March 2008 - Speaker Exchange

Industry Leaders Speak Up

By Sieglinde Friedman

For strategic direction on the appropriate content for the eRetailer Summit, in concert with the ERA Education Committee, Research Task Force and Retail Council, ERA reached out to leaders in the direct-to-consumer industry to determine the key issues that affect them and the tools and solutions they seek. The educational programming that recently took place at the eRetailer Summit reflected on the results of this outreach effort. Held March 2-4, the Summit was focused on providing insightful, practical means on how retailers/marketers can position themselves to dominate the competition. Speakers representing the top 50 e-retailer and technology companies presented progressive, content-rich materials on video advertising, blogs, customer loyalty and profiling at the conference.
For those of you who were unable to make it to Miami, here’s a dialogue with some of the speakers who participated in the e-Retailer Summit. ERA sat down with one group of panelists-who spoke on Tuesday, March 4 on the topic, “Optimizing the Customer Experience in an Online World”-to gather their thoughts regarding a wide range of solutions. The panel consisted of Ed Foy Jr., CEO of eFashionSolutions; Peter Phillips, VP product development at Fandango; Michele Gibson, director of web marketing at Cisco; and Donna Hoffman, chancellor’s chair and co-director of Sloan Center for Internet Retailing at the University of California at Riverside.

ERA: Why is it so important for the e-retailer to engage the online customer?

Ed Foy Jr: Appealing to the customer is the key to retention. Whereas multichannel retailers have the benefit of various touch points with customers, pure-play e-retailers have only one channel to use to truly gain customer loyalty. As a result, captivating the customer is critical for creating a balance between price and different types of sticky “retention” tactics. This is what helps the e-retailer stay relevant and helps build a brand that is not driven exclusively by price or discounts. Since online shoppers are easily distracted and it only takes a second to click out-it is imperative to give them a reason to stay. Furthermore, we have learned that often, online consumers go to a site looking for a particular type of product and therefore, it is more purposeful to design sites and provide content that is pertinent. Engaging customers is also critical for extending their length of time on the site, which we hope will ultimately lead to increased purchases.

Peter Phillips: It is important for many reasons, but the most critical is that engagement engenders trust. Consumers have more and more choices, but less and less time to spend engaging with those outlets. They need to feel comfortable with the brand and confident about the benefits of engaging with its site, especially if they are going to conduct a commercial transaction. Trust can be engendered in a variety of ways, and many of the Web 2.0 initiatives-such as social networking-are prime examples of tools that sites can use to create this trust.

Michele Gibson: The online customer now has tremendous power over how they research and explore making purchases. Immediate engagement is critical, as world-wide web users are increasingly impatient with finding the information they need. Providing a truly winning experience is the only way for e-retailers to distinguish themselves from the next e-retailer. Your site must address the customers’ needs on their terms.

At Cisco, our goal is to be ready to interact with prospective customers no matter where they are in the purchase cycle. The web gives us the global reach, and power to interact with customers 24/7. We are using personalization to provide a rewarding experience based on what we know of the user-combining data sources and observational information.

We have found multimedia to be particularly effective in engaging online customers. ‘Video data sheets,’ (short video segments that show the product and highlight its advantages and ability to solve business problems), have proved extremely popular. These embedded videos are typically one of the most clicked upon links on whatever page they appear. We have found that people who watch these videos go deeper into our website. They look at four or five times as many pages. They also come back to the site with higher frequency and also engage with partners with greater regularity, too.

Donna Hoffman: There are a lot of online retailers and a lot of websites out there! The competition is keen and sophisticated and there are many different kinds of content vying for the online customer’s attention. If online retailers don’t make the effort to sincerely connect to their customers with interactive dialogues, those customers are likely to move on. Online consumers want to be part of the process and consider themselves in control online. Retailers who don’t give their customers an opportunity to exercise this control are going to find themselves lost in the ether.
ERA: We realize that the customer wants to be engaged while online, but what do you suggest in terms of customer relationship-building that clearly increases loyalty and retention?

Foy: At eFashion Solutions, we know that customer retention and loyalty start with the basics: service. The operational aspect of the online retail business is a huge retention tool. Too often, retailers are so focused on advanced technology that they overlook the basics. Customer loyalty and retention is the result of exceeding expectations. Here are a few basic steps we follow: 

  1. Communicate - E-mail order confirmation immediately.

  2. Speed - Ship packages on the same day orders are placed.

  3. Surprise - Upgrade shipping for repeat buyers.

  4. Personalize - Send thank you cards via U.S. Postal vs. e-mail to loyal customers.

  5. Luxury - Send handwritten notes (from the CEO) to big spenders who have a long history.

  6. Service - Invest in your call center by training staff on fast ring response, knowledge of product line and reply to e-mails within an hour.

These tactics create an experience that customers do not necessarily expect and definitely will not forget. Once these have been mastered, then start using technologies to customize offers to different customer segments, add loyalty programs and the like.

Gibson: Building a relationship with the customer can involve providing access to information whether from people or documents in whatever way the customer feels comfortable. This variety of engagement can be accomplished by using many tools. has experimented and uses Click-to-Chat, third-party testing information and product use documents. Focusing on both pre- and post-sales activities helps build a lasting relationship with the customer.

Programs that customers can join and provide benefits or entitlements are effective in increasing loyalty. Even something as simple as a well-run newsletter program can work. We have seen that targeted programs that are not readily available to all can work even better. Developing communities can be a very effective way of building deeper relationships with your customers.

Another tactic that has worked extremely well is using click-to-chat, where customers can interact with a live representative by clicking a button. By both allowing users to self-navigate to this resource (reactive click-to-chat) as well as serving it up appropriately to targeted users (proactive click-to-chat), we have garnered some incredible conversion rates. I have seen up to 40 percent conversion to leads through this (where a typical marketing program might result in three to 10 percent conversion).

ERA: Could you please discuss examples of relatively simple steps an e-retailer might take to enhance overall customer satisfaction?

Phillips: Some of the social networking tools-user reviews, message boards, etc.-are useful because they allow peer-to-peer feedback, and word-of-mouth is incredibly powerful. Customer satisfaction surveys with clear, actionable follow-ups are also important for building a strong customer experience. Finally, you need a team specifically tasked with looking at the customer experience (whether it’s housed within product or marketing). You need to look at the experience not only onsite, but also via all other touch points (e.g., e-mails, etc.), and that’s essential for evolving strong customer relationships.

Gibson: Enhancing a customer experience can be as simple as getting rid of old site content and providing up-to-date content including product capabilities and pricing. In addition, providing consistent web interfaces and creating web pages with a clear purpose and measurable performance indicators can ensure that web pages fulfill their purpose and continue to do so over time. Online newsletters, RSS feeds and podcasts provide methods for customers to stay in touch with what solutions are offered for business problems without being interrupt driven for customers.

Make sure that you do the basics very well. Customers have routine expectations that are sometimes overlooked. Failure to meet these expectations can detract enormously from other efforts to provide a great experience. Make sure that information and their transactions are secure. Provide great access to post-purchase service and support resources. Notifying people when their products ship, when delays occur, etc., are important ways to maintain trust.

ERA: If Web 2.0 is a knowledge-oriented environment where human interactions generate content, what features might an e-retailer incorporate to offer a richer experience without overwhelming new visitors or sacrificing usability?

Foy: Customer reviews and ratings can help create a richer customer experience and greatly impact the bottom line. Consumers trust their peers, especially when purchasing online, and endorsements from others can provide the reliability that is so important for e-retailers. Customer published videos and other editorial content can also help create a richer experience, but the e-retailer must be careful that the merchandise offered does not get buried and the ease of purchase is not sacrificed.
Phillips: I think it’s critical to note that you can’t just assume that there’s a standard package of Web 2.0 tools to generate an optimized customer experience. Each site has a unique audience. The business owners must carefully manage user research to determine and utilize the ideal set of tools.

Gibson: reserves an area on product pages for related popular pages. This area allows visitors to see what other websites consumers have visited from a particular page. Being able to put customers or potential customers in touch with other customers or provide a peek into other’s behavior is a powerful tool.

Hoffman: Some strategies include implementing some so-called Web 2.0 tools. For retailers a little nervous about this, we suggest thinking about it in terms “low hanging fruit.”  For example, the site could develop a widget that customers could download. This is a great and inexpensive way to keep a literal connection open with a customer. There are lots of great ideas out there for clever widgets, and many aren’t that expensive. Something useful and creative is the key.

Consider all the tools that Web 2.0 offers, including blogs, vlogs, photo-blogs, mob blogs, wikis, social networks, social bookmarking and tagging, podcasting (a.k.a., audio blogging), vidcats or vodcatgs (video casting), content syndication (RSS feeds, Atom) widgets, blidgits, chat rooms, message boards, mashups, mobile phones, mobile computing and portals. Then consider the usual online retailer goals, such as to drive traffic to the site, increase interactivity, improve rates of retention and purchase frequency, enhance customer experience, and so on. The trick is to link the Web 2.0 tools to specific goals, rather than just throw something new and different on the site because it’s cool. If the tools are used in the service of specific marketing goals-and the tools are well implemented-the online retailer will have a much better chance of offer richer experiences without turning off visitors.

ERA: Do social networking/word-of-mouth strategies lead to increased customer allegiance, trust and product awareness?

Foy: Engaging consumers by allowing them into your world and empowering them will only build networks of brand advocates. The viral effect is imperative. YouTube and blogging are successful because they empower customers and that will grow over time and will continue to influence e-retailing. Your satisfied and loyal customers are becoming your best spokesperson and via these new channels your message is delivered and received by not just one or two potential customer but hundreds, thousands and in some cases, millions. Just one more reason to fine tune the basics, such as timely delivery of packages, sufficient communication, etc., to be sure the word of mouth is positive and drives traffic and not the other way around.

Phillips: In many cases, yes. For example, Fandango has historically seen advance ticketing and registrations rise most sharply for movies getting the most onsite buzz via our user reviews. We are now looking at a series of site optimizations which will be released shortly that will provide enhanced tools for networking and providing user review feedback.

Gibson: Online communities provide a way for customers to talk about their solutions, voice questions and provide help to potential and current customers. Hosting user conferences, whether online or in person, can also help stimulate discussions between customers. Word-of-mouth tools like delicious and digg can scale the customer contact efforts dramatically.

Cisco’s Networking Professionals Connection (or NetPro) is a community where technical users can interact with other networking professionals on a 24-hour basis worldwide about even the most complex technical issues. Customers are happy because they get the information they need (about a third avoid calling Cisco’s Technical Assistance Center by finding help through the community), and it is also beneficial to Cisco as two-thirds of NetPro users have bought a Cisco product based on something they read on NetPro.

Hoffman: Some great research clearly shows that social networking and word of mouth strategies can do much to strengthen key customer metrics. The key is to utilize social networking and word of mouth strategies that link the brand in meaningful ways to customer discussions. Where retailers can fall flat is by slapping some stuff online that has no relevance to their customer target. Online customers are savvy and can see through empty and false promotions. Retailers should strive to have real dialogues with their customers, offer them valuable content that is worth passing on or clicking through, and see these kinds of strategies as a way to get closer to their customers (as opposed to simply generating more clicks).

Sieglinde Friedman is ERA’s vice president, board & strategy. She can be reached at (703) 908-1021, or via e-mail at [email protected].


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