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The High Definition Value Proposition: Courting Online Customers for the Long Haul

When I was in college, most of the women I knew had a "list".  Some of the guys I hung out with had one too.  The "list" was the inventory of qualities that the person they'd eventually marry would have.  Ok, I confess, I had a "list".  Mine was ambitious and multi-dimensional.  The guy would have to be almost freakishly smart, and equally funny. He'd have integrity. He'd love to read as much as I did, and probably some of the same books.  He'd like cats and red wine.  (The list goes on, but I think you get the point.)  The key here is that even though there were plenty of potential mates who were nice or funny or smart, all of us with a "list" were looking for someone who could play on more than one dimension, someone who was uniquely "all of the above".

So, what does this have to do with e-commerce?  Well, actually quite a bit.  I'm a big believer in the power of a strong value proposition, and value propositions at their best are multi-dimensional.

Your customers need more than one reason to buy.  Ideally, those reasons to buy will appeal to them on a number of levels, both rational and emotional.   In our current economic climate, it's easy to get caught up in the one hit wonders of free shipping and 25% off.  While valuable, those things alone won't set you apart or help you build a loyal, lasting relationship with your customers.   To do that, you need a value proposition that is high definition, that's "all of the above".

So, is your e-commerce value proposition high definition? The new year is a good time to "take inventory" and see how you stack up on all of the necessary dimensions.   Ask yourself the following:

What are the emotional benefits of buying from your company?  In other words, when a customer buys online from you, how do they feel? If they tell someone at a cocktail party that they bought online from you, what does that say about them?  Think of it this way: if I buy a Volvo, I might feel safe or feel confident that I'm keeping my family secure.  If I tell someone I own a Volvo, it might say that I'm safety conscious or willing to spend extra money on quality.  Does your site experience or the product you sell deliver emotional benefits? Or do you fall into the emotional void?

What functional benefits do you provide?  For most e-commerce sites, functional benefits are things like 24X7 access, a robust on-site search feature or a large number of skus for sale.  The fact that the Volvo has a bunch of airbags and a frame that holds up in a crash means that it has solid functional benefits (note how those functional benefits fuel the emotional benefits described above). Amazon's one click checkout, Borders magic shelf and Etsy's shop by color match tool are examples of  unique functional benefits.

What are experiential benefits your customers enjoy?  In other words, when someone buys from you online, what do they experience? It might be a friendly customer service rep, a fast and courteous email response or a surprise gift of free samples when the package arrives.  To stick with the Volvo analogy, it might be the mechanic at the Volvo dealer that's honest and doesn't speak in automotive jargon. It could be a surprise thank you note from the salesman that sold you the car, or someone serving you a hot beverage while you shop the showroom. Beyond the pure transaction, what's the experience that surrounds it like?

Does your e-commerce business offer relationship benefits that foster longevity? These are the benefits that grow over time, that deepen loyalty.  Yes, it does include things like traditional loyalty/points programs, but many truly unique relationship benefits are deeper and more personal.  As I do more business with you, do you know me better and help me more effectively?  In the offline world, think about the salesperson at Nordstrom who calls you when she gets something new that she knows you'll love, or the car dealership that gives you a free loaner car for life when you buy your second car from them.  In the online world, it might mean personalized recommendations, or participation in an online community of people who share your passion. It might mean the opportunity to attend special events or help design the new product line.

The goal of course is to offer a truly robust and unique value proposition that is emotional, functional, experiential and fosters a relationship....all of the above.   If all of the parts aren't there, it's easy to see how a lopsided value proposition falls apart.  For example:

•  The airlines offer a relationship benefit in the form of frequent flier miles.  But, the experiential aspect of traveling on their flights is miserable and getting more so all of the time.  So, all of those "relationship" benefits don't really foster relationship at all.

• You might love your hairdresser's personality and the "experiential"  hip decor in her salon, but if her core functional benefit (the quality of her haircut) doesn't stack up, you'll probably move on. 

• A technology company that offers a product that functions well will only get so far unless they bring some emotive or experiential elements into the mix.  We like the iPhone for its functions, but what makes us love it is the fact that shopping for it in the Apple store and using it is an engaging, fun experience. 

So, how do you determine if you have a balanced, multi-faceted value proposition? Start by taking an inventory of all of the things you offer in each of the categories. Circle the ones that are unique to you or that you do better than your competitors.  You'll probably see that in at least one or two categories, you have an opportunity to do better.  That means when you look at the list of initiatives you need to prioritize for '09, things that enhance those weak categories should be towards the top of the list.

Just like the good looking date who can't hold a conversation or the wealthy date who has no personality, customers are unlikely to stick with a retailer whose value proposition is lopsided.

And, in case you're curious, I did find a guy that met the "all of the above" criteria on my "list".  Granted, it was a full thirteen years after college, but worth the wait.

Darwinian Marketing: Where Are You In The Evolution?

 

**Note - To the person/company who came up with this slide, thanks. I saw it in a colleague's presentation and have used it here without knowing the original source. I'd be happy to provide credit where credit is due, just let me know.

It's been 5 days and counting. Another load of yellow pages books was delivered to my condo building this week, and every book is still sitting right where it was delivered.  Not a single resident of my building has taken one.   This isn't a new phenomenon, of course.  Last year, I wrote a post about the same experience.   But I love evolution, and every time I see the pile of books, I think about how the internet has helped marketing to evolve, and how that has forced marketers and the companies they work in to evolve  - not an easy thing.

I had a discussion recently with a search marketing solution provider, and we shared our thoughts on the importance of marketing accountability, especially in today's financial climate.  We realized that we see similar behavior patterns from clients in our respective work.  Both of us work with clients of all sizes, and regardless of size or maturity, companies wrestle with their evolution to accountability.  Whether you're talking about a website or a search marketing program, being able to measure means adapting to a new environment.

For many businesses, marketing has never been particularly measurable.  When something isn't measurable, it's only natural for it to be viewed as an expense vs. an investment or a revenue driver.   While being able to measure the success of an online marketing program sounds like nirvana compared to blindly writing a check for a display ad or another year of the yellow pages, most companies find that it takes a good deal of work, time and mindset shift to navigate in the new world; in other words, it takes evolution.  

Industry veterans report that on average, a company trying a paid search program for the first time abandons their effort in 3 months or less.  Yet, any astute search marketer will tell you that it takes much longer, 6 months at least, to see real impact, optimization and ROI.  Websites are the same way.  How many times I have seen potentially great sites abandoned after a couple of months, left idle after the "project" was officially over and the company moved on to other things.  Trouble is, if you're not used to measuring your efforts and you suddenly have the bright shining light of data staring you in the face, the early results may show less than favorable statistics, and the instinctive "flight" reaction to abandon any money-losing effort kicks into high gear.

A recent Marketing Accountability Study by ANA/MMA (download a copy here) provides some great insights into how companies are coping with their evolution towards marketing accountability:

• Only 27% of study respondents said that marketing and finance share common metrics in their companies.
• 44% of respondents said that their senior management views marketing as an expense vs. a revenue driver.
• There is direct correlation between time spent on marketing ROI and progress made.  In a Conference Board study referenced in the report, 63% of those who had been pursuing marketing ROI for six months or less reported no progress towards their goal, while 73% of those involved for three years or more said they had made good progress.
• The key hurdles to making marketing analytics easy to use were cited as a) people:  training staff to use analytics and think differently and b) process:  integrating analytics into planning and strategy.  So, it is indeed about evolution.

As I think about companies and clients, large and small who have made the successful transition to marketing accountability, they have some important things in common:

• They view marketing as a strategic function vs. a discreet set of tasks
• They identify success metrics up front before they "test" anything.  After all, what are you testing if you don't know what you're measuring?
• They align the organization around common metrics and communicate progress regularly.  Marketing accountability requires that you work across the entire organization: finance, sales, operations, customer service, IT, etc.  in order to be successful.  Example: you can buy keywords and put up web pages all day long, but if the person answering the phone or processing orders isn't aware or on board, your ROI will plummet.
• They take the long view, starting at a level realistic for their company's size and resources and build from there.  They watch metrics to get early benchmarks and then seek ongoing improvements vs. overnight fireworks.  They stick with it vs. hopping across trial and error tactics. They understand that integration of customer data and automation of measurement processes will be a lengthy but worthwhile.
• They focus on progress, not perfection.  Getting all of the numbers and data sources to line up, getting every program to execute perfectly, it just doesn't happen  But that's not a reason to scrap your quest to accountable marketing.  In fact, it's the reason to keep going, keep pushing, keep moving forward.  Evolution, like momentum is a hard thing to break once it's started.

If you're well on your way to accountable online marketing, keep moving. If you haven't started, take the first step, however painful, and keep moving. 

And to you yellow pages book delivery guys, my building doesn't want any next year. 

Attention Accidental Shoplifters: Shop Online, Avoid the Dangers of Messy Store Shelves

Over a year ago, an article appeared in the WSJ; I read it and it stuck with me.  Laura Landro, a WSJ reporter, was accused of theft in a Kmart store. The article is well worth reading. In short, here's what happened:

Landro went to Kmart with her kids and bought a bunch of stuff (hundreds of dollars worth).  Among her purchases was a pair of flip flops.  When Landro was shopping and found the pair she wanted amongst the messy shoe display, there was no box. So, she put the flip flops in a random available shoebox and put them in her cart.

Turns out that the shoebox she chose was ticketed  for a cheaper pair of shoes, so at the register, the shoes rang up for $16.50 instead of the actual $24.50 price.  Security guards had been watching Landro and accused her of stealing $8.00 from the store.  Despite her protestations of innocence, a humiliated Landro was banned from making future visits to the store.   Offical word from Kmart indicated that they stood behind their security team, though it was "unfortunate" that Landro had this experience.  She was still banned from the store.

As a shopper, I was horrified when I read this article.  How could a good customer be treated this way for a simple mistake?

As a retailer, I was conflicted. Shrinkage is a huge problem and shoplifters cost retailers billions of dollas a year.  Loss prevention teams at stores work hard and follow firm processes to stop theft.

Of course, as a merchant, I was irritated that a messy shoe display was the real cause of this mishap.

In the end, I concluded that it was sad for everyone that common sense couldn't prevail in retail.  And, as an e-commerce advocate, I also concluded that Landro should have just shopped online and avoided this whole mess.

I was reminded of this article last week when I found myself in a near-miss situation as an accidental shoplifter.

It was the day before Thanksgiving and I had to do the unthinkable: make a stop at the grocery store.  I just needed two things: flowers for my holiday table and a few votive candles.   After arriving at Whole Foods and selecting my flowers, I headed to find the candles.  The store was packed.  The candle display was a nightmare, as you might expect on a busy day.  Hundreds of candles in boxes, out of boxes, in the wrong boxes, stacked irregularly in a very narrow aisle.  It took me almost twenty minutes to find the right number of candles in the right colors, which involved crouching on the floor and reaching for the sky.  At one point, a couple of kids came barreling  through the aisle with a shopping cart.  As I moved to get out of the way, candles tumbled everywhere.  Fortunately none broke.  I recovered the scattered boxes and managed to get them all back on the shelf ( as a retailer, I instinctivley started fixing the display). To my relief, there was no "clean up on aisle 4" loudspeaker announcement.   I headed for the checkout.

After I paid for my items, I looked down as I put my wallet back into my purse.  I was horrified.  In the outside pocket of my rather large handbag were two votive candles.  Now, I know that it's a cliche' for a shoplifter to say "they must have fallen into my purse...." but in this case, they really DID fall into my purse.  It must have happened when the kids ran through the aisle and all of the candles fell.

Embarrassed, I handed the candles to the cashier and said "I'm so sorry, these must have fallen off the shelf.  I guess this makes me look like a shoplifter, not exactly a title I'm eager to have!"  She looked a bit taken aback, but thanked me and took the candles out of my hand.  As if on cue, a supervisor-ish looking person appeared behind her and offered to put the candles back on the shelf.

Now, I have no idea if I was on camera or if I was ever suspected of shoplifting at Whole Foods.  But it almost happened.  As I walked to my car a bit shaken, I could see the headlines: " 25  year retail veteran and e-commerce leader caught shoplifting " .  Talk  about a career killer.   I have no idea what would have happened if I had walked out of the store with the candles.  Would they have believed me when I told them it was a mistake? Would I blame them for doing their jobs and catching a thief?  Would I have wound up banned from my neighborhood grocery store, or worse?

So, as if I needed one more reason, I'll be doing my holiday shopping online this year.  Those messy shelves in the stores are more than an annoyance; they can lead to an unintended life of crime.  If you're shopping brick and mortar, be careful out there.