For those who aren’t familiar with the phrase, we at FutureNow define Unique Value Proposition as: The brief, memorable phrase that concisely and powerfully describes the value of your business and creates excitement in the prospect.  The value proposition is not a slogan or a phrase designed for advertising, although that is one potential use for it.  Instead, its purpose is to answer the prospect’s implicit question, “Why should I do business with you and not somebody else?”

If you haven’t yet developed, tested, and optimized a Unique Value Proposition, bookmark this post and stop reading. Go read this and this.  Oh, this one is good, too

If you do have a solid UVP already developed and placed on your homepage and other important landing pages, let’s get down to the business of taking your UVP to the next level!

Homepages and landing pages aren’t the only place where your UVP needs to do some persuading.  There’s a whole, entire experience with your company (marketing touch points, landing pages, conversion experiences, post-purchase support, etc.) that can and should emanate your UVP so that it can be felt through every second a prospect or customer spends with you.  That, of course, will help with the “memorable” part of the UVP definition.

Here are a just a few ways in which your UVP could “cascade” across the user experience:

• phone on-hold messaging
• marketing/merchandising/promotions
• email signatures from employees
• site navigation
• site graphics
• blog theme

If you have a UVP, does it currently inform design and optimization decisions?  Do your graphic designers and copywriters have it in front of them wherever they work?  How about Marketing, does the UVP find its way into promotions so they’re not run-of-the-mill?

Let’s look at some random ideas from real UVPs, and brainstorm on how businesses could leverage them across a holistic site experience.

These are paraphrased and excerpted from real UVPs out there on the Web.  [Disclosure: most of these come from present or past FutureNow clients.]

“…family owned and operated…” — Sure, this can differentiate.  It would be cool to see this “family” concept cascading across the site design with family member bios, in the About Us section, and maybe even through some humor, e.g. ‘Help us settle a family argument by picking your favorite of our new product line.’

“…guiding clients through the admissions maze…” — I like the mental image of a ‘maze,’ so there are lots of ways that could be incorporated into various graphics through the site.  And copy could play a part, too.  Imagine a confirmation message that says, ‘Congratulations.  You’re one step closure to making it out of the maze.’

“…enhance your relationships, finances, and spiritual life…” — 3 is always the magic number, so building these 3 aspects of life into a ‘trinity’ graphic showing the words and icons in perfect harmony could be very persuasive.  And it would make sense to have site navigation reflect these as categories.

“…what if understanding men could be easy?” — Using the ‘what if’ approach can be very persuasive, so imagine how a good designer and copywriter could team up to build that theme across an entire site?

“…connect to a thriving community of designers…” — Being able to connect with a ‘thriving community’ of any kind is compelling, but how to express that and substantiate it?  A ‘ticker’ could display every time a new member signed up for a community, or posted a comment, etc.  And graphics could be used to further enhance that feeling of thriving community.

This was just a one-sided brainstorm, so perhaps not the best quality, but hopefully they spark some ideas as to how you can work your own UVP further into the fabric of your online business.

Leave us a comment with any examples of companies you feel are executing on this concept in an elegant way.

What I love most about this list is the way it segregates into sub-components or elaborations on Future Now’s  three questions that are the basis of Persuasion Architecture:

1) Who is coming to the site?

2) What is it they are trying to accomplish?

3) What action do we want them to take, and how do we ensure this matches up with what they are trying to accomplish?  In other words, what do they need to know/feel/believe in order to confidently take that action?

Separating out Seth’s List

Here’s how I see Seth’s list falling into those categories:

1) Who is coming to the site?

• Who are we trying to please? If it’s the boss, what does she want? Is impressing a certain kind of person important? Which kind?
• Who are we trying to reach? Is it everyone? Our customers? A certain kind of prospect?
• What are the sites that this group has demonstrated they enjoy interacting with?
• Do people find the site via word of mouth? Are they looking to answer a specific question?
• Will the site need to be universally accessible? Do issues of disability or language or browser come into it?

2) What is it they are trying to accomplish?

• “If it’s the boss [that we are trying to please], what does she want?”
• “Are they looking to answer a specific question?
• Does showing up in the search engines matter? If so, for what terms? At what cost? Will we be willing to compromise any of the things above in order to achieve this goal?

3) What action do we want them to take…what do they need to know/feel/believe in order to confidently take that action?

• What is the goal of the site?
• In other words, when it’s working great, what specific outcomes will occur?
• Are we trying to close sales?
• Are we telling a story?
• Are we earning permission to follow up?
• Are we hoping that people will watch or learn?
• Do we need people to spread the word using various social media tools?
• Are we building a tribe of people who will use the site to connect with each other?
• Is there ongoing news and updates that need to be presented to people?
• Is the site part of a larger suite of places online where people can find out about us, or is this our one sign post?
• Is that information high in bandwidth or just little bits of data?
• Do we want people to call us?
• How many times a month would we like people to come by? For how long?

Operational [and larger] Questions

Yet, while Seth’s persuasive questions are covered within these three categories, there’s a pile of operational questions left over:

• How many people on your team have to be involved? At what level?
• Who needs to update this site? How often?
• How often can we afford to overhaul this site?
• How much money do we have to spend? How much time?

In other words, what will this cost us? A question that opens the door for much larger debate of, do we really need to incur this cost in the first place?  What makes us think we need a redesign?

And that gets us to the question that our own Jeffrey Eisenberg tackled within his free report 7 Big Questions of Highly Effective Online Marketing. For starters he suggests that people interested in redoing their site should ask the big questions first:

• Do we need a redesign, or can we work with what we have?
• Exactly how would a redesigned site better serve our visitors?
• If the best-converting sites are often boring in their design, are we willing to design our site with that in mind?  [in other words, do we have the intellectual integrity to separate out an notional "want" for a prettier/slicker website from a real business need]
• Will we incorporate a scientific testing methodology into our redesign so we can optimize user interactions based on predictions of how our different audience segments will engage with the site? [in other words, are we really serious about redesigning to improve performance?  Serious enough to bake accountability into the very fabric of the redesigned site?]

And if you’re not sure if you need a redesign, perhaps it’s best to take a cold hard look at your current Website in order to:

• Isolate what isn’t working and what is
• Determine whether you need to re-conceive your site because too many elements bog down the original design

On Target as a Precursor and Follow-up to a Website Redo

While Future Now has been involved in hundreds of successful Website redesigns and renovations, Bryan and Jeffrey Eisenberg clearly saw that there were far more sites out there in need of optimization and improvement than full scale redesigns.

And far more Website owners who couldn’t answer the majority of the questions posed in Seth’s post and Jeffrey’s report.

That’s how OnTarget was born.

OnTarget allows Website owners to gain insight into what is and isn’t working with their current site, and provides them with prioritized recommendations to optimize the site, fix the leaks, etc. Think of it as an incremental redesign based on measurable results.

With OnTarget it is only when major persuasive and usability obstacles can’t be surmounted without major retooling, re-skinning, etc. that a site redesign is contemplated.  And in those cases, the business owners are able to answer those critical questions posed by Seth and Jeffrey.

This often means walking away from big redesign projects.  But it always means providing the client with the wisest and best use of his online resources.

[Editors Note:  The author of this article is now blogging at jeffsextonwrites.com]

One of my clients from over a year ago, was successfully implementing our recommendations. He was seeing increases in his conversion rate, measuring success in “clicks”, or more orders being completed online. After speaking with one of his customer service reps one day, I was informed that her call volume had increased substantially since working with us. She was also able to convert a high percentage of these callers into sales because they were better informed. Unfortunately, because they weren’t tracking these calls as conversions, we were unable to prove to the owners that call volume and conversion rates from phone calls were a measure of the success of our project.

It’s just as important to track phone calls, not just clicks, as conversions for your web site.

For some high ticket items, or for some industries that are more cutting edge, visitors may be more likely to want to speak with a representative in order to get questions answered, gain confidence and place an order via phone. There will always be the visitors who simply don’t feel comfortable placing an order online and want to speak with a live person in order to place their order. These conversions should not be ignored. The improvements you make to your site will directly affect call volume and the conversion rate of these calls.

Now, you can track your call analytics alongside your web analytics. Not only can you view the number of phone calls but you can also set the phone call URL as a goal in Google Analytics, so that you can see the value of these calls. Now you can calculate offline conversions, which have resulted from online marketing efforts.

By using unique phone numbers for your different marketing communications channels, you can track which traffic source generated the call, allowing the company to improve their overall marketing campaigns. When a visitor is referred from one of the traffic sources, a unique phone number will appear on your web site, allowing you to track conversion rates for phone calls. This will help you determine which keywords, sites, or PPC campaigns generate the most phone calls, and in turn, which ones result in successful conversions via phone.

Check out this screencast to see how ifbyphone has integrated their solution with Google Analytics.

Screencast – http://public.ifbyphone.com/demo/google-analytics-integration-screencast

Are you tracking your calls and your clicks properly?

Contrary to common opinion, David Ogilvy didn’t have a preference for long copy.

What he had was an overwhelming bias towards anything that had been proven to work (which included long copy).  Ogilvy’s real, professed preferences were for consumer testing, research-driven techniques, and performance-based advertising in the truest sense of the term.

Based on those things, the conclusion he came to was that messaging and relevance had to have highest priority. Everything else – creativity, design, layout – should be subordinated to the end goal of conveying a salient message in as persuasive a manner as possible. In print, this took the form of what has come to be known as “The Ogilvy Layout.”

Understanding Ogilvy’s Layout and Why it Still Works

There are three main parts to the Ogilvy Layout, with a corresponding and crucial quality for each element:

1. The picture, which should have “story appeal”
2. The headline, which should tie into the “story appeal” of the picture
3. And the body copy, which most be placed in the right relationship to both the picture and the headline as to anticipate the reader’s visual preferences and enhance readability.

I’ve dealt with Story Appeal in previous posts, but let’s talk about headlines before diving into why Ogilvy’s favorite arrangement continues to stand the test of time.

What I’ve Noticed About Ogilvy’s Headlines

In his book, Ogilvy on Advertising, David Ogilvy writes about the importance of captions no less than 4 times, urging the reader to include captions underneath all of their photographs each and ever time.  According to the research Ogilvy cites, 4 times as many readers read captions as body copy and 10 times as many people read headlines as body copy.

So while it may seem obvious that the headline and the main picture (or “hero shot” in today’s lingo) should be related, it also seems that you can grab even more reader-grabbing power for your headlines if you make use of some of the compelling “what’s this picture all about” draw of captions.  Here’s a perfect example of this:

Pretty difficult not to read a bit more about that story, isn’t it?

Let’s Talk Layout and Arrangement

Here’s the thing: because of his attention to research, Ogilvy knew what many online copywriters are still learning:

**People scan and skim first and read second

and they only read IF their scan turns up something worthwhile.**

Now, in magazines, which are mostly read as a diversion, the first thing to get scanned are pictures.  We are visual creatures and pictures typically convey a lot of information (and emotion) fast, so a strong visual is almost always going to be the first thing the eye fixes on when the reader is engaging in general browsing for interest.  Please note, though, that this scanning order changes for task oriented individuals interacting with a website.  People scanning a web page redefine “worthwhile” by relevance to their task, and therefore focus on the headlines first.

Getting back to magazine ads, if the picture is intriguing, the next thing a person will scan is the headline and possibly the caption.  After that, and only after that, the person in question will skim (or read) the body copy.

For emphasis, this is THE order in which an audience will scan a magazine ad/page:

1. Picture first,
2. Headline second,
3. Copy last.

To quote Ogilvy himself:

“Readers look first at the illustration, then at the headline, then at the copy. So put these elements in that order – illustration at the top, headline under the illustration, copy under the headline. If you put the headline above the illustration, you are asking people to scan in an order which does not fit their habit.”

And to paraphrase Steve Krug, don’t make the reader think; it’s just as easy to stop reading or engaging with the ad as it is to expend the extra effort navigating an oh-so-creative-but-against-the-grain layout.

Eye Tracking Heat Maps Prove the Power of Ogilvy’s Layout

The brilliant people over at Think Eye Tracking recently put three different car ads to the test: one Ogilvy-inspired 1-page layout compared to 2 new-school double-trucks (aka 2-page spreads). You can see their blog post about  their tests here, but I’ve also posted the Ogilvy-inspired heat map below. Check it out:

Notice how the headline and body copy receive most of the attention.  The picture draws the eye, but the messaging gets the most time and attention from the viewer/reader.

Unfortunately, a direct comparison of heat maps isn’t possible, because Think Eye Tracking only posted the heat map from the Porsche add and not the ones from the Mercedes and BMW ads.  But they DID give percentages of each ad’s ability to create reader retention of various elements within the ad, including the  call to action.  Assuming that the call to action was made within or at the end of the body copy (a fairly safe assumption), we can see how the ads stack up in terms of getting people to read the copy/pay attention to the messaging:

• Ogilvy Layout/Porsche Ad: 59% of readers noted the call to action
• Mercedes Ad: 29%
• BMW Ad: 11%

The Ogilvy Layout doubled readership of the copy while using half the ad space!

Incidentally, the use of a 1-pager instead of a double-spread was also recommended by Ogilvy, as the double-spread cost much more but didn’t increase readership in proportion to its cost.

And for those of you who read this far, or who doubted Ogivly’s performance-based bias, enjoy this short video of Ogilvy addressing the Direct Marketers of his day:

Click here to view the embedded video.

Just for the record, while I DO draw some distinctions between the online world and old-school direct marketing, I also think that online “marketers” who stray too far from direct marketing principles end up producing websites like this:

www.porsche.co.uk/innerstrength

In case you’re wondering, yes, that is the URL used in the Porsche ad’s call to action.  Just the sort of thing you’d remember after flipping through the ad isn’t it?  Not.

Anyway, go ahead and frustrate yourself by interacting with that “piece of work” for awhile.  You’ll undoubtedly find yourself wishing that the same, sane approach to design and layout had been used in creating the website as had been used in designing the ad.

P.S. I’m not advocating a literal use of the Ogilvy layout to a digital format, but rather an intelligent application of Ogilvy’s subordination of design, creativity, and layout to messaging. More about that in a follow up post…

[Editor's note: the author of this post is now blogging at jeffsextonwrites.com]

Click here to view the embedded video.

Now I’ll be the first to admit: normally this sort of humor is right up my alley — I’m the one in the FutureNow office who sees “giggle-value” every time a new iPhone flatulence app comes along — but seeing this as an advertisement was funny the first time, and each time I re-watched I became less and less enthusiastic and more and more offended. What’s next? Shall we be subjected to Dunkin’ Donuts Butt Munchkins?

I’m guessing most people would be offended by this ad. But leave personal sense of what qualifies as funny aside for a moment, and consider: At the end of the day, the purpose of the ad is to sell more product. Perhaps in this case one might argue the real focus is on creating product awareness, so that at some point in the future I *might* try the product. Either way, I’m dubious as to whether the ad does anything more than make me aware of Hardee’s new product but lacking the inducement to act.

Did you watch the video? What’s the actual product name? As I wrote this post,  I had viewed the video 8 times, but actually cannot recall the product name since my mind wants to refer to it as “Hardee’s B-holes”. Now there’s an anti-inducer.

What do you think? Offensive, or just puerile humor (not that there’s anything wrong with that, fellow South Park fans!). And what does it say when the more times the audience is exposed to the marketing, the less likely the viewer is to choose the product, or even remember its name?

So the natural thing to do is trim non-performing words and phrases in order to increase the efficiency of your PPC spend.  And that’s exactly what one client did, except rather than increasing his efficiency, he dropped his sales by 30%.

Why?

Because, depending on what you sell, lots of people buy on their second, third, or umpteenth visit to your site, rather than the first visit.  Those visitors are building confidence in you as they move through their buying process.  But most systems don’t (or can’t) track user behavior over multiple visits.   So when those early and middle buying-stage keywords shown up as non-converters, they get cut.

The shame is that not everyone is able to track the following sales drop off, which may not occur for days, weeks, or months, back to the act of cutting those keywords.

Trading away Dennis Rodman as a Non-performing Player?

Would you trade Dennis Rodman for non-performance?  Of course not, right?  Rodman’s defensive stats alone tell the tale.  At his prime, Dennis was pulling down a truly astonishing 18.7 rebounds per game.  For reference, the previous year’s league leader in rebounds (David Robinson) averaged 13 per game.

But if the only stats you looked at involved scoring, you’d get a different picture. Comparing Rodman’s 8-9 points per game against other star players’ 20 or more points per game, you’d likely have been misled into trading Rodman, only to find yourself wondering why you started losing games and everyone else’s scoring stats went up against your team.

Think of your assisting keywords terms as the Dennis Rodman’s of your PPC campaign, except you’ll get all the assists and none of the off-court shenanigan’s.

There’s plenty of other ways myopic analysis can leading you astray

A recent eConsultancy post discusses how Google’s default window for tracking cookies can distort traffic data.  Left in its default cookie window setting, Google Analytics (GA) will classify visitors as “search”-driven traffic for six months following a single search based click through to your site – regardless of how they got to your site previous to that search or how they might arrive at your site following that search. Here’s an example of how this might skew your results:

Let’s say you’re driving traffic to your site via radio ads and that a listener, after hearing your ad, types your url directly into his browser.  Later, he comes back but this time, he types your business name into Google and clicks through on a displayed search result.  Following that, he visits your site three more times via bookmark or directly typing your URL into his site. That’s a total of 5 visits.

Question: How many of those visits would GA classify as search-driven?

Answer: 4 out of 5.

GA would count the first search-based visit and then all of the remaining 3 visits, despite the fact that the following three visits didn’t use search and may have taken place several months after the initial search.  Multiply that by all your visitors/visits, and you can see how your understanding of what drives traffic to your website might be distorted in favor of search. And under the impression that your traffic was mostly generated by search and not, say, your radio ads, you might be tempted to cut them from your ad spend.   Obviously, the same thing could apply with e-mail campaigns, magazine ads, etc.

Bringing Clarity and Orientation to Web Improvement Efforts

Any experienced Web Analyst or Website Optimizer could extend this list of “gotchas” and “classic mistakes” almost indefinitely.  It’s just not that uncommon for an uncareful analysis of data to lead online marketers either to analysis paralysis or sub-optimal optimization strategies.  Is it any wonder that 70% of businesses collecting wed data fail to act on their analytics data?

Obviously this issue has been central to Bryan and Jeffrey Eisenberg’s Web careers since the beginning.  It’s why they helped found the Web Analytics Association; why they published The Marketer’s Common Sense Guide to eMetrics, Call to Action and Always Be Testing; why they created Persuasion Architecture; and ultimately why they’ve built the OnTarget program.

The central theme amongst all of these issues is bringing clarity and actionable insight to Web improvement and online marketing efforts.  They are all answers to the business owner who feels confused or disoriented by the data he’s given and want’s a clear direction toward more sales/conversions and improved website performance.

So, if you find yourself struggling to make sense of your online marketing data, or frustrated by non- or counter-productive optimization efforts, ask yourself: are you giving credit where it’s deserved?  Or do you need help achieving greater clarity and actionable insight from your optimization efforts?

Click here to view the embedded video.

Not only will the dog not go out the door, despite evidence it’s not there (she sticks her head thru, for goodness sake…sounds like logical, rational, tested evidence of no door, right?), but instead is cued to the behavior of the door handle. And it’s not immediately clear that she believes the evidence since she then waits outside for the door handle to be involved in re-entering the house. What she really needs is the repetition of the new activity several times before modifying her own behavior. So there’s a delay between the implementation of the change and its measured improvement.

What’s interesting is that you see this behavior in humans too. How many diet solutions focus on giving one a sense of “feeling full”, not because one needs to eat so much, but simply one has gotten used to eating a certain relative volume of food and therefore reinterprets a smaller volume as “I’m not done yet”. Or, your City fixes some streets and roads and months later drivers still need “Warning: New Traffic Pattern” signs to remind them that something different, even something improved,  has come along.

Of course over time, we all become used to the new way of doing things and that’s when the actual benefits of optimization will start to yield your company the long-tail, long-term results.

This is why we so often talk about a “cycle of improvement” and a “culture of testing”, because optimization gets its biggest bang from operating continuously. So the next time you make some improvements to your site, consider the idea that it’s completely normal for a dip in conversion to occur at that point in the persuasive process; use the time to plan your next round of improvements, so that when you come out of the dip you’re ready for the next cycle. Get realistic about your expectations and you’ll be pleasantly surprised.

Instead of looking at your traffic by what marketing efforts are bring the most amount of visitors and converting best, look at your visitor mix as a starting point.

There are 3 types of visitors who can come to your website:

1. Buyers – you know who they are because they converted to a sale or lead.

2. Potential Buyers – these are visitors who are in the market for what you offer, but for any number of possible reasons, don’t buy. They may be at earlier stages in the buying process, doing research to sell it internally, not adequately persuaded, driven away by bad usability, etc. The upshot is, there are countless number of changes/improvements you can test and make to bump these visitors from potential into actual buyers.

3. Disqualified Traffic – these are visitors who wouldn’t buy no matter what (maybe they arrived to your website by accident – they typed shingles and were looking for the medical condition not what you put on roofs, or maybe they don’t have the type of budget your product or service needs, etc.).

On a typical website, 3% of visitors are Buyers and the other 97% is distributed among the Potential Buyers and Disqualified traffic. You should be asking yourself these 2 key questions:

1. Of your non-buyers what percent are potential buyers? And how can you increase those?

2. What marketing efforts are bringing ample amounts of traffic, but with poor quality traffic – i.e., what’s driving a disproportionate amount of disqualified traffic?

Your web analyst should be able to tell you the answers to these questions.

The opportunity to increase sales is in:

• understanding that 97% of non-buying traffic better,
• bringing in less Disqualified traffic and more Potential Buyers, and
• More effectively turning those Potential Buyers into Buyers.

For example, if you look at the top converting retail websites, one of the key reasons they have such high conversion rates (way above 3%) is their intense focus on bringing back repeat customers. Note: You should subscribe to each of their newsletters to see some of what they are doing!

What you should do next:

1. Find your expert (if you have them) and coordinate their efforts to get it done.
2. Educate your team and then coordinate their efforts to get it done.
3. This is what we do, if you would like you can talk to us.

Cost Per Visitor (CPV) – How many advertising, marketing, SEO, etc. dollars do you need to spend to bring in each Website visitor you’re getting.   Don’t look at conversion just yet – it’s your website’s job to convert the visitors; marketing’s job is to get them there in the first place.  So Cost Per Visitor is the best starting point for measuring your return on marketing spend.

Also, feel free to break this down by channel: SEO, e-mail marketing, PPC, conventional media, etc.  Some channels are easier to track than others, but give all of them your best shot.  Now plot your CPV performance from the beginning of the year till now and see how you’re doing.

Revenue Per Visitor (RPV) – Top line revenue is usually easier to calculate and track, so we go with RPV, but if you’ve got the metrics to figure out bottom line Profit Per Visitor, all the better.  So basically you’re looking for how much money you are bringing in per Website visitor, and you’re looking to see how this metric is changing from the beginning of the year until now.

CPV should be decreasing and RPV should be increasing

What to do if these metrics aren’t moving in the right direction:

1. Take a look at your marketing spend. What’s working?  What’s not working?  Look at differing channels, keywords, time of day, etc.  Get accountability from the tactics you are using to drive traffic.
2. Focus on improving your conversion rate.  Your Website’s conversion rate can act as a lever to both CPV and RPV.  By examine keywords and marketing campaigns in terms of scent and scent trails, you can improve the performance of your campaigns and drive down CPV.  By improving micro-conversions throughout the buying process, you can increase macro-conversions, average order value, repeat customers, etc – thereby improving RPV.  For tools on how to do this, take a look through our archives, read Always Be Testing (or any of our other books), or give us a call.

Feel free to let us know how you’re doing, or to post any questions you have on these metrics and improvement tactics.  We’d love to hear from you.

[Editor's note: the author of this post is now blogging at jeffsextonwrites.com]

Are they only using metrics to make them feel better about their efforts or are they using the data to find ways to continuously improve their efforts? And with the widely available tools today, why aren’t the other 21% of businesses even capturing this web analytics data?

Is it because as John Lovett, Senior Research Analyst at Forrester claims in his post Forecasting Change for Web Analytics, that it because of unfulfilled promises by the analytics vendors, that their isn’t enough talent available to analyze the data, or is it because the tools available were too limiting?

Why do you think marketer’s collect data and don’t or can’t act on it?

P.S.  During editing, Jeff Sexton reminded me of one of his favorite jokes: “What’s the difference between a used car salesman and a hi-tech salesman?  The used car salesman knows he’s lying.”  No offense to my vendor friends

Never?

You mean no one has ever blocked the exit and said something like, “Hey, I saw you put that bottle of wine in your cart, why didn’t you buy it?”

It sounds funny until you realize that most online remarketing services offer to do exactly that to your website visitors.  They’ll pester them with e-mails, pop-ups, and phone calls should they have the bad fortune of visiting your site, adding something to your shopping cart, and then not buying it.

Why would otherwise sane e-tailers revert to such uncivil, gorilla-like tactics?  Really bad assumptions about both human nature and the nature of online shopping.  They simply haven’t compared what they’re doing to that kind of offline analogy.  So here are the bad assumptions, along with a few suggestions on how to correct them and what to do instead:

Assumption #1: Everyone is a late stage buyer

Related assumptions: Everyone who puts something in your shopping cart has a full-blown intent to purchase that item, and it was just chance or a shopping cart flaw that caused them to “abandon” your cart.  Cart abandonment is caused within the cart itself.

Corrections:

• Lots of people research and comparison-shop before they buy.
• Adding an item to cart is often a means of comparison shopping
• Adding an item to cart is often the only way to get important information for making the buying decision – stuff like shipping costs, whether express delivery is available, gift options etc.
• Most lost sales are caused by a lack of information and persuasion on the product page and the rest of the website – not by the cart itself.

Assumption #2: Long-term effects will parallel short-term gain

Related assumptions: sales that you recover from abusive or annoying tactics are easily tied to increased revenue and therefore are more important than the much-harder-to-measure ill will and annoyance created by those same techniques.  That the successes are as cumulative as the ill will generated.

Corrections:

• “He who would run his business with visible figures alone will soon have neither business nor visible figures to work with.”  -    W. Edwards Deming
• Don’t mistake a lack of hate e-mail or complaints as a lack of passionate response.  Or at the least, find out a way to measure the offense or annoyance you’re causing amongst the visitors who you don’t convert through your remarketing efforts.    If more people are converted than are pissed off, and the converted become repeat buyers, then keep doing what you’re doing.  But have the discipline to find out for sure.
• Pissed off people are a lot more likely to share their experiences than a visitor converted through remarketing tactics.  And even the converted visitor will be less likely to do ANY further early stage shopping from you now that they know what to expect from putting an item in your cart or visiting your checkout page.
• Ask any remarketing service what the longer-term trends for their customers have been.  If they can’t tell you overall impact on their clients conversion rates for periods of at least 1-2 years, you should be very, very suspicious.

Assumption #3:  It never hurts to ask.

Related assumptions: that the mere form of a question /offer renders it impossible to offend visitors’ sensibilities or violate their sense of privacy and online safety.

Corrections:

• Read this Seth Godin post
• Imagine that you had only started to fill out a check-out form, had not ever hit any kind of “submit” or “enter” button before closing out, but now have that website e-mailing and calling you because they pulled the info off of their server in real-time, as you typed it into the form.  How do you feel about that?  Think this thing doesn’t happen?  It does.
• A website forces you to create an account in order to checkout.  You create one.  Then you see that they gouge their customers on shipping charges.  You close out of the process and now you’re receiving spam from that company/website.  Are you EVER likely to do business with them in this or any other lifetime?

So are all automated responses and attempts to “save the sale” a bad idea?

Absolutely not.  Just let your offline sense of what’s appropriate guide you in your applications of this online technology. Pushy sales clerks can kill brick and mortar sales just as easily as over-aggressive re-marketing techniques for the simple reason that human nature doesn’t change just because a person goes online.  In fact, I frequently recommend Why We Buy to Web optimization specialists and online copywriters for exactly this reason.

So to use that offline analogy, let’s say you are looking at a more expensive bottle of wine and that the store owner sees you put it back on the shelf to grab a few other cheaper bottles.

Would it be ok for the clerk to approach you, mention that the bottle you were looking at is one of the best buys he has in the store, guarantee you’ll love it, and offer to give you a discount to get you to try a bottle?   Or for him to show you similar bottles closer to your price range?

As long as the clerk was respectful and took “no” for an answer, there’s no problem with that at all, right?  So how could you do it online?

• You could show special offers on previously-deleted-from-the-cart merchandise during the checkout process
• You could have a button on your product page that says “alert me to any specials or discounts on this product,” and then follow-up with a special e-mail offer AFTER the visitor has given you permission to contact them.
• For completed sales – and completed sales ONLY! – you could send a follow-up e-mail with special deals on previously-deleted-from-the-cart merchandise
• And a few other techniques that I’m sure you’ll come up with yourself if you spend some time thinking about it.  I don’t want to give away all my secrets without exacting any mental work from my readers

All of these things work just as well online as their offline counterparts, which is far more than can be said for most “gorilla” (re)marketing tactics.

P.S.  Before going through all this trouble to remarket, why not make sure you’ve fully optimized your checkout process to begin with?  Bryan Eisenberg’s initial and follow-up blog posts on this are a great place to start.

Thanks to GigaOm I learned about Jeff Bezos’ obsession in a footnote he wrote to Amazon’s 2008 letter to shareholders:

” At a fulfillment center recently, one of our Kaizen (continual improvement) experts asked me, “I’m in favor of a clean fulfillment center, but why are you cleaning? Why don’t you eliminate the source of dirt?” I felt like the Karate Kid.“

Amazon’s obsession with continual improvement has permeated their culture and made them a great company.

Here are just a few dangerous obsessions holding back many of our readers from more success:

• Data collection obsession – 79% of businesses obsessively capture Internet traffic data, yet only 30% of them changed their sites as a result of analysis.
• Keyword obsession – Keywords don’t fail to convert. We fail to convert visitors for that keyword.
• Short copy obsession – Of course people won’t read your copy if it isn’t relevant.
• Search Engine obsession – SERP rankings are crucially important but I never met a search engine spider with a creadit card. What happens after the searcher clicks through matters just as much.
• Shiny new object obsession – It’s the corporate version of ADD. Companies get distracted with the newest new new thing, invest lots of energy into it then they have unrealistic expectations of success.

What are your company’s obsessions? Are they useful or harmful?

Here are other apps besides OnTarget that are using Google Analytics’ Data Export API.

Here is OnTarget for Google Analytics:

OnTarget provides full optimization, testing, and improvement cycle recommendations on how to improve goals online and increase conversions from marketing campaigns. Clients determine how many resources can be devoted towards optimization each month. FutureNow’s analysts deliver a to-do list of suggested improvements matched to client goals via the OnTarget interface. These changes are tracked using Google Analytics and the impact is fed directly into the next round of ensuing recommendation.

We’ll be announcing lots of cool new features and soon you’ll see specialized OnTarget for Retail and OnTarget for Lead Geneartion products. Just stay tuned…same bat time..same bat channel.

In fact, whenever I work with B2B and complex sales clients it’s a sure bet their website won’t:

1) Adequately address the multiple decision-makers and influencers involved in securing the lead

If a sales manager needs to justify a training expense to his CEO and CFO, wouldn’t it help to provide your inside champion with messaging and tools to help him make his (read “your”) case?

It’s usually good to have sections of your website and messaging designed specifically for those secondary decision-makers and influencers that need to sign-off on the decision of your inside champion.  As an analogy to the consumer world, would you really want to construct a website that sells engagement rings without providing content and messaging for the prospective fiancee?

2) Have planned (and tracked) conversion points for visitors who are early in the buying process

To keep with the consumer analogy, let’s say you’re considering having a pool put into your back yard.  Assuming that one of your local pool suppliers/installers had a website with valuable early and middle stage content, how many times might you visit their website before actually contacting them and becoming a lead?

• You might come to them early on when doing preliminary research regarding what type of pool you wanted, what size, shape, depth, etc you should look at, what kind of associated expenses and purchases are involved, etc.  Reading this stuff might take 3-5 or even 15 different visits.  How would you know if any of these visits are successful?  How could you measure or get a handle on your Website’s influence on such a buyer?I’d normally suggest having a goal for these types of visitors.  Maybe it’s downloading a pool planning or pools for dummies report/PDF.  Maybe it’s playing with an interactive pool builder or pool cost calculator.  Whatever it is, having a trackable (and helpful) event for these early stage buyers helps to track your Website’s success in attracting and engaging

• Moving to the middle stage of the buying process, you might touch the site again when you are closer to buying and constructing a short list of potential contractors/installers.  This time you might drill down into why you should do business with them and not someone else, reading up on their installation timelines, the skill of their install crew, etc.You may or may not feel like filling out a lead form at this point.  But a valuable and well-merchandised free download titled something like, “10 Questions to Ask Any Pool Contractor,” might look far more attractive to you – especially if you only had to provide a name and e-mail (rather than the lead forms more detailed info requests) to get it.

• And then at the late stage of your buying process you might look at the site a third time to fill out the form or get the phone number to actually buy the pool. What a waste if the pool website only had the lead form as a conversion point, without ever providing (let alone tracking) any of the early and middle stage downloads and conversion events.  Questions would go unanswered, and prospective buyers would go unengaged / go somewhere else.

Needless to say, the exact same patterns of behavior occur for B2B sites as well.  And yet most B2B sites don’t have defined content and conversion points for their early and middle stage visitors.  Your prospective leads are going to go somewhere to get their questions answered, shouldn’t it be on your website not your competitors?

3)  Have metrics/analytics capable of tracking visitor behavior over multiple visits.

While early and middle stage conversion points help a Web analyst/website optimizer get a better handle on a sites overall success in engaging early and middle stage buyers, it still leaves them guessing at the big picture, simply because they can’t track a lead generation or sale all the way back to that prospect’s first visit to the Website.  This can be crucial for gauging the real success of a PPC campaign.  Key words that might look unprofitable (because they target earlier stage buyers) might be spectacularly profitable – but only after the 8th (or 20th) visit to the site.  Unfortunately, if you can’t track visitor behavior over multiple visits, it’s difficult to get a handle on real – vs. false- measures of keyword performance.

While I love, love, love Google Analytics / Google Ad Words, this is exactly one of these tools shortcomings.  And it’s one reason that we insist that our OnTarget clients install our software in addition to GA/GWO: OnTarget can bracket visitor behavior through keyword entry and track individual visit behavior over multiple visits.  It’s a wish-list come true for us Future Now Persuasion Architects and can be a positive boon for our On Target clients.

So there you have it: start matching your B2B and complex sale website to the real complexity of your sale.  I’ll be writing follow-up posts with exercises and steps on how to do this, but in the meantime, would it be too forward of me to suggest you sign up for On Target?

According to the Omniture survey:

• Marketers picked cost per click and click through rate as among their top metrics to optimize search campaigns instead of deeper metrics such as return on ad spend, cost per customer (or sale) or profit per order
• 43 percent of e-commerce respondents do not know how to accurately measure profit per customer (or order)
• 67 percent of respondents indicated not having enough time to effectively manage campaigns as their top issue in search marketing, while only 35 percent use an automated bidding solution

Are you surprised? We aren’t; check out the 7 Deadly Sins of Web Analytics.

Every day leading companies strut their James-Bond-cool stuff, showing off their sophisticated tools and fancy talk about ROI.

It’s hard to take them seriously knowing that underneath that James Bond tuxedo their diapers are soiled.

In 1998 we were frustrated because companies didn’t understand their conversion rates. In 2009 we remain frustrated.

Much less than 1% of the thousands of companies we’ve spoken with are the exception.

Do you have any insight as to why marketers remain enamored of the shiny new object but reject focusing on the fundamentals?

___________________________________

P.S. Josh James, the CEO of Omniture, in January of 2005 said “Web analytics can pay for itself with a single business improvement — so the real question is how quickly can companies make data-driven decisions? This willingness to change will ultimately dictate time to ROI.”

The problem is larger than that. In another email marketing study in 2007 by Silverpop, it was found that many people’s email marketing sucked, and that there was poor messaging follow through on the website from the email campaign. This often happens in a large organization because the team responsible for email marketing lives in a silo separate from the website team. When the organization is not in silos or when you have a smaller team though it still happens. They have not figured out how to integrate web analytics and website optimization with their email marketing; a critical piece of the marketing equation.

According to the eROI Q1 2009 Study: Trends & Use of Email Analytics:

The savvy email marketer knows that developing a truly targeted email campaign goes beyond simply segmenting by demographic and focuses on behavioral segmentation, which enables delivery of the most relevant, targeted messages to your recipients. How does one track behavior? Easy, just follow the data.

An individual who visits your site from an email campaign, but doesn’t make a purchase, can be targeted with an offer different than that sent to a person who eventually abandons their shopping cart, or another person who makes a purchase. Intelligent email marketing requires different tactics for follow up and re-engagement based on previous actions, but if you are not capturing any of these analytics all of this might sound like magic.

The 80% that measured their email marketing efforts were asked to rank the metrics they tracked by importance and ranked open rate, followed by click rate and open to click ratio as the most important measures.

Though they receive the most attention, these metrics ultimately give you the least amount of insight into the true success of your campaign. Open rate, as mentioned earlier, is not a reliable metric. Click rate is better, but unless you can tie those clicks to dollars, campaign ROI can still be a little tough to prove.

Tragically, about one-eighth of all email marketers are not tracking conversions. Of those, the majority don’t track conversions because of time or budget considerations, but, shockingly, about one-quarter aren’t tracking conversions simply because they do not know how.

Are you leveraging intelligent dynamic emails? Emails that are triggered based on the analytics and actions of your website visitors and customers? Let us know if you need help.

So start your headline optimization process with a close look at scent.  These links will help drive home the point:

Bryan Eisenberg gets interviewed on Scent and Landing Page Stickiness:

Click here to view the embedded video.

How lack of scent feels like “bait and switch” to website visitors

Broken scent between e-mails and landing pages accounts for 35% of failed campaigns

Step 2. Angle of Approach: After you understand what it will take to provide continuity of scent, you’ll need to do the research and idea generation to come up with that compelling hook, or angle of approach that will compel readers to stop and scan the article.

Think of it this way, if scent is about matching information, keywords, and look and feel, angle of approach is about matching your copy to visitors’ emotional drives, motivations, hopes, dreams, fears, etc.  Of course, it’s also about introducing a compellingly interesting thought into the reader’s mind.  For some incredibly helpful tools and techniques on Angles of Approach,take a look at the following blog posts:

How to connect with your prospect’s dominant emotion

How to polarize an audience to speak to the prospects you most want

Roy Williams on Choosing Whom to Lose

Why writing to a specific person (or persona) Overcomes the 200 Headlines Myth

The power of Magic Words – and how to find them

Sean D’Souza on the Power of New & Knew

Sean on how specifics beat generalities when it comes to Angles of Approach

Roy Williams on Framing First Mental Images

Compelling the visitor to keep reading

Why your headline may want to refer to an unseen action

I’d recommend you come up with at least a couple of different approaches and test them.  This might cause you to rewrite your first paragraph or two of body copy for each test variant, but it’s well worth the effort.

Step 3. Wordsmithing: Once you have the angle of approach and the “Scent” requirements, then it’s time for some of the traditional wordsmithing normally associated with writing headlines.  Can you sharpen the point?  Can you increase the curiosity factor?  Should it be a statement or a question?  Can you swap out words to create different emotional associations or connotations?  Can you test fractions vs. percentages?  What kind of presuppositions can you bury in And so on.

Here’s a monster list of links containing some of the best stuff I’ve seen on Headlines:

First, go sign up for Sean’s newsletter and get his free PDF report on Why do most headlines fail.

Second, read through Jay Abraham’s list of 100 Greatest Headlines Ever written

Third, listen to Gary Bencivenga’s explanation of why you should build credibility into your headlines

Now feast on Brian Clark’s brilliant headline articles:

5 Simple Ways to Open Your Post With a Bang

10 Sure-Fire Headline Formulas That Work

7 More Sure-Fire Headline Formulas That Work

Warning: Use These 5 Sure-Fire Headline Formulas at Your Own Risk

How to Get 53% More Readers for Every Blog Post You Write

And for sheer tonnage of listed techniques, it’s hard to resist Chris Bloczynski’s post:

99 Headline Techniques Revealed

Or SEO Blackhat’s 54 Headline Templates That Sell

Of course, it goes without saying that with all these choices, you’ll want to test and optimize, and the Grok’s own post on Top 10 Ideas for Testing Your Headlines is a great place to start, or you can watch the webinar on testing headlines and calls to action:

In January, I was sitting with Jack Love publisher of Internet Retailer as he was being interviewed on WebMasterRadio. Jack told my friend Jim Hedger that it didn’t take much to look good over the last 6 or 7 years in the ecommerce space while industry growth was 25% or greater year after year. A rising tide lifted all boats. Most people could just be on auto-pilot and their business would grow.

Times have changed.

We are no longer experiencing that explosive growth, and in these turbulent times I still see many people hoping to pilot their business using auto-pilot. I have bad news for those people. If you want to avoid a crash and burn over the next few years you are going to have to roll up your sleeves, maintain control, and maneuver yourself to safety.

This week at the “New Rules for Engagement” breakfast Forrester analyst Patti Freeman Evans played the following humorous video (just wait till the commercial ends) from the Daily Show with John Stewart for the 50+ retailers in the room:

In every bit of humor there is underlying some truth. I am seeing so many businesses relying on “Emergency Christmas”, offering huge sales (20+% off) week after week. You probably can see many of those same offers in your inbox. This show of panic to move merchandise is not the way to a safe landing.

I urge you not to stay the course, the times for easy money are over. Sully could have crashed in the middle of NYC, but he stayed calm with effort, some close calls and real precision he could succeed. So can you.

]]> http://www.grokdotcom.com/2009/03/05/sully-sullenbergs-secret-to-online-success/feed/ 4 http://www.grokdotcom.com/2009/02/27/building-an-optimization-culture/ http://www.grokdotcom.com/2009/02/27/building-an-optimization-culture/#comments Fri, 27 Feb 2009 11:54:00 +0000 Bryan Eisenberg http://www.grokdotcom.com/?p=3078 There has been plenty of hot air blown into the bubble that’s getting ready to burst on Internet marketers again. I watched it happen the first time. With all the financial chaos crashing around us now, the last we need is the blind ignorance of the “new economy” happening again.

Earlier…

There has been plenty of hot air blown into the bubble that’s getting ready to burst on Internet marketers again. I watched it happen the first time. With all the financial chaos crashing around us now, the last we need is the blind ignorance of the “new economy” happening again.

Earlier last month some hot air came from Interactive Advertising Bureau CEO Randall Rothenberg, who wants to prevent the Internet advertising economy from becoming “performance based.” This week provided another more disheartening statistic. Helen Leggatt, of BizReport, writes:

With the number of channels a marketer has to manage and monitor increasing, you’d think technology would be employed to make their job easier. Not so. It seems marketers are foregoing analytics to measure their online marketing campaigns…When asked about their use of measurement applications, less than half (47%) of the 1,545 American and British marketing professionals polled by Alterian said they currently use analytics to measure their online campaigns.

Sure, the shear number of those ignoring analytics in today’s marketplace is alarming, but it’s not all that surprising.

At first blush, one could conclude that site owners suffer from either arrogance or ignorance. Marketers either believe they don’t need analytics because they are smart enough to trust their gut (arrogance), or they don’t know what to do with them (ignorance). The Web analytics community has been split on this issue. Eric T. Peterson, Web analytics consultant, argues Web analytics is hard, while Google’s analytics evangelist Avinash Kaushik argues Web analytics isn’t hard. This still doesn’t sufficiently explain why more than 50 percent of marketing professionals fail to integrate analytics into their marketing efforts. (No doubt, getting value out of Web analytics is complex, something I’ll address in a future column.)

Mitch Joel, author of “Six Pixels of Separation,” offers some valuable insight:

It’s hard to measure the success and efficacy of your Digital Marketing initiatives if we’re feeling like our own home base could use a little renovating and extreme makeover. The problem is that many people built their online presence with a one-time budget. While they may have factored in ongoing budget for Web hosting and occasional updates, this strategy has left them paralyzed.

The bigger problem I’ve encountered in company after company is that most have failed to make Web site optimization a part of ongoing business operations. And who can blame them? For many, analytics have failed to live up to the promise that analytics vendors have been selling. Many companies have “been there, done that,” honestly attempting to use analytics to improve and have seen very little result in comparison to their effort.

As I commented on Mitch’s blog:

I blame it on our ADD mentality. Campaigns are exciting and change frequently, providing us with our next, new, shiny object fascination. Most people’s websites are static and lack the ongoing imagination and efforts required to reap the benefits of continuous improvements.Most campaigns would perform better if people only realized how many times a visitor engages with your campaign and then abandons only to search or reach for your “home base” later. This recession will weed out many of those who don’t pay attention to this.

If only they had stuck with their effort to make Web analytics work.

Still, commitment alone could put you on a hamster wheel. How does one know when to stop a particular test, stop improving a particular element, or drop a complete design in favor of something new? You must also commit to learning. Learn about your visitors, why they do what they do, and how you can better give them what they need and want.

The companies that benefit most from analytics have a culture of optimization. Whether it is explicit effort or part of a company’s DNA, each of these has some sort of process or system for analyzing the data, generating recommendations, and most important executing improvements, learning, and starting the process all over again. This improves the ROI (define) of efforts and ends up paying for itself and much, much more.

Optimization using analytics causes an interesting dichotomy. It is a rather simple concept, and there are many valuable and impactful “simple” lessons to be learned. But it is also complex; you can go very deep in analysis. To get the most out of your analytics — or just your optimization efforts — develop a cost-effective, smart system for improving continuously.

Not Using Analytics?

You are running out of excuses. Let’s deal with some of the smaller ones.

• If arrogance is your problem, do nothing. Your competitors will soon overtake you.
• If ignorance is your problem, learn. A good start is to get good at using a free product, eventually you can pay for more.
• If budget is a problem, it doesn’t have to be. You can do all kinds of things for much less money than you would imagine. Some of them are even free.
• If resources are the problem, that’s OK. Just move forward at a slower pace. Optimize what you can as often as you can with the resources you have now. Soon you’ll catch up and surpass the arrogant company mentioned above.

Optimizing the Organization

Want to have a culture with a constant eye toward getting smarter and better? Here are a few things that your organization can do:

• Adopt an attitude that every action measured in analytics has an actual human being behind it. Don’t allow your optimization team or analyst treat your visitors like stats. Try starting by looking at them as personas.
• Don’t get overly addicted to shiny new tools and technologies, or even to marketing platforms. New isn’t always better. Here are a few wise words from the lovable venture capitalist Guy Kawasaki:
  Follow through on an issue until it is done or irrelevant. Many organizations set goals and even measure progress toward them. However, after a short time, some goals are no longer on the radar because people start focusing on the coolest and most interesting stuff. For example, fixing bugs in the current version of a software application is not as interesting as designing a new, breakthrough product — but your current customers think it is. Legend has it that Pat Riley, the coach of the Los Angeles Lakers, measured stats of his players and posted each player’s progress on his locker.
• Commit to a culture of execution. “Execution is not an event — a onetime push toward achieving goals. Rather, it is a way of life,” says Kawasaki.

One of the most important things about improving is making it a way of life, so that it happens over and over.

What’s keeping you from using analytics to optimize your marketing?

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• Early means that the visitor has a problem, and is looking for a solution.  They may not know who you are, or that your product/service solves their problem.
• Middle means that they have an intention to buy a product or service that solves their problem, but not necessarily from you.
• Late means that they’re persuaded to buy from you, and intend to close the deal.

Sometimes, websites seem to be doing everything right, but the Key Performance Indicators (KPIs) just aren’t as high as everyone expects.   Their sites are functional, accessible, usable, and intuitive.  Their look and feel is credible, and their content is high quality.  So why do their visitors not behave as we expect? Why do well-planned and well-executed scenarios (e.g. PPC ad, to landing page, to lead generating form, to thank you page) not always convert?

You guessed it: Buying Stage Schizophrenia.

Buying Stage Schizophrenia is when our selling process doesn’t jive with the visitor’s buying process.  It’s when our conversion funnel is designed for a buying stage that the visitor isn’t in.  Take a look at your site’s conversion funnel…it’s most likely designed for Late Stage buyers, right?  Take a look at one of your PPC campaigns…are you showing Early Stage keywords a Middle Stage ad that sends the visitor down a Late Stage funnel?  Poor visitor

The key point is to be aware that multiple buying stages are traversing your designed scenarios.  It’s fine if your funnel is fine-tuned to Late Stage buyers, but do you have easy navigation paths to let an Early or Middle stage visitor branch out and get more information?  It’s fine if your PPC landing pages are perfect for a Middle Stage searcher, but can an impatient Late Stage searcher “Buy Now”?

How do I identify buying stages to improve my scenarios?

A few ways, using basic analytics tools and skills, are:

• Look at your keyword lists (in-site search, organic keywords, and paid keywords) and start segmenting by buying stage.  Guessing is OK.
• Look at click paths and navigation (which pages would be attractive/informative to the various stages?)
• Look for those who bail out of conversion funnels (it could be that they’re not ready to buy)
• Look at entrance sources (organic vs. PPC vs. referrals vs. direct visits)

Coincidentally (read: not coincidental at all ), we just launched a subscription service that can help with this very issue, you can start improving your conversion rate for as low as $1,000 a month.

Over the past several columns, I’ve examined conversion rate basics. This week, we continue our study of the basics with an updated look at RFM.

Recency represents the number of days since the customer last completed the action you’re profiling. Frequency represents the number of times the customer has completed this action since the first time she completed it. Monetary value represents the total value (usually total sales) the customer created by completing these actions.

The classic RFM model produces scores that rank customers relative to each other for the likelihood that they will repeat the action being profiled. Any action can be profiled: visits, purchases, logins, and so on. High likelihood to repeat an action, providing this action has economic value to the company, means high future value. Low likelihood to repeat means low future value. RFM is that simple.

RFM is a commonsense way of sorting marketing and optimization decisions based on what your visitors actually do and what they spend.

What Can RFM Do for You?

Let me defer that answer to a friend, optimization junkie, and fan of RFM. According to Frank Malsbenden, VP/GM of Vision Retailing, parent company of Shoeline.com:

The use of RFM metrics can drastically improve the effectiveness of e-mail marketing. It’s no secret that your best chance at repeat business is within 30 days of the customer’s last purchase. It’s not hard to grasp that frequency of purchases are a key metric in understanding the “health” of your customer database. And if you think about what you expect for service levels at retail establishments you spend heavily with, it’s easy to put yourself in the shoes of customers who spend big bucks with you. This is RFM, and catalog empires were built on the premise that recency, frequency, and monetary metrics should be the driving force in customer retention strategies…

But sometimes in e-commerce, we outthink ourselves, get too cute by half, or just get too plain confused by all the data that flies our way on a daily basis. Instead of keeping it simple, we get too “sophisticated.” What we should be doing is mastering techniques like RFM that have been proven over time. The possibilities with RFM and e-mail are endless. At Shoeline.com, we’ve started off with the basics. We developed e-mail templates for customer’s who purchased 30, 60, 90, 180, and 365 days ago. The content for each template is dynamically driven based on the RFM score of the recipient as well as references to previous purchases. We’ve developed the process so that these e-mails are sent automatically every day. All we have to do is change the content for the templates on a seasonal basis to ensure thematic relevance. The results speak for themselves. In 2008 the difference in open-conversion rate (orders/opens) was 31 percent higher for RFM-driven e-mails versus our traditionally segmented e-mails. The difference in straight conversion rate (orders/recipients) is so stark I’m afraid to go public, for fear of losing credibility. These results have prompted us to increase the percentage of RFM-based e-mails in 2009, and you can be assured that someday soon, 100 percent of our e-mails will be RFM-based.

Obviously the value of RFM goes beyond e-mail and can be used to increase SEM efficiency, ad targeting, and even merchandising. Still the simplest and most profitable use of RFM scoring is to identify and resell your best customers over and over.

Getting Started With RFM

Start by reading my previous columns on the subject: “Betting the Farm on RFM, Part 1” and Betting the Farm on RFM, Part 2.

Once you grasp RFM fundamentals, you’ll be inspired. Once you sort by these criteria, you’ll quickly find new and exciting ways to use them, such as:

• Is that PPC (define) campaign really bringing in high RFM customers or just low RFM customers? Any campaigns you would kill?
• What do high-scoring customers buy more of? Are there any patterns? Can you make them an offer to sell them again?
• What other behaviors are high RFM visitors engaging in on your site? Are average number of pages higher or lower? Is time on site higher? And so on.
• Create new KPIs (define) designed to optimize higher RFM visitors retention.
• Does RFM data give you any insight on merchandising and inventory?

My one tip when using RFM: don’t waste too many resources turning low RFMs into higher ones. It’s much more efficient to keep higher RFMs engaged.

If you need a quick immersion in RFM, again I highly suggest “Drilling Down: Turning Customer Data into Profits with a Spreadsheet” by good friend Jim Novo.

Have you learned anything interesting from employing RFM techniques? Let’s us know in the comments section what you’ve found.

While I can’t help but shake my head at the elevated nose and depressed intelligence of a dying attitude that associates “performance-based advertising” with creative shabbiness, that’s not what really bothered me about this piece.

What bothered me was two-fold:

1)    The Interactive Advertising Bureau’s confusion about the very medium it claims to represent.

2)   The implied motivation behind the IAB’s attempt to bring branding to the web.

Let’s deal with the first point and how it relates to branding via Internet Advertising.  Basically it boils down to this:

“You can close your eyes but you can’t close your ears.”

If I’m watching TV or listening to the radio and I’m interrupted by your ad, I can’t help but overhear your message, even if I look away and suddenly switch my attention to getting that last bit of salsa onto my Frito or avoiding the bumper of the car in front of me.

Since I’m at least half paying attention, great creative can cause me to redirect my attention back to your ad, thereby allowing the ad’s message to sink in.  Given enough repetition, the ad gets absorbed to the point where it can sway my decision when I’m actually in the market for the advertised product or service.

It’s a seemingly inefficient process that’s made shockingly effective through intelligent use of mass media.  The required repetition and non-targeted nature of your audience is more than overcome by the sheer number of people you reach and the amount of times you reach them.  As listeners and viewers convert over time, your mass media campaign can potentially create dramatically more traffic and sales on a per-dollar basis than targeted direct response methods.

So for intrusive or interruption-based media, great creative plus reach & frequency all go hand in hand for an effective ad campaign.  And I’ve said before that offline branding efforts can pair especially well with a solid online web presence.

So the takeaways are:

1. Branding almost always requires repeat exposure – this is why frequency matters.
2. Branding only becomes efficient when you can reach a lot of people cheaply – this is why reach matters.
3. The end goal of branding is to implant enough good associations about your product/brand/offer in the mind of the prospect to get them to buy from you once. You get one shot because actual experience either reinforces or destroys branded associations after the first purchase.  Lot’s of recent brands have been built on extraordinary customer experience and very little to no advertising, but almost no brands have made it with mediocre experience and lots of branding campaigns.

Unfortunately, the Internet is NOT an intrusive or interruption-friendly media.  It’s an interactive or “engaged medium” precisely because you need audience permission and participation to make it work.  Attempts to shortcut the “permission and participation” part usually meet with dismal results: we’ve become extraordinarily good at concentrating on the active window while ignoring banner and right-hand column ads. That means great creative stands very little chance of grabbing attention from an Internet user’s task at hand.

Other than adolescent boys staring at Lamborghinis and viewers of the rarely successful viral video, people who aren’t in the market for what you are offering have no interest in voluntarily exposing themselves to your ads.  And, for a participatory medium like the internet, that leaves only people actively interested in your market/offer.  People who, I don’t know, might indicate that interest by, say, typing keywords into a search engine or something…

Nor is the Internet a medium where there’s usually any significant space or time between being engaged by an ad to buying the advertised product.  If I click on a search-generated ad, I’m pretty much already at some stage of the buying process.  You don’t have to repeat the ad to make it sink in or design the ad so that its message is memorable; you just have to make it salient to my task-at-hand and I’ll click.  This is why ad relevance or “scent” has generally displaced the importance of “great creative” for PPC ads.

Yes, it helps to make more concerted efforts at grabbing people earlier in the buying process, but they still have to BE in the buying process to begin with.

So despite his protest at the misapplication of reach and frequency models to Internet advertising, I suspect that IAB President Rothenberg wants to similarly misapply an interruption-based model of branding to a permission-and-participation-based medium.

Brand builders plan around reach and frequency because reach and frequency are intrinsic to the mechanics of branding. You might be able to do branding on the web through viral videos or other entertainment-based efforts, but you’ll still have to ensure you reach a large number of people with enough repetitions to make your message sink in.

Will a fully engaged audience require less repetition than a more passive one?  Sure, but less might mean 5-15 times vs. 156 or more repetitions.  Other than planes hitting the World Trade Center or your wife saying “I Do,” very few messages are burned into your memory the first time your experience them.  And I don’t care how “great” your creative is, your actual business message (vs. the novelty you wrap around it) will never reach that level of impact.  This is why viral campaigns work better than single videos.

And this brings me to my last point and what bothers me most about the IAB’s push for “great creative” over “performance based” advertising:

They never once said that performance based advertising wasn’t making the wisest and best use of their clients’ ad budgets. They never seemed to indicate that their clients would be selling more and gaining more market share if they were actively branding on the web.

What they said was: “it was time for online publishers to reclaim some of the premium advertising turf vs. general market media, especially network television.”  Followed up by a statement that the Internet’s emphasis on performance-based or direct response advertising, “does little to elevate the perception of online’s premium communications value.”

Hmmm.  Does this sound like Randal and the IAB are most concerned for what’s best for clients or in what’s best for Internet Advertising Agencies?

If you’ve been to one of our trainings over the past few years, or seen any of us present at a conference, you’ve probably heard the line about the average tenure of a Chief Marketing Officer being less than the gestation period of an elephant.  Well, it’s time for some new material.  New research from executive search firm Spencer Stuart shows that CMOs are making it into their 3rd year with the same organization, on average, based on a review of the 100 most advertised brands in the U.S.

The CMO Strategy column in Ad-age does a good job postulating why CMO tenure is rising, and soliciting feedback from the folks who put together the research for Spencer Stuart, as well as a few who currently hold the position of their firms marketing top dog.  I’m encouraged to see most interviewed recognizing the (necessary) shifting role towards more accountable marketing- establishing hard measures of success and utilizing Analytics tools to help achieve the organization’s underlying objectives:

“Elisabeth Charles, who starts a new post as CMO of Petco in mid-February, also credits analytics and measurable results for the increased tenure. “You see a lot more folks doing marketing ROI studies, using more direct marketing that can be measured and shows a payback, as well as really scrutinizing the balance of brand investment vs. traffic or sales driving initiatives.”

Ms. Charles goes on to point out an area that has improved but “is still highly underleveraged”, that of utilizing technology & tools to better tap into consumer insights- listening to the voice of the customer.  Interesting she brings that up, as it dovetails with a another piece of research on CMOs, seemingly far more negative.

Bestselling author Scott McKain (@scottmckain) points to a new study by the CMO Council, and opines:

“While we often first point the finger at the Chief Financial Officer as being disconnected from customers, the truly shocking part of the study is that it is the Chief Marketing Officer who fails to listen to, and learn from, the very people they are marketing to!”

Now before you get all hot and bothered by Scott’s comments, he’s simply reacting to the CMO Council’s published statistics.  MediaPost spoke with the Executive Director of the CMO Council, Donovan Neale-May, and when you understand the lens through which he views the role of CMO, it makes sense why he’s led Scott to the conclusion above.

Donovan defines the CMOs most critical role as “owning every facet of listening, learning, interacting, engaging, and optimizing the relationship with the customer, and understanding where the attrition, pain and aggravation is, and doing this in real time.”  I like that definition, although I’d offer we need to add an explicit benefit/outcome- optimizing the relationship with the customer, to what end?  As long as it’s help them achieve their goals, and by extension, our business goals, I’m on board.  Doing so also reminds ourselves of our responsibility to our organization to be new age accountable marketers   I digress.

“Neale-May argues that the study shows that marketers tend to view customer services reactively, as a function for resolving a problem, not enough as an opportunity to engage or interact. Only about 37% of companies surveyed gather customer insight from customer engagement situations, per the firm. Only 15% use such situations to identify and cultivate potential customer champions and advocates. Only a third reported that they look for ways to turn problems into new sales opportunities, and only 16% introduce new products or services to further monetize the relationship.”

Apparently this research seems to validate what Elisabeth Charles expressed in her Ad-age quote, underleveraged indeed.

However, I think these two pieces of research, taken out of context, simply show (or aim to show) extremes on a continuum.  This shouldn’t be a sky-is-falling blog post, there’s good news and opportunity here.  As a marketing community as a whole, there’s still plenty of room for growth, but collectively *I think* we’re improving.  I look at brands like Comcast (with Frank @ComcastCares), Dell (@RichardAtDell), JetBlue (@JetBlue), Southwest Airlines (@SouthwestAir) as signs of a positive trend.  I look at service providers like BazaarVoice, who not only get it themselves, but can be legitimate resources to helping their client organizations improve their efforts to better listen and serve their customers.  I look at CMOs like Barry Judge (BestBuy), Sam Decker (BazaarVoice), Patrick Moran (Mzinga) who are clear examples of accountable marketers, who know the value of (and have the discipline to) measure success and continually optimize, not to mention constantly listen, learn & interact with their customers.  These signs point me to this trend accelerating in the future, despite the current research.  I choose to see the glass half full, although I know, hope is not a strategy.

All that said, I can be as optimistic as I choose to be, but I’d much rather listen to the marketing practitioners themselves, you guys out there with your feet on the street.

• Do you see a shift in your organization towards aligning your business objectives with your customers?
• Do you see the Marketing group and the Sales groups breaking down silo walls and collaborating on the same performance goals?
• Are you finding service providers and tool makers who help you leverage the social web to get closer to your audience, to better understand them, and to better service them?

If so, we’d love to listen and learn from you, so please share with your community here and don’t be a stranger.

Here are 5 strategies companies use to become market leaders.

They have great operations -

Operations that let them be more efficient than you at getting order picked, packed and delivered so that customers’ expectations are exceeded. These efficiencies in operations also allow them to keep their costs down.  At the same time those interested in capturing additional market share invest those efficiencies back into improving the customers’ experience. Walmart.com online exemplifies this quality.

They do a better job at generating word of mouth -

Everything they do is focused in on delighting customers. They are driven by service. They understand that success is a long term strategy and can afford to do what they need to in order to please their customers. They go to every extreme to delight their customers and offer lagniappe in many ways.

They live on “life-time value” metrics. They are driven by a passion to serve and a philosophy that it is easier to keep a customer for life than to try and keep acquiring new ones. These some times over the top efforts that lead to so many of their customers sharing the amazing experiences they have had with the brand. Zappos.com exemplifies this quality..

They deliver as good of a product/service in a more customer friendly way -

I’ve seen this one happen so many times. One day you, the market leader, the first person to market with the product, with significant marketing budgets, and with the hugest market share become aware of some smallish competitor and ignore them because their product isn’t up to snuff.

They slowly start winning customers, that just need the basic features they offer. All the while they keep building up their product/service. However,  from the get go they eliminated many of the hassles of getting started with their business. Instead of a complicated sale processes, or in-the-way sales people they made their pricing transparent and made it easy to sign up online to get started right away. GotoMeeting employed this strategy when competing with Webex.

They do a better job at being found when people need them -

Location, location, location. Budweiser is not the world’s finest beer. However, they sell a lot of beer. Bud dominates so many channels that they are always available. We know Bud and so we order it because often good enough is good enough. Amazon applies this principle online.

Wherever or whatever you search for comes up on their site or on Google as being sold by them. I am not just talking about having a first place ranking for the most competitive single word key phrase, but they have invested in having content (a large portion customer generated) that spans the long tail, from early in the buying process to later in the buying process. Their pages tend to keep showing up time and time again. They thrive on generating content that is relevant and are thrilled to live off the 3 or 4 searches a month for a particular piece of content or obscure product as long as they have thousands of them that people are finding. Amazon has utilized this to keep adding product categories to their vast catalog.

They developed a culture that continuously optimizes the customer experience -

This is different than being customer intimate, it is more incremental, it is about being metrics driven. The key is to focus on key performance indicators that drive success for your business and being relentless and innovative in way to drive up those numbers. They may not often start off as the category leader but through relentless testing and optimizing they gain market share. These companies tend to be less risk averse preferring gradual and continuous change. This is a very powerful strategy for companies to leverage in a down economy, because while your competitors are trying to maintain status quo you focus on constantly improving. Many of Intuit’s brands exemplify this strategy.

How can you leverage these strategies to drive your own growth?

Transparency.
Speed.
“We” are smarter than “Me”.
Interconnectivity.

These are just a few of the staples of the digital world in which we now live, and each present opportunities for success, or potholes that must be navigated around as business owners & brands interact with their audience, prospects and customers.

Consider three brand interactions I had yesterday, and observe the different ways I shared my experience with others (prior to this very public broadcast of all three!)

The good, the bad and the ugly

As some of you may know, I’ve recently decided to take the plunge, and make an honest woman of the one whose been by my side this past decade and a half (note to female readers: yes, I’m aware, I took a VERY long time getting around to the question, and yes I’m VERY lucky she said yes!)  We’re having a destination wedding so we wanted to make sure we gave our guests as much planning time as possible, seeing as we’re the kind of friends who inconvenience you and make you come away on vacation with us   That meant getting the save the dates out uber-early (check) and then even getting the invitations out sooner than expected as well.  The invitation buying process wasn’t exactly what I’d call easy, and online was ZERO help.

[An aside, if you're in that business, an area the web *should* dominate is in the education process of nurturing first time B&G's from early through late in the buying process.  What types of things do they need to know, what does all the vernacular mean?  It seems the main value proposition most sites pitch is a cost savings, which while it's nice, seeing as every other wedding vendor adds the "most important day of your life" tax, is only part of the equation and a useless one if you can't figure out how to get the invitations you actually want!]

I digress.  We ended up ordering from William Arthur, via Papyrus.  Elka, our absolutely fantastic “coach” through the process at Papyrus told us not to worry when the first proof came back, and wasn’t exactly as we had planned.  We were reluctant to order a second proof, for fear of delaying the eventual shipment, but she recommended we did, just to make sure they’re exactly as we wanted.  The second proof came back perfect, and off to the printer they went.  Here’s where the two brands each went above and beyond, and provided a delightful experience worth writing about (seeing as we live in a pay-it-forward world):

1. Elka called us to let us know she rushed the delivery, so we wouldn’t be delayed from our original planned mailing date.  Within a few days of her phone call, we received our order, much ahead of schedule.
2. William Arthur, on the top of the box had included an envelope “to the bride & groom”.  When we opened it we found they had included 10 extra copies of everything we ordered.  There was a note that read, “While printing your order, we noticed a few extras came off the line, so we hope you enjoy them with our compliments”.  Whether they intentionally produce a few extras, or this really is the case, who knows, who cares.  The end result is, they know we have far greater use for the “extras” than the trash can does and even keeps the groom from having to open every box of inserts to see what the finished product looks like (and getting them all dirty!)

I wonder, how many soon to be brides has Kelly now recommended Papyrus to?

Contrast that with the last remaining newspaper I’ll ever subscribe to in print form, the WSJ.  For the past few months I experimented with reading the Journal online only, like I do every other newspaper I still read (a dwindling number these days, sadly).  Ultimately I noted, I read more of the paper when I had it in print form than I did online only- I had a deeper engagement with it. Then in the mail (interesting to me that it wasn’t an email) I received a “professionals discount” with a very good rate for home delivery, and I decided it was time to resubscribe to print.

The subscription process was smooth & easy, not unexpected although many other sites (and far too many newspaper sites) fail here, and I was emailed a confirmation upon completion.  Imagine if you bought from Amazon, and your confirmation arrived, noting what books you had bought, how much you paid, what CC you used, etc… everything but the shipping/arrival date.  It would never happen, right?  Well, it happens every day with the WSJ!  Great to know my subscription was confirmed, but would you believe I had to write back, not once, but twice before giving up and assuming I’d simply have to wait and see if the subscription ever actually started!  Fail.

Ironically enough, missing subscriptions must happen with some frequency, as evidenced by the fact that yesterday (a few days AFTER I started receiving delivery) I got an email telling me I should have started receiving the paper already.

Where does this actually hurt?  Well, seeing as the newspaper business seems to be fighting the banking industry for the title “most likely to be OOB” these days, you’d think they want new subscribers?  I had the option to pass along my discount to other colleagues I thought would enjoy it.

I wonder, why haven’t I passed it along to anyone yet?

Then there’s the really ugly… and since I made a new years resolution to be more positive, and less snarky (it’s a two year old resolution!) I’ll change the name to protect the guilty!  Our CTO and resident coffee roaster John (unlike me, who is our resident lives-at-starbucks-far-too-much-guy) was scouring the ‘net looking for a new source of beans.  He knows we’ve talked to a few of the leading players in this space of late, and wanted to see what was out there.  After a little hunting, he found just product he was looking for at, er, um, Bob’s House of Beans   We thought it was a little odd the logo didn’t resolve properly, but chalked it up to Firefox/Mac issues, and kept plugging along.  Added beans to cart, check.  Entered credit card info, check.  Make purchase, fail.  Try as we might, the shopping cart and backend merchant account just wouldn’t connect, and after five minutes of reloading, we abandoned.  We tried once more later in the day (I assure you, purely as an experiment) and still couldn’t order.  If you’re an online retailer, no matter how large or small, you simply have to be able to calculate the cost of downtime, and require some proactive monitoring to alert you while the problem is ongoing.  In this case, the problem could have been on the bank side (I suspect not) but it’s really irellevant- the retailer lost the sale.

This is conversion 101, and yet, these are the mistakes which are still out there on the web.  If your site has some of these basic challenges, don’t get caught up in judgment (or let anyone else make you feel bad, myself included), it is what it is.  What’s important is taking the steps to correct, early & often. Get yourself on a program, and commit to continually improving your customer experience.  It’s the only way to grow in this day, age and economy!