By Dawn Marie Yankeelov, Aspectx

Customer Retention: Learn Critical Factors for Maintaining Online Commerce

Tech To Be Covered: 4 C’s of Customer Retention

• Conversion

• Automated Channel Crossings

• Cooperative Communications w Third Parties

• Clarity of Messaging

• Conclusion

Do We Still Need Websites?--”Think wholesale, less retail. Think

distribution, less destination. Think serving, less selling.

--Websites are important because you own them. They feed into your database, and the users they attract tend to more loyal and viral, a big reason we should never give short shrift to direct feedback flows.”

---Pete Blackshaw, Ad Age, August 2010

Ecommerce: Recession?• The number of online shoppers through May 2010 at

the sites of Akamai clients was up 11.87% over an average day in 2009—which the Akamai Online Shopping Data Visualization Tool sets as its benchmark.

• Last year shoppers were 6.23% below that average.

• Transactions 2010 were up 36.71% over the average day vs. 21.2% on Memorial Day 2009, and sales were up 37.44% vs. 24.33% last year.

Ecommerce: Maintains Annual Growth

Retention vs. Acquisition

• 2000-2007: Ecommerce growth averages 20% annually

• Focus on acquiring large masses of increasing new online shoppers

• 2007-2009: Ecommerce growth totals 10%

• Focus shifts to retaining highly valuable customer bases and maximizing conversion of visitors to buyers

• Packstream Research, 2009

Key to Retention and Conversion lies in the Customer Experience

“Customer experience is the hot concept of the moment in business circles. It's certainly not a bad thing to be pleasant with customers and make them comfortable, but too often companies are using ‘customer experience’ as a firewall between themselves and customers. The other half of customer service -- and the thing that balances out ‘Have a nice day!’ -- is overt and outbound customer engagement.”

--Denis Pombriant, Managing Principal of the Beagle Research Group in CRM Buyer, 2010

Conversion Rate Possibilities

In November of 2008, almost one-third (30.6%) of all visitors to ProFlowers.com

made a purchase — the highest conversion percentage among all retail websites,

according to Nielsen.

Conversion Begins with Greater Message/Product Relevancy

…greater Product Relevancy begins

with Consumer Analytics

Usability Increases Conversion• Analytics can help test site

usability

• Eddie Bauer decreased home page departures by 41% through Coremetricsusability tests.

Altered by Behavior (Maxymizer)1. U.K. mass merchant TheHut.com discovered

that moving its “Add to Basket” button off of its category pages boosted conversions 64%.

2. A red circle placed at the top of every product image indicating the discount from the regular retail price worked.

3. Not having the Add to Basket icon at the bottom of each product listing left more room to show more products on a page without having to scroll down as far.

Tied to Google Analytics

New Class: Ranging from $49 to $499

Also Helping Increase Conversion: More Relevant Search

• May 2010: thefind overtakes Yahoo Shopping to become No. 2 search engine for retail queries, according to comScore

• Trailing only Google, thefind’s search engine helps users make buying decisions before visiting the retail site

Survey Said….• A picture is worth a

thousand words.

• 77% of surveyed retailers currently are or intending to incorporate images into paid search.

Conversion Includes Social Media

5 Social Media Trends to Watch1. Crowdsourcing2. Group Buying3. Mobile Ads leading

to Payments4. Comparison Pricing5. Having a Social

Media Policy

Best Practices/New Tools

Digital River clients that deploy its new SocialStream tracking tool can send any product promotion or other announcements through their Facebook and Twitter accounts and receive reports on how much traffic and revenue they generated, conversion rates, and other metrics such as revenue per visitor.

Case Samples: Dell, 1-800 Flowers, P&G brand Pampers, MyEtsy, Threadless

Social E-Commerce ServicesBrandMe

Creating Virtual Models for effective on-line shopping. Are you ready for the runway? Create your own 3D virtual model for women, and dress up with the latest looks.

Social Store BuilderThe solution enables merchants to push their products onto social networks sites such as MySpace and Facebook.

Off the Wall$30K plus 8%, a selling app for your company in FB status updates.

Hot Stuff: Discounts of Day

Twitter Climbs on board

Amazon: Watch It Unfold

The Gilt Plan

A whopping 27% of all Yelp searches come from their iPhone application. Over half a million calls were made to local businesses directly from the iPhone App, or one in every five seconds. Nearly a million people generated point-to-point directions to a local business from their Yelp iPhone App last month.

The Mecca: The Recommendation Engines

• Personalization delivered through ‘mass customization’

“The more targeted the offer, the fewer gimmicks you will need to sell it. It will sell itself because it is what people want.”

--Edwina Dunn, Dunnhumby

Proving in Metrics

Conversion: The Spenders Matter

Getting Them to Notice--Women utilize the Internet at a slightly higher rate than men

for professional information or enrichment (Pew Internet).

--Women still appear to be time-starved purchasers.

--There is a small but significant increase in the amount spent by women as work hours increase. Women with high-speed connections, who research products and who participate in Internet auctions spend more online.

--By far, though, the largest effect on spending (for both women and men) comes from having an online deferred payment account.

Brendan Hannah and Kristina M. Lybecker, Colorado College Working Paper 2009-02May, 2009

Following Best Practices on Cross Channels

Best in Class Performance shared several characteristics:

1. 56% use campaign performance to optimize future campaigns

2. 52% optimize all cross channel efforts by eliciting input from agencies, partners, and other in the value chain

3. 50% update customer profiles based on customer interaction --Aberdeen Group, 2009

The Ultimate TruthFocus on High Value Customers

to Increase Return on Marketing Investments.

It’s Cheaper to Upsell or to Cross-Sell

to Existing Customers

than

it is to New Customers.

Strategic MeasurementA. # of Loyal Shoppers. % of brand purchased by loyal

shoppers; % of marketing budget allocated to loyal shoppers.

B. Create More Value. Basket size, categories shopped, visit frequency.

C. More Relevant Product Assortment by Key Shoppers.

D. Quality Trials Vs. Brand-Equity Advertising.

Shopper Marketing Magazine, June 2009

Questions to Ask• Can we send individualized communications to our top

shoppers? Personalized URLs, for example.

• How can we understand our price-sensitive shoppers, and the prices at which we hold and grow their business?

• How can we create a new product line that is very relevant to our high value shoppers?

• How can we reflect shopper behavior and put our brand where our shoppers will expect to find it?

--from Dunnhumbly USA white paper, 2009

Move to Micro-Targeting• To identify and reach people that will

consume these more relevant items• Companies switch spend from mass

broadcast to highly targeted attention grabbing activities for tighter segments

• Consumers interact online through “relevant published content”

Methods to Target Consumers

A. Rules-Based: Show Items Based on RulesB. Comparative Filtering: Show Items Based on

User RatingsC. Behavioral Targeting: Show items based on

inferred behavioral segmentsKey Fact: Text and Content Characteristics

Have a Measurable Effect

Behavioral Inference has reached the Web

Video Tops the Cross Channel Campaign List

Video Stats Lift Performance

• According to Forrester Research, the percentage of the top 50 US online retailers that offer videos on their sites increased to 68% in 2009 from 18% in 2008.

• Numerous case studies have also confirmed that visitors who view product videos are more likely to buy than visitors who do not. (Emarketer Survey, 2009)

Product Videos Work

Incentives and Payment CardsOn the Rise

Mobile Marketing

Target understands the importance of having multichannel mobile retail support.

• In May 2008, Target launched its mobile site, where guests could view products, read reviews, check ratings, find the nearest store, browse the Weekly Ad and view latest marketing campaigns.

• The retailer launched the Target iPhone application later that year, in November 2008.

• In 2009, Target extended the mobile offerings on its iPhone application and for mobile in general, just in time for the holiday season.

• During the 2009 holiday season, the Target iPhone application ranked as high as No. 1 in the free lifestyle application download category.

Cooperative Communication to Third Parties

TurnTo Networks, a leader in social commerce, today announced the general availability of the TurnTo social commerce suite, providing online retailers with next-generation social shopping tools… by over 35 online stores, and adds the new social purchasing sharing product to the line-up.

Facebook Open Graph package: sites will have access to a one-click "Like" button that connects to Facebook, more "social plug-ins" to pull an individual user's Facebook friends and their activity into third-party sites, and a toolbar that aggregates all these features as well as live chat.

WinBuyer Corp.

Third Party Listings

Google Product Search

Reviews and the Like

Google: Your Friend

Value of Biggest Fan

• Track Fan’s Level of Engagement by • Sweepstakes• Contests• Promotions• Lists• Polls…..right on your fan pages…..

Packstream• Retention marketing software delivering

relevancy at the point of package delivery

Adotas.com ReportsFan cross applications see a seven to 10

times increase in interaction rates with their social media content and often quadruple sales…..

….and consumers can be analyzed for upsell…..

The Summer Romance: 2010 Cross Channel Couple

Amazon friends FacebookThe world's largest retailer is using the social

networking giant to serve up personalized product recommendations. Consumers can log in to their Facebook profiles through Amazon.com to receive tips for movies, music and books.

Clarity of Messaging

• Dynamic Pricing Possibilities• Languages of Choice• Payment Options• Insider Deals, Content, Access to People• Listening to Feedback and Building Lifetime

Relationships

Clarity of Messaging 101:Dynamic Promotions to Individual Customers

WrapUp

• CLARITY OF MESSAGINGCustomer Retention means Targeted

Messaging to your Public Audiences• MicroTargeting• Customer Feedback and Crowdsourcing

Wrapup• COOPERATIVE COMMUNICATIONS Customer Retention means Social

Business/Social Media• Calls to Action• Engagement (contests, solicited

feedback, acknowledgement of top buyers)

• Comparative Pricing• Reviews, and Participation

Wrapup

• CHANNEL CROSSINGSCustomer Retention means cross

marketing amongst a number of mediums• Watch for more Mobile• Sophisticated Customer Profiling• Touch Often theTop Valued Customers

Wrapup• CONVERSION Customer Retention means reviewing

online actions and converting them to sales and upsells from the most loyal customers.• Data Analytics• Outbound Customer Engagement• Product Relevancy• Usability Tests

Aspectx• Dawn Marie Yankeelov, Founder of Aspectx

• dawny@aspectx.com• Twitter: @dawnyaspectx• Facebook, Linked In, Plaxo Pulse• www.aspectx.com