eBay Says Online Retailers Need To Innovate

In a presentation at the Internet Retailer Conference and Exhibition in San Jose, Gary Briggs, chief marketing officer at eBay said online retailers should think more outside the box.

“Online retail is rapidly maturing but we are not doing enough to innovate,” Mr. Briggs said. “I am offering a call to action to the industry to innovate more.”

Mr.Briggs pointed out that online spending is often less than traditional retail spending. He also said retailers need to create their own ideas and mimic what others have done.

“There is a lot more to offer than just free shipping,” Mr. Briggs said. “Free shipping is important but when I go to Web sites and look at how the marketing is done, there has to be more than free shipping to compete.”

Mr. Briggs said that brands should give up control and listen more to the consumer in order to innovate.

He cited the example of eBay Motors. eBay saw that users were selling cars on the site but a category did not exist. Users were listing cars in categories like toys, and sales were not increasing. Since the addition of eBay Motors, the online retailer has sold 2.5 million cars a year.

“Our system of innovation is more than what is inside the four walls of our company,” Mr. Briggs said. “We are trying to let the users help us shape how we create our Web site and offer products to customers.”

6 Marketing Tactics Worth Paying

Here’s the trouble with marketing programs: Unlike with hard assets like buildings or machinery, you may have little to show for your investment when the money’s all spent.

Marc Lore isn’t fazed by such uncertainty. A serial Web entrepreneur and father of a two-year-old, Lore founded Diapers.com back in January 2005. Last year his Montclair, N.J.-based outfit posted sales of $11 million, says Lore, thanks to rabid interest from parents looking to buy diapers, soaps, bottles and baby formula for their little ones. (Lore expects to cross the break-even mark in 2008.)

His big marketing bet: a referral program that so far has racked up $200,000 in costs, including development and rebates. Lore credits the program with attracting 40% of Diapers.com’s 200,000 unique users a month. “It was absolutely the biggest driver for [our] growth early on,” he says.

Here’s how the referral program works. Moms and dads send an e-coupon from Diapers.com with a unique code to fellow parents. When their friends cash in on the coupon, they type in the referrer’s code. From then on, every time those new customers place an order on Diapers.com, the referring mom or dad gets $1 in their Diapers.com account.

Sure, those rebates can add up. But given that each order clocks in at $85 on average, that marketing investment amounts to a mere 1% of sales.

Unlike many entrepreneurs, Lore seems to be striking a tricky balance. While keeping a lid on marketing expenses is critical, at some point you have to pay up if you want to drive sales. “Small businesses will say it’s too expensive instead of looking at marketing strategies as an investment,” says John Janstch, author of Duct Tape Marketing. Still, he says, a good marketing strategy is one thing “you can’t really cheap out on.”

With that, here are some marketing strategies that are worth the investment.

The first step most entrepreneurs overlook is defining the market–and its willingness to pay–for their product. (Indeed, such analysis is a fundamental step in any sound business plan.) Market surveys–online, direct-mail or by phone–can help, though they can cost up to $10,000. Online surveys are easiest. Zoomerang charges $599 for a year subscription to its service, which helps craft survey questions and analyze the data; Survey Monkey offers subscriptions starting at around $20 per month.

You know you need a Web site, of course, but the key is getting the most out of it. Start with a clean design that tells people precisely why they should spend their time and money with you. Then Budget a few grand for getting noticed by the big search engines like Google and Yahoo! You can buy keywords like Google’s AdWords, which help direct customers to your Web site (see “Marching Up The Search Stack”) or even hire a “search-engine-optimization” expert (see “Should You Hire A Search Engine Consultant?”).

You’ll also want to shell out for an effective e-mail campaign that will slice through the information overload and get your business noticed. Those that give customers a call to action–like Diaper.com’s referral program–will get more people onto your Web site or into your store.

E-mail marketer Constant Contact charges $15 a month to blast e-mails to up to 500 addresses; $30 will get you up to 2,500. StreamSend charges $6 per month for 500 e-mails and up to $50 per month for 50,000 e-mails. Those prices include testing presentations in different e-mail formats–such as Yahoo! mail and Google mail–and tabulating the response and bounce-back rates. Note: You have to provide the addresses, which might require an additional investment in lists of names sold by list purveyors. (For more e-mail marketing tips, check out “Artful Spam” and “E-Mail Marketers Should Look Beyond Outlook.”)

Of course, no one hits on the perfect strategy on their first try. Instead of placing all your bets on one radio advertisement or telemarketing campaign, concurrently test two or three strategies on targeted groups of customers and in limited areas. “It’s hard to convince companies to do this because they want to do everything rapidly, but then they end up wasting a lot of money,” says Wharton’s Lodish.

In the end, remember that marketing isn’t just about one tactic vs. another. It should be an ongoing effort that involves a variety of maneuvers to raise your business’ profile against your competitors. “Look at the overall system,” says Jantsch. “Look for ways to build momentum by having strategies work together. It’s like building a house–the more pillars you build, the easier the overall job is.”

Forbes

Enhance Your Website with Video

Thinking about adding video to your site? Here’s how to do it.

Communicating with your customers through video can offer them a fresh alternative to basic text on a static website. We all know the saying, “A picture is worth 1,000 words.” The principal is the same for a video on a website.

When deciding whether to add video, ask yourself the following questions:

• Will adding video enhance sales or provide another benefit to my business?
• Do I have the time and financial resources?

If you decide video is right for you, here’s a look at the steps you’ll need to take.

Creating Video
If you do it yourself: Depending on the quality of the video you want, you could create it yourself. I wouldn’t recommend using a $500 home camera for shooting. A more professional camera could cost $1,500 and up. These cameras will give you the quality you need to make a video suitable for online viewing. Once you have purchased a video camera, you might want to consider accessories, such as an external microphone to capture audio more clearly and a tripod so you won’t have to hold the camera with your hand.

If you hire someone: Hiring a professional videographer will ensure the video is of the best quality. It might be fun and adventurous to do the video yourself, but do you have the time or expertise? Hiring someone isn’t cheap and will add several hundred to several thousands of dollars to the cost of the video, depending on what you have them do.

Licensing Video
There’s a lot of video already available that you could license and use on your website–or integrate into a promotional CD or use as part of a TV advertisement. Sites like Mochila specialize in creating a marketplace for video producers and consumers to buy and sell video. Brightcove–a more mature version of YouTube–has more than 2,000 member-supplied videos in its library available for license. Brightcove, Podtech.net, YouTube, Blinkx, Google Video, MSN Video and Yahoo! Video have thousands of videos you can embed in your website for free.

Editing the Video
If you’ve hired someone to produce the video for you, or licensed it from a third party, you can skip this section. However, if you’ve decided to make the video yourself, you’ll need to edit it. Windows XP comes bundled with Windows Movie Maker. This will suffice for a few test videos. However, if you want to create a more professional video you’ll need features that Windows Movie Maker doesn’t have. Consider video-editing software from Pinnacle Technologies, Ulead or Adobe Premiere. Apple’s Final Cut Pro is one of the best video-editing tools, but is only available for Macs.

Hosting the Video
The easiest way to enable the video for others to see is to use one of the services listed above to host it. These services will host your video for free if you advertise or for a fee if you don’t advertise. If you host the video yourself, you have to manage the space it takes on your web server and ensure there’s enough bandwidth for people to view it properly.

Like everything else on the internet, publishing content is only part of the process. You also have to make sure people view the content by marketing it. Right now, using online video for business is not as popular as e-mail marketing or websites; however, it’s growing. You might want to keep your eye on this market and start testing its viability for your business now. You’ll be ahead of the curve and ahead of your competition in engaging customers.

Entrepreneur.com

Manage Your E-Commerce Business, Not Just Your Website

Beyond the virtual shopping cart: understanding the full importance of e-commerce in selling online.

When you think of e-commerce, it’s only natural to think first and foremost of the shopping cart — the web page that customers interact with to browse and buy. But in reality, that front-end is just a small part of the entire e-commerce ecosystem. Businesses that focus only on the cart run the risk of costly breakdowns in the supply, service, and marketing aspects of their e-commerce operation.

Too often, entrepreneurs assume that e-commerce operates without any involvement from the front office. Not so! Although the self-service nature of e-commerce can take the sales rep out of finalizing the purchase, even the most automated outfit needs a front office that is informed and ready to act on customer inquiries.

Prospects and clients have questions that self-service cannot address, and visibility into e-commerce customer records makes all the difference in answering them promptly and effectively. Whether dealing with payments, collections, order transit, or marketing, without a closely connected front office, opportunities will quickly slip through the cracks and customer service will become more costly and uncoordinated.

Marketing professionals also need a complete picture of the customer lifecycle inside the e-commerce operation in order to understand the full impact of their efforts. Simple keyword search or banner-click reports only scratch the surface of the effect both online and offline campaigns have on the buying process. When marketing can see not only how many customers arrived and what they searched on, but what they did during their initial visit and all subsequent visits to the e-commerce platform — including service inquiries as well as browsing and buying — those campaigns can be tightened and optimized on performance, rather than on guesswork or simple trending.

The back office also needs to be linked to e-commerce as more than just a dumping ground for pick lists and shipping orders. Linking the status of a client’s account with the company may be an important consideration as the order flows through the system — is the customer in arrears on another account and no credit should be extended? Is the customer a VIP or just coming off a bad experience and his order should be treated with kid gloves? That kind of visibility isn’t available on a sterile shipping order, and is only possible when e-commerce is seen as a wheel linking together every customer touch-point in the company.

Just as important as linking the various departments of your organization with your e-commerce system is linking them in real-time. “Batch” or “queue” synchronization, common when an e-commerce platform is pieced together with multiple disconnected applications from a gaggle of different vendors, invariably puts your departments at risk of being behind transactions carried out through the Web store. And the Web’s always-on, 24/7 nature has driven customer expectations to new heights — buyers expect that if they pick up the phone to ask a question about an order placed two minutes ago, everybody from the shipping department to the AR rep knows about it.

Real-time data flow in and out of the e-commerce operation also promotes cost-effective supply management. If your e-commerce ordering system is not in harmony with your inventory database and procurement triggers, you run the risk of delayed restocks and promising merchandise not on hand to customers ordering late in the day. Those mistakes typically are solved with costly expedited shipping or other customer make-goods, but are easily avoided by pairing orders and inventory together in an up-to-the-second marriage.

Anybody can sell online these days — the web shopping cart is commodity technology. The gears of e-commerce are numerous. It’s those businesses who treat their e-commerce operations as a complete business, and pay close attention to all the other crucial details, from inventory to accounting to service, who are successful selling online.

Inc.

Flat-Fee and Other Online Shipping Gimmicks to Soothe the Savvy Customer

“As exciting as e-commerce is, it’s still a bricks-and-mortar world when it comes to the average American shopper. So some of the most powerful lures in online retailing these days focus on cheap shipping.
“Fixed shipping fees make the purchasing decision cleaner for consumers,” says Matt Rutledge, CEO of Woot Inc., a Carrollton, Texas e-tailer of consumer electronics and other gear. “For them, you’ve got to make it akin to driving out to buy something at the store. It’s neat and clean.

“The further away that you can tuck shipping distastefulness from the online-buying experience, the better.”

That bit of psychology explains the popularity of e-tail icon Amazon.com’s flat-fee Prime shipping service, launched in 2005. For $79 a year, members get unlimited, free two-day shipping with no minimum purchase.

The times, they have a-changed

Once upon a time, not very long ago, e-tailers thought way differently about shipping fees. Many sites showed their high shipping fees only near the end of a transaction — a margin-enhancing “gotcha” — to make up for one of the high costs of selling on the Web. But savvy consumers who spent a little time comparing prices often found that shipping fees wiped out the “deal” they thought they were getting.

Today, the Web is still a low-margin environment, but Prime, among other models, was a response to higher consumer awareness of — even preoccupation with — stiff and often padded shipping charges.

“People who are online love free shipping, and if there’s a shipping charge, they like to know what it is before they totally check out,” says Miki Dzugan, president and marketing chief of Rapport Online, an Internet consulting firm in Sedona, Ariz.

Some cold, hard facts

A recent Jupiter Research survey found that free shipping is the top promotional method of encouraging online buying. In another recent study, rival market-research firm Forrester Research reported that 57 percent of abandoned online shopping carts were tied directly to surprise shipping fees at the end of a purchase.

Forrester also found that 88 percent of the online shoppers surveyed have left items in a cart without completing the purchase.

What’s the math?

Reporting on Prime, Inc. magazine asked Amazon founder and CEO Jeff Bezos how the company can afford “the guy who pays you $79 so he can order a $3.99 razor whenever he needs one.” Bezos said, “It all works out. Somebody else will order an $800 digital camera. On average, it’ll pencil out OK.”

Jason Billingsley figures that for a return on investment for the average Prime customer, he must order only six to 10 times a year, depending on order size and content. Billingsley, vice president of marketing for Elastic Path Software, in Vancouver, says that’s because the typical cost of two-day shipping in North America is $7 to $10.

“Amazon’s genius in launching Prime was that it essentially became like a buyer’s club, or an insurance policy,” Billingsley adds. “You may or may not use up your quota. It also promotes loyalty to Amazon, because there’s little need for consumers to look around for free-shipping offers.”

Other takes on the tack

Yoox.com, a fashion and accessories e-tailer, charges $7.95 for regular shipping and $14.50 for express — no matter the order. “That’s because we continually want to have the best customer care and be fair, and not dissuade people from buying more product from us for larger amounts of money,” says Hilary Bowers, co-founder of the New York City-based company. “It costs us far more than that to ship most orders.”

More e-tailers are moving right past flat-fees to free shipping. Petsmart, the online pet supplier, offers it for orders of more than $75.

“We’re crossing some kind of new threshold here,” says Mark Taylor, chief logistics officer of RedRoller, a Norwalk, Conn., provider of software that compares shipping costs. “Customers are the ones that are winning.”

StartupNation

Improve Your Online Customer Service

If you’re wondering why customers aren’t coming back to your e-business, maybe you should take a long, hard look at your customer service.

Even if you master each and every one of the internet marketing strategies out there–sales copywriting, search engine optimization, e-mail marketing and the rest–they’re not worth a dime if you forget about customer service. It’s a strategy that all truly successful business owners understand and pay careful attention to because the one thing all successful businesses have in common is satisfied customers.

There’s an old saying in business: A happy customer will tell one or two people; an unhappy one will tell 10! So it pays to keep your customers happy–especially when doing business online.

Online, a seriously ticked-off customer might not just tell 10 people; they might also write a lengthy rant on their blog, post comments on other people’s blogs, write a negative review of your site on a shopping website, or criticize you on forums and message boards. Or all of the above.

And worse, once something’s been written about you online, it’s very difficult to get it removed. This means that any prospective customer who decides to do a search on your business name could come across it.

So while good customer service might cost a bit of time and money, bad customer service online could cost you dozens of prospective customers. Think how much losing even just 10 sales would cost you, and compare it to the extra sales you’ll gain from making your customers happy.

What’s really interesting is that many case studies show that building good customer service into the operation of a business increases a company’s efficiency as well as its sales. Here are some simple strategies to help you improve your customer service:

Step #1: Automate your sales process to keep customers in the loop.
Use autoresponders to thank your customers for their order, welcome them to your opt-in e-mail list, and send them order confirmations and other transactional emails like “your item has shipped” notices. Customers have come to expect these courtesies, but not everyone online bothers.

You can even add an element of surprise to these customer-service e-mails by including a coupon for money off their next purchase or some extra information they’ll find relevant to the product they’ve just bought. You may also want to ask if everything is all right with your customers’ purchase or if there’s anything further you can do.

This kind of follow-up can relieve any possible feelings of buyer’s remorse and reinforce the positive feelings about your business your customers had when they originally bought from you.

Step #2: Create a comprehensive FAQ page.
An FAQ page answers most of the questions people might have about your products or services. You should also create an FAQ e-mail address, such as info@mysite.com, and keep track of the questions that customers or site visitors actually ask, then answer them and put the answers on your FAQ page.

With those common questions taken care of, you’ll be freed up to spend time giving personal attention to the visitors who need it. The more quickly you handle their concerns the more impressed they’ll be. And you’ll also stand out in the crowd–a recent Pelorus Group study found that a shocking 42 percent of retail sites take five days or longer to respond to customers.

It’s often the times when you respond to a customer’s concerns promptly and personally that generate a huge amount of goodwill for your business–and referrals. Even angry customers can be turned into devoted fans if you pay attention to them, acknowledge your mistake if you’ve made one and fix their problem.

Step #3: Make it easy for people to contact you.
There will always be times when a customer needs to talk to or e-mail someone directly, so don’t hide your contact details away in a dark corner of your website, and always provide contact information on every message you send out.

You may also want to create a customer service page on your site that includes your FAQs, the names and e-mail addresses or phone numbers of people who can help, and other relevant information.

I’m often surprised at how many people with small e-businesses really don’t want to talk to customers and actually make it hard for people to get in touch. But the worst thing you can do is look like you’re hiding or just don’t care.

Step #4: Personalize and segment your e-mail messages.
I can’t say this often enough: Use your customers’ names in your e-mail subject lines and in your messages. Only 4 percent of marketers personalize and segment their messages, according to Jupiter Research, and yet personalized messages have almost twice the click-through rate of bulk e-mail.

As an e-business owner, you can personalize and segment your communications with customers in many ways, including:

• Personalizing emails with names and other pieces of information you collect
• Sending customers personalized birthday, anniversary or special occasion offers
• Sending customers details of new products you know they’ll be interested in (in its recent “Consumer E-Mail” study, DoubleClick reported that 43 percent of the respondents would respond to “purchasing recommendations based on past purchase behavior”)

The more details you can collect about your customers, the better you can serve them with laser-targeted offers, thank-you messages and information that’s relevant to their needs and wants.

This is where your e-mail management software makes your life easier. It can do the segmenting and personalizing for you, so you can spend your time thinking of more ways to target your marketing.

Step #5: Ask your customers how you can serve them better.
People love taking short surveys, and it’s been shown that customer satisfaction is rated higher among people who’ve been asked what they want, even if their answers haven’t been acted upon. Just asking what your customers want and how you can make your service better makes them feel listened to.

Actually acting on their suggestions and improving your service is gravy!

Remember, good customer service doesn’t have to cost much. You don’t have to spend a fortune giving away free products or large discounts. Even a small gesture like thanking customers for their business can help maintain a positive vibe around your business. And automating your everyday customer service tasks frees you up to respond to real concerns or complaints–making your overall customer service even faster and better.

http://www.entrepreneur.com/ebusiness/ebusinesscolumnist/article172294.html