A few weeks ago I attended a UKFast roundtable talking about the marketing mix and how it’s changing especially with more and more digital marketing channels opening up. Check out the video below to see me rambling on with a few other clever Manchester people.

The Internet and Ecommerce have really taken off, especially in the last five years. By all accounts, this is going to continue. Recently though, there’s been much speculation about Internet growth rates and whether they and the revenues derived from them are really going to continue growing at such an astronomical rate.

The general consensus is no.

Verdict consultancy recently released a report (November 2009) that states two trends that we need to be highly aware of which I hav

1. Growth will become more difficult: Through a combination of factors such as a slowdown in broadband adoption and increasing maturity, there will be less new customers appearing online than in previous years.
2. Purchase process: Customers will visit more sites than ever before making their purchase, plus there will be more retailers to choose from.

Combining these two factors will mean that the traditional acquisition model used to grow by a lot of current retailers will not be enough to meet their new targets. We can no longer just be on the hunt.

Most organisations are not farming

So what else can we do? Well a lot of retailers have started to farm their existing databases (customers) to try and get them to purchase more from them. It’s far cheaper after all to convert a current customer again than bring on board an entirely new one.

This of course makes good sense. Unfortunately, the general approach is quite flawed and does not take advantage of the much greater potential that farming can provide. Very often the approach is centered around bulk email sending to a customer database with several offers on the email. We have no idea whether the customer will like the offer presented to them. It’s a simple numbers game of if we throw enough email at the wall, some of it will convert to orders.

Generally this has worked quite well for retailers and has therefore earned email marketing the reputation is deserves of being a low cost delivery mechanism with high (if gradually eroding) returns.

This is not farming and it’s not hunting. It’s looking at your land and using a giant cannon to fire food/nutrients at your land. You have no idea which land grows what but let’s just do it anyway.

How to farm

So, having said all of this, what is farming? Farming is caring for your land (customers) and giving them the right food and nutrients to create the right results. So let’s drop the metaphor – it’s about highly targeted, well delivered messages based on not only them as a person but their behaviour.

Clean

To create an effective farming strategy, we first of all need clean data. Your database is probably not clean. In fact, it’s probably a mess. It’s been added to over time, not used very much or maintained, and could be in multiple places and with different types of data. We need to:

• Bring all of the different data sources together
• De duplicate this information to have one single set of data per person
• In the case of email data, check that all the domains exist and can accept email and all email addresses are in the correct format

Now our data is quite clean, but we still don’t know whether the actual email addresses exist as this is a problematic area. Therefore our first send will clear out a lot of dead email addresses. If you have already been sending regular emails, al lot of this will already be done.

Segment

This is the crucial stage. Currently we have a mass of data that still can’t be used for farming. So we need to create smaller groups of data based on their preferences and behaviour. We’ll take an ecommerce site as an example. In this case you should have the following information:

• Who they are (contact details, name etc)
• Where they are (address information)
• What they have bought (purchase history)
• What they have returned (surprisingly important)
• When they buy (time of day, week, month, year)
• What they have responded to before (email activity history)
• Where they came from (original source of customer)

The list above is by no means extensive and you may not have access to all of the data, but it will serve well for our example.

Based on the data above, we need to find the pockets of customers where correlations can be observed. For instance are a high % of your customers in the South East? Do people who are in the north only buy certain products from you and not others? Do people generally seem to buy in the evening, weekends or is there no pattern? All of these kind of questions will help you identify pockets of highly concentrated data that share behaviour.

Target

Finally the action part. Once we have identified some great pockets of data we need to use their behaviour to send them the right message, at the right time.

Let’s say that we have 1,200 customers who seem to buy at the weekend, are located in the West Midlands and really like the electronics section of your website. That’s pretty specific I know, and sometimes it’s not always possible to get that specific but we can always try. We should segment as deeply as there is a strong correlation of data. 1,200 people exhibiting the same behaviour is significant, 3 people is not!

So we have the data, what can we send? Well the idea would be to send an email, possibly on a Friday afternoon or a Saturday morning or even a Sunday morning (all at points in the weekend) with an electronics specific offer. If there’s something massive happening in the West Midlands that weekend, like strong gales or heavy rain, the campaign could focus on that.

If you were one of those 1,200 customers who received that email, are you more likely to respond? According to your behaviour you will!

Conclusion

Yes, it’s a lot of work, and it’s worth the effort. The returns that can be gathered from highly specific campaigns sent to very segmented data are much more than the returns of bulk mail shots scattered out. The hard work is also in the initial clean and segmentation. Following this process you should tweak change and retest or segments every so often (6 months or so) but generally it’s just coming up with the right messages to send to your segments.

So please, start farming as well as hunting. If I get another email inviting me to a women’s only networking event, I think I’ll scream.

Just published is my new article over at Think Vitamin, Carsonified’s blog. It’s about surprisingly 5 important themes for this year in ecommerce. These are generally themes to look at if you have all of the basics like well converting pages, easy checkout, etc all sorted. Check it out:

http://carsonified.com/blog/business/5-important-e-commerce-themes-for-2010

We are coming into a digital / data age by all accounts, and have been for a while. Everything is based on data, data data and making decisions based on that data, especially for ecommerce sites. Really though, do we know what we’re looking at? Do we understand the numbers? The differences in conversion rates, visitor sources and the like?

The truth is that data has two major caveats that everyone needs to be aware of and needs to put their statistical hat on to understand:

Data can tell any story

Depending the on the way you cut your data, the way you include or exclude certain groups and the metrics you use, data can tell wildly varying stories to people. The data, of course, is always the same (hopefully). One pool of data, and we attach meaning to that data. It’s the meaning we attach that can differ so much!

If we go into data wanting to draw a particular conclusion, then we can find a way to do it! Be careful.

Data needs to be statistically relevant

The good old AB test. A dangerous tool at times. We’re comparing two different landing pages. One converts the visitor 10% better than the other one. We’re all happy with the work done. Is this number real? ‘What do you mean is it real?’ I hear you cry – how can numbers lie? They can’t. But they can hide the whole truth.

First of all, sample size. Did you test enough visits and conversions. It ran over 100 visits? Not enough! To get statistical relevance we need a large sample size, over a decent time period.

Secondly, if you try an AA test, comparing exactly the same creative to itself, in theory they should perform exactly the same. In practice, this does not always happen. In fact, over at Get Elastic they performed an AA test and one version outperformed the other by 4.97%! Shocking. So that 10% difference could of been 5%, or 15% – who knows!

If you perform tests make sure you have statistically relevant numbers, and that the results you get show a very clear difference between the two. If you can, perform an AA test also.

My article on why context is so important to mobile marketing, and how that differs to normal marketing has been posted over at Wise Marketer. You’ll need a free login to read the article (well worth the effort) and I would thoroughly recommend registering for their daily update – so much great content comes from these guys (if I do say so myself):

http://bit.ly/bcKoDb

Most companies are collecting data for no reason. Far too often we’re coming across companies that have some form of analytics but no idea why. They have had it put in (mainly because it’s free) and someone has normally shown them how to log in and told them what some of the numbers mean. They have never logged in again, let alone actually done any analysis of the data.

Data is useless without meaning. Meaning is useless without action. Companies need to be analysing their website statistics, finding out why certain trends are appearing or not appearing, and take action to change what they are seeing. Only then are you truly using web analytics, and not just being a data collector for no reason.

Here are some things you might want to know about your visitors:

• Where are they coming from? Which of these sources is the most profitable? What’s the trend of these visitor sources? Which are declining or increasing over time?
• What is my bounce rate? Which content gives the worst bounce rates (and therefore should be fixed)
• What content are they looking at on my site? Which pieces of content are the most popular? Which produce the most exits from the site?
• What keywords are people using to visit my site? Are they all brand led? If so what can I do to encourage people to visit my site that haven’t already heard of me?

There’s a ton of questions you can ask yourself. So why not start asking yourself right away. Stop collecting, start analysing.

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We hear it too often. There have been so many times that I’ve heard people comparing offline shopping to online shopping. Trying to recreate the offline experience in an online store.

Here are what I believe are the fundamental differences:

1) Online, you can be in 10 shops at once

The possibility of comparing lots of different website’s product at once is so easy, especially with tabbed browsers now the standard. If you’re offline, you can only see one product at once price in one store at once. This is a crucial difference. Do you know what your main competition is doing to stand out? Free delivery? Delivery options? Bundled deals? And so on. Make sure you have points of difference.

2) No parking, no journey, no walking

Simple, but there’s less logistics. You can do some shopping in literally a couple of minutes online. Visits can be short or very long on a website. Quite often in offline world, you don’t spend a very long time in one store, but move from shop to shop. Generally this is done simultaneously while online. Much less stress (in theory) than an offline shop. Also a better use of time as there’s no journey time involved like going to a town centre or an out of town centre. Make sure you take advantage of these things.

3) You have to arrange for delivery

Once ordered, you don’t have the product immediately, unlike a lot of offline transactions. Especially with slightly larger items, that means delivery to somewhere that can accept it, or wait for it to arrive one day. This can be a pain for the customer. Although a lot of stores have moved this forwards a lot recently and there’s also quite a lot of innovation in this area with lockable boxes for large parcels. How are you making delivery as easy as possible and doesn’t put people off?

4) There’s more support in store

In theory, there’s good customer service advisors in store to advise and guide the customer through the store to what they want. They can answer questions you may have, you can touch and feel the products, and they can tell you things you may not have know about the product before, or suggest things they could buy with it.

This is where offline can easy trump online. The sheer level of proactive customer support is the big boon offline.

I say this is ‘in theory’ because recently the customer service has been pretty shocking ion a lot of established UK retailers like Debenhams, Tesco and New Look. Many of them have shop assistants chatting to each other while serving you, and generally not supporting the customer. The one thing where they can stand out from offline they are turning the other way. Shocking.

So for your site – think about exactly how you can can give as much support as possible. Live chat? Possibly. Great support copy on delivery, returns, etc? Essential. Great product descriptions, images and bundling? Yes please.

Lots of commentry on the web today about Firefox 3.5 being the most popular browser. Really, when you add up Internet Explorer, it’s still IE at 55.4% and Firefox at 32.1%. See graph below. There’s a problem though

This is not what you’re clients stats are like. See below two of our major ecommerce sites for big brand names here in the UK. Note the Internet Explorer total (and underneath how much IE6 is still important too).

Make sure you work with your clients visitors, not the web news deadlines.

This is a follow on from the ‘7 deadly sins of beginning a web project‘ which I posted last month, this post deals with what to do, as opposed to not doing.

1) Assign a website champion

This is crucial. There needs to be someone inside an organisation that is running the website project that will be responsible for it. And I don’t mean someone who just is the point of contact for the rest of the organisation, but someone who will drive the project, be passionate about the project, and is prepared to educate the rest of the organisation on the best way forwards, in collaboration with the agency helping to build the site.

2) Understand what you want from your website

Do not start a web project by just thinking ‘We need a new site because the current one is a few years old’. Really think about it:

• What is the website’s purpose for my organisation?
• What are the top 5 tasks we want our customers to accomplish on the site?
• What plans do we have to enhance the website in the future?
• Who will be coming to our website (demographics, purpose, reason for visit etc)

There’s a lot more questions but there are a few to get you started!

3) Understand what they want from your website

Your visitors! If you have a current website, ask them what they like and dislike about it, and given half the chance, what they would improve. That information is gold dust, and shows you what needs to be focused upon for the new project. If you don’t have an existing website – ask those that are likely to use the site what they need. It’s not about you!

4) Don’t over spec the technology

This is one of the craziest parts that we have seen happen. Instead of doing step 2, companies can just start looking at packages and what functionality they provide. Suddenly, it’s essential for them to have granular access control. Really? Is it? How many people are going to be editing the site? Only 2. Both in marketing. So what’s the need for access control? Exactly. That’s just a simple example – however it can get truly out of control and cost an organisation thousands it doesn’t need to spend. At least, not immediately.

5) Remember phasing

This is related to the above. A website is never a one off build project (or at least it shouldn’t be!). It should always progress in phases, building up the site and adding only what is necessary, and preferrably when your visitors want it. That way you can change often and quickly, and measure how the changes help or hinder your site. The days of massive complete redesigns (should) be nearing an end.

6) Get expert advice

Very important in my opinion. You may know your target market very well. You may know your own business inside and out. What you may not know is the web and what it’s potential is for you. A great agency who lives and breathes digital and marketing as a whole can take you strides forwards with your website. You need advice that challenges you, pushes you as an organisation and helps you leap towards your goals. You do not want to hire a ‘yes man’. In a recent pitch for a website I said that (paraphrasing) ‘If you’re just looking for an agency to push stuff around a page for you until you’re happy, or one that will just do as they are told, that’s not us. If you want that, we are not the right choice for you. If you want to be guided, helped and challenged, then we can help’

7) Set a strong project plan

With dates, milestones and targets to be achieved. Do not let yur project drift or go off course. Stick to the plan and things are much easier to finish and much less painful along the way.

As some of you may know, we work with a number of retailers helping them with their ecommerce operations. One of those companies is Next where we operate one of their 3rd party websites that sells Made to Order products such as curtains, blinds and some furniture.

It’s now been going close to 2 years and so we have a nice wodge of data that we can analyse to see the trends that are appearing. The most interesting relationship we’re seeking to understand at the moment is that between sampling (getting free samples of curtain fabrics in the post) and purchase of an actual product.

We recently sent out an email to all those people that didn’t purchase but had ordered samples, it’s been pretty successful, generating a good number of orders and paying for itself many many times over. On analysing the data of those that purchased on the promotion, we found that there seemed to be a optimum time between samples bought and the purchase date. We’e now thinking of setting up a system to take advantage of this new found optimum date to remind people at that time.

We’re now looking to delve deeper into the sample to purchase relationship to see how we can:

• Convert more people to order from sampling
• Reduce the level (and therefore cost) of sampling without reducing orders

Which should result in some pretty huge return on investment.

I think some ecommerce websites can focus too much on their traffic sources, increasing traffic from X route and their conversion rate, and not always think about some of the other simple measures on their site such as registration, sampling (if you have it) and other metrics. Are you obsessed by traffic and not behaviour?