Results-Focused Online Marketing Strategies

Do you still think in terms of how to “position” your company? In the past, companies had the luxury of making a decision as to the “face” that they would put forward to the public and they carefully managed this facade in hopes that they would be able to control public perception of their company.

This does not work anymore.

Repeat, this does not work anymore.

With the transparency of the web, the rise of ratings systems, and the brutal honesty of the blogosphere, superficial attempts at “positioning” simply do not resonate and become a liability to your brand.

So what to do? Start by understanding that the ONLY long term route to success is to replace the idea of positioning with the idea of “communicating the essence of your company.” What is your company all about – what does it do better than anyone and what are its values?

To “position” your company in any way except the answer to the above questions will simply cause unmet customer expectations, which the world will hear about in very short order.

Stop trying to make lofty statements that don’t resonate and start portraying your company exactly as it is and you’ll do a great job of attracting and satisfying the type of customers that will make your business thrive.

Note: Can you tell this post is the product of a debate I recently had with someone about positioning?

Something happened in December that should have gotten headlines in every small business paper, magazine and website in the world. Interestingly, instead, unless you‘ve read the Google blog or done a search on “local targeting” you’re probably unaware of what happened.

What happened is that Google added Google Maps functionality to its Adwords program.

Got a decent website for your electrical supply company in Seattle and don’t want to waste money paying for clicks from outside of Washington State? Simply select the Locations feature in the Target Audience options in your Adword campaign settings, select Washington state on the map and you’re done.

Ooops, discovered you need to add Portland because you’re getting lots of sales from there? Just go back in, select Portland and add it to your target.

Your own targeting criteria will be as unique as your business, but the results are the same: less overall cost for your Adwords program, much more qualified traffic to your site, and much higher ROI.

With only a tiny percentage of businesses taking advantage of these opportunities there is no good reason for you not to dive right in.

Worried that it’s too complicated? Well, it is a bit intimidating at first, but with an investment of a couple hours of keyword/competitive research and hour to set up your Google Adwords account you’ll be rocking.

In recent weeks we’ve been gearing up to relaunch our website for the next “iteration” of our business. This involves doing things like registering domains for “client-branded” A/B testing, getting professional help to redesign our site, and implementing the tools we need to optimize our site.

Much like the “shoemaker’s children,” we’ve been going without a number of the things I tell clients they absolutely must have in place for effective website optimization. Well, we’re finally changing that, but as a young company we’ve still got to consider our budget (or lack thereof) for this effort.

This is where Google comes in. There are a couple of free Google tools that are mind-blowingly powerful if you leverage them well. Without further ado:

Google Analytics
While lacking the “Enterprise” power of major analytics providers (Omniture, WebSideStory, etc.), Google Analytics is incredibly robust for a free tool. Plus, it’s easy to install.

Even non-techy folk (like myself) can manage to implement it by themselves across their site and blog if they take the time to read through the instructions. I had it up and running correctly on our 50 page site and blog within 30 minutes.

Our implementation even included setting up specific conversion goals that we wanted to measure.

Interestingly, for some companies, Google Analytics is a better choice than some of the more robust offerings. The reason for this is that you’ll never get past the surface of what the Enterprise solutions offer unless you spend a LOT of time at it (trust me on this, I’ve spent days sifting through data in Omniture and WebSide Story).

Put it this way: unless you have a huge site or a large multi-channel effort (i.e. involving email conversion tracking and CRM), you’re likely just fine or possibly better off with Google Analytics.

Google Website Optimizer
Google Website Optimizer is a tool you’ll find within Adwords. It’s primary purpose is to quickly and efficiently conduct A/B testing on landing pages for clicks to your site from Adwords.

Put simply, you can create two dramatically different versions of the page that people land on when they click on an ad you have placed in Google Search or on a content site. Then, you track the results until you can determine a “winner” of the test.

For smaller companies, this saves an awful lot of hassle in setting up a script to randomly display the different pages in the test and having the web team manage the process. If you can edit your web page and put it online, you have all the skills you need to do it yourself if you’re willing to read the instructions.

Now, the beauty of this is that Google Website Optimizer works even if you’re not paying to run Adwords. The folks at Google are quite generous in these regards. All you need to do is sign up for an Adwords account (free) and you’ve got access to it.

Also, using the Website Optimizer is not limited to Adwords. For instance, assume you have two strong opinions on what headline should be on a product page. This usually involves an argument and possibly (50% likelihood) the wrong decision.

With Website Optimizer, you can quickly create a second version of the page (with the different headline). Simply drop a snippet of code on both pages, set your conversion goal in Analytics, and you’re off to the races. You can now run an A/B test on the page.

So, what are you waiting for?

For a while in my career I worked in a company where traffic was considered the main yardstick for success and growth. This became incredibly frustrating at times as, while there was always some more budget to grow traffic, getting budget for marketing optimization and conversion improvement was next to impossible.

While traffic is indeed a critical factor, it’s the wrong one to focus on if you haven’t invested in optimizing conversion on your web site.

Like George Kastanza figuring out a witty retort hours too late to use it, here I am some years later to present some pretty compelling math on why companies should focus first on conversion.

First, a couple assumptions:

• - The company in this example is selling a product (but the same principles work for ad revenues, B2B lead generation, etc.)
• - The company has not undergone extensive marketing optimization on their web site and/or promotions already.
• - There exists an opportunity to raise overall conversion rates by 5% or more (I have yet to work with a company where this is not possible).

In the first example below we have an example of a CPM banner ad where conversion is the only option as the ad is currently running at negative ROI (See previous post on Working the Math on Online Advertising).

As you can see, with the assumptions I put in, the ad campaign initial is returning only $.80 on each dollar spent on it. Despite the thought of “making it up in volume,” spending more on reach on this campaign will only drive it further and further into the red.

On the other hand, if the company takes the time to run some insightful a/b tests on the ad and the landing page, all of a sudden the campaign is making money (ads and landing pages present significant opportunities for conversion improvement). Best of all, the campaign is now scalable. In this case, the logical thing to do is to NOW increase the reach of the campaign until it hits a point of diminishing return.

In the second example, let’s have a look at web site conversion and the case for optimization versus spending on reach.

In this case we compare a 10% traffic improvement against a 5% conversion rate improvement (from 2% conversion to 2.1% conversion). “But Rob,” you might say, “we make more extra revenue by paying for traffic and we get 10% more people exposed to our brand.”

That argument would be true for the first month, but to truly understand the power of optimization, let’s look at the math over a year:

• - Buying 10% additional reach costs $50,000 per month, which equals $600,000 per year, for a 160% overall ROI in the example shown.
• - Paying a consultant or agency $10,000 a month for 4 months is a good guess for what it might take to get 5% better conversion on a site with these kind of revenues (hey, I never said this blog wouldn’t be self-serving sometimes). This assumes the site hasn’t already been optimized.In this case, let’s assume the 5% improvement kicks in 2 months into the process. What this math works out to is that a mere $40,000 spent on conversion will result in $400,000 in new revenues for a 10x or 1000% ROI.

That’s pretty compelling math, isn’t it? Better yet, you don’t have to choose one over the other. By doing the work of improving conversion FIRST, then adding the spend on reach, you now get an example that looks like this:
Wow. Keep in mind that no real life scenario is as simple as the case I’ve described. That said, these are incredibly powerful principles and I hope I’ve helped show you why it makes sense to focus on conversion before opening the wallet for reach.

BTW, despite my tongue in cheek reference to hiring a consultant or agency, conversion and marketing optimization is definitely an area where you should develop in-house skills if at all possible.

Once upon a time, SEO was simple: put a lot of good, relevant content on your site and you’d be rewarded with qualified traffic.

Then, as seems to happen with all online mediums (email, blogging, forums), trickery and “secret tactics” became the way to climb the search engine rankings. The big problem with this is that instead of being rewarded for adding value to the Internet, many SEO practitioners were being rewarded for polluting the Internet with spam sites, ugly gateway pages, keyword spam, etc.

That was about the time I stopped actively participating in SEO. I’m a “content guy” at heart and believe the long term path to success is to add value to the medium you are working in. I had no interest in learning how to “beat the algorithms” and I put my energies elsewhere (community development, word of mouth, email newsletters).

Well, what’s old is new again and there’s a bit of a renaissance going on right now in SEO. The algorithms have caught up to the SEO spammers and successful SEO now boils down to exactly 3 things:

1. Lots of good content, regularly updated (a great reason to blog about your business).
2. Inbound links to your content from high quality sites (which happen when you write great articles or posts and actively promote them to other sites).
3. Proper site structure, tagging, and coding (another reason to hate Flash-based sites).

That’s it. Do a good job on those 3 things and your rise in the search engines is pretty much guaranteed.

Did I mention I’m back on the SEO bandwagon in a BIG way?

Ever struggled to figure out whether it makes sense to make a specific online ad buy? There’s really only one way to figure it out, and that’s to run the math on it.

Expect your “best guesses” to be way out of whack the first time you try this excercise. That said, doing an estimate and then a report after the campaign is the only way to get the insight and learning required to make better and better ad buying decisions.

More importantly, if you have ad buys that you do on a recurring basis, you MUST do this kind of analysis to figure out if they are making you money or not.

So, in a nutshell, here are the rows you will put in your excel spreadsheet:

1. CPM (the amount you pay per thousand for your banner ads).
2. Cost per impression (1/1000 of the above - somewhat redundant but it helps with our formulas and to illustrate a couple of points).
3. Click % (the percentage of people who click on the ad - this ranges from almost nothing to a couple percent for a highly targeted vertical ad).
4. Cost per click (cost per impression divided by click %) *Note: for Google Adwords, where you are paying based on cost per click, this is where your spreadsheet starts.
5. Landing page conversion % (this is the percentage of people who arrive at the landing page from the ad and take your desired action).
6. Cost per conversion (Cost per click divided by landing page conversion %).
7. Value of conversion (this is your net profit if you are selling something or an assigned value if you are undertaking lead generation or other activities).
8. ROI (Value per conversion divided by cost of conversion)

Once you arrive at ROI, there are a few factors to consider. For instance, if there is branding and/or residual value in your campaign, you will want to factor this in. Don’t expect to achieve positive ROI in all your campaigns, but be prepared to aggressively test and optimize the ones that are close to positive ROI.

Once you successfully found an activity that generates clear ROI, you have uncovered a beautiful opportunity and need to explore how you can duplicate and/or scale up your efforts. This is the key customer acquisition strategy of most of the biggest companies on the Internet: Find a few ROI-positive acquisition methods and scale them up like crazy.

There are a million variable factors in this model, but keep it simple to start and then expand on it as you get comfortable. For instance, you may want to assign the “value” of the action as your average LCV (lifetime customer value) instead of the value of a one time sale.

The beauty of using the model is that as time passes and you get real results to enter in the spreadsheet, you’ll get more and more accurate in your projections. Some of my clients keep a tracking document that stores both their original projections as well as the post-campaign actual results for each campaign they run. While this requires that you put your ego in check (a lot of the projections will be very, very wrong), it eventually becomes possibly the most important and accurate decision making tool in your business.

So, while it will take you a few minutes to set up the first time, this exercise is very straightforward and becomes incredibly valuable if you do it for each campaign you run. Also, as you can see, it is an excellent tool for and “apples to apples” comparison of different types of advertising (AdWords vs CPM for instance).

If you get really creative, you can even find ways of incorporating contests, trade shows and sponsorships into this model of ROI comparison (this gets tricky but is definitely valuable as you get comfortable with this kind of model).

BTW I actually thought this was going to be a quick and easy post before I started, but as I got further in it became clear that this is an area that will require some more digging.

More to come (including an example)…

Business Blogging is red hot right now, and for good reason. A well thought-out corporate blog can do a lot for your company.

First off - lets clear up what business blogging is not.

Your business blog will not be a significant traffic driver. You may get some highly desirable traffic, but in setting your blog up for success, get rid of the thought that it will drive a lot of traffic. Ain’t gonna happen.

So, with that out of the way, what are the specific reasons why business blogging makes sense?

1. Credibility. This is one of the best platforms in the history of marketing to show your customers that you understand their needs and values. Forget about speaking to “everyone.” Your blog will establish credibility for you if you speak clearly and honestly to the groups that matter the most to you.
2. Connection. Chances are, if you’re a senior player in your organization, it’s rare that you get to speak face to face to actual customers. A blog and its commenting system allow you get opinions and engage your most vocal users on an intimate level.
3. SEO (think “long tail). A regularly updated blog covering topics that matter to your users is one of the most effective SEO strategies going. Just bear in mind that it will take time. It’s like going to the gym: the first couple months are no fun and you don’t see results. If you persist beyond that, you’ll reap the bounty of your hard work and it gets rewarding. Quit at that point and you’ll never benefit from your foundation of hard work.

I was having a conversation the other day with a friend who’s considering launching a startup when I had a moment of clarity and was able to succinctly explain a huge mistake that many startups make.

What is the mistake?

Most startups study and emulate the most successful startups that have gone before them (YouTube, Facebook, DivX, Skype, etc…). This is totally natural, but:

Most startups emulate what these success stories are doing now, and not what they were doing when they were actually starting out.

This is often most apparent when it comes to marketing approaches. Many startup CEOs are unwilling to engage in niche marketing as “that market isn’t big enough.”

They look to the super-successful startups who have achieved widespread market penetration and fail to see that, almost without exception, the success stories started by appealing to a very small and focused group and then expanded out to complementary groups until they achieved market ubiquity (there’s my pretentious word for the day).

By way of example, let’s pretend we’re launching a web startup aimed at creative professionals. We should definitely target ALL creative pros, right? Wrong, wrong, wrong. Unless you have an incredibly large budget (and a big desire to burn though it quickly), the best approach is to identify the ONE specific group of creative pros who your startup product best serves.

In this example, let’s assume that graphic designers are the first target. Contact a bunch of them directly, join their trade organizations, get to know them, and win them as a group. Once you’ve achieved your goals with this group, create and launch a photographers channel and do the same thing. Continue to expand your reach one group at a time (illustrators, web designers, copywriters, advertising professionals, etc, etc, etc).

Along the way, make sure you’re adding the features for each group (or positioning the existing features in a manner that makes sense for each group). At some point in the process you’ll find that your venture has picked up a life of it’s own and that users and groups are starting to emerge spontaneously.

What you’ll find at the end of this is that you have a much larger pool of dedicated users and a much more “authentic” and valuable offering.

Since I’ve been consulting, I’ve had the pleasure of doing what I call End To End reviews for several e-commerce clients. In performing an E2E review, I review all online copy and communications from a customer perspective.

As such, I take the role of the customer, typically starting at the home page, moving through the information gathering process, the product catalogue, the purchase process, the fulfillment process, the support process, the follow-up communications and customer marketing.

What I’ve found without exception is that at some point there is a communications breakdown where the tone or logic in the communications stream breaks down, leaving a disjointed customer experience.

These breakdowns might occur in the sales process (feature-based language on the product page turns into high pressure sales talk on the “buy” page), the fulfillment process (your ecommerce/cart vendor uses dramatically different language or contradicts what your site says up to that point), or the service process (the customer service pages feel like they are from a different company than the rest of the site).

Usually, these disjoints are caused by the fact that these different areas of the site have different “owners” who are ultimately responsible for them. These areas become their own “silos” and exist more or less independently from each other.

While this may makes sense from an internal perspective, it makes zero sense to your visitors.

How do you solve this problem? Well, unfortunately for many companies with long-established business processes, truly “blowing up” the silos is not necessarily an option. The single easiest answer is to appoint a customer advocate within the company who has the sufficient authority to oversee the continuity of c0mmunications. This might be your Director of Marketing or can be someone more junior, as long as they are senior enough (or respected enough) to get different parties within the company to get on the same page.

The tools required to perform an E2E review are not particularly sophisticated. Going through your most common customer processes, “screenshotting” your progress along the way, and making notations as you go is more or less all you need to do.

The first time you do this, I virtually guarantee you’ll find and document some disconnects in your communications process that will be sufficient to get stakeholder buy-in if you present the information tactfully.

Alternatively, if you don’t have the time to invest or don’t have someone who can ignore the trees and see the forest, it’s definitely a project worthy of bringing in help for. Either way, I have yet to see a company that does not have some serious breakdowns in their communications process, so it’s definitely something you should have a look at.

Can you be too smart?

Having worked in several tech companies, I’ve had the pleasure of working with a lot of very, very smart people (I keep hoping it will rub off but, so far, no dice).

Obviously there’s nothing wrong with being smart, but there’s definitely a danger in being “too smart.”

Here’s the deal: when confronted with a marketing challenge, the first temptation is to review the problem, think it over, and come to a highly logical solution. From a logical perspective, you can often come up with a bulletproof position that is fully defensible if questioned.

That said, you may still be dead wrong, as consumers are not necessarily logical creatures (or, at least, they may not share your same viewpoints that lead to your logical answer).

This is critical to keep in mind when preparing a web site, product page or special offer as people will typically NOT do what you expect them to do. Given this fact, it’s critical that we take a stance as marketers and make marketing an “outside-in” exercise rather than an “inside-out” exercise.

Think of Jane Goodall. She didn’t become an authority on chimpanzees by studying their biology and making sound logical assumptions as to how they would behave. Instead, she went into their environment, observed their behaviors and tested her hypotheses. She took the outside reality and brought it in to her studies, rather than hypothesizing internally and applying it outwards.

Fortunately, as marketers we don’t have to go live with primates. We can learn about our markets through research, interviews and surveys. We then need to validate our assumptions through a/b testing and observed behavior so we can do the right thing for our customers, even when it conflicts with our own logic.

OK, so “hate” might be a strong word.

Let me ask you though, are potential customers coming to your web site to be entertained or to gather information? Unless your answer is “to be entertained,” don’t waste your visitors’ time with Flash.

Reasons to avoid Flash:

1. While flash intros and pages may win design awards, they lose by being slow and harder to navigate than html.
2. Everybody’s in a hurry. Why would you make someone wait 20 seconds to get through an animation to find out your message when you could otherwise deliver it instantly? Show your visitors some respect!
3. Bandwidth hiccups can make you look stupid. Face it, even on a high speed connection you still get some connectivity ups and downs. Your Flash looks like crap if this happens before it’s loaded or during its load time.
4. It costs you money. I have yet to see a single a/b test where a Flash home page beat a static page in terms of conversion.

OK, now I’ve got that off my chest.

P.S. If you have a requirement that Flash can help you fulfill, by all means go for it. As a tool it can be brilliant - as a strategy it’s horrendous.

P.P.S. Yes, I know there are some great Flash web sites out there. However, they are almost all for brand oriented companies who don’t sell online (liquor, soft drinks, etc).

In building out a home page, many companies try to be inclusive and make compromises to satisfy all stakeholders within their organization.

Avoid this like the plague if you want an effective home page.

I know this sounds harsh, but the truth is that every additional item on a page that does not serve the main goal of the page ends up robbing from that main goal. With this in mind, you definitely want to reserve the bulk of your home page for the one or two main products/services of your organization, relegating the rest to much lesser prominence.

So how do we keep all areas of the organization/site happy and make sure they get appropriate promotion and exposure? Here’s some thoughts for different areas:

Customer Support
First off, anyone looking for support will definitely find it as long as you have a clear “Support” link in your top menu. Additionally, give Support a TON of prominence in any purchase confirmations, newsletters and customer communications. After all, nobody needs support until they’ve started using the product

Smaller Products and/or Sales Channels
“I know sales are still small, but how will we grow sales if we don’t put it on the home page?” This is a familiar refrain from product managers the world over.

That said, if a smaller product only contributes 10% of total sales, you’ll be losing money like crazy through the opportunity cost of giving it significant prominence on your home page. The solution: a keyword-rich mini-site or landing page devoted 100% to this product. This, combined with significant merchandising of this product to existing customers will garner significantly better all-around results for the product and the company.

Partner and Affiliate Recruitment
A link in your main menu will suffice for qualified partners and affiliates. If they are truly qualified they will have the insight and motivation to click on a menu link without other forms of persuasion being necessary.

Community and Resources
These are areas dear to my heart, but with the exception of specific circumstances (lead generating contests, etc), don’t usually deserve major coverage on the home page of an e-commerce site.

Communities and resources, like customer support, should instead be pitched hard to existing customers/members. As well, bear in mind that one of the huge values of community and resource sections is that they are a huge SEO asset, and usually generate the bulk of their new visitor traffic through search.

There are obviously times to break these rules, but don’t do so just to take the path of least resistance. If you stay true to these rules and only break them when there’s a clear business reason, your home page will be much the better for it!

I read a good article on email reputation the other day by Ralph Wilson at Web Marketing Today. He supplies 11 great tips on improving your delivery rate. In these tips, he rightly advocates removing bounced recipients and finding ways to engage and woo back subscribers, but leaves out one critical tip: clean out the dead!

Particularly if you’ve been sending email for a long time, it’s likely that you have an extremely large percentage of your database that is not interested in receiving your emails. Don’t take this personally, it’s a natural consequence of time and shifting interests.

“Email is cheap,” you might say, “why would I cut people out of my list?” Well, a pattern that I’m starting to see is that if you’ve been sending emails for a couple years or more, if you’re using responsible email practices, and if your open rate is less than 20%, it’s likely that 50% or more of your database is effectively dead.

Let me give you a couple examples. I did one project this year where we experienced problems migrating a large list from one email vendor to another. Deliverability was an issue after migrating the database and we needed to act fast. In this case, I filtered the list down so that it included only people who had opened an email in the previous year, had purchased a product in the last 18 months, or had joined the list in the last 3 months.

The result was that we reduced a list of 2.9 million subscribers to a list of only 1.2 million. Sounds scary, doesn’t it? When I saw the size of the new list I thought I was in big trouble. That said, a funny thing happened when we deployed the next newsletter.

Although we had cut the list by almost 60%, we still got 90% of the typical response in terms of opens and clicks. While it would have been nice to have kept that last 10%, the huge cost savings of reducing the deployments by 60% and the improvements to deliverability meant that our roi went through the roof and the cost savings more than made it worthwhile (as well as justifying my fees for quite some time).

More recently, I worked on a database about half this size with similar results. The only difference in this case was that without the deliverability crisis we had more time to tinker with the final segmentation rules for who we kept and who we removed from the database.

In this case, we were able to get to a point where we balanced the “age” of the subscriber against their activities in the past 2 years and were able to cut the list size in half while maintaining virtually 100% of the open and click activities as compared to past mailings.

Again, the cost savings and the improvements to deliverability made this a tremendous win and in one fell swoop we virtually doubled the roi on what we were paying to deploy emails.

Bottom line: if you have a large list and have been sending email for over a year then you could achieve some significant cost savings by cleaning up your database.

Are you as addicted as I am to a/b testing? If so, you need to remind yourself from time to time to step back and look at longer term results.

The reason for this is that an a/b test will always show the “winner” of a short term test, but does not reflect what you’re doing for your business in terms of customer loyalty or lifetime customer value (LCV).

For instance, I guarantee you that an aggressive sales email with a discounted offer that expires quickly will always outperform a less aggressive offer. With that in mind, however, an overly aggressive offer will hurt your brand and reduce the trust your best customers have in your offering.

So, how to protect against this? First off, use some common sense! If your home page or emails are starting to look like a multi-level marketing pitch, you’ve gone too far. Secondly, step back from looking simply at revenues and have a look at other critical indicators, such as the abandonment rate of various pages and the unsubscribe rate from your newsletters.

If your company has the data (which it should if you’re serious about staying in business), step back and have a look at average annual sales per customer, as well as month over month, quarter over quarter, or year over year trends.

Remember, just because a single test seems to validate an overly aggressive tactic, that doesn’t mean it’s the right thing to do.