first be a studious reader. (How else will you know whom to steal, er, borrow from?) So, in that spirit, we’ve compiled a list of some of GrokDotCom’s favorite Web copy resources in hopes that copywriters everywhere will steal the best tips from our colleagues, friends, and staff. Enjoy!
Writing Headlines
1.) “Headlines: Do You Really Need 200 to Land a Good One?” — Attversumption.com
2.) “Are Your Headlines Missing These Precise Psychological Triggers?” — Ezine @rticles
3.) “Top 10 Ideas for Testing Your Headlines” — GrokDotCom
Readability
4.) “Nobody Reads Web Pages — But Everybody Engages Websites” — American Small Business
5.) “The Secret of Writing to be Read” — Seth Godin
6.) “People Really Do Read Online — Who Knew?” — Marketing Interactions
7.) “Fight the Bull” — Bullfighter software helps to eliminate jargon from web copy
Customer-focused Copy
8.) Test your customer-focus ratio with Future Now’s ‘We-We’ Monitor.
Copywriting Techniques
9.) “Six Types of Words That You Should Axe in Business Writing” — Bizcovering
10.) “Going for Broca: Show Don’t Tell in Action” — GrokDotCom
11.) “Time vs. Money” — GrokDotCom
12.) “What is Substance?” — GrokDotCom
13.) “Style vs. Substance” — GrokDotCom
14.) “Pain vs. Gain” — GrokDotCom
15.) “Intellect vs. Emotion” — GrokDotCom
16.) “Emotional Perspective Redux” — GrokDotCom
17.) “You Ain’t All That! — A Marketing Copy Autopsy” — GrokDotCom
Trust & Relationship Building
18.) “Transparent Marketing: How to Earn the Trust of a Skeptical Consumer” — Marketing Experiments Journal
19.) “Inspiring Online Credibility” (a three-part series) — GrokDotCom
20.) “Screencast: Building Trust & Credibility Online” — GrokDotCom
Email Marketing
21.) Retail Email blog
22.) MailChimp resources center
23.) GravityMail — keeps your emails and newsletters from getting junked by sp@m blockers
24.) SpamAssassin — Open-source spam filter
Copywriting Blogs & Resources
25.) Copyblogger — Brian Clark
26.) The Copywriter Underground – Tom Chandler
27.) Grammar Girl — Mignon Fogarty
28.) ChrisG — Chris Garrett
29.) ProBlogger — Darren Rowse
30.) The Copywriting Maven — Roberta Rosenberg
31.) WebInkNow — David Meerman Scott
32.) Visual Thesaurus
33.) Word Spy
Transcription Services
34.) SpeakWrite
35.) Casting Words
36.) AccuConference — Record interviews and conference calls, download them as MP3 files, and even have them transcribed for an extra fee. Great for podcast interviews, content planning and tutorials.
Copywriters
37.) Jack Forde
38.) Cynthia Williamson
39.) David Garfinke
40.) Chuck McKay
41.) Bob Bly
42.) Tim Miles
Public Relations
43.) “Podcast: David Meerman Scott on the New Rules of Marketing & PR” (a two-part interview on how to make the most of multi-channel public relations) — GrokDotCom
Blogging
44.) “Blogging for Beginners” — ProBlogger (Whether you’re starting a blog or just thinking about it, this is the place to be. A great collection of must-read how-to posts from Darren Rowse.)
45.) “5 Simple Ways to Open Your Blog Post With a Bang” — Copyblogger (Finesse tips from Brian Clark.)
46.) “Write a Review — Rediscover Your Blogging Groove” — ProBlogger
47.) “How to Attract Links and Increase Web Traffic — The Ultimate Guide” — Copyblogger
48.) “The Two Most Important Words in Blogging” — Copyblogger
49.) “Lessons in Corporate Blogging” — Nicholas Carr for BusinessWeek
Persuasive Online Copywriting
50.) Persuasive Online Copywriting: How to Take Your Words to the Bank by Bryan Eisenberg, Jeffrey Eisenberg, and Lisa T. Davis. In our first book, the Future Now team gives a step-by-step tutorial in writing for the Web. Out-of-print since 2006, you can either pay $100 or more for a used copy on Amazon, or download the ebook for just $19.95.
Part 2 of the Cheat Sheet…
Since there are so many great resources to copy, we’ve decided to start with the essentials first — but, yes, there really are 101 links! In Part 2, we share some our favorite tips, including how to use web copy to engage different customer personas and personality types. To make sure you don’t miss out on future copywriting and marketing optimization tips, subscribe to GrokDotCom (weekly, monthly, or daily newsletter — or read daily via RSS). Thanks for reading!
. .
EDITOR’S NOTE: Join us on June 2, 2008 in Manhattan for FutureNow’s Persuasive Online Copywriting seminar. Tickets are only $795 for this popular one-day crash course on the most profitable ways to move the bottom line with nothing more than words. Just words.
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Written by:The Grok
Screencast: Building Trust & Credibility Online
If the roof of your home started leaking, you probably wouldn’t waste much time trying to fix it. And unless you happen to be a carpenter, you’re likely to find someone else to do the job. You’d probably call a professional; someone with experience, who can find the source of the problem and patch things up. A leaky roof isn’t generally a good place to shop on price alone. You want to know that whomever you hire can be trusted.
Well, your website isn’t much different. Each day, visitors come to your site, hoping to find someone they can trust. The strange thing is that people tend to think that the words they use online are somehow different than the words they use face-to-face. They’re not. But online, you need to be even more careful about how you relate to would-be customers. They’ve got less to go on. Looking you in the eye isn’t an option, and talk remains cheap — even if it’s in the form of web copy. So, it’s your job to change that around; an especially difficult thing for smaller and/or local brands.
Today, I’m going to show you how one of my clients, Roof Life of Oregon (www.rooflife-oregon.com), used Persuasion Architecture™ to replace their own, virtual roof. I’ll show you how each page uses trust-building elements to create persuasive momentum with the customer to make them feel at home.
Have you used any of these techniques before? Are there any websites you like to visit that inspire confidence? Ones that need fixing?
If you have questions about how to build trust online, please share them in the comments.
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Written by:Dave Young
How Amazon Lost Me (and My Money)
One word: Fulfillment.
I recently purchased a set of Sony Ericsson earbuds from Amazon.com. I already knew the type of earbuds, which color, and even the model number I wanted to order. (That’s what we call a “late-stage” visitor.) Amazon didn’t have to do much to convince me to buy. All I wanted was a clear product image, showing what I could expect with my purchase.
I didn’t just want a new set of earbuds; I wanted the Sony Ericsson brand earbuds, since they’re specific to my phone. The product image confirmed that I was receiving a genuine Sony Ericsson product, and I was further convinced by the product title and description. As a repeat Amazon customer, I expected to receive what I was shown (see thumbnail pic).
You’d think Amazon fulfilled my expectation, but no. Here’s what happened…
The headphones were delivered in a flimsy envelope — not quite the bubble wrap-protected box I imagined. The shabby packaging, held together by a piece of tape that looked 10 years past its prime, was an unwelcome surprise. Where was the original Sony Ericsson packaging I saw on the site? It took me about 15 minutes just to be sure this was actually what I ordered (”Is this even an authentic Sony Ericsson product?”). These types of situations are what have kept me away from online auction sites.
Granted, this was a small, $10 purchase. But imagine ordering an expensive watch or handbag online, or even a gift delivered to a loved one. How can you be certain that the product is authentic or will be appropriately packaged and well-presented? We can’t. Instead, we rely on past experiences, product images, and brand recognition to do the job..
I’ve been spoiled by some great e-commerce sites, including Amazon, over the years. They’ve made my shopping experience delightful from start to finish by delivering the product as I imagined it, almost every time. And I’m a loyal customer to those sites. But now I’ve got a strange feeling about Amazon. They’re the industry leader for a reason. They revolutionized online order fulfillment. In fact, they’re supposed to be the gold standard of e-tailers.
Am I expecting too much from e-commerce sites? I don’t think so. In fact, I’m verbalizing what all people who purchase online are thinking — no, expecting. Consumers demand an easy and delightful shopping experience, from the first click to the time the order is in our hands.
I won’t give up browsing on Amazon just yet — they still have great product details and customer-generated reviews — but they’ve lost me as a paying customer for now. And regardless, I don’t see myself buying electronics from them anymore.
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Written by:Peter Lee
