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

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

How to use Social Media as a Customer Service Tool

This headline is taken from a post you can find here.

The younger your customer base, the more important it is that you pursue this strategy.  Granted, it’s not exclusively relevant to younger customers.

In additional to the Social Media, you should also add SMS capability to your customer service arsenal (if I can use that term).  I’m sure you’ve noticed how many younger people use the phone less for talking than for texting.

That’s a trend you should not fight … instead, go with it.

While I don’t think you can avoid using social media for customer service — over the long term — I’d also push people towards texting, if you can.  After all, texting is at least private, by default.

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

The seventh step to multichannel commerce

We’re getting there, slowly but surely.

This is the step where everyone wants to start … it’s time to set up a web site.

Some of my consulting colleagues have reported there are over 900 ecommerce platforms, from which a merchant can select, upon which they can build an ecommerce store.  The variables seem to go on forever … but don’t forget the previous six steps we’ve outlined.  Those are the non-negotiables (or at least, should be).

After those, nearly everything may negotiable.  Merchants all think their business is unique and needs features or capabilities which other merchants don’t need.  Or they need some feature tweaked.  The only thing I would remind you of is that changes, tweaks and new/modified features cost money.  So, before you go requiring lots of customizing, make sure the customization you need will actually make more money for you than taking the feature, the way it comes.

Consultants love to help clients customize things … often makes them more money.  But many, if not nearly every, merchant asks for things that do not increase sales and may even increase cost or have other negative impacts.

There is a lot to be said for finding an ecommerce platform that has:

  • experience in your industry
  • experience with your other applications, such as Product Master, Inventory, OMS, WMS
  • uses a technology your staff is already familiar with, so you can make minor changes and fixes, yourself
  • an effective user interface, which merchandisers, customer service reps and others can be quickly trained on
  • a plan to stay up-to-date on marketing and technology improvements
  • already supports your current marketing activities
  • supports your current payment processors
  • a good cultural fit with your present staff

When you select your ecommerce platform, you must include every department in the decision.  Don’t let the technology people drive the decision without major input from merchandising, customer service, finance, operations.  It’s very expensive to change ecommerce horses … and the technology itself is not always the most important consideration.

It’s about people and process … the technology is actually less expensive to change.

Then again, take advantage of the technology to improve your processes and perhaps lower your labor costs.

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

The sixth step to multi-channel commerce

Step 6 is about customer service.

Customer service poses an interesting problem for multi-channel merchants.  A common complaint about customer service at brick & mortar stores is that a shopper often can’t find anyone to even take their money, much less help them with a problem.  And I suspect this is at least one factor in driving some people to the web, where customer-self-service is more possible.

In the direct commerce environment, merchants often are faced with a conflicting dilemma.  Customer service remains an expensive proposition, even when it’s over the phone or via some text based medium (SMS, chat, Twitter, email, Facebook), because it takes so many people.

However, on the other side, customer service is often a merchant differentiator.  So, it’s well within the self-interest of merchants to provide as good a customer service experience as possible.

Seth Godin, in his blog, on Sep 26, 2012, wrote:   The simplest customer service frustration question of all … “Why isn’t this as important to you as it is to me?”

And the reality, it often seems, is that a customer’s problem is rarely as important to the merchant as it is to the customer.  But that is so easy to change, if merchant leadership decides to do it.

Nearly everyone has had horrible customer service experiences and nearly everyone has had great ones.  Customer Service staff needs to have the authority to fix customer issues and the tools to do so.

In addition, customer service should be reachable via a channel or medium of the customer’s choice … a list of options which is continuing to grow:

  • phone
  • web self service
  • chat
  • SMS (short message service), aka text messaging
  • Twitter
  • Facebook
  • electronic mail

And here’s an important reminder:  Customer Service should come before your web site.  It rarely does, but it should.  Because the moment your web store goes live, you’ll need customer service.

Filed under: Direct Commerce, Ideas, multichannel commerce, , , , , , , , , ,

The second step to multichannel commerce

Step one = a single, unified product master

Now, step two — a cross platform, cross-channel order management system [OMS].  By this, I mean an order management system which can support transactions and customer service in one or more physical stores, in a call center, at a web site, or on a mobile site.

This is a tall order.  And of course, it’s relevant, only if you really use all of these transaction channels.  Maybe you have one I missed — the point is that your order management system should support transactions in every channel thru which you sell.  That should include Amazon or eBay or any other ancillary channel.

This single OMS enables you to have a single view of your customer and allows you to fix in transaction in any channel in any other channel.  That is what your customers are beginning to expect.

Can you transaction on an iPad or iPhone?

Can your customers check themselves out (self-check-out at the grocery store, or self-check-out at Apple Stores)?  Walmart announced they are testing self-check-out on iPhones.  Where do you stand?

The principle here is that customers should be able to transact with you in a manner that suits them, rather than in a manner that suits you.

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

Are you using Social Media for Customer Relationships

If you’re not, you probably should be.  When your customers mention you in Twitter, on Facebook, or in any other social media, they are giving you feedback — good or bad — and it’s your chance to interact with them.

Don’t let these opportunities go by.  And don’t let social media only be the domain of the marketing staff.  Because social media are not just for distributing promotion codes or advertising messages.  Social media are for venting.  For praising.  For bashing.  For ….

Social media are your chance to demonstrate you are listening, paying attention, and willing to do something.

New tools are coming out regularly … they are very affordable for most companies.  You should monitor the social media with the same discipline and focus as you give your phone calls and emails.  Well, maybe more focus, because a lot of companies try to avoid answering the phone and take forever to answer emails!

Filed under: Ideas, Opinion, , , , , , ,

Customers Prefer Easy to Exceptional

Customers Prefer Easy to Exceptional — this link takes you to the full article in Multichannel Merchant.

It’s an excellent premise.  And the premise of the article — that customers prefer easy resolution to exceptional customer service — is consistent with the fundamental idea that direct commerce is about convenience.

So, Merchants, make it convenient (read that as “easy”) to buy things from you and easy to resolve any problem that might arise.

Filed under: News, 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, , , , , , ,

Kevin Hillstrom: MineThatData: 16 Multichannel Marketing Myths

Kevin Hillstrom: MineThatData: 16 Multichannel Marketing Myths.

This is a great post, which you should read in detail.  I picked it up from a consultant friend, Ernie Shell, who blogs at Direct Commerce Systems.  Kevin’s post, in effect, reminds me of how much the direct commerce trade press struggles to report real information, rather than the self-interested sales pitches of companies who will benefit from promoting their view of what builds sales via the direct channels.

Read and learn from Kevin’s post.  It’s great stuff.

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

What will likely happen in Q4

Press reports are starting to come out that:

  • retailers are not hiring as many seasonal employees for 2009Q4.
  • merchandise orders for Q4 may be as much as 20 percent lower than in previous years

What can we concluded from these two facts:

  • customer service in retail, brick & mortar stores may reach an all-time low.  There simply won’t be anyone around to help you.  You’ll probably have a hard time just finding someone to take your money.
  • e-commerce sites will gain sales faster than ever before — for multiple reasons:

First, because you can check yourself out and don’t have to rely on finding someone to help you.

Second, retailers will likely make sure inventory for their online store is broad and deep.  Because they can sell to anyone, anywhere at anytime.  Thus, they will more likely sell thru online store inventory than physical store inventory.  Plus, they can replenish inventory for the online store faster than they can to physical stores (at least, in most cases).

Third, buying online is less frustrating and annoying than going to a store.  This will be especially true, because there will be fewer sales discounts in physical stores (due to lower inventories) and fewer people to help (see “First”).

*  *  *  *  *

Now, don’t get me wrong.  Total direct commerce sales (as reported by the Commerce Dept) remains about five percent of retail sales, but direct commerce sales are growing reliably, while total retail sales has been in decline for most of the past 12 months.  The bottom-line:  We will see direct commerce (online & catalog) take a big jump forward in Q4.

That in turn will cause at least a short-term increase in activity during the first half of 2010 by companies who will seek to upgrade their online store, or maybe even finally set one up.

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

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