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New Year’s Lesson: 3 Big Things That Clients and Cats Taught Me about E-commerce Success (and cat training)

It's a new year, and that means that in our work and personal lives, we are reflecting and looking ahead.

Sometimes, my personal and professional lives parallel one another and enlighten me in surprising ways. Such was the case in December.

Professionally, I started working with a new e-commerce client. They have a terrific product that's very desirable and priced fairly. They have a great cause tied to their company that is impressive and admirable. The founders are passionate and smart.

What's wrong with this picture? For one, they're not doing a lot of business, nowhere near as much as they should be. They're frustrated. The riches of e-commerce seem to be passing them by.

Personally, my husband, dog and I adopted two young kittens, Vincent and Theo. They are adorable, as most young kittens are. They are delightful to be around. They are thrilled to be in a home instead of a shelter, surrounded by food, toys and comforts.

What's wrong with this picture? We have a very steep, open spiral staircase in our house. The cats would hang out in the upstairs bedroom, but were too scared to come down and spend time with us, so we either had to make special trips upstairs to visit them, or only see them at night when we went to bed. All of us were frustrated. The riches of being a family were eluding us because we couldn't get the cats over their fear of the stairs.

At the start of December, little did I know that I'd be solving both of these problems concurrently, nor did I realize how related the two problems really were. Call me the crazy cat lady, but in the end, the 4 month old kittens provided a lot of insight into how we make buying decisions and why we engage with and commit to brands.

First, a bit more about my client. After doing a full audit of their e-commerce website, their competitors' sites, their business and their customers, it really boiled down to 3 big things.

Big thing #1: They weren't acting like merchants. Everyone who sells online is, by definition I suppose, a retailer of sorts. But many, especially in e-commerce, don't take that role to heart or understand the obligation that comes with it. It's so much more than simply putting your product online and providing a shopping cart. It's so much more than showing up in search results. It's about powerfully and consistently persuading your customers that what you have is something that they want. Persuasion can take on many forms: a)compelling, rich product imagery, b)informative and engaging copy full of features and benefits, c)suggestive selling and product recommendations, d)removing barriers via things like free shipping, alternative payments, and a clear, liberal return policy, or e)helpful tools that allow for easy comparison, sorting, filtering and sharing of products.

Interestingly, in person, my client is a vibrant and skilled sales person. Yet, her site is lifeless and impersonal. The product, as wonderful as it is, can't be seen as special or desirable without a merchant doing their job. Remember the phrase "may I help you"? You can't exactly ask that of an online shopper (well, you can if you offer live chat; in this case, they don't), but your site should reflect that you've thought through the answers to that all important question. If you don't have the experience/instinct for retail, get educated or hire someone (a merchant!) who "gets" the nuances of persuasive selling in an online environment. If you are thinking about becoming an online retailer, do yourself a huge favor and work in a brick and mortar store for 6 months waiting on customers. You might not like it, but you will learn lessons that will help you enormously in the e-commerce world.

Big thing #2: They weren't being story tellers. As I mentioned, this company has a compelling cause, and buying their product truly does make a difference in the world. When I asked my client how she expected customers to find her site on the web, she replied: "Word of mouth. We thought that with our great product and great cause that word would get out there." So, here's the thing about word of mouth: First, you have to have customers (see #1 above). You have to tell the story yourself really well at least a few times before your customers will tell other people. Then, you have to invite customers in, give encourage them to engage, and give them a megaphone. Customers need to a) understand the story b) be compelled to tell it c) be invited to be a part of it and d) given the tools to tell it easily. No matter how passionate they are about you and what you sell, you're going to need to give them a little help. One of my favorite sites that does this well is TOMS Shoes. Take a look at the home page and you see a page bursting with how to do it right.

This leads me to Big Thing #3.

Big thing #3: They weren't making conversation. My client, despite the struggles with their e-commerce store, had set up a Facebook page and Twitter account. Good things. However, both were being used like billboards vs. conversations. Every post and tweet was about themselves; what they were doing, what sale they were having. The few followers they had weren't participating. Some self promotion is ok, but the power of these tools is in the dialogue, the listening, encouraging conversation and engagement. Without that, it's hard, if not impossible to stimulate and foster the word of mouth and storytelling that is so critical to my client's business.

Ok, so what about the kittens? Surprisingly, when I dissected the problem, I found that I was making the same errors in cat training that my client was making in operating her e-commerce store.

Once Vincent and Theo were big enough, I removed the barricade that we had put up at the top of the stairs. I expected that they would eagerly come down the stairs to explore the rest of their home. Wrong. Days and weeks went by, and they showed no desire to leave the bedroom. They occasionally ventured to the top landing, only to run away in fear. At one point in my frustration, I picked them both up and carried them downstairs, forcing the issue. They freaked out, and quickly went back up stairs, showing no intent to return.

Then, I decided I needed to act like a merchant. It wasn't enough to simply open the store (in this case, the barricade) and expect results. I needed to point out the benefits of being downstairs. Delicious food. Special toys. Lots of affection and laps to sit on. For several days, I tempted them with how wonderful life could be beyond the bedroom. I was persuasively selling the concept of coming downstairs. Within a week, it was clear that they finally wanted to come downstairs. They just needed continued encouragement and persuasion to get over their fear.

So, I also had to be a storyteller. I had to tempt them numerous times, in different ways for the message to sink in. One time it might be luring them with a feather toy. The next time a dish of favorite food. The next time praise and affection. Every time, the ending of the story was the same: see guys, downstairs is fun, and it's fun every time. Word of mouth, if there is such a thing in the cat world, did eventually do the trick. Vincent, the braver of the two kittens, eventually took a deep breath and made it, slowly down the stairs on his own. Theo protested and wouldn't join his brother. But, later that day, Vincent made it up and down the stairs 2 or 3 times, each time seeing the benefits of good food, fun toys and lots of affection. The next time Vincent descended the steps, Theo was right behind him, eager to experience what his brother had no doubt bragged about. Word of mouth in action.

Wallowing in my success, I nearly made a critical error. After a couple of days of the kittens coming downstairs, I noticed that they had reverted back to their usual habit of hanging out upstairs for most of the day. Why weren't they coming downstairs with the enthusiasm they'd had before? Maybe because I hadn't worked to keep the conversation going. I acknowledged them when they came downstairs, but had done little to keep them interested. I was tending to my own work while they wandered about aimlessly, sometimes getting bored. I quickly learned that I didn't need to be involved with them every second, but that I needed to create an environment where they could entertain themselves and stay engaged in being downstairs, with occasional guidance and participation from me. Sound a bit like your social media/engagement efforts?

Conclusions?

My client is a bit like my kittens. She's at the top of the stairs, taking it all in. She's starting to see the benefits of acting like a merchant, being a story teller and encouraging conversation online. I must continue to help her, show her that it's ok to take that deep breath, that first step and come down the stairs to a better place. Be the same vibrant person on line that she is face-to-face.

My client's customers are like kittens too. They are at that scary top step when they come to her site every day. My client needs to persuade them to join her, to experience her product and to engage with her brand.

As for Vincent and Theo, they have become vocal advocates of exploring their new downstairs home, and have earned their spot as "junior partners" in my consulting practice, reminding me often that I need to take my own advice.

Happy New Year.

Attention E-commerce Marketers: Your Brand is Showing (everywhere)

With more than 14 years worth of spending a lot of time on e-commerce sites under my belt, online store surprises can be hard to come by.  Rare as it is, I love it when I see something so well done that I smile at the screen, remember the moment and want to tell people about it.

The delicate balance between appropriately conveying the emotive aspect of the brand and efficiently driving transactions is one that e-commerce teams have struggled with since the early days of the channel. (see my previous poston this topic) With robust features and functionality now commonplace in most online stores and best practices in transactional ease will known, online brand differentiation in e-commerce is as challenging as ever.

But sometimes, the essence and personality of your brand can come through in the most unexpected of places on your site.  When that happens, it's not only a pleasant surprise for your customer; you leave an indelible, emotional mark on their site experience.  Just what a brand is supposed to do.   It's not just about the imagery on your home page, the tone and language of your product descriptions or the helpful tone of your service information.  Yes, you need all of that.  But how about some of the hidden or forgotten corners of your site? It's really these places where you can take an otherwise ho-hum (or even frustrating) experience and turn it into a positive emotional connection.   A few of my recent favorites are below.

On the new Columbia Sportswear e-commerce site (launched in the Fall of '09), the company's beloved spokeswoman, Ma Boyle is with you all the way.  Even when you get a 404 error (I love this).

 

When I bought holiday cards from JibJab (everyone's favorite site for elfing yourself into all kinds of humorous situations), I got this thank-you screen after signing up.  I now not only know the people behind the company, but I feel like I have a cheering section behind me, celebrating my new membership and sharing an inside joke.

 

We all love Woot! not just for the screaming deal of the day, but sometimes just as much for the irreverent humor that goes into the site's content.  Woot! leaves no page unturned (or shall I say un-clicked?)... Take a look at the customer service FAQ page.  This page is either dry as dirt or excruciatingly courteous on most e-commerce sites.  Woot! actually makes theirs fun to read and uses the page to hammer home their personality, which is good considering the brutally bare bones service policies.

And then there's Moosejaw, long a leader in cutting edge, youth oriented marketing.  Note the clever language enticing me to create an account -everyone will like me more!  Now there's a reason!

The moral of the story: leave no page un-clicked. Some of those necessary, straightforward pages outside of the ever precious purchase path can be hidden gems of opportunity where your brand personality can shine through.

Keeping up with Your Customers: 5 Fundamentals for Tackling the Multi-Channel Monster

This morning, two very good articles about multi-channel retailing popped up from Twitterers that I follow.  With way too much to read already, I hesitated to click but I am glad that I did.  This is a topic I have long been passionate about; and with the changing dynamics of customer behavior in a recession and mobile moving like a high speed train, more and more retailers are becoming equally passionate about aligning channels and devices to capture demand.  First, a bit about the two articles and then my take.

Both articles are well worth reading.

The first, in How to Fit Into Your Customers' Multi-Channel Lives, Peter Merholz of HBR does a great job of setting the historical stage for multi-channel services.  Long before e-commerce or the Internet, Kodak helped customers and built loyal relationships by breaking up the process of taking pictures an developing film, letting each step be managed by the people and places best suited to the task.  Apple followed suit with the iPod decades later by separating the music purchase and management from listening.  Good multi-channel food for thought for any  retailer or service provider.

The second, a new blog post at X-Channel Retail provides a good overview of recent multi-channel studies from Aberdeen and Retail Systems Research.  You'll find plenty of stats indicating that multi-channel initiatives are alive and well in most top-tier retail organizations, with improved visibility to inventory across channels and coordinated marketing efforts high on the priority list.

It's hard to argue that investing and executing well on a multi-channel strategy is a smart thing to do.  But achieving the elusive "seamless experience" is easier said than done.  With mobile adoption on a fast and furious pace, the need for retailers to orchestrate the research, shopping and buying experience not only across channels but devices (and devices within channels) means that execution will be more complex than ever.  While many retailers are doing it well, many are simply not prepared for the cultural, technical or organizational challenges that come with tackling the multi-channel monster.  Having spent a good portion of my career and consulting life in the multi-channel world, here are my top 5 fundamentals for taming the beast:

1.  Focus on the unique strengths and uses of each channel and device.  Multi-channel is about more than having the website available in your store or on a mobile phone.  It's about each channel bringing unique value to the customers' shopping and buying experience along the way. Think about the Sears curbside pickup program; customers receive a text message when their online purchase is ready for pickup at the store curb.  The cell phone didn't process the transaction, but made it a more convenient experience.

2. The decision to integrate across channels and devices must be deliberate.  Most retailers today are multi-channel in at least some sense.  Most have some level of channel synergy, but often that synergy has happened organically or accidentally.  Despite the clear customer demand for multi-channel convenience, many retailers organize and incent team members to behave like silo channel operators.  According to the Shop.org 2008 SORO Report, 85% of multi-channel retailers say that their website's highest priority is to drive online sales and profit.  If that's the case, multi-channel initiatives are unlikely to be at the top of the priority list, with online conversion drivers taking precedent.  If the decision is to integrate (and it should be), giving it the appropriate priority and resources will leapfrog internal silos and organizational boundaries.

3.  The technology essentials must be defined and planned.  Those in the know on multi-channel will tell you that transparency to inventory and pricing across channels, centralization of customer data and flexible access to product content are key. None of these are small things, so a clear road map will need to be created based on priorities and anticipated ROI.

4.  Multi-channel integration requires clear ownership and teamwork.  An executive mandate to integrate is critical, but so is "on the ground"  leadership.  Often, multi-channel initiatives lack a clear owner or a dedicated cross-functional team to focus on execution.  According to the SORO study, only 37% of companies surveyed reported having a cross-functional team to design and roll out cross-channel features.  Consistent accountability for multi-channel programs vs. treating them as "side projects" outside of normal business will go a long way.  You'll need a great knowledge source from each channel, someone from customer care, someone from IT and likely others, depending on the initiative.

5.  Objectives and incentives must be aligned around customer scenario success.  Teams tasked with multi-channel issues need to map the "end to end" customer experience, carefully planning how each channel or device will help the customer achieve their goals.  If performance metrics are focused on customer success, the right decisions will follow.  Chances are someone on your e-commerce team is skilled in scenario design: tap into them for multi-channel experience design.

Finally, pace yourself and don't expect overnight success.  Most multi-channel initiatives by their nature are hard to do well.  Be sure roll outs are carefully planned and tested before wide release, and have mechanisms in place to gather customer and employee feedback early.  You're going to have a long relationship with the multi-channel monster.

Why CRM Matters More Than Ever in Tough Economic Times

Everywhere I go, someone is trying to save me money.  The grocery store.  The department store. Restaurants. And of course e-commerce sites.  It's everywhere: coupons, signs screaming "sale", huge percentages off.  It's like every retailer in the world is dolling out virtual dollar bills.

No question, we're in a nasty economic situation and no question, it's taking more incentive than ever to get the register to ring.  As a retailer and as someone who has spent the better part of her life trying to crack the code on getting customers to buy, it pains me to no end to see these genuinely well-intentioned efforts by retailers executed in a way that is costly and ineffective in achieving the desired result.  Here's my latest example:

There's a spa/salon not far from my house.  It's fantastic and I've been going there for years.  Actually, as I've aged, I find that I go there more frequently as there's a lot more work that needs to be done.  Brows, nails, toes, hair, the occasional facial when the wrinkles get too hard to hide.  You get the point.

I am a regular, to say the least.  Every 3-4 weeks for haircuts and brow waxing.  Typically every 4-6 weeks for pedicures and periodically, a manicure for an important meeting or occasion (too much typing to get them on a more regular basis).  While the economy is tough, and I, like everyone else have found things to trim back on, my hair and nails will not stop growing.  So it's doubtful that my spending habits at this salon will change much in the months or years ahead.

This salon has my appointment and purchase history for the last however many years.  A lot of years.  They can probably predict when I need an appointment better than I can.  The technicians all know me by name and are always pleasant to deal with. We have a nice relationship.

So, here's the kicker.  I have right now, sitting in front of me on my desk, the following:

• A letter from my hairdresser offering me $10 off my next haircut
• A gift card from a nail technician offering me $15 off my next service combo of $65 or more
• 5 (count them) $5 off coupons good on my next service or retail purchase now thru April.

So, what's going to happen?  I'll use all of them.  But, as you've probably figured out, I would have made appointments and paid for services whether or not I had this pile of discounts.  I have no doubt that business for this salon is probably not what it was a year ago (hardly anyone's is, after all).  But, they are now making their business worse by spraying discounts far and wide, giving many of them to customers like me, who show no slowdown in their purchase activity.  They'll be making less money on me without the benefit of any extra business.

I know, implementing and executing well on CRM is not an easy task, but if this one anecdotal example is any indication, the payoff would certainly be there.  What if the salon only mailed coupons to those customers that they hadn't seen in 6 months? Or those customers whose spend over a certain period of time had slowed by a certain amount?  The really painful thing here is that they HAVE the data.  I know.  Every time I call for an appointment, the service rep diligently types the info into a computer and verifies my contact and credit card information that they have on file.

Managing customers is about more than having a nice relationship, it's about having a smart and profitable relationship.  In these times, can we afford any less?

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. 

From the Author's Mouth (well, actually, from his computer): An Interview With Martin Lindstrom

If you haven't had the chance to read Martin Lindstrom's book Buyology yet, trust me when I tell you that when you read it, you'll have plenty of questions. I did. Fortunately for me (and you) Martin generously agreed to answer a few of my questions in an email interview.  Our virtual discussion is below.  My review of the book is not quite as interesting, but if you'd like to read it, you can find the post here.

SM: The neuromarketing research used in Buyology is obviously very complex and expensive.  How quickly do you see these techniques becoming more widely available?

ML: I am pretty convinced that it is only a matter of years before many if not most of the Fortune 1000 brands in one way or another will begin adapting components from the neuromarketing communities in order to strengthen their research.   Recently I founded Buyology, Inc. , a New York based company specializing in analyzing brands based on the findings from the Buyology study.  My idea was to make this type of insight accessible for everyone, not just for the big boys, and thus ensure that we'll see a combination of qualitative, quantitative, and neuromarketing based research.  It makes sense, as we today know for sure that existing research techniques simply aren't able to understand and analyze our subconscious mind.  Neuromarketing studies can today be conducted at price tags as low as $40K.  As the techniques become more advanced and the technologies and software more sophisticated, we'll see a further price drop, and most likely offerings which even the smallest companies would be able to afford.

SM: You cite the humbling statistic that 80% of new product launches fail within the first 3 months.  For companies that can't yet afford or access neuromarketing research, what sorts of things can they be doing to improve on the failure rate?

ML: The premise of my book is to dare; dare to be different, to go to the edge - in short, to stand out.  A wise man once said " If you're standing in front of a monster and need to beat it, turn its strength into its weakness."  The strength of Fortune 1000 brands is that they have the capital to build brands.  Their weakness is that they're inflexible, afraid of offending anyone, and petrified of standing out.  As a small business this is your opportunity.  Some of the most successful brand releases I've seen build exactly on this; they provoke, stand out, go to the edge.  In short, they leverage the fact that they dare in contrast to the multi billion dollar brands.   In fact, when advising those Fortune 1000 brands I often ask them to imagine cutting their marketing budgets in half, helping them to recover their entrepreneurial spirit, simply for the reason that they struggle to regain that spirit which once helped them to become what they are today.

SM: It was clear from the research that a sensory approach to branding; one that incorporates sound, touch and smell in addition to visual elements is very important.  This obviously gives brick and mortar stores an advantage over e-commerce sites, at least for now.  Do you see the e-commerce experience becoming more sensory, and if so, how?

ML: I'm still surprised about why sound hasn't found a natural role on the internet. We all have speakers, and we all have ears - yet how come less than 1% of the top 1000 websites contain branded sounds, i.e. sound which reflects the signature of the brand?  And how come navigation sound hasn't hit the net yet? I mean, you use your cell phone and it replies by playing navigational sounds when you dial, switch it on/off, have a low battery, you name it.  The same is the case with computer games, your TV, even your alarm clock.  Yet still when you visit Amazon, eBay or any other shopping site, there's just dead-on silence.  No confirmation sound when I've clicked "accept credit card", no sound confirming when I've placed stuff in my basket, no error sound if I've filled things out wrong.  How come? I think that would be a good first step to pursue before anything else.

SM: I was fascinated by the chapter on mimicking behavior; how seeing others do something makes us want to do it too.  Will the explosion of user generated content and social tools work to a marketer's advantage to propel this behavior?

ML:  Most definitely, and it is already happening.  It is not coincidence that YouTube and other video sharing networks have turned out to become as popular as they are.  We love to observe, imitate, and repeat other people's behavior.  I still recall when I was a kid watching Michael Jackson moon walking.  Suddenly the whole world was imitating him, then we were wearing a white glove.  Those trends or fads are likely to be started by brands in the future, and because of the internet they're likely to spread substantially quicker and more efficiently.  From a practical point of view this means that brands will begin to consider how their new soda has to be consumed, or how their new candy is to be eaten.  In short, they'll no longer just develop the product, but consider the entire experience package and spread this using social media.

SM: For me, the greatest irony in the book was the success the cigarette makers are having with subliminal marketing.  The law says they can't advertise traditionally, yet that doesn't seem to be a detriment to their success.  This obviously raises some ethical issues and some interesting debate about government involvement in these sorts of situations....thoughts?

ML:  I was honestly shocked when we discovered the true power health warnings have on smokers - encouraging them to smoke even more.  It's scary, and so is the fact that we indeed smoke more, not less at a global scale.  How come?  Because the tobacco companies were banned from advertising and thus had to find alternative avenues.  This was indeed the best thing which ever could have happened to them.  Why?  Because it forced them to think about new techniques.  As everyone else was resting on the good old techniques, tobacco companies suddenly went ten years ahead of time, bypassing the problem the rest of the brand world today faces: that consumers are bombarded with information and thus the impact is somewhat diminishing.

So, what have we learned?  I think government needs to play on equal terms with the tobacco industry.  When I released Buyology we were, to my knowledge, the first in the world using fMRI to understand the true power of tobacco advertising.  Considering the impact the tobacco industry has on the world and our health, not to forget the cost of the health bill, anti-smoking communities should have access to substantially more sophisticated research techniques and thus gain the latest insight about the true effect of anti-smoking campaigns.  This should be the starting point, and a lot of resources should be put aside to further understand the true influence of tobacco related messages.  Once we've discovered the truth (or as close as we can possibly come to the truth) new regulations should be established, yet regulations which can be adjusted as time goes by and new research results emerge.  It will always be the dog chasing its tail.  My hope is with studies like the Buyology project we'll continue keeping an eye on players and beat them at their own game.

SM: As I read the book, I noticed a lot of parallels with another recent marketing book, "Buying In" by Rob Walker.  You cite many of the same brands (Hello Kitty, Livestrong, American Apparel, Apple, etc.) Have you read the book? If so, do you feel that your findings are complimentary?

ML: There are indeed parallels, and I'm glad this is the case.  It would be kind of scary if everything I wrote about in Buyology would be totally opposite of everyone else.   It is easy to identify  the successful brand players in the world; the numbers and the buzz tell it all.  This where I'm in clear agreement with people like Rob Walker.  Buyology however represents one difference which Rob's and I'd say just about every other book or study out there doesn't include: scientific evidence proving why the Hello Kitties of the world have succeeded.  The good news here is that some of the theories we've been working on for fifty years or more have finally been confirmed.  The bad news is that many of the theories now finally can be confirmed to be an utter waste of money.  So you could say where Rob and other's books are version 1.0, Buyology is version 2.0; where science offers us an insight and a dimension never put on the classic brand heroes of today's world.

SM: What stores do you do go to for your favorite dopamine hit?

ML:  It's funny you're asking about that, because I often joke around with this exact term when my girlfriend and I are shopping, teasing her by saying "let's go in and get a dopamine boost."  I love brands which are not yet discovered.  I love art, creative stuff that doesn't have labels on, but which tells a story that is unique and special.  I love products which have a special story.  I love stuff you can't buy everywhere, but only in small stores; somewhere in Japan, Columbia or Saudi Arabia.  Things which no one has and few care about.  That gives me the rush.  And yes I am, by the way, affected by brands, however I guess I'm one of the harder individuals to persuade (for some strange reason) ;-D

King Midas in Reverse: How Cross-Channel Influence Helps Your E-Commerce Sales

Typically, when executives talk about multi-channel strategy, they talk about the web's influence on offline sales.  For many multi-channel retailers, the e-commerce channel is about much more than the online transaction.  It's the means by which customers research products, compare prices and make purchase decisions before heading to the store.   Smart retailers actively use their websites to drive traffic to their stores, letting customers view store inventory or place orders online for in-store pickup.

Many multi-channel retailers track a multitude of metrics to quantify the importance of the website beyond e-commerce sales, looking at things like:

• Visits to the store locator
• Orders placed through an online catalog or catalog quick-order feature
• Calls to a separate 800# to stores or a call center
• Number of orders picked up at and returned to a store
• Orders placed or influenced by an in-store kiosk
• Online promotions on the website or sent via email redeemed in store

And the list goes on.  A study from Jupiter Research indicates that at least 40% of store purchases are influenced by the web, with that number expected to rise to over 50% by 2012.  All good news if you're an e-commerce leader in need of justifying the importance of your channel.

But here's another side of the coin that is probably looked at too infrequently:  the number of online sales that started in a store.  These examples are somewhat anecdotal, but since they both happened to me in one weekend, I'll consider that significant.

This weekend, my husband and I made a getaway to Portland. With a rare free Saturday in a different city on our hands, we went shopping.  Not long into our journey, I found myself in the dressing room at a Banana Republic.  The woman in the room next to me was running the salesperson ragged, asking her for a change of size in several items.  The salesperson was able to locate the desired size in two items, but was alas sold out of the other three.   At the end of the try-on episode, the customer said " you know, I think I'm just going to go home and get all of this online..."  I could almost hear the saleswoman sigh in frustration though the door.

As it turns out, I bought 3 items at Banana Republic that day, but the pair of jeans I wanted wasn't available in my size.  The poor salesperson worked for almost 20 minutes turning the store and the stockroom upside down for the pair that her inventory system said she had, to no avail.  I bought the jeans online this morning.

But it didn't stop there.  After lunch, we headed to Powell's Books, arguably one of the world's best independent bookstores, where I expect very few customers enter without making a purchase.

Like most people, yes, I buy a lot of books on Amazon.  And yes, I have come to rely on their algorithms to suggest the perfect books to me.   But as I wandered the cavernous rooms of Powells, I stumbled upon book after book that I had never heard of and found myself wanting an armful of them. 

But then I remembered; why buy a bulky, physical book when I've got my Amazon Kindle?  It would be so much easier, and maybe even a little cheaper to download these books.  Not to mention my already overcrowded bookshelves need some relief.   

I found a scrap of paper in my purse and wrote down the titles of about eight books with plans to download them from Amazon when I got back to the hotel.  The whole time, I kept wishing that there was a way that Powell's could get credit for the sale.  Why couldn't I download them right there in the store with Powell's getting some sort of commission for writing that charming review or having the good sense to feature them on a shelf with some of my other favorites?   

Alas, some of the books I'd written down weren't available for the Kindle.  But, I had already left Powell's, and I was in "one click" mode, so Amazon got the order for the physical books too.  Raw deal for Powell's.

So, it occured to me after these two incidents, only a few hours apart, that perhaps in these tough times for brick and mortar, store merchants ought to be a bit more vocal about getting credit for some of those online sales that seem to be outpacing their growth.  Be it for size/color selection or just not wanting to haul a bunch of packages around the city or mall, we're using the offline world to tell us what to buy online almost as much as the reverse situation.  And while the influence of online research on offline sales has gotten top billing as an analytics exercise, I don't hear or read much about the reciprocal effect.  If anyone has data points on brick and mortar impact to online sales, it would be great to see it.

And meanwhile, you might want to say thanks to all of those hard working people in the stores for all of the business they're sending your way.

   

REAL Category Ownership: The Tugless Tank = Seamless Shopping at Land's End

True e-commerce excellence is always worth applauding, after all, it's not easy.  Some companies have become so good at it that we tend to take them for granted.  Amazon wowed us with one-click ordering years ago, and it remains the standard for speed and simplicity at checkout.   I buy online all the time, and I must admit that it's rare that I have an experience that is so seamless and well executed across channels that I feel compelled to tell the story.  Don't get me wrong, I have good online shopping experiences all the time - but they have become so commonplace that it takes something out of the ordinary to get me to the keyboard.  In this case, it's the human touch at just the right moments that makes the difference.

Some time ago, Land's End decided to own the women's swimwear category.  A somewhat risky move, given that Land's End does not have physical stores for customers to try on product, and the return rate for the swimwear category can run in excess of 50%. 

A swimsuit is a product that most women don't like to buy - there's nowhere to hide, and photos of flawless models only exacerbate the situation.  Most retailers in the swimwear business barely put their toe in the water (or shall I say the pool?) in this category, concerned about the tough economics and inevitable customer dissatisfaction.

Land's End decided to be the comprehensive resource in the category, and a woman's best friend to boot.  Lucky me.

For the record, I should confess that I don't swim (not much opportunity in Seattle anyway) and I don't have a bathing suit body.  But later this summer I'm going to Iceland on vacation (yes, I know, an odd choice) and I am intrigued by the number of thermal pools I'll have the opportunity to experience.  So, I need a bathing suit. Land's End to the rescue.

I was prompted to start with Land's End from their catalog. The page investment they've made in the swimwear category is truly impressive, and the product assortment drives way down into the long tail of offering: petite, tall, plus size, mastectomy, and more.  I doubt that there are many women that Land's End couldn't serve in this category.   Once I saw a few attractive styles in the catalog, I went online to finish my selection.  Here again, I was greeted by a broad assortment, easy navigation, and plenty of rich product information to help me find the right style and fit.  I meandered between two styles a number of times, and a pop-up window appeared, offering me live help.  I declined, but was impressed by the timing...just at the decision point.  In the end, I added both styles to my cart assuming I would return one of them (remember that 50% return rate?).  My suits arrived a few days later, with easy return instructions in the box.  Thanks to Land's End's great tips and product information, both suits fit and actually looked good.  Given that swimwear shopping is a rare occurrence for me, I decided to keep them both. Begone, high return rate!

But here's the clincher.  Two days after my suits arrived I had a voice mail on my home phone from Land's End.  The friendly phone rep said she called to find out how the suits fit, and offered to answer any questions or help me with an alternative style or size.   Wow.  I never called back, I didn't have the need, but what a phenomenal service. They know this is a tough category, and instead of leaving the customer in the lurch to figure it out, they were with me every step of the way, owning it, being the experts, being my friend, even providing in-home service.  Bravo.

Sometimes, e-commerce excellence that truly differentiates is achieved by the human touch.    

Can a Bad Brand Experience Ruin a Great Product? Can a Not-Great Product Erode a Brand? Probably. And Yes.

I have a dilemma. And I have a good article for you to read. The dilemma and the article hit me at just about the same time,  and I realized that they are both related to the same issue: products and brands, and the intertwining of the two.

First, the article. It's called "Gap Lacked Momentum, So Rightly Cut TV", and it appeared in Ad Age this week.  As you may have read, Gap, Inc. announced that it was cutting TV advertising.  Rather than viewing this move as a sign of gloom and doom, J.C. Larreche, the author of the article (and a  book he shamelessly plugs) believes that the move to cut marketing spend is a good one. Why throw good money after bad? If Gap has fundamental issues with product offering, the instinct to "over market" will lead to what Larreche refers to as "a vicious circle of mediocrity".  Having spent my fair share of years in apparel retailing, I have witnessed this first hand. "This season's product is missing the mark, so if we just spend more on marketing, we'll get it to sell...."  If the product is not right, you're only hurting your brand by turning on the marketing faucet.  If you've got things humming on the product and consumers are engaged, then the marketing spend will be more efficient, and brand momentum will grow.  All good things.

So now, for my dilemma (and I swear these two things really are related).  About 14 years ago, my husband (who was not yet my husband) and I stumbled across a small, charming winery in the Paso Robles area of California. After being totally seduced by their deep, rich red wines, we signed up for their "wine society", a fancy way of saying they get to charge my credit card and ship us two boxes of wine every year.  I even started giving wine society memberships as gifts to my parents, sister and friends.  So now, the winery gets to charge my credit card a lot.  For 14 years, I've spent about $1000 a year with this winery.  I am sure they had no idea of my lifetime value when I walked in the door, but I suspect I've exceeded whatever their expectation might have been.

Every year, for the last four years they have screwed up my shipments. My parents might receive two shipments instead of one.  My sister might not get anything even though my credit card was charged.  My credit card expired last year and instead of reaching out politely to get the new expiration date, I got an abrupt voice mail from a woman saying "your credit card was declined, we need to talk to you."  Nice.   

Last week was (almost, maybe) the last straw.  I received my credit card statement, and once again, things were a mess. The winery charged me for four wine shipments instead of the three that they should have. I have no idea if one of my gift recipients received two shipments, or if they just thought I wouldn't notice. I called. Delightfully, "Rebbecca" answered, the same woman who, the prior year seemed to think I had a credit problem. Funny how I remembered her, but she didn't remember me.  I calmly explained the problem. "I've been charged four times for what should be three shipments".  The answer, in a deadpan tone (I am not making this up):  "I show you were charged three times."   There was a long pause.  Finally, I stated that I was getting frustrated. That I had had numerous foul ups with every shipment for the last four years, and not once, not once has the winery apologized.   The answer (in a deadpan tone again): " We have a really bad software system". 

OK, so I won't bore you with the rest of the conversation, which didn't get much better (though they did finally credit me for the erroneous charge when I became insistent. Bravo, Rebbecca.).  But here's how this experience and the article all tie together: The winery's product is great. Fabulous wine. I love it.  But the brand experience is a joke.  While Gap sees that weakness in the product offering is erosive to the brand, why doesn't the winery see that a weak brand experience is erosive to the product?  It's all intertwined, co-dependent, whatever you want to call it.  And weakness on either side of the equation will hurt your business.

So my dilemma is....should I cancel my wine society membership? Surely there are plenty of other wineries that can make good wine and not mess up on the rest of the formula. Advice welcome here.  As good as the wine is, I'm having trouble separating the product from the experience.   

 

Attention Merchants: Retail Therapy is For Real, So Stock Up On Lipstick

In the beginning, man created the wheel. And shortly thereafter, someone (probably a woman) put a shopping cart on top of it.  (After all, why waste a perfectly good wheel?)  From there, consumer behavior (otherwise know as shopping for fun) was born.

No shock, an article in the WSJ last week, The Neuroscience of Retailing confirms that there really is such a thing as Retail Therapy. No surprise to those who have shopped to feel better for the last 21 centuries, but we now have scientific evidence that shopping is fun.  Or at least it makes our hearts beat faster and our brains release serotonin.  Don't believe it? Just try shopping with a heart monitor and eye camera strapped to your body, like the subject in the article did.   And she was in T.J. Maxx.  Just imagine what happens when she's in a designer boutique. Call the paramedics.

Alas, with high gas prices and the economy in a downturn, many retailers are in a slump. But just think about the customers; they're slumping worse, poor things, depressed that they can't shop as much as they used to.

The answer? It could be as close as the cosmetics counter.  A recent article in the NY Times, Hard Times, But Your Lips Look Great discusses the "Lipstick Index".  Theory behind the Lipstick Index says that in times of economic hardship, we still need to satisfy our shopping habit. We still need to feel good about ourselves, even when world events or economic conditions make it inappropriate.  In other words, lipstick and small indulgences experience an up-tick in sales when the rest of the retail world lags.   

While there is not scientific evidence to support the Lipstick Index like we now have with Retail Therapy, my merchant common sense indicator says there's something here.  A friend of mine who worked for a large lingerie retailer confessed shortly after  September 11  that online  sales in the days immediately  following  the attacks were almost uncannily robust. Same principles apply. Something small, comparatively inexpensive and a bit self- indulgent.

So, as a retailer facing tough times, what's your "lipstick"?  What's that affordable, irresistible item that someone can buy, even if their gas bill has tripled and they didn't get a raise?  We used to point to a $4 Starbucks latte' as the affordable indulgence; but with more than three locations on every street, Starbucks hardly qualifies as an indulgence anymore. That means there's room for someone else to be the retail therapist and help people feel good, even when they can't afford it.  Chances are, if you can make them feel good when they don't spend a lot, they'll come back to you for a bigger dose of serotonin when the economy improves.