Direct-to-Customer Commerce

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Strategic insights into the direct commerce industry, including ecommerce, direct marketing and related fields

You don’t have customer until the second purchase

When a customer buys from you the first time, it’s a test.  It’s a test of you and your business:

  • is the product what I expected?
  • was it easy to complete my purchase
  • did they treat me right?
  • did it arrive when and as expected?
  • if I have an issue, will they resolve it quickly and the way I want it resolved?

The answers to these questions will either increase or decrease the likelihood of a second purchase.  And if they do buy a second time, you probably really have a customer — good for you.

11 Personal Gestures to Turn Casual Buyers into Lifelong Customers  — this is a post from Practical Ecommerce that suggests additional things you can do to make a tentative Customer (that is, first-time buyer) into a Lifelong Customer.

Good points to consider for your business

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Filed under: Direct Commerce, Ideas, Opinion, , , , , , ,

How Seamless Are You?

How Seamless Are You? is a study by Accenture on omni-channel retailing, from the customer’s point-of-view.

In my review, I found nothing earth shattering … because it told me what I expected:  customers want to be able to do business with you on their terms, rather than on yours.

Customers expect uniformity in products, pricing and promotions across all available channels.

So, if your organization is complaining about the negative impact of “show rooming” on your sales, then you should immediately consider the fact that your business may not be competitive in these three areas.

There seems to be some reluctance, among some retailers, to recognize that you win and keep customers by being the best company to buy from.  That may mean the best products, or the best prices, or the most attractive promotions.

But you can’t just sit there doing everything like you’ve always done things and expect to preserve your place in the market.  You must be better at something.

You must be more convenient, have a better selection, more available inventory, lower prices … something that differentiates you.

The principles of success have not changed … only the tactics required to implement those principles in the most effective way.

Filed under: News, Omni-Channel Commerce, Opinion, , , , , , , ,

Axle Digital Announces Launch of Grand Central Commerce Platform for Multi-Channel and Social Commerce | Virtual-Strategy Magazine

Axle Digital Announces Launch of Grand Central Commerce Platform for Multi-Channel and Social Commerce | Virtual-Strategy Magazine.

This is an interesting develop … the continuing integration of social media into the marketing mix, especially, the marketing automation mix.  This is especially worth reviewing, if your target demographic is on the younger side … < 30.

Check it out and let me know what you think.

Filed under: multichannel commerce, , , , ,

Defining and Measuring Good Customer Service

One of the keywords I monitor is customer service.

I remain impressed with how many people think about it, and how we dance around the edges without really getting to the heart of the matter. (at least, that’s the way I see it)

It seems to me that good customer service can only be measured by a customer.  Yet, many of us try to estimate a measure of customer service by measuring something other than the customer:

  • on-time-delivery
  • speed of answer (in a call center)
  • wait time
  • average handle time
  • percent of calls with 1st call resolution
  • return rates

These are each appropriate measures of something — and I’m not advocating that we stop measuring them.  But they do not equate to good customer service.

Good customer service equals meeting a customer’s expectations regarding how a transaction should go.  From checking out, to getting the product, to handling a return, to dealing with a problem that crops up along the way.

I think we should be making following up calls to a persistent percentage of customers who complete orders and a set of customers who did not complete orders.  Here are the questions:

  1. If you did not complete an order, why not?
  2. If you did complete an order, were you satisfied with how the entire process was handled?  Y/N
  3. If No, what went wrong?
  4. If No, did we handle the problem the way you wanted us to? Y/N

You see, it doesn’t matter if we think we handled an order correctly.  It doesn’t matter whether we think we handled a problem correctly.

The only thing that matters is what the customer thinks.

Do you know what your customers think about your customer service?

There is a direct correlation between customer service satisfaction and repeat buying rates.  And it’s cheaper to motivate a customer to buy again, than it is to find a new, first-time buyer.

Filed under: Direct Commerce, Ideas, , , ,

Keeping Email Marketing in Proper Perspective

Kevin Hillstrom writes today on: Within E-Commerce, Email Marketing is Not Dead.  Using very simple and clear data, he demonstrates the continuing role of email marketing in maintaining customer buying habits.  He also highlights that this same data does not support using email marketing for customer acquisition.

Boy, now that’s a lesson I wish a lot of merchants would learn.

Filed under: Direct Commerce, News, Opinion, , , ,

Acquisition Spending, Direct Mail on the Rise: Winterberry Report

Acquisition Spending, Direct Mail on the Rise: Winterberry Report.

Interesting market analysis and forecast for 2011 by Bruce Biegel, managing director of Winterberry Group, interviewed in Chief Marketer.

In general, direct and digital marketing are not the dominant advertising channels, as compared to traditional media.  Paper-based direct mail is making a little comeback, expected to rise 5.8% in 2011.

Worth reading the whole piece.

Filed under: Direct Commerce, News, Opinion, , , , , ,

E-Commerce and Retail

Kevin Hillstrom: MineThatData: Multichannel Wednesday: E-Commerce and Retail.

The link above takes you to an outstanding set of observations about how multi-channel customers behave in the various channels, and how you should adjust your marketing communications based upon the acquisition channel.

Great insights that are worth your attention

Filed under: Direct Commerce, Ideas, Opinion, , , , , ,

e-marketing verses p-marketing?

That’s short for electronic marketing verses paper marketing.

I’m raising the question of what is the balance between electronic marketing (in the form of email, etc) and paper-based marketing (in the form of direct mail or catalogs.

As a rule of thumb, I sense a general agreement that response rates from electronic marketing is about 10 percent of similar paper-based marketing efforts.  Obviously some do better; some worse.  Comparisons are difficult.  Because the market segmentation is less strictly enforced for e-marketing efforts — since cost is so minimal, compared to the cost of p-marketing.  Therein lies one of the more significant issues.

When the focus is on acquisition, any new customer is valuable.  So the low cost and similarly low response rates seem to be a non-issue.  However, when attrition rates are considered, part of your strategy must be to maintain and grow the size of the current customer file.  Can you rely on e-marketing efforts alone to meet your customer acquisition goals?  It’s certainly more difficult.

When the focus is on customer files, finding this balance becomes very important, because customer marketing is generally the source for the most profitable sales revenue.  And if response rates for e-marketing are 10 percent of p-marketing, profitability of e-marketing efforts must be about 10 times higher than p-marketing, to maintain profit goals — as sales revenue declines.

How likely is that?

Certainly possible — but not always a likely outcome.

In my view, this calls for more of a balance between these two marketing strategies that I generally see in the marketplace.

Personal anecdote — when I get a paper catalog, I routinely drop it on the reading table where I watch TV.  Then often, while watching/listening to the news (or some other equally mind-numbing program), I flip thru the catalogs.  I never know when something will catch my eye — something I can no longer live without.

I can’t do the same thing with e-marketing — at least not yet.  Maybe when I get an iPad, that will change.  But Apple has only sold a couple of million iPads, so market penetration of iPads is still small.

Several years ago, we heard catalogers talk about the “shelf life” of their catalogs.  That is, how long did a customer let the catalog sit around before they trashed it.  A few days ago I noticed one blogger write about the “half-life” of a marketing promotion.  Both terms get after the same point.

Back to business:

e-marketing seems to require a bulls-eye shot to produce revenue.  While a paper catalog or other p-marketing efforts have the potential for a much longer shelf-life.

We need more balance.  I think it will produce more loyal customers, more revenue, more profits.

Filed under: Direct Commerce, Ideas, Opinion, , , , , , ,

A Direct Marketing Strategy for a Weak Economy

I don’t want to suggest that I’m the only one who can come up with this strategy.  Any seasoned direct marketing person, who is thoughtful about it, would probably reach the same conclusions.

In a weakening economy, it’s typical for direct marketers to focus on promotions to their customer base.  After all, response rates from customers are dramatically better than response rates from non-customers.  Pretty obvious.

And, with what will likely be shrinking budgets, the pressure will be on to produce more with less — and leveraging the customer base is the easy solution to such pressures.

But every direct marketer knows there is constant attrition in the customer base.  And that attrition will likely increase in a weakening economy.  Under normal circumstances, we balance the customer acquisition efforts to at least offset the customer attrition, if not actually grow the customer base.

Thus, the conundrum of a weakening economy for direct marketers is how to acquire customers in sufficient numbers to offset customer attrition while maintaining profits from customer promotions, all with lower budgets, when most expenses are increasing.

Well, it should go without saying that you cannot do all of those successfully.  But you can have some traction in all those areas.  Let me suggest how that may be possible.

First a couple of working hypotheses:

  1. Your best customers buy thru multiple channels — they visit your stores, get your catalog, order over the phone and over the net.  They’re not just multi-channel buyers; they’re cross-channel buyers.  They use one channel to facilitate buying in another channel.
  2. Customers and Prospective Customers with disposable income are comfortable with email and web.  There are certainly some marketplaces where this is not true, but they tend to be marketplaces where cost the sole criteria for purchase — but even Wal-Mart has a significant web presence.
  3. There’s a difference between shoppers and buyers.  While it’s getting better, shopping on the web is still more difficult than buying.  By this, I mean, if I have some idea of what I want to buy, the web is easy to use to find something to buy.  Conversely, if I have no idea what I want, then the web is a difficult place to go to narrow down the possibilities.  This is one of the reasons that sending catalogs to customers and prospective customers results in online purchases.  I can browse the catalog for ideas and then go online to buy.
  4. Email and Search are so cheap it scary.  The problem, if you call it a problem, is that the response rates are 1/10th of response to paper mail; but the cost can be as low as $0.001 per message.  It may actually cost more to create the message than to send it prospects.  Natural Search has no direct cost (it’s all indirect, because it’s based upon how well you construct your web pages).  Paid Search only costs, when someone clicks thru, so you get impressions for zip.
Okay, with those working premises, here’s a strategy for you:
  1. Focus most of your marketing budget on your customer base with the goal of maintaining revenue streams and profit margins.
  2. Emphasize natural and paid search to identify prospective customers because the cost is so much smaller than paper mail.
  3. Construct an email tree of emails which takes a prospective customer from inquiry thru their second purchase.  This means sending multiple emails, each constructed to build on their prior response/non-response to take the prospect closer to buying.  It’s a weaker strategy to simply construct messages and blast the same email to everyone and their grandmother — you should still be concerned with Offer, Copy and List Segmentation.
What do you think?

Filed under: Direct Commerce, Opinion, , , , ,

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