There is a wealth of options out there for startup online retailers looking to craft and manage all-important marketing campaigns and programs, as Part 1 of this series notes.
While e-tail technology and support continues to get cheaper and become more ubiquitous, the barriers to commercial success are also growing. Larger and more established retailers continue to invest their resources and get better at using the online channel, while the ranks of new and small and medium-sized business (SMB) market entrants swell. These factors are several reasons why e-tail startups are learning from the experiences of others and tapping as many avenues of support and advice as they can, particularly when it comes to e-marketing and automating the marketing function to the greatest degree possible.
Just how important is marketing to the aspiring e-tailer? “Critical. Automated marketing for startups and SMBs is the price of admission. Understanding and improving the customer experience is how to stand out from the crowd,” commented Eric Feige, general manager at Usability Sciences.
The main challenges facing startups include ensuring they employ people with a keen understanding of marketing, specialize in the e-tailers’ particular line of business and have the technical acuity required to manage campaigns, according to Affect Strategies’ President Sandra Fathi.
“When e-tailers outsource or assign to ‘experts’ SEM (search engine marketing) or SEO (search engine optimization), often the person is an expert on how to perform the task but not the topic or store they are performing it for,” Fathi told the E-Commerce Times. “This can create very expensive problems. Thousands of dollars could be spent optimizing the site for the wrong keywords or creating Google AdWords campaigns that attract the wrong search customer.”
To avoid this pitfall, startups “must be sure they understand exactly what type of services they are buying and understand how to evaluate and measure their marketing campaigns. Online marketing is fluid and constantly changing. E-tailers need to monitor their campaigns closely to make sure they are continuously performing,” she said.
Companies such as MerchantAdvantage offer products and services that startups can use to automate online marketing processes and move up the e-marketing learning curve quickly. The company’s Channalytics data analysis and data feed management software offers the means whereby startups can automate the time-consuming processes of collecting, organizing and analyzing e-tail site data and using it to create and manage online marketing campaigns and programs.
Data obtained from e-shopping carts typically provides much of the raw material for MerchantAdvantage’s analytical software and data feed manager.
“Each of the various shopping cart technologies has interesting and useful features, many of these features can translate well into useful data within our application,” president and cofounder Michael Lambert commented.
“One simple example is to import sales information along with standard product data and use the sales data (we refer to this as collateral data) to aid in selecting which products to feed, based on previous sales successes. The more information that is available from the shopping cart, the more successful the marketing campaigns are likely to be.”
Analyzing Data and Predicting Consumer Behavior
Needless to say, the ability to analyze and predict the behavior and purchasing decisions of online consumers is gold to online retailers. Companies such as Usability Sciences and Proclivity Systems work with online retailers to try and do just that.
“Usability Sciences routinely works with prominent global and national retailers by helping them understand the specific behaviors of their customers particularly as it relates to improving conversion, loyalty and competitive differentiation,” Feige explained.
One of the company’s solutions, Attitudinal Analytics, surveys and tracks thousands of actual user sessions, analyzing the data to determine how and why they abandon shopping cart purchases as well as what works best throughout the online marketing and sales experience, Feige explained.
“Certain clients have seen online revenues immediately spike once our recommendations have been put into production,” Feige said.
Proclivity Systems recently introduced Proclivity, a hosted application service that enables e-tailers to predict which customers are most likely to buy certain products at particular prices.
“[Proclivity] is a hosted system that produces targeted merchandise and customer campaigns across multiple channels — e-mail, Web sites and direct mail,” explained CEO and company founder Sheldon Gilbert.
Secure, confidential and automated data feeds link e-tailers’ and the Proclivity system via the Internet. The data is analyzed based on sales and product information parameters set by the e-tailer and then run through the system’s proprietary statistical analyses. The results are then accessible to their owners via the Web and used to create and manage marketing campaigns.
“It works both ways,” Gilbert noted, “in that a targeted list of customers will be produced based on data for a given product, or a targeted list of products can be produced based on modeling of customer profiles, from individuals to much larger segments of the customer base.”
It turns out that online shoppers are, for the most part, creatures of habit, according to Gilbert. Based on common metrics marketers use to evaluate campaigns — such as key performance indices, open rate, click-through, order conversion and sales productivity rates — Proclivity has been yielding increases on the order of 200 to 400 percent since it began, Gilbert reported.
Automated Marketing Options
The ability to collect and organize data from various online marketing and sales sites as well as across their own front and back end systems is the key that enables e-tailers to leverage and make effective use of the data picked up by their e-tail applications.
“Although our imports and exports are completely configurable, we are working in various ways with ProStores’ Web Stores and eBay Stores, Everest Software, BeanBasket and many others to make our application easier to use, and more powerful,” MerchantAdvantage’s Lambert told CRM Buyer.
Some e-tailers are more comfortable than others when it comes to allowing third-party online marketing specialists manage their campaigns so the company offers a Value Added Reseller Program, Lambert explained.
“That is a program in which we introduce merchants to marketing professionals that use our software to accomplish their clients’ — the merchants’ — goals,” he said.
Fees for these services typically depend on store-keeping unit (SKU) count and often sales volume if percentage of profit is part of it, Lambert continued. “Ballpark figures are that MerchantAdvantage and other software tools are in the (US)$100 to $400 per month range — in our case we do not share profits — whereas similar service offerings range from $1,000 to $15,000 per month for SMBs and they typically do share in your profits.”
Getting the Back End Right
Assuming that an e-tailer can use data feeds to access and transfer data from their front-end applications and Web services, it is on the back-end where all the data has to come together, be analyzed and then put to use in the creation and management of marketing campaigns and programs.
“The administration area allows the coalition of statistics and e-mail addresses which can be used for marketing purposes. The evaluation of statistics is as much an art as it is a science and one should be careful not to get too bogged down in it. It is too easy to get lost in the numbers and to lose sight of the big picture. There are many programs and services available to assist with analysis,” commented Daniel Vidoni, e-commerce consultant and owner-operator of Storefinder.com.au and Vidoni.com.au.
“One needs to determine the costs to benefit ratio when deciding which of these approaches one takes. Different people in different businesses and different personalities will be attracted to different solutions. I think it’s very important to be as objective as possible when deciding these things and also not to be afraid to experiment. Business should be fun; it’s all a matter of perception,” he said.
Simply put, marketing’s main benefit is gaining the exposure an e-tailer needs to generate business, Vidoni continued.
“Systems such as Google Adwords allow you to determine what your return on investment (ROI) is and to make adjustments to your marketing campaign as you go. It also allows ‘split testing’ of concepts and keywords which can help you fine-tune your site.”
Tracking and Evaluation
Putting a good tracking system in place is central to evaluating marketing programs, added VevoCart director Vince Pichpongsa.
“It is essential for e-tailers to track leads/conversions for each marketing campaign and to discover which one is profitable and which one is not. Most tracking systems provide very useful reports such as ROI, source of incoming traffic, number of visitors, etc.”
VevoCart chose Microsoft’s ASP.net as the development framework for its online retail offerings. Compiled, as opposed to interpreted, Web sites built with ASP.net are faster and more robust in terms of error handling and memory leaks, Pichpongsa noted.
Among other reasons for going with ASP.net, it “is widely used and supported. … The framework comes with powerful built-in tools enabling rapid development of efficient Web applications. This object-oriented technology is developed from the ground up and provides a cleaner development environment compared to older technologies.”