Using the Marketing Funnel to Drive Marketing Action

The concept of inbound marketing has caught on, and one of today’s mantras is, “We’re going to do content marketing.” That sounds a lot easier than it is; there are a number of disciplines to be followed if content marketing is to be successful. But lately I’ve been struck by the extent to which marketers fail to use the marketing funnel as one of those disciplines.

We are all familiar with the concept of the funnel, both as a strategy concept and as a way to report metrics. SEOmoz has a good generic concept, one which parallels the consumer purchase process and is an excellent beginning. Awareness shows that funnels can become complex by setting a social marketing funnel on top of the classic marketing funnel.

The very idea of a funnel, of course, is that many prospects are acquired, some drop out along the way, a smaller number convert to actual customers and once they are customers, they need to be retained. The concept seems impeccable, but I see two big problems in the way it is being used.

1. The assumption that marketers want to get as many prospects as possible into the top of the funnel. Are they getting more than they can properly handle in qualification and conversion processes? This may be more a problem in B2B where qualification is labor intensive than in B2C, but unqualified prospects are a problem in any space. The more unqualified prospects there are the more filtering has to be done, whether they are businesses or consumers. More is not necessarily better—it is just more.

I remember a story told to me long ago by a direct marketing agency. They had a client who needed a really small number of qualified leads, say 10 per month, because that’s all their service operation could handle. The marketer’s point was that it was harder to get a finite number of well qualified leads than a lot of leads. Amen.    

2. Not using the funnel to reverse engineer the acquisitions plan. It seems obvious, but if you need a certain number of customers to meet sales goals, and you have a known conversion rate, that is a simple model of how many acquisitions you need.

That also makes the point that a funnel is not just a concept. It is a model that needs to be quantified for each business—probably for each product or at least product line. Given the data marketers have today, that really isn’t a tall order.

But it does require discipline to create the model and to use it to guide marketing activities—turning up the throttle when needed, turning it down as required.

That should lead to a steady flow of sales. From the marketer’s perspective it should provide a number of prospects that can be given appropriate attention in the conversion process. That’s a well ordered and productive funnel, not one that is prone to unmanageable torrents and dangerous shortfalls.

That’s a well ordered and productive funnel, not one that is prone to unmanageable torrents and dangerous shortfalls.

Do Your Community Members Deserve a Badge?

Social media badges are not a brand-new phenomenon. I have an impressively interactive badge on the right sidebar from the Pickens Plan community. I downloaded it because I like the community and I like the message of the badge, not because it does me any particular good. I was interested to see a new application by the Huffington Post over the weekend.

In doing research, however, I came across careless use of the term. There are quite a few writers and sites that use “badge” to identify the “this site is a member of Facebook” app like this one that you can get from many social networks. The purpose of these apps is to link you through to your page on the social network. That makes them a chiclet (note proper spelling!), not a badge as HuffPost, the Pickens Plan and others are using the term.

According to my friends at Overdrive Interactive, who have an excellent white paper on the use of chiclets, “Chiclets enable a user to quickly share web content by automatically posting articles, photos, video, and other content to their blog (WordPress, Blogger, TypePad), public bookmark page (Digg, Delicious), or social profile (Facebook, Twitter).” You can download the white paper from the Overdrive home page.

Badges have a different, and perhaps a more personal, use. CNET likens them to the efforts many of us made in Boy or Girl Scouts to collect merit badges for various accomplishments.

According to CNET, the current craze for badges started with Foresquare and the competition of its users to earn status in the community. The HuffPost application rewards its most engaged users by making their comments more visible. There are various levels of activity, which they outline on a FAQs page. For example, a member can become “Moderator” by flagging objectionable commentary on the site. As Bryan Person pointed out last week, sites are either overlooking or falling behind in the important activity of moderation. Encouraging help from their members is an excellent approach. Rewarding them in a visible way for their help seems equally desirable.
Not incidentally, the application for a badge results in the applicant linking their Facebook or Twitter account to HuffPost. The publication is cagey about how they will or won’t use that info, but the FAQs do point out that “the shift in privacy is very minimal.” Not sure exactly what that means, but it worries me about as much as people who complain that their privacy has been violated on other social networks. Social networks aren’t a place for those who zealously guard their privacy!

HuffPost is clear that its current effort is intended to increase member engagement with the site. Why can’t the concept be extended in a way that rewards members for desired behavior. That makes it like a CRM loyalty program. Why is that not a good idea? The Tesco Clubcard is the classic example of a vibrant online loyalty program, but I don’t know any firm that’s using a “proud member of” type badge as a tie-in with its loyalty program.

Maybe we’re thinking too much about social media as an acquisition tool and not enough about its potential value as a CRM tool. What are your thoughts?

Does Search or Social Media Have More Impact?

Of course there’s a secondary question—impact on what? For several days I’ve been thinking about two specific questions:

1. Does search marketing or social media drive more traffic to websites? I’m going to limit it to PPC and not include SE0.
2. Does PPC or social media have more impact on sales?

Both sound pretty simple and straightforward, right? If we believe that, we’ve forgotten all we know about the interconnectedness of media. Nevertheless, starting out with two specific questions led me to some interesting data.

Going backwards, we also know that question two is not as simple as phrased; there is immediate impact on sales and delayed impact. From early studies we know that web exposure, which was mostly display advertising at that time, had some immediate conversion impact but also had longer-term impact. In other words, it often took more than one visit for a consumer to decide to make a purchase. Think about your own behavior—does that make sense? We also learned that conversions occurred offline in retail stores after consumers had visited websites. That was a pretty common phenomenon in the early days, “research on line buy offline.” Again, we’ve all probably done that. Are we more likely to just go ahead and buy online today; probably depends on a number of things.

The same is true of the online vs. offline conversion issue. These 2005 data seem pretty straightforward. More people convert offline. comScore went on to say that they “analyzed the time lag between consumers’ initial searches and subsequent purchases made in the same categories during November and December of 2005. . .more than half (56%) of consumers’ online holiday buying actually happened in subsequent internet sessions, clearly demonstrating the strong latent impact of search.”

I’ve been looking for a replication of this study ever since. I’ve never found one. Does that mean that the latent impact of search has become part of Internet marketing conventional wisdom and no one sees the need? I did find a marketer’s analysis of a single campaign in 2009. He found that initial Google results were faster to come in than Yahoo’s, but that 31% of all results came in after his (approximately 1 month) campaign was over. I’ll take that as confirmation until someone shows me otherwise.

Ok, so here’s what I found in terms of traffic. The answer to question 1 looks pretty simple, right? Search is the winner by a huge margin. But look at what else eMarketer said (newsletter, October 22, 2009):

According to research by ad network Chitika, social sites Facebook and Digg are more likely to send returning traffic your way than search engines such as Yahoo!, Google and Bing. More than one-fifth of users referred to a site by Facebook visited at least four times in the course of a week. Less than 12% of Google-referred visitors were as loyal.

It doesn’t say that the loyal users were more likely to buy, but would you agree that the likelihood of a purchase goes up with repeat visits? It does seem likely; how much is unanswered, at least in any recent research I could find.
The most interesting data I found is this 2007 study of the influence of newspaper advertising on web traffic. 44% of people who saw an ad did additional research; 67% of them did their research online; and 31% went to a search engine first.

But strong brands matter; in 2009 Nielsen found that 61% of the holiday traffic of retail web sites came from direct visits, not search. A Nielsen spokesman said:

the fact that such a high percentage of people go directly to retail sites and even those that search generally have a pretty clear intent as to which website they'd like to go to -- it makes a compelling argument that brand and past experiences [with a marketer] matter an awful lot and will be far more significant determinants of success than any customer acquisition strategy that they're going to engage in."

That’s really interesting. Two things strike me. First, that’s holiday shopping data for retailers and it may be different for purchases during the rest of the year. Second, all marketers have to do customer acquisition, so the question as to whether social media or search is best for acquisition still matters. Each and every marketer has to answer that by looking at quality vs. quality of initial referrals and the persistence of customers who were acquired in various channels—in other words by Customer Lifetime Value. At the same time, it’s unlikely that one acquisition channel will ever be enough; the question is allocation of resources.

Question 2 one more time--does search or social media have more impact on sales? Here’s data from the current Razorfish Fluent Report. Offline friends are most trusted when making a purchase—WOM again and always. TV was also trusted by these respondents, then “online” activities of several types appear. Search is down at the bottom as far as trust when making a purchase is concerned.

The issue is not straightforward in the sense that either search or social media is “best.” However, there seems to be a pretty clear picture in these data. Search brings more people to your site; social media gives them more trusted information on which to base their purchases. It’s not either/or.

Several times while I was looking for data I came across a good piece of advice. Marketers must measure the impact of various media at each stage in the conversion funnel. It changes from “just looking for information” to “deciding to buy something” and in between. That’s the real message; marketers must use all the tools in their arsenal—wisely!

Social Shopping--Another Trend for 2010?

If I had added one more trend to Monday’s list, it would have been social shopping, so I decided to end the week with a summary. I’ve written a lot during the holiday shopping season about good uses of social media by retailers and results from the season confirm the importance of social media to ecommerce. According to Internet Retailer:

Another trend that emerged from the holiday season is the growing importance of online social networks, blogs and forums. Among consumers researching and buying holiday gifts online, 28% said social media influenced a purchase decision, compared with 11% who said they were guided by a customer-generated product review, 7% by an expert review and 6% by a Facebook message, comScore says. Observed comScore’s (chairman Gian) Fulgoni, “We are getting our first real glimpse at the impact social media will play on commerce as we enter the next decade.”


Earlier in the fall the site SheSpeaks asked about brand-related activities and found a lot of it on both social networks and Twitter. Other 2009 data from SheSpeaks found 55% of women they interviewed logging into social networks multiple times each day; 72% log in at least once a day. That’s huge!

The strategic use of social media by retailers is important, but the precise definition (if there is one!) of social shopping (or social commerce) is more narrow. It is an attempt to allow shoppers to bring onto the web some of the “social event” feeling of shopping in the mall with a friend. That may be an important part of the physical retail shopping experience that Internet retailers can provide on the web going forward.

As I’ve looked at the space, there are two basic ways to do that:

• Join one of the shopping sites that supports social experience. There are a lot of them and more being added. ThisNext is a good example of a site where a merchant can get a free tool that allows visitors to post a product to the site, where it joins the pool for online discussion. They have an application called Shopcast that encourages consumers to add ThisNext content widgets to their own personal pages. The common thread in this type of site is that retailers must encourage shoppers to list products on the site. Another set of sites appear to feature the products of partners; Couture Society is one of those.

Actually, it’s rather hard to find out precisely how retailers get products included; maybe that’s intentional, maybe it’s because the space is still new.

• Add social shopping functionality to your site. Clearly, this would be the more expensive option, but it gives retailers control. I wrote about Decision Step earlier in the year. BazaarVoice is another firm that offers a robust set of social applications. These, obviously, work on your own site and the merchant doesn’t have to rely on a third party site.

Be it social media in general, or social shopping in particular, interaction between shoppers seems to be the direction in which ecommerce is moving. Does it create a new type of business model, or is it just value-added to the existing ecommerce model? For now, I think it’s the latter, but that could change. It certainly is a part of Web 3.0 – the open ecosystem that is gradually replacing the walled-garden sites of the early Internet.

Internet marketers should keep an eye on what is going on in this space. It seems to offer merchants a way to reach out—often to the friends of friends (“birds of a feather”) who might also find the offering attractive. That’s cost-effective customer acquisition!

A Cautionary Note About Widgets

I often tell my students that we could learn a lot from marketing programs that don’t work, but marketers—understandably—don’t want to talk about them. Quite by accident I ran across one that had unintended effects.

My intent was to write a post about widget distribution networks, since we are all looking for cost-effective customer acquisition tools. In the process, I ran across the Kimberly-Clark Room-a-Day Giveaway and the widget it used in the promotion. Ok, looked like a good example because the widget was successfully distributed across a network.

Kept on looking, and what I found was that the web is littered with broken links to the widget. That is as it should be, because the 2008 contest ended. But I thought there ought to be a working archive somewhere so I could see the dancing Huggies and other Kimberly-Clark brands. Static captures like this one were all I could find. That piqued my curiosity, especially when I realized that KC is running the sweeps again. The highly successful sweeps was launched again on The View on January 14 with, according to Ad Age, lots of promotional support but not a widget in sight.

According to the Ad Age article, they are using Twitter this year, but I don’t see any evidence of it on the sweeps home page or on the Connect with our Brands page, although I didn’t register for any of the brand messages. I kept looking, and there is Twitter listed on Very Recent. The Twitter messages I found link to the sweeps home page, but I couldn’t find where they come from.
The 2009 sweeps has a new spokesperson—Thom Filicia. He was the designer on Queer Eye for the Straight Guy if that places him for you. The Ad Age article describes him as the blogger for the campaign. I searched his name and found all sorts of blog activity (try it; it is an exercise in creating visibility). I finally found his blog for the sweeps under Kimberly-Clark Brands. It’s interesting, but I still haven’t found the source of the Twitter for the campaign. Mommy blogs, perhaps.

But I digress. Why no widget this year? I found the complaint about the autoplay (wish we’d just delete that command from the programming lexicon) on several blogs. Here’s what Donna DeClemente said about the pros and cons of the widget on her promotions blog (links removed):

. . .they're really engaging audiences with an interactive promotional component that features a dynamic new website along with cutting edge digital technology that's enabled the first sweepstakes enabled widget.

(Please Note: I originally had the widget embedded right here in this post, but moved it to this new page instead. The reason being is that the widget automatically plays and the audio would come on immediately each time you visit my blog.)

Anyhow, I think this widget is amazing. Not only does it offers the user the interactive fun of being able to choose both a specific dance along with where the packages dance (I like the Abby Road location), but it also represents the very first time a widget has built-in functionality allowing viewers to directly enter a sweepstakes. This is truly innovative and a application that should help take sweepstakes to the next level (Sweeps 3.0?)

Now once the user is registered it remembers their name and lets them know how much time is left till they can enter the sweepstakes again with a digital clock countdown . . .

There’s more, and her evaluation is interesting. But her problem was that of other bloggers I found—the autoplay that really annoys people who are trying to read other blog entries. I have to admit that I also wonder about dancing Huggies, etc. Was it cute, or was it silly? And does it matter? A lot of promotional material is silly but if it attracts attention and is reasonably entertaining it works.

My guess is that this widget was more annoying than entertaining and that Kimberly-Clark was smart enough to recognize that and come up with another promotional tool. They haven’t given up on social media, they are just learning from a lot of what has worked very well for them and one thing that didn’t. I just hope they don't disregard what looks like great interactivity in the widget in the annoyance factor.

Learning from what does and doesn't work is what social media in 2009 should be all about!

I'm an Avatar: Can I Help You?

Yes, perhaps they can. Since the early days of the Internet artificial intelligence experts have been touting the potential of “virtual people” to provide customer information, service and support. I’ve been writing about them for most of that time and run into the same problem each time; the firms whose products I used as examples before are no longer around. This has been a really difficult market in which to get sufficient traction to survive.

That’s why a post on Dave Jackson’s Weekly Web Tools blog a couple of weeks ago caught my eye. He focuses on small businesses and really cares about customer service, so his evaluation of some of the current services was thought-provoking.

SitePal essentially allows you to create “talking FAQs” using their avatars or customer avatars from a photo you supply. All their services are based on a one-time fee. They have 3 service packages ranging in price from $9.95 to $39.95 per month based on usage and number of avatars. Check it out for yourself, but turn the volume down; all their pages open with an audio message—that’s what they do, after all.

Live Face on Web (also opens with audio) produces those little people who walk onto your screen and start talking to you. These are essentially videos, so they have a different business model—a one-time fee for production. Prices range from $259.95 for a 15-second/50 word video to $3,281.95 for a 300 second/1,000 word video.

The difference between these live avatars (is that an oxymoron? I don’t know!) and the earlier chatterbots is that these deliver audio, either automatically or on request by the visitor. Earlier versions were chat or SMS-based. They are the “chat with a live agent” functions that you see on many ecommerce sites, just using the bot to put a face on the chat. The Marketing & Innovation Blog reviewed several of these back in March. The VirtuOz site, for example, offers several agents, each to perform a specific task, from customer service to lead generation and conversion, on your site.

MicroSoft Live Agent also offers chat-based agents. You can take them for a trial run on their site and they have a good gallery. They offer APIs so developers can customize applications for their own sites.

There are lots of solutions out there. Hopefully some of these will survive, because the possibilities of improving customer service and support in a cost-effective way are real. The early developers loved to say that these agents don’t take coffee breaks or vacations. True, and the opportunity for consistent service 365/24/7 is important. Marketers have to remember, though, that good customer service requires access to a human agent if the automated services don’t satisfy the need. The trick is getting people to use the automated services before they pick up the phone or fire up their email program.

These autoplay video avatars are intrusive and annoying to some of us (not to mention the person in the next cubicle!). However, they may be what’s needed to say, “Use the cost-effective automated support service first.” How you say “then you can access life help if you need to” without encouraging people to go directly there is a problem. I’d suggest that you probably don’t make the offer until the automated service is finished. What’s for sure is that a good plan for customer service escalation is required to keep customers happy and costs low!

Succeeding in the Blogosphere

There are a number of recent reports that shed light on what’s going on in the blogosphere and how to succeed there, especially for business bloggers. Time to take a look and try to bring some of them together.

Technorati’s State of the Blogosphere 2008 surveyed bloggers themselves as well as analyzing its own stats. The stats on the number of blogs make it clear that the blogosphere is huge and active. A lot of blogging is personal, but business blogs are quickly assuming a prominent role in the communications strategies of companies large and small. This chart shows some of the downsides for the business blogger, but the outcomes are generally positive and include industry and enterprise visibility. That should encourage employees to blog.

The report also makes it clear that products and brands are important subjects of posts for both personal and business bloggers. The degree to which bloggers consider blogs an important and valid source of information is striking. Ok, they are biased, and you do have to consider the source of your information before deciding to trust it. People are, for better or for worse, placing considerable trust in the information they acquire. More about that tomorrow. The report has a lot of information; it’s worth a read.

How do businesses make the blogosphere work for them? Two recent studies from Compendium Blogware provide strong recommendations.

The first is a whitepaper about blogging for search. The rules for making your blog posts visible in search results (organic results are the most effective, good news for those who can’t afford a lot of PPC) are the same as they are for web sites. You just have more control over how you do it on a blog. The basic rules are to use keywords in post titles and content. Links can be helpful. Keeping content current, while not eliminating the old, is an advantage of blogs over websites. Blogs need to be active and they need clear focus. I’d add that tagging can be very useful in bringing in traffic through search.

Why is that traffic so important? It’s the best acquisition method, bar none. It brings unique new visitors to the blog and site. The other whitepaper uses Marketing Sherpa data to look at the critical relationship between blogging—to acquire new potential customer contacts—and email for ROI—read that conversion. That relationship alone is enough to encourage corporate blogs, although it’s important to note that acquisition of potential customer contact information doesn’t happen by accident. It has to be carefully designed into the overall communications program. The report points out that there’s also a benefit in terms of content. The business has to produce a lot of content for its blog. Using content wisely between blogs, email, and dynamic site content can leverage the value of that content.

The value and credibility of traditional advertising approaches seems to be on an irreversible downward slide. The value, credibility and consumption of user or employer-generated content are all on the rise. What marketer doesn’t want to take advantage of a more cost-effective channel of communications that has greater credibility with the target audience? That’s the value of business blogging in a nutshell.

Surround Marketing

I’d like to introduce a concept developed by Arun Poojari. Arun is the National Sales Head - Brand Solutions for Microsoft Advertising in India. His Surround Marketing is clearly a new media concept. The title is reminiscent of the surround session media buy offered by publishers including The New York Times, but it’s much broader.

The media model he uses is Entertain > Connect > Inform > Assist > Convert. It bears some relation to the one I wrote about several months ago, but it focuses only on acquisition. That’s find, since the purpose is to look at new media in the acquisition process.
And that’s an interesting perspective. His stages and the techniques in each are:

•Entertain. Use video, games, and/or rich media

•Connect. Banner advertising, which can be on social networks or other sites like portals. Social networks can also host marketer pages; Target is a good example. So can virtual worlds, which Arun doesn’t have on this graphic.

•Inform. Email, mobile advertising and applications of many types sit squarely on the line between Connect and Inform. They can be used for either purpose, perhaps both at the same time. Special events and other on-line promotions can be highly informative.

•Assist. Organic search is often the first step in finding out about products and services and the brands that offer them.

•Convert. He sees paid search as closer to the end of what we used to call the conversion funnel. Paid search should be coupled with campaign-specific landing pages and a clear conversion strategy and path.

This is a content ecosystem, not the conversion funnel of olden days (a decade or so ago). The conversion funnel could be controlled by a savvy marketer. No one controls the ecosystem of content, which includes but certainly is not limited to, marketer messages. Content of all kinds, much of it user created, swirls around in rather fashion. Marketers can be—must be—part of that ecosystem, but they cannot control it.

Today’s marketer wants to use the new media to reach certain target audiences. The Sears ArriveLounge campaign I wrote about yesterday is a good example. Sears is using the large social network portals as well as audience-specific networks. That’s good, but are there other places on the Internet where this target audience hangs out? Undoubtedly. I’d suggest that no media buy is going to cover them all, even for a deep-pockets marketer. If your online budget is not robust, a media buy covering all sites is unlikely.

That puts a premium on engaging the audience so they’ll share with their friends. Everyone is trying to do that—at least everyone puts a share this link or icon on their communications. That’s the facilitator, but it’s not enough to get the potential customers you do reach to help you reach others that haven’t been reached yet. That requires content that is actually worth sharing.

And that’s the challenge in a nutshell!

Best Practices B2B Site

I recently saw a mention of Mfg.com, and since I’m fascinated by B2B marketplace sites, I took a look. Founded in 2000, it seems to be profitable and recently obtained another round of venture funding. It is commonly described as an exchange for parts and components, but they describe their model as a proprietary platform that facilitates “the complex process of sourcing and selling manufacturing services”. They recently revamped their platform to make it easy for buyers and sellers to share CAD designs to speed the sourcing process, so they are clearly a sophisticated user of technology.


What I found was also a best practices site for B2B community building. They have numerous industry-based communities, a system of news feeds in which a member can subscribe in various ways including content channels and tags, and various blogs. They offer blogging to their members and have a company blog. When I investigated the profile of frequent poster aj, I met Mfg.com’s Director of Community Content. His profile page included his other blogs, his most-used tags, and other members with profiles similar to his. Great personalization and networking! They also recognize Top Contributors on the community home page, which is another nice touch.

The site says it helps customers:

Find content. The site is content-rich and uses tags as well as content channels (the site calls them “spaces”) to organize it. There are various search options. They have a sophisticated system of RSS feeds that allows people to subscribe in various ways including tags. They also have email notification, which seems more limited in scope. They are pushing RSS, which is interesting, given how full our email inboxes are these days.

Create content. Members are asked to create profiles. They can comment on blog posts, ask questions, and receive feedback. The other content creation mechanisms are wiki-based, allowing for various types of documents that can be shared with open or closed groups. The documents allow for many types of review and comparison.

Collaborate on content. Creating wiki-based documents on the site draws colleagues of the members (who then have to become members) to collaborate on documents. And since the site is content-rich, that offers the likelihood of the new member starting the cycle all over again.

Take a close look at those three steps—find, create, collaborate. That’s social media strategy in a nutshell. Content to draw people to the site, social connectivity to increase the usefulness of the content, and collaboration to allow members to work right on the site and bring others with them. When members are not on the site, RSS feeds remind them of the value it offers to them.

This is best practices in terms of strategy as well as execution!

Customer Retention--How the Internet Has Changed It

Read the first installment (strategy) here.
Read the second installment (acquisition) here.
Read the third installment (conversion) here.

When I began to think about this series of posts, my initial reaction was that retention had changed less than acquisition and conversion. I like the Peppers and Rogers model of retention – Identify > Differentiate > Interact > Personalize. It’s a data-driven approach to retention and that’s as is should be.

Long before the Internet, marketers who were able to identify their end customers and obtain a mailing address for them sent retention mailings—letters, catalogs, and offers of all kinds. The main difference is that the Internet allows more marketers, especially traditional mass media marketers, to identify their customers and communicate with them.

I was half right. Or maybe I was right until social media burst upon the scene a year or two ago. With that the retention scene was changed just as radically—and as permanently—as acquisition and conversion.

First, there’s email. My sense is that most marketers are using it badly. We have an email list and we blast emails to it frequently. It’s cheap—so what if we only get a small open rate or smaller (and declining) click-through rate? It’s not hard to get an ROI that looks pretty good. We should be asking how it looks to our customers. Are we contacting them too often with communications of too little relevance? Do we need to go back to the chapter on Segmentation 101 and begin applying it to our electronic communications? It will take a bit more time and effort, and therefore will cost a bit more. Will it be worth it in terms of both conversions and—even more important over the long run—the image of and trust in our brands? Look in your own inbox, take a quick tally of how many commercial emails are really relevant to your needs, and answer the question for yourself.

Second, there’s social media in the broadest sense. It gives us opportunities to push content—in a totally permissioned environment—to customers. In the process, it also allows us to reach people who might become customers, but my sense is that most of the best marketer uses of social media are for customer retention.

This whole blog is about social media, so let me just give you two brief examples, both from one of my favorite best practices sites. National Geographic publications and broadcast long predate the Internet, but they moved onto it well and smoothly. Take a look at the site and see how well they do cross promotions.

But my examples are pushing content to users on other sites and pages, all in ways that drive people to the site. They always have a great selection of screen savers and I change mine often. I’d love to show you the current Madagascar hibiscus, but my desktop is too messy. What I can show you is the bar that remains at the bottom of my desktop page. That’s a constant reminder of who provided the lovely photograph that improves my pc experience and imprints the National Geographic brand in my mind.

Then there’s the widget I downloaded to another blog a couple of months ago. The Green Guide Tip of the Week widget is perfect for the “Living Green at Wellfleet Bay” blog. I had to cut the size down a bit to fit in the column, so it’s a bit

small, but it works. If you look carefully, you can see that there’s the tip itself and two more pieces of “green” content that would drive readers to the National Geographic site. What you can see is the large “Get This Widget” bar. It should be somewhere; it is one way to increase the distribution of the widget. However, it’s the largest item and it’s easy to mistake it for the content. When you click, you get HTML, which could be confusing to the non-Web 2.0-savy reader. Overall, it’s a great performance, though! Their newsletters are wonderful in terms of content, but I don’t get the sense that the content is personalized to my activities on their site.

We all need to do branding. That applies to current customers as well as prospects. We all want to bring users to our site. We want customers to return frequently to consume content, purchase goods—whatever our objectives are. We want non-customers to come to our site in a way that makes them prospects for conversion. Good Web 2.0 applications can do both, but I maintain that retention is usually the primary objective.

For retention to work we have to be present in customers’ lives in ways that are non-intrusive but that support their needs and lifestyles. We have a lot to learn, a lot to experiment with, to make that happen. I suggest that Web 2.0 applications are a great way to accomplish retention in ways that are welcomed by our customers.
Sphere: Related Content

Conversion--How the Internet Has Changed It

Read Part 1 here.
Read Part 2 here.

There’s a simple answer to the question. Pre Internet, only B2B marketers and B2C marketers who sold multi-step products (think automobiles and life insurance, for example) had to engage in conversion marketing. Mass marketers acquired customers and perhaps they had retention programs, but most, especially consumer packaged goods marketers, didn’t have to do conversion marketing. How could they? They didn’t know who potential customers were, what they were interested in, and how to reach them. The web has changed that, dramatically and forever.

The direct marketing conversion process is still the basis. It is stated as Acquire > Qualify > Distribute > Follow Up. In direct marketing, especially B2B, distribution is especially important. Leads could be distributed to the field sales force (high cost), to an internal sales force (moderate cost), or to non-personal, usually mail, follow up (low cost). Then there were two remaining challenges. One was to nurture leads until they were at a high readiness state and then forward them to the field sales force for closure. The other was to motivate the field sales force to follow up leads. Those issues still exist, but the larger challenge for all marketers is using the Internet, especially the website, effectively in the conversion process.

The conversion process (and the retention process also) will be more effective if acquisition has been well done. That means acquiring high-potential customers, not necessarily acquiring the most customers. Successful acquisition requires targeting, as discussed in the previous post. Unless people stumble onto your website by accident, they are coming in from advertising or some other online (or offline) content. Don’t just dump them onto a home page and hope they’ll find what they need. If you can simply drive them to a product page with no chance of confusion in what they are looking for, that’s great. Often that’s not the case, and even if it is, it risks visitors taking a look and leaving without giving you a chance to capture an email address. That is an important function of a landing page. A good landing page is also promotional and moves visitors a step further in the direction of purchase.

Once the visitor moves off the landing page onto the site, the question becomes how to move the person through the site, resulting in an eventual purchase—whether that takes one visit or many. It is very useful to study the paths visitors take through your site and to try to understand what pages are moving them closer to purchase, which pages are not, and where they are leaving only to return later, and where they are abandoning for good. Commercial metrics services provide path data. They can also help you segment both identified and anonymous visitors. Different segments are likely to follow different paths and are almost certain to convert at different rates.

To help understand segments, it is helpful to create personas. Personas can be thought of as a way to put some human flesh on your segments. They help everyone from web designers to marketers develop approaches that work for each segment. Staples redesigned its site around personas. Best Buy (item 1, item 2) has used them both in site development and in developing concept retail stores.

Whatever else you do, keep in mind that most visitors don’t purchase in a single session. Metrics guru Avinash Kaushik recommends measuring “days to purchase” and “trips to purchase.” With that data in hand you can develop a meaningful contact program. That may include offering a carefully-timed incentive to close the final sale. At that point the visitor officially becomes a customer, part of your retention program.

Think carefully about what “conversion” is in your particular situation. It is always desirable to be able to track a visitor from the first contact through to a final sale. If all the activity occurs online, that’s possible. If conversion occurs offline, it can be difficult, and you may want to establish a number of metrics mileposts on the way to final conversion.

Acquisition costs a lot of money. A well thought out conversion strategy is the first step to ensuring that money has been well spent.
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RIAs Connect Marketers and Customers

Yesterday Adobe sent me a white paper about a product called Adobe Air. It looked like widgets, and I like widgets, so I opened it and read it.

No, it isn’t widgets, it’s a development platform for rich internet applications (RIAs). As I understand the difference in simple layperson’s terms, widgets provide a single piece of functionality—check the weather from your desktop, subscribe to this blog by email or RSS (see the right column), or get NFL schedules and team results on your iPhone. The thousands of widgets available connect you to a single type of functionality at your desktop or on the go, and they’ve become very popular.

RIAs seems to be a next step in Web 2.0 functionality. First an example. I downloaded the Google Analytics application, and it’s now sitting there on my desktop. By clicking on it I can get direct access to my Google Analytics account, select any of the blogs and websites I have on the account, and look at the current stats for that site. It’s just like being on Google Analytics except that I don’t have to go to the site and sign in. Because it’s easier, I check more often. That’s the same experience I’ve had with widgets and RSS feeds. Adobe has over 40 RIAs for download at present. This shows one that connects the user directly to content from NASDAC.
Cool! So I started reading a bit more. A post on ZDNet from last year, by enterprise applications expert Dion Hinchcliffe not only does a pretty good job of explaining but also puts another spin on it. There are many potential applications of RIAs inside the enterprise. The examples in the second paragraph above are all of connecting customers with your content and functions.

There are many platforms for developing RIAs. Some appear to be special-purpose, dealing with specific platforms like the popular AJAX used by so many retailers. Microsoft’s SilverLight is another developer platform that has gotten a lot of attention in recent months. They have an excellent overview of what RIAs can do for marketers and enterprises on the SilverLight site.

The good news is that RIAs are clearly an up-and-coming way of dealing directly with your customers—and making it easy for them to deal directly with you. Think about the fact that this puts your application right in front of the customer. They don’t have to go to the net and search for the information—thereby undoubtedly encountering search results and ads from your competitors. You’ve created an environment in which it’s easier to deal with you than to include your competitors in a consideration set.

The bad news is that this is not DIY in the sense of marketers doing it themselves. This involves JAVA, AJAX and all sorts of all other languages that only developers speak. So it takes some skilled work by developers to create the apps. Once that is done, it becomes easy for the marketer to deploy and the customer to use.

That may be an emerging definition of Web 2.0.
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Customer Acquisition--How the Internet Has Changed It

As I wrote on March 4, the Internet has changed the core marketing communications processes fundamentally and forever. Marketers are still trying to come to grips with that fact and to learn how to leverage and optimize the power of the Internet in integrated marketing communications programs.

We all know what the Hierarchy of Effects looks like. We were weaned on it as marketers. Unfortunately, it’s still the mental model that many of us use. I argue that it is simply not the way marketing works today. It probably was never entirely hierarchical. Today it’s more like a maze with many ways of getting to the end goal—a trusted brand. That makes it hard to specify a process that fits all situations, much less make it one that is hierarchical. Earlier I described it as circular and I think that’s an improvement, but that still doesn’t express the complexity of the decisions marketers face.

In the mass media era we spent time and money to reach our target segment and create brand awareness. In the Internet era the more direct approach is to attract the target’s attention with relevant content. The Internet supports the acquisition process in two significant ways:

•Marketers can target an audience for acquisition with little of the wasted reach of mass media. Targeting by display advertising on carefully-selected web vehicles (sites, blogs, social networks) is similar to mass media and we know that it accomplishes brand development as well as generating action. PPC advertising based on contextual keywords targets to an individual’s current behavior. Behavioral advertising, based on actions already taken by anonymous visitors, offers more precise targeting and is consequently growing in favor with marketers.

•Marketers can incite to action, which usually requires driving people to their website. They must carefully consider the actions they want target customers to take on the website, how they will encourage them to take desired action, and the experience visitors will have while they are there and afterward—in the fulfillment and service process. They must also make decisions about how to measure success and how to capture data from newly-acquired targets.

The set of possible actions represents basic objectives that marketers may choose for their campaigns. They include, not in any order of priority:

•Drive first-time visitors to a retail location to make a purchase.
oThat may be as simple as offering store location information, often with maps and other ancillary information. It can include sales promotions like coupons.

•Encourage an immediate purchase on the site. This can rely on compelling content—from product descriptions to customer reviews—and a well-designed and maintained site that leads visitors through a planned, step-by-step process.
•Provide incentives to make an immediate purchase on the site.
oThe incentives can be part of the advertising—a free shipping offer, for example. They can be presented on a landing page as part of a formal conversion process. They can be presented on the site—an offer to “buy two and get a third for half price” shown, at a minimum, on the home/main product page and on the order page.

•Invite visitors to register by offering relevant content:
oAdditional product information—brochures or demos
oSite functionality—build your own product
oA newsletter or alerts with offers of interest
oCoupon downloads
oParticipate in brand community activities

•Encourage visitors to stay on the site longer
oContent like videos
oActivities like games and contests

•Give visitors a reason to return
oCompelling content, excellent experience, ongoing events

These generic objective types have an element that is familiar to B2B marketers but less so to most consumer packaged goods marketers. They imply a multi-step process, except in the minority of cases in which the first-time visitor makes an immediate purchase. If not, the visitor must be enticed to return. Successful retailers have been good at doing that; producers of mass-marketed products (and some services, insurance sold through agents, for example) have not.

The multitude of possible actions and the fact that not all culminate in an immediate sale pose two additional questions. First, how do we measure success? It is not enough to simply attract visitors to the website. We have to get them to make a purchase. Even though that may take several visits, the process is relatively easy to track on the web. Once it leaves the web for a retailer or a dealer, it becomes much more difficult

Second—and necessary for developing the correct metrics—is what is our working definition of acquisition? Is it merely getting an anonymous visitor to the site? Probably not; that’s the click-through dispute. Is it capturing an email address so you can begin to develop a dialog? If you are marketing a genuinely multi-step product—cars or real estate, for example—registration may be an acceptable definition of acquisition. In those two cases, conversion occurs off the site, so that argues for a more limited definition of acquisition. You may hold out for an initial sale as the only acceptable measure of acquisition. That depends on many things including the product itself and your ability to track through to the sale.

Acquisition is a complex task. The Internet hasn’t really made it simpler. It has, however, made it possible to target--even at the acquisition stage. It has made it possible to measure, not only success in ROI terms, but the path of getting there. Finally, it allows marketers to plan campaigns based on data, both consumer behavior data and programs results data.

The change in approach to acquisition is not an option. Marketers cannot afford to ignore the potential of interactive marketing in their total mix, both for reasons of cost efficiency and because consumers are demanding the relationships.

The changes in acquisition lead to a greater role for conversion. More about that in a forthcoming post.
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