Monday, November 7, 2011

Six questions for analyzing a website

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by Seth Godin

It's tempting to believe that any website can become a perpetual motion machine of profit. But before you start one, invest in one or go to work for one, a few things to ask:
  1. What's the revenue per visit? (RPM). For every thousand visitors, how much money does the site make (in ads or sales)?
  2. What's the cost of getting a visit? Does the site use PR or online ads or affiliate deals to get traffic? If so, what's the yield?
  3. Is there a viral co-efficient? Existing visitors can lead to new visitors as a result of word of mouth or the network effect. How many new visitors does each existing user bring in? (Hint: it's less than 1. If it were more than 1, then every person on the planet would be a user soon.) This number rarely stays steady. For example, at the beginning, Twitter's co-efficient was tiny. Then it scaled to be one of the largest ever (Oprah!) and now has started to come back down to Earth.
  4. What's the cost of a visitor? Does the site need to add customer service or servers or other expenses as it scales?
  5. Are there members/users? There's a big difference between drive-by visits and registered users. Do these members pay a fee, show up more often, have something to lose by switching?
  6. What's the permission base and how is it changing? The only asset that can be reliably built and measured online is still permission. Attention is scarce, and permission is the privilege to deliver anticipated, personal and relevant messages to people who want to get them. Permission is easy to measure and hard to grow.
Do the math on successful companies online and compare it to those that are struggling and these six metrics will help you understand the difference. For example, if the RPM is less than the cost of getting a new visitor, you've got trouble. If the site is relying on fads and occasional PR but isn't building a permission base, that's trouble too.
The good news is that each of them can be changed if you're alert and willing to do surgery on the business model and structure of the site.
The ideal structure is a business that's a platform, not merely a place to stop by. Once people move in and become members, they're hesitant to leave, they share permission over time, they tell their friends, their RPM goes up and the cost of acquiring and hosting members goes down. The real question is: are you on that path?

Shoppers share top 5 “must-haves” for buying online this holiday season

Some of the most insightful data we gather from the annual Shop.org eHoliday Study centers simply on what matters most to consumers.

In partnership with BIGinsight, we asked consumers: “When choosing to make holiday purchases from a given online retailer, what is most important to you?” In an industry fueled by constant innovation – whether technical, marketing, merchandising, and beyond – the answers are a reminder that, no matter what those of us in online retail may dream up next, our customers will be looking for a number of key factors.

With a nod to last year’s rankings, here is this year’s fantastic five “what matters most to consumers” list:

1. Seeing the shopping cart total prior to check out: 4.5 of 5. Like last year, this function tops the list for consumers again. As Forrester Research has found, a leading cause of shopping cart abandonment is simply sticker shock when they see the final total including shipping costs. Bottom line: continually update the shopping cart total on relevant pages, thereby getting ahead of this issue even before the customer starts the formal check out process.

2. Product available to ship immediately: 4.5 of 5. Up from number 5 last year, consumers clearly want no surprises on the inventory front, either. Many retailers have bought (very) carefully into inventory in recent years after the 2008 holiday inventory glut – all well and good, but the burden is on the retailer to communicate clearly when inventory levels are minimal (see Boden USA’s effective use of color coding to indicate product availability in terms of in-stock, limited inventory, and out of stock, still one of my favorite examples). Putting a different spin on managing inventory stock issues, ModCloth actually keeps out of stock items on its site, allowing customers to sign up to be notified via email when the item is back in stock – which, in turn, becomes a remarketing tool that the customer is happy to receive.

3. Value for money / good deals: 4.4 of 5. Solidly in third place again this year, consumers continue to look for good value. As many have pointed out, this doesn’t just mean the price itself – it’s about conveying to the customer how the price relates to the qualities of the product such as quality, durability, fashion quotient, uniqueness, and the like.

4. Clear product descriptions: 4.4 of 5. A merchandising basic that always needs updating and fine tuning, this merchandising area now also benefits from the explosion of product video available to consumers. Executed well, product video can significantly enhance the clarity and depth of the product description – a fact not lost on close to half of retailers surveyed who invested significantly this year in product videos. Indeed, Golfsmith’s commitment to using video to explain technical details and ease of use features for products has resulted in increases for both conversion and SEO rankings.

5. Guaranteed on time delivery: 4.4 of 5. Again, imperative for holiday purchases in particular. Those coordination meetings you held last month with your operations staff and shipping vendors will go a long way towards ensuring a minimum of delivery snafus – and for those rare instances, you’ve got a flawless plan to make things right for the customer. Of course, customers can help themselves on this front via clear, visible shipping deadlines calendars (number 10 on their list of customer priorities, by the way). Another perennial favorite of mine, Nordstrom’s holiday shipping calendar, lays out shipping deadlines by each of the three most popular winter holidays (Christmas, Chanukah, and Kwanzaa) – I just wish it were already accessible from the home page even now.
What else are consumers looking for when choosing to do business with one merchant versus another? Broad product selection (4.3); merchant reputation (4.2); free return shipping offer  or policy (4.2); the ability to see product reviews from other customers (4.1); and – in tenth place, mind you – promotions (4.1). Clearly consumers don’t simply buy based on free shipping – yes, it’s important, but their decision to buy from you – or your competitor – is often likely much more multi-faceted.

For the full data for this and numerous other eHoliday survey questions, please visit Holiday Central on the Shop.org Web site.

Wednesday, November 2, 2011

How Digital Is Your Company?

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Originally posted on the Harvard Business Review.

Recently, the CEO of Edelman wrote a blog post celebrating a company milestone. In it, he referenced our efforts in the non-analog world as “social digital.” To most, this may seem insignificant because the word “social” is often overused in professional circles. But the addition of “social” to the “digital” is immensely significant because it symbolizes that the current revolution is not only digital, but codependent on social behaviors and interactions from human beings. If the digital revolution was about computers being connected (the internet) then the social-digital revolution is about people being connected (the social web).

Though social and digital share similar attributes, they are not the same thing. Many organizations learn this lesson the hard way when they set up a “digital embassy” on a social network like Facebook, only to find out that fans can be unpredictable, vocal, and even antagonistic. Digital is the infrastructure, the plumbing and wiring, but social is the behavior and quite possibly the glue.
We are the sum of our connections in this social-digital revolution and doing business in the social-digital era means being connected.

A site called the Social Business Index underscores this point, at least in theory. It uses an undisclosed algorithm to provide a real-time assessment and ranking of how social (or connected) a company is. The site looks something like a stock exchange of businesses ranked by how “social digital” they are at the moment, likely related to the size and activity of their networks. The first few companies to appear on the list are what you might expect; Facebook and Google retain top spots. But the rankings get more interesting as you see companies such as Coca-Cola, Burberry, and Time Warner in good standing. The index sparks an interesting question. Will companies who embrace “social digital” perform better than those who don’t? To participate in the social-digital revolution, brands, businesses, and organizations need to take the following actions:

Add a social layer across all business functions.
Most organizations have “legacy” systems in place which have yet to integrate a social layer. For example, Facebook pages are often receptacles for customer complaints, yet this feedback does not get funneled into the same databases that compile information from areas such as call centers. Being “social” in a digital age means integrating social data and interactions across all of your business units and pulling in data from traditional, digital, and social sources.

Pursue a policy of integration and specialization.
Organizations must adopt a social-digital mindset if they wish to capture value in this area. This means evolving the culture and skillsets of your workforce. Being able to engage productively and appropriately in public-digital spaces may become as necessary as being proficient in private-digital communication such as e-mail. However, integration across complex organizations takes time and so specialization may be needed in order to develop social-digital capabilities. Last year, I asked if we should fire marketing managers and hire community managers. While marketing managers still play a critical role — today it’s common for a business to hire or contract community managers to run their social properties at scale.

Build, activate, and maintain a vibrant social graph.
Being “social digital” means being able to build and sustain a “social graph” with those who are critical to your business eco-system. In simpler terms, this means having the ability to build and sustain a human network which can potentially make your business smarter, better, and more inclined to adapt. Today, most businesses wishing to take advantage of the social-digital revolution are in the “crawling-walking” phase of their transformation; they are focused on building numbers measured by likes, followers, and the amplification of their messages. Tomorrow, many companies will be in the “running-flying” stages of social digital; they will connect effortlessly with multiple stakeholders who make their businesses smarter and better positioned for the future. Tomorrow’s metrics will be new efficiencies, ideas, products, and services as well as better business intelligence.

When Lego was in the process of reinventing their company in the 1990s, they reached out to the most connected Lego enthusiasts around the world to serve as a virtual R&D lab and ambassador network. In essence, this was an early example of leveraging a social graph for business. A social graph is not only about what you know, it’s about who you know. In the social-digital revolution, being digital won’t be enough — organizations will have to learn to connect with individuals, groups, and digital tribes on human terms in order to be not only digital, but social. These organizations may be the ones who come out on top after the social-digital revolutionary dust settles.

Monday, October 31, 2011

The Trouble With Live Chat


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Live-chat queue times hover around 6 minutes, and an average live-chat engagement takes more than 18 minutes to complete. And "complete" doesn't always mean "successfully complete." Even after patiently waiting and engaging for nearly 20 minutes, users with more difficult questions are often told to pick up the phone.
Fast, easy and accurate -- ask any consumer to describe good customer service and that is the likely response you'll receive.
Traditionally, people have reached out to call centers, confident that a well-trained customer service representative would have the knowledge to fill in the blanks. But moving away from the computer and picking up the phone is an annoyance. And long hold times have come to be a given.

Online channels are the new top choice for people looking to find information, conduct business, make purchases, complete membership registrations, plan trips and more.

We live in an age of instant gratification, and customers are impatient. If they don't find what they're looking for on a company's website, they bolt (just check your own site's 'time-on-site' and bounce rates to see the ugly truth). This is especially true for online commerce, which consistently shows a 57% abandonment rate if customers can't find the answer they're looking for.

So, how can companies keep customers on their sites and allow them to have meaningful, valuable interactions? The answer is surprisingly simple: Provide them with the information they really need in a timely manner. In fact, quick query resolution is the top reason consumers will rate a customer experience as excellent, according to research from Avaya.
 

Consumers Want to Be Self-Reliant

Online chat can help. Online chat's lack of channel shift is a major step forward in terms of convenience, and live-chat agents certainly provide an easier path to knowledge than most website search boxes are capable of offering -- but it's not flawless. When reps are managing multiple conversations at a time, delays are inevitable, and that's frustrating for users who expect instantaneous, 1-to-1 service.

To make matters worse, most live-chat reps are so inundated with the same types of questions that they end up investing more time familiarizing themselves with scripted answers than on developing specialized knowledge of the organization they serve. No wonder just 25 percent of customers surveyed say online chat meets their expectations.

In a perfect world, the solution would be to increase the size of your live-chat staff. As most organizations have found, though, there's no end to user appetite for the service. It's a victim of its own success: People with questions that they consider too trivial to justify a phone call have no such hesitation when it comes to live-chat. Queue times hover around 6 minutes, and an average live-chat engagement takes more than 18 minutes to complete.
And "complete" doesn't always mean "successfully complete." Recent studies show that even after patiently waiting and engaging for nearly 20 minutes, users with more difficult questions are often told to pick up the phone to get their question answered. This is true for interactions with companies of all sizes, including large corporations.

These points are not to imply that investment in live-chat is bad. It's definitely a step in the right direction, but there is plenty of room for improvement. With the massive adoption live-chat is seeing, the opportunity is ripe to increase its ability to provide the fast, accurate answers that customers want, right at their point of need.

Live-Chat Meets Its Match

Recent advances in virtual agent technology are making an amazing degree of enhancements to live-chat possible.

When implemented as the first point of contact for your Web customer service system, virtual agents can easily answer all of your commonly asked tier-1 and tier-2 questions. They're capable of serving millions of users simultaneously, and always meet increased demand with ease. They provide information immediately, work 24/7 and never get sick. Training is accomplished by simply updating their knowledge base. They're even able to serve customers in multiple languages. Virtual agents have been proven to increase site engagement. And, most importantly, they serve up information in the most natural way possible: by engaging the user in a conversation.

For more difficult questions, an advanced virtual agent is able to determine immediately if it doesn't know the answer and seamlessly escalate the user to live-chat, even providing a conversation history to quickly bring the live-chat operator up to speed.

Never Miss an Opportunity Again

Perhaps most importantly, virtual agents reduce live-chat reps' queues. Suddenly, users with specialized questions no longer have to wait to chat. And, since reps are no longer burdened with answering the same questions repeatedly, they can spend more time with the customers who require higher touch service, greatly reducing the need to send users to call centers for answers and giving them time to capitalize on revenue-generating opportunities.

The cost of implementing a virtual agent to complement live-chat centers is minimal when compared to attempts to improve service by increasing staffing. Once implemented, the cost is just a fraction of live-chat, which averages US$5 per contact.

You have what your customers are looking for, and both you and the customer want to make finding "it" easier. Virtual agents do just that, enabling both you and your customers to make the most efficient use of time, turning potential into actual, and matching demand with resources. 

Fred Brown is CEO of Next IT.

Saturday, October 29, 2011

10,000 Hours of Practice

 I think I MIGHT have sent a similar article, but I can't find it SO. I like this observation about behavior, that innate talent doesn't mean you'll succeed. That practice does make perfect. It also explains why we're all at varying levels of expertise at any given time...we've all spent varying amounts of time learning in any given area.

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In the book Outliers, author Malcolm Gladwell says that it takes roughly ten thousand hours of practice to achieve mastery in a field. How does Gladwell arrive at this conclusion? And, if the conclusion is true, how can we leverage this idea to achieve greatness in our professions?
Gladwell studied the lives of extremely successful people to find out how they achieved success. This article will review a few examples from Gladwell’s research, and conclude with some thoughts for moving forward.

Violins in Berlin

In the early 1990s a team of psychologists in Berlin, Germany studied violin students. Specifically, they studied their practice habits in childhood, adolescence, and adulthood. All of the subjects were asked this question: “Over the course of your entire career, ever since you first picked up the violin, how many hours have you practiced?”
All of the violinists had begun playing at roughly five years of age with similar practice times. However, at age eight, practice times began to diverge. By age twenty, the elite performers averaged more than 10,000 hours of practice each, while the less able performers had only 4,000 hours of practice.
The elite had more than double the practice hours of the less capable performers.

Natural Talent: Not Important

One fascinating point of the study: No “naturally gifted” performers emerged. If natural talent had played a role, we would expect some of the “naturals” to float to the top of the elite level with fewer practice hours than everyone else. But the data showed otherwise. The psychologists found a direct statistical relationship between hours of practice and achievement. No shortcuts. No naturals.

Sneaking Out to Write Code

You already know how Microsoft was founded. Bill Gates and Paul Allen dropped out of college to form the company in 1975. It’s that simple: Drop out of college, start a company, and become a billionaire, right? Wrong.
Further study reveals that Gates and Allen had thousands of hours of programming practice prior to founding Microsoft. First, the two co-founders met at Lakeside, an elite private school in the Seattle area. The school raised three thousand dollars to purchase a computer terminal for the school’s computer club in 1968.
A computer terminal at a university was rare in 1968. Gates had access to a terminal in eighth grade. Gates and Allen quickly became addicted to programming.
The Gates family lived near the University of Washington. As a teenager, Gates fed his programming addiction by sneaking out of his parents’ home after bedtime to use the University’s computer. Gates & Allen acquired their10,000 hours through this and other clever teenage schemes. When the time came to launch Microsoft in 1975, the two were ready.

Practice Makes Improvement

In 1960, while they were still an unknown high school rock band, the Beatles went to Hamburg, Germany to play in the local clubs.
The group was underpaid. The acoustics were terrible. The audiences were unappreciative. So what did the Beatles get out of the Hamburg experience? Hours of playing time. Non-stop hours of playing time that forced them to get better.
As the Beatles grew in skill, audiences demanded more performances – more playing time. By 1962 they were playing eight hours per night, seven nights per week. By 1964, the year they burst on the international scene, the Beatles had played over 1,200 concerts together. By way of comparison, most bands today don’t play 1,200 times in their entire career.

Falling in Love With Practice

The elite don’t just work harder than everybody else. At some point the elites fall in love with practice to the point where they want to do little else.
The elite software developer is the programmer who spends all day pounding code at work, and after leaving work she writes open source software on her own time.
The elite football player is the guy who spends all day on the practice field with his teammates, and after practice he goes home to watch game films.
The elite physician listens to medical podcasts in the car during a long commute.
The elites are in love with what they do, and at some point it no longer feels like work.

What’s Next?

Now that we’ve reviewed the trends uncovered by Gladwell’s research, what can we do about it? All of us want to be great at something. Now that we know how other achievers have gotten there, what can we do to join their ranks?
One approach: We could choose a field and practice for 10,000 hours. If we are currently working in our target profession, forty hours per week over five years would give us ten thousand hours.
Or… We can look at the question in reverse. Where have we already logged 10,000 hours of practice? What is it that we do really well? What tasks do we perform so well that people ask: How did you do that? Sometimes when we fall in love with practice we don’t even recognize it!
If you’re running a company, what does your company do better than anybody else? What is it that the individual members of your company do better than anybody? How do you create an environment that gives everyone on your team the opportunity to practice?

Conclusion

Business is tough, especially now. Yet even in the midst of a challenging economy, there are individuals and companies that prosper beyond all expectations. Practice plays a major role in success.

Suggested Reading

Outliers, by Malcolm Gladwell. Through interviews and statistical analysis, Gladwell determines why some people and organizations achieve success far beyond their peers.

About the Author

Raymond T. Hightower is president of WisdomGroup, creators of outstanding web-based software. WisdomGroup leads the open source user group ChicagoRuby and we created the annual WindyCityRails conference.