E-Commerce Guide by Michelle Zitz

essential guide to

E-Commerce

Today’s Industry: E-commerce enters virtual worlds, by David Ward Social Commerce: Customer reviews make strategic impact, by Sam Decker Measurement: Smart ways to choose Web analytics, by Phil Kemelor Fundamentals: Has your multichannel strategy become Frankenstein’s monster?, by Patrick McHugh CRM: Shopping online with “Megan”, by Ken Goldstein Plus: Insights on personalization, checkout strategies and going global

A SU P P L E M E N T TO D M N EWS

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DMNews • E-Commerce Guide 2007

Editor’s Note

here is an argument that can be made that consumers will buy the product they want online from the site that offers the best combination of low price and ease of use. And, certainly for some online transactions, that follows. But, the online habits of ordinary people have become extraordinary. They are customizing their experiences through various Web 2.0 tools, picking and choosing where they receive their information and constantly looking for a new, rich experience. They are not just going online to buy a specific product; they are browsing virtual stores and even malls with the same degree of curiosity and pleasure as in a bricks-and-mortar environment. While cost and functionality are still important, they are simply Eleanor Trickett cost-of-entry requirements. Consumers are looking for that differEditor in Chief entiating element that enriches the e-commerce experience for them. Within the pages of this guide, industry experts will pave the way to creating those experiences, from the impact of social media on e-commerce, to virtual shopping games. You will also read about the building blocks of best practices in the area, from searchandizing to analytics to payment methods. The online shopping experience has never been so interactive or, frankly, so much fun. And so, in that spirit, DMNews is proud to bring you this inaugural Essential Guide to E-commerce. —Eleanor Trickett, Editor in Chief

EDITORIAL: Editor in Chief Eleanor Trickett Managing Editor Cara Wood Editorial Director Julia Hood ART AND PRODUCTION: Graphic Designer Robert Falcone Production Manager Michelle Chizmadia ADVERTISING: District Managers Jodie Solomon, Sammy Patel Classified & Source Directory Account Manager Ralph Claudio Circulation Director Ronald S. Moyer Group Sales Director Steven Sottile HAYMARKET MEDIA: President/Publishing Director Lisa Kirk Chairman/CEO William Pecover SUBSCRIPTIONS: (845) 268-3156 DMNews (ISSN 0194-3588), incorporating iMarketing News 114 West 26th St., New York, NY 10001 Telephone (646) 638-6000 © 2007 Haymarket Media DMNews is published weekly on Monday (50 times a year), except for the following: July 2 and December 31.Publisher: Haymarket Media Inc., 114 West 26th St., New York, NY 10001. Periodicals postage paid at New York and additional points of entry. Reproduction of any part of DMNews or its trademarked or copyrighted supplements without express permission of the publisher is prohibited. Annual subscripton rate $49 US, $99 Canada & Mexico, $149 other international. Single copy $10 US, $16 international. Postmaster: Send address changes to DMNews, Subscription Department, PO Box 316, Congers, NY 10920-0316 USPS 496530

Table of Contents Feature 4 E-commerce enters virtual

Social Commerce

Measurement

11 The payment process in virtual

19 Smart ways to choose Web

11 Social networks open new window for

19 E-mail+display: natural marriage for

7 How to get the best search for

12 Best practices essential for online

20 Alternative payments give key buyers

7 Beyond borders with direct

12 Reviews make strategic impact

21 E-mail marketing drives both e-tail

8 Has your multichannel strategy

13 Go where customers are: How

22 Cheat sheet to making Web

worlds, by David Ward

Fundamentals your site, by Shaun Ryan

marketing, by Donald A. Depalma become a Frankenstein’s monster?, by Patrick McHugh

9 How to provide a seamless connection between online marketing and commerce, by Graeme Grant

9 Using comparison shopping engines to merchandise, by Rob Wight

worlds, by Andrea Kaminski

direct market testing, by Bill Eager

marketing success, by Loren Weinberg beyond your site, by Sam Decker to bring your Web site into social spaces, by Mike Swartz

analytics, by Phil Kemelor

e-commerce brands, by Ian Thomas an alternative, by Chris Daly

and retail sales, by Dave Hendricks site optimization work for you, by Heath Podvesker

CRM 14 Shopping online with “Megan”, by Ken Goldstein

14 What’s next in personalization?, by Stan Dolberg

16 Embrace testing and reap the

rewards, by Kimberly Snyder

18 Turning browsers into buyers, by Alastair Rampell

18 Increase consumer checkout options to

capture more sales, by Marwan Forzley

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04 FEATURE DMNews • E-Commerce Guide 2007

E-commerce enters

Canada Post launches its own city in Second Life to interact directly with consumers By David Ward ooking to both modernize its image and offer its retail partners new ways of interacting with consumers, Canada Post, the Canadian postal service, recently launched Maple Grove, a standalone city in the online virtual world of Second Life. Noting that there are hundreds of thousands of Canadians among the 8 million registered worldwide users of Second Life, Laurene Cihosky, SVP for Canada Post’s direct marketing, advertising and publishing business, describes Maple Grove as both an e-commerce and a branding play. “Canada Post, like most postal services, is not seen as the most innovative of companies – but our president, Moira Green, is determined to modernize our image,” she explains. “Historically, the post office has always been an important center of the community and a real-world social networking space. In Second Life, we want to be that social center for this new generation.” As well as the presence of 3-D storefronts and e-commerce locations, Maple Grove is a full virtual urban center complete with streets, chairs for avatars to sit down and socialize in, and even a replica of Canada Post’s headquarters in Ottawa. It also contains its own concert hall where Second Life celebrities can perform. Unlike many Second Life ventures, Maple Grove has its roots in direct marketing. Cihosky says the Maple Grove retailers are all included in Canada Post’s “lookbook” catalog, which the company

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launched last year. The lookbook catalog is backed by a multichannel campaign that includes a Web site, e-mail, Web search ads and an aggressive media relations outreach program. “We included this as part of the package for signing up for the lookbook,” she says, noting that this provides a way for Canada Post and its retail partners to dip their toes into virtual worlds and gauge how they work both as a branding tool and e-commerce portal. Virtual city features varied retail mix Maple Grove offers a mixture of US retailers such as SkyMall and Brookstone, Canadian divisions of international chains including Toys ‘R’ Us and Sears, and Canadian-specific stores such as Red Canoe and Everything Olive. Each store contains about four to five items. “They are the same products that are in the catalog,” says Chris Shigas, vice president of Raleigh, NC-based French West Vaughan, Maple Grove’s designer and developer. While Canada Post is not the first corporate brand with a virtual world footprint, Maple Grove is a bold step for a major company from a country that has lagged behind the US in both online and catalog shopping. “Canadians have traditionally lacked a lot of choices, partly because for a long time US retailers have been reluctant to come up here,” Cihosky says. “So this is one of the initiatives we’re using to get US retailers to come to Canada and see how it works.”

DMNews • E-Commerce Guide 2007 FEATURE 05

virtual worlds Maple Grove has only been up and running for several weeks, so it’s a bit early to gauge how successful it will turn out to be. But traffic has been good and several retailers have reported they have sold out of some items. Stickiness is an encouraging sign “With a lot of Second Life retailers, you’re buying virtual clothes or a virtual car or condo for your avatar,” Cihosky notes. “Maple Grove allows you to buy stuff for the real you.” Shigas adds that the most encouraging early sign is the virtual city’s stickiness. “Right now, people are spending in excess of 35 minutes there, while most Web sites would be thrilled to get five minutes of time,” he says. He adds that most of the stores knew going in that this would be unlikely to become a major revenue generator for this holiday season. “The retailers understand that this is a new medium and we’re all learning how to build relationships between these early-adopter consumers and brands,” Shigas says. “We know these Second Lifers also have MySpace pages, so they’re connected through a variety of social marketing platforms. If we can get quality relationships with these consumers, then they’ll go out and spread the word.” Erik Hauser, founder and executive creative director of San Francisco-based Swivel Media, is an early adopter of marketing within virtual worlds such as Second Life. He notes that because people tend to behave the same in virtual worlds as they do in real life, you can learn a lot by tracking their behavior in Second Life and other “meta-verses.” “As a marketer, if you can get somebody to buy your product by offering them convenience, control and choice in a virtual world, then they’re more likely to do so in the real world,” he explains. n

E-commerce trends that are taking off 1 Virtual worlds Moving quickly beyond providing virtual world replicas of their products and services, brands are establishing storefronts in Second Life and other “meta-verses” with direct links to the traditional Web sites selling real-world items. 2 Nonprofit e-malls Nonprofits such as the Sidney Kimmel Cancer Center are establishing branded e-malls where supporters can shop at online retailers such as Amazon and Macy’s. A percentage of each customer’s sale is sent to the nonprofit organization. 3 Social shopping Sites such as ThisNext, Kaboodle and StyleHive are combining social networking and shopping by providing opportunities for consumers to gather online to swap buying tips and help each other track down and purchase hard-to-find products. 4 Mobile commerce Despite screen-size limitations, sites such as Amazon are aggressively migrating to cell phones and PDAs so consumers can shop on the go. 5 Hi-def VOD via game consoles Led by Microsoft’s Xbox Live service, game console makers are partnering with major entertainment companies to enable downloads of high-definition movies, episodic TV and sporting events, providing consumers with an alternative to cable video-on-demand choices and DVDs. E-COMMERCE GUIDE

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DMNews • E-Commerce Guide 2007 FUNDAMENTALS 07

Fundamentals FUNDAMENTALS Page 07

How to get the best search for your site, by Shaun Ryan Beyond borders with direct marketing, by Donald A. Depalma

Page 08

Has your multichannel strategy become Frankenstein’s monster?, by Patrick McHugh

Page 09

How to provide a seamless connection between online marketing and commerce, by Graeme Grant Using comparison shopping engines to merchandise, by Rob Wight

-commerce tools are getting more sophisticated, but before building virtual world shopping sites with mobile potential, available on social networking sites, it helps to get the basics right. Topics include searchandising, local advertising in a global market, centralizing back-end systems, shopping engines and predictive marketing.

How to get the best search for your site By Shaun Ryan ecause of the advances in search engines like Google and Yahoo, people now expect a similar experience when searching on e-commerce sites – a simple site search that provides relevant results. Unfortunately, companies often don’t give this area enough attention because of limited resources and tight budgets. But doing this can be simple First, pick good titles. Not only will Shaun Ryan good titles mean that SLI Systems your search results look better in Web search and in your site search results, but the more relevant results will also rank higher because most ranking algorithms rank matching words in the title higher. For example, a search for the keyword term “blue widget” will result in higher rankings for pages that have the term “blue widget” in the title than those that don’t. A good search solution will allow you to change the look of the search results, and it’s important to have a clean, simple layout on search results pages. Adding extra details to the search results page, such as page size, stars to score each result, icons and other items is tempting but not necessary. Google is a good example of how to keep a search results page as simple as possible. Site search is like a continual survey of your visitors’ needs and desires. When visitors type information in the search box on your site, they’re not only telling you what they’re looking for, they’re also telling you what terms they associate those products with. Understanding what your visitors want from your site can help you focus on areas that need the most attention,

such as product areas that are in demand or highlighting content areas that need attention. Conduct your own search: an often overlooked but easy task is to try searching on your own site, or even better, get a group of people to try it. We are often surprised at how many sites we find where the site search isn’t working properly. Even if you’re not making changes to your site you should perform regular checks to ensure that the site is operating as expected and to collect ideas for improvements. In short, it’s easy to have an e-commerce site with an effective site search, you just need to take a few simple measures to ensure the optimal experience for your customers. These are all simple tasks that can be performed by anyone — you don’t have to be an expert, or have a large budget. Dr. Shaun Ryan is president and CEO of SLI Systems. Reach him at shaun.ryan@sli-systems.com.

Beyond borders with direct marketing By Donald A. DePalma he world population now is around 6.7 billion, so marketing only to Americans leaves more than a few people out of your target demographics. Sure, many of those 6.4 billion non-Americans might not be interested in what you have to sell, but some will. Your challenge is to figure out whether you have something those non-Americans want to buy and how to sell it to them. Figure out whether your products make sense in foreign countries by researching their population, demographics and buying habits. If the country has an aging population, like Japan, buyers might be interested in goods that make their golden years more comfortable. Conversely, younger nations like India with a growing middle class will spend their disposable income on items like cars and home goods. The next question is “how will they buy?” If

08 FUNDAMENTALS DMNews • E-Commerce Guide 2007

you physically sell in a country, you will naturally follow their linguistic, business, and legal conventions. Otherwise, few people will understand what it is you’re selling. When marketing your wares on the Web, language is the first point of interaction with a prospective buyer. In countries where English is not the preferred tongue, you will have to Donald A. DePalma provide enough information in Common Sense Advisory the local language for people to find your site and browse it. If you’re actually selling something there, you also need to adapt the registration forms, transactions, shipping, and support mechanisms to work for that country. Last year we surveyed 2,430 consumers in eight non-Englishspeaking countries to determine their language preferences when buying on the Web. Most people prefer buying in their own language. More than half our sample buys only at Web sites where the information is presented in their language. People with no or low English skills were six times more likely not to buy from Anglophone sites. Eighty-five percent of our respondents say that having prepurchase information in their own language is a critical factor in buying financial services. At the same time, only 45.8% of the sample told us that language is important to buying clothes. The more valuable an item, the more likely it is that someone will want to read about the product and buy it in their own language. It takes more than language to sell something. Over two-thirds visit English-language sites at least once a month, but just one quarter purchase goods or services at those properties. Even if information is available in their language, it’s important to allow them to use their credit cards or national currency. Donald A. DePalma is the founder/chief research officer of Common Sense Advisory. Reach him at don@commonsenseadvisory.com.

Has your multichannel strategy become Frankenstein’s monster? By Patrick McHugh s marketers’ efforts have grown and expanded into new channels, such as e-mail or mobile, their infrastructure has often become a Frankenstein monster — disparate software and services stitched together and coming apart at the seams as it lurches forward. So how can marketers break free from the constraints of siloed solutions to emerge from the darkness of limited visibility into customer preferences and results? The best chances for success starts with a clear vision of your goal; in most cases that is ensuring that communication — whether it be e-mail, direct mail, mobile, or all three — is personalized, relevant and targeted. Here we’ll discuss the steps along the marketing maturity curve necessary for moving from multichan-

nel to true cross-channel marketing. Although many organizations claim to practice cross-channel marketing, what they actually do is multichannel marketing, communicating with customers and prospects through multiple disconnected channels without any real consistency or coordination. Disparate systems, often located both in-house and at vendor sites, make it difficult to track interactions. The solution is the adoption of true cross-channel marketing, combining the attributes of multichannel marketing within a single platform that manages customer information and marketing performance — literally extending “across multiple channels,” including traditional and emerging technologies, to deliver meaningful content to customers and prospects. As is the case with growth of any type over time, the evolution of multichannel and cross-channel marketing within most organizations follows a maturity curve. Organizations typically begin their evolution by outsourcing all marketing campaigns to mail houses or e-mail service providers. Eventually, organizations begin to experiment by migrating a preferred channel in-house, a cycle that can continue until all channels are managed in-house. Consider companies like Sephora, a leading worldwide retail beauty chain. Sephora had outsourced management of its customer loyalty card program to an outsourced service provider. Seeking to gain more flexibility and timely Patrick McHugh access to the specific buying Neolane Inc. habits and behavior of its customer base, and the ability to effectively identify links between online and in-store shoppers, Sephora took its database in-house. Using enterprise marketing software and data mining technology, Sephora is now able to drill down into a centralized marketing database to compile sophisticated segmentations using each customer’s unique transactional history gathered from the various interactions points, including point of sale, Web and the call center. Then through effective outbound coordination across channels, Sephora doubled response rates without increased spending, reduced post-campaign analysis time from five days to one, and improved productivity by 70%. The range of channels through which marketers will be able to reach customers and prospects will continue to grow, making the practice of true cross-channel marketing more critical than ever before. The ability to integrate and manage technologies and the ability to use them interchangeably will enable organizations to optimize the customer experience. With the right tools, your cross-channel marketing epic doesn’t need to become a tragedy.

Patrick McHugh is executive vice president of North American Operations at Neolane Inc. Reach him at patrick.mchugh@neolane.com.

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DMNews • E-Commerce Guide 2007 FUNDAMENTALS 09

How to provide a seamless connection between online marketing and commerce

Using comparison shopping engines to merchandise

By Graeme Grant customer visits an online store and is drawn into a dynamic and interactive promotional microsite. The consumer loves what they see and clicks on an item to buy. But then the site redirects the interested consumer to the retailer’s basic product category page with no selected item easily in view. Frustrated, they close out of the browser and never complete the purchase. The good news in this situation is that retailers are responding to the need for more engaging shopping by building these dramatic, fun and innovative marketing microsites. The bad news is that even the leaders are often failing to make commerce an integrated part of these interactive marketing experiences. Instead, customers are usually faced with a disjointed experience where they browse and interact with the brand, but when it comes time to actually view and select the items they would like to buy, Graeme Grant they are abruptly redirected to Allurent Inc. another site — one that does not look or feel anything like the rich experience they were previously enjoying. Retailers should provide a seamless connection between marketing and commerce. If you’re attracting customers to an engaging blog or Web video, make sure commerce happens there too. Don’t force them to leave the context that attracted them in the first place. If customers are attracted to richer merchandising displays on your site, let them buy straight from that display without any extra steps. Make your merchandise play a starring role in your marketing. The online presentation of your brand should showcase your merchandise in a manner that lets customers really interact with it as part of the experience. Examine ways in which you can provide contextually appropriate shopping opportunities for consumers. It’s time to take another look at all of your company’s online assets and think creatively about tying them with commerce. Insist on measuring the full ROI of interactive marketing. Focus not only on the brand impact, which is important, but also track the commercial impact of interactive marketing microsites. Are they driving sales? If not, why? Avoid reflecting your organizational structure in how you present your brand. Often a company’s main e-commerce site is built and maintained by core programming and the marketing microsites are owned by a separate team of designers. Bridge organization gaps to close dislocations in the customer experience.

Graeme Grant is the COO of Allurent Inc. Reach him at info@allurent.com.

By Rob Wight You’ve worked hard to merchandise those great gifts for Christmas. So why would you hide them from shoppers looking to buy something special for their loved ones? That is just what some retailers are doing as they send their well-intentioned product data feeds to comparison shopping engines. Proper placement of a seller’s products on comparison shopping engines can make the difference between success in product sales and invisibility. Currently, two major methods are used for mapping a retailer’s product data to the comparison shopping engines: category-level mapping and product-level mapping. You’ll want to use a product-level mapping system to make sure your products gain maximum visibility among the shoppers who are looking for them. The basic difference between these two methods for mapping products can be found in the level of detail used to determine the categories where a retailer’s products should appear. Product-level mapping looks at each product to find the correct placement, while category-to-category mapping examines only the category names, assuming that all categories at retailers and comparison shopping engines are the same. Retailers who use mapping at the product-level are much more likely to see every product found in its optimal place at each comparison shopping engine, regardless of any differences in category names. The assurance of proper product placement is possible because product-level mapping provides intelligence based on the actual products found in each category for both parties, not simply forcing the match based on category names. It can see that a toy TV for children belongs in the toy category, where parents shopping for their children will find it, not in the broader electronics category where a product defined as a TV would normally be found. Product-level mapping helps to support a shopping engine’s online plan-o-gram. What are the odds that a department Rob Wight store, for example, would Channel Intelligence merchandise bath towels with children’s apparel? Not likely, because it would make for an odd shopping experience for the consumer. Plan-o-grams are designed to help store merchandisers group like products together for easy discovery by the consumer. Marketing categories used online should be thought of like end caps in a store. End caps are used to help decorate or advertise certain products, while leaving the majority of the actual product units in their correct store location.

Rob Wight is co-founder/CEO of Channel Intelligence. Reach him at rob.wight@channelintelligence.com.

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DMNews â&#x20AC;˘ E-Commerce Guide 2007 SOCIAL COMMERCE 11

Social Commerce SOCIAL COMMERCE Page 11

The payment process in virtual worlds, by Andrea Kaminski Social networks open new windows for direct market testing, by Bill Eager

Page 12

Best practices essential for online marketing success, by Loren Weinberg Reviews make strategic impact beyond your site, by Sam Decker

Page 13

Go where customers are: How to bring your Web site into social spaces, by Mike Swartz

ith Facebook opening its network to businesses and the rise of shopping focused social networking, the ecommerce world is focusing on how to best use social networks, virtual worlds and user generated content, as well as the best practices involved in the online social scene.

The payment process in virtual worlds By Andrea Kaminski onducting business, in virtual worlds, is only possible by implementing an efficient payment environment, which includes the introduction of a virtual currency and payment mechanisms. It has to be defined how the virtual currency can be acquired, for instance by buying the virtual currency with real money or by earning it within the world. Second Life for instance installed Andrea Kaminski a currency exchange Arvato that is called LindeX. Users can exchange real money into Linden Dollars and vice versa. At the same time Linden Dollars can be earned within Second Life by selling virtual goods. Second Lifeâ&#x20AC;&#x2122;s virtual currency can be bought and exchanged to and from many real-life currencies. The exchange service is globally available and exchange transfers can be easily made for instance with a real-world credit card or from an Internet wallet account. Once Linden Dollars are purchased, they can be spent within Second Life. Applying a wallet principle, reduces the risk of overspending and monetary implications of fraud activities. This solution is cost efficient for the consumer, as real-world payment instruments and corresponding costs are also decreased. The virtual currency has to be convertible to real world currencies, which allows the consumer to retract the money from the virtual world at any time. Sellers profit from this concept, and exchange fees are paid to Second Life parent company Linden Lab instead of paying additional interchange fees. The payment and exchange mechanism allows sellers and Linden Lab to

derive revenue from the virtual economy while minimizing costs. This is an important success factor for a virtual world. Payments within Second Life are made by exchanging virtual currency from one user to another user. These virtual transactions are supported by the innate programming logic of Second Life. Thus users do not have to use credits cards or other real-world payment instruments. However, some companies plan to issue virtual loyalty cards that would grant the users discounts when shopping at certain places within Second Life. In addition, users can bring their money to virtual banks to gain interest. Money can be paid in and paid out by using virtual ATMs. The future will show how business models develop in the virtual arena. From a payment and legal perspective, the situation is certainly more complex when money can once more be extracted from the virtual world. As the virtual money has a certain value in the real world, it has to be determined if a bank licence is necessary to safeguard and exchange money. Andrea Kaminski is vice president, international finance and managing director, Arvato Finance Services Ltd. Reach her at Andrea.kaminski@bertelsmann.de.

Social networks open new windows for direct market testing By Bill Eager ow does Pepsi discover what color container will sell more of a new soda? How does GM know if an in-dash GPS system will resonate with women ages 25 to 30? Market testing. After white boards, prototypes and market research surveys, the final stage of market launch is a market test. This can occur in one or multiple towns, states or countries, and it is the best way to gauge whether a particular product will fly or flop.

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Enter social networks. Today, with more than 1 billion members, Internet-based social networks like Facebook, MySpace, Microsoft Live Spaces, YouTube, LinkedIn, Ning and more than 100 others represent a new opportunity to test the waters. In fact, social networks offer many advantages over product testing and market research in shopping malls or grocery stores. No longer a fad for teenagers, social networks attract members of all ages and demographic groups. Every single day 150,000 new members join the fast-growing Facebook social network. According to market researcher ComScore Media Metrix, 48% of Facebook visitors come from households with incomes over $75,000. Social network members share their interests, opinions and buying preferences with members of their personal network. In a blog, video or folder, a social network member can communicate with 10, 100 or 100,000 friends in a matter of minutes. It is the combination of the accelerated speed of sharing and the exponential increase in the number of lives touched that creates this new Bill Eager opportunity. bSocial Networks Plug market testing into social networks and you change the way companies bring products to market. We have already seen how companies successfully promote and obtain feedback with Internet-based market research and product promotion that includes e-mails, online surveys and blogs. That’s good, but the icing on the cake is a market test. Social networks can take the pulse of thousands — even millions — of potential consumers in a matter of hours if not minutes. It gets better. There is a big difference between asking people, “Would you buy this candy bar if it has the green wrapper, or the red wrapper?” and actually motivating them to purchase. Market testing involves market sales. In the “real world,” this is the most expensive, often most time intensive, aspect of direct market research. E-commerce is just beginning to enter social networks. eBay is testing an application interface with Facebook where members who belong to eBay can sell their products into their social network. Bill Eager is co-founder of bSocial Networks. He can be Reached at bill@bsocialnetworks.com.

Best practices essential for online marketing success By Loren Weinberg ouTube. Facebook. MySpace. Wikipedia. There is a revolution taking place in online behavior that is fundamentally reshaping what is required for an engaging, productive, and successful Web site. An effective site used to be one that had pleasing layout and colors, intuitive navigation, and helpful text and graphics. Those

days are gone. Consumers today demand a tailored and interactive experience online, and have little use for one-size-fits-all content. Users expect to do much more than find information online, they expect to interact with others with similar interests and to have an engaging and personalized experience. Consider how we now shop online — a product at Amazon. com with a five-star user rating commands a higher price than the comparable three-star item — we care what other people think. And engaging in dialogue matters — bloggers are the new generation of press, capable of building buzz around your products or exposing flaws. Whether the online community builds, hurts or ignores your brand has a lot to do with whether or not your organization is contributing to the dialogue. Offering a personalized Web experience and building an online community around your brand is a competitive requirement. First of all, you need to know your customer base. Defining your customer segments and the material that is most effective for each is the foundation. Then, you need to set up rules defining what content will be delivered to each customer segment online. Each visitor must automatically be associated with a segment in real-time. A user’s segment can be identified explicitly via login, or implicitly by the user’s online behavior and navigation. Web content management tools with personalization capabilities can enable you to set up these targeting rules and then dynamically deliver the right content to the right site visitor. Building an engaged online community is more art than science. That said, it requires that you offer a foundation of Loren Weinberg collaborative capabilities such FatWire as blogs, wikis and social tagging. Once you have established these capabilities, the resulting online discussions require ongoing monitoring and contribution in order to keep the material fresh and the dialogue helpful. We all know the online channel is important for branding. But offering a compelling experience online is increasingly required for competitive survival. Loren Weinberg is VP of marketing and product management at FatWire. Reach her at loren.weinberg@fatwire.com.

Reviews make strategic impact beyond your site By Sam Decker fter implementing ratings and reviews, most retailers find that their initial sales increase is like an iceberg. We know that “top rated products” navigation and merchandising drive up to 50% higher conversion and 60% higher average order value as compared to other navigation paths. And we know this is just the beginning. Retailers quickly see the above-surface benefit of displaying re-

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DMNews • E-Commerce Guide 2007 SOCIAL COMMERCE 13

views on product pages. But once they understand the strategic, multi-channel, multi-vehicle opportunity of word of mouth to evolve their marketing strategy, they realize the strategic benefits were beneath the surface. User-generated content can change the way companies market. For example, Bazaarvoice clients use workbench reporting and alerts to help marketers, merchandisers and brand managers make decisions about product merchandising. From there, messaging is adapted to tell customers these products were chosen by their peers. For the same reason, more than 70% of online shoppers seek out ratings and reviews, according to both Jupiter and Forrester Research, they also find this content compelling in other marketing vehicles. For example, CompUSA drives tens of thousands of visitors to its site each month through natural search traffic fueled by user-generated content. This traffic converts at a higher rate and generates a higher average order value than other search traffic. Burpee added reviews to its long-running RSS feeds, and saw a 43% higher click-through rate compared to previous RSS feeds. Bath and Body Works incorporated links and content from reviews in its e-mail campaign for its FitFlop product. It included authentic reviews from customers behind nicknames such as “Youngandfun” in St. Paul who said “…the difference was almost instant!” The FitFlop campaign achieved 10% higher conversion and 12% higher sales per visitor compared to campaigns that did not include customer ratings and reviews. Golfsmith also tested reviews in e-mail. It performed an A/B split test with the same products, but one e-mail campaign included the headline “Top Rated Products.” They found that relevancy and authenticity of Top Rated merchandising yielded a 42% higher revenue per e-mail. Fair Indigo features reviews on in-store kiosks, allowing customers to make better purchase decisions in the store. Loblaw, a large grocery store chain in Canada, featured reviews in its print circulars and in-store signage, yielding eyeopening uplift in sales for “Top Sam Decker Rated” vegetable lasagna. Bazaarvoice Retailers such as Blair and Cabela’s feature snippets of reviews and top rated products in their catalogs. The sum total benefit of user-generated content is beyond a product page. A strategic view of user-generated content allows smart marketers to develop a social commerce strategy across functions and marketing vehicles where results can be multiplied.

Sam Decker is chief marketing officer at Bazaarvoice. Reach him at sam@bazaarvoice.com.

Go where customers are: How to bring your Web site into social spaces By Mike Swartz dentify your target audience. Drive them to your Web site. Capture their e-mail addresses. Market to them. When did these basic commandments of interactive marketing begin to sound more like a police action than a dialogue and learning relationship that we as marketers are supposed to encourage? Interactive marketing is not an interrogation. It’s not a forced march. And just when companies were starting to get their arms around the traffic generation issue, the model has changed. Today, instead of driving traffic to one domain, brand marketers must become more savvy about integrating customer experiences across networks of Web sites, applications and devices. Just as effective marketers bring products to customers and not the other way around, effective interactive marketers need to bring their Web sites to the customer. The days of driving prospective customers to a single destination are over. Customers are smarter about how, why and where they spend their digital time. Companies need to go where they are. Here’s an example. Let’s say a 34-year old woman, married, mother of two, is planning a family vacation. In many instances her planning will most likely begin with a search engine, however the journey doesn’t stop there. She’ll go to travel sites, both for booking Mike Swartz and for information about her Carlson Marketing desired destination. She might send a query to her LinkedIn network or perhaps consult her Facebook friends. She might even click to call a travel agent or a hotel. If a brand is looking to attract her business, close it, get her to come back and along the way tell her friends how great it was, then the brand’s sole focus cannot be simply to drive the customer back to the Web site. Bringing the brand into to every stop the trip-planning mom makes is a much more effective strategy. Fortunately for marketers, the technologies needed to bring Web site content, functionality and offers to the customer are now available, and fairly simple to apply. Rich media units, widgets, gadgets, desktop applications, RSS feeds, social networking sites and a host of other tools make it possible to monetize customer interactions. Your customers are already spending their time on the major social networking sites like Facebook, YouTube, MySpace LinkedIn, Flickr, not to mention the hundreds of other similar sites. Why aren’t you there? Your customers are downloading Yahoo Widgets, Google Gadgets and other desktop applications, like weather watchers, stock tickers and the like. Are you giving them what they want?

Mike Swartz is senior director of planning and interactive services at Carlson Marketing. Reach him at mswartz@carlson.com. E-COMMERCE GUIDE

14 CRM DMNews • E-Commerce Guide 2007

CRM CRM Page 14

Shopping online with “Megan,” by Ken Goldstein What’s next in personalization?, by Stan Dolberg

Page 16

Embrace testing and reap the rewards, by Kimberly Snyder

Page 18

Turning browsers into buyers, by Alastair Rampell Increase consumer checkout options to capture more sales, by Marwan Forzley

ustomers that shop both on and offline spend more and buy more often, according to the National Retail Federation. CRM focuses on how to build a customer relationship and includes articles on cross-channel selling, building the customer experienence and providing customers with alternative payment features.

Shopping online with “Megan” By Ken Goldstein ne of the great debates around the commercial Internet recently centered on the most appropriate analogue experience to create business models. Many looked to traditional print models and others looked to television. While both had merit, neither embraced a more fundamental, imaginative and customercentric paradigm — that of creating a sense of place. Only now, with three-dimensional virtual worlds, is our industry starting to see Web sites as places. And wherever people gather, there has always existed the opportunity for business to thrive. A true visionary outside the digital spectrum is Rick Caruso, developer of The Grove, an extremely popular shopping and entertainment complex in Hollywood. Centered on a landscaped park, Ken Goldstein The Grove is a new Shop.com age mall meticulously crafted to encourage social interaction: conversation, strolling and people-watching as well as dining and shopping. There is a movie theater, a farmers market and trolley cars. The Grove is a place where you can easily spend a pleasant couple of hours hardly thinking about how many times you reach for your wallet. How do you transfer this type of experience to the Internet? How do you open up a conversation with today’s busy woman, whom we at Shop.com call Megan, and create a fun, interactive exchange? Last October, we conducted a customer survey and learned that today’s busy woman – age 30-55 years, college-educated, employed and

with children – not surprisingly, wants to have fun. She wants an enjoyable online experience that is more than an exchange of money for goods. This insight led us to introduce a variety of programs, features, and promotions to create that sense of fun. Megan likes games and contests, often more than men. According to a Nielsen Entertainment study (October, 2006), 64% of online gamers are female with almost half over the age of 40. Last May, we launched our virtual shopping game, Cart Me Away, where a steamy TV drama meets an all-time favorite game show. Megan likes learning and sharing tips and ideas on clothing, gifts and recipes. We recently launched our blog, The Shopping Vine, to help reinforce her online community. Our conversation with Megan has just begun. We’ve got her attention — our customer base is showing increasing numbers of Megans each month — and now we’re adapting our offerings to continually strengthen the dialogue. We aspire to be a place where she likes to hang out, and if we can get anywhere close to what Rick Caruso has accomplished with The Grove, we’re guessing she’ll come back often. Ken Goldstein is chairman/CEO of Shop.com. Reach him at Ken.Goldstein@shop.com.

What’s next in personalization? By Stan Dolberg aking the right recommendation at the right time to the right person — it sounds so easy. Personalization technology has been seen as the key to automated upsell and crosssell, but it has historically underperformed. Despite early personalization missteps, and the weaknesses of the commonly used variant known as “collaborative filtering,” the science behind personalization has evolved recently to merit serious consideration. The most interesting aspect of the new per-

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16 CRM DMNews • E-Commerce Guide 2007

sonalization science dynamically marries three elements: detailed attributes of people such as shopping preferences and purchase history; detailed attributes of products or services; and real-time intent of the shopper. These factors, applied to dynamically constructed cohorts, promise to leave the days of silly product recommendations behind. The frontier for technology-driven sales recommendation is to take them across channels, across shopping cycles and even across segments. Making rich automation-assisted recommendations has become real on the Web, helping merchants in large retailers make recommendations against large product assortments and avoid the “best seller” syndrome, perpetuating underperformance of 90% of the inventory. Now it’s time to apply this capability across channels, pushing smart recommendations right into the contact center and the store, tailoring them based on customer history and shopping bag. The key to this is using technology that can learn from top agents and store personnel so that top-performing humans train the personalization engine to Stan Dolberg be smarter in every channel. n2N Commerce Beyond upsell and crosssell, the key to maximizing transactions is to string transactions together across time, both online and in the contact center. While the customer is still in the moment of shopping, companies can make a compelling recommendation of a next purchase, a concept we call next-sell. These are recommendations based on the just-completed transaction, and use the most current data to add a new transaction, not just add another item to the bag, keeping the customer in the shopping moment. The rage among retailers is grouping customers into segments and personas based on profiles with defined traits and needs that the company can consistently address through products, services, and branding. These worthy efforts slot customers into segments or personas once, to remain there for all time. Personalizing across segments builds on the concepts of segmentation and personas but makes them dynamic. The emerging cross-channel shopper sees a retailer as a holistic entity. The retailers who step up to service the cross-channel shopper must harness technology to put each channel in a position to service the customer across channels, across shopping cycles and across segments.

Stan Dolberg is chief platform strategist at n2N Commerce. Reach him at sdolberg@n2ncommerce.com.

Embrace testing and reap the rewards By Kimberly Snyder am often asked by online retailers, “What is the best day of the week to send my message?” or “Should we highlight a free shipping offer or a discount in the subject line?” The answer is, “It depends.” I know, marketers hate to hear that, but there are many factors to consider when determining how to manage the relationship, including your customers’ online spending habits, your sending frequency, the call to action and the content. Getting to know your customers’ shopping preferences through testing will be more useful than any general survey. Only by testing your e-mail campaigns and analyzing the results will you actually determine what motivates your customers to click, browse and buy. Accurate tests are simple to create, monitor and track. Create two versions of your message that are exactly alike except for the one variable you’re trying to test. Consider testing some of these variables: send time, subject line, from name, call to action and message templates to optimize the preview pane. Label each message in the test so you can determine the results. Build test lists by randomly splitting your intended file in half by creating an A/B split. Many online retailers are taking a new approach with subject lines. For example, a recent J. Crew campaign uses the subject line, “Sale… (duh)”. It’s important for all retailers to test new initiatives against their top-performing subject lines to ensure customers are engaging at a higher rate. Kimberly Snyder Retailers must also take Bronto advantage of the opportunities presented by preview panes. Uncovering the levers that move consumers to the point of purchase will provide valuable insight into your e-mail marketing campaigns. The size of your test list needs to be large enough to elicit a sufficient response in order for the results to be statistically valid. If your e-mail campaign sends to 100,000 consumers, 100 responses to your test will not be significant enough to draw accurate results. Embrace your data. Take the time to analyze the results and apply your findings to your next e-mail campaign. The data should indicate a measurable lift over the control message in order to apply the new variable to your next e-mail. If you tested sending your message on Thursday against the regularly-scheduled Tuesday campaign and the results had only a 1.3% increase in clicks, you may want to test another day against your control. Bottom line: Routinely testing your e-mail marketing campaign will enable you to find additional opportunities to optimize and improve your ROI.

Kimberly Snyder is account manager for Bronto. She can be reached at Kimberly@bronto.com.

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18 CRM DMNews • E-Commerce Guide 2007

Turning browers into buyers By Alastair Rampell ometimes, they’re just not that into you. Your customers, that is. It’s a difficult pill to swallow, but no matter how many edits you make to your copy, layout changes to your site or even price reductions to your products, many visitors to your site will simply not purchase from you. There is a light at the end of the tunnel, though. It turns out that your non-buying customers might be great customers for another business out there, and that you can let these customers pay you by transacting with a non-competitive business, creating two transactions where before there were none. It sounds complicated, but it is efficient and can have substantial effects on revenue, profit and customer loyalty. Here’s how it works. Let’s say you walk into McDonald’s and order a Big Mac for $2. When you are about to pay, the cashier tells you that you can pay either by cash, credit card or by signing up for Blockbuster Online. The third option is a bit of a curve ball, but think of the simple economics: Blockbuster is charging customers $20 per month, and McDonald’s is charging $2 for a single hamburger. It’s not hard to see that at $20 per month and Alastair Rampell 50% gross margins, BlockTrialPay buster could profitably afford many multiples of $20 to acquire a new customer, far exceeding the cost of the $2 hamburger. If Blockbuster pays $50 to McDonald’s for this customer, all parties benefit: Blockbuster gets a new customer at a relatively low acquisition price, McDonald’s gets 25 times its regular price, and the customer gets a free Big Mac. Now of course, in the real world of brick and mortar stores, it’s almost impossible for a cashier to seamlessly sign up a customer for Blockbuster or anything else. There are the logistical issues of signing up a customer for another company’s products, but equally problematic is figuring out what a customer wants and presenting it at the appropriate time and in the appropriate manner. Maybe a customer doesn’t want to sign up for Blockbuster, but will shop at Gap.com, or switch to GEICO, or join eBay; which one should be shown to the customer in order to maximize revenue? In the online world, other merchants are only a click away, and presenting dozens of offers in an efficient format is well within the grasp of technology. Using incentive marketing as a payment option also has the tremendous benefit of injecting positive seasonality into almost any business. Even if your business has nothing to do with Valentine’s Day and never will, you can offer your shoppers a discount if they buy flowers from your advertising partner.

Alastair Rampell is the co-founder and CEO of TrialPay. He can be reached at alex@trialpay.com.

Increase consumer checkout options to capture more sales By Marwan Forzley fter investing time and money to build a lucrative e-commerce infrastructure, merchants are looking for returns on their investment. But even when they bring consumers from the home page to the shopping cart, they risk losing them at the final step: payment. The reason might be customers don’t feel safe completing the transaction. A recent survey conducted by MODASolutions and JC Williams Group, 80% of consumers surveyed reported the availability of “a safe and secure online payment option” is the most important factor when shopping online. Merchants can address these consumer concerns by offering Marwan Forzley alternative payment options. MODASolutions Checkout options can serve a number of roles on a retailer’s Web site. Some speed the checkout process by offering customers a one-click transaction without releasing financial information. Others provide an extension of credit with a reduced or no interest incentive for a certain period of time following purchase, and some limit debt by not requiring credit to check out. There are also options that allow shoppers to pay through their online bank account. Online banking allows consumers to better control how they pay for purchases and give them more ability to better protect their personal and financial information, and lessen their fraud vulnerability. For retailers and retail marketers, the benefits can be tracked in the bottom line. Payment alternatives bring new customers to the checkout, including those who might have abandoned their shopping cart if they were not comfortable releasing their card numbers, or concerned about increasing their debt. Alternative payment options also increase consumer confidence, making shoppers more willing to increase their average order values and return to the site for future orders. Additionally, payment alternatives cost retailers significantly less in transaction fees versus credit cards. According to Javelin Research, alternative payment methods are expected to account for 30% of all online purchases by 2012, representing a 14% increase from today. Retailers must consider their customers and their preferences. When they provide customers with checkout options for security, convenience, and manageability, retailers are likely to be the biggest winners of all — reaching otherwise untapped market segments, providing enhanced customer service, reducing costs, and — best of all — increasing sales.

Marwan Forzley is the founder and CEO of MODASolutions. Reach him at marwan.forzley@modasolutions.com.

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DMNews • E-Commerce Guide 2007 MEASUREMENT 19

Measurement Measurement Page 19

Smart ways to choose Web analytics, by Phil Kemelor E-mail+display: natural marriage for e-commerce brands, by Ian Thomas

Page 20

Alternative payments give key buyers an alternative, by Chris Daly

Page 21

E-mail marketing drives both e-tail and retail sales, by Dave Hendricks

Page 22

Cheat sheet to making Web site optimization work for you, by Heath Podvesker

nline is a great space for retailers because it provides them with hard data that can be measured and incorporated back into another campaign. Measurement includes articles on how to best use Web analytics along with some case studies on how these numbers have been used.

Smart ways to choose Web analytics By Phil Kemelor ou’ve just gotten the call that you need to select a Web analytics solution to understand the effectiveness of your organization’s online marketing initiatives and overall Web channel strategy. Before you interview vendors, understand the organizational requirements and issues that can impact the value of the Web analytics solution after it is purchased. Think about the types of reporting and analysis you want from the tool. What are the business questions you’ll need to have answered by the solution? Solutions generally report on content, e-commerce, marketing and navigation, but some do a better Phil Kemelor job than others. Semphonic Think about the security issues. Does your organization have legal, regulatory or privacy issues regarding the collection and use of online visitor data? This may determine whether you want to host your solution inhouse or go with a Software as a Service (SaaS) solution. Consider who will be managing the solution once it is purchased. If there are few resources available in-house, it may make more sense to go with a SaaS solution. Who and how many stakeholders will require access to the Web analytics reports? How will report access and distribution be managed? Getting reports into the right hands is the key to success, but often overlooked as a critical requirement. Make sure the solution you choose has sufficient flexibility for automated report scheduling as well as ability to export data into Excel. Depending on the size of your organization, you will likely be looking at an investment of

between the mid-five figures to low six figures on an annual basis. Vendors calculate the base cost of the contract from the number of page views or server calls. If you go above this number, you’ll be charged additional fees. In general, contracts with Web analytics vendors are very complex. Make sure you ask about all incremental charges that impact your annual fees. If you do your homework, as described above, you’ll be able to initiate a selection process that helps you create a short list of vendors who have licensing, data collection and maintenance models that mesh with your organization’s needs. After you’ve reviewed vendors’ responses you’ll ask them to provide a demo of the solutions. Your goal should be to get “a day in the life” with this tool. Web analytics projects need to be approached with a clear understanding of requirements, budget, and human resource experience and availability. Phil Kemelor is vice president of strategic consulting services at Semphonic. Reach him at pkemelor@semphonic.com.

E-mail+display: natural marriage for e-commerce brands By Ian Thomas ccording to a May 2007 Forrester Research report entitled US Retail e-Commerce Forecast 2006 to 2011, business-to-consumer e-commerce will grow to more than $270 billion in 2011 with online retail comprising 9% of total retail sales. As e-commerce increases, more brands will compete for online consumer relevancy and reach in order to drive sales faster than their competitors. Across categories, the natural marriage of email and display media provides today’s online advertisers with key performance indicators that they are able to easily and more immediately quantify against a lead-to-sale conversion

20 MEASUREMENT DMNews • E-Commerce Guide 2007

yardstick. For example, in the case of Microsoft’s “Featured Offers” campaigns which are powered by Datran Media’s StormPost e-mail marketing and monetization system, advertisers in categories such as bath and beauty or health and fitness are able to leverage analytic targeting to serve both standalone e-mail offers and highly contextual banners within e-mail newsletters. These advertisements reach pre-qualified consumers engaged in buying cycles and a plethora of other relevant scenarios. As those consumers convert, advertisers quickly see the results. So, can e-mail and display perform as a convergent media channel for branding as well? Of course e-mail is a great place for massive reach and targeted direct response advertising, but is it also a top branding tool? Recent Dynamic Logic studies and Windows Live Hotmail user scenarios are proving the case. E-mail is a point of influence and the place where people Ian Thomas plan what to do and what to Microsoft buy with their friends and families. Seventy-eight percent of US Windows Live Hotmail users discuss their social arrangements in e-mail, 81% of female users discuss travel in e-mail and 76% of US male users age 18 to 35 discuss electronics and gadgets purchases in e-mail. Advertisers who are fortunate enough to be inches away from these e-mail conversations can benefit from the medium’s status as a social fabric that underlies consumer behavior. According to three ad effectiveness research studies conducted by Dynamic Logic on one-day Windows Live Hotmail takeover for NBC, Jeep and Cingular, increases in favorability and intent metrics for these campaigns were at or above the average for Dynamic Logic’s Index for entire campaigns in the advertiser’s categories. AdRelevance recently revealed that up to 53% of online advertising inventory is in or around the inbox. The revenue and branding benefits advertisers are already beginning to receive from the e-mail and display combination are significant. Yet, many are still leaving money on the table. Ian Thomas is director of advertiser and publisher solutions at Microsoft. Reach him at ian.thomas@microsoft.com.

Javelin Strategy and Research, in a September 2007 study, found that existing customers are driving alternative payment usages because they are more convenient and more secure payment options. Traditional credit cards’ online transaction volume in the United States is forecast to decline to 44% by 2012 while alternative payments will grow share to 30% in the same period. This new generation of affluent shoppers is composed of savvy shoppers who use technology and social networks to find products with superior value. Merchants who equate value solely to price are missing out on significant margin opportunities. Affluent consumers are willing to pay more for high-quality, unique products, but still seek value in the purchase process. That value is delivered through alternative payment services that minimize the consumer risk for transacting remotely and offer different ways to pay to help them acquire these products. Home Décor Products, a flagship online destination for home improvement and décor items, experienced great success as soon as it made Bill Me Later available to customers. The branded program offers shoppers a dedicated line of credit towards the purchase of thousands of items on the company’s site. Home Décor Products understands that multiple payment options and flexible billing are important to satisfy customer demand and grow loyalty. “After experiencing the positive results of offering Bill Me Later, we chose to implement the Preferred Account program to give customers even greater choice and increase consumer satisfaction,” said Michael Golden, president, Home Décor Products, Inc. “Given the convenience Chris Daly and flexible payment terms, Bill Me Later we believe this competitive advantage will deliver an even greater increase in average order values and increased frequency of purchases.” Success is not about offering a new payment option to buyers; it’s about leveraging an alternative payment provider as a strategic marketing partner to drive new customers to merchants. Alternative payment solutions also serve to drive down merchant discount fees for card not present sales resulting in incremental cost savings for remote transactions.

Alternative payments give key buyers an alternative By Chris Daly here’s no doubt that multichannel merchants who don’t offer shoppers secure and convenient payment options are limiting their sales and profit potential. Sophisticated online buyers want a variety of payment options, demanding convenience, flexibility and greater security at the point of sale. When it comes time to pay, buyers are no longer reaching first for the plastic in their wallet.

Chris Daly is marketing director of luxury and catalog practices at Bill Me Later. Reach him at Chris.Daly@billmelater.com.

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DMNews • E-Commerce Guide 2007 MEASUREMENT 21

E-mail marketing drives both e-tail and retail sales By Dave Hendricks -tail or retail?” was a common question posed by brands across categories as the earliest market space pundits watched e-commerce sales grow and in-store sales, especially holiday shopping tallies, decline. It was a necessary question. However, the idea that e-commerce might entirely displace traditional retail isn’t logical. Today’s most successful brands see the relationship as a symbiotic one especially when their bottom line is in focus. New Balance, Old Navy, Williams-Sonoma, PetSmart, Neiman Marcus, J Crew, Victoria’s Secret; these are just a few of the brands that you and I are both likely to have online and offline relationships with today. So, how do we get from an online brand engagement to offline shops these days, and what’s the value to the brand marketer who spends at least a portion of his or her media budget to get us there? According to an increasing number of reports, e-mail media is one of the most successful ways. Not surprisingly, many of today’s top brands have already increased their commitment to e-mail marketing to drive both e-tail and retail sales. Consider the following. E-mail marketing lifts purchase intent

“E

by 66.1% (Insight Express for Datran Media). According to the Shop.org State of Retailing Online, 2006, full 26.9% of retailer respondents derive 11% or more of their sales from e-mail marketing, and online retailers have become even more aggressive in using both their Web sites and e-mail to promote stores and catalogs. Those statistics are promisDave Hendricks ing but, until recently the quesDatran Media tion everyone really had on their minds when contemplating their e-mail media spend was, how much commerce activity can it generate? According to the Direct Marketing Association, this year, the e-mail acquisition spend will result in $21.9 billion in revenue. If you haven’t considered this number with your CFO recently, now might be the perfect time.

Dave Hendricks is vice president of market strategy at Datran Media. Reach him at dhendricks@datranmedia.com.

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22 MEASUREMENT DMNews • E-Commerce Guide 2007

Cheat sheet to making Web site optimization work for you By Heath Podvesker ptimization for retailers has always had a unique set of challenges due to the number of SKUs, the prioritization of special offers, and the synergy, or lack thereof, with bricksand-mortar retail sites. To best leverage optimization, multiple creative concepts and offers should run simultaneously to multiple audiences to produce a more relevant dialogue with each segment that will achieve higher conversion rates. A portfolio of differentiated assets can be created and be completely on-brand and comply with style and/or messaging guidelines. Focus on the audience. Optimizing based on traffic — the number of clicks or page views, for example — often results in increased performance, but it limits insights into why lift is accruing and, more importantly, misses the most essential point: the people. Keep it honest. Transparency is crucial to success. It is important to monitor and communicate the success of optimization. Share the great deal of intelligence that results from your optimization project with other members of your marketing organization, as well as with brand stewards and agency partners to help guide new creative development both with media teams and with product development.

Know where to optimize. If optimization is done well, it should achieve results no matter where the placement, but in order to achieve maximum ROI, choose a section of real estate that is above the fold and as large as possible. Also, when choosing which page to optimize, the home page is almost always the best choice. A good second choice is a optimizing product or section home page. Evaluating performance directly identifies the lift realized from direct conversions. Because the optimization program focuses on audiences and developing a relevant dialogue with individual users, the increased level of engagement can lead to users unexpectedly converting to products or services for which you’re not optimizing. This is crossover; Heath Podvesker watch for it closely. While not [x+1] Marketing a direct measure of success, consider it a fringe benefit. Heath Podvesker is at [x+1] marketing. Reach him at hpodvesker@xplusone.com.

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