Terry Jukes - President of B2B Direct Marketing Intelligence, LLC

Catalogs Go Back to the Future

I'm a longtime cataloger marketer, and I'm intrigued at how the new generation of e-commerce marketers are beginning to sound more and more like circulation managers. I took part in a meeting the other day where performance variables of a particular company’s Web site were discussed. The question on the table: How do we get more out of the Web site? Here's a recap of what was discussed. (Note the similarities to catalog mailing.)

* On increasing site traffic (i.e., circ), a question was posed: How could more qualified visitors be attracted to the site through an optimal combination of organic — driven by site keywords/phrases, site links, optimal navigation, among others — and paid search?

* Then the focus shifted to response rates and conversions. What could be done to get more visitors to place orders from those site pages? Banner ads, promotional offers, cross-sells and upsells were all discussed.

* A discussion ensued about average order value and how it could be improved by driving more units and line items per order.

* Up next was customer retention. Once you have that first order, how do you keep customers coming back to your site for future purchases? Welcome e-mails, parcel inserts and ways of recognizing returning customers were all discussed.

* And lastly came the discussion about how various media — catalogs, print advertising, sales forces, e-mails, Web sites, etc. — could be used together so “1+1=3.”

If you leave out the fact that we were talking about the Web, this was exactly the type of conversation that could've taken place 20 years ago. The point is that the discipline of direct marketing has remained the same for many years. Yes, the medium has changed and the balance of the marketing mix has changed, but the disciplines of circ, response, orders, average order value, customer retention, housefiles and others are still very much the basics of the business.

Truth be told, I was glad to see it. I was also glad to see that in these difficult times, there's at least one smart company that knows that by managing the basics excruciatingly carefully, it'll survive this recession and be in better shape to prosper in the future.

Terence Jukes is president of Ability Commerce, a 140-person firm that designs, builds and runs e-commerce and related marketing programs for catalog companies. He can be reached at terryj@abilitycommerce.com.

RFMPCP ... What?

I recently met with an experienced B-to-B direct marketer to talk about what his company is doing to “get more with less.” It's a common theme these days. We discussed how many marketers, particularly new e-marketers, weren't paying enough attention to the basics, such as RFM segmentation and a good contact strategy. The discussion then turned to how his company had improved on the tried-and-true RFM tool. Here are some key points I took away from that discussion:

• We all know that RFM is about dividing the customer file into groups of customers based on when they last ordered (recency), how often they order (frequency) and how much they order (monetary). Developing your promotion, offer and contact frequency using these variables is often referred to as “the basics," allthough I still encounter many companies who have yet to adopt this discipline.
• The next “P” stands for product. Essentially, you segment RFM into further groups by what product categories they purchased. What you often see here is that you don’t have customers who buy all categories of your products, but rather groups of customers that buy only one category of products.
• Then in today’s multichannel-integrated world comes “C,” representing the channel your customers prefer to order in. You might try to segment them into online, offline or both to start.
• The last “P” stands for price, which, as you might expect, is an increasingly important variable in this recessionary marketplace. Here, segment your customers based on whether they buy at your full catalog price or whether they wait for promotional offers — or some combination of both.

Of course, such segmentation analysis is just the beginning. What you do next is what counts. Armed with this database intelligence, you'll then want to develop offers for each segment that appeal to its respective characteristics and buying behaviors. The goal is always to obtain another incremental percentage lift in performance.

Terence Jukes is president of Ability Commerce, a 140-person firm that designs, builds and runs e-commerce and related marketing programs for catalog companies. He can be reached at mailto:terrj@abilitycommerce.com.


Is 'Batch and Blast' Your E-Mail Strategy?

Lately I've heard a number of B-to-B catalogers complain about falling e-mail response rates and rising unsubscribe rates. It very quickly comes to light that, for the most part, they're following a “batch and blast” e-mail strategy. They form an offer and send it to their entire e-mail lists. No B-to-B cataloger I've ever met has a completely homogeneous customer file. In fact, it's quite the contrary: They all have groups of customers from different segments who want and need to be treated differently.

When thinking about a comprehensive e-mail program, you must consider several different types of e-mails. When used together, they're relevant and interesting to your customers. Here are a few examples to consider:

• Transactional e-mail advertisements. Most catalogers use transactional e-mails to confirm orders and shipments. As a secondary message, think about creating promotional space in these e-mails for products and services related to the items being purchased, or invite the customer to join a frequent buyer program.
• Abandoned cart e-mails. A gentle reminder of a shopping cart that you're saving for the customer, along with an offer to complete the transaction, can go a long way to recouping lost sales.
• E-mails for abandoned/inactive wish lists and shopping lists. If your site offers shopping lists, consider using the items on that list to create private sale e-mails, especially 24-hour sales for slow days.
• Private sale e-mails. Nothing attracts a shopper like an e-mail offer specifically designed for him or her. Areas to target include items previously purchased, items viewed, new items or clearance items. The trick is selecting relevant items based on the individual customer's profile.

Also, when developing e-mail offers, make sure your copy recognizes customers that order online vs. those who prefer to order by phone. Develop specific landing pages that make it very easy to order (i.e., as few clicks as possible) the offer being advertised.

Hopefully these ideas will get you moving away from a one-offer-fits-all strategy and toward more targeted, relevant offers that boost response rates and reduce the number of unsubscribes.

Terence Jukes is president of Ability Commerce, a 140-person firm that designs, builds and runs e-commerce and related marketing programs for catalog companies. He can be reached at TerryJ@AbilityCommerce.com.

One-to-One Marketing Is Here … and Has Been for Some Time

For years our industry has talked about true one-to-one marketing. It's the end result of all our database marketing expertise. Well, some B-to-B catalogers are still talking and not doing, making me wonder how they continue to survive.

Here are some of the better examples of one-to-one marketing I've seen recently:

• A catalog that uses variable data printing on the front cover to showcase related products to prior purchases.
• A Web site that recognizes new, returning and/or registered (i.e., signed in) visitors and presents them with custom Web pages reflecting past site visits, customer profiles and/or product purchases.
• An inbound call center that uses caller ID to match incoming calls to customer accounts in order to customize upsell and cross-sell offers.
• Customer service reps who use exception reports to alert shoppers to possible duplicate orders, duplicate payments or other potential transactional errors.
• Outbound transactional sales reps who are assigned to customer segments, demographic profiles or specific customers who understand the customer’s business enough to make appropriate product and solution recommendations.

The bottom line is that this technology has existed for some time, yet so many B-to-B catalogers continue to treat all customers in the same fashion, with little regard to profiles, shopping behaviors, past purchases or stated interests. Then those same businesses often wonder why their response rates are falling.  

So, where does your business stand when it comes to one-to-one marketing effectiveness?

Terence Jukes is president of Ability Commerce, a 140-person firm that designs, builds and runs e-commerce and related marketing programs for catalog companies. He can be reached at TerryJ@AbilityCommerce.com.

Are Your Web Sales Growing Fast Enough?

Many people I talk to continue to enjoy great success with their B-to-B Web sites, even in this terrible economy. Visitors, orders, sales and customer satisfaction are all up. In most cases, it's the "bright spot" of the business that counterbalances falling mail response rates and dramatically increasing operating costs.

The one question, however, that needs to be asked is: Are your Web sales growing fast enough? "Enough," of course, is a relative concept, but any business should make sure it's getting as much as it can from its Web channel. Ask yourself these questions to see how your company's Web site is performing:

1. What percentage of your total orders are being taken online? What percentage of those are driven by mail vs. truly generated online?

2. How many new customers are being acquired annually by the various new customer acquisition tools now being used online? How much of that is driven by offline activity vs. online activity?

3. What's the average order value trend of online-generated orders?

4. How many “pure” online customers do you have? Is that percentage growing?

5. What's the retention rate of your online customers vs. offline or multichannel customers?

6. What are you doing to benchmark and improve all these performance measurements?

In my day-to-day experience, I've noticed that there are three kinds of companies. First, there are those that know the issues, have found their solutions and are pulling way ahead of the pack. Then there are others that know what the issues are but are struggling to find their solutions. Finally, there are those companies that don't have a clue. They're usually the ones that judge their Web sites based on what they look like and not how they perform. That's akin to judging the success of your catalog based on its creative without regard to the list selection and circulation plan.

So, which group do you fit in? Are your Web sales — and new customer acquisition — growing fast enough?

Terence Jukes is president of Ability Commerce, a 140-person firm that designs, builds and runs e-commerce and related marketing programs for catalog companies. He can be reached at TerryJ@AbilityCommerce.com.

Retail's Struggles Are B-to-B Catalogers’ Gain

B-to-B catalogers always have had several advantages over retailers. They can maintain and offer wider and deeper product offerings as they're not limited to retail space. They can provide expert telephone sales and support, warranty and repair services, installation advice, and other “knowledge-based” services much better than a retailer can. Furthermore, new Web site shopping functionalities make it easy for customers to find, shop, learn, compare prices, order return and access a host of other related services much better than they could if they were standing in a store.

Now consider slumping retail sales and the impact of that on the ongoing viability of any and all retail stores. Think of the retail competitors in your market and what they might be doing to close marginal stores and cut their losses. Office Depot, Lowe's, Home Depot, CompUSA and others have announced store closings.

Also, think what will happen if this trend continues for another year or two. Consider the stores that remain and how they'll be cutting staff and services. And then there's inventory; inventory reductions impact product selection and in-stock availability. Could this benefit your B-to-B catalog company and present it with a unique opportunity?

Follow the steps below to help identify potential growth opportunities:

• Identify the retail competitors you have.
• Compile a list of all their stores and, in particular, the ones that may be closing.
• Target your catalog mailings to their trading areas. You might even communicate that “X store at Y location will be closing soon” and invite the shopper to try your offering.
• Ink-jet local messages on your catalogs. This can be a cheap and effective way to target local trading areas.
• Develop an appropriate “welcome offer.” Push your competitive advantages over retail, and give prospects a reason to try you now.
• Target your outbound telesales to businesses in the trading area of closing retail stores.
• Communicate to your customers in your catalog the advantages you hold over retail. For example, a headline like, “Is your neighborhood retail store closing? If so, we can help.” This might get your shoppers thinking about what would they do if their local sources of supply dried up.

With retail floundering, now's the time for direct marketers to stress their competitive advantages and steal market share from that channel. Good Luck!

Terence Jukes is president of Ability Commerce, a 140-person firm that designs, builds and runs e-commerce and related marketing programs for catalog companies. He can be reached at TerryJ@AbilityCommerce.com.

How to Keep Your Job … and Your Business

1. Are you using RFM analysis to refine your circulation plan on a monthly basis?

2. Are you enhancing your RFM analysis with product purchased and order channel data?

3. Does your Web site work? (This question may sound silly, but more than 70 percent of site abandonments happen because the shopper perceives the site doesn't work!) Here are some examples of areas where you site's performance may not be optimized:

Does your site return zero or error search results more than 2 percent of the time?

Do your pages take more than one second to load?

Do you ask customers to view more than six pages before completing an order for any one item?

Do you ask for payment before showing shipping and handling charges?

Does your site rank and show up on the first page of keyword search results?

Are your online sales growing by more than 10 percent?

Are you acquiring 30 percent-plus of all new customers online, for free?

4. Are your telephone customer service reps empowered to solve 90 percent-plus of all problems they're presented with on the first call?

5. Are you tracking when and in what shape your catalogs are received in-home?

6. Is your catalog's copy and photography selling or merely informing?

7. Do customers rave about you? (If not, you have work to do!)

8. Is your employee turnover, including your call center, less than 20 percent per year?

9. Do you have multiple sets of numbers around your business that can't be reconciled easily?

10. Are you driving your plans and programs — and your business — or simply reacting to daily problems?

I suggest in these troubled times that we simply turn off or tune out all the depressing news and focus on doing the right things the right way. If we simply do that, we'll survive to see a better economy and healthier businesses.

Terence Jukes is president of Ability Commerce, a 140-person firm that designs, builds and runs e-commerce and related marketing programs for catalog companies. He can be reached at TerryJ@AbilityCommerce.com.

Ask Your Vendor Partners for Help

Last week I provided several tactics your company can use to improve the performance of your inbound call-center reps. This week, I examine another key performance area in your inbound call center: how your call-center management team reacts to shifting inbound call volumes. In today’s recessionary environment and online ordering world, historical call volumes based on the number of catalogs mailed may not materialize like they used to.   

A call-center manager schedules staff based on projected call volumes, which are usually derived from mail volumes. This forecast never will be 100 percent accurate — there will be too few or too many reps at some point in time.

If there are too few reps, most companies I know have other employees who can be pressed into service at a moment's notice until additional call-center staff can be called in. When there are too many, the manager quickly must adjust by sending reps home, assigning them to other tasks, among other possibilities.   

The bottom line is that call-center managers must measure staffing volumes by their ability to adjust staffing (i.e., costs) to “flow like water” with inbound call volumes. This is all while maintaining acceptable service levels.

It's not about how they did in comparison to budget, but how they did in comparison to reality; what really happened hour by hour. Many companies’ budgets don't account for the flexibility that allows managers to make hour-by-hour adjustments in staffing.

Here are some tips to consider when planning your company's call-center needs:

• use split shifts, part-timers and seasonal reps;
• use a backup call center or virtual reps to help handle peaks in call volumes;
• review staffing and service levels against call volumes every hour;
• have training planned that can be done immediately when call volumes slow;
• use nontime-sensitive work (e.g., collection calls, mail orders, etc.) to occupy reps when call volumes drop;
• organize backup agents, possibly marketing staff, to take calls when call volumes spike unexpectedly;
• instill a spirit of flexibility so everyone “gets it" that responsiveness is key; and
• provide incentives to support that spirit of flexibility.

Terence Jukes is president of Ability Commerce, a 140-person firm that designs, builds and runs e-commerce and related marketing programs for catalog companies. He can be reached at TerryJ@AbilityCommerce.com.

Is Your E-Commerce Site Up to Snuff?

In my column last week, I discussed how catalog/multichannel merchants can reduce their dependency on the USPS in the face of ever rising postal rates and the threat of a five-day delivery week. One of my suggestions was to improve your e-commerce site.

I'm currently the president of a company that builds new e-commerce selling systems for catalog companies. One of the things we do with new or prospective clients is review their current sites and assess where there are opportunities to increase sales.

I'm always amazed at how lacking many of the sites are, and wanted to share some statistics to consider as you ponder the effectiveness of your own site.

Over a period of six months, we reviewed 56 e-commerce sites for catalog companies. Sites were scored in eight best practice areas: “indexability,” homepage best practices, organic ranking, title and meta description tags, internal site search, linking, site stickiness, and cart functionality. Here's what we learned:

• Overall, site search is poor. Only two of the 56 sites reviewed provided suggested search terms as users typed keywords into the search box. Sixty-eight percent did a poor or very poor job of addressing common synonyms, misspellings and plural/singular variations. Only 28 percent had strong zero-results pages (the page returned when no results are found). 
  

• The online shopping cart was another area that lagged behind best practices. Forty-one percent of the sites didn't have a perpetual shopping cart and emptied their shoppers’ carts as soon as they left the site. Just 36 percent offered a guest checkout option, while 64 percent required shoppers to create an account before checking out. Checkout options were limited to credit card-only on 70 percent of the reviewed sites.

• Strong search engine optimization (SEO) was lacking on many sites. Twenty-seven percent had poor or nonexistent title tags, 70 percent had poor or nonexistent meta description tags, and 39 percent either didn't use or poorly used alt attributes. Less than 45 percent of the sites had strongly optimized keywords in their top or left navigation.

• Seventy-three percent of the sites didn't offer customer product reviews or ratings. With all the recent studies emphasizing the importance of customer reviews to increasing conversions, we were surprised at how few sites offered them.

• Nearly all of the sites reviewed placed an illogical emphasis on what the site looked like and not on how it functioned. The reality is that sites today must drive SEO (acquisition), excel on user experience (conversion) and be the reason shoppers return (retention). Site mediocrity these days can be deadly.

Based on our knowledge and experience moving similar companies to more productive e-commerce systems, of the 56 sites we reviewed over the six-month period, we estimated that the average site could increase its online sales by at least 45 percent and online customer acquisition by at least 30 percent. No small prize.

Terence Jukes is president of Ability Commerce, a 140-person firm that designs, builds and runs e-commerce and related marketing programs for catalog companies. He can be reached at TerryJ@AbilityCommerce.com.

    

What Would Reduced Mail Delivery Mean to You?

Postmaster General John Potter recently asked Congress to lift the requirement that the agency deliver mail six days a week. Dropping Saturday or Tuesday delivery seems to be the option. The obvious question then becomes: How will this affect my business? The obvious answer (at least in my opinion): It’s going to happen, so prepare for it.

More importantly, everyone needs to realize the problems and challenges facing the U.S. Postal Service aren't going to get better any time soon, and it's going to continue to have a negative impact on your businesses. It's not just this one event, but rather the future course and direction of one of our largest “partners” that concerns me. Consider the following:

• The USPS lost $2.8 billion last year.
• For 2009, the projected loss is estimated to be “$6 billion or more,” according to the postmaster general.
• The postmaster general also predicts that 2009 will be the first year since 1946 that the amount of money collected by the USPS declines.
• Total mail volume in 2008 was 202 billion pieces, 9 billion less than the year before and the single largest annual drop in USPS history.
• There's a huge pension fund contribution liability outstanding … the amount and state of which seem to change with the political winds of the day. (In all likelihood, the guy or gal who delivers your mail will have a better pension than you do.)
• Postal rates are expected to increase again, this year by 4 percent to 5 percent. That's after the punitive rate increase of 2007.

I'm not an expert reader of tea leaves, but as a businessman, this isn't a “partner” I'd want. Problem is, you can’t live without the USPS. The only prudent course of action is to try and manage the negative impact on your business. Here's 11 tips to help you make the most of your relationship with the USPS:

1. Believe that your postage will continue to increase at rates well above inflation; make sure you budget for it. Also, operate under the assumption that one day a week of service will be cut — and it may be Tuesday (the worst choice for B-to-B catalogers).
2. Continue testing new mail formats that are cheaper than mailing a full-line catalog.
3. Carefully test reducing frequency to your repeat online buyers.
4. Invest in search engine optimization and pay per click to acquire new customers online. This will allow you to reduce your prospect mailings.
5. Test alternative media — whatever makes sense for your product category or market segment. Find new ways of acquiring customers.
6. Rethink industry trade shows as sources of new customers.
7. Beef up your personalized e-mail capability. E-mail needs to relieve some of your dependency on customer mailings.
8. Improve your Web site. The better it is, the more your buyers will use it, like it and come back to it, reducing their dependency on mailings.
9. Convert your smaller customers to credit card payments and your larger ones to electronic payment systems. Mailed checks are no longer an efficient form of payment.
10. Examine similar businesses around the world, particularly Europe, to see what they're doing. Postal rates in Europe are much higher than the U.S., so they've been dealing with this problem for some time. You may find some innovative ideas that might work for you.
11. Join the American Catalog Mailers Association. In numbers we have a voice and can slow the progression of postal rate increases, and lobby for relief (a bailout maybe?) from the pension fund liabilities.

Terence Jukes is president of Ability Commerce, a 140-person firm that designs, builds and runs e-commerce and related marketing programs for catalog companies. He can be reached at TerryJ@AbilityCommerce.com.