Image is copyright of Buy Nothing Day UK

“Lock up your wallets and purses, cut up your credit cards and dump the love of your life – shopping. ”

“Saturday November 26th is Buy Nothing Day. It’s a day where you challenge yourself, your family and friends to switch off from shopping and tune into life.”

So says the blurb on the Buy Nothing Day website.  You can see where they are coming from.  Most of us would agree that there is more to life than shopping and so why not devote a day to the appreciation of a simpler, non-consumerist existence?

I’m all for devoting time to friends, family & fresh air, but the notion that it’s wrong to buy stuff is plain crass.  Especially now.  It oversimplifies a message to the point that it’s counter-productive. It hijacks an opportunity to say something useful and says something destructive instead.

How many thousands of struggling small businesses, the lifeblood of our economy and the green shoots of its recovery, rely on consumer purchases to sustain them and provide for the people that work in them? They need all the help they can get – many relying on the next few weeks of seasonal shopping to carry them through another year.

Examining the environmental and ethical impact of consumerism is a worthy agenda – but let’s keep it real.  Buy local – YES!  Buy quality – YES!  Buy from small businesses – YES!  Support ethical businesses – YES!  But please don’t think that buy buying NOTHING you will achieve ANYTHING very much at all.

There are plenty of online retailers out there, worrying whether they’ll still be here this time next year.

At this time of year, with the next few weeks due to deliver a significant proportion of annual turnover, the pressure is never greater to squeeze that extra pound out of your customers.  Merchants up and down the country are burning the midnight oil to fine tune the promotional plan in the hope that Christmas profits will sustain their business through another year.

But how many merchants find themselves accidentally training their customers to expect a juicy offer before they’ll place an order?  How many are struggling for ways to avoid having to settle for reduced-margin sales.  For many, it can feel like the dreaded discount death spiral.

Even at this late hour, there are dials you can tweak to avoid giving away your Christmas profits in the way of reduced margins.  Turning down the discounts dial is just one thing you can do.  There are dials you can turn up too – even now, when it really matters – dials that can result in more profits (more cash!) without increasing your planned order volumes.

I’m a bit of an evangelist for niche retailers adopting a discount-free marketing strategy.  And so is my colleague, Patrick Pitman, in Austin, TX.  He’s just put together a four week crash course that’ll give you creative, constructive guidance on what to do instead of pitching endless discount codes to your customers.

I recommend you check it out at Zero Percent Off!  The course consists of a series of 20 minute audio lessons with worksheets.  It’s priced at US$197 but you can actually pay what you like.  How’s that for an offer

Don’t miss out on the biggest online shopping days of the year.

Christmas is a huge milestone in the calendar of a catalogue retailer.  After months of military-style planning, your promotional campaigns are in full swing and your well-oiled fulfilment operation purrs effortlessly as it shifts into a higher gear.  Not long to go now!

As you ride the festive wave and count down the days to the holiday, you’d be forgiven for looking forward to spending some time out of the office and forgetting about business for a few days.  But will your business keep on working for you over the Christmas shut-down, even if your staff are at home enjoying their mince pies?

The fact is, you can’t afford to neglect the busiest online shopping days in the entire year.  In 2009, like the year before, Boxing Day was the busiest day for online shopping.  The next day, the 27th, was the second busiest day.  Online sales on Christmas Eve and Christmas Day were up 36% on the previous year.  Although YOU might be ready for a break, your customer has different ideas!  They have gift money and vouchers to spend, and new gadgets to shop with.  And more than anything – they’re hungry for some bargains.

Last year, John Lewis began its online clearance at 6pm on Christmas Eve and reported an increase of 23 per cent in sales for the first three days of its online sale, compared to the same period last year.  On Christmas Day, their website took an order every ten seconds on average – the peak shopping hours being between 9pm and 10pm.

Have you planned to take advantage of this opportunity?  If you’re looking no further than the Christmas postage deadlines, there’s a good chance you’ll miss out.  Here’s a checklist of actions you should be thinking about now.

1. Have your site update ready to roll out on Christmas Eve.
Time to clear away the tinsel on the header, ditch the last posting dates, and re-organise your featured categories and products.  Your customers are ready to change gear, and it’s your job to make the site relevant to their changed requirements.

2. Set expectations for customer service.
Your customer service team is likely to be depleted or absent altogether over the holiday period.  Make sure your customers know when to expect their purchases, and when they can expect to get an answer to their queries.

3. Make sure all your gift voucher recipients can redeem their vouchers online
There’s nothing worse than having a gift voucher and not being able to spend it online.  It’s a bugbear of mine – and surprisingly common.  If your system can’t handle it, it’s time you did something about it.

4. Use your social media channels to build the hype.
Build a dialogue of engagement with your followers and use it to remind them about you during the holiday period.  Use scheduling functionality to maintain the dialogue, even when you’re at home enjoying your Christmas lunch.

5. Launch your sale.
There’s no better time to create some empty space on the shelves and turn those slow-moving lines into cash.  If you run just one clearance sale a year, make sure you launch it over the Christmas holiday rather than waiting until January.

6. Land an email in your customer’s inbox on Christmas Day.
Come on, you’d be mad not to.  Whether it’s Christmas Day or Boxing Day, let your customers know you are open for business!  If you don’t, someone else certainly will.

There’s no doubt that the web continues to evolve into an increasingly visual medium. Consumers like pictures, and they like video even more. So – as the technology continues to evolve at warp speed – maybe now’s the time for small business to sit up and pay attention?

Video has the power to showcase products and build brand awareness in a unique and compelling way. By engaging, educating and entertaining visitors, the niche retailer has the opportunity to connect with their customer in a way that cultivates loyalty and encourages ‘social dissemination’ of the brand. It’s no surprise to learn that video is the most ‘shared’ content type on the web.

“Isn’t that all a bit fluffy?” I hear the cynics cry. Well, maybe – but it’s only the start. Consider the importance that Google now attributes to video and you’ve got an altogether more measurable incentive to rethink your strategy.

Since the roll-out of the Google “Caffeine” upgrade earlier this year, the Search Engine Results Pages (SERPS) are increasingly dominated by real-time and video results – part of Google’s mission to deliver fresher, richer results. Video in particular, seems to get preferential treatment (unsurprising, given that Google owns YouTube). Not only do video results now capture some of the prime real estate in the list of organic results, but the new left nav column provides advanced search options on video results that reflect their enhanced status.

Video for ecommerce

As well as generating qualified traffic for your website (more on video SEO below), you can employ video effectively to increase conversion in the following ways:

1. Product demonstrations. The next best thing to seeing the product in “real life”, a video gives a visitor the opportunity to see its features in action, and provide some human scale. It’s an opportunity to assert your ‘authority’ as an expert and build consumer confidence.

2. Brand building. No matter how carefully you’ve crafted the copy on your About Us page to skillfully convey the uniqueness of your product or service, and your company values, relatively few people will read it. By providing supplemental video you can engage those unwilling to read the blurb, and do it in a way that makes it easy for them to share it with their friends.

3. Customer service. Whether it’s to provide answers to frequently asked questions, share customer testimonials, provide instructions, or simply put a human face to your operation – customer service video can help break down resistance and smooth the visitor’s path to purchase.

What makes a good video?

OK, so it all sounds quite good in principle and you’ve probably got some ideas on what to do. Here’s the conventional wisdom on what makes a good video for an ecommerce site:

1. Keep it short. The first 15 seconds are critical – so save your best for first. Three or four minutes is a good length as a rule, but note how Google enables you to search for videos of different length. No doubt there’s a trade-off opportunity in terms of competition and ranking.
2. Make it relevant. Treat your customers (and Google) with respect. Unless your video can educate, engage or entertain – you’re probably best thinking of a better idea.
3. Make it SEO smart. Like the rest of your content, you need to optimise it for organic search. I explain this in more detail below.
4. Shoot it in HD. It’s just a hunch, but I think HD will rank probably rank better than not. Google presents you with the option to filter out HD videos, and I think that’s a pretty good indication of its preference.

What makes a video good enough?

This is perhaps the biggest psychological barrier that small businesses face when considering video. Does my video need to be professionally produced, or is it something we can do inexpensively in-house? Do my customers expect slick production standards, or is ‘basic’ acceptable?

With a Flip camera or iPhone 4 you can quickly and easily capture decent HD video. All the software you need to add the bells and whistles is readily and cheaply available to download. If you do any of your own product photography, you probably already have most of what you need, and someone who understands how to do it. That’s one end of the scale.

Although no-one wants to damage their brand with unprofessional content, ask yourself what’s good enough for the purpose you’re seeking to fulfil. We live in the YouTube age where consumers accept clips with a wide variety of production standards – ranging from zero to Hollywood. With a steady camera, decent lighting, and a reasonable quality voiceover – you can, for example, produce a perfectly respectable product video. When you need something more professional, you may be pleasantly surprised with the cost that you can negotiate with a specialist.

The SEO factor

Optimising your video for SEO is really no different to optimising any of your other content. Here’s a checklist for making sure your video appears in Google’s blended search results:

1. Start with your keywords. Before you even start making your video, choose two or three keywords maximum on which to base your content. Make sure you use these keywords in the video title, tags, description and any back-links you create to the video.
2. Lead with the product. If it’s a product video, make sure the first few frames feature a shot of your product, as YouTube will use this as a static image for your video.
3. Post on YouTube. Google owns YouTube, so you can bet that it’s well indexed. Create your own YouTube channel and include links back to your site in the description for each video (use a URL shortener). Organise your content, customise your channel, work your tags, and manage your comments in a pro-active way.
4. Add a transcript and subtitles. It’s definitely worth getting to grips with the new closed caption feature in YouTube, given that subtitles and transcripts are translated into other languages – and indexed in all of them.
5. Create inbound links to your video. As with other content, it’ll rank better when other sites are linking to it – especially if those links include the relevant keywords. Start by linking from your blog, your Facebook page and your Twitter feed. Book-marking your video with social book-marking sites like Digg, Stumble and Delicious will help others find your video and create their own links to it.
6. Participate and promote. Engage the YouTube community by using the Like, Comment, and Favourite features on other people’s videos. Promote your own videos across your other channels, even your catalogue, your delivery notes, your customer service emails.
7. Analyse. Start with YouTube’s built-in Insight reports – especially the “Discovery” data that tells you how viewers found your video. Then use Google analytics to generate more sophisticated reporting on the performance of your YouTube channel, and the conversion rate of the visitors it sends to your ecommerce site.

Ready to have a go?

An increase in qualified traffic and conversion rates is a powerful incentive – so how do you get started?

Perhaps you already have a social media champion or other marketing staffer who can drive a test project forward. Why not take advantage of a forthcoming photo shoot, a trip to a supplier, or a gathering of customers? The team members in a small business invariably have a rich resource of material and ideas between them. Your suppliers may even already have video content that could be repurposed.

So why not take your top ten keywords from your latest keyword research and brainstorm video ideas based on those words alone. Choose one, make it happen, and start measuring. As they say in the movies, the rest will be history.

Case study: Teaching a close shave drives qualified traffic

Robert Johnston, owner of my local barbershop and shaving emporium The Gentleman’s Shop, decided to make a short video called “How to get a great shave every morning”. It’s six minutes long and cost £1,000 (and a free shaving set) to have it professionally produced.

Since posting it in September last year, it’s been viewed over 26,000 times. Over 75% of those views are from people who found the video through the YouTube – in other words, people who’ve probably never heard of the Gentleman’s Shop. That’s a lot of qualified traffic – qualified by the store’s most important keywords – that is getting delivered to the site. And the video will continue to deliver traffic for weeks, months, and quite probably years to come as people continue to discover, discuss and share it.

Article licensed for publication with Creative Commons “Attribution” terms.

First published in Catalogue & e-Business Magazine, September 2010

The theory goes that direct commerce is a cash-generative business. Our customers generally pay up front, and we in turn negotiate credit terms with our suppliers. So why is cash flow and funding so often cited by niche merchants as the factor that most inhibits their growth?

No prizes for providing the answers. Most businesses start life underfunded. Things very often take longer than anticipated. Not
everything works to plan (some mistakes being more costly than others).  We need more and better people. Ultimately, having tasted some success, we become impatient for growth and need to invest so that the momentum can be maintained.

For these reasons and others, it’s not unusual for direct commerce businesses to need an injection of cash. Take care! Raising finance for your business should not be undertaken lightly. At best, securing funding is a time-consuming diversion from the core business. At worst, it can be a stressful, expensive, and often needless denouement for a promising brand. You could end up diluting your ownership and increasing your personal liability.

If you’re investing in premises or equipment, consider the leasing options. If you’re facing a short-term cash-flow blip, think creatively and work through the usual list of cash-saving and cash-generating measures. If you’re certain an injection of finance is what the business needs, steel yourself for the task ahead, and don’t delay with getting started.

Preparation

The financing paradigm works like this: The more desperate you are to raise cash, the harder it is and the longer it will take. Don’t leave it too late, or you’re at risk of gravely compromising your negotiating position and reducing your options. Figure out your strategy and have a plan in place before you need it. You’ll be grateful later on.

Often businesses struggle to raise funds in times of distress purely because they’re so busy fire-fighting the symptoms of their funding problems that they can’t spare the time to start planning their way out. Never has it been more important to have a firm grip. If you’re on top of your business planning, can point to a recent set of key performance indicators, and are up to date with your financial reporting, you’re more than halfway there.

Develop a good pitch—two sides of A4 or approxima tely 10 slides. Avoid too much detail, but don’t leave out the key information (how much money you need, why you need it, and what you’ll give in return). Don’t write it as a speech; make it an outline that you can talk around and expand on.

Separately, have ready a good written business plan including your financials. You’ll need a standard nondisclosure agreement if you’re going to be sharing it with someone with whom you don’t already have a confidentiality understanding.  Think of potential investors as customers: They’ll certainly exhibit similar behavioural traits as part of their decision-making, and you need to accommodate them all. In the same way that your prospects make an instant decision on whether to engage further with your brand based on the look and feel of your catalogue or website, potential investors will quickly form an initial decision based on what they think of you as much as your business.  You can’t beat having the facts and figures at your fingertips to support
any questions you may have to respond to, but at the end of the day, it’s the sizzle that sells the steak in your business. You’ll need to demonstrate passion, belief, and management capabilities as well as a firm grasp of details.

Your options

The amount of funding you’re seeking will, to a certain degree, dictate the most appropriate source. For smaller amounts (perhaps up to £50,000), your bank will probably be your first port of call. An extended overdraft facility secured against the assets of the business is likely to be your best outcome. In today’s climate, however, the bank is likely to take the opportunity to secure any liability with a personal guarantee or a charge over your house—not something to rush in to without proper consideration. Many entrepreneurs are willing to go there, but all breathe a huge sigh of relief when they are finally released from such a guarantee.

The government’s Enterprise Finance Guarantee is designed to encourage banks to provide small and midsize businesses with funding of up to £1 million. The anecdotal evidence is that lenders will still seek personal guarantees (although they are not permitted to take a charge over a principal private residence) and are fairly picky when it comes to businesses with few assets on their balance sheet other than stock. Talk to your bank or consult the Business Link website for a list of participating lenders.

Most venture capital companies are uninterested in making investments of less than £1 million and anyway usually require a level of professional due diligence and legal work that would knock it into touch as an option for most smaller businesses.

Friends and family can fill a gap at the lower end of the spectrum with either a loan or an equity investment. Mixing personal affairs with business can sometimes be difficult, particularly if a dispassionate outlook is required. Each party needs to know what he’s letting himself in for, and some expense on an appropriate agreement is certainly worthwhile.

An angel at the table

Finally, and usually most appealing for small businesses, are independent investors, more commonly known as business angels. Such individuals can make ideal partners. To start, a quick deal is often possible, minimising the disruption to your business. They will usually have solid general business acumen and broad experience, providing you with a useful and interested sounding board. Occasionally, if you’re lucky, they will have direct relevant expertise of your product or your business model and will be enthusiastic about contributing some of their time at a strategic level on a regular basis—something that can be incredibly valuable to your business. As a stakeholder in your business, an angel will be highly motivated to safeguard his investment and deliver a significant return. This can often mean that he will assist you with securing additional funding further down the road.

To improve the odds of partnering with the right angel, you need to do some homework. How do you define the ideal investor? Do you want a back-seat investor or an active one? Is his network important to you?  Are there particular areas where your angel investor could usefully focus? Are you ready and willing to listen and learn from the investor? When you meet potential angels, take the opportunity to interview them and to make sure they really do understand the dynamics of your business model.

Angel investors do not usually want control of your business, but they’ll expect a significant equity stake, usually between 20 percent and 40 percent, to provide them with the upside they are looking for.  They tend to be highly motivated to participate to some degree. They won’t want to run your business (that’s your job), but they will expect certain management controls to be put in place. It’s definitely worth dealing with these principles early on, to avoid surprises or misunderstandings later. Make sure that they are incorporated into your shareholder agreement.

Many entrepreneurs baulk at the prospect of angel financing because of the implications for their own shareholding. If your balance sheet is weak, it can be hard to justify a bullish valuation of your business, even though you believe in its potential. The outcome can be an unpalatable offer in terms of the equity you need to hand over for the investor’s cash. This is a good time to start thinking creatively.  Some equity will strengthen your balance sheet, but so long as your investor feels he is being offered enough of an upside, consider a hybrid deal that includes some loan stock. Very often the prospect of extracting a proportion of his investment at an early stage is an attractive way of reducing his risk. It leaves more equity for the business owner, some of which could be offered as options to incentivise key staff.

Raising finance can be a tough exercise, and you’ll need to wear your thick skin. But finding the right sort of partner can be a tremendously revitalising experience for you and your business. Many of the most successful brands in the sector today have been through the process several times. It’s part of running a business, and the ambitious entrepreneur will treat it as an opportunity rather than a chore.

Red flags to an angel investor

Seven signals to avoid when pitching to a potential investor:

• The creditor black hole. Don’t imply that you’re raising funds to pay
  off creditors—focus instead on how the cash will add value or unlock
  potential.
• Silly salaries. Never mind what you think you’re
  worth; investors want to see you sharing the pain, investing some
  sweat. None will begrudge you an attractive bonus linked to
  performance, however.
• Wobbly morale. Your team can easily and
  unwittingly betray any cracks in morale. Work hard to unify your staff
  and bolster morale before introducing 
an investor.
• A flawless business. Your proposition becomes less plausible if it fails
  to acknowledge any weaknesses. After all, a canny investor will treat
  them as opportunities.
• Unrealistic valuation. Of course you want to hang on to equity, but don’t let that drive an overoptimistic valuation of your (cash-strapped) business.
• Risk blindness.Risk-free businesses are fantasies. Make sure you demonstrate awareness of the risks your company faces with some basic sensitivity analysis.
• Arrogance.You may think you know everything there is to know about
  your business, but afford potential investors some credit. There may be
  plenty you can learn from them, even if you don’t make a deal.

Resources for finding potential angels

• Angel Investment Network
• Angels Den
• British Business Angel Network
• Business Link
• Cmypitch

Article licensed for publication with Creative Commons “Attribution” terms.

First published in Catalogue & e-Business Magazine, January 2010

Art by Bubbo-Tubbo

How a retailer of adventure luggage attracts high-converting traffic with search-friendly content (and has a lot of fun in the process)

When I met him in June at the Internet Retailer conference in Boston, he’d just spent a week on a 500-mile off-road expedition putting a brand new Land Rover LR3 through its paces in Colorado, courtesy of Land Rover Lifestyle magazine.  By the time you read this, he’ll have just arrived back from a three-week expedition to a remote corner of Namibia.  All this, while running a successful and growing retail brand back home in Montana.  How does he get away with it?  Well, put simply, Jim’s business is Adventure.Like his father before him, Jim Markell was a parachute rigger in the marines.  Day in, day out, paratroopers quite literally put their lives in his hands every time they jumped out of a plane.   Today, he applies the same perfectionist’s appreciation of quality materials and attention to detail to manufacturing and retailing the Red Oxx range of premium adventure luggage.  Needless to say, every piece has an unconditional lifetime guarantee.

Building a content-rich landscape

I was already a fan of his product range thanks to an introduction from a colleague in the US, but now I’m an admirer of his marketing strategy too.  Why? Because Red Oxx uses content not only as the cornerstone of a successful, long-term, sustainable search strategy, but it positions this content at the heart of a wider marketing strategy in a manner that leverages its effectiveness exponentially. More on this “holistic” approach later, but first a summary of the tactic.

Over several years, Red Oxx has been publishing informative articles of around 800 words, framed around particular keyword phrases developed using tools such as Wordtracker or Keyword Discovery.  Importantly, the focus is deliberately on longer keyword phrases of three or four words, thus avoiding the most popular and competitive phrases.  They’ve found that the fourth word in a keyword phrase can add the extra degree of specificity that results in significantly higher click-through and conversion rates.

For example, when the airlines changed the rules for carry-on luggage post 9/11, there was a surge of interest in the subject from travellers worldwide.  It was also a subject of particular interest to Red Oxx, who make a range of bags based around these regulations.  Keywords phrases were researched and informational content was crafted, generating a surge of traffic to the site and a very short payback on the effort employed.  So successful was this particular campaign that it still generates top 10 organic rankings for certain keyword phrases and a steady stream of high-converting traffic more than six years later.

Swimming with sharks as a marketing strategy?

Where the example above was a somewhat opportunistic tactic straight out of the guerilla-marketing handbook, the next example epitomizes a slow burn and sustainable content strategy that has become the mainstay of the Red Oxx approach to generating qualified traffic from search.    It’s based simply on understanding their customers – what sort of people they are, and perhaps more importantly, what sort of people would they like to be.  By tapping into these aspirations with content that allows the merchant to interweave their brand and product, there is an opportunity to create the content-rich landscape that the search engine robots really appreciate.
Take swimming with sharks.  Hammerhead sharks to be specific – on Cocos Island, 300 miles off the Pacific coast of Costa Rica.  Yes, it really exists (I spent five eventful days there once, but that’s another story), and it’s one of the world’s top Scuba destinations where you’re guaranteed to see more varieties of shark in greater quantities than you might previously have thought advisable or even possible.

So Jim and his cousin Shawn took a trip there a couple of years ago with a company specializing in live-aboard diving trips.  They came home with some nice pictures, a bit of video, and enough words to create a series of four 800 word articles for the Adventure Journals section of the Red Oxx website.  Of course, no detail is spared when it comes to describing the choice of kit bags to take along for the ride – but the content is nevertheless compelling: detailed, well written, keyword rich, and supported by some visually appealing pictures and video.

The articles were all written in-house, and then optimized for search by an agency at a cost of around £250 each.  The cost of adding the supporting video content was probably less than £1,000.  The articles rank more highly than the website of the dive company that took them there.  Even with the cost of the trip factored in, it paid for itself within a year and, two years on, continues to pull in a steady stream of traffic with those high-ranking four word phrases (try “costa rica cocos sharks” and you’ll no longer be surprised to see a retailer of adventure luggage at number 3 on the first page).  The expectation is that it will continue for many years to send qualified prospects to the Red Oxx website at no additional cost – but this is not the only benefit.

Realising the holistic benefits

As I hinted earlier, the real benefits start to kick-in when your content becomes part of a wider strategy for your website. Dovetail with your email marketing in a way that reinforces your brand and supports your merchandise offering.  Allow your content to intertwine with your product pages and vice versa.  Your overall site search visibility will improve as people link to your content or click through from search results pages.

For Red Oxx, this strategy has delivered consistent and profitable double-digit organic growth.  It does no paid search.   It never sacrifices margin by discounting products in order to generate sales.  It no longer needs to tour the circuit of specialist consumer exhibitions (although they still do, mainly to gather ideas for fresh content).  Customers themselves generate a significant amount of content in the form of product reviews and travel diaries.  Jim even boasts of impatient email subscribers demanding to know when the next bulletin is being broadcast so they can read up on the latest Adventure Journals!

Of course, where merchants selling commodity products may struggle to achieve similar success, Red Oxx is a brand that is made for this strategy.  They make a unique range of products with a great story, and sell them to a booming market niche made up of voraciously inquisitive customers with money to spend. Notwithstanding the caveats, the Red Oxx story provides food for thought for any small online business, not least being this: if your brand is your passion, creating lots of keyword rich content can be not only fun, but perhaps the best long term investment you can make in your website.

Take-away points

• If your brand has a good story – tell it
• Write for the person you customer would like to be
• Research the long keyword phrases that will provide the sweet spot
• Create a content-rich landscape to boost overall site visibility
• Think holistically about your content

Article licensed for publication with Creative Commons “Attribution” terms.

First published in Catalogue & e-Business, September 2009

Measure email ‘success’ with care or risk squandering your list

When a merchant struggles to meet it’s sales plan, resisting the ‘send’ button on another email broadcast can be devilishly hard to do. Relatively fast and cheap compared to catalogues, where’s the harm with frequent email offers? Let’s explore the answer with one merchant’s true story from December that should give you cause for reflection.  Watching the sales roll in, they overlooked costly consequences.

But before I begin the case study, let’s jump ahead to the key learning points:

1. Be careful what you measure when evaluating your email marketing programme. If you only measure aggregate sales driven by email to determine effectiveness, the ‘send’ button can be a tempting but fickle friend. Pressure to achieve sales targets or maximize a seasonal opportunity drives up the frequency of email offers. But remember: an “It’s working, keep sending!” mentality has consequences that must also be measured.

2. Measure email results with an eye towards maximizing the lifetime (i.e., long-term) value of each address. That presupposes that you’ll have a *relationship* via email, which in turn assumes you’ll even be able to get your emails delivered to that person in the future. If you’re not regularly measuring deliverability and assessing receptivity (both explained below), with a similar kind of attention that you give to measuring sales, then watch out for a painful surprise.

Now back to the case study:

A multi-channel retailer with a bit over £1M in website sales conceived of a ‘deal of the day’ promotion to be delivered via email in the run up to Christmas. Their list consisted of customers or opt-in subscribers who had historically received 1 to 2 email offers per month. As usual, those email addresses received two offers at the start of the month. Then over the next 22 days, an additional 12 email offers arrived.

Each offer featured a product or category prominently, with a special price that expired at midnight or within the week. Each offer’s details appeared both as text (HTML) and again as a tasteful graphic, with the text version present in case the recipients’ email settings blocked images from being displayed. Subject lines conveyed urgency and opportunity. Sometimes two or three additional items received secondary placement. All in all, a professionally planned and executed campaign.

Near the top of every message appeared an invitation to opt-out of email offers with a red “click here” text link. While this always appeared at the bottom of every message, the additional placement at the top demonstrated the retailer’s concern about the potential frequency overload.

Let’s check results:

* Email was the merchant’s only ‘source’ of e-commerce traffic and sales that showed a gain over the prior year (other sources being organic search, catalogue direct referrals, etc. as measured by Google Analytics). On the way to a +30% gain over the prior December’s sales driven by email meant smiles all around the office and a continuing confidence in hitting the “send” button.

* In fact, sales from email helped the company grow year-on-year sales by 10%. Exclude the major contribution from email and sales would have contracted by nearly an equal amount.

By these measures, the email programme showed brilliance in conception and delivery during a very tough retail period. And that’s where the retailer was focussed:  on a measure of aggregate sales driven by email offers.

So let’s look closer and identify other consequences:

* Click through rates (meaning the # of human clicks on links within each email offer) declined from 7% to 5% to 3% to 1.5%.  This demonstrates a decline in interest or unwillingness to really “open” the message.  (By the way, conventional measures of “open rates” are rubbish since the advent of the message preview window. Clicks are what matter.)

* Subscriber list size declined 5% as a result of unsubscribes. People were taking up the offer at the top of the message to ‘click here’ and end the bombardment.

* The list contracted another 5% due to ‘bounces’. This can mean that ‘soft’ bounces due to full mailboxes turned into ‘hard’ or permanent bounces due to sufficient frequency of re-sends during a certain window of time.

* ISP’s noticed an increase in the rate at which recipients (the ISP’s customers) flagged the messages as spam. Combined with the higher than normal bounce rates, some ISP’s took action. One, the 4th most important ISP on the retailer’s list, temporarily blacklisted the merchant. This meant all messages were sent to junk mail and not delivered to recipients. Another ISP, Gmail, flagged the retailer with a “watch” status, meaning it was on the verge of being blacklisted, a fate from which it’s hard to recover with that particular ISP. And those are just the ISP’s the merchant knows about.

With hindsight, a seemingly successful programme may have weakened the brand’s ability to market effectively by email over the long-term. In my opinion, I would never wish to see a decline in the size of a list.  I would prioritise a focus on maintaining click-through rates that are above average.  As a result, I believe that sales growth will naturally follow.

Put yourself in your customer’s shoes.  She’s probably signed up to 10 or 20 email lists, depending on how prodigious a shopper she is.  We’re all vying for her attention, and a share in her discretional spending.  Unless she’s an ultimate fan of your brand (yes – they do exist, and you should make the most of them), surely it’s common sense that her attention span will diminish in inverse proportion to the number of messages you send her – until eventually she doesn’t even notice what they’re emailing about?  The tragedy of this scattergun strategy is that when you finally email your customer with something she genuinely is interested in, she may well have hit the delete button before she even noticed.

The risk of too frequent *broadcasts* is email list fatigue and contraction. And you won’t know what too frequent is for your customers unless you can really measure it. Moreover, you risk the reputation of your server and business, should ISP’s decide not to deliver your messages. So you’d do well to measure ‘deliverability’, too.

Since 2006, my companies have relied on an email marketing platform from E-business Coach that measures the health of my programme in these ways. See the list nearby for important questions to ask your email service provider, or to ask when evaluating a new one.

Here’s one way in which I would have handled the campaign detailed above differently.  After the 2nd in the flurry of email offers, I would have filtered the list according to the actions of the recipients themselves. Did they click on a link, giving a true measure of whether they opened the message and paid attention? If yes, send them a subsequent offer. Measure. Repeat.

This kind of email campaign becomes an exercise in “narrowcasting” as compared with universal “broadcasting” to the whole list. An email campaign sustains and strengthens a retailer when it encourages customer relationships by narrowcasting relevant offers at an “appropriate” frequency. The current retail climate is the perfect time to use such a strategy, given that there are many retailers who will find it difficult to resist the send button over the coming year, and tax our patience in the process.

What do you think? Please write in to share your assessment or suggestion for handling this retailer’s email campaign. What would you do differently given the chance?

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Can you measure these essential aspects of your email programme?

Ask your email service provider, or the next one you evaluate:

1. Can I measure the rate at which my messages are delivered to the top (50, 100, or more) ISP’s?

2. Can I test that deliverability before I send the final version of my message.  In other words, can I test deliverability without sending to my own list?

3. Can I measure click-through rates, or the number of times a link in the message was clicked?

4. Can I identify specifically which link each recipient of the message clicked?

5. Can I easily develop a follow-up recipient list tailored to those email addresses that show having clicked on a certain link?

If you’re capable of running an email campaign with those capabilities above, you’re well on your way to making email a sustainable driver of web sales, come good times or bad.

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© Murray Kenneth 2009
First published in Catalogue & e-Business
Picture by S Migol

Hard-working entrepreneur WLTM generous, sharing M or F banker for LTR – deep pockets & GSOH essential. Box 3428.

Is our dream bank manager really out there?  Someone who’ll always be there to support us when the going gets tough, encourage and nurture us, share our risks as well as our profits?

It’s a touching notion, but one that’s probably an anathema to many business managers as they struggle with their “virtual” banking relationship and an attitude to the sharing of risk that’s based on the philosophy of “me first”.  It’s no wonder that two thirds of us are apparently dissatisfied with our banks, especially given the stream of news stories featuring record profits, sub-prime jitters, and Northern Rock.  Merchant bankers, eh?  Is that just Cockney-rhyming slang?

Frivolity aside, our bank is a usually a key stakeholder in our business – and successful stakeholder relationships often pay dividends at the end of the day.  So what’s the secret?  How do we extract the best from the relationship?  How do we become more than just an account number to our bank manager, and what is there to gain from making the effort?

The benefits of a good relationship

1.    Save on costs

Benefit from low or even free rates for standard banking services such as monthly fees, transaction costs and overdraft charges.

2.    Borrow better

Enjoy preferential borrowing rates, gain access to loan products that may not be generally available, and the minimise corporate and personal security you may need to put up.

3.    Stay informed

Get the heads-up on new products and services that can help you save money or streamline your business processes.

4.    Be prepared

A manager that knows and understands your business is better prepared to act quickly for your benefit in times of opportunity or crisis.

All these benefits are real, tangible and translate directly to the bottom line.  In certain cases, they can make the difference between the success and failure of your business.

Fostering a productive relationship

In order to foster a positive relationship with our bank, the first thing we need is a bank manager.  If yours disappeared into the ether to join your Royal Mail account manager, if you never had one in the first place, or if your existing manager is not a business specialist – then now’s the time get a new one!  If your bank can’t provide you with a commercial relationship manager, you’re probably with the wrong bank.

It’s so important that we meet our bank manager in person, and meet him regularly – especially if we are intending to cultivate a long term and mutually beneficial relationship.  It may seem like a chore when there’s little to report, but consider it an investment in time – we never know when we’ll need him.  Get to know him (or her) a little bit: find out a bit about him and see what common ground you have on a personal level.  Not only does it strengthen the relationship, but it makes business that much more interesting when you’re dealing with “real” people!

Next, it’s down to business.  Make sure your manager understands your business – not necessarily every intricacy, but the basic principles of your industry, your sector, its cash-flow dynamics and its risks.  Provide a copy of your latest business plan and highlight any important changes.  Bring along some catalogues or other marketing collateral to bring the business to life.  Finally, and most importantly, provide enough in the way of basic financial reporting to satisfy your bank manager that your business has effective and efficient financial control arrangements in place and remains financially viable.  Ask for guidance on what your manager would like to see, and solicit general feedback on your plans and performance, and the ways in which the bank can assist you.

Banks don’t tend to like nasty surprises.  If the business is experiencing difficulties it’s important that you forewarn your bank manager in advance of any likely ramifications for your obligations to the bank, or the general health of your balance sheet.  Come clean by explaining the cause of the problem, and detail the plans that are in place for getting the business back on track.  As in all relationships, poor communication can often cause frustrations and exacerbate your difficulties.  Understand your bank manager’s situation and avoid putting him in a difficult situation.

Many of us place great value on the longevity of a business relationship, particularly in a constantly changing commercial environment that seems designed to encourage anything but.  It’s certainly possible to build a good rapport with your bank manager in a short space of time, but add in some longevity and you will establish a powerful relationship that may prove invaluable to the success of your business.

It may not last forever!

As your business evolves, don’t forget to keep on top of the relationship.  Periodically review the products and services you use, and in particular keep an eye on their terms and conditions – it’s quite possible that they will need some adapting as you grow.

It’s often the case that as circumstances change, compelling reasons may arise for changing your banking arrangements – however good your relationship may be with your bank manager.  In such situations, remember to make a proper evaluation of the whole package of products and services on offer.  Will the service justify the cost?  Will you have access to the most suitable and best value funding?  Will you have a bank manager who is able and has the time to understand your business?  Will you be providing a fair level of security on your borrowing?

Of course, it’s always possible to mix and match your banking products and services from more than one provider – but there will be a trade off in terms of your value to each provider and the lack of single point of contact.

In this age of the internet, it’s as easy to make a superficial comparison of banking products and charges as it is to, well…, as it is to scan the Lonely Hearts ads.  Make sure that someone in your financial team is shopping around for the best deals so that you have the ammunition to capitalise on the strength of your relationship with the bank manager and squeeze out the very best deals possible from your existing bank without having to up sticks and leave.

Banking comparison websites
Compare charges and offers at the British Bankers Association website:
Or the Simply Business website.

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Managing your bank manager – takeaway tips
•    Understand the benefits of a good relationship – it could make or break your business
•    Put the effort in – meet regularly, share information, get to know him
•    Keep on top – know what it costs, understand your options, use the strength of your relationship to put profit on the bottom line

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© Murray Kenneth 2009
First published in Catalogue & e-Business