Digital Marketing Metrics – How To Convert Customers

There is much talk in digital marketing about how to generate visits to your website but of course that is only half of the challenge.  If you run an ecommerce site you want people to buy from you.  To use the traditional terminology you might say the strategy for driving visitors to your site is your acquisition strategy and the strategy for getting them to buy from you is your conversion strategy.  Once visitors are on our site we need to maximise the conversion rate.

Having fun with funnels

Google analytics uses conversion funnels to enable you to track the movement of visitors through your website.  If you are selling products you clearly need to structure your site in a way that leads customers through a clear and logical process to a ‘goal URL’ which might for example be the Thank You page after check out.  You are likely to lose visitors at each stage in the process but it is the marketer’s job to minimise the ‘wastage’ at each stage.

How Conversion Funnels work

In the example above visitors to the site are shown at the top level.  We can track where visitors came from and which page they landed on.  As we move down the funnel visitors get nearer to your goal but visitors are lost at each stage.  Some may leave the site, others may visit another page and not follow the direction of your speficied goal.  Let’s take a look at some of the stages in the conversion process shown in the funnel:

  • Bounces – the bounce rate is the number of visitors who leave the site without visiting any other page.  High bounce rates might be a sign that your content is not engaging visitors or you may be driving visitors to a page that is not relevant for them (time to look at your SEO and inbound link strategy!).
  • Browsers – here visitors are moving around the site and may be visiting a few different product pages for example.  The site is engaging interest at some level.
  • Early Waverers – visitors at this stage may be looking at specific product specifications, prices or product guarantees for example.  They are deciding whether to go to check-out.
  • Late Waverers – these are visitors who actually go into the checkout process but abort before the payment stage.  Perhaps the checkout process is too slow, confusing or does not feel secure?
  • Conversions – visitors reaching this stage are the ultimate gauge of success for our marketing objectives.  They have moved through the whole buying process and purchased a product or service.

How to improve conversion rates

Conversion funnels show us the stages at which we lose customers but not why we are losing customers – so we need to experiment.  Say your check-out process goes Billing >Shipping > Payment > Review > Thank You.  If you discovered that you are losing 40% of click-throughs from the shipping page you could test different elements of the page.  For example, are shipping options confusing?  Is the next call to action clearly displayed?  Are shipping costs uncompetitive?

By changing significant aspects of ‘problem’ pages, one at a time, you can use customer behaviour to determine what is wrong and how to fix it.  Amazon, for example significantly increased conversion rates by introducing their ‘One Click’ option making the checkout process as simple as possible.

Don’t just analyse – act!

One of the great advantages of digital marketing is that we have a wealth of analytical tools available to us – many of them free.  However, information is no use unless we can act on what it tells us.  That’s why testing and experimentation is really what comes after web analytics and where the time honoured rules of direct marketing testing can be bought into the digital world.

Digital Marketing Metrics – The Fundamentals

If there is one thing that all successful online businesses share it is a real understanding of what works and what doesn’t when it comes to digital marketing.  A strong understanding of how marketing efforts are paying off is crucial to ensure you get the most from your online investment.  The great news is that there are a huge number of possibilities for measuring online marketing success, so many in fact that it pays to start by thinking about the basics.

Traditional vs Digital Metrics

Before direct marketing came along traditional advertising, particularly brand advertising was very difficult to measure in terms of ROI.  Direct Marketing was built on being clearly measurable.  You could calculate your ROI for all of your campaigns and use testing to adapt and improve future performance.  That is also the basis of measuring metrics online but we now have some big advantages including:

  1. More measurement options – you can derive a much greater array of information from online customers than you can for offline by tracking their behaviour.
  2. Speed – you can measure customer behaviour in real-time.  Try doing that with direct mail!
  3. Cost control – for example if you are spending money on PPC campaigns you can set daily and campaign limits for spending so there is no wasted budget.

Basic online metrics

The most popular method for reviewing digital metrics is google analytics.  You can generate well over a hundred different reports using this tool but first things first.  The most basic metrics you find on your google analytics ‘dashboard’ are:

  • Visits – total number of non-unique visits to your site
  • Page views – total number of page impressions i.e. number of times pages have been viewed
  • Pages per visit – an average number of pages viewed by each visitor e.g. 2.9
  • Bounce rate – the number of visitors leaving you site after viewing only one page
  • Average time on site – otherwise known as ‘stickiness’.  How well the site maintains visitors
  • % new visits – how many visitors have first timers on your site

These metrics serve a purpose but if you are selling something online you need to look deeper.  The first question to ask is ‘What is the goal of my website?’.  You may have a number of goals but if you are in business your main goal is likely to be to sell X amount of X product, generating X amount of revenue.

Start with Goal Setting

Google analytics enables you to set-up a number of goals and run reports specifically to check how well you are doing in achieving them.  Say your current goal is track how many visitors are reaching the checkout page on your site i.e. buying a product.  You can set up a goal called ‘Buy Product’ and define this as a ‘URL destination’ goal.  This will then enable you to report on how many times visitors reach the Confirmation of order page.

Different types of goal

Even the most hardened capitalist should be interested in more than just sales – you need to understand what leads to sales.  Digital marketing success needs to be measured in more holistic sense.  That’s why google analytics allows you to measure goals in 3 ways:

  • A URL destination goal – allows you to see how many times visitors have visited a certain part of your site.  For example, if they sign up for your email newsletter each time they do so a URL will be displayed.  Google Analytics will count how many times that URL is reached so you can measure how many users are signing up against your objectives.
  • Time on site goal – this is a useful metric because it helps to prove how engaging your content is which in turn helps to show how engaged customers are with your site.  Engagement increases your chances of making sales and building a loyal customer base.  In 2010 the average website visit was 5.2 minutes according to google analytics.
  • Pages per visit goal – this helps to show much navigation around your site the average visitor is doing.  Your goal might be to get visitors to visit at least 5 pages.  Your report would then show the percentage of visitors doing so.

So these are a few basic but useful ways to measure your marketing goals online.  When getting started for the first time the most important thing is to have a clear view of which pieces of information are most important for measuring success, your key performance indicators (KPIs) and to produce a number of structured reports for delivering that information.  In my next post I will look conversion funnels, another important measure of your digital marketing performance.

Digital Marketing Tips for Charities

Times are tough for all of us and not least charities in a recession.  Charities are working harder than ever to justify investment in marketing but at times like these they have the much to gain from an intelligent and innovative use of digital marketing.  Here are some ideas for getting an edge online…

Be social!

It seems that virtually every charity has a presence on social media and why not?  It costs nothing to start a Facebook page or Twitter account.  It’s what you do with it that counts.  Before people decide to support a charity they need to not only agree with cause but feel some trust and connection with the charity itself.  Social media campaigns should encourage ENGAGEMENT and INTERACTION.  Compare these two Facebook posts:

“We have helped 50,000 children get access to education in Africa.”

“Tell us your favourite thing about the work we do?”

The first post, although a powerful statement, could be termed a marketing message.  Will it generate interaction or lots of ‘likes’?  The second post, being a question, is far more likely to generate valuable feedback about the motivations of supporters and get conversations started – that leads to engagement.  There is a place for both approaches but it pays to build a smaller engaged audience rather than large disengaged ones because engaged audiences are more likely to visit your site and donate.

Share your brand

In the charity sector it is crucial to have a strong and trusted brand that also translates into the digital environment.  Understandably, charities are very protective of their brands but should brands be ‘fixed’ by marketers or given the chance to evolve?  Consumers are beginning influence how brands are perceived and this may apply to charities too.  For example, if prospective or existing supporters start feeding back on the specific projects they want a charity to support or say they want to receive news and information in new formats there may be advantages to letting your online community influence the future direction of your brand.  A strong brand listens and is not afraid to evolve.

Keep active!

Until relatively recently many charities main method of communication with supporters was a six monthly newsletter about all the great work they have been doing.  Some provide quite glossy and professional publications, which have on occasions lead to cries of ‘they spend all my money on marketing!’  Charities have to communicate but the digital world allows that communication to be ongoing.  Charities have to invest time in posting relevant, high quality content frequently.  Who would donate to a charity if their website and social media presence has not been updated for 6 months?  The great news is that this can now be done for relatively little cost.  Time is the key investment!

Talk talk

FACT 1:  People love to watch short films about things that interest them (Youtube!)

FACT 2:  The internet offers a free distribution channel

For the first time charities have the opportunity to produce video content or audio in the form of podcasts at relatively low cost.  These could be a valuable tool in gaining attention and communicating the hard work that the charity is achieving on the ground yet many charities have yet to take full advantage.

This is about more than just producing good content.  That content needs to be found easily by existing and potential donors.  That means having an SEO and link building strategy to drive traffic.  It’s also important to not view this as simply broadcast media.  Include a call to action, encourage interaction and record the number of views as well as how many people share the content.  Great content could generate a viral campaigns that spread your message far beyond your core audience.

Measure success

This might sound obvious.  Clearly, charities should track their ROI for all of their digital and offline channels. It’s important to know where new donors first heard about you and track their lifetime value against those different channels.  Building a solid and loyal base of donors takes time so rather than just looking at short term revenue generation digital marketers should clearly define how they will measure success and look into the key metrics now easily available including:

  • Mentions of your brand online e.g. using Buzz Metrics
  • Search engine rankings for your website, micro-sites, blogs etc.
  • Inbound links i.e. how many other sites are linking to your content
  • Web analytics – unique visitors, page impressions, time spent on your site etc.
  • Social media metrics e.g. Tweetdeck

These are just a few tips but the most important tip of all is to have a clear and defined marketing plan for digital marketing activity which is also integrated with offline activity.  Charities who plan in this way can use digital marketing to help them through tough times while keep their marketing budgets in check.

Writing online copy – 5 tips for marketers

Does digital copy and content produced by marketers really need to be any different to the copy produced for traditional offline media?  While there are some truths about writing copy that will never change the evolution of digital media brings some new challenges we can’t ignore.  Here are just a few tips for anyone producing online content…

Less is more

Consider how you read copy online, whether that’s on a PC, mobile or tablet.  People don’t read the internet in the traditional sense.  They skim read.  No matter how much pride you have in your website and it’s content remember that people are visiting it with a clear objective.  They may want to ask a question, compare a product or maybe even buy something but they want to do this quickly.  If they have to trawl through paragraphs of marketing speak they are far more likely to visit your competitors site instead.  Use fewer words to communicate your message clearly.

Use customer speak

One of the biggest sins of any marketing copywriter is to write for an audience based on assumptions.  A previous boss once told me that when writing copy I should remember that ‘men are analytical and women are emotional’.  That is an assumption and a very broad one!  There is no better way to understand the language of your customers that to listen to them.  Listen to calls in your call centre, visit your shop floor, read customer complaints and testimonials.  Marketing teams always have their own jargon and way of talking about their products but how well do you and your colleagues represent your audience?

Create ‘personas’

Busy and stressed exec persona.

This is a way to bring your web users ‘alive’.  You create a number of virtual people who each represent a segment of your customer base.  You give them a name, socio-demographic profile and picture.  How web savvy are they?  What are their ‘information goals’ i.e. why are they likely to visit your website?  How much time to they have – are they busy parents or retired people with more free time?  Eventually you build up a detailed picture of your customers and prospects and have a much better chance of engaging them as loyal customers.  Remember, the personas are not just imaginary friends but virtual people based on your real customers.

A picture speaks a thousand words

This has never been more true than online.  The internet is a very visual medium and if you can bring copy alive with relevant images you have a far better chance of keeping visitors to your site interested.  If you are trying to communicate lots of information quickly consider using an infographic.  Try using images of real people, better still actual customers, instead of glossy images of models. Who are customers most likely to trust?  Make sure that brand based images are relevant and meaningful and ensure that you feature product images wherever possible.  Make things tangible and remember images are as important as words.

Navigation, navigation, navigation…

The web is awash with websites that are difficult to navigate.  Sites with search functions that never return what you are looking for.  A well structured homepage with clear navigation to all main areas of the site and clearly structured links and back-link throughout the site is essential.  Not only does it improve your SEO but it greatly reduces the chances of your customers going elsewhere to achieve their objective.  Sites with high bounce rates are usually poorly structured or contain badly written copy.  You may have literally seconds to convince visitors to your site that they are going to find what they are looking for.

In the accelerated world we live in people have short attention spans.  They expect the internet to deliver what they are looking for immediately.  Imagine telling someone 20 years ago that you would be able to find the answer to virtually any question in seconds on their computer.  As marketers we have less time to engage our customers and far more easily accessible competition.  In the digital world we need to upgrade to copywriting 2.0.

The art of link building

Networking the traditional way

The art of networking is one that businesspeople have long been trying to master.  ‘Get business cards printed and get out there and talk to the right people’ are words that many of us will have heard.  We have also all been told ‘it’s not what you know it’s who you know’.  Whatever your opinions about networking if you want your business to get noticed online you can’t ignore its online equivalent – link building.

What is link building?

Put simply a link building strategy involves getting other websites to display links to your site.  These are called ‘external links’.  There is also a strategy for links within your own site which is called ‘internal link architecture’.  External links are about more than just allowing users to navigate the internet, they are important in building the AUTHORITY of your website and thus your rank in search engine listings.

All links were not created equal

Some businesses have unscrupulously tried to post as many links to their site as possible, all over the web, to increase their authority with search engines.  Search engines got clever and changed their algorithms to that links are ‘weighted’.  You might think of an external link as a vote for your site but some votes carry much more value than others.  A vote from a site which itself has a high level of authority carries much more weight.  Some links actually carry no weight at all.  This are called ‘no follow’ links (and are used in Tweets for example).

How do you find sites with authority?                      


One simple way is to check the Google PageRank of a site.  All sites have page rank of between 1 and 10 with 10 being sites with the highest authority.  Getting a link from one of those sites to yours would do your search rankings a power of good but you would need a lot more links from sites with a ranking of 1 to achieve the same effect.  Much like in the real world a recommendation from the President of the USA would be worth far more than a recommendation from your mate from the pub.

Link building tactics

You need a solid plan to implement a link building strategy.  Tactics fall into the following categories:

  • Manual link building – the DIY approach to link building where you post the links yourself.  You don’t need to make friends with the other site first.  You might post links on social networks for example but this tactic is of limited value.
  • Mixture of editorial and manual – editorial input refers to owners of other sites who may be encouraged to link to your site.  Much of your strategy may rest on building relationships and trust with other site editors.
  • Completely editorial – sites with very strong and valued content are able to generate links from other, trusted sites without being prompted.  Having great content is invaluable for a highly successful link building project.

Link building ideas

There are many possibilities but here are some of the most important ones:

Great content – it is worth repeating that this is the single most important factor not only for a link building project but for the success of your online business full stop.  You can generate all of the traffic in the world but if your site does not contain content that people want to actually read and use you won’t be successful.  Ideally you want people to SHARE your content.  Why not produce a free podcast about how your product(s) can help people?  Think viral!

Digital PR – Traditionally you may have sent a press release to tell the media about your great products.  Today you might contact web owner or blogger to review and post links to your site.  Some bloggers make a living reviewing products in this way.

Ask your customers – if you have happy customers many of them might we willing to help spread the word about your business.  Do they write blogs?  Do they ‘like’ you on Facebook?  Do they have their own websites?  Ask them to mention you and link you your site where appropriate.

Giveaways and competitions – it is a timeless truth that people like a good competition or giveaway.  Other sites with customers interested in your prize or competition may be happy to provide a link.

Use social media – the upsurge in the popularity of social media in recent years has massive implications.  In fact ‘likes’ are becoming the new ‘links’.  This is a topic for another post.

Sounds like hard work?

The days when companies could cheat their way to the top of search rankings are long gone.  Now you need the relevance provided by keywords (SEO) and the authority provided by link building.  If you are a small or start up business this might seem daunting.  Although you need more nuance and sophistication in your approach today, it can be done.

If you have a niche product there will be less competition for keywords which means that link building less important.  Your SEO will take you muchfurther.  Even if there is lots of competition, don’t forget the power of offline channels to generate online traffic.  Direct mail, door drops, off the page ads, radio and TV ads, even billboards can all drive traffic to your site cost effectively if your campaign is well targeted.  We marketers have never had so many options are our disposal, the trick is picking the right ones.

Who needs search engines?


Getting your website noticed with keywords

Search Engine Optimisation is about getting your website ranked highly on search engines.  In this introduction I will look at the foundation of SEO – keywords.  Even people who aren’t familiar with the term will have experience of entering their own keywords into a search engine to find what they are looking for.  When a search engine displays your results it does so on the basis of RELEVANCE and AUTHORITY.

What is keyword relevance?

A search engine will pick up keywords from sources including titles, on-page text, headers and inbound links to a website.  If you are building a website and hope to generate visitors (and ultimately sales) you can’t afford to ignore keywords.  So how do you pick your keywords?  Firstly you need consider the following:

1)     Are the search words relevant to your business or product?

2)     Is there an appropriate number of searches for your keywords?

3)     How much competition is there for those keywords?

A brainstorm is a great way to come up with keywords. You want variety so this calls for some imagination.  Start with the obvious ones and then some up with as many different variations as you can.   Say you own a pet shop, some of the keywords listed below might be on your list.  The number to the right shows the estimated number of UK searches per month for each of the terms according to Google Adwords:

Did you find me on Google?

Pet shop (generic keyword) 368,000

Pet Shop London (geographic) – 12,100

Cat collars (product) – 90,500

Buying a cat (information based) 6600

Cat collars London (product/geography) – 91

These simple examples show the importance of getting the right balance between relevance and volume of searches.  The most generic search terms tend to be the most competitive making it hard to get a high ranking.  ‘Pet Shop’ might work for a major online pet retailer but not a local shop.  ‘Dog collars London’ is far too specific and unlikely to make you a millionaire.  The challenge is to find the middle ground and have fun doing it.

You should spend plenty of time researching your keywords before beginning any SEO project.  A great place to start is with the keywords tool on Google Adwords.  Experiment with your keywords and be creative.

Beating the competition

Don’t forget that unless you are providing a very niche product you are up against competition for the attention of the search engines.  Don’t be tempted to emphasise traffic over relevance.  You might feel great ranking higher than your competitor but if you are receiving so many phone calls you can’t deal with any other customers you will soon regret that approach.  Look for ‘long-tail’ keywords which deliver less traffic but have a better chance of ranking highly on searches.

How do you use your keywords?

Why not just pick one or two keywords and repeat them frequently to get the search engines interested?  This is the way things often used to work.  This sometimes made for uninviting copy which turned customers off.  Google became aware of this and started to look for keywords based on natural language patterns rather than mechanical repetition of terms.  This meant that webmasters needed to be much more savvy and creative in how they come up with and use keywords.  Today it is advisable to write your web content without worrying about SEO in the first instance then adapt your content intelligently.  Your content needs to be natural because search engines have gotten clever.

The importance of authority

So you have picked your keywords and you set about building your web content.  It won’t be long before you are at the top of the Google rankings!  Sadly, it’s not that easy.  Rankings are also driven by authority which is based on the ‘link profile’ of your site.  Links to your site from other websites help to build your authority.  If you get links from websites which themselves have high levels of authority better still.  Youtube has 565 million external links.  Twitter has 2.1 billion. has 334 million but it ranks highest on the web for ‘trust’ because of the reputation of the sites that link to it.  Link building deserves its own post.

Is SEO harder than you thought?

In principle SEO is not too difficult.  In practice it can be challenging.  However, it is as much an art as a science and far from being a sterile pastime for computer nerds it requires innovation, imagination and creativity.  The relevance aspect comes from keywords and the authority aspect from link building.  The web is full of companies large and small that have built their success on an intelligent use of SEO so it remains a key area for any digital marketer and any company planning to sell online.

Marketing on Facebook – An Introduction

If you use Facebook you will have noticed the winds of change blowing through the site over the past few months particularly new ‘timeline’ page layout. You now have the full width image across the top, a smaller profile shot to the bottom left of that and room for some top line information about yourself.  The timeline itself runs in reverse chronological order down the page.

If you are a business owner and want to create a page for your business, it works in the same way – in fact the layout is perhaps better suited to a business. The main headline shot is perfect for a relevant brand related image, the profile shot is for a company logo, the ‘about’ section allows for a short introduction to your business (see below for a little known grocer’s page).  The timeline allows you to make posts and interact with your audience.

Facebook gives businesses three ways to market themselves.  They can 1) create a page, 2) create an ad or sponsored story and if they are feeling adventurous they can 3) create a platform which transforms their website into a Facebook friendly social experience.  Most people are familiar with creating a page so I will focus number 2 for this introduction.

Say you own a small chain of upmarket wine stores in the Birmingham area called Theodore Wines (posh enough?) and want to use Facebook to promote your business.  What might your Facebook Marketing Plan look like?

Set objectives

These need to be clearly defined.  You might use Facebook to build brand awareness (e.g. by encouraging people to ‘like’ your page) or you might want to grow sales.  Theodore Wines decide on the following:

1)     Increase footfall in their stores by 10% over the next 3 months

2)     Quantify the source of the extra footfall (i.e. the Facebook campaign).

They already have a Facebook page with 650 ‘likes’ but need to extend awareness beyond their existing ‘fans’ to achieve their objectives.  They will drive prospects to a landing page on their website to drive the next action.


This is critical, especially considering the nature of the product and the campaign objectives.  The sensible approach would be to build a profile of existing in-store customers and work from there.  Facebook allows targeting of ads by location, education and work information, age, gender, age, gender, likes and interests and so on.  Theodore Wines will target Facebook users with the following profile:

  • Aged 40 – 60
  • Live in Birmingham, UK
  • List any of the following as interests – ‘Wine, cookery, fine dining, entertaining’.
  • University educated
  • Married

Once they have entered that information, Facebook would provide an estimated ‘reach’ which is an estimate of how many people would see the advert.  They may then change the targeting criteria to increase or decrease the potential size of the audience.  They may need to broaden these criteria to increase their reach.

Design an engaging advert

Accurate targeting is important but the campaign will not achieve its objectives without an engaging advert.  They decide the following:

Title – ‘Love wine? Discover Birmingham’s finest purveyors’

Body copy – ‘Visit one of Theodore Wine’s 6 Birmingham stores to enjoy a free wine tasting event.’

Image – a shot of a couple within the target age range enjoying a glass of wine

Remember, the objective is in-store footfall and Theodore Wine’s is a premium brand.  Rather than simply offering discounts they decide to encourage people to attend an in-store event to sample their wines.  Prospects clicking through will go to a specific campaign landing page and enter their name and email address.  Theodore Wines will then email them back with details of their nearest tasting event and customers will print the email or quote a unique code to gain entry to the event.

Managing the advertising budget

Theodore Wines have a budget of £3000 for the campaign.  Facebook provide two ways of paying for the campaign – CPC (cost per click) or CPM (cost per impression).  They decide on the former and set a daily maximum budget of £300.  They then need to select a bid-price for their click thoughs.  This is not an exact science because bid amounts will fluctuate depending on how many other businesses are targeting the same demographic.  Facebook suggests a bid amount of £1.20 per click but as the campaign progresses Theodore Wines discover that an average bid amount of £1.05 allows them to achieve the desired number of click throughs.

Theodore Wines soon learn that they need to monitor their click through volumes and bid amounts on a daily basis to ensure that their ad is being served and that they are generating a sufficient number of click throughs.  They soon realise that this requires a little more work than a traditional off the page advert but there is also more in-depth information on the performance of the campaign.

Learn and improve

Facebook provides some very useful information about the performance of the campaign.  Everyday a member of staff is responsible for reviewing the following:

  • Volume of impressions – the number of times the ad has been ‘served’ on a Facebook page.
  • Volume of click throughs – the number of prospects who have clicked through to the campaign landing page.
  • Prospect demographics – the number of click throughs against the various targeting criteria selected.

When prospects have clicked through they will then monitor:

  • Number of visits to the landing page
  • Number of prospects entering name and email address
  • Number of prospects visiting each of the wine tasting events.
  • Amount spent on wine at each event.
  • Overall increase in in-store footfall over 3 months.

As the campaign progresses they will use their learning to improve the targeting of the campaign as well as testing different versions of the advert.  They soon learn that continually using campaign performance information to improve the campaign is the key to success.


Ultimately, the final ROI will define whether the campaign was a success but without a clear marketing plan the campaign would be unlikely to achieve its objectives.  How many companies clearly plan their Facebook campaigns?  On the right is a list of the ads that were served on my page this morning.  Of the four you can see I would only consider clicking on the bottom one because it is targeted at me based on a specified interest.  Perhaps the Right Guard could have been targeted more effectively.  There must be hundreds of thousands of Stone Roses fans on Facebook but I have not listed them as a band I like.  I use deodorant but who doesn’t?  Take a look at the ads served on your page.  How many are obviously targeted at you?

Clearly, Facebook offers some exciting marketing possibilities but companies looking to use these need to remember the marketing truth that badly targeted adverts don’t work.  Some companies are running very successful Facebook campaigns so maybe internet advertising can work after all.  If it’s planned properly that is…

Is customer loyalty possible online?

The emergence of digital marketing and its impacts on customer loyalty have been massive and far reaching.  Customers will display loyalty for many reasons and the core reasons are the same now as they were in the pre-digital era.  It’s still about indentifying your target market, providing products they truly want or need, making them easily available and then building a relationship with customers.  So why has digital thrown the cat amongst the pigeons?

Go back a few decades and loyalty was often based around face to face human relationships.  To use retail as an example, think of the romantic image of a lady visiting her local grocery store in the fifties. People got to know the people working in their local businesses.  Even if they didn’t there were other reasons for loyalty, not least accessibility.  If there was only one grocery store within 5 miles of home the chances are you would use it.

As we all got richer and the economy developed we started to get far more choice about what we buy and who we buy it from.  Supermarkets, rather than just relying on attracting customers who lived nearest to their store realised that in a more competitive world they had to do more to attract and KEEP customers, hence the rise and success of the various loyalty card schemes.  Then the internet came along, bringing unprecedented changes such as:

  • Increased competition – The products and services you offer to customers can be compared not only on price but one a mind-boggling array of different characteristics.  Look at PC specs for example.
  • Increased choice – There is next to nothing you can’t buy online so products and services have to fight harder than ever to get noticed.
  • Ease of accessibility – you can buy a car off ebay, from your phone, while taking your dog for a walk.

These are just 3 of the reasons it has been said that the concept of online loyalty is a myth.  Consumers are savvy in the digital age and will seek out what is best for them.  So what can we marketers do about it?  In order to survive and thrive companies need an online value proposition (OVP), a rarely used term coined by Chaffey et al.

Suppose you build a new website selling music CD’s and downloads.  There are thousands of other companies doing the same thing.  You might work very hard on SEO to get high up the search rankings.  Say you managed to get it into the top three on organic search results on google (quite a challenge!).  Would that guarantee success?  You would probably acquire some new customers but would you keep them as you frantically tried to maintain you position on google?  Not without an OVP.

I tend to buy lots of music online so I started thinking about why I use the sites I do and discovered the following:

Site Main OVP Secondary OVPs Weakness Price Choice, personalised   recommendations Faceless corporate – no brand  engagement Music reviews Listen to audio clips, high brand engagement Cost, limited choice Listen to any track before buying Choice, fast despatch Badly packaged products. Niche selection Personalised service Lack of choice, overseas   location.

It was only when I sat down to look at the reasons I use these sites that I realised that they all have characteristics that differentiate them from their competitors.  My perception of each site’s OVP may be different from what each of them intended but all provide a strong reason for me to return.  Think about the sites you use and ask why you use them.

So why don’t I just use one site?  Is this true loyalty?  True loyalty can only be defined by buying 100% of a product from the same company.  That is certainly far more difficult in the digital world but perhaps rather than defining success by ‘loyalty’ online companies should just focus on developing something, fresh, engaging and if possible unique that keeps enough customers coming back.  They should embrace the opportunities that digital channels offer rather than being frightened of new challenges.  It’s never been tougher to succeed but companies need to keep two words in mind if they are going to keep customers – ‘add value’.

Internet advertising doesn’t work!

What?  Of course it works.  In fact online advertising spend increased from $26bn in 2010 to $31.7bn in 2011 (source IAB). That’s a 21.9% increase in one year.  Companies would not waste that kind of money if it wasn’t working right?  The dictionary definition of advertising is ‘the act or practice of calling public attention to one’s product, service, need, etc., especially by paid announcements’. Companies still pay to do that online just as they do in offline media.

The first ever online banner ad

In the pre-internet days that definition would have worked pretty well.  Advertising was all about ‘pushing’ or announcing your message to your market and there were some pretty big media channels with a massive reach that enabled companies to do that with great success. So what’s changed?  It seems to me there are three main differences between online and offline advertising.  With online ads:

1)     You as a consumer find an advert rather than it finding you (about half of total online ad spend is on search marketing).

2)     There is greater potential for interaction between organisations and consumers and between consumers themselves.

3)     The organisation has much less control over the way it is perceived.

Point 1 needs a post of its own so I will focus on points 2 and 3 here. If you are old enough, you will remember how pre-internet advertising worked.  Brands were king.  Hugely successful TV ads for PG Tips (monkeys), Shake n Vac (crazy woman with vacuum), Milk Tray (‘the man’) created powerful brand images and shifted product by the bucket load.  But you still have those today I hear you say.  What about Compare the market (meerkat) and Go Compare (insane levitating opera singer)?

So on the surface advertising and brand building is still taking place in much the same way but looking deeper you find there has been a seismic shift.  Firstly, organisations used to talk AT customers.  They created a brand position and message and announced it to the world.  There was a monologue.  What we have now is a dialogue and much of that is not between the organisation and their customers but between consumers themselves.  Online forums, blogs, fan pages…people are talking about products in an open, honest and human way, whether organisations like it or not.

Who are you going to trust?  A multi-national corporation and their brand team or impartial peers and consumers who have already tried the product out and are telling everyone about it on the internet?  It is only in the past couple of years that many organisations seem to have realised that the way their brand is perceived in no longer in their hands.  That is why they are falling over themselves to get on Facebook, Twitter, Youtube and more recently looking into people’s interests on Pininterest.  Their intention is to know what consumers are saying about them and to be able to influence that.  The first intention is honourable, the second requires a wholesale shift in the way organisations communicate with their customers.

On Facebook yesterday I noticed a link to the Stella Artois UK fan page.  I have not listed ‘beer’ as an interest on Facebook but I’m sure the marketers at Stella Artois know I fit a certain profile that makes me likely to enjoy an occasional pint of Stella, which I do.  Their page seems to be a good example of how to hit consumers with the brand and then build engagement, feedback and dialogue, even if that does consist of people asking for free beer.  Hey this is a beer fanpage.

The headline branding of the Stella Artois UK Facebook fan page

The internet has democratised advertising.  This is no doubt terrifying to many organisations, particularly those with claims to great customer service, amazing product reliability etc.  Now those claims have to be TRUE because if they aren’t your customers are going to tell everyone about it online.  This is great news.  For the first time customers can get real insights into products and services before they buy them and organisations have the opportunity to build an army of advocates who basically advertise their products for free.

In the coming years many organisations will live or die depending on how they adapt.  ‘Advertising’ online doesn’t work.  Focussing time and money on communicating, facilitating, listening and joining in with customers is the way forward in this brave new world.

Channel hopping: Direct Mail vs Email

Mick was the managing director of a successful company selling plumbing products, more than 10,000 different products lines – something he was very proud of.  He had recently added two new salespeople to his ranks, Derrick and Eric.  Both came with very good recommendations but looking through their sales figures for the first 3 months, Mike was worried.  Both were well below their targets and needed to show improvement if he was to keep them on.

Derrick - communicating a pitch

Mick decided to meet with them separately to get their feedback and thought that asking a few of their customers about them would help too.  He met with Derrick, an imposing character and a salesman with decades of experience, ‘an old hand you can trust’ said his previous employer.   Mmm, on his salary he should be thought Mick.  ‘So Derrick, how have you found your first 3 months with the business?’.  ‘A mixed bag’ said Derrick, ‘I have some accounts that I have really enjoyed working on and don’t forget that I have bought in 5 new accounts in my time here’, Derrick pointed out.It was true that Derrick had bought in some new accounts, some of which could be big.  Mick decided to give some of them a call.  ‘Derrick is a man with presence’ said one.  ‘He knows how to tell a story’ said another, ‘He made me feel emotional about plumbing products!’.  Mick was impressed.  He often felt emotional about plumbing products but rarely met anyone else who shared his enthusiasm.

‘I haven’t enjoyed working with existing accounts so much’ said Derrick.  ‘Some have complained that I don’t understand their account like my predecessor.  Some have said that they don’t hear from me often enough and I’m not giving them the same kind of offers they are used to.  There is only so much time in the day though Mick’.

Mick called a few of his existing customers. ‘He turned up in the middle of the day when a phone call would have done’ explained one.  ‘He’s a bit slow with the offers and can be a bit in your face’ said another.  Mick was concerned and needed to think.  Existing accounts were the company’s bread and butter.

Next he met with Eric.  Eric was a younger, less experienced, salesman on a lower salary but ‘thinks on his feet’ said his previous employer.  ‘Tell me about your first 3 months’ said Mick.  ‘I have enjoyed most of it, especially getting to grips with your database.  You have so much information on customers buying behaviour.  Millions of rows!  I have been able to carry out some analysis and I’m working on a model to predict buyer behaviour and anticipate the kind of offers that they should be interested in.  You need to use that information to tailor communications and make offers at the right time.’

Eric produced a report, which has been updated just before the meeting.  It showed how he had increased customer value on some existing accounts and on specific product lines.  He planned to put a low cost programme in place to make timely and relevant offers to customers based on their past buying behaviour and to find ways to generate customer feedback.

Mick was slightly taken aback.  ‘OK but I employed you to get new business not just to develop existing accounts’ Mick pointed out.  ‘To be honest Mick, new business is not my forte.  I don’t much enjoy cold calling or turning up to meet people who might not even be interested in our products’ Eric replied.  ‘Targeting’ said Mick. ‘Get yourself in front of the right people’.  ‘But I haven’t been given any good leads and those I have spoken to didn’t even remember my first phone call.  There are plenty of other sales people calling them every day.’

Eric - hard at work on his databases

Mick could see Eric’s point.  Eric was of slight build, not naturally charismatic and not the kind of person you would notice in a crowd.  The world had millions of Erics but maybe this one was a bit different.  He seemed to be a good listener.  He certainly had an eye for detail and was an adaptable, quick witted type.  Mick had a plan – teamwork.  Derrick would be responsible for new business.  Getting quality leads, making appointments and signing up new accounts.  He would also help to get the first order by conducting follow-up meetings and would carry out courtesy visits to high value customers to keep them happy.  Eric would be office based.  He would be responsible for account development.  Finding cost effective ways to cross-sell and up-sell as well as analysing sales trends by individual account as well as at sector level.

Three months later Mick reviewed the sales figures.  Derrick had bought in 8 new accounts and some were starting to generate a large spend.  He also had a good book of prospective customers and had high quality, engaging sales literature to give to prospects.  Eric meanwhile had put a contact strategy in place, based on his knowledge of the company database, that was not only increasing the average frequency and value of spend but seemed to be improving customer retention.  He was conducting regular customer surveys and using information from social networking sites, used by customers, to tailor his communications to them.

Mick felt happy and relieved – to think he had been considering letting these guys go.  He could now clearly see how they each had a role to play.  ‘Deploy your salespeople where their strengths lie’ he thought.   Obvious when you think about it.