Customer Lifetime Value Panel @ RDI

On May 6th, Red Door hosted a panel discussion on Customer Lifetime Value that included a number of industry experts.

Red Door Interactive President, Reid Carr started the session with a quick introduction of the panel and the topic at hand. He pointed out that acquisition and conversion strategies often dominate the focus of Web marketers at the expense of retention and extension strategies. This leads to a lost opportunity for engaging with your customers and creating long-term value instead of one-off conversions.

At that point, the panel discussion kicked-off with speakers, Rick Enrico of Juice Media, Susan Tull of BlueHornet, and Katelyn Himes of La Quinta Hotels. Instead of providing a transcript of the entire session question-by-question, I’ll just summarize the main points made by each individual during the Q&A.

Rick Enrico proclaimed that the future of marketing lies in automated one-to-one communication with customers through multiple touch points. By leveraging data from marketing channels such as mobile, social, search, and email; companies can segment their users by behavior/interaction/analytics and then generate content that is hyper-relevant to each segment. Companies should use segmentation and relevancy to replace “batch and blast” in their marketing communications. Moreover, companies should move towards a pull marketing strategy in which they give customers a choice about how they interact with the brand. One customer may want to be contacted by mobile text message when a specific product is available, while another may want to be contacted by email when the company is offering special promotions. By giving customers the option to choose the content and the medium, companies will generate better customer lifetime value.

Susan Tull focused on email communications and started by pointing out that marketers have been talking about automated one-to-one marketing communications for ten years, but that now the tools are available to implement it effectively. Marketers need to get started with segmentation and one-to-one marketing now or they will be left behind. Companies should take a “crawl, walk, run” approach so they aren’t intimidated about acting now. You can worry more about advanced strategies when they get further into the process. One easy strategy to get started with is email link segmentation. Look at what links people are clicking on in your emails and segment those people into groups based on their behavior. Then follow-up with those various groups with relevant messaging based on the links they originally clicked on.

Susan stressed that the first thirty days after someone opts in to email is typically the best/most profitable time to engage with them. The rest of the panelists nodded in agreement. Companies should send a series of messages during that period to encourage the customer to engage with the brand and/or make purchases. With regards to analyzing results, many marketers are mistakenly judging the value of a campaign by looking at one-off transactions when they should really be looking at customer lifetime value.

Katelyn Himes gave the in-house marketer’s perspective on customer retention and value. Companies should leverage behavioral data to further engage with their target market. For example, La Quinta saw their email response rates nearly double when they segmented respondents and non-respondents and sent a special follow-up message to each group. Marketer can also see great value when they create event-triggered email campaigns. Event-triggered emails tend to be more relevant to the user and may increase their patience and receptiveness in receiving other promotional offers via email. By analyzing and segmenting users based on recency, frequency, and monetary value (RFM), companies can be more strategic with who they market to and how they market to them. Lastly, Katelyn stated that companies should treat their customers like a spouse. Give them a chance to provide feedback, listen to their feedback, and take the necessary actions to create a happy long-term relationship.

In the end, the whole panel agreed that customer perception is reality, and that testing is crucial to any marketing efforts that a company undertakes.

Posted by John Faris

5:11 PM 1 comments

Good Copy Is Good Usability

Usability consultant Caroline Jarrett submitted an article to UsabilityNews.com about an issue that's near and dear to my heart - the usability of writing. She says: "USA HOUSE OF REPRESENTATIVES PASSES PLAIN LANGUAGE ACT
The answer is that the USA House of Representatives passed the Plain Language in Government Communications Act of 2008. It achieved bipartisan support, passing with a massive majority of 376-1. The lone opponent, the aptly-named U. S. Congressman Flake, issued this commentary on the topic: “Bad bill. Voted no”."

In her article, Ms. Jarrett offers some books about writing clearly. (I'll add my favorite, "Why business people speak like idiots.")

She discusses the similarities between good technical writing, and good usability. I have long held that there is no distinction - or at least no clear line where one stops and the other starts. The goal of each is to make things clear, easy, and empowering for the reader, application user, or site visitor. Use language, images, and concepts that are appropriate for the audience. Anticipate questions and provide answers. A Web app or site can have the most sensible flow possible, but if the steps or pages are labeled in a cryptic or overly-stylized way, people might well end up being very confused when trying to use it.

The designer/writer may have created something brilliant and elegant, and they know exactly what they meant by it, but that counts for nothing. Others have to "get it" - that's the only measure that counts in communication.

One point Caroline Jarrett didn't quite touch on, is usability testing for content. Just as we test applications and Web sites to be sure people use them easily, we should test instructions, online help, and getting-started guides, to be sure they support the reader as we would hope.

Posted by Linda Eskin at RDI

5:43 PM 0 comments

Papa John's Hits $1 Billion in Online Sales

Yes, that's billion, with a "b".

According to this article on CNN.com: http://www.cnn.com/2008/TECH/biztech/05/08/papa.johns.ap/index.html, "In the past seven years, Louisville-based Papa John's International Inc. has made a lot of dough from online ordering -- more than $1 billion to be exact."

"Since launching its Web-based ordering in 2001, Papa John's said it has invested more than $15 million in online ordering technology. Customers can place online orders up to 21 days in advance. Another function lets consumers repeat their most recent orders with just one click."

According to the article, Papa John's online sales have been growing at more than 50% per year. Online orders and orders via text messaging (introduced last year) now make up 20% of their sales.

The article also discusses Domino's Pizza Tracker, where customers can check the up-to-the-minute status of their pizza. How fun!

Pizza Hut's online orders have reportedly grown six-fold in the past 3 years.

Great, I wasn't hungry... Now I want a pizza...

Posted by Linda Eskin at RDI

8:55 AM 1 comments

Excuse me, do you sell concrete blocks?

Let’s chat about one of my favorite user experience concepts: Good user experience is good customer service. Does your site treat customers like you’d want your employees to treat customers, with competence, and a helpful attitude? Here’s an example:

The other day I dreamed up a simple backyard project I wanted to do. I went to the Web site of a popular national home/garden supply store (you know who) to get the answer to a seemingly simple question: “How much do 8” x 8” x 16” concrete blocks cost?”

I happen to know this company sells concrete blocks, because I see them in warehouses when I visit the stores, but “Do you sell them?” might be a question some site visitors would have, too.

So I entered “concrete block” in the search field, and clicked the button. This is the online equivalent of walking right up to the Customer Service desk at the front, and asking, essentially “do you sell concrete blocks, and how much do they cost?” But the search results, amazingly, included no concrete blocks of any size or shape. Not pavers, or caps, no full-size or half-size blocks, adobe-look, dry stack… nope. Just glass blocks. 3 pages of glass blocks. 31 products related to glass blocks, a masonry saw blade, and some kind of resin-based paver tile.

Here’s how I see this kind of gross incompetence from a Web site’s search feature: I just walked up to the customer service desk at a big construction supply business, asked about concrete blocks, and got a blank stare and a bunch of irrelevant suggestions (“How about these lovely glass blocks?”).

If you run a business, would you put up with staff who treated customers that way? Of course not. If your front-line customer service people can’t provide basic answers to simple, common, easily-foreseeable questions, like “How much are concrete blocks,” you obviously either hired the wrong people, or you need to train them.

If your site’s search feature can’t provide reasonable results to simple queries, maybe it’s not the right search technology, or maybe you haven’t “trained” it right. Be sure your search feature can handle misspelled product names, for instance, and that it “knows” drywall and sheetrock are the same thing. This requires some customizing and configuring. But just like training new employees so they can represent your company well, it’s a wise investment, and well worth your time.

If you want to have some fun, try searching for “bricks” at the same site. One of the results is a LaCie “Brick” Desktop Hard Drive, but no actual red, clay, building-material bricks.

Posted by Linda Eskin at RDI

5:21 PM 1 comments

Google Resurecting Newspapers

Newspaper advertising drives online traffic and consumer purchasing.

The Google Print Ads program began in November 2006 with a test that included 50 newspapers and a small group of advertisers. Since then, the program has grown to include more than 750 newspapers representing 48 of the top 50 DMAs and covering 70 percent of U.S. paid circulation.

Of those who said they researched at least one product they saw in the newspaper, 67 percent said they conducted research online, compared with 48 percent who visited a store, 23 percent who called a store and 23 percent who asked a friend.

Source and more information: Newspaper Association of America NAA

Posted by Paul J. Bruemmer

8:26 AM 0 comments

My Starbucks Idea

http://mystarbucksidea.force.com

This site is interesting to me on a couple of different levels. According to the home page, the purpose of the site is to “shape the future of Starbucks—with your ideas”. Sounds feel-good enough, doesn’t it? The site is basically a Web 2.0 take on the good old fashioned suggestion box with a hint of digg.com. Being the somewhat cynical person that I am, to me, the site screams “our sales numbers are on the decline and we’ll try anything…”

This site is also interesting to me because rather than building a custom app, Starbucks chose to use force.com, a product of salesforce.com. According to SalesForce, “Force.com is the world’s first Platform as a Service (PaaS), enabling developers to create and deliver any kind of business application, entirely on-demand and without software.”

In any case, even if the site is an concealed ploy from a corporate giant looking to help struggling sales, I think the lesson learned is that all companies can benefit from listening more to the voice of the customer and more importantly, taking actions based on what the masses are saying. Now that they've put this out there, we'll see if Starbucks will walk the talk.

Posted by sandra

10:53 AM 0 comments

Universal Search is kickin-in

Out of 1.2 billion queries surveyed, 220 million (17 percent) contained a Universal search results. 87 million people searched during the measured period, and 58 percent saw a natural search placement. Within the Universal results, individual placements broke out this way:

Video 38%
News 34%
Images 19%
Multiple placements 15%
Maps/Stocks/Weather 10%

Source: Search Insider Rob Garner

Posted by Paul J. Bruemmer

9:56 AM 0 comments