We often hear about the Four Ps of marketing – namely Product, Price, Place (also known as Distribution) and Promotion, but its People, that can make all the difference between a good marketing strategy executed brilliantly, and a great marketing strategy which flops.
A recent article by Zeynep Ton of the Harvard Business Review, titled Retailers Should Invest More in Employees, explores the connection between customer service and low cost retailers. To summarise his findings, Zeynep found that contrary to popular thinking, low cost retailers who invested in their staff (through better conditions, better pay and very importantly better training) tended to be more profitable. That’s, right, when you spend more you can make more!
Lets start with the logitics side of things. It is your employee, not the inventory management systems that can identify and fix a messy shelf. Its the employee not the Point of Sale system that can tell when the price on something doesn’t scan up correctly and fix it. Its the employees not the rostering systems that can see there are too many customers in the cashier queue and pen an additional checkout. when you fail to invest in your human resources, you fail as a business to make the transaction as efficent for your customer and your conversion rate and profitability suffers.
The other really important area that your employees affect the success of your business is in their enteractions with customers. Happy, engaged staff are much more likley to give customers a sincere smile, answer their questions in a helpful way, or go the extra mile in helping a customer who has had a bad day, or bad experience with your business. These experiences form the foundations of real customer loyalty, brand equity and most importantly the profitability of your business.
Put simply you need to start looking at your human capital as you would any other capital investment. Considering the return you can make on even small investments in this resource, it is often the most effective place to start investing.
Many online retailers do almost everything right but still fail to win big in world of ecommerce. To illustrate how difficult it can be I’d like to share with you the story of an online retailer who did almost everything right.
Bob, has spent many years (and many thousands of dollars) building up a solid eCommerce site, which is well designed, competitively priced, and ranked well in the search engines for his chosen keywords. He is receiving a large number of visitors, they come, they see and they put his products in their shopping cart. But sadly that is where it ends for most of them. For one reason or another 65.23% of them abandoned their shopping carts and left his store to buy elsewhere. The tradgedy through is not that they where doing this, but that he didn’t know that it was happening, or how to fix it.
In our experience, we have found several reasons why customers abandon shopping carts and the effectiveness of an ecommerce store in converting visitors to buyers (known as the conversion rate) suffers. The mind map below lays out our top 10 reasons why visitors abandon their carts, along with some important considerations when looking at improving your conversion rate.
The first step we recommend to all of our clients is to get their web analytics audited to ensure we can track ecommerce transactions, with a tool such as Google Analytics. This will help us to answer many of the what questions.
From there we need to start considering some of the “Why” questions, and qualitative tools such as 4Q survey can assist in getting feedback from the customer as to why they are visiting your store, and what their experience has been.
Have you ever left a shopping cart at the checkout? I’d be keen to know what caused you to do so, especially if I haven’t included it in the mind map below
I recently came across the following Periodic Table Of SEO Ranking Factors on Seach Engine Land and it appealed to the inner scientist in me. For any one else out there who enjoyed (or at least remembered) high school chemistry, take a look and let me know what you think…
AdWords Express is the simplest way to advertise on Google. Putting together an ad and setting up your campaign takes just minutes. Google take care of everything else automatically, ensuring your ad is only shown to people looking for what you have to offer in the area that you operate.
Over the past decade the Google Adwords platform has grown in sophistication and complexity. This has offered unrivalled power for experienced PPC professionals to track cost per sale, and optimise every cent of their marketing budget to deliver the maximum return on investment.
This sophistication has come at the cost of simplicity. Google Adwords is no longer something that a small business can afford to do on an ad hoc basis. It takes a considerable amount of time to learn how to harness the power of the Adwords Engine, and apply this to a campaign
Enter Adwords Express. Adwords Express removes most of the complexity and controls from a campaign so you only need to worry about
AdWords Express ads can be shown in the following places:
To determine AdWords Express ad position, Google looks at both the advertiser’s bid and the quality score of the ad
AdWords Express is designed to reach customers in your area who are looking for businesses like your clients. AdWords Express uses proximity targeting (also known as targeting a radius) to show the ad to people physically located near the business. In addition, we identify search terms to help reach customers who are searching for businesses in the area.
| AdWords Express | AdWords | |
| Keywords | Pick relevant business categories with pre-selected keywords |
Select individual keywords, match types, and negative keywords |
| Bidding | Monthly budgets and automated bidding |
Advanced budgeting and bidding functionality |
| Reach | Show ads in the local area, generally around a 25km radius |
Show ads locally, regionally, or globally |
| Ad Format | Text ads shown on desktop and mobile devices |
All ad formats available including text, display, video |
| Google Places | Places listing required | No Places listing needed |
| Website | No website required | Website required |
To answer this question you need to ask yourself the following three questions. If you can answer each with a yes, then chances are Adwords Express is a great first step for you.
[important]If you would like us to set up an Adwords Express campaign for you, we are offering a 1 hour consultation with our Google Adwords Certified Professional for a flat fee of $100. For comprehensive campaign management of Google Adwords by a Google Adwords & Analytics Certified Professional including set up of your analytics and conversion tracking, our rates start at around $500 per month. [/important]
We’re delighted to announce that in cooperation with the Shire of Capel we will be providing a free community safety workshop for the local community on the importance of Cyber Safety and Security.
When: October 13th 2011
5:00 – 6:30PM
Where: Dalyellup Community Centre
If you can’t make it to the event you can view a copy of the presentation here:
Cyber Safety & Security Presentation (Power Point 10mb)
Cyber Safety & Security Presentation (PDF 2Mb)
Cooking with Poo – Viral Marketing Campaign
In a recent announcement by Groupon, after raising almost a $1 billion in funding, CEO Andrew Mason said “we will continue on our mission to change the way people shop locally and serve the world’s local businesses”.
But is Groupon, and other group discount sites, changing the way people shop for the better or doing it at the expense of small business?
There is no doubt that the Groupon business model has been a tremendous success, you just have to look at the amount of money they’ve made and how quickly they’ve grown to realize they are on to something big.
The growth has been a result of two important factors:
But are there enough small businesses to make this model survive? In a word… yes.
When you consider that, on average, about 80% of businesses in the U.S. alone are small businesses with less than ten employees, there are a lot of potential customers to keep the likes of Groupon and other deal sites churning out the revenue for many years to come.
But the bigger question is whether or not these deal sites are really doing anyone any favours.
Part of my issue with group deal sites is not specifically the model but the hype and lack of clear understanding of the costs associated with these advertising models.
For many small tour and activity businesses, where the owner of the business does not necessarily have a business background, the seduction of acquiring hundreds of new customers without investing any upfront cash can seem too good to be true.
But, frankly, it is too good to be true and the downstream costs for a small business, once all the numbers are crunched, are perhaps not what a business owner might have expected.
You don’t have to look very far on the web to find stories of disgruntled retailers, spa owners, restaurateurs, and even photographers who have been stung by a Groupon promotion. What seems to be a common theme across all of these stories, however, is the lack of understanding of the true costs of running a group buy promotion and the impact it has on cash flow and future revenue.
Let’s take a look at the example of a sightseeing tour as way of determining the costs of running a Groupon campaign for this particular business type.
Not bad, considering Groupon doesn’t have to handle fulfilment or customer service.
Group buying sites have suggested that the money spent on acquiring new customers should be looked at as advertising and not necessarily as the cost of sales.
For a small business whose profit margin is on average 5%, an advertising campaign that costs, in this example, $27,000 and brings in 250 new customers is not sustainable when you consider that locals (the primary consumers of group deals) are less likely to re-use a tourism based product or service again.
The other dilemma facing tourism related businesses is that there is little or no opportunity for upgrading or upselling their product. In most cases, the customer is only going to spend what the value of the coupon, so the business loses out on the up-sell potential.
Think about this for a moment, at 5%, this operator would have to sell $540,000 worth of tours to cover the cost of this one “advertising” campaign. This works out to about 3,857 full paying customers to subsidize 250 deal seekers.
Sobering numbers for a small business owner who has to spend his or her days trying to provide the best possible experience for their customers and pay the bills at the same time.
Now, don’t get me wrong, group buying sites have worked well for many types of businesses, I just think that before a business, especially a small tourism business, chooses to execute a group deal, they must look beyond the hype, do their research, and crunch the numbers. There is no such thing as quick cheap cash.
By participating in a group buy promotion a business is essentially extending credit to hundreds or thousands of customers for which they are now liable, at least until the coupons expire.
In the previous example, the company is adding $8,312.50 in revenue but they are also adding $35,000 in short-term liabilities for tours not yet delivered for the life of the coupon, that would give any accountant a mild heart attack.
The other side of this equation is the consumer and the affect that group sales sites are having on the perception of value of local businesses. Consumers don’t know the individual business’ costs or how much revenue they are making from each customer.
What many consumers will do is assume that you’ve built in enough mark-up to make the deal worthwhile because why on Earth would you run a deal like that otherwise?
Over time, this has the effect of eroding the perceived value of the service being provided and the service runs the risk of becoming, GASP, a commodity. No one wants their service to become a commodity.
Patrick Lefler through CustomerThink:
“The risk here is that profitable customers become conditioned to wait for sales and discounts–reluctant to ever pay full price again.”
In a segment dominated by small businesses, the in-destination tour and activities segment is an excellent target market to advertise on group buying sites like Groupon.
Considering, however, that over 85% of these businesses don’t distribute their products through sites like Expedia and Viator because they consider 20-30% commissions to be too high, it seems ironic to me that they would be willing to jump on a model that charges an effective commission of 75%!
For a limited time we are offering businesses operating in Bunbury, Busselton, Margaret River, Donnybrook, Bridgetown and Nannup free assistance in setting up their free Google Places listing.
If you are not aware of what Google Places, take a read of our article on location based marketing services.
We have several clients who have made great progress from their Google Places listing, including one client who had been running a website for two years that hadn’t delivered a single lead. Within 48 hours of setting up his Google Places listing they received their very first enquiry from the internet.
If you would like to take us up on this offer, then please call us on 0448 488 002 to get your free Google Places listing set up today.
