June 6, 2011

Customer Lifetime Value: The Often Ignored Metric in Your Marketing

When you think about selling your products online do you think about acquiring sales or do you think about acquiring customers? For many online retailers, in fact many business owners, the focus is on sales, not customers. This wrong-headed thinking can actually cost you money. Here are some ways this mentality gets you into trouble:

1. Short-Sighted Customer Service Policies
The number one rule of customer service: treat your customers the way you’d want to be treated if you were in their situation. Sometimes this means losing a little money in order to preserve a long term relationship. Most of us dread dealing with customer service at any business. We expect to be put on hold. We expect to hear “no”, even if the mistake was on the company’s part. It’s a nightmare. So when we have a great customer service experience, we not only have positive feelings about the business in question, we tend to recommend them to other people.

Examples of customer service gone awry that loses you customers:
I bought a ticket to go to Japan earlier this year, then a tsunami struck, causing me to change my vacation plans. What did United Airlines do? They charged me a $600.00 change fee and made me spend an hour on the phone with their customer service people. They made changing my plans expensive and inconvenient.  I hope they really enjoyed that $600.00, because this frequent traveler will NEVER fly them again. That 1 hour of my time and frivolous $600 charge (after I’d already spend $2000 on tickets), cost them a customer for life, a customer who would have spent tens of thousands of dollars with their business over the next few years. All that to get $600.00!

My husband bought a case for his new iphone 4. The company sent him the wrong case. They insisted he send back the wrong case, in order to get the correct case. Even if they reimburse for the shipping, they are forcing their customer to pay for the shipping initially, further delaying the arrival of the product he ordered several weeks ago and giving him an errand to run. Guess where we won’t be shopping next time we need an electronics case?

(By contrast, on the rare occasions that we send the wrong item to a customer at Ex-Boyfriend, we just tell the customer to keep the item and pass it on to a friend, and we send the correct item right away. As a result, we get happy customers, positive word of mouth and maybe our product ends up in an additional customer’s hands that we hadn’t planned for.)

2. Weak Attribution Management
Attribution management is one of the most widely misunderstood concepts among inexperienced business owners. First of all, let’s define the term. Attribution management, means tracking the source of your sales, with the understanding that sales often come from more than one source. For example, let’s say you run an ad on a blog. A customer clicks your ad, sees your stuff but doesn’t buy. Let’s imagine they clicked your Facebook “like” button, and a few weeks later they click a link from your Facebook page to your site and make a purchase. Which source resulted in the sale? Was it Facebook? Was it the ad? The answer is both, and this is where attribution management comes in. Attribution management looks at the first click that delivered a sale, the last click and interim clicks that served as assists.

Currently, attribution management can be tough to track without sophisticated tools or some programming skills. (I personally created my own attribution management system for my website using cookies and IP addresses.) The good news is Google Analytics is releasing attribution management capabilities pretty soon. The feature is currently in beta testing.

Why does this matter?

If you think of acquisitions in terms of sales instead of customers, you may cut off a productive marketing channel that is providing valuable assists, even if it is not contributing to direct sales. It may be effectively nurturing customer leads, even if it’s rarely the impetus to get people to buy. It may be keeping your brand name in the forefront of the customer’s thoughts, so when they Google your brand name and make a purchase, that isn’t just by luck, it’s those tools you used to foster customer relationships that put your brand name in their heads.

Examples of these marketing tools might include blogging, advertising, social media and email marketing.  Just because you don’t see direct sales from them each day, doesn’t mean they aren’t turning people into customers.

3. Lack of Customer Relationship Management
If you think of customer transactions as a one-and-done deal, you lose your chances of bringing them back for subsequent purchases. Once you’ve had someone buy something from you, the goal is to keep in touch with them, so they buy again in the future. Even if you don’t sell the kind of product people buy over and over, maintaining a relationship with past customers encourages them to recommend your business.

Now when I say keep in touch with customers I DO NOT mean sending them constant annoying sales emails. No one likes that. You need to employ a little gentle persuasion. Think about things you can do to keep them interested in you without selling to them constantly.

Here are some things that have worked for us at Ex-Boyfriend:
- Free Downloads
By offering our fans fun free products like drink markers, notecards, etc., we give our customers a fun reason to re-visit our website. Free gifts are a great way to engender a positive experience with the brand and keep our branding in front of our audience.

- A Good Blog
Notice I didn’t say blog, I said a good blog. A good blog is one with content that’s genuinely interesting for your customers. It’s not filled with sales content or boring details about your personal life and photos of your kids. It’s fine to include some personal elements and some sales copy, but if that’s the focus of your blog, no one is going to read it. At Ex-Boyfriend we share funny videos, cocktail recipes, comic strips, etc. Our primary goal is to keep our fans entertained and connect on a personal level, not sell them stuff. Getting them to shop with us is a natural by-product of having fun content.

- Social Media
Like a good blog, a good social media presence doesn’t contain non-stop sales copy. A little sales copy is okay, but the focus should be on content your audience finds interesting. This can include sharing your entertaining blog posts, asking a question that prompts conversation, sharing fun stuff you’ve found online, etc.

- Email Marketing
There are lots of schools of thought on email marketing. Some people advocate frequent contact, some people advocate regular, but not constant, contact. I think 1 or 2 mailings per month is a nice amount for retail businesses. It’s not so frequent that people will unsub because you’re spamming their inbox, but it’s often enough that they don’t forget about you.

Like social media and blogging, make sure your email content provides some value above and beyond sales messaging. You want to give people a reason to open those messages, and if they expect nothing but sales talk, they are less likely to open.

 


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February 2, 2011

Site Traffic: Quantity Vs. Quality

Filed under: Marketing Messages — Tags: , , , — Meredith @ 9:53 am

A popular question I hear is “How can I get more traffic to my website?” This is the wrong question. The question you want to ask is “How can I drive qualified targeted traffic to my website?” Targeted traffic is traffic that’s most likely to convert. These are the people who are most likely to give you money. You don’t need tons of visitors if you’re getting the right visitors.

To give you an example, imagine you sell cat collars. Would you rather advertise in a biker newsletter with 300,000 subscribers for $100 or Feline Wellness Magazine, with a readership of 80,000 for $300.00? On the face of it, you might think biker newsletter, more people and less money. The better option is the cat magazine though. It’s more targeted so you’re more likely to actually sell product.

While the example I’ve given is a pretty easy one to understand, my point is to get you to think critically about where and how you market. You can have 1,000 fans on Facebook, but if you sell jewelry on Etsy and so do your 1,000 Facebook fans, your chances of selling to those people are pretty slim. You can buy an ad on a site that’s read by thousands of Etsy sellers for $10, but unless you sell supplies or educational materials for Etsy sellers, there are probably better places for you to advertise.

It’s nice to feel liked. It’s nice to see traffic coming to your site and get praise from friends on Twitter. All those warm fuzzies can fuel your confidence, but they won’t pay the bills. Marketing a business properly is too much of an expensive venture, both in terms of time and cost, so you want to choose the marketing activities that are going to make you the most money.

Not sure if your marketing activities are making you money? Check out my new book on Google Analytics.


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January 3, 2011

Start The New Year With a Marketing Calendar

Filed under: Marketing Messages — Tags: , , — Meredith @ 7:59 am

Even though the Christmas tree might still be in your living room, it’s time to start thinking Valentine’s Day, at least if you have an online retail business. Marketing and merchandising for seasonal occasions is an essential part of boosting sales, and doing it effectively means planning ahead. That’s why it’s important to take stock of all the events throughout the year you could market for and set a schedule for when you’ll start doing your marketing for each.

Here are some popular ones:

Valentine’s Day:
At the latest you should begin your marketing by mid-January. If you are hoping for some print press remember that monthly publications work months in advance and you can start pitching them as early as November. Weekly, online and daily publications need less lead time, but you still want to get on their radar by early January.

If you plan to do a coupon, giveaway, or other promotion, you’ll want to start drumming up interest with your customers by mid to late January.

Graduation
People start shopping for grad gifts as early as April, so if you have products that make good graduation gifts, come up with a plan to market them by early March and start pitching those products to monthly media outlets. Weeklies, dailies and online outlets can be pitched throughout April and into early May.

By late April you’ll want to make sure your website is updated with graduation gift suggestions. This includes optimizing for keywords related to searches for graduation gifts and updating online ad campaigns to encourage graduation gift purchases.

Weddings
Although people get married all year, a lot of weddings happen in June. If you have products that are suitable for bridesmaid gifts, groomsmen gifts or wedding gifts, prepare to market them this way as early as April. Pitch print outlets first and remember monthly outlets work 2 months in advance. Select appropriate online media outlets to pitch and plan to update your website with a wedding gift guide area.

Having your website up to date for wedding shoppers by early May is ideal, since people start shopping for wedding gifts early.

Back to School
Back to school is a major shopping occasion and it starts as early as August. To take advantage, start getting ready by late June. Again, you’ll want to pitch monthly print press early and then move on to weeklies, dailies and online media.

Have your website updated with back to school related keywords and shopping guides by mid-August at the latest. If you plan to do promotions with customers, you’ll want to get that started around mid-August also.

Halloween
Even before the back to school rush dies down, it’s time to plan for Halloween. Get product placement pitches out in early August to print outlets and start updating your website in late September.

Christmas
Since Christmas is the #1 largest shopping occasion, you’ll want to give this the most lead time. Plan your Christmas marketing campaigns before the end of October. Remember to have your website merchandised by mid-November because people do online shopping early.

Other Events
You can incorporate a ton of other events into your marketing plan throughout the year. Think about charitable fund raising promotions (i.e. you can do promotions tied to breast cancer in October or help raise funds to an AIDS related charity in early December — World AIDS Day is December 1). You can even celebrate something fun or silly like Talk Like a Pirate Day. The key is to know what events you want to make part of your marketing plan and be prepared for them early.

Think about other businesses or organizations you can partner with, products you can promote, ways you can attract media attention, things you can do to merchandise your website and optimize your keywords and ad campaigns.

It’s even a good idea to chart out a calendar now, for the next 12 months, with all the different marketing tasks you’ll need to set in motion on certain dates, in order to make the most of upcoming occasions.

Don’t forget, I’m doing a special Valentine’s Day marketing co-op for indie designers. If you want to join us, here are the details.


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September 14, 2010

Finding Your USP

Filed under: Marketing Messages — Tags: , , — Meredith @ 8:49 am

The easiest-to-market products are those that solve a problem for customers. That sounds like BS lofty marketing speak, and also sounds like something that may not apply to what you sell. So let me give you concrete examples of how this might apply to you:

1. You sell bracelets. Many people can’t find bracelets that fit just right. I’m on the petite side and most bracelets fall right off of my wrists and hands, thus I don’t own many bracelets. Conversely, a plus sized consumer might find most bracelets are too small. So there’s your problem: bracelets have fit issues. You can solve the problem by selling a product with a custom fit or maybe in different sizes.

2. You sell handbags. I hate when my lipstick opens up in my bag and gets all over my bag. You can solve this problem by designing a bag that has a built in cosmetics compartment that’s stain-proof and easy to clean.

3. You sell dresses. I never know if something is going to fit me and I hate to pay for shipping both ways just to try something on. You solve the problem by offering free shipping and free returns. You absorb the cost by raising your product prices. As a consumer, I don’t mind because it’s such a huge convenience to be able to try on clothing for free. (Hint: this is what Zappos does and it’s very successful for them.)

Alright, now that we’re clear on how you as a crafty business owner might solve a problem for a customer, let’s move on to how you can figure out what your USP is. A USP, by the way, is a unique selling proposition. It’s the thing that makes your business different/better than your competitors.

An artisan might say “well my products are prettier,” but this is too subjective and may not be enough of a competitive edge. There are lots of pretty products out there, the business person who figures out how to solve a problem is the one who will make the most money.

To figure out if your business solves a problem…

1. Make a list
Make a list of all the selling points for your product/brand. Do you offer a large range of sizes? Do you have the best prices? Do you offer a ton of color choices? Do you offer free shipping? Do you have a generous return policy? Do your products have a special feature that saves time or offers convenience?

Make a list of every little thing you can think of that serves as a selling point for your brand. (Note: while I said pretty isn’t a selling point, it might be one if you sell a product that normally isn’t pretty like orthopedic footwear or maternity underwear. If you sell jewelry or handbags or dresses or paintings, pretty is a given, don’t put that on your list.)

2. Scope the competition
Find other brands that sell in your niche and see if they have any of the same features and benefits. Any time you find competitors who share the same selling points, cross that item off your list.

Note: you’ll only want to cross things off if competitors share some of the same combinations that you offer. For example, a competitor might have low prices, but they may charge a ton for shipping to make up for it. You’ll want to really carefully evaluate what your competitors offer to see if their advantages are truly the same as your own.

3. Define
Once you’ve figured out what you truly have to offer that other brands do not, you need to showcase this offering to customers. If your advantage is that you have the most size options, say this on your website and in your marketing copy. If your advantage is that you have the most generous return policy, highlight this throughout your marketing copy in places like shopping cart, check out and product pages.

What if I can’t find a USP?
If you can’t find a USP, you may be in trouble. If your sales are slow and you feel like your business is going nowhere, your lack of USP may be part of the problem. Re-think how you can change your products, store policies, etc. to give yourself a competitive edge.

If you’re not sure what your USP should be, talk to customers or prospective customers. Try to figure out what problems they have when they try to buy the kind of product you sell. Then think about what you can change to address those problems.


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September 13, 2010

The Language of Marketing: It’s Not About You

Filed under: Marketing Messages — Tags: , — Meredith @ 7:56 am


Today Megan at Craft MBA pointed out a video series that shows artisans doing boring repetitive tasks. The videos were produced by crafters in an attempt to explain to the craft-buying public why handmade products can’t be offered at Wal-Mart prices. Megan wrote about how this marketing message rubbed her the wrong way and I agree, but this post is about why.

Whining that your job is hard so you should get paid more is still whining. No one likes whiners. But the bigger problem here, is that this marketing message is about what customers should do for YOU. You (customer) should pay ME (artist) more because my job is hard.

Marketing messages are not about you, they are about the customer. Your focus needs to be on what benefits your product gives the customer. They don’t care if it took you 1000 hours to make or cost $1000 in materials. They just want to know what’s in it for them.

Take for example the new Nissan Leaf ads. They depict a polar bear watching his icy home melt. The bear treks across the ocean and into a suburban neighborhood where he finds a Nissan Leaf owner, and gives him a hug, for driving an eco-friendly car that’s helping preserve his habitat. Who is the protagonist in this narrative? It’s not Nissan, it’s the consumer, it’s the car owner. The message is clear, buy this car so YOU can feel like a hero to the planet. This car is worth $30,000, because it’s a small price to pay to get to be a hero.

Imagine if Nissan’s ad were all about the years of R&D their researchers had to do to design the car. Imagine if the ad were all about how expensive it is to make a Leaf. Would that make you want the car? Probably not. You don’t care. All you care about is what will the car do for you.

Good marketing appeals to the customer’s ego, fears, hopes, sense of self. A better approach to getting customers to buy handmade might include appealing to:

- Their needs to feel like a non-conformist or trend setter

- Their desire to have something customized and upscale

- Their sense of patriotism

- Their concern for the environment

The “handmade is hard work and I don’t get health insurance” message makes artisans come off like panhandlers trying to elicit sympathy. Think about how you feel when someone in rags asks you for spare change. You might have sympathy for them, but mostly you feel put out and uncomfortable. Do you want your marketing to make your customer feel like a star or do you want them to feel like they want to get away from you as fast as possible?

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