Exploring Marketing Technology

Category: Web Marketing

New ways to create and measure sites so they improve their ability to bring your best customers closer and attact other individuals just like them

  • Designing an application around consumer behavior

    A recent post on Experience Matters offered a great example of how you can design a user experience around an existing need. Their example is YouTube:

    1. Consumer Need: The ability to share themselves with potentially millions of others through site and sound.
    2. Augment Behavior to include Brand: In the case of YouTube … perhaps the best use of this network was not for a brand to spread its own content, but help consumers share their own. After all, the initial consumer need identified above was the desire for consumers to share themselves with the masses. Wouldn’t it make more sense to empower them in continuing this behavior rather than competing against them? If successful, this takes the process full circle and makes the brand-infused behavior become part of the original consumer need.
    3. Why is this behavior occurring?: YouTube made video distribution easier (on a mass scale) than ever before. It didn’t require hosting a server or website, or being isolated to sending your large files across flaky channels. From a content consumer perspective, YouTube and sites like it offer the depth and variety that professional producers simply cannot match. The quality (for now) of the content is obviously not comparable but consumers are willing to look past it because the content is original, very controllable, and often more personal.
    4. Consumer Behavior: Millions of people are uploading their thoughts, talents, and parodies onto a video sharing network. Even more millions of people are watching those videos (the majority of which are user generated, not professional).

    They call this reverse engineering. But really, it’s simply finding a need and filling it in a unique and viral way. Major online successes are the clearest examples to describe this process because their imprint is so deep and the applications are so new and different from the status quo. Here’s another example:

    The Birth of Amazon

    Jeff Bezos set out to make an e-commerce site. Period. He reverse-engineered from a fundamental desire to buy something in your underwear (so to speak) and not to buy books. It turns out that books simply met the right criteria for ease of warehousing and shipping. Also, books were searchable in a vast and accurate — but, before Amazon, difficult to access — database.

    The success of both of these examples is obvious. Len Kendall of Experience Matters defines success this way: “When a brand can improve or change a consumer’s behavior so it still satisfies their initial needs.”

    He goes on to say that a really big success is when a brand can radically change consumer behavior in a way that makes it virtually inseparable from the initial need.

    The Killer App For Your Brand

    What is the fundamental need that your audience wants to fill? How can you satisfy that need with your brand and some unique technology?

    As an experiment, I tried this reverse engineering exercise with a brand that seems the very antithesis of high-tech. Next week I’ll reveal the brand and the solution.

  • Try a soft-sell approach to your commitment-shy past customers

    What is the value of a web visit that ends without an action? Sure, if that visit ends in a sale, or some other action, the answer is easy. But what about the person who “snacks” on your content but leaves without a conversion? Today data mining expert Kevin Hillstrom makes a case for testing a less strident reaction to an abandoned shopping cart visit. At the very least, he advises testing against a control group when you send discount offer emails to these not-ready-to-purchase past customers.

    In the post he suggests the following:

    Click for a larger versionConstruct a value model in your transactional records using the following “dummy variables”:

    • Shopping Cart Abandoned 1 Month Ago
    • Shopping Cart Abandoned 2 Months Ago
    • Shopping Cart Abandoned 3 Months Ago
    • Website Visit, No Shopping Cart, No Purchase, 1 Month Ago
    • Website Visit, No Shopping Cart, No Purchase, 2 Months Ago
    • Website Visit, No Shopping Cart, No Purchase, 3 Months Ago

    When you do this, Hillstrom contends that what many find is this:

    Unconverted website visits and abandoned shopping carts are not the end of the world! In fact, these activities tend to increase future customer value, as illustrated in the graph above (months four and twelve in the graph).

    Hillstrom likens future value, as measured by non-sale visits, as “sort of like a heartbeat … each additional purchase (months six and eighteen in the graph) results in a shot of adrenaline, causing the heart to beat.

    “Each unconverted website visit or abandoned shopping cart results in a mini-jolt, as evidenced in many statistical models.” Indeed, he writes, “We view the activity as part of a relationship.”

    The take-away from those trying to derive value from any type of site is obvious: Build into your value model a way to watch unique visitors over time, and match “non-committal” behaviors that accompany purchases (or subscriptions, or whatever your call-to-action is) to a dollar amount.

    And also: When you see folks abandon a conversion funnel, stay calm!

    Another tip is consider measuring two specific signs of interest using my Content Interest Index. You can see a seven-minute YouTube video describing what it is, and its value, by visiting this post about the Index.

    Note: The link above was to a blog post called Jeff’s First Pecha Kucha. This is a way of presenting slide show content in a prescribed format that is brief and often quite fun. If you are in the Milwaukee area, don’t miss this evening’s Pecha Kucha Milwaukee at the Sugar Maple. It should be a lot of fun!

  • Focus on customers to survive in this economic downturn

    Gartner Research recently posted six strategic customer-focused areas for survival in this economic downturn. In a nutshell they focus on automating your way through these hard times. Each of the six acknowledge there will be many growth opportunities arising from the dramatic changes taking place right now.

    The challenge their report emphasizes: To find customer- and sales-focuses areas to cut costs and reinvest wisely.

    Of the six, three are revenue-generating. Here they are, with a brief explanation of why they were included and what sort of immediate ROI might be expected:

    1. Customer Retention Management

    Gartner contends that holding onto customers who have a high value — or the promise of high value — is “Essential in difficult economic times.” The firm recommends calculating customer profitability / value and creating retention programs customized to each segment’s needs.

    Common sense, right? But the vast majority of businesses are still light years away from calculating customer value — let alone devising ways to retain them!

    It was Peppers and Rodgers, of The One-To-One Future fame, who most famously wrote about a business’s #1 asset as being its customers. That book was written in the early 1990s, yet the  systematic protection and “mining” of valued customers is still rare — so rare, in fact, that it still inspires whole books about those who dare to do it  well. (I’m thinking here of the book describing the astounding success of Harrah’s).

    Gartner projects that in 2009, “Companies that develop effective retention management processes will reduce churn of profitable customers by at least 10 percent within six months.”

    That’s a substantial bump. If your best customers follow the 80 / 20 Rule (that 20% of customers account for 80% of your profits), then this 10% reduction in churn of those best customers will mean — assuming every other rate is unchanged — an 8% increase in gross profits. That’s not chump change.

    One proviso: By gross profits, I mean the money you get to keep after you’ve set up your retention methodology. These efforts aren’t free. But if you approach the process prudently, you’ll be gleaning far more profits from your existing customers, and feeling less strain to replace “churned” customers via ever-more-expensive acquisition tactics.

    2. Lead Management

    Speaking of customer acquisition, Gartner next recommends that marketing departments become more involved in the lead management process. By doing so, “Companies can improve lead quality and ensure higher conversion rates.” How do they define this expanded role? Here are two examples:

    1. Leveraging marketing insights — They advise using marketing data that the sales function may not be privy to augment leads before their sent through the sales pipeline
    2. Leveraging content — Helping the sales force use product information that’s already available to identify prospect needs early, and improve the impact of each sales contact

    Companies that automate lead management processes this year will increase revenue by another 10% — all, “Within six to nine months, despite the uncertain economy,” reports Gartner.

    3. Online Marketing

    Interactive marketing isn’t a panacea. But it is a more cost-effective — and measurable — way to reach customers than traditional techniques. Here, Gartner claims that companies who, “Identify and prioritize three to four online marketing initiatives and measure marketing ROI,” will drive another 10% increase in revenue within six months.

    I would be more skeptical of this projection if I haven’t seen it at work personally. Online business-building efforts have a surprisingly fast break-even when they’re done carefully. I see this payback being even greater today than a year ago, in a more hyper-competitive marketplace.

    By that I mean we’ll soon be seeing an environment where only the fittest survive. The battle for limited business will shake things out quickly. That means very shortly, those who aggressively reach out for new business will find fewer hands fighting to grab it.

    But that comes at some risk. More customer-focused investments need to be made starting today.

    Life and Death in the Tar Pit

    It’s appropriate that on this, the 200th birthday of Charles Darwin, we take a moment to ask ourselves how we are going to ensure that our businesses are not one of the losers in this heated battle for survival. Gartner’s report highlights constructive areas for the investment of scarce marketing dollars to ensure we come out winners in our category.

  • 5 blogging tips for small business

    Many moons ago the authors of the book Citizen Marketers posted a list of reasons why small businesses of all stripes — either b-to-c or b-to-b — should consider blogging.


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    Equally valuable in their post were these tips for the business blogger once the thing is up and running. Here they are:

    1. Do not have someone else write your blog. Write it yourself.
    2. Blogs should not be managed by the PR department or ad agency. Blogs are best when they’re authentic, which may include run-on sentences, detailed analysis or critical opinions. Typically, those qualities run counter to the sensibilities of traditional public relations.
    3. Do not have a thin skin. Comments to your posts may bite or sting, especially while other people watch. But a strong benefit of blogs: unwarranted criticism often causes other customers often to spring to your defense. Trust-based relationships emanate from taking the bad with the good.
    4. Do not let your blog go unattended for weeks at a time. Focus on several posts per week, even if they’re just a few paragraphs.
    5. Do not make your blog a branding exercise of self-centeredness. If you endlessly promote yourself and your services, no one will care.

    Much of what followed in their post is dated. But re-reading it just now, I see these five tips as withstanding the test of time. Violate them at your own risk.

  • Google Latitude brings web closer to place-based networking

    Today Google has proved correct the predictions of many, including anthropologist and technology expert danah boyd. For years she has been fond of saying that the next iteration of the web — the much ballyhooed Web 3.0 — will be place-based. In a post of hers from two years ago, she writes the following:

    I believe that geographic-dependent context will be the next key shift. GPS, mesh networks, articulated presence, etc.

    People want to go mobile and they want to use technology to help them engage in the mobile world.

    Leaping across the chasm to a robust mobile web experience won’t be easy. Especially in this country. Like the ancient city of Bable, the current state of U.S. carriers is one of everyone speaking a different language.

    This suits the carriers just fine.

    As long as you cannot easily share rich functionality with someone who has a different cell plan, the temptation to switch is less. In other words, as long as each carrier is as dumb as the next, we all remain tied to our current one. In a confederacy of dunces, you might as well stick with the dunce you know.

    Enter Google, Stage Left

    Even before 2005, when Google purchased Dodgeball, there have been indications that they see the future in place-based networking. Everyone has been watching for the big play; the one that will accelerate the steady march to this new networked experience.

    In the meantime, many of us have done our own experimenting with what has been available. I, for one, have toyed with Brightkite.com — especially its “I am here” interface with Twitter (my handle in both: TheLarch).

    The experience has been kludgy.

    This is rarely a word used for Google applications, though. And today they officially announced Google Latitude.

    Here’s a video to explain how it works. It’s about (surprise, surprise) privacy:



    What Latitude will do for our progress toward rich mobile networking is not necessarily revolutionary, but it is evolution on steroids.

    I am certainly not the only person predicting that the news today is big.

    I am, however, the only one in this particular location. Perhaps by later this year, if you’re a close friend, and I choose to let you know, you’ll be able to know through Latitude exactly where my current “here” happens to be.