Beyond the Buy Button: The Huge Additional Value of Retail Websites

Sometimes, I think we focus so intensely on the e-commerce sales of our sites that we miss the overwhelming additional value they bring to our businesses. Retail websites, particularly for multi-channel retailers, are more multi-dimensional than any other channel and any other brand vehicle. We fail to recognize the value of these sites beyond the buy button at our own peril.

Some are starting to see the additional value. During her presentation at the Retail Innovation and Marketing conference in San Francisco last week, Express Chief Marketing Officer Lisa Gavales talked about her epiphany surrounding Express.com’s value to the brand. It was Express.com’s traffic numbers that sparked the light bulb in her head. She realized that Express.com got as much traffic in a week as all of the Express stores combined. In other words, half of Express brand interactions were occurring on Express.com. Lisa immediately understood the marketing value of such high levels of engagements from Express’ customers. So much so, in fact, that she came to a conclusion she deemed controversial during her presentation — Express.com should be a marketing vehicle first and a direct sales channel second.

After the presentation, my good friend Scott Silverman, Shop.org’s Executive Director, asked me if I agreed with Lisa’s positioning of Express.com. I rambled on a bit before essentially saying “yes and no.” I’ll now take this space for what I hope is a more coherent answer.

I completely agree with Lisa that retail websites are much more valuable to the overall business than their direct sales indicate. Applying resources and strategic importance to sites based only on their percentage of sales is a mistake that could prove very costly in the long run. Customers use our sites for many reasons beyond direct transactions and our failure to highly prioritize those intentions is a disservice to our customers that will affect our bottom lines. But the value of our sites goes well beyond just marketing and direct sales and simply switching priorities is not enough. Furthermore, I worry that prioritizing marketing higher than everything else will lead to the types of conversion problems I previously discussed in my post “Conversion tip: Don’t block the product with window signs.”

Let’s consider some of the many values a retail website provides for a multi-channel retailer:

• Marketing vehicle
  As Lisa noted, the marketing value of our websites is immense. We are getting tons of traffic, and each engagement is an opportunity to enhance our brands. (Of course, if we’re not careful, the opposite is also true.) Websites are a highly efficient way to strengthen the Customer Engagement Cycle. Both online and offline marketing vehicles can direct customers to our sites to further enhance our messages. Our sites are also a great way to tell people about our stores on both a collective and an individual level.
• Merchandising vehicle
  Customers come in droves to our sites to learn more about the products we sell, whether they intend to buy online, over the phone or in our stores. Our sites have to essentially be our best and most knowledgeable merchants. They have to lead customers to the right products for them and provide the right information for them to make a selection, regardless of the channel where the purchase takes place.  This is a huge, often untapped, opportunity for quality merchants to reach their customers and sell them the right products.
• Customer research tool
  This is a bit of a double entendre. As mentioned above, our customers are certainly using our sites for their research. But we can also use our sites to learn more about our customers. There is a wealth of information to be had about what our customers are doing and what they desire. Not only can we see what they purchase, but we can also use web analytics to see what they look at. With tools like those provided by ForeSee Results (shameless plug), we can also know what they are thinking, what they are intending to do, and how they are perceiving our brands. All of this can be done fairly easily and inexpensively in ways that are either impossible or impossibly expensive in the physical world.
• Customer relationship enabler
  We can continue to build relationships with our customers by applying what we’ve learned above to give them better experiences. The applied knowledge of our merchants combined with the long-lasting memory of our websites should allow us to constantly serve our customers better. As we focus on building those relationships with more personalized site experiences, more informed personal interactions via contact centers and in-store, and more relevant email and direct mail communications, we will build stronger loyalty with our customers.
• Community builder
  Websites also give us ways to connect our customers with each other. Our brands can act as a central hub for like-minded customers to find each other and help each other find products that meet their needs or solve their problems. How great is that? We can make these connections both via our own sites and via social networks like Facebook. Either way, it’s another way for our brands to provide services for our customers. Our sites can also allow our brands to be more localized by providing additional vehicles for our stores to connect with their communities.
• Sales driver — in-store and online
  And, of course, we can sell stuff. We can sell lots and lots of stuff online. Our sites are still not where they need to be for maximum usability, so we have plenty of opportunities to improve their ability to sell directly. But we also have lots and lots of opportunity to drive traffic into our stores. We can show inventory; we can let people buy or reserve online and pick up in-store; we can host coupons;  we can help people find a store close to them; we can provide reviews and recommendations to people standing in our stores (whether via kiosks or mobile phones). The possibilities are endless.

These site values are not mutually exclusive. Their value in combination is exponentially higher than any one individual value. Therefore, it’s critically important to consider our sites holistically when determining their place and priority in our strategic plans. We need to consider their combined value when we determine allocation of resources and organizational structure.

Too often, though, resources and executive attention are not apportioned to the site according to this additional value. And we often don’t even measure these additional value points (which might explain the lack of resources and executive attention). If our most important measures of our sites revolve solely around direct sales, we will continue to minimize the importance of all other values of our sites.

I believe the multichannel retailers with the brightest futures in this new decade will be those who fully embrace and leverage the multi-dimensional value of their websites.

What do you think? How is your site valued in your organization? What retailers do you think are most recognizing the additional value of their sites?

3 steps to a more effective retail Facebook presence

Amidst the many clouds of uncertainty surrounding retail use of social media, a few key strategies are starting to emerge. Three recent studies, including a white paper written by yours truly, have examined customer interactions with retailers via social media. Encouragingly, all three studies (Emarketer recently summarized the findings from studies by Marketing Sherpa and Razorfish) have very similar findings regarding customer desires in their social media interactions with retailers.

While the percentages varied slightly, all three studies found customers who “friended” or followed retailers said they were interested primarily in learning about new products and new or exclusive promotions. How great is that? I have to admit I was a bit surprised to see these results because it seems like current conventional wisdom says to avoid being promotional on sites like Facebook in deference to its more personal nature. In hindsight, that conventional wisdom seems a little questionable since it’s unlikely customers are going to interact with retailers like their friends. They know we’re about selling to them — we’re retailers!

More good news: It appears that the customers who follow retailers are really the best, most engaged and brand committed customers for those retailers. I suppose that’s not terribly surprising, but it’s certainly valuable information. Since our findings were part of a larger customer satisfaction study, we were also able to determine that site visitors who also interact with a company on a social media site are more satisfied, more committed to the brand, and more likely to make future purchases from that company than customers who don’t follow those retailers. Our study also found that 61% of people who follow retailers follow less than five retailers. That’s further  indication that people are really focused on their absolute favorite retailers.

We also found that more than 80% of shoppers who use social media list Facebook as a site they use regularly, which makes it the overwhelming social media leader. YouTube came in second place with only 31% of shoppers.

So, to summarize, our best and most engaged customers like to interact with us on Facebook (an incredibly viral platform) and want to hear about new products and promotions. This is a great foundation for a successful strategy!

Without further ado, here are three steps to a more effective retail Facebook presence:

1. Focus on best customers
   Rather than trying to build our fan base to the highest possible numbers, let’s focus on getting as many of our highest value customers as fans on Facebook. They’re the most likely to become our Facebook fans anyway, but they’re also the most likely to recommend us to their friends. Facebook’s viral nature gives us the opportunity to put our Word of Mouth Marketing on steroids, and developing messages for our best customers gives us a clear focus. We should reach out directly to our best customers via targeted messaged and encourage them to join because we…
2. Give ‘em special promotions and news about products
   These are our best customers. Let’s treat them well and make them feel special. Let’s give them exclusive offers and early notice on cool new products.  Victoria’s Secret does an excellent job here, and it shows. Of the Internet Retailer Top 40 retailers’ Facebook pages I looked at, Victoria’s Secret has by far the most fans at almost 2.7 million at the time of this writing. Clearly, they are delivering on customer expectations, and they’re being rewarded for it by attracting lots of really engaged customers.

   My good friend Adam Cohen, partner and social media lead at Rosetta and blogger at a thousand cuts, (and my go-to guy on all things social media) correctly cautions against too many rich, exclusive promotions as they could be unsustainable as the fan base grows. This is particularly true if the offers start to attract deal seekers who are not our best customers. Good warning from Adam and in line with the excellent old adage “everything in moderation.”

3. Leverage Facebook viral features
   We’re giving great, exclusive offers and product news to our best customers. Those best customers are the most likely to recommend us to their friends. Let’s encourage them to do so. It could be as simple as letting them know an exclusive offer can be shared with their friends by simply hitting the “share” link.  There are lots of Facebook applications and other techniques that can be used, but I would personally just start simply and go from there.

(Bonus tip) Make sure your page can be found in Facebook search.
This isn’t really one of my key steps, but during my research I was surprised by how poor Facebook’s search is. For example, I searched for “LL Bean” and found nothing. Then I tried “L.L. Bean” and again got nothing. Their page is actually entitled “L.L.Bean” with no space between “L.” and “Bean.” Facebook’s search will only find it if you search for it exactly as it’s titled.  So, my tip is think about how people might search for your brand and then name the page with the most common search term.

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Three separate studies have all found that customers who friend or follow retailers in social media are most interested in learning about promotions and new products. That’s some mighty strong corroboration, and it’s incredibly great news. Judging from the large percentage of retailers with little-to-no Facebook presence, I’m guessing many have been holding pat waiting for a clear direction on how to best leverage social media. While this information may not give the clearest direction for all social media channels, it certainly provides some clarity on today’s biggest channel, Facebook. Different social media channels require different strategies and tactics, and in the end it’s still important to learn more from our customers about their specific needs and desires and then work to satisfy them.

In the meantime, let’s build some really great Facebook pages for our best customers and give them some exclusive offers to enjoy. Please let me know when you’ve got your page running so I can become a fan!

What do you think? What have you learned about Facebook? What tips do you have?

The Missing Links in the Customer Engagement Cycle

The Customer Engagement Cycle plays a central role in many marketing strategies, but it’s not always defined in the same way. Probably the most commonly described stages are Awareness, Consideration, Inquiry, Purchase and Retention. In retail, we often think of the cycle as Awareness, Acquisition, Conversion, Retention. In either case, I think there are a couple of key stages that do not receive enough consideration given their critical ability to drive the cycle.

The missing links are Satisfaction and Referral.

Before discussing these missing links, let’s take a quick second to define the other stages:

Awareness: This is basic branding and positioning of the business. We certainly can’t progress people through the cycle before they’ve even heard of us.

Acquisition: I’ve always thought of this as getting someone into our doors or onto our site. It’s a major step, but it’s not yet profitable.

Conversion: This one is simply defined as making a sales. Woo hoo! It may or may not be a profitable sales on its own, but it’s still a significant stage in the cycle.

Retention: We get them to shop with us again. Excellent! Repeat sales tend to be more profitable and almost certainly have lower marketing costs than first purchases.

Now, let’s get to those Missing Links

In my experience, the key to a strong and active customer engagement cycle is a very satisfying customer experience. And while the Wikipedia article on Customer Engagement doesn’t mention Satisfaction as often as I would like, it does include this key statement: “Satisfaction is simply the foundation, and the minimum requirement, for a continuing relationship with customers.”

In fact, I think the quality of the customer experience is so important that I would actually inject it multiple times into the cycle: Awareness, Acquisition, Satisfaction, Conversion, Satisfaction, Retention, Satisfaction, Referral.

Of course, it’s possible to get through at least some of the stages of the cycle without an excellent customer experience. People will soldier through a bad experience if they want the product bad enough or if there’s an incredible price. But it’s going to be a lot harder to retain that type of customer and if you get a referral, it might not be the type of referral you want.

I wonder if Satisfaction and Referral are often left out of cycle strategies because they are the stages most out of marketers’ control.

A satisfying customer experience is not completely in the marketer’s control. For sure, marketing plays a role. A customer’s satisfaction can be defined as the degree to which her actual experience measures up to her expectations. Our marketing messages are all about expectations, so it’s important that we are compelling without over-hyping the experience. And certainly marketers can influence policy decisions, website designs, etc. to help drive better customer experiences.

In the end, though, the actual in-store or online experience will determine the strength of the customer engagement.

Everyone plays a part in the satisfaction stages. Merchants must ensure advertised product is in stock and well positioned. Store operators must ensure the stores are clean, the product is available on the sales floor and the staff are friendly, enthusiastic and helpful. The e-commerce team must ensure advertised products can be easily found, the site is performing well, product information in complete and useful,  and the products are shipped on time and in good condition.

We also have to ensure our incentives and metrics are supporting a quality customer experience, because the wrong metrics can incent the wrong behavior. For example, if we measure an online search engine marketing campaign by the number of visitors generated or even the total sales generated, we can absolutely end up going down the wrong path. We can buy tons of search terms that by their sheer volume will generate lots of traffic and some degree of increased sales. But if those search terms link to the home page or some other page that is largely irrelevant to the search term, the experience will be likely disappointing for the customer who clicked through.

In fact, I wrote a white paper a few months ago, Online Customer Acquisition: Quality Trumps Quantity, that delved into customer experience by acquisition source for the Top 100 Internet Retailers. We found that those who came via external search engines were among the least satisfied customers of those sites with the least likelihood to purchase and recommend. Not good. These low ratings could largely be attributed to the irrelevance of the landing pages from those search terms.

Satisfaction breeds Referral

Referrals or Recommendations are truly wonderful. As I wrote previously, the World’s Greatest Marketers are our best and most vocal customers. They are more credible than we’ll ever be, and the cost efficiencies of acquisition through referral are significantly better than our traditional methods of awareness and acquisition marketing. In my previously mentioned post, I discussed some ways to help customers along on the referral path. But, of course, customers can be pretty resourceful on their own.

We’ve all seen blog posts, Facebook posts or tweets about bad customer experiences. But plenty of positive public commentary can also be found.  Target’s and Gap’s Facebook walls have lots of customers expressing their love for those brands. Even more powerful are blog posts some customers write about their experiences.  I came across a post yesterday from entitled Tales of Perfection that related two excellent experiences the blogger had with Guitar Center and a burger joint called Arry’s. Both stories are highly compelling and speak to the excellent quality of the employees at each business. Nice!

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Developing a business strategy, not just a marketing strategy, around the customer engagement cycle can be extremely powerful. It requires the entire company to get on board to understand the value of maximizing the customer experience at every touch point with the customer, and it requires a set of incentives and metrics that fully support strengthening the cycle along the way.

What do you think? How do you think about the customer engagement cycle? How important do feel the customer experience is in strengthening the cycle? Or do you think this is all hogwash?

“If it ain’t broke, you ain’t looking hard enough”

The poor economy has done nothing to lower customer expectations of online retailers, and recent mixed results data from ComScore and ForeSee Results indicate that retailers who continue to improve their customer experiences are pulling away from their competitors in both sales and customer satisfaction.

ComScore reports online retail up 4% for the holiday season. While an increase is always nice, this is a much lower growth rate than online retail has seen in the past. And last year’s comparison base was far from stellar. ForeSee Results shows a significant drop in customer satisfaction year over year. Since satisfaction is predictive of future financial results, a drop is concerning.

But still, I wondered how sales could be up at all if satisfaction was so far down.

A deeper look at the ComScore data shows the Top 25 retailers growing 13% while “Small and Mid Tail” retailers are declining 10%. Satisfaction scores are also split, but the differences we’re seeing seem to be more based on those retailers who are continually improving their sites versus those whose cost containment measures have slowed or stopped improvements. It appears that the retailers who closely measure the effectiveness of their sites from their customers’ perspectives and continuously improve their customers’ experiences are the retailers with increasing customer satisfaction scores. Those retailers who didn’t improve customer experience this year are suffering declining satisfaction scores. Many of those in the Top 25 are the retailers who have continued to enhance their customer experiences. Those enhancements are not only helping them to increase their sales, but because of the high visibility and usage of those tops sites, they’re also raising consumer expectations of all sites.

Customer satisfaction can be best defined as the degree to which a customer’s actual experience meets his or her expectations. Therefore, rising expectations can depress satisfaction scores if customer experience improvements don’t keep pace.

In the rapidly changing world of online retail, stopping or delaying improvements is like treading water in a swimming race. While you may temporarily save some energy, you will fall hopelessly behind and your only hope of catching up is spending a lot more energy than you likely saved treading water

Growing online retail businesses realize and fully embrace the need for continuous improvements, and they also realize that online retail in general is far from producing the level of customer experience truly necessary to provide excellent self-service shopping experiences. I recently heard Robin Terrell, Managing Director of John Lewis Direct in the UK (and Amazon alum), say “If it ain’t broke, you ain’t looking hard enough” in a talk about the need to improve customer experience. It’s a brilliant statement, and I totally agree with what he was saying.

So, “improving customer experience” is a huge and vague statement. Where do we start?

1. Recognize that it’s broke and you ain’t looking hard enough
   We’re still in our infancy in online retail, and we’ve got a long way to go. We too often try to increase our sales by generating more traffic and don’t spend enough time converting the traffic we’re already got. Often, the obstacles to conversion are not the big, shiny, whiz bang functionality; they’re lots of little things that add up to big problems. Those problems are hard to see without a concerted effort, as I discussed in more detail in my Tree Stump Theory post and other posts on conversion.
2. Truly learn how effective your site is from your customers’ perspective
   We can all identify lots of improvements we’d like to see on our sites, but it’s the improvements our customers most need that will drive our best growth. So understanding where we are and aren’t effective from our customers’ perspectives is critically important, but difficult.Focus groups and usability labs can be very helpful, but they can’t be our first or only methodology because it’s not possible to project learnings from a small group of people onto our entire population of customers.

   First, we need to quantitatively understand our effectiveness in the eyes of our total population, and that requires a statistically solid customer polling and analysis capability. Blatant and shameless plug alert: I’ve had great success using ForeSee Results in the past for exactly this purpose. Once we understand problem areas at a macro level, we can add a lot of color by interacting directly with customers in focus groups and usability labs. More details on this process can be found in my post entitled “Is elitism the source of poor usability?”

3. Consider getting some help from usability professionals
   Usability audits are different from usability labs. Usability auditors are professionally trained to understand how people interact with websites. Many of them have degrees in Human-Computer Interaction, a field that truly seeks to understand how people interact with software. These types of people can really help to identify problems with our user interfaces that untrained eyes have trouble seeing but which regularly obstruct customers from accomplishing their tasks.
4. Put in place a process to continuously improve
   This is really about budgetary and project management mindset. We must just accept the fact that we can’t tread water in a never-ending swimming race, and our only chance of competing is to keep swimming. We have to build our staffs, our budgets and our processes with the recognition that competing in the marketplace means continuously improving our customer experiences. Which leads to …
5. Wash, rinse, repeat
   Since the leaders in the marketplace are running this same cycle, we cannot rest. We must continue to recognize our sites are broken, continue to measure our effectiveness from our customers’ perspectives, find problems, fix them and begin again.

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We’ve got a lot of data that shows that retailers who best satisfy their customers generate the best financial results. I suppose that statement doesn’t sound like rocket science. But understanding that satisfaction has a direct relation to expectations and that our customers’ expectations can change independent of what we do on our own site is important. The leaders are continuously improving their sites, and they’re improvements are raising our customers’ expectations. We’ve all got to swim harder to keep pace.

What do you think? What’s your view on the marketplace? How have you see customer satisfaction affect your business?

Sitting in the “Marketing Hot Seat”

My good buddy Adam Cohen, a Rosetta partner who heads up their Search, Online and Social Media businesses, issued a challenge called “The Marketing Hot

You’re the CMO.  You
have a marketing budget of $1M.  Your company is a consumer product
company, relatively unknown / early stage.  Customers who know the
product like it. CEO wants ROI within 12 months.  What do you do?

I thought this would be a fun exercise to take on, particularly because the scenario placed me in the seat of a manufacturer, publisher or product company. Would my retail oriented perspective provide a different line of thinking than would typically come from a manufacturer, and would that perspective be worthwhile? I’d certainly love to know your thoughts.

My take is actually the first one Adam posted on his blog, A Thousand Cuts. Check things out over there over the next few weeks to see perspectives from the other 12 bloggers.

Here’s my answer to Adam’s challenge:

OK.
Setting aside all the caveats about the fact that I don’t know what the product is, what it costs to make and what our margins are, here’s generically how I would approach the situation:

Strategy

1. Thoroughly understand the customers who like our product
   The customers who know our product like it. We need to find out why, in their words, and determine what personality traits, hobbies, demographics, etc. in those customers are relevant to their liking our products so that we can speak to others like them.
2. Get our online destinations right
   With a relatively small marketing budget, we’re going to need to maximize our online strategy. (Actually, we should do that even if have a large marketing budget.) We need to make sure our website and our retailer websites are highly usable and highly effective in merchandising our product and providing the ability for customers to easily spread the word about us.
3. Drive traffic with whatever budget is left
   Only when we have ensured that we have solid destinations for our traffic will we start to actively search for traffic.

Tactics

1. Learn as much as we can about the customers who most love the product.
   Why do they like it? What are there personality types; let’s use the Myers-Briggs personality test and really get a  thorough understanding of these folks. How do they describe our product? Let’s pay attention to the words they  use as we’re going to reuse those words in our copy.
2. Hire ForeSee Results to measure our site’s effectiveness from our customers’ perspectives.
   I realize this may seem self-serving since it’s my company, but I was a client for seven years before joining the  company three months ago, and I’ve see how well it works.  So, I want it in this role. So there! We’ll use  measurements, analysis, Session Replay and usability audits to ensure we’re providing the best experience  we can.
3. Hire Bryan Eisenberg to develop archetypes and to implement Persuasion Architecture on our site.
   We need to speak to customers in language that resonates, and Bryan understands how to do that. We’ll also use  his language for product descriptions and other content we give to retailers for their sites.
4. Create a high quality product video.
   We’ll use this video on our own site and we’ll give it to retailers for their sites. We’ll focus on the key aspects  customers love and use copy that includes words that resonate with those customers. We’ll also show real  customer testimonials.
5. Launch customer reviews and customer forums on our site
   We need to make sure our customers can openly provide their thoughts about our product, even when  they’re negative.
6. Launch several blogs on our site
   Since we only have one product, we need to provide some fresh and compelling content on our site to give people a reason to come back. The content doesn’t need to be about the product all the time. It can be able anything, as  long as it’s compelling. I’ll focus on general marketing, our CEO can blog about leadership, and we’ll find some  people to blog about topics our customers are interested in. All of this blog content will also be great for SEO.
7. Launch a marketing campaign to retailers informing them about key customers and teaching them how to sell the product
   Our initial marketing efforts will essentially be internal. Let’s get the sellers pumped up and doing their jobs well  before we send customers their way.
8. Develop a widget for retailers that gives customers the ability to easily share information about the product
   We need to give our customers ways to share information about our product on their own in a way that is easy and  positive. Let’s create a fun widget that people want to share on Facebook, Twitter, email, etc.
9. Get our SEO right, buy search terms, send emails, run re-marketing campaigns, etc.
   I don’t want to minimize the value of these techniques, but we really need to make sure our destinations are right  before we add lots of traffic.So there you have it. My main point here is to focus on the customers first, the destination second and the traffic driving last.

What do you think? Does my strategy make sense? How would you have addressed the challenge? Do your manufacturer/publisher/product partners address your needs?