Direct-to-Customer Commerce

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

Low Cost Digital Marketing leads to Lazy Marketing

Digital Marketing … especially, email and social media … is leading to marketing the easy way.

Marketers are just buying keywords, or blasting emails to everyone on every promotion, disregarding whether any part of the target market is already a customer.

I’ve bought vitamins from the same company for over ten years.  They send them every 60 days.  Once or twice a year, I start seeing Ads by Google for this company, everywhere I go.  Why?

Lazy marketing.

There are two broad categories of lists:  compiled lists and response lists.  In the digital world, we haven’t figured out how to “purge” our existing customers from email campaigns or PPC campaigns, because we perceive that the cost to purge them exceeds the cost of including them.

But, we’re ignoring the cost of irritating our customer base.  Denny Hatch, writes in Target Marketing, this month about getting a promotion from Amazon for two books he’s already bought from them.  How long before Denny just marks Amazon promotional emails as “Spam” and never looks at them?

There is a sense in which the Golden Rule applies to marketing as well.  Your customers are likely annoyed by the same things you’re annoyed by … pay attention out there!

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

The eighth step to multichannel commerce

Step 8 is marketing & promotion.

What a can of worms that is … or at least can be!  And obviously, in a single post, I’m not going to cover this topic.  This is a topic of unending variables.

I really only want to make a few points.  First recognize the difference between the channel or medium and the activity.  You can advertise by mail, market by mail and promote by mail.  Mail is a medium of communications.  Advertising, marketing and promoting are the activities.

Multichannel commerce, it seems clear, by definition refers to conducting commerce (which means generating sales) thru multiple channels.  So, I’m not taking about advertising, which is just sending a message.  I’m thinking about making an offer to a customer or prospective customer to conclude a transaction with me.

We have more channels than ever, for commerce:

  • brick and mortar stores (fact-to-face)
  • paper mail (flyers, postcards, letter packages, catalogs)
  • electronic mail
  • social media
  • web store
  • smart phone app
  • tablet app
  • telephone
  • direct response broadcast (radio, television)

… and I’m probably leaving something out.

So, in the ideal world, your marketing & promotion efforts will generate commerce transactions with your customers.  And it should be your customers choice to use any particular channel.  Your offers, products, promotions should all be visible to your customers across all channels.  And that takes no small effort.

Here’s the next important point:  If you can’t measure it, consider not doing it.  The beauty of direct marketing, direct commerce, whatever you choose to call it, is that it’s measurable.  And with technology you can almost measure everything.  But not everything is worth measuring.  But if you’re not measuring anything, you’re wasting a lot of time and money.  And if you’re measuring so much you can’t comprehend the data or analyze the data, you’re still wasting a lot of time and money.

So, be deliberate about what you measure.  The most basic and most useful things to measure are:

  • customers who got an offer
  • customers who bought
  • how much they bought
  • how many they bought
  • what it cost to make the offer
  • what it cost to fulfill the offer

You’ll know a lot, if you keep these six data points for every channel and every promotion.

Think about this … it’s a lot to think about.

Filed under: Ideas, multichannel commerce, , , , , , , , , , , , , , ,

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, , , , , , , , , , , ,

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, , , , , , , , , , , , , ,

Developing a uniform Brand experience across multi-channel

There are two sides to this question — and most see it as a marketing issue.  And certainly it has serious marketing implications.  But the Brand experience is not built entirely upon how merchandise is presented or described.  A huge portion of the Brand experience is based upon customer interactions.

Almost intuitively, we know that we must provide appropriate value to the customer (the combination of price and quality).  However, in addition, we need to treat customers in a way that matches their expectations of the Brand.

And there is a problem with customer interactions across different channels.  After all, it makes somewhat obvious sense that it’s difficult to interact with a customer the same way in a face-to-face scenario, compared to a call center scenario, compared to an ecommerce scenario.

But a truly uniform Brand experience in a multi-channel environment seems to demand more similarity than differences in the nature of those diverse interactions.

So, how do you do it>

I can only suggest a strategy:  deploy a single order management system across all channels.

Boy, that seems simple.  Conceptually, of course, it is pretty simple.  But it’s also deceptively simple and, in reality, very difficult.  And the difficulty is not in the technology, but rather in the management.  It’s likely you will also want a single warehouse management system, as well.  But that’s not as essential, because it’s possible to move inventory & product data between multiple systems and a single OMS.

But the central obstacle to accomplishing this goal is willingness of different internal departments collaborating on a single solution.

In a sense, this is another form of channel conflict — but it’s at the operational level, rather than at the sales level.

To execute this solution, retail operations, customer contact center operations and ecommerce operations must agree on a single OMS to capture sales orders and manage customer transactions at all points of sale — regardless of channel.

Then all these units must collaborate to develop uniform training for staff, based upon uniform company policies.

It’s Change Management 101 — something that almost always gets short shrift.  And, although I don’t mean it personally, it is often the fault of marketing / sales, because they are too anxious to build sales rather than build an enduringly satisfied customer.

Often, only the CEO can solve this, with the patient understanding of the board and shareholders.

Not so simple after all, is it.

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

The last step in direct marketing channel integration

I had lunch earlier this week with a old and tenured friend, who runs a personalized mail business.  As with many, if not most or all, direct mail production companies, his business is suffering some.

He asked me to peer into the future and tell me what I thought was going to happen to the industry.  I won’t claim that my insights are better or more predictably accurate than anyone elses, but here they are:

First, I think the efficacy of direct marketing is being publicly proven — again.  For example, as I posted earlier.  The DRTV business is growing in this economic downturn, because of the reduced price of network TV advertising.  General advertising agencies don’t have budgets from their clients to “over pay” for television time, so DRTV is proving how much stuff you can really sell over TV, rather than just advertise it.

Second, while retail sales are flat or down, ecommerce and mail-order sales are flat or increasing (this according to US Dept of Labor statistics).  Retailers continue to commit increasing resources to their ecommerce initiatives.  Chicos FAS even “replaced” their CEO because he had not devoted sufficient resources to their “direct” business, which was growing faster than any other segment.

Third, internet based retail stores are great “buying” channels, but poor “shopping” channels.  Even with ubiquitous broadband access, you cannot flip thru a web site the way you can flip thru a catalog.  Interestingly, the big catalog companies, such as LLBean and Lands End and others, continue to drive business to their web site by mailing catalogs.  And their web sites are continuing to grow as the point of origin for more and more of their total order volume.

Fourth, electronic-mail does not replace paper-mail (at least, not yet).  By all reports I’ve heard, response to email marketing is 10-20% of response to paper-mail marketing.  That means if you get 2% response to a catalog, you’ll get 0.2% response to an email effort — at best.

And even if the email marketing effort is statistically more profitable, the gross sales and net income remains dramatically lower than traditional direct marketing efforts.  So, all of these merchants who are trying to save money by shifting declining resources to electronic marketing will likely find they will have to return to a more balanced budgetary strategy.

The more difficult question is when will this rebalancing occur — almost impossible to predict.

So, here’s the question I think we need to be contemplating more:

How can we integrate the web as a response channel to paper-based direct marketing efforts, in order to document their efficacy?

And in my opinion, this integration should be more than back-matching orders to mailing files, or forcing customers to enter “source codes” from their catalog.

Let’s have a little creativity in response tracking

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

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