The Evolving Internet Marketer

Customer Acquisition vs. Customer Retention

Frederick Reichheld of Bain & Company reports that …

• Over a 5 year period businesses my lose as many as 1/2 of their customers over a 5 year period.
  
• Acquiring a new customer can cost 6 to 7 times more than retaining an existing customer.
  
• Businesses who boosted customer retention rates by as little as 5% saw increases in their profits ranging from 5% to a whopping 95%.

So why is retaining customers so often given such short shrift (and resources) compared to obtaining new ones?

Do we take existing customers for granted?

Are we unsure of the level of their satisfaction with our products or services and we’re therefore uncomfortable in approaching them to buy more?

Are our sales’ compensation programs more heavily weighted to acquiring new business?

Has there been turnover in our sales staff and we have accounts who no longer have an account manager or salesperson assigned or, if one has been assigned, who has no relationship developed with that account?

Whatever the reasons it’s obvious that attention to a customer retention program will pay dividends in diamonds to those wise enough to make the investment. My dad would call it, “working smarter not harder.”

Direct Mail Drives Web Traffic

According to a study conducted by the Winterberry Group and reported by eMarketer.com “researchers found that 21% of respondents visited a corresponding Web site within 30 days of receiving direct mail, up from 14% in 2003.”

eMarketer.com also cited research by Internet Retailer stating that direct mail influenced web traffic is up 50% in the last 3 years.

The lesson for Internet Marketers is two-fold. 1.) Don’t neglect traditional marketing channels but 2.) tie them to the web to leverage and extend the power of a single channel campaign. Saavy internet marketers will also go the other way by driving web traffic to brick & mortar locations with off-line only redeemable offers.

Whatever you do be sure to ‘close the loop’ by using landing pages on your website to capture incoming Direct Mail traffic. Like the saying goes, “you can’t improve what you don’t measure.”

Online Sales Forecast – Holiday 2006

Still looking for a reason to sell online? How about, “Cuz Santa says so!”? JupiterResearch predicts a record 114 million users will shop online this holiday season, representing a year-over-year increase in online holiday spending of 18 percent to $32 billion.

Overwhelmed by Decisions? Give Your Product or Service an Edge.

I went grocery shopping this weekend. What a nightmare of too many choices and not enough information. The toothpaste aisle almost killed me. It used to be easy. Crest, Colgate, Pepsodent … Selection was simple. You went with Crest because that’s what your Mom bought or you chose the lowest price because your spouse said we had to pinch pennies and voilà, you’re done with the toothpaste and on to shampoo. Life was good.

Now, it’s Saturday afternoon. My 20 minute dash to King Soopers has turned into a seemingly endless morass of indecision. I’ve met my Waterloo in Aisle 2, Dental Care… I’ve been assaulted by at least 15 different brands with 6 or more variations each.

Do I choose Colgate, Crest, Pepsodent, Arm & Hammer, Sensodyne, Tom’s of Maine, Rembrandt, Aquafresh, Ultrabrite, the store brand, etc., etc., etc? Do I select for whitening or super whitening, tartar control, breath freshness, flavor, plaque elimination, sensitivity or – what a concept – simply cavity control? Or do I choose by price, promotion, size, bundles?
You want an education in decision overload? Search on toothpaste at DrugStore.com – they’ll provide 238 results and proudly announce that there are 51 more results available at their partner, Beauty.com. My heart is pounding and my vision blurring just recalling the horror of it all.

How did I choose? I finally made a selection based on A.) did the toothpaste have fluoride and B.) who was willing to give me the best stuff? Moronic, eh, but that’s how we consumers choose. In the absence of sufficient information to make an informed choice; a clear bias towards a specific brand; or obvious (or personally appealing) product differentiation we consumers will default to the “what’s in it for us” mode of decision making. In this case I sold my teeth cleaning soul to Aquafresh for 3 Free Music Downloads with every purchase.

The marketing 101 lesson in all of this? If your product or service doesn’t stand out in a crowded field then you need to either differentiate it so that it does or else bribe your customers for their patronage. The former is harder but it’s the right way to go otherwise your customer’s loyalty will only be as strong as your latest spiff.

The lesson I learned? From now on I buy my toothpaste at Costco. Even though I have to buy 6 or 12 tubes at a time I’ll exchange bulk purchases for decision paralysis any time!

The Next Big Things on the Internet

Time magazine (October 23, 2006), on the heels of the $1.65 billion buyout of YouTube.com by Google, identified the web sites they felt stood a good chance of being the next big things. Here’s their list although if you want to know why Time thinks their the NEXT BIG THING you’ll have to buy the mag or hit their site.
Farecast.com – trends airline ticket prices to advise you whether or not to buy that ticket home to Grandma’s for X-mas now or if you should wait. Kayak.com has something similar (and simpler). Don’t know if it’s theirs’ or they’re licensing it. Turns out that I should have bought my daughter’s X-mas ticket 2 months ago. Oh well!

Zillow.com – I think this site is cool. Enter your address and it will not only map it but overlay what it believes to be the current market price for not only your place but all of your neighbors as well. Don’t know if it’s accurate or not but nice to know that – at least according to Zillow – I’m not upside down on my mortgage … yet!

Yelp.com – here’s another great idea that I actually thought of and never did anything about. Yelp makes it easy for local folks to write reviews on local businesses. Seems to do a good job with restaurants but my search for orthodontists (my son needs one, ouch) while turning up several yielded none with reviews. Once these guys hit critical mass — and they’ve built enough viral sharing features into the site to make this a real possibility — they might really have something.

30Boxes.com – a web calendar for Generation Y is the focus of 30Boxes. Live life transparently. Invite your buddies to tie their calendars to yours so you always know who actually has a life while you’re home voting for tonight’s Dancing with the Stars contestants. hokey
Other Cool Sites:

• pinger.com – send voice mail from your cell to email…
• doostang.com – use who knows who you know to reach that next rung on your career ladder
• 37signals.com – project collaboration
• pandora.com – instant radio station
• blurb.com – create a book from multiple media streams

Generate More Referrals; Tell Your Customers What You Do!

Seems funny, right? Of course your customers know what you do! After all, they’ve hired you to do it!

Yeah but do they know everything that you do? Probably not. I was reminded of this when I came across a note I scribbled a while back. I’m not sure who to attribute this ‘Rule-of-thumb’ to but I know I can’t take credit. I’m not that bright

The Law of Generating More Referrals:

To generate referrals from your customers, tell them what you do.

Why? Because 80% of your clients only know 20% of what you do. Furthermore, 80% of your clients would provide referrals but only 20% are ever asked.What’s the lesson here? It’s two-fold…

1.) The best referral programs combine education with incentive. You inform your customers of all that you do and you incent them to provide referrals. When you think about it, all the affiliate programs on the web these days are really formalized referral programs. I refer you to a vendor and, when you buy, I get a commission or a referral fee. You don’t have to be so formal but why not knock a few bucks off your customer’s bill each time they refer a customer to you? What do you have to lose … except business!

2.) Ask the 80% of your customers who aren’t currently providing referrals to do so. Do it in conjunction with an education and incentive program for the best results. And don’t just ask them once. Periodically ask them. You don’t need to be a PITA (pain in the ass) but you should from time to time remind them of not only what you did for them but what else you can do (hey, they may end up referring themselves!) AND what you’ll do for them for their efforts. Seriously, how much does it cost you to acquire a new customer? I’m pretty sure you can run a decent referral program for less then that amount per referred customer.

Here’s a simple system (must be, cuz I thought of it) for incenting your customers. Give them or mail them a coupon with their name on it. Tell them if they give it to a colleague or friend who’s not currently a customer and that colleague uses it, you’ll send them a coupon for their own use. Yeah, you’ll have a few bad apples who’ll try to scam you but run a limited test and see if the increase in new business is worth the effort. I’m betting it will be.

Whether you incentivize your customers or not, whenever you do get a referral. Say thanks. Send the referrer a card or a gift basket. Make a big deal out of it. In other words, show them that you’re paying attention and that you appreciate their efforts on your behalf.

I want a Firefox Extension to … (and other great lists from econsultant.com)

Have you fled the dark side and switched to Firefox? Even though Internet Explorer 7.0 is stealing some of the Firefox thunder by incorporating notable FF features like tabbed browsing there’s sitll plenty of reasons to make the switch. First and foremost, in my view, are the literally thousands, of extensions available. From determining the color of a single pixel to incorporating a weather feed in your status bar, Firefox extensions are incredibly useful tools (and some not some useful but fun anyway!).

To learn more about Extensions and begin exploring the wonderful world of same, visit https://addons.mozilla.org/firefox/extensions/. If this seems overwhelming to you, the good folks (or folk) at econsultant.com have created a list of the 200 (+) extensions they feel are most useful broken out in 32 categories. Give it a look. Very cool stuff.

Internet Explorer? Who Cares? … Walmart Optimizes for Firefox

Okay, so my headline is wild speculation but what else explains the appearance of Walmart’s web site in the new Internet Explorer 7 versus the new Firefox 2.0 browser?

Wal*Mart as it appeared in Microsoft Internet Explorer 7

Wal*Mart – as it should be – in the new Firefox 2.0

Good Store Design Essential to Site Success

Did you ever walk into and out of a store based on its appearance. Merchandise was poorly organized or strewn around; the store was dirty; the staff unkempt…

Now look at your web site’s store… Does it bear a closer resemblance to the well layed out and slickly merchandised aisles of a Gap or the stacked on tables next to the weed eater design of Billy Bob’s annual Spring garage sale and basement blowout?

 Store Design Matters; whether online or off

In  a report published by Questus (a web design firm) and reported by eMarketer.com, 68% of Online Shoppers used a site’s appearance as a determinant of trust.

Bottom line? If a web site doesn’t look professional, it won’t earn your trust. And, of course, who wants to shop at a site they don’t trust? The question you need to ask yourself is, “Does my site generate trust and with it the confidence that a shopper needs to buy from me?”

Good Design Includes Good Navigation and Ease of Use

An attractive design creates trust but the ability to easily find and buy what you need are other key factors. Questus’ survey demonstrates that while price reigns supreme as the #1 factor influencing purchase; site navigation and the checkout process carry significant weight in a shopper’s decision making process.

Think of it this way, a great looking store that’s poorly merchandised — women’s garter’s next to men’s hats, potatoes next to drain opener (you get the picture) — combined with a checkout process that’s tortured — e.g., the Target store with 60 checkout stations of which 2 are manned — is a recipe for abandoned shopping carts and frustrated shoppers who not only won’t come back but either won’t tell their friends about your site or, worse, will warn them off of it.

Do a little testing with your site. Ask your friends, staff or colleagues to go shopping on your site. Give them a list of things to purchase. Set up some 100% coupons to be applied at purchase – so they don’t actually have to spend anything. Then ask them to report back on their experience. And don’t forget to shop your site yourself. For an even greater eye opener, shop your competitors’ sites the same way. Which experience was better? Take the information you learned and use it to improve. Both your customers and your bottom line will thank you.

By the way, I’m a great believer in imitation as the sincerest form of flattery. So, if you don’t know where to start, you might take a look at e-tailing.com’s list of 100 top merchants. Take an internet road trip and see how the top merchants do it. You may be precluded by budget and resources to do exactly what these folks do but you should be able to glean enough good ideas to make a great start in improving the attractiveness, merchandising and profitability of your store.

Google Makes it Easy to Spell Check in Wordpress

Do you wish that WordPress had spell check? Well it doesn’t, not built in anyway. You can add it by way of various plug ins or you can use the latest version of the Google Toolbar which allows you to spell check text entered into web forms, including WordPress. It works better in the Firefox version than the IE one and, while overall, it’s not nearly a powerful spell checker as you would find in MS Word it gets the job done (mostly), is easy to use (easier in Firefox) and makes it unnecessary to fool around with adding a plug in which might be incompatible with the next version of WP.

Here’s a screen capture of the IE version at work…