Online Insights: Web Analytics

What Should You Test?

New clients just getting started in A/B and multivariate testing often ask us for advice on what to test on their websites or mobile web initiatives. The answer is: It depends on what you are trying to accomplish. Since you can test pretty much anything about your website, what you should focus on depends largely on the combination of your user’s goals. What are they trying to accomplish with your own marketing goals? What do you want your users to do?

Determining where users spend their time on your site will provide insight for areas to test. You can find this information through web analytics click stream analysis (like Google Analytics reports), with heat maps that show you where users are focusing their attention within each page (like Crazyegg), with survey tools that allow users to explain what they do and don’t like, and various other types of tools. No matter how you get your information, you should be looking for common pathways through which your users are navigating around your site, as these are the areas where testing variations is most likely to affect behavior.

As a marketer, you should also have a clear definition of what your own goals are for the site.

For example, are you interested in selling product, acquiring leads or generating clicks to other sites? Put another way: how do you measure success? The answers to these questions will help you zero in on what you should be measuring to gauge the outcome of each test.

What to Measure
Once you identify the key pathways through your site, refer to the following list for ideas of specific things you might test variations of. Consider making not-so-subtle changes; bold changes produce bold results, whereas tepid changes often produce little or no effect.

Text/copy

• Long vs. short
• Style and tone, such as chatty vs. formal
• Positioning, such as which value propositions, features and benefits work best
• Call-to-action text

Font, color and size

• Think about your target audience. For example, if your audience is older, test larger fonts.
• Roughly 15 percent of men are color blind; consider contrast and colors in text and surrounding areas.

Buttons

• Color
• Location relative to the form or feature
• Copy/text

Navigation

• Sequence of items
• Labels
• In-line text link
• Link style, such as underline or bold

Images

• Content of image, such as including a man vs. a woman vs. a group
• Size and color depth
• Location on the page

Layout

• Location and size of areas or boxes on the page
• Attention focus, such as which layouts help focus vs. create distraction
• Buttons and links, and where to place them

Functionality

• Three-page checkout vs. five-page checkout
• Requiring form fields vs. making them optional
• Adding bells and whistles vs. turning them off

Photograph by Hemera/Thinkstock

In addition to creative elements, you should also consider the effect of added content (like heavy images or scripts) on site speed. In many cases, there is a strong correlation between a site’s speed (the combination of page load and render time) and marketing goals like conversions or bounce rates. In other words, faster sites produce higher conversions.

For example, Mozilla.com, one of the top 50 trafficked websites worldwide, found through testing that by streamlining a landing page, it was able to get the site to render 43 percent faster and as a result, increased conversions by 15.3 percent. This translated to more than 10 million additional downloads per year.

Website testing is a highly effective way to make systematic improvements that boost conversion. Identify what your users are doing (or want to be doing) on your site, clarify your marketing goals, and then try testing variations that are likely to nudge users along through your site’s conversion pathways. And remember that optimization isn’t only about creative; it includes site speed and performance. When users experience a more usable, persuasive and faster site, everyone wins.

Eric J. Hansen is the founder and CEO of Boston-based SiteSpect and the chief architect of the firm’s non-intrusive technology for multivariate testing, behavioral targeting and digital marketing optimization. Follow Hansen on Twitter at @ericjhansen.

February 2010 – Cover Story: Make Site Search More Personal

Subjectivity is the Key to Driving Site Search Success

By Dr. Scott Brave

If your site search is failing both you and your customers, you aren’t alone. Marketers, website managers and search professionals across all types of organizations struggle every day to produce sets of meaningful search results that truly help their user base–rather than inundating them.

Enterprise search has long been the de facto standard for websites and corporate knowledge databases, predominately employing text-matching algorithms. While statisticians might be impressed with the outcomes, users who initiate searches find themselves drowning in a sea of homogenous data.

Search professionals and merchandisers are in no better position, with product catalogs and content that is constantly growing and changing.

Site search has come a long way over the past few years, and some traditional vendors are even making impressive strides to improve relevance without having to rely as much on manual tuning. Even so, the single most important ingredient to produce relevant search results is still often lacking: subjectivity. In other words, typical search engines still have no reliable way of accurately interpreting users’ intent or determining what results are actually useful in your ever-growing sea of content.

“What exactly is so wrong with objectivity?” you might ask.

For one, the critical information needed to determine relevance is simply not in our content. The content that makes up our websites–whether HTML, flash, video, PDFs or some other type–seems like the best place to discover a match to a user’s search terms, but often it’s not. Frequently, there’s a mismatch in how a user phrases his or her query and the words content creators use–and that’s just for content that the engines are able to spider.

If we make an assumption that the content is in a format that’s spiderable and that it contains the user’s search terms, it still doesn’t mean that the documents that are returned in the results are truly relevant. The key is to understand what content is useful, when it’s useful and who it’s useful for. However, that critical information is in users’ heads, and it’s based on their experiences and needs. That’s why introducing subjectivity into search is so important.

The best approach for surfacing this subjective insight might seem to be to explicitly ask the users. This approach seems good on the surface, but upon further scrutiny it’s flawed from a standpoint of coverage, bias and inaccuracy. Some enterprise search providers are beginning to move in this direction, but have generally failed to recognize a fundamental rule: actions speak louder than words. As social science has taught us all along, if you really want to understand people, you need to watch what they do, not what they say.

A few players in the enterprise search space have even figured this out. That’s the good news. The bad news is that they neglect to look beyond search. What users are doing in search only skims the surface of what’s really going on. Anytime someone comes to your website, they are looking for something. Many times they will have done a search on Google before they came to your site. Their Google search terms are your first clue. Once they get to your site, not all users search. And even if they do, there are many steps and actions that they take after the search is performed. Every action, be it search, navigation, engaging with content–or even all of the above–is providing you with valuable clues about what’s useful, why it’s useful and who it’s useful to.

Consequences of Objective Search
Site search is one of the single most important features on websites, and a primary method for your users to find the products and content they need. The consensus among analysts is that while there have been great improvements in site search technology, the current options aren’t making the grade–on the user experience side or the search manager side. To really move the needle on the search experience, companies will have to look at new methods that fall outside of the traditional search technology realm. Independent analyst firm Gartner predicts that by year-end 2013, more than 30 percent of the most popular websites will use search technology to better target content by adapting to the user’s context.

Poor search experiences aren’t just an inconvenience for users, they are also costly. Marketing budget is spent attracting visitors to your site. Opportunity cost is sunk into the hours spent manually tuning search results and content. Customer service costs rise as users pick up the phone or send e-mails. Revenue is lost as prospects and customers abandon your site in frustration. This clearly isn’t lost on companies. A recent study by Internet Retailer reports that 35.9 percent of online retailers have plans to upgrade their site search.

Creating a Personalized Search Experience
Improving site search isn’t just about producing better search results. It’s about personalizing the search experience to each user based on their specific needs. It’s about making search subjective.

If continuing on with the status quo is no longer an option because of both the negative impact on customer experience and the high associated costs, then you need some concrete, objective points to consider when looking for a solution to the search problem:

Think not only about content, but also about context - Users come to sites with intent. That intent might be indicated in a Yahoo or Google search that brought them to your site. After reaching your site, they might then express intent or context in the pages they visit and engage with, the links they click and maybe the site searches they perform.

What else are they doing to express intent and even engagement on the site? Consider how long their mouse hovers over a piece of content. Are they engaging with multimedia content? Do they spend time comparison shopping, hopping back and forth from one document to the other? This expression of interest may span multiple searches and actions, and finding content that engages them and holds true value for the user’s specific intent or context may also take multiple steps.

By paying attention to the context of users’ visits, you can begin to fine-tune their search experiences and identify what web pages and content will be most relevant to them.

Make search social - In recent years, explicit user actions such as click-throughs, ratings and feedback were introduced to solve the issue of search relevancy. We’ve seen this on the likes of YouTube ratings, Yelp reviews and Amazon product commentary.

However, today’s advanced social search techniques have evolved to take into account how humans search for, find and consume information and products in the physical world. In this sense, the implicit feedback users are giving you as they navigate both the web and your site are much more important and telling than explicit feedback–on many levels. These implicit actions take into account all traffic, not just a small percentage. They also include information such as how a visitor arrives at a site and every action they take once they arrive, including navigation patterns, search behavior, browsing behavior and even interactions with non-spiderable content like video and PDFs.

Remember, actions speak louder than words or, in this case, search queries as well as navigation on the web and throughout your site. It’s amazing what a little listening will tell you about your visitors and what will interest them.

On a larger scale, you should also consider the macro data that can be collected and analyzed from all your website visitors. As this data is continuously distilled, virtual communities of like-minded visitors begin to emerge. Actions, patterns and tendencies associated with these communities form the basis of a collective prospective that you can use to deliver better search.

Automate the fine-tuning process - When companies do find flaws in their search results, the approach most take is to manually tune and tweak the search algorithms or the content. With this approach, companies can only focus on the most popular products and content, and they miss out on the highly profitable long tail. Simply put, it isn’t timely, scalable or all-inclusive.

Furthermore, search administrators are rarely subject matter experts and possess little knowledge about how visitors think about a company’s products and services, making it difficult to establish rules to actually help users. When subject matter experts are deployed to tune the content, it takes valuable time away from more high-value activities they could be focusing on, and still only addresses the most popular searches.

Companies need a solution that automates the fine-tuning of results in real-time, and allows the site to change the results as the behaviors of visitors themselves change, continuously optimizing the conversion potential of search.

Give online marketers “community plus control” - If we rethink how we approach fixing search and let our users or online community automatically surface the right content in the right context in real-time, we can really take our sites to the next level. Yet with that automation, companies still need the capacity for control.

Automation should do the heavy lifting for marketers, but it must have flexibility built into it. Online marketers and merchandisers will still need to create business rules to augment and sometimes even override what the community is doing.

Think outside of the box engine – Remember, search should be more than just a box. The engine is just one piece of the navigation framework that guides visitors to your products and content–no matter where the content lives or the format it takes. Perhaps it’s on the homepage, internal product pages, customer support areas, a microsite or elsewhere. It could be HTML, multimedia, a PDF or even some other format.

If companies begin to accept the limited nature of search engines and the concept of intent, they can do much more than fix search. They can start recommending products and content the second they see users expressing intent. When companies create these personalized experiences–be it personalized search results or personalized product and content recommendations across the site–they create a user experience that is engaging at every touch. And driving users to the best content every time they visit ultimately improves sales and reduces costs.

Dr. Scott Brave is co-founder and CTO of Baynote. He holds a Ph.D. in Human-Computer Interaction from Stanford University. Dr. Brave can be contacted at scott@baynote.com.

December 2009 – Online Insights: Online Advertising

Understanding Brand and DR Synergy

Management wants to see immediate results from marketing investments. And why shouldn’t they? Long-term investments in brands are hard to measure, so why not focus on what is measurable and generating strong return now? The problem is that companies that overlook retail branding sacrifice both long-term and short-term margins. Investments in brand campaigns might not get credit for helping the bottom line, but over time those companies that invest brand dollars can see a measurable lift in direct response ROI versus the companies that don’t.

Historically, such contentions have been hard to measure and harder still to leverage in systematic, data-driven ways. With the advent of new tools, new ways to measure and much more rapidly quantifiable media, this is all changing. Not only can we directly assess the financial effect of branding, but we can also make sure that branding campaigns and direct response efforts work together to drive better results for both. And not next year or next quarter, but right now.

Strong Brand Association is Key

How do we know brand investments provide better returns? My company, Rocket Fuel, runs display ad campaigns for a wide variety of retail marketers on our proprietary online ad network. Nearly all are focused on driving immediate and measurable sales. We see these results in real-time, and use them as input into our technology platform to tune the campaigns, better find the right target customers and deliver results.

As we started running these campaigns, we began to see wide variations in success among advertisers.

Companies who have made large investments in building and establishing their brands are seeing great results–often a ten or even 20 times return on their advertising investments. Companies entirely focused on immediate response, without similar brand investment and equity, are seeing much lower returns on similar tactics–as low as two to three times spend, or worse. But they are happy with these results, even though much higher ROI could have been achieved by reaping the benefits of investing in long-term brand value.

Why did some advertisers get great results and others didn’t? Of course there are wide variations in creative, messaging, offers, target, landing pages and consumer interest in products offered. While it’s challenging to hold all these potential variables constant, if you look at enough campaigns, you will start to see a persistent pattern emerge. Retail ad campaigns backed by strong brands tend to perform better than those without strong brand associations. Typically, we see differences of three to five times better performance for strong brands over weaker ones. One top women’s fitness apparel brand achieved 10.3X ROI within a single month: for every dollar they invested they were seeing more than $10 spent in their online store. Similarly, a top brick-and-mortar, high-end fashion retailer achieved over 20X ROI.

We’ve also noticed that this isn’t restricted to strong brands developed solely through traditional offline brand-building efforts–several online-only brands reached their cost per action (CPA) goals at very high volume. For corporate marketers, it seems clear that a marketing investment that makes your direct response spend three to five times more effective would be a worthy one.

It’s All About the Analysis

With the advent of new tools and capabilities online, we can go one step further and not just measure the connections between brand and direct-response advertising, but also use that knowledge to make both campaigns work better. Here’s how it works:

Every marketer is familiar with using test and controls to understand causality between different kinds of tactics, creative and the like. My advice is to use a similar methodology to understand and leverage the connections between brand and response marketing.

First, a marketer needs to run tightly controlled brand and response programs with integrated data and analytics so results can be looked at across the programs. The advent of online technology tools allows for much more rapid feedback and analysis (typically on a daily basis) for both kinds of marketing. The right analytics and data can yield valuable insights, such as helping marketers understand if a consumer who sees a strongly messaged “brand ad” for a major retailer, engaging with themes such as trust, quality and beauty is then more likely to respond to a response-oriented message (i.e. a specific offer or incentive). You can also test and drive better brand engagement by understanding more about the audiences that respond to specific offers.

Take a Holistic Approach

By tightly controlling these kinds of programs, marketers can then start to evaluate how the programs are affecting each other. Coupled with careful analyses of the audiences under evaluation, marketers can start to optimize each program together as one integrated effort. Ideally, marketers should be able to optimize both brand and response campaigns not only to be effective in and of themselves, but also to make the other more effective as well.

In other words, direct marketers can tune brand campaigns to make sure that they drive brand metrics to achieve response-oriented results. And response campaigns can be adjusted so that we learn how to best take advantage of the brand engagement we are driving, and drive more of that as well.

Such an integrated set of programs would create much more value for marketers and their companies. The tools to do all of this exist today, but must be assembled for this purpose. The barriers to transforming your marketing efforts are not technical, but systemic. Too many marketers have brand and response budgets, personnel, objectives, etc. siloed into separate organizations or agencies so that it is nearly impossible to leverage these kinds of synergies. As an industry, we must challenge ourselves to continue to make all marketing accountable. The companies that do this systematically will take marketshare from those who don’t.

Richard Frankel is president of Rocket Fuel, Inc., a hybrid ad network that drives ROI for both brand-oriented and direct-response campaigns. He can be reached at rfrankel@rocketfuelinc.com.

October 2009 – Online Insights: Channel Integration

Direct Digital Marketing

By Brian Deagan

There are millions upon millions of ways to effectively combine the respective strengths of the various digital communications channels to improve customer relationships and increase sales. In fact, simply contemplating where to start is enough to intimidate some marketers from seeking the new innovations necessary to keep their businesses ahead of the competition. However, these marketers will miss out on huge segments of the ever-evolving pool of consumers and prospects by failing to employ a multichannel strategy in their direct digital marketing.

Direct digital marketing–digital marketing that is addressable to a specific consumer with an e-mail address, a mobile phone number or a web browser cookie–is the best way to unlock new opportunities and improve key loyalty and sales metrics.

Getting the most out of a multichannel direct digital marketing strategy first requires the ability to leverage the massive amounts of valuable data available to advance business goals. Having a universal profile management system enables marketers to bring known customer attributes–like past purchase history and enterprise customer data–together with online behavioral data points like keyword search activity and–most important–e-mail, mobile and website activity. Combining data from multiple channels unlocks entirely unique segments. For example, it becomes possible to create a segment of customers who have not made a purchase or opened an e-mail in the last six months, but who have used a mobile coupon. Understanding a customer’s multichannel lifestyle opens up enormous opportunities for growth.

While many attractive multichannel strategies exist, here are a few effective and cost-efficient tactics that use multiple data points to create previously unattainable segments and best-in-class results.

Multichannel Tactic #1: New Product Launch (Channels: Web, E-mail)
When launching a new product exclusively online–using the e-mail and web channels–it is important to use the data points from each channel to shape overall strategy. For example, if a company chooses to send an e-mail announcing a new product, the content on the website should reflect information gathered from the e-mail channel. Onsite targeting technologies–using the web browser cookie as a customer “address”–can leverage data points like e-mail opens to create rules that rotate dynamic content on a homepage or landing page.

This way, when a customer opens a new product e-mail and clicks through to the homepage, they should see the new product again. (Remember those old advertising clichés about frequency and consistency of message?) If a customer who has not received the new product e-mail visits the homepage, it is better to display legacy product that the consumer is familiar with in order to create the conditions for an immediate purchase. A recent study showed that this exact tactic showed a potential increase in sales of 25 percent.

Good onsite targeting solutions also include built-in testing and optimization tools that ensure the most effective content is always in market. This is an elegant, but simple multichannel approach currently employed to great success by direct digital marketers.

Multichannel Tactic #2: Customer Communi-cations Preference Center (Channels: Mobile, Web, E-mail)
The consumer is clearly multichannel, but marketers are lagging behind. One way to make communication with consumers more convenient for them–and more profitable for you–is to create a customer communications preference center. For example, every direct digital marketing program includes some form of e-mail marketing. But is each e-mail newsletter available for consumers to receive in the form of a mobile webpage, an SMS message or a mobile e-mail? If not, it is limiting the consumer’s capacity to interact with your brand, and limiting your brand’s ability to create the conditions for a purchase. Consumers want choice in how they receive communications, and marketers who fail to take advantage of the multichannel environment are leaving sales on the table.

Multichannel Tactic #3: Sales Event Reminder (Channels: Mobile, E-mail)
Every direct digital marketer knows that the majority of e-mail opens happen within the first 72 hours of a campaign’s launch. But if a sales event is planned for Friday through Sunday, and the e-mail campaign was sent on Monday, it is likely many customers and prospects will completely miss the opportunity. As proven and historically reliable as e-mail is as a channel, it is still rather imprecise and sometimes verges on impersonal. These traditional drawbacks to e-mail create the perfect opportunity for including mobile in a sales event reminder campaign. Because mobile is as precise and immediate as it is personal, a reminder for a sale can be sent anywhere from two days to two hours before the event. Using both the mobile and e-mail channels to inform customers about an event opens the door to additional viral, word-of-mouth activity and helps maximize potential sales.

Multichannel Tactic #4: Re-marketing with Triggered Messages (Channels: Mobile, E-mail, Web)
Understanding the customer’s website browsing behavior unlocks myriad new and exciting segmentation and targeting strategies. Recognizing a website browser as an e-mail subscriber immediately allows the marketer to understand what content and information has already been presented to the customer and display more aggressive offers designed to capture a sale. However, when that e-mail subscriber, mobile subscriber or return website visitor browses product pages without purchasing–or abandons a shopping cart–it can be difficult to re-engage that customer in a meaningful way to entice a purchase. Re-marketing is an extremely effective tool for re-engagement, and mobile and e-mail are the ideal channels.

Sending a targeted message with a more aggressive offer to an e-mail or mobile subscriber hours after they abandon their shopping is a proven tactic for increasing sales. A tactic as simple as requesting feedback with a brief survey or form also provides additional insight necessary to complete immediate sales opportunities and create more successful marketing programs in the future.

While multichannel strategies may seem expensive and complicated, they are quite cost-effective and surprisingly simple if the right solution is available. Software solutions that combine multichannel capabilities with a marketing datamart specially designed for developing cross-channel, targeted segments is ideal.

With the ever-increasing popularity and ease of software-as-a-service marketing solutions, marketers have more tools at their disposal to create and execute simple multichannel direct digital marketing strategies that appeal to consumers and increase sales.

Brian Deagan is the co-founder and CEO of Knotice, a direct digital marketing solutions company. You can reach him at bdeagan@knotice.com.

August 2009 – Online Insight: Personalization

Critical Success Factors

By Meyar Sheik

There’s a great deal of noise surrounding personalization systems and how they can be leveraged for increased revenues, conversions and average order values. However, without a cohesive strategy, your implementation efforts will most likely provide inconsistent results at best.

Addressing the Critical Success Factors
Chasing the latest fad or going about personalization piecemeal won’t cut it. You need to be systematic in your approach and understand the critical success factors.

Scope – Personalization initiatives must en­compass all four facets of customer en­gagement: acquisition, engagement, conversion and retention. Failure to consistently customize the user experience at any of these steps means money left on the table. Utilize a platform that supports all customer touchpoints, including e-mail, cell phone, web and physical stores.

Automation – Merchandisers are expert at promoting and positioning their products. However, with large, dynamic catalogs, broad user bases and 24/7 inventory changes, there is a trade-off between the amount of personalization needed and the time and resources required to manage it manually. Manual efforts often end up being out of date, impersonal and less relevant.

Automated personalization platforms use data about shopping behaviors and catalog interactions to serve recommendations and content without manual selection and management. The service should work 24/7 to stay relevant. This requires sophisticated, self-optimizing algorithms. They can support not only typical scenarios such as best sellers, most popular and new arrivals, but also dynamically and in real-time adapt to optimize each individual recommendation selection process.

The system should allow overriding to accommodate retailer-specific merchandising and business rules to support sales, product introductions, inventory management, margin goals, cross-selling and other merchandising efforts.

Performance - The platform needs to operate in real-time, not only for outputs such as serving content for web page recommendations, but also for inputs to the personalization engine. SaaS platforms must process current traffic patterns and click-stream data of each individual visitor in rapid fashion in order to provide the most personalized customer experience possible. This can be combined with historical profiles across channels and touchpoints to produce optimized selections.

Using real-time inputs is the most effective and efficient way to deliver relevant information–consumers’ present behaviors on the site are the most accurate representation of their interests and needs–not the demographic data that they filled out months ago.

Scalability - The platform you choose should be able to manage large and complex product catalogs (if applicable) and should include the ability to leverage all of your offline purchase and customer data.

It should be clear that one-off feature and function implementations simply will not be optimal for most retailers. Still, systems needn’t be overly complicated or time consuming to implement. Done correctly, with the right platform to meet the critical success factors, you can realize the truly enormous revenue and conversion potential of personalization.

Meyar Sheik is CEO and co-founder of Certona, revenue optimization solutions providers. You can reach him via e-mail at msheik@certona.com.

August 2009 – Online Insights: Marketing

Don’t Let Your Competitors Out-Market You

By Scott Smigler

If you have ever opened a “real-world” storefront, you are keenly aware of the many benefits of doing business online, such as broader reach and lower overhead costs. On the other hand, while online retailers have a much larger potential customer base, your competitors are abundant and they are getting more sophisticated by the minute.

With competition rising and marketshare falling, many online retailers find themselves wondering: “What are my competitors doing better than I am?”

If this sounds painfully familiar, here are five ways your competitors may be out-marketing you–plus some actionable tips to improve your online business.

They are writing better website copy addressing customer pain points
Your stronger competitors are writing better website copy that addresses the real reason their customers found them in the first place: to resolve a pain. Sure, writing lots of unique content can improve your SEO results, but it is quality, not quantity, that improves conversion rates.

Quality copy validates the pain that has driven your customer to find a product that can help them and recommends specific solutions in a credible way. This copy appears on category and product pages and also in the form of buyer guides.

Example: Let’s say that you sell shoes. You can use Google’s Keyword Tool to find variations of the word “shoes” in order to uncover specific customer needs. In browsing Google’s keyword recommendations, you may quickly learn that variations of the phrase “comfortable shoes” generate hundreds of thousands of searches each month.

Now, go back to your website. How well do you cater to individuals who are specifically motivated to find comfortable shoes? If the answer is “not well,” this could be a big opportunity. Create headlines and messaging that specifically cater to people who are looking for comfortable shoes, and produce guides such as “the 25 most comfortable shoes we’ve ever seen” or “how to identify the most comfortable shoes” and watch as your traffic, search engine rankings and conversions soar.

They are identifying strategically important keywords for SEO
Sophisticated competitors are thinking strategically about the keywords they focus their SEO efforts on, rather than blindly targeting high-volume terms or terms their competitors target. They take many factors into account such as likelihood to buy, “real” competition and derivative keywords that allow them to kill many birds with a single stone.

Example: Going back to our shoe retailer example, let’s suppose you–reacting to learning how many people are searching for variations of the phrase “comfortable shoes”–immediately focus your SEO resources on those phrases without thinking about whether your site offers a great solution for people who want to find comfortable shoes. It would take a great deal of effort to attain high rankings for all variations of “comfortable shoes,” and if you’re not committed to 1) offering the most comfortable shoes available, and 2) helping site visitors find the most comfortable shoes quickly and effectively, those SEO resources will not be properly leveraged. Both time and money will be wasted.

A more strategic approach would be to consider whether your store truly is the best option for these customers in terms of product selection, internal site marketing, messaging and overall merchandising. If the answer is “yes,” you should proceed with aggressive SEO. If the answer is “no,” you should commit to being–and marketing yourself as–the number-one source for comfortable shoes before committing scarce SEO resources to attain top rankings in search engines.

Selecting keywords strategically is similar to building a well-diversified financial portfolio. First, you must identify your time horizon and your goals. Then you must build a collection of equities (keywords) that allow you to achieve your desired return for the least amount of risk.

They are increasing conversion rates through multivariate testing
Your stronger competitors are in it for the long term and understand that running a successful online retail business requires a commitment to converting traffic into sales as efficiently as possible.

Example: All things equal, over the long term, who will win assuming both competitors sell the same products and use the same marketing techniques: Competitor A who converts two percent of site visitors into customers, or Competitor B who converts three percent of site visitors into customers?

Competitor B, of course. Having a higher conversion rate also gives you other competitive advantages in addition to greater revenue. If your site monetizes traffic more efficiently, you can afford to outbid competitors in PPC and spend more money on SEO and other marketing activities.

They are more sophisticated about managing their brand
Savvy online retailers know that there are many benefits to establishing and consistently communicating their brand. Companies with strong brands stand for something specific that makes them a distinct choice in a crowded marketplace. Companies that stand for something benefit not only from more word-of-mouth promotion, but from better word of mouth. Make sure your messaging is consistent across your entire website and at all customer touchpoints.

Example: Consider Zappos. Their brand is all about service. Many of their customers reinforce this brand message when introducing Zappos to their friends. They’re then more likely to buy, associating Zappos with a very specific concept: service.

Their e-mail marketing is timely, interesting and relevant
The most efficient way to maximize the lifetime value of your customers is to stay in touch via e-mail marketing. In fact, a 2009 Forbes study found that, next to SEO, e-mail and eNewsletters were the most effective online marketing tactics for generating conversions. The challenge, however, is staying relevant to past customers so that they continue to open your e-mails and buy from you when they have a need.

How can you make your follow-up e-mails work harder for you? First, make them timely. After a customer makes a purchase, automatically e-mail them a “thank you” including a list of related products. Second, make your e-mails interesting. If you send a weekly eNewsletter to your customer base, use humor or ensure that there’s value in the e-mail beyond a list of products. Third, make your e-mails relevant. If your site caters to multiple customer segments, tailor your e-mails according to the needs of each segment.

Bringing it together
Online retail sales are likely to double or triple in the next five years. Also, as industries mature, there is a natural consolidation that occurs whereby a smaller percentage of companies will garner a vast majority of the marketshare. In other words, there is a lot at stake, and your competitors are working very hard to position themselves as the winners in their (your) space as Internet commerce matures.

The good news is that the battle is far from over in any specific segment of online retail. You still have the opportunity to be the competitor that everyone else looks up to.

Scott Smigler is the president of Exclusive Concepts, a leading resource for online retailers seeking to convert online shoppers into loyal customers. He can be reached via e-mail at scott@exclusiveconcepts.com.

August 2009 – Online Insights: Analytics

Found: The Missing Middle Class of Leads

By Paul Markun

For many marketers, getting more brand recognition and lead generation is key for increasing company success. Today, not only can your website generate and funnel new leads, but it can also provide critical insight into all website visitors throughout the sales cycle, delivering key sales intelligence to achieve higher conversion success.

We have all seen that the marketing game has changed. The old hierarchical broadcasting of marketing information has been replaced by a much more interactive dynamic. Twitter, Facebook, blogs and every media source and event are tied into the web. Today’s online community is much more connected, and has conversations and movements that can be harder to target your message to and capture the leads from. Customers and prospects communicate directly to each other in this one-to-one world. But where there is communication, there are digital footprints. The question is, how can we use all of this to help lead generation and sales intelligence?

Most marketing organizations launch numerous initiatives, including webinars, whitepapers, tradeshows and e-mail campaigns that generate an impressive growth in the number of leads. In addition, budgets are spent on SEM and public relations activities, driving people to your site. If they fill out a form then they become part of your CRM. But otherwise, they are effectively invisible. And the vast majority doesn’t register–at least not initially. Your marketing dollars go unrecognized. This invisible group is one part of the missing middle class.

The gap between hot and cold leads
In addition to the invisible prospects on your website, there is often a distinct and significant gap between hot leads that get a lot of attention and the many informational ones that do not. These informational leads may have been previously imported into CRM but were forgotten because they were not ready to take action. But suddenly, they are interested and all over your website, unknown to you. Sales teams have to deal with many cold leads along with the hot ones, together with RFP responses, so you can imagine which ones get the attention.

How can we uncover digital clues and indicators and serve the missing middle class of leads? How can you address the group that is in between hot and cold–the interested visitors searching the site for answers, watching videos and downloading info, but not necessarily being fulfilled? We tried various initiatives with Google Analytics to tackle these problems, but I found myself sorting through piles of meaningless statistics and enlisting technical people in interminable meetings to set up what I thought were simple requests. For my requirements, having the web analytics tool external and separate from my web content-management system added more complexity, not the integrated answers my marketing and sales teams were seeking.

The “A-Ha!” moment
Like so many marketers, I needed better web analytics for tracking leads on the website and a way to present personalized content to bump conversion rates. Plus, I needed to find and understand the middle class of leads at the right time, just as they are ready to transition to hot lead status. And it needed to be easy.

Fortunately, there is now integrated software including web analytics, marketing automation and website content management. This is available for small to large organizations, so the customer engagement and personalization that Amazon has done so well is now available to many other organizations. In our case, we started the process in January of this year and were gaining exciting and surprising insights within weeks.

Visiting with your visitors
An important first step is to have GeoIP abilities built in, identifying the country, city, registered company and more about visitors, even if they didn’t fill out a form. This provides sales and marketing instant alerts to visitors on the site: who they are and where they are from and, most important, what they are interested in. Sales will be excited to have visibility to an entire group of visitors they previously could not see. One very large deal was closed in part because our sales team could identify the various visitors from an interested company, but from different groups, and ascertain the timing and content of what they downloaded and searched for. They stepped in to help compete the education and familiarization process across departments and win the business.

Having the content editors in control of segmentation parameters such as visitor personas and content profiles means content gets created and targeted more effectively. The marketing team can track and identify profiles and their website experiences, and present appropriate offers at the correct time. Our inbound traffic from blogs, Wikipedia, Twitter and other social forms of communicating are now part of our communications, messaging and goal attainment on our website.

Campaign management
To understand our numerous campaigns, the team was able to quickly track where visitors came from, what they searched for before and while on our site and what goals they accomplished. We found that certain online properties where we were advertising were far more valuable than we thought–and others a disaster. One publication had a lower click-through rate, yet their visitors spent much more time on the site, downloaded more content and would eventually register to get our premium content.

Using global cookie retention, even if the visits are weeks or months apart, they can be automatically tied together. That let us understand campaigns that were really working, and others that just had a lot of clicks but not the right target audience. The context makes a huge difference, and we ended up shifting our ad dollars accordingly.

Better signal-to-noise ratios
Being able to identify traffic types right away is now possible. We realized that about 90 percent of the overall traffic on our website was from robots, which is not unusual. This can easily skew the statistics, so you’ll want a system that easily tunes them out in order to get clean results. Additionally, other simple check-box filters eliminate our internal company traffic and easily distinguish between first-time and returning visitors. All of these various forms of noise were skewing what we thought visitors were doing on the site. Since it is easy to adjust, our content editors can see the differences between various visitors and their favorite content. They can set up some personalization rules so different content shows up for different profiles, such as technical whitepapers, business videos or vertical industry cases studies.

All together now
In today’s economy, running the right advertising campaigns, generating the most effective buzz and creating the optimal content is critical. While your prospects and customers have so many more connection points in their decision-making processes, new website content-management technology can bring out the “lost middle class” in the upper/hot category. Sales can share in and act on their visibility on the website. Of course, all the relevant information should be readily imported into your CRM system, so sales can manage the pipeline with much sharper radar and marketing can track the ROI.

Tapping into a valuable group of web prospects that you may have been missing previously will pay off handsomely. An easy-to-use website system for your marketing and sales teams makes a tremendous difference in discovering new, important ways to identify and assist web visitors, and in overall team effectiveness.

Paul Markun is vice president of marketing of Sitecore, leading the company’s initiatives in communication, lead generation and channel and public relations. He can be reached at pm@sitecore.net.

August 2009 – Cover Story: A Hyper-Efficient Market

Transitioning from click-fraud detection to traffic-quality assessment

By Richard Sim

Online advertising–a medium where a tremendous amount of data is readily available and performance can often be measured down to the penny for a given ad–is on the verge of a revolutionary shift. Ad buying and selling is rapidly evolving toward a “hyper-efficient” marketplace driven by near-perfect information and real-time transactions.

Buyers and sellers are increasingly leveraging technology to make informed decisions to meet their particular performance requirements. Meanwhile, data storage costs are going down, database technologies and analytical tools are becoming more powerful, processing speeds are getting faster and online ad spending is growing year over year. These trends are creating a “perfect storm” for online advertising and revolutionizing the way the industry buys and sells inventory.

Armed with high-powered, data-driven systems, cutting-edge machine-learning techniques and predictive-modeling methodologies, a new class of ad sellers, marketers and solutions providers is rapidly emerging to capitalize on this new opportunity. Much like the emergence of hedge funds and the automated trading desks of Wall Street in the 1990s, the online advertising industry is experiencing a dramatic transition in which access to data and the tools to leverage that data are separating the sophisticated, efficient clearing houses from the outdated, speculative arbitragers.

One of the key enablers of the development of a truly efficient ad marketplace is the increasing use of analytics to predict user intent. Predicting user intent has historically been a core component of measuring traffic quality for the purpose of eliminating invalid or fraudulent traffic, but the focus is rapidly shifting toward optimizing the positive end of the quality spectrum to drive better ad performance.

In the Beginning, There was Click Fraud
Click fraud can be defined as the act of producing clicks or impressions that have no economic value to the advertiser due to malicious intent on the part of the clicker. A click can be fraudulent when the clicker has no intention of converting, giving the advertiser no chance to reap a return on the investment in that click. Click fraud clearly reduces marketers’ ROI, as ad spend is funneled to malicious perpetrators in lieu of facilitating the acquisition of legitimate customers.

To date, ad sellers have addressed the issue of click fraud with varying degrees of success. Each of the major search engines–including Google, Yahoo, Microsoft and Ask.com–has settled or has pending litigation on click-fraud-related cases brought by advertisers. Almost all ad sellers have an in-house filtering system to rid their network of fraudulent click activity. However, the amount of time, energy and resources required to keep up with the dynamic nature of online threats is an increasing burden, especially as it forces trade-offs between growing the business versus investing in cost centers.

In recent months, click fraud has re-emerged as a top concern for consumers and marketers alike. Facebook is facing widespread advertiser complaints about undeterred click fraud in its network. Microsoft recently filed a $750,000 lawsuit against a family of three for committing competitive click fraud. The FTC, in an unprecedented move, recently shut down the operations of the Pricewert/3FN ISP, known as a safe harbor for extremely malicious entities involved in online crimes such as child pornography, click fraud and spam. It’s clear that click fraud remains a serious threat to online advertising. And as ad dollars continue to shift from traditional media to online, this threat will only loom larger.

Why is click fraud such a difficult challenge for the industry to address? There are several reasons. First, click fraud, like any online threat, is highly adaptive in nature. While fraudsters commonly take the path of least resistance when targeting vulnerable networks, they do adapt as needed when options run dry. Customers have reported blacklisting IPs and user agents leveraged for malicious attacks only to find that new ones pop up within minutes.

Second, the black hat community is highly networked and collaborative, and readily shares data about vulnerabilities and successful fraud strategies. Evidence of successful fraud campaigns (such as checks received from ad networks) are commonly touted in black hat forums and websites, along with detailed reports on how these campaigns were executed. This level of collaboration and information sharing is yet to be replicated on the security and defense side. Finally, click-fraud detection is simply very difficult to accomplish. Click-fraud detection fundamentally boils down to answering the question, “What is the intent of the person who is clicking on this ad?” Clearly this is not an easy question to answer, and the answer is difficult to validate.

These challenges have created a market opportunity for companies (like mine, Anchor Intelligence) to emerge and provide enhanced protection and security for ad buyers and sellers. Anchor Intelligence’s flagship product, ClearMark for Traffic, is a click fraud detection system, which, at its core, has a sophisticated machine-learning and rules-based system designed to predict user intent. ClearMark enables search engines, networks and publishers to protect advertisers from fraudulent click activity by identifying invalid ad clicks in real time. Customers are empowered to reduce these threats by withholding payouts to the fraud’s perpetrators and evicting fraudulent publishers from their networks while preventing advertisers’ budgets from ever being negatively impacted.

The Next Generation: Traffic Quality and Predictive Analytics
As data and analytics have grown in sophistication and scale, cutting-edge marketers have realized that addressing click fraud is only the first step toward optimizing ad spend. Marketers have recognized that applying the same data and analytics toward identifying, understanding and capitalizing on the entire spectrum of traffic quality is the most lucrative opportunity available to their organizations. As a result, Anchor has recently been encouraged by our customers to leverage the predictive analytics of ClearMark to assess the entire spectrum of traffic quality, including high-value clicks.

Traffic quality is a measure of the value of a click or impression along a continuous spectrum from good (likely to convert) and bad (invalid and/or fraudulent). Traffic quality depends on a combination of interdependent factors including user characteristics, the context in which a user is interacting with an ad, the ad creative and, of course, timing. The more information that is available about each of these factors, the better the optimization potential.

Companies like ours with the ability to detect whether a user who is clicking on an ad has malicious intent can also apply this technology to predict whether the intent of a user is authentic and furthermore, if that authentic intent is relevant for the advertiser. As customers have recognized the game-changing opportunity present in applying technology to assess and optimize the entire spectrum of traffic quality, companies have begun to enhance their intent-prediction capabilities to change the way online advertising is bought and sold.

In the not-too-distant future, an advertiser will be able to make ad-purchasing decisions based on the predicted value of a given click or impression to that advertiser, as opposed to how it’s done currently–based on general prices set by disparate marketplaces. Many of today’s standard targeting frameworks are founded on the assumption that applying known characteristics about populations of users enables advertisers to improve the performance of these ads over untargeted ads. These frameworks have been successful not only because they improve ad performance, but also because they make sense. It would be hard to find anyone who would argue against the notion that males between the ages of 35 and 45 who make over $100,000 per year are more likely to buy a luxury car than the average user.

However, those obvious dimensions are unlikely to have sole predictive value when measuring expected performance. Going forward, we believe that advertisers will also be able to target inventory based on “value tiers” (groups of traffic dynamically identified based on their propensity to convert), rather than limiting themselves to standard targeting frameworks like demographic, geographic and behavioral targeting. These value tiers will incorporate standard targeting parameters in addition to a limitless number of other dimensions that have a direct impact on a particular ad event’s propensity to lead to conversion for a given advertiser. And the more access to data and analysis about both obvious and non-obvious dimensions an ad server has, the greater the expected lift it can generate.

While this concept may sound somewhat audacious, Anchor Intelligence and its customers have already begun to partner together to seize the opportunity of traffic quality assessment and targeting–improving the performance of ad inventory by leveraging intelligence about traffic quality.

For ad sellers, this has not only helped eliminate poor quality traffic from their networks, but also enabled them to capitalize on their highest quality traffic sources. Leveraging data and analysis about various dimensions such as IPs, user agents, ad placements, behavioral profiles and websites, the performance of advertising on ad networks and search engines can be improved by scoring ad events on a continuous spectrum of traffic quality. In fact, by leveraging data typically unavailable to traditional ad buyers and sellers, Anchor Intelligence has enabled search engines to enhance ad-matching decisions to improve quality scores from advertising partners and ultimately improve advertiser ROI.

Characteristics such as the ratio of the ad footprint to the content footprint on a referrer site, the types of browser plug-ins installed on a user’s machine and the ISP that provides a user’s Internet access are all data points that impact the likelihood that a given ad event for a individual advertiser will lead to a conversion, but are essentially ignored by standard targeting methods.

Not only can ad sellers leverage traffic quality intelligence, ad buyers can improve performance by supplementing standard targeting dimensions with non-obvious metrics that also impact conversion probability. As most advertisers and ad servers know, historical conversion is one of the most reliable indicators of expected performance. However, conversion data is not always readily available for marketers to leverage. We have worked with some of the largest online advertisers to optimize their bidding strategy for head, belly and long-tail keywords by building out conversion probabilities even in cases when historical conversion data does not exist.

By leveraging a machine-learning algorithm using our extensive reputation database, proprietary network intelligence and traffic-based observations to score each inbound ad click and optimize keyword bids, the performance of advertisers’ ad spend can be improved five to 10 percent in a matter of weeks.

Our company and others have just scratched the surface of leveraging predictive analytics to assess traffic quality for ad buyers and sellers, but early results are extremely promising. As search marketers around the country scrutinize advertising expenditures and opt out of low-performing and stale campaigns in an effort to maximize ROI, ad sellers and buyers can now capitalize on the traffic quality of each ad to ensure that every click or impression results in positive value for the business.

The days of media buying through personal relationships and handshakes over expensive rounds of golf are quickly disappearing. The market as a whole is embracing a shift toward a hyper-efficient marketplace. A new crop of data providers, audience-measurement companies, yield optimizers and ad exchanges have introduced new capabilities to facilitate information exchange and real-time decisioning.

Companies like BlueKai, Acxiom and Experian are offering access to their unique datasets to optimize targeting. Other audience-measurement companies like Quantcast, Compete and AudienceScience are providing detailed profiles of audience types to facilitate enhanced targeting. Yield optimizers like Pubmatic and Rubicon Project are introducing real-time decision-making capabilities at the time of an ad event to optimize publisher payouts. And finally, ad exchanges like ContextWeb and AppNexus are creating open platforms to facilitate data sharing and more efficient marketplaces.

Each of these camps promises to introduce efficiencies to the existing ad buying and selling process. Anchor Intelligence intends to leverage its technology platform, data footprint and its proprietary analytics to predict user intent and capitalize on the emergence of a hyper-efficient marketplace. For search marketers seeking to optimize their online spend in the wake of an apparent resurgence of fraudulent attacks on their ad dollars, a holistic understanding of traffic quality will enable them to not only survive these challenging conditions, but in fact thrive while their counterparts lag behind.

Richard Sim is vice president of product and marketing at Anchor Intelligence, a traffic-quality solutions provider utilized by ad networks, search engines and advertisers. Sim holds an MBA from the Wharton School of Business as well as a BA in Political Economy from U.C. Berkeley. He can be reached at richard.sim@anchorintelligence.com.

Summer 2009 – The Ultimate Performance Metric

A misunderstood and undervalued business measure, customer
satisfaction can be used to predict customers’ likelihood to shop
again, buy more or to remain loyal to your company in the future.

By Larry Freed

From Wall Street to Main Street, looking at the connection between revenue and the bottom line is the norm. Revenue is an excellent indicator of past and current performance, but e-retailers are struggling in an economic downturn to identify key indicators of future success.

In a landmark ongoing study, researchers at the University of Michigan have conclusively established a crucial—and very strong—connection between customer satisfaction and a company’s financial future, whether the markets are up or down. Companies that perform well on the University of Michigan’s American Customer Satisfaction Index (ACSI) enjoy better revenues, profits, loyalty, word-of-mouth recommendations and return visits. They even achieve higher stock prices. The University of Michigan’s findings have been corroborated by other universities, and the findings are consistent: high customer satisfaction, when measured accurately, predicts success.

Why Customer Satisfaction?
Most e-retailers know the importance of online metrics in managing their business. Online marketers tend to know a lot about their shoppers’ basic behaviors: where they came from, which pages they clicked on, how much they spent and what they abandoned in their cart. There is no question that all of these metrics—clicks, hits and revenue—reveal a great deal about the state of the industry and of an individual company, as does reviewing the rate and trajectory of growth or decline. However, there have typically been severe limitations to understanding what is fueling the growth or decline, the conversions or cart abandonments and the changes in traffic. That’s where understanding customer satisfaction of online shoppers comes in. It’s the difference between behavioral and attitudinal data. You need both to succeed online—and you can’t fully understand one without the other.

A world-renowned economics professor at the University of Michigan was the first to create a methodology that measures customer satisfaction in such a way to predict customers’ likelihood to shop again, buy more or to be loyal to the company in question. Used as a leading macro- and micro-economic indicator by governments around the world, the ACSI methodology has been proven again and again in extensive, academic, peer-reviewed research to be a predictive indicator of customers’ future behaviors. A January 2006 article in The Journal of Marketing even highlighted the connection between the ACSI and future stock prices: an ACSI-based portfolio substantially beat the market and has for more than eight years in a row, in both up and down markets.

In other words, the higher your online customer satisfaction, the more likely your customers are to buy from you, recommend you and be loyal to you.

In fact, the stakes are very high: in a recent study of the Top-100 online retailers (as determined by sales volume), a single-point increase in customer satisfaction predicted an average increase of nearly 9 percent in online sales year-over-year (according to the Top-100 E-Retail Index, May 2009).

Moreover, our research shows that a highly satisfied online shopper is 71 percent more likely to purchase online from the retailer than a dissatisfied online shopper. It has traditionally been difficult, if not virtually impossible, for a multichannel retailer to quantify the value of the online shopping experience at the store level, but we find that a highly satisfied online visitor is 44 percent more likely to purchase offline and 72 percent more likely to recommend the website. These figures help to quantify the multichannel value of the website.

There can be no doubt that when measured correctly, customer satisfaction tells you what customers will do and why they will do it, allowing companies to have a powerful tool at their disposal to predict the future.

Metrics That Work
What do I mean when I say, “when measured correctly”? There is no shortage of ways to track online customer satisfaction, but you need online metrics that track it in a way that is credible, reliable, accurate, precise, actionable and predictive. These online metrics also need to be continuously gathered and dealt with promptly. If any of these qualities are missing from a metric or suite of metrics, a company cannot expect to be able to positively impact the bottom line.

It’s never been easier to collect voice-of-customer feedback, but the challenge is putting that feedback into a scientific context that helps companies know how to predict and shape customer behavior in the future. Any measure worth tracking should meet all of the following criteria:

Credible – How widely accepted is the measure? Does it have a good track record of results? Is it based on a scientifically and academically rigorous methodology? Will management trust it?

Reliable – Is it a consistent standard that can be applied across the customer lifecycle and across multiple channels? When all remains the same, do we get the same results with every measurement? (If my watch is correct today, but isn’t tomorrow, it isn’t reliable.)

Precise – Is it specific enough to provide insight? Does it use multiple related questions to deliver greater accuracy and insight? (A watch without a minute hand may be accurate, but without the precision of the minute hand, it does us little good.)

Accurate – Is the measurement correct? Is it representative of the entire customer base, or just an outspoken minority? Do the questions capture self-reported importance or can they derive importance based on what customers say? Does it have an acceptable margin of error and realistic sample sizes? (Most customers will report that a lower price is important to them, but lowering the price may not induce them to buy.)

Actionable – Does it provide any insight into what can be done to encourage customers to return to the site, buy again or recommend it? Does it prioritize improvements according to biggest impacts? (A methodology without actionable insight helps us keep score, but it doesn’t help us improve results.)

Predictive – Can it project future customer behaviors based on their satisfaction with the site visit? (The goal is to invest our efforts in those things that will yield value. Without predictive capability we are left to shoot at our targets in the dark.)

Metrics that don’t have the above-listed qualities can do more harm then good. They will provide you with a false sense of security that will lead you to make bad decisions based on bad data—if you put garbage in, you get garbage out.

You Can’t Manage What You Can’t Measure
In many cases, customer satisfaction data has taken a back seat to other kinds of metrics. But if metrics don’t provide a complete picture, a business is hamstrung: it can’t manage what it can’t measure.

A good customer satisfaction methodology can help address all of the following common problems faced by online retailers:

Companies have reams of customer data but no idea what to do with it – Computers and the Internet make it easy to collect all kinds of customer behavioral data, but the result is often piles of numbers and yardsticks without any insight into what they mean or how they can help move the needle. Customer satisfaction can help businesses prioritize what will most influence customer behavior.

The metrics show what the customer is doing, but not why he or she is doing it – Many measurement systems reveal nothing about the driving factor behind behaviors. Following site visitor paths throughout a web session will show where a customer has been and what he or she bought, but it provides no information about the customer’s website experience, satisfaction or loyalty. Did they visit 15 pages because they were incredibly engaged or because they couldn’t find what they were looking for? Tracking sales data is absolutely essential, but it doesn’t grant insight into what they didn’t buy, why they didn’t buy it or what it will take to get them to buy it next time. Customer satisfaction metrics answer those crucial “why” questions and allow managers to make decisions accordingly.

If there are satisfaction metrics in place, they are not consistent and scientific – Medical diagnostic tools stand up to the rigors of science and academia. The health of a business deserves the same sort of scrutiny. A scientific approach helps create consistency and predictability as managers determine the cause-and-effect relationship between customer satisfaction and future behaviors. A consistent metric allows for benchmarking over time and against others that are competitors or best in class.

The value of a website is measured only by its sales or its ability to generate leads – The website should be integrated with the rest of your business’s channels. Even if a consumer doesn’t execute a purchase on your site or submit a request for more information, their experience will shape their future buying decisions and their overall impression of your company. Customer satisfaction metrics will allow a business to understand what needs to be done to ensure that those decisions and impressions are favorable, and to maximize the value of the online channel to their organization overall.

Most metrics provide only an instant snapshot of customer behavior without long-term implications – Just as it’s important to measure website traffic on a continuous basis, companies should be measuring customer satisfaction continuously to observe the impact of seasonality, competitive activity and other changes in the market that affect the demand for their products and services (e.g., high gas prices, legislative changes, seasons or holidays).

Most metrics look at the past, but reveal nothing about the future – Most web metrics have no predictive qualities. Sound investments are based not only on what the customer has done in the past, but on what she will do in the future. You need a metric that is linked to future behaviors (such as likelihood to return to the site, recommend it or buy again) and future financial performance. Driving a car forward while looking only in the rear-view mirror invites disaster; similarly, businesses cannot only rely on making decisions based on the past.

A Business-wide Priority
In the current hyper-competitive environment, customer satisfaction monitoring is the single most important tool for separating companies that will succeed from those that will fail. The pace of evolution in the Internet age necessitates immediate action because the customer will not wait. They’ll just find a more satisfying experience elsewhere on the web after being frustrated by your site.

A satisfied customer is a customer that will return, buy again and tell people about a company. A dissatisfied customer has the power to tell millions of people about their bad experience and prevent hundreds of thousands of people from interacting with a given business in the future. This kind of power is reason enough to make customer satisfaction a business-wide priority.

Larry Freed is an expert on online customer satisfaction. He is also president and CEO of ForeSee Results, a market leader in customer satisfaction measurement. He can be reached at Larry.Freed@ForeSeeResults.com.

Spring 2009 – Direct Response Marketers: Achieve Your Online Potential!

Some multichannel marketers—especially those with roots in DRTV—tend to approach their web presence with an emphasis on cost management. By instead focusing on the following 10 fundamentals of online marketing, these marketers—in fact, all marketers—could enjoy web revenue that far exceeds their expectations.

By Bob Greenstone

Just 10 years ago, if you had a successful product on TV, you didn’t really need a website. That’s because less than two percent of sales came from inbound web traffic generated by DRTV media. Just five years ago, almost any ol’ website would’ve been sufficient to handle the 10 percent of sales being processed online. My how things have changed!

Today, you need a carefully designed, expertly managed website to capture the 50 percent of sales (or more) a successful DRTV campaign can deliver. To put that in perspective, if you were foolish enough to run your business like you did 10 years ago, your CPOs would be twice what they could be. Moreover, the gap between a good web services provider and a great one has increased just as dramatically. These days, you could be doing 50 percent of your sales online and still be leaving another 50 percent on the table. I’ve seen it happen.

I can’t blame DRTV marketers. They come from an industry where campaigns hinge on a dollar or two per order, so squeezing pennies from suppliers seems like the surest strategy for success. But the web is a totally different animal, and marketers need to realize that cost management alone is insufficient to realize a campaign’s full potential. For example, while it’s true that you take orders in similar ways on the phone and on the web, the similarities end there. While you can usually only squeeze small improvements out of your inbound telemarketing process with better or more aggressive scripts, on the web you can literally double or even triple your sales through dozens of well-executed changes managed in real time.

Yes, that’s right: Most DRTV marketers have the potential to double or even triple their web business. “How is this possible?” you may ask. “Isn’t a website just a website? If they come to my website, no matter how poorly optimized it is, won’t the customers just buy anyway?” No, no—a thousand times no!

Consider a small change, such as to the headline of your site, the positioning of the order button or the color scheme. In statistically valid experiment after experiment, we have demonstrated that changes to these elements can increase or decrease sales by as much as 20 percent—per factor! I know it sounds crazy, but it’s true.

Now imagine what years’ worth of findings like these could do if applied to your website, and you’ll see why the quality of your web services is so important these days.

Not only that, but the supplier you select can bring you amazing benefits or incredible grief in other areas as well, such as data security, website uptime, the flexibility to make quick changes or even the ability to predict the potential success of a DRTV product before you invest in commercial production and media.

With this in mind, here is my checklist of the top 10 things you need to achieve your full web potential, whether you’re using an outside supplier or managing an in-house team.

The Best Possible Conversion Rate

A conversion rate is defined, simply, as the percentage of website visitors who place an order. If 100 people visit your site and 20 place an order, that’s a 20-percent conversion rate. So how do you maximize that number? In today’s online world, where consumers are used to amazing visual experiences, the old techniques aren’t working as well as they used to. Take streaming video. It’s not what it used to be. In fact, I’ve even seen it lower conversion rates. These days, sophisticated animations and well story-boarded websites do a much better job of driving sales. So how do you know what’s optimal? Simple: Test, test, test. If your web team doesn’t have A/B split testing capability or, better yet, multivariate testing capability, you are most definitely leaving money on the table.

The Highest Average Sale

The average sale is calculated by dividing the number of visitors who place an order into the total revenue generated by the site. Most DRTV websites today imitate the phone experience by using the exact copy and flow from the campaign’s telemarketing script. Not a bad place to start (provided that script is working), but that’s usually as far as most marketers go. Simply testing one set of copy, one image and one presentation of these elements is a strategic relic from an earlier time. Modern multivariate testing technology can test dozens of copy points, images and other combinations to identify the recipe that delivers the highest average sale. You may need a team of talented graphic artists and copywriters to get there, but help is available at no incremental cost to you if you outsource to a competent web services provider.

Solid Data Security

Poor data security could destroy your business overnight. Most suppliers tout PCI compliance, but this is a very minimal standard that provides virtually no protection against data loss. Your web solution needs to involve not only basic protections, such as PCI compliance and HTTPS secure web pages, but also a complete data security plan with proper supervision. Most DRTV marketers have no idea how their data is stored and handled. Yet if their supplier loses a batch of credit card numbers to a cyber-thief, they will be on the hook, potentially for millions of dollars. Some questions to ask: Does your provider have an SAS-70? Do they even know what that is? How many millions of dollars of data loss insurance do they have?

Adequate Support Staff

Testing offers and keeping your website current are critical to executing your marketing plan effectively. There’s nothing worse than getting a distorted read on a new offer because your online team failed to update the site properly. Here again, there are several important questions to ask if you’re outsourcing. How many graphic designers and animators do they have on staff? How many IT support personnel? How many account executives?

“Five Nine” Server Uptime

The expression “server uptime” refers to the percentage of time your website is available to the public. This is important for obvious reasons. Just as you can’t sell from an empty shelf, you can’t process orders without a live website! However, unlike brick-and-mortar stores, keeping a virtual store running 24/7 involves a lot of technical details that can prove daunting. Most times when your site goes down, you’re probably not even aware of it—unless you happen to be trying to access it at that moment. In order to ensure the ideal maximum uptime of 99.999 percent, known as “five nines,” you need to have a minimum of two data centers online with your websites on both of them. These data centers also need to be “load balanced,” which means that if the primary data center has any issues at all, the other data center can automatically kick in and handle the extra load. It is rare for a provider to have this capability, but it does exist in the marketplace. The provider also needs to have 24/7 monitoring and alarm systems in place that notify tech support staff of impending or existing hardware, routing or connectivity issues, as well as attempted intrusions by hackers.

Real-time Reporting

Next-day reporting is not acceptable in our “on demand” world. For myriad reasons, you need real-time reporting. But this is not as easy or as trivial as it sounds. The type of servers that accept orders are different than the type that crunch mountains of data and turn it into meaningful reports in real time. Do you or your supplier have access to both? If not, you’re at a competitive disadvantage.

Sources for Incremental Sales

In addition to helping you manage your paid search advertising, your supplier or web team should also be able to help you get massive amounts of incremental orders from affiliate, search and e-mail campaigns. Competency in this area cannot be overemphasized. Proper affiliate management can increase web sales 25 to 50 percent! These sales aren’t free, of course, but most are paid for on a cost-per-acquisition (CPA) basis. That means your ROI is locked in at 200 percent or better. Here’s a quick way to find out if your web team is maximizing this opportunity. Go to Google and search for your brand name. If you and your affiliates don’t own the top paid and natural search listings, you are once again leaving money on the table. As for e-mail, look for a provider that has a highly seasoned program at least five to 10 years old and that aggregately e-mails a billion or more pieces each month.

A System for Saving Sales

It’s an unavoidable fact: Even on the highest-converting websites, the majority of visitors leave without buying. A well-known technique to help address that problem is a pop-up chat window. As the name implies, when a visitor tries to leave the site without buying, a window pops up and encourages them to chat with an artificial intelligence or a human that can answer questions and present better offers. These pop-ups are sophisticated enough to avoid most pop-up blockers and can increase sales by 10 percent or more. A no-brainer, right? The only problem is that the third-party solutions on the market take a large chunk of the “saved” sale. On the other hand, a first-rate web services company should have this capability built into its system and offer it free of charge to clients.

Flexible Pricing

If you’re using an in-house web team, this one doesn’t apply. But if you’re outsourcing, you should know that pricing has really come down in the online space. In fact, it is now common to find vendors that offer services related to inbound traffic for free. Such vendors (my company is one) earn their compensation from various types of third-party offers made after your transaction is completed. This model is significantly improving campaign break-evens by eliminating a cost center, especially with campaigns where web sales are in excess of 50 percent of total sales. It’s even being applied to the telemarketing side in a new packaged offering of web and IVR for free.

Great Attitudes

IT departments are notorious for their difficult attitudes. They can be rigid in their thinking and reluctant to accept new information, especially from more creative personalities. To achieve your full potential online, you need to overcome this common barrier. As a wise man once said, the only constant is change. That’s especially true in the online world. As I mentioned earlier, being a few years out of date in your thinking can mean the difference between campaign success and failure.

Bob Greenstone is CEO of Permission Interactive, Inc. in San Diego. He can be reached at (619) 708-7456 or at bob@PermissionInteractive.com.