Last week I had conversations with several CEO’s of the Top 50 Internet Retailers and the prevailing feedback I received was: “Jeff, we just can’t seem to get social to work for us and certainly haven’t been able to monetize it. We’re also looking for new ideas for the Holidays and ShoppeSimple seems to have cracked the social code. According to merchants I’ve been talking to, you’re making merchants money in social. So, how can you help us?”
A year ago I started writing this blog for executives like you to help make heads or tails of all this and provide ideas to monetize social and mobile commerce. As we move into the months ahead, the daily economic news continues to leave all of us uncertain as to what Q3 and the upcoming 2011 Holidays will look like. Last Friday, when I got the following news feed, it just made me quiver…
Will Bernanke provide relief to our industry?
Bernanke in a terse statement and in inscrutable language of Fed-speak Friday 8/27/2011, “said that he has tools left in his tool kit that could be employed to spur the economy, but he isn’t going to use them now”. In plainest English, that’s troubling in the extreme.
If the Fed really could be taking measures to add vigor to a dismal economy, then what are they waiting for? Joblessness remains at epidemic proportions, housing prices are falling, and homeowners keep sinking into delinquency. Manufacturing seems to be retreating anew, and Europe and Japan are both in distress, snuffing out hopes that our exports can lead us out of the ditch. The only impressive growth is found in the production of dreary economic forecasts and worries that we are headed for a double-dip recession.
So what are your plans to ready your business should your numbers for Q3 and Holiday/Q4 go off forecast?
What’s your Plan B should your consumers pull back from buying?
How do you plan to protect your margins?
In my discussions with CEO’s, not only were they interested in finding alternative paths for protecting their businesses, but they also wanted to find new innovations that would not cost an arm and a leg or take a substantial amount of time and resources to implement. They also wanted to have plans at the ready to protect their margins should the economy continue to go off the cliff.
Social monetization is not a black box that your business can’t crack or unlock. In fact, you have been building your social commerce for years and if you look at social and mobile, they are an extension of your base ecommerce business. To this point most of the valuable components and digital assets for social monetization are already in place for you to leverage.
But what will force you to hit the social wall and socially bruise your business before you rethink, realign and radically change your internal way of thinking around social? We have seen too many cases where businesses have unfortunately developed a “social media mental block”. Everyone knows they need to engage with consumers, but the resistance companies face in moving resources from established areas that work into new areas is tremendous. This is why big companies are so slow to innovate, says Geoffrey Moore, author and venture partner at MDV. In this Entrepreneur Thought Leader Lecture at Stanford University, he explains “that while there are no shortages of great, groundbreaking ideas at big companies… including many that could threaten startups… the established culture at those companies prevents the ideas from maturing.”
I use a different set of words…I call what is going on inside of the Big Company The Gunslinger Effect. When you apply these same standards to social marketing and monetization, you allow mature online marketing channels to stand in the way of your social and mobile commerce development. Here’s how it works:
- Thinking that every sale that comes from social is just channel shift from other traditional online channels.
- Forcing the social team to jump through ROI hoops to show that their ROI is stand-alone. How can that be? Social Conversions happen across channels.
You already know that in your ecommerce business orders have multiple channel touches so why would Social not fall into this allocation methodology? I hear about these internal debates/discussions all the time. Unfortunately in more cases than not, social at the moment loses and these social touch orders reallocate back into the traditional channels.
From my seat and hopefully yours, the present value of a buck-in-the-bank is a fundamental financial metric everyone should get in business, especially today. This idea should trump all others.
Now, don’t get me wrong, I get the value of analytics but not at the expense of social monetization. Cash-in-the-bank is cash in the bank.
More on this point…if you are forcing the analysis of social to live up to your mature PPC, Affiliate, email and other well established online channels, why would you want your business thinking this way? If you are expecting your Social ROI to be more than zero before you jump into the water, how will you ever take the first step to grow your social and mobile business? You didn’t do that with email in the mid-90’s and now look at the monetary asset value of your email database. Today, getting started in social provides another future value of several new databases (Facebook Likes, Twitter Followers and mobile text) and what they will be worth to your business just 2-5 years from now. It is so misguided to believe you can’t make an investment in social with this type of future pay-off. I know you didn’t think that way with email capture in the 90’s. And from 2004-2006 you didn’t hold to this standard when your business started working with Google Adwords. You took early bets on this Adwords/PPC channel and now if you shut off your PPC program what would happen to your online sales?
Your efforts to monetize social and mobile become inherently easier when you look at social through this new lens. What our clients have found is that growing your social business and monetizing the channels is not just a deployment of a Facebook store and pushing a fire hose of products at your consumers. It’s something much more important:
- The development and implementation of social ideas that integrate with your core ecommerce channel marketing.
- Two-way communication with your consumer over relevant offers they want to see and where they want to see them.
- And the ability to monetize social with just one click.
It’s why our client installations include a social road map and execution plan. And, why implementation is quick so you’re making money in less than a month without any implementation costs whatsoever.
To make my point…you have one of your social email assets working for you today. You are banking a ton of cash using it. How do I know? Just answer the following. Where is your email-capture on your site? Now do me a favor…recommend to your boss that you move this email capture to the footer of your home page and see what she/he tells you? I can hear the colorful words now. X@#4Z&*! Of course, this would never make sense to do.
For many of you, if you want to monetize your social channels, it simply starts with answering this question: Why are your social icons in the footer of your website? And ask yourself: Who in your organization decided to put them there and why?
In the mid-90’s you had to have the courage to capture an email address. You had the courage to put the capture in the header of your website. And now with social and mobile, who in your organization has the courage to argue the point that social icons need to be placed in the header of your website too? This is one of the easiest things you can do to begin to capture and monetize social. Or, is it for your organization?
Abandoned shopping carts cost online retailers $18 billion/year!
A Comscore/Paypal study found that more than 54% of consumers said the following about the reasons why they abandon their shopping carts:
- Wanted to comparison shop: 37 percent
- Wanted to look for a coupon: 27 percent
But wait a minute…you may be asking yourself, why in a post about making your business more social, would I be talking about abandoned shopping carts? Shopping cart abandonment is for those traditional ecom guys. Old School Jeff… you may be thinking. Well that’s just my point. The opportunity to grow social channels falls right on the doorstep of your core ecommerce business.
From my seat it certainly isn’t Old School. The power to monetize social and mobile is in integrating social into every fiber of your ecommerce site and your online marketing. It is also why I don’t believe in giving up your checkouts to Facebook, Twitter and external mobile platforms. My long-term experience and hard fought lessons in ecommerce say your site MUST control the shopping experience along with the CART and check-out process. If someone tells you otherwise…or they want to place your CART on social channels watch what happens to your bank account.
Abandoned carts and check-out issues have been around for as long as ecommerce and social email. They all are linked together…but who talks about them? Unfortunately merchants haven’t invested as much time, resources and effort to defend CART and check-out abandonment according to MarketingSherpa research.
Abandonment within CARTs and Check-Outs is an issue costing online retailers 71% of their ecommerce conversions. What is even worse and more alarming, 22% of merchants admitted that they didn’t even capture relevant stats on shopping cart abandonment.
Another study by a leading Customer Experience Management (CEM) research firm measured the total number of shoppers who actually purchased divided by a far larger number of those who put something into their cart. Turns out that the average cart abandon rate in this study was a whopping 59.8%!
Do you know what your abandonment stat is? Bottom line…Yikes!
So I ask you…would you want to avoid a conversation with someone who puts something in his or her shopping cart or comes to your cash register ready to buy? In your store would you turn your back on that customer who put merchandise on your sales counter? Of course you wouldn’t and neither would our clients. That’s why we’ve developed Abandoned Cart social tools which help you speak to your best shoppers while they are in your shopping cart wanting to have a buying conversation with you. We help you close a sale because you deliver relevant offers to these consumers while they are engaged and shopping with you. If more than 50% of consumers abandon your cart because they want to comparison-price shop or find a coupon wouldn’t you want to assist them further with their buying decision-making?
This not only flips the current model of how merchants deal with Abandoned Carts but you can actually close more business with your best potential buyers. Having these conversations with consumers over relevant offers/content while they are in the shopping cart, in the mood for buying and before they defect, is a much better solution than drenching them with a fire hose of products offers, chasing consumers once they have defected from their carts and your site, or using retargeting approaches to get them back to your site. It’s better from a privacy and consumer “creep” factor also as you won’t need to chase your best buyers around the net and have them wonder how you know where they are?
Just like we help you reduce defection from your website, convert your email database into buyers, monetize your Facebook Likes and Twitter Followers, and enable mobile sharing, isn’t it time to mitigate your shopping cart defection?
When your business is leaking sales from your shopping cart abandons it’s a no-brainer for ShoppeSimple to socialize these shopping carts and minimize abandonments. Our clients have seen through A/B split tests reductions in lost carts by 25% or more. Because we are giving consumers more of what they want, we have also seen carts increase in sales by more than 33%. Imagine the profitable impact to your business from executing these social possibilities. Imagine the positive margin impact.
Exclusive Abandon Cart Offers
But I am hearing some of you Gunslingers out there thinking ”No”, we would have these orders already. They are in our cart! But that’s not the point…we are talking about the carts that do not get closed.
I know some of you are reluctant to include a limited time offer in your abandoned cart programs. You fear that customers will share the information with friends to the point where soon all online shoppers will abandon purchases and wait for the discount to arrive via email. At ShoppeSimple our program doesn’t work that way or use email. Customers may be looking for deals, especially now with this economy, however, when you present more of what they want when they are in the buying process it’s natural for them to place an additional item or two into your order. In fact, haven’t you been trying to accomplish this with related items on your site for years? But have you ever asked your consumer to self-select themselves into the items they really want while they are closing their cart?
But worst case, let’s say you gave a 10% additional discount on a relevant item. The additional revenue you will bring into the business will significantly offset the discount and make it worth your while. If your average sale is $100, with $50 of that being profit, and you sell 250 items each day online, you’re making a profit of $12,500 every day. However, if you can sell an additional 100 items each day at 10% off, you’re increasing your profits over 30%… even accounting for the discounted price and the cost of deploying any additional marketing.
Real Proof…
When you take the ShoppeSimple program in its entirety and use our best practices we know you will succeed. In fact, we guarantee it. One of our customers, generating $8 Million in sales (annualized) or around 10% of their online sales, has renewed with us again. Another customer just renewed after seeing great matchback results with a rebuy rate lift of 38% and an Average Order Value lift of 32%. Still another recent renewal increased their frequency from 1 order per year to 2X+ on their active customer group.
With ShoppeSimple you can achieve results like this too.
So take the first step. Let me know what your schedule looks like in the next couple of weeks and we’ll get our conversation started with a virtual meeting.