Online Marketing

Martin, the very tanned ski instructor, told us before we went up that when we got off the top of the T-Bar and looked down, we would be wondering why he had brought us up this far. He was not wrong. It seemed impossibly steep for us intermediate/beginner-level skiers. My wife, Claire, just couldn't bring herself to look down, glancing across to the edges of the run instead. Madeleine, my eldest at 13, who I had bribed to even get onto the T-Bar, was very quiet. Which left Annabel, at 10, who was looking up at me with a very angry scowl on her face. I was going to pay for what happened next in so many ways from so many people.

Just getting to this stage had been a test of our endurance. While the first two days of skiing on the beginner slopes had gone without a hitch, this last day was lining up to be a doozey. It started with waking up and finding out that the frost was so hard that the water pipes had frozen in the bach we were staying in. So, no tea or shower. Looking outside I could see our car resembled an ice cube with wheels.

Minus six degree temperatures were the norm as we drove over the mountain pass to the start of the ski field where we met a nice friendly mountain man who told us with a smile that chains were required. Great! Both Claire and I were 'wheel chain virgins' so off I went with the rental car instructions, which told us to tie the red chain to the yellow hook. My hands were numb and so I thought was my brain as I struggled – until I realized that THERE WERE NO RED CHAINS ON THE DAMN THING. And before I get a barrage of comments that, as a colour-blind individual, any normal person could have figured it out, I can confirm that Claire – who is not afflicted as I am – can vouch for me. But we endured and fixed the Mensa puzzle that was the car chains to get our front tyres wrapped in steel and were able to rattle our way up the mountain. So far so good.

As it was the third day on the mountain, we were experienced in where to go to vacuum our wallet for ski-lift tickets and, likewise, how to leverage our feet into the rental boots without destroying a tendon or two. So, hot, tired and rather frazzled, we made it onto the snow only to find Annabel's ski bindings were not working. Claire and Madeleine were fine, so they disappeared in a daze of snow ploughs leaving me with a very upset girl and skis that didn't fit.

Three times I went back and forth from the snow to the rental shop to get these bindings to work. By the end, I must admit to being a tad short with my comments to Clarke from Canada who was working on the bindings – sorry Clarke.

Anyway, we eventually had a good morning on the easy beginner slopes and then decided to head up – with help from instructor Martin – to the upper climes of the mountain and the first T-Bar station. Once up there the view was amazing. You looked through the range of snow-covered mountains across the Canterbury plains to a rather smoggy Christchurch in the far distance. But, unfortunately, this brief moment of tranquillity was quickly destroyed as a gaggle of groovy snow boarders flew across the tips of our skis. It was time to get serious and make it down the mountain.

Martin told us we would take it really slowly and just do one turn across the side of the slope and then wait at the other end. He went first and made it look effortless. Claire was next and promptly nosedived into the edge of the mountain. Now, before I present my reaction, I must add that in the two days prior she was the only person who hadn't fallen over, at all, even on the really slippery icy parts – and she had a slight smugness about the fact, too. So I admit I may have yelled out some 'encouragement' that could have been taken the wrong way.

Anyway, the girls were next and they coped, and I brought up the rear and managed not to bowl them all over. We then snaked our way very gradually down the slope with many a small mishap along the way. The extra speed from the steeper slope made everything seem to come at you in one big white rush.

There was so much to remember – lean forward, put your weight on the downhill ski, look ahead of you, keep relaxed (yeah right!), bend your knees, hands out in front. Halfway down, Martin stopped and let us get our breath back. With the wind chill, the temperature must have been a small minus figure but we were all hot from the work.

Then as we gathered our thoughts he did something really smart – he went round each of us and told us to focus on just one specific thing (unique for each of us) for the next few turns. Forget the list of eight or so we needed to do – it was just one from Martin's list.

Focus on the Few

I was told to remember to keep my hands out in front of me. That's all. Try it yourself as you are sitting down. Move both your hands so they are in front of you and parallel with your shoulders and see what happens. You should naturally lean forward. Once I did this my weight moved onto the front of my skis and gave me slightly more control over my turns. Now, it was still very messy I admit, but it felt like progress was being made.

Madeleine had to weight her downhill ski more, Annabel to look further ahead and Claire to bend her knees more. We all made it to the very end and the start of the T-Bar queue. And then it was back up to do it all again – with no change of instruction – just focus on that one thing Martin had told us. And, by George, we started to make some progress. Slowly, I must admit, and not without some snow carnage along the way but by the end of the last run we were better than when we had started.

This all got me thinking on the drive back to the bach. I remembered how this strategy was similar to something I had read in a book on the flight down (REWORK by the founders of 37 Signals, it gets a quick review later in this month's newsletter). It mentioned the power of doing a few things very well rather than trying to spread your attention across many and achieving little success in any of them.

Gordon Ramsey, the celebrity chef, is a proponent of this strategy too. When sent in to fix an ailing restaurant his first task is frequently to cull the menu down. It allows for less waste and lets the chef focus on improving the quality of what's left. Most online marketers could do with their own Gordon Ramsey experience, too.

We often come across people who are trying to spread their efforts across too wide a 'menu' of online marketing tactics. Search, social, email marketing and even affiliate marketing are all on their weekly list of things to do, none being completed with much level of proficiency.

This month's customer coaching call talked to this point, with my rant early on in the discussion about the difference between being effective and being efficient. I laboured the point a bit to get the message home but nevertheless knowing 'what' to do is obviously more valuable – and is a sign of being effective – instead of just being efficient at getting 'things done'.

Being a father of a teenage daughter, I see this whole effective vs efficient theory playing out with the amount of time Madeleine spends on Facebook, MSN chat and text, all to ensure she remains connected with her group of friends. Each of these is a highly efficient communication tool, but are they effective? Do they bring her any closer to her friends?

I used to meet up with my mates for an hour or so each week to walk around the village and chat (grunt) like teenage boys did back then and we still managed to create quite close friendships. I'm not that convinced that all this barrage of banal e-gossip actually does bring people closer together.

Now, I know that all this discussion of 'focusing on the few' will make those with a perfectionist personality feel very, very uncomfortable. Because no doubt as I barrelled through the white stuff with my hands duly out in front, I was probably committing a mass of ski posture sins along the way. But it didn't matter – I was making progress. That's the fallacy of a perfection culture. By following its path you never give yourself the right to really focus on the few and perfect these whilst letting the others remain very rough around the edges.

And so, while you may cringe when you see the layout of your email marketing campaign – it may not matter a dot. Because for your industry, knowing how to attract your type of prospects, the focus should be on organic search and growing your exposure through Google, something that you do very well indeed. And likewise, I have seen many a business 'hidden' to Google searches that was successfully built on very solid ground with good old-fashioned direct-mail promotional flyers being mailed out once a month, supplemented every other week with an email message.

Another twelve months of email marketing lie ahead but should you carry on in January just as you ended in December?

The start of a New Year is a great time to take stock of the last 12 months of email marketing statistics to determine what trends, if any, signify the need for an email marketing strategy review.

To start this process I suggest you tabulate the key email messaging statistics for last year’s campaigns including invalids, bounces, opens, clicks and unsubscribes.

Firstly, let’s start with invalids and opens. Any trends you see in these two values should match any changes you have made in your data collection and management methods.

For instance, if you collected a large number of new email addresses through a trade show in June by asking prospects to write their details onto a card then, when you emailed them with July’s newsletter, both invalid and bounce percentages should have risen due to this quick but notoriously unreliable method of data collection.

Likewise, if you started to collect permission for your email newsletter online by asking subscribers to fill in a form on which they confirmed their email address twice then your invalid and bounce rates should have been seen to slowly fall.

If the values of both invalids and bounces have remained relatively flat, with your bounce rate being below 2.5% and your invalid rate below 2% then all is fine. Your work here may be on finding new methods to re-activate those already in these two groups.

Managing the re-activation of bounced email addresses is not the easiest of tasks in which to achieve and as such is frequently missed. Perhaps this is the year that you instigate a process that helps to find these lost subscribers?

When tracking your open rates you may see a slow decline. Don’t be too concerned – this is due to an increasing percentage of subscribers using email clients that suppress images by default. (The open rate statistic is gathered by tracking a subscriber’s ability to download an image that is specific to them but otherwise hidden in the email content.)

However, if the last 12 months’ figures show a falling open rate that is greater than a 5% change then your issues may lie with your content rather than any industry-wide issue and further investigation will be required.

For those with a relatively consistent email list, e.g. a monthly newsletter, I would advise reviewing each email send with a view to splitting subscribers who have opened the message into two groups – new and existing subscribers. (New being those who see this month’s edition as their first.)

The data may show a disproportionate number of new subscribers opening the message compared with those already on the list. This reveals content that appeals the first few times it is received but then quickly wanes as editions continue to roll out.

If there is no conclusive evidence based on splitting the open rate by the recency of subscription, try to look further into the make up of those opening across multiple editions to see if there is some sort of common ‘opener subscriber’ profile.

Conversely, for those not opening – are there any specific characteristics in this group, e.g. high value customers, low value customers? For some reason the communication is not continuing to resonate with a specific audience segment(s).

If one of the common components of your ‘non-opener profile’ is the ISP they are using to collect their email through then you could be having issues with successful deliverability to this audience. Check to ensure that you have a number of seed addresses for this ISP and run some of your own tests using the content of prior editions to see if this is the problem.

For those newsletters that rely on a website to hold most of their content, click-through rates are strong gauges of content comprehension. These statistics are not artificially deflated by any outside technology trends and as such can be viewed as a true reflection on the success of your email communication methods.

A twelve-month review of what content generates the most click throughs will help to further cement your understanding of the content your email audience finds the most appealing. Likewise, the converse statistic will guide you on what not to include in your next edition.

Falling click-through rates are a concern. As for falling open rates, it helps to find any common subscriber profiles among those doing more or less clicking.

To help you some email dispatch tools automatically show the percentage of existing and new clickers as individual tools for each campaign. In this case editions that show an even split between new and old clickers reveal content that is appealing to both subscriber groups. Other tools just bundle your clickers into the one aggregate group for you to split out yourself.

I see the unsubscribe action as being somewhat like the ambulance at the bottom of the cliff of inattention. Falling open and click-through rates are the precursor to people taking up this option. A high proportion of those not opening or clicking will have mentally unsubscribed to your communications well before they choose to click on your link to confirm their status.

That said, after plotting your twelve-month unsubscribe trend you should see a relatively steady set of unsubscribe figures – any sharp increases are strong cause for concern.

So there you go – just a few quick ways to ensure your email marketing efforts for the next 12 months are built on your learning from those before allowing for any tweaks, where required, to your overall communication strategy.

I'll try not to start this article off with a rant, but it will be hard. Anyway, once I'm over this part I can ensure you this is followed with some solid, practical and rational discussion.

Anyway, from where I'm sitting there seems to be two types of business owners, each with their own predominant mind set – both staring down the same barrel of an economy under stress. On the one hand you have those who are sucked into every depressing news article the media publishes. This they absorb and take to heart and by doing so allow it to remove any enthusiasm they have left. These people see all this 'economy' stuff as being 'done' to them and so, once it all stops, all will be back to normal. That is as long as they can survive along the way. So for them, all they can do is sit back and hope they can ride out the storm of an economy in turmoil. Based on the theme of the two recent articles Paul Holmes has written for the weekend papers I would put him in squarely within this category.

In one he cited the increased difficulty in selling his premium olive oil at the Auckland Food Show when compared with the same experience a year prior. For him, this issue supported the commonly understood but rarely discussed fact that the economy was going down the toilet. I have heard of the Big Mac index being a predictor of purchasing power parity between alternative currencies but now we have the sales (or limited ones in this case) of olive oil being correlated to dire economic issues.

The week after his first article, the NZ Herald did a follow-up note, including some of the letters that were sent in by readers. As usual, there were a bundle that supported the view that all is bad and we need to hide in a hovel until it all goes away. However, within this mire was one from the show's organizers stating that he was sorry Mr. Holmes had not achieved the same success that other exhibitors had this year. In fact, other premium suppliers of olive oil had actually sold out their product during the same days he was struggling to shift a drop. Just brilliant – it brought a chuckle across the table that Sunday afternoon.

Now, don't get me wrong – I am not one to gloat at anyone's misfortune – and I readily admit that when it comes to consumer spending, if the For Lease signs along Auckland's Newmarket are anything to go by, then things are tight.

Nevertheless, my view is that when things start getting tough it is very easy – and is almost a natural reaction – to focus attention on what we see as causing the problem (usually it's some nebulous thing like the 'economy') and blame it for ALL of our problems, when there could be a dollop of our own making in what we are experiencing.

But this counter view just gets lost in the barrage of media sound and print – as it continues its obsession with espousing the view that we are helpless and just mere pawns in the process. I suppose you sell more papers and grab more TV viewers when you convince people that this is all 'beyond their control'. And what's more, with it changing daily if not weekly, it is our personal responsibility to keep updated on all the latest ills that are heading our way.

So with all this brainwashing, when the economic changes push buying decisions out a bit further, and more prospect convincing is required, few make the connection to what this means for their online marketing. And, for example, if you rock up to a food show expecting to present your wares in exactly the same way you did last year then things may be a struggle. The market has changed and, therefore, your marketing needs to.

Some have wised up to this fact. And, just like there was an olive oil business a few stands down from Mr. Holmes that was doing a roaring trade, we have seen stories of business success from those who have tweaked their marketing to best suit the current economic state.

Now, there's a multitude of different forms this act of tweaking can take, but here are three 'category wide tweaks' that could be applied to nearly all business types and produce some positive change.

Tweak #1: Fix all Leaky Buckets

Here you're looking for improved efficiencies in your current marketing and promotional activities. It applies to both your customer and prospect marketing. First, here's an easy one – a customer 'win back' campaign. This is for all those customers who used to buy from you but, for a whole wealth of reasons, don't now.

They have already had the initial marketing expense invested in them to get them to that first sale – now all you need to do is convince them to come back and purchase again, and again. Just like a regular customer newsletter, every business should have in its regular promotional arsenal a quarterly customer 'win back' campaign that rolls out during the year to entice those who have bought to buy again. The offer could be a 'value add' or a product/service discount – whatever it takes – and you will need to test which works best and to what degree. All this could be delivered by good old trusty direct mail or email. Whatever form this takes, this campaign could be honed into something that brings people back spending at a very efficient cost per sale.

Fixing prospect 'leaks' was the subject of this month's customer conference call. The fancy title I used here was 'Lead Nurturing' but the outcome is exactly the same – to slowly nurture your leads so that they have a greater chance of making a purchasing decision at a later stage. Order-hungry salespeople may need their customers to purchase when they want, but as decision cycles move out so does the likelihood of this occurring to the same degree it may have in the past. Only today I read in the NZ Herald how a Newmarket furniture shop owner used to have people walk in off the street and purchase a $5000 couch in one visit. Nowadays people will come back for multiple visits and involve their friends and family in the decision all to buy a $400 table. Heaven knows how long your prospect nurturing campaign will need to run to convince people to buy a couch. And I bet he doesn't have any prospect marketing in place to carry this message.

Tweak #2: Re-align the Economics of your Marketing

This point came up in discussion with a customer only a few weeks back. Most people would think it would be just crazy to spend so much on prospect marketing that they effectively lose money on each new customer gained. Sounds like a path to economic failure, doesn't it? Well, not in all circumstances – a few massive corporations have been built upon such a strategy.

For instance, Guthy Renker, who is an aggressive infomercial marketer with operations worldwide, has very successful businesses that operate exactly this way. It goes something like this. You sign up to purchase their face cream, which costs a once off $29.99 with the opportunity to renew each month for, say, another $19.99. Those first purchase customers come in at a loss, which is only turned into a profit when they make the second or third purchase. Guthy Renker's businesses have such large cash reserves that they can manage to carry this 'debt' for the first month BEFORE they purchase again and the tide starts to turn and boy does it turn in their favour. It's this 'economic power' they have to, say, take on 100,000 new customers at a first stage loss of just under $3 million, that makes them one of the big boys of infomercial fame.

The same theory applies to other businesses too. Going back to the discussion I had with this customer. The latest reports from their AdWords account showed that, with the Google Marketing costs and our management fees, they were just about breaking even on their new customer acquisition process, whereas previously they had sneaked through with an OK profit. Now this business offered a range of products that had a very strong likelihood of repeat purchase – I would pick a conservative estimate of around three times a year. However, times were now different, cash was short, and so people were clicking on their ads but not necessarily buying – when they wanted.

Their AdWords traffic delivered a sizable proportion of their new customer sales but still, for them, no profit = pain so they stopped their campaign. I showed them that they were effectively running breakeven on customer acquisition and how their email marketing efforts needed to be ramped up to turn this into a good profit but to no avail.

They stopped and in a very short time saw their sales fall by 40% and the likelihood of future revenue drop with it. They just didn't have the 'economic power' to make the online marketing work.

For them, in their market, the marketing economics had shifted – and they weren't able to shift with it. And, yes, there is an equivalent to Guthy Renker in their market that is 'vacuuming up' what's left of these prospects as new customer acquisition costs go to breakeven, and will probably remain there even when they move into negative numbers.

Tweak #3: Turn up the Value Volume

This month's newsletter includes a review of a book all about doing less. Now this may seem to be a very strange subject to cover when most are trying to increase their activity levels. But, as usual, it's the converse that's true. Taking the route to doing less enables you to increase your focus on each task. And, by applying this increased level of focus to the right areas of your business – like increasing your value proposition to prospects – then things really start to take off.

So, getting back to that Furniture store owner I mentioned earlier. If the value you provide is a warm and dry floor space for prospects to walk around your stock while they decide what they want, then things are looking quite grim. Every furniture shop I know of has this. Gee, you can just hop on TradeMe and scan hundreds of pictures of second-hand (and new) furniture from all over the country without even having to brave the wet of winter.

Likewise, I read a recent article by a bicycle parts importer in which he complained that sales were a real struggle as cyclists were now choosing to buy from overseas websites and skipping over the locally stocked product. As one who has done this on occasion I can tell them why – the price difference – it's huge. The margin between locally sourced and overseas products is just way too high, so it is still worth the effort and the hassle of ordering it yourself. The internet has destroyed most of the value that was there for those who used to spend their time locating unique overseas products and then try to charge a steep margin for the privilege. Only last month Permission purchased some specialist software on Trade Me from a distributor with all the legitimate commercial license keys and, by doing so, saved over $1250 in the process when compared with using the local distributor.

Within all this value degradation sits my local restaurant Ragu as a shining example of people doing it right. They have recently leased a space at the top of Pt Chevalier shops that was bare for quite a while. Prior to them taking over, the space had hosted a few restaurants/bars that all seemed to splutter to a slow, and what must have been an expensive, halt. But these guys are thriving. I was in there on a Wednesday night a few weeks back for an evening meeting with a community group I am involved with and the restaurant was half full and the bar was comfortably buzzing. It just smelt successful.

This time we were eating. The waitress greeted us at the door, showed us into the bar while we waited for others to arrive, and helped us organize our drinks. All with a nice warm and welcoming smile. This high level of service carried on throughout the evening. The food was great, the price reasonable, and there wasn't even a grumble from the cashier when we asked if it was OK for us to pay individually for what we ate and drank. No problem at all.

Ragu gets some space here because it fits within an industry category that must be doing it especially hard at the moment. Hospitality – especially restaurants – must be right there on the firing line when it comes to cutting back the family budget. But there they are, fighting for all they are worth to make you feel very happy indeed when you spend your hospitality dollars with them. Yes, they have invested in great staff, while others could be pulling back in this area and, yes, they have launched a business in a category at a time that most would have thought it to be completely barmy – but from where I'm sitting things look very good indeed.

They are a great example of a business that has taken control over their fate in this economy while others are just sitting back and letting it happen to them. Doing nothing is not something that fits with my character and based on you reading this far I'm sure it doesn't fit with yours either. So I hope the three points that I have delved into here make it on to some part of your list for some 'focused' attention to get things started. Let me know if they do and keep me updated on the success they bring in the weeks ahead.