CRM and eCommerce, an Intro

Customer Relationship Management and eCommerce… is there a more happy marriage to be made in online heaven?  In many ways, e-commerce applications, such as online storefronts, are great examples of CRM theory come to life.  Your storefront is like a laboratory, with the aspects of sales, marketing, customer service, and analytics all there to be adjusted and perfected, without the unknown variable of employee quality to contaminate the results.

While there may be no definitive beginning to the e-commerce era, for the sake of argument, let’s just say that it all began in 1995 when Amazon.com started selling books.  Never mind that it took almost eight years for the retailer to turn a profit in all four quarters of the same year… e-commerce’s time had come.  

However, not all things retail translate easily into “e-tail.”  For one thing, those pesky shopping carts seemed to be abandoned at extremely high rates.  Hardly a surprise:  If consumers don’t have to invest any time traveling to their local shopping malls, why shouldn’t they just leave items unordered in an online cart and surf off to another site, looking for better selection or price?  For e-tailers, the downside of impulsive purchasing is impulsive shopping-cart abandonment.

E-commerce is also fraught with other problems unique to the online experience:  secure payment, shipping, viable customer service, returns, instantaneous price comparisons, and now the re-emerging threat of state-by-state taxation.  But, there are upsides as well.  The technology provides the ingredients for perpetually efficient, automated, commercial activity (24 hours a day, every day of the week) and e-commerce managers now have access to a mass of consumer data and virtually unlimited quantitative analysis and business intelligence.

Wendistry realizes that creating strong relationships with customers online (and ideally, expanding those relationships to include offline customer interactions) presents special challenges.  So, this week, in a series, Wendistry will explore new technologies and techniques that offer insights on how to maximize your online channel.  Get ready for Part 1 tomorrow and happy SHOPPING!!!

 

You are What You Buy

Rob Walker is The New York Times Magazine’s “Consumed” columnist and author of the new book Buying In: The Secret Dialogue Between What We Buy and Who We Are.  In the following interview, Kevin Zimmerman, Senior Editor of “The Marketing Xfactor,” asks Walker about his arguments that no consumer is “brand-proof” and traditional marketing tactics still carry a lot of weight. 

Q:  How did Buying In come about?   A:  As I was writing “Consumed,” I thought there was something bigger going on.  All the talk about how the new empowered consumer was indifferent to brands, was “brand-proof,” was so out of line with what I saw happening on a regular basis.  I think you can probably make better decisions if you can get over this idea of being brand-proof, and get a little more realistic sense of what’s going on in your own head and in the marketplace.

Q:  One of the key takeaways from your book is the concept of “murketing.”  Can you explain what the term means?   A:  It’s about the murkiness we see now between what is branding, and what is everything else.  What’s happening as the result of TiVo and some of these other emerging technologies is the potentially lessening of the impact of such initiatives as the 30-second commercial.  However, people in the business of marketing are clever.  They saw this trend coming, and unleashed quite a bit of creativity in terms of where marketing could be in our lives.  That could take the form of television shows that are essentially a spin-off of a creative brief of a brand, as happened with (male grooming product) Axe and its show Game Killers– you can’t really TiVo the ads out; it’s the show.

On the flip side, word-of-mouth agencies came along and didn’t hire an actor to go out and pretend to like a product in public.  It was more of a voluteer basis, where they’d say, “Hey, sign up, you average consumer, and maybe youo’ll get some free products and tell your friends about it, and then tell us aboutthat.”  You would think intuitively that given what we say in polls about hating commercials, no one would do that, but in fact tens of thousands have signed up.

Q:  Another example you cite in your book is the fact that Ramones t-shirts outsell Ramones albums by an exponential factor.  What does that tell us about iconography, especially when it arguably comes at the expense of the icon– in this case, the music– itself?   A:  People are slightly resistant to the idea of logos in general, but the Ramones logo means something that’s so instantly translatable.  It’s different to different people, but it serves as shorthand for “maverick spirit” and “independent music.”  The same is true for the CBGB t-shirts, where the club doesn’t even exist anymore.

It’s not conspicuous consumption, where you’re trying to show off to other people; it’s more a self-signaling situation where you have a story of yourself in your head and what’s consistent with it, and what isn’t. 

Q:  Is there a pitfall involved when people take that approach, that “I am defined by this brand / product?”   A:  That’s the payoff I build to, what I want readers to think twice about.  Is this a reflection of who you are, or more a hope or a building block?  You can’t really build a self through the things that you own.  It’s a basic point of psychology.  People get tired of things.  We do a poor job of evaluating how long the happiness of acquisition will last. 

If you’re trying to build a self through acquisition of symbols, it becomes a never-ending loop.  You can’t decide to go to the mall to see who you are; you have to know who that is first. 

 

Great Ideas Come to Life

Are you a garage inventor with a great new gadget that you would love to see grace the shelves of stores worldwide?  Everybody has a great idea that could change the way we work, the way we play, or the way we live. 

Check out people who are following through on their ideas.  Everyday Edisons… Welcome to a new TV show on PBS highlighting ordinary people with simple solutions for the everyday problems we all face.  Their ingenious inventions ease life’s complexities, make everyday processes more efficient and make our lives more enjoyable.   Here is a promo snippet for the show!

The average person is unaware of the multi-step process by which a raw concept is transformed into a tangible product.  The goal of Everyday Edisons is to introduce viewers to the process of invention and help them understand how to take their own ideas to the next level.  Genius!

 

Slow Down and Smarten Up

It should take you two and a half seconds to read this sentence.  Any faster and you won’t absorb its meaning.  The motor response of the retina, and the time it takes the image of a word to travel from the macula to the thalamus to the visual cortex for processing, limits the eye to about 500 words a minute.  (That’s peak efficiency; the average college student can expect a rate about half that.)

“There is no such thing as speed reading,” says Keith Rayner, a cognitive psychologist at the University of Massachusetts-Amherst.  “Not if your definition of reading is comprehending text.”  Studies show that fast readers fare worse than slower ones when questioned about the text. 

So, to get smarter, slow down.  The quest for knowledge isn’t a race…. learn more by pacing yourself.  It’s even okay to move your lips. 

 

Trade Show Fiascos

I spent this past weekend with a client who had a booth at a trade show in Houston.  My firm provided all the creative and content for their marketing slicks, their banners, their rolling Powerpoint slide show, the works.  Which got me to thinking this morning about visual presentations and company presentation in general.

The restaurant industry is a strange sub-culture.  People stay up late, drinking is de rigueur, and the waitstaff in most places tend to be quite pornified.  This trade show was no exception.  Someone please explain to me what a non-slip, yet non-stick, floor coating have to do with 6 foot tall women’s cleavage hanging out?  Why are most men so predictable in this environment?  Isn’t it insulting to all involved?  ugh.

Please, please, please THINK about what these tactics say about your company way after the trade show is over.  After all, not only are women half the population on the planet, they also can be a huge source of word-of-mouth marketing… both for the positive AND the negative.

 

Using Twitter for Business

I have to be honest… for all of my love for technology and all things “kinda geeky” when I first heard of Twitter, I just didn’t get it.  And, really, I’m still kinda doubtful, but recently I stumbled upon a blog entry by Richard Brooks, President of flyte new media, in which he gives details on how to use Twitter for business.

Twitter is the inevitable conclusion for a culture fascinated by fame and soundbites… the short attention spans due to an overwhelming amount of data we process on a daily basis.  But, at its heart, Twitter is just a communication tool.  Like the Web and the phone and the telegram before it, it’s just another connective device.

Within this participating audience are a growing number of people who use Twitter for business…. not just aggressive web marketers who “tweet” every blog post they make and create links to all their online activities.  Rather, there are professionals using Twitter in the following ways:

• Follow industry leaders who post links to important resources and influence conversations
• Post questions for quick answers and answer others’ questions to establish your credibility and expertise
• Create links to your Web site or blog (don’t over do it!)
• Keep up on the buzz in your industry
• Network with like-minded (cutting edge) people

The more people who follow you on Twitter, the more influence and networking opportunities you have.  Thus, it makes sense to try and build a following.  Try:

• Follow them:  but be discriminating.
• Post some good tweets right before following someone else:  If someone follows me and they only tweet about how hungry or tired they are, I don’t follow them back.  The same goes for people who haven’t tweeted in a while.
• Complete your bio:  People don’t follow strangers, so complete the one-line bio and include a URL in the More Info URL section of your profile. 
• Add your Twitter feed to your blog or to other social media profiles.
• Reply to people you are following, especially if they’re not yet following you:  That’s a great way to engage somone and get them to follow you, even if they didn’t follow you before. 

 

It’s Always Who You Know

I had drinks on Tuesday evening with a buddy of mine from my UBS days five years ago.  He is now a managing director at a hedge fund.  While we were enjoying wine and pizza appetizers at Palomino, another buddy of mine who is a freelance financial consultant came in with a very wealthy restauranteur.  Hugs and handshakes and “a pleasure to meet yous” all around.  Then, they were joined about 15 minutes later by three other guys who also manage a hedge fund that specializes in emerging restaurants.  The point of this story is that while people like to do business with people they know and shop at companies where they have some sort of connection to another person, the same is true for finding startup capital.   

The old adage for raising money is that investors invest in the team first and the product/service second.  Therefore, if investors are primarily investing in people, then what they are really investing in are relationships built on trust.  This is why entrepreneurs tend to raise money from friends and family first.  Though it’s not easy, trust can be created from scratch.  That said, if you’ve burned through all your immediate prospects with whom you have significant pre-existing relationships, you need to be prepared for the consequences:  fundraising will take a long time.

As an entrepreneur looking to raise capital, the approach cannot be to simply sit back and email executive summaries blindly.  An email, even a pitch, is not a trust building event.  It’s really just a foot-in-the-door.  The best entrepreneurs understand this difference and figure out ways to use it as a launching pad for relationship development.

If you’re serious about raising money, you need to be serious about developing relationships.  Instead of emailing, attend events to meet people personally.  After a pitch, follow-up religiously with contacts… why not invite them to coffee to find out more about what they do and who it would benefit them to know?  You could possibly be the gateway and then they owe you a favor… a great position to be in! 

 

Things You CAN Control…

You can’t control gas prices, weather, or competition… but you CAN react.  In the “right” way.

Here’s the dirty little secret about marketing:  for many businesses, marketing affects just 9% to 15% of short-term sales.  The rest of short-term revenue is attributed to nonmarketing factors; all the external issues that affect a consumer’s purchase decision, including weather (”Man, I don’t want to get out of my car in this rain!), gas prices (I’m not driving 15 miles just to get to that store… it will wait.), your operational practices (”Where’s my 10%  off coupon that I usually get in the Sunday paper?”), and your competition (Yeah, but, Joe’s Pizza offers a Kids-Eat-Free night.).  All of these factors are out of your control.

Growing a business is complex.  You can have the best marketing campaigns in the world to drive people into a store or business, and if cash registers are broken and accounting departments can’t process invoices, sales will fall.  In those situations, you can max out your marketing budget and revenues won’t move.

Similarly, in today’s perceived recessionary economy, you can’t market successfully unless you take into account nonmarketing factors such as macroeconomic dislocations that may be lowering sales.  For example, a home improvements retailer might develop messages that address budget concerns by appealing to the cost savings of “doing it yourself” rather than hiring a contractor.

Don’t, however, think that doing everything stated above will dramatically move the needle.  When it comes to marketing, judging outcomes is complicated.  By continuing to market, you at least have neutralized a falloff. 

So, what can a CMO / CEO learn from this?  Above all, the influence of nonmarketing factors on marketing teaches us the importance of understanding the big picture… the relationship between the two so that your sales forecasts more accurately reflect reality; including those factors you may not be able to control.

 

Problem-Centric Marketing… Drive REVENUE!

All businesses strive to recognize the needs of buyers when developing sales success strategies… at least, they should.  Here at Wendistry, we’re constantly advising clients against marketing for creativity’s sake.  Businesses (and consumers) buy products and services to solve problems and make life easier.  They may have too much of something that is undesirable or too little of something that is good.  Either way, the problem is a gap between where they are and where they want to be.

The problem faced by the buyer is something of a tipping point.  If they are aware of the problem and are troubled by it, they will act.  If they don’t… no sale.  So, how do we incorporate the buyer’s problem into our marketing and revenue generation strategy?  And, how do we choose the right problem to begin with without harping on the negative?

1. Start with your assumed strategy:  what are you going to sell, to whom do you plan on selling it, and through whom will you reach these buyers?
2. Consider the issues behind your assumed strategy:  your challenge is to identify a buyer problem for which you have the strongest solutions.  Make a long list and then prioritize.
3. Rationalize this list down to your “best” problems.  This is decision time.  If you are good at solving buyer problems that offer little reward, you will major in the minors.  On the other hand, if you are focusing on the right problem but are not in a strong position to fix it, the competition will eat your lunch.
4. Now, ditch your strategy, and rebuild it around the problem.  If you’ve chosen the right buyer problem, you should let it guide your future strategy. 

Judge which businesses and/or consumers suffer most from this problem, and will be most prepared to pay money to have it fixed.  This is your new market.  Determine what a complete solution to this problem looks like.  That is your new offering. 

Having recast your strategy, we now need to help our prospective buyers to act.  Businesses and most consumers don’t just wake up in the morning and decide to purchase something.  They take a journey:

• First, they have no problem;
• then, they do;
• then, they know they need a solution;
• then, they choose between those options;
• and finally, they receive the benefits for which they had hoped.

We refer to this progression of thought as “the buyer’s journey.”  Marketing is a crucial means of identifying and managing the steps in the journey.  It all boils down to the fact that people pay money to have their problems solved.  Choose the right one, help your customers and prospects see it, and profit. 

Marketing Allocation

New customer acquisition marketing is important, but after company launch (say 6 months to a year into the life of the business) it should take a back seat to retention marketing.  To get the most out of a retention marketing strategy, it’s best to create specific campaigns for the numerous audiences your company gathers based on their stage of product involvement.

Acquisition:  Allocate approximately 30% of your resources here

• People you want to use your product/service but who do not know it exists
• People you want to use your product/service but who are using a competitor or similar product

Retention:  Allocate approximately 70% of your resources here

• People waiting on the beta list, pre-order, etc.
• Early adopters who help by providing feedback on your product/service (you should quickly identify these people and reward them!)
• People who are inviting other people to your business (quickly identify these and REALLY reward them!)
• Developers, partners, collaborators (the people who rely on your business in any way or build something new upon it)

 

Next Page »