customer retention: learn critical factors for maintaining online commerce success
DESCRIPTION
The challenge for retailers is no longer how to lure shoppers online, but how to add value for their existing customer base. Examine critical business functions for online commerce success, as well as best-in-class factors — transpromo, crosschannel campaigns and deep-dive personalization. Learn the “four Cs” of staying alive — conversion, clarity of messaging, channel crossings and cooperative communications with third parties. Also, learn several key software and cycle management tools that incorporate analytics and printed literature.TRANSCRIPT
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By Dawn Marie Yankeelov, Aspectx
Customer Retention: Learn Critical Factors for Maintaining Online Commerce
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Tech To Be Covered: 4 C’s of Customer Retention
• Conversion
• Automated Channel Crossings
• Cooperative Communications w Third Parties
• Clarity of Messaging
• Conclusion
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Do We Still Need Websites?--”Think wholesale, less retail. Think
distribution, less destination. Think serving, less selling.
--Websites are important because you own them. They feed into your database, and the users they attract tend to more loyal and viral, a big reason we should never give short shrift to direct feedback flows.”
---Pete Blackshaw, Ad Age, August 2010
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Ecommerce: Recession?• The number of online shoppers through May 2010 at
the sites of Akamai clients was up 11.87% over an average day in 2009—which the Akamai Online Shopping Data Visualization Tool sets as its benchmark.
• Last year shoppers were 6.23% below that average.
• Transactions 2010 were up 36.71% over the average day vs. 21.2% on Memorial Day 2009, and sales were up 37.44% vs. 24.33% last year.
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Ecommerce: Maintains Annual Growth
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Retention vs. Acquisition
• 2000-2007: Ecommerce growth averages 20% annually
• Focus on acquiring large masses of increasing new online shoppers
• 2007-2009: Ecommerce growth totals 10%
• Focus shifts to retaining highly valuable customer bases and maximizing conversion of visitors to buyers
• Packstream Research, 2009
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Key to Retention and Conversion lies in the Customer Experience
“Customer experience is the hot concept of the moment in business circles. It's certainly not a bad thing to be pleasant with customers and make them comfortable, but too often companies are using ‘customer experience’ as a firewall between themselves and customers. The other half of customer service -- and the thing that balances out ‘Have a nice day!’ -- is overt and outbound customer engagement.”
--Denis Pombriant, Managing Principal of the Beagle Research Group in CRM Buyer, 2010
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Conversion Rate Possibilities
In November of 2008, almost one-third (30.6%) of all visitors to ProFlowers.com
made a purchase — the highest conversion percentage among all retail websites,
according to Nielsen.
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Conversion Begins with Greater Message/Product Relevancy
…greater Product Relevancy begins
with Consumer Analytics
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Usability Increases Conversion• Analytics can help test site
usability
• Eddie Bauer decreased home page departures by 41% through Coremetricsusability tests.
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Altered by Behavior (Maxymizer)1. U.K. mass merchant TheHut.com discovered
that moving its “Add to Basket” button off of its category pages boosted conversions 64%.
2. A red circle placed at the top of every product image indicating the discount from the regular retail price worked.
3. Not having the Add to Basket icon at the bottom of each product listing left more room to show more products on a page without having to scroll down as far.
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Tied to Google Analytics
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New Class: Ranging from $49 to $499
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Also Helping Increase Conversion: More Relevant Search
• May 2010: thefind overtakes Yahoo Shopping to become No. 2 search engine for retail queries, according to comScore
• Trailing only Google, thefind’s search engine helps users make buying decisions before visiting the retail site
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Survey Said….• A picture is worth a
thousand words.
• 77% of surveyed retailers currently are or intending to incorporate images into paid search.
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Conversion Includes Social Media
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5 Social Media Trends to Watch1. Crowdsourcing2. Group Buying3. Mobile Ads leading
to Payments4. Comparison Pricing5. Having a Social
Media Policy
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Best Practices/New Tools
Digital River clients that deploy its new SocialStream tracking tool can send any product promotion or other announcements through their Facebook and Twitter accounts and receive reports on how much traffic and revenue they generated, conversion rates, and other metrics such as revenue per visitor.
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Case Samples: Dell, 1-800 Flowers, P&G brand Pampers, MyEtsy, Threadless
Social E-Commerce ServicesBrandMe
Creating Virtual Models for effective on-line shopping. Are you ready for the runway? Create your own 3D virtual model for women, and dress up with the latest looks.
Social Store BuilderThe solution enables merchants to push their products onto social networks sites such as MySpace and Facebook.
Off the Wall$30K plus 8%, a selling app for your company in FB status updates.
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Hot Stuff: Discounts of Day
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Twitter Climbs on board
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Amazon: Watch It Unfold
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The Gilt Plan
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A whopping 27% of all Yelp searches come from their iPhone application. Over half a million calls were made to local businesses directly from the iPhone App, or one in every five seconds. Nearly a million people generated point-to-point directions to a local business from their Yelp iPhone App last month.
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The Mecca: The Recommendation Engines
• Personalization delivered through ‘mass customization’
“The more targeted the offer, the fewer gimmicks you will need to sell it. It will sell itself because it is what people want.”
--Edwina Dunn, Dunnhumby
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Proving in Metrics
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Conversion: The Spenders Matter
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Getting Them to Notice--Women utilize the Internet at a slightly higher rate than men
for professional information or enrichment (Pew Internet).
--Women still appear to be time-starved purchasers.
--There is a small but significant increase in the amount spent by women as work hours increase. Women with high-speed connections, who research products and who participate in Internet auctions spend more online.
--By far, though, the largest effect on spending (for both women and men) comes from having an online deferred payment account.
Brendan Hannah and Kristina M. Lybecker, Colorado College Working Paper 2009-02May, 2009
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Following Best Practices on Cross Channels
Best in Class Performance shared several characteristics:
1. 56% use campaign performance to optimize future campaigns
2. 52% optimize all cross channel efforts by eliciting input from agencies, partners, and other in the value chain
3. 50% update customer profiles based on customer interaction --Aberdeen Group, 2009
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The Ultimate TruthFocus on High Value Customers
to Increase Return on Marketing Investments.
It’s Cheaper to Upsell or to Cross-Sell
to Existing Customers
than
it is to New Customers.
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Strategic MeasurementA. # of Loyal Shoppers. % of brand purchased by loyal
shoppers; % of marketing budget allocated to loyal shoppers.
B. Create More Value. Basket size, categories shopped, visit frequency.
C. More Relevant Product Assortment by Key Shoppers.
D. Quality Trials Vs. Brand-Equity Advertising.
Shopper Marketing Magazine, June 2009
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Questions to Ask• Can we send individualized communications to our top
shoppers? Personalized URLs, for example.
• How can we understand our price-sensitive shoppers, and the prices at which we hold and grow their business?
• How can we create a new product line that is very relevant to our high value shoppers?
• How can we reflect shopper behavior and put our brand where our shoppers will expect to find it?
--from Dunnhumbly USA white paper, 2009
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Move to Micro-Targeting• To identify and reach people that will
consume these more relevant items• Companies switch spend from mass
broadcast to highly targeted attention grabbing activities for tighter segments
• Consumers interact online through “relevant published content”
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Methods to Target Consumers
A. Rules-Based: Show Items Based on RulesB. Comparative Filtering: Show Items Based on
User RatingsC. Behavioral Targeting: Show items based on
inferred behavioral segmentsKey Fact: Text and Content Characteristics
Have a Measurable Effect
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Behavioral Inference has reached the Web
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Video Tops the Cross Channel Campaign List
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Video Stats Lift Performance
• According to Forrester Research, the percentage of the top 50 US online retailers that offer videos on their sites increased to 68% in 2009 from 18% in 2008.
• Numerous case studies have also confirmed that visitors who view product videos are more likely to buy than visitors who do not. (Emarketer Survey, 2009)
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Product Videos Work
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Incentives and Payment CardsOn the Rise
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Mobile Marketing
Target understands the importance of having multichannel mobile retail support.
• In May 2008, Target launched its mobile site, where guests could view products, read reviews, check ratings, find the nearest store, browse the Weekly Ad and view latest marketing campaigns.
• The retailer launched the Target iPhone application later that year, in November 2008.
• In 2009, Target extended the mobile offerings on its iPhone application and for mobile in general, just in time for the holiday season.
• During the 2009 holiday season, the Target iPhone application ranked as high as No. 1 in the free lifestyle application download category.
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Cooperative Communication to Third Parties
TurnTo Networks, a leader in social commerce, today announced the general availability of the TurnTo social commerce suite, providing online retailers with next-generation social shopping tools… by over 35 online stores, and adds the new social purchasing sharing product to the line-up.
Facebook Open Graph package: sites will have access to a one-click "Like" button that connects to Facebook, more "social plug-ins" to pull an individual user's Facebook friends and their activity into third-party sites, and a toolbar that aggregates all these features as well as live chat.
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WinBuyer Corp.
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Third Party Listings
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Google Product Search
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Reviews and the Like
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Google: Your Friend
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Value of Biggest Fan
• Track Fan’s Level of Engagement by • Sweepstakes• Contests• Promotions• Lists• Polls…..right on your fan pages…..
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Packstream• Retention marketing software delivering
relevancy at the point of package delivery
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Adotas.com ReportsFan cross applications see a seven to 10
times increase in interaction rates with their social media content and often quadruple sales…..
….and consumers can be analyzed for upsell…..
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The Summer Romance: 2010 Cross Channel Couple
Amazon friends FacebookThe world's largest retailer is using the social
networking giant to serve up personalized product recommendations. Consumers can log in to their Facebook profiles through Amazon.com to receive tips for movies, music and books.
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Clarity of Messaging
• Dynamic Pricing Possibilities• Languages of Choice• Payment Options• Insider Deals, Content, Access to People• Listening to Feedback and Building Lifetime
Relationships
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Clarity of Messaging 101:Dynamic Promotions to Individual Customers
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WrapUp
• CLARITY OF MESSAGINGCustomer Retention means Targeted
Messaging to your Public Audiences• MicroTargeting• Customer Feedback and Crowdsourcing
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Wrapup• COOPERATIVE COMMUNICATIONS Customer Retention means Social
Business/Social Media• Calls to Action• Engagement (contests, solicited
feedback, acknowledgement of top buyers)
• Comparative Pricing• Reviews, and Participation
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Wrapup
• CHANNEL CROSSINGSCustomer Retention means cross
marketing amongst a number of mediums• Watch for more Mobile• Sophisticated Customer Profiling• Touch Often theTop Valued Customers
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Wrapup• CONVERSION Customer Retention means reviewing
online actions and converting them to sales and upsells from the most loyal customers.• Data Analytics• Outbound Customer Engagement• Product Relevancy• Usability Tests
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Aspectx• Dawn Marie Yankeelov, Founder of Aspectx
• [email protected]• Twitter: @dawnyaspectx• Facebook, Linked In, Plaxo Pulse• www.aspectx.com