Kaboodle Case Study Site: Kaboodle.com Objective: Increase awareness and user adoption among the Female 25-34 age demographic for the social commerce site Kaboodle.com. You have just taken a new job at the site Kaboodle.com. They are aiming to expand their customer segment of Females in the 25-34 age range. They are strong in the 18-24 age range, and now aim to expand their penetration into the slightly older demographic.
1. In your own words, explain the business model of Kaboodle, focusing on the value proposition to the Kaboodle user. Who pays? Kaboodle’s product is free for its target customers, which is women in the U.S. The revenue stream comes from business partners who pay Kaboodle for online advertising, commissions for actual sales, and premium services such as the Premium Partnership Program. Kaboodle also share revenue with other websites such as shopping.com. What for? Kaboodle consumers use the service for an easier online shopping experience by collecting information about products at one place and making purchase decisions by interacting with like-minded people. Members also get access to the patented “Add to Kaboodle” button, which organizes products through lists and makes shopping more convenient. Kaboodle offers retailers a place to build brand awareness, interact with customers, and take advantage of sales opportunities. Why? Kaboodle users benefit from being part of an online shopping community with like-minded people where they get access to tools that makes their shopping experiences easier and faster by enhancing their shopping experience through organized lists, input from “soul mates,” discounts, and chances to win prizes. Users can create their own profiles, interact with other users, share advice and get feedback. Business partners benefit from being in Kaboodle’s network through increased brand awareness and sales opportunities. Through the Premium Partnership program retailers can take the interaction with users even further by offering deals and discounts. Kaboodle’s many activity possibilities and their creative encouragement of users to participate creates customer loyalty, which makes investment in Kaboodle more beneficial. Sites such as shopping.com benefit because they receive revenue through affiliate marketing partnership with Kaboodle. * http://www.kaboodle.com http://www.kaboodle.com/zm/retailers http://www.npost.com/blog/2006/04/17/interview-with-manish-chandra-ceo-of-kaboodle/ hsepubl.lib.hse.fi/FI/ethesis/pdf/12190/hse_ethesis_12190.pdf
2. Describe how you would go about determining what the target percentage growth should be in this new demographic. Using current online data and trends, describe how you would help Kaboodle understand what a bold but also realistic goal is to grow this new customer segment. In order to set a realistic goal for growth different criteria have to be taken into consideration. Kaboodle needs to look at: The industry it is in. Is the use of social ecommerce services expected to increase or decrease in the future and why? (See next slide for trends.) The target audience . How likely are they to adopt Kaboodle’s service based on their needs, conditions, and demographic background? The competition : Are there many organizations offering the same product to the same audience that Kaboodle wants to target? Is the market already saturated with similar service offerings? What are the competitors strengths and weaknesses? How are competitors differentiating themselves from one another and can Kaboodle create a sustainable competitive advantage? How can that be an opportunity/threat to Kaboodle? Looking into these areas and providing data would help Kaboodle to set a bold, but realistic goal for target percentage growth. Bold would be driven by the sustainable competitive advantage that Kaboodle identifies, as well as the unique value proposition(s) it can offer both its customers and business partners.
Social Ecommerce Trends Looking at the following e-commerce statistics it is clear that there is market potential for a social ecommerce organization such as Kaboodle: IMRG and Capgemini predict that the UK online retail market will grow by 110% in the next decade, reaching £123bn by 2020. 42.6% of UK consumers buy something online at least once a week, and the average online spend per shopper is £71 per month. Recommendations from friends or family is the single most important factor in the choice of website to buy from, with 71% giving this reason. 46% said knowledge of the retailer from their high street presence was a key factor. Price was the most important factor in choosing to shop online for 60% of respondents, followed by convenience of having items delivered (51%). Free shipping was the most popular motivation for 82% of UK consumers, followed by price guarantees (72%), alternative payments (60%), and ratings and reviews (59%). F-commerce is also booming and predicted to grow. The most popular product industry is apparel, followed by women’s jewelry, home & garden, gift & flowers, and computers (by total products). More and more retailers are hopping on the social shopping bandwagon and use Facebook storefront shops to sell merchandise. Consumers can receive friends’ input before buying something. When actually making a purchase, the user is normally directed to the retailer’s website. As seen, the social ecommerce market is growing and by taking other criteria such as the target audience and competition into consideration, Kaboodle can set a realistic growth goal in order to expand their customer segment of females in the 25-34 age range . *http://econsultancy.com/uk/blog/6426-e-commerce-stats-round-up-2 http://www.socialtimes.com/2011/02/facebook-ecommerce/
3. Finally, make key and specific recommendations on how you suggest Kaboodle can reach this growth target in the new demographic. Where and how will you identify target audiences? To be able to reach the growth target in the new demographic, research about women 25-34 years old has to be conducted in order to understand their interests, values, their buying behaviours, purchase patterns, and what they might look for in a social e-commerce site as well as what would make them stay loyal to Kaboodle. Kaboodle is strong in the 18-24 age range and even though women 25-34 have many characteristics in common with younger females there are also a few differences. The younger group of women (18-24) are in college or have just started working. The majority have also not settled down yet, which means that this group is not as affluent as the older group of women, but they do have more “me-time.” The target women are more likely to have climbed higher up on the career ladder and are often also settled down with infants or toddlers as part of the family. This makes the target group more affluent, but these women often feel time-deprived and find it difficult to carve out any “ me-time. ” Both groups take interest in social e-commerce sites for the enjoyment of shopping, but the target woman is more likely to value a site where she is given solutions to help her manage the complexities of her life, which helps in decreasing her stress and workload. Even so, she is also looking for a place where she is given an identity. Though this group has a higher income, these women still look for value and good deals. Possibilities for the target group to reject Kaboodle are risks such as the limited product-shopper interaction that can come with the online ordering experience as well as fears over the security and privacy of personal information. Used properly, Kaboodle has the capability to tackle these obstacles by providing reviews of products created by other users, extensive product information, customer service, well known brands users are familiar with and presenting products in a way that makes users feel more secure about their shopping choices (can for example be done by navigation and categorization). Once the women and their general interests are identified, Kaboodle has to bring content to where they are spending their time and make them aware of the organization’s services and how they can benefit from them. These women can be found both online and offline through different media. *http://adage.com/whitepapers/whitepaper.php?id=10
b) What specific strategies will you use in social media? Explain in detail how you will leverage the social networks that exist online. How can Kaboodle reach, engage and convert these people to be loyal users of Kaboodle? To be able to reach, convert and keep the target group loyal, Kaboodle has to make sure to bring them content that is relevant to these women. Kaboodle has to make use of other social networks that these women use, such as the most common ones: Facebook, LinkedIn, and Twitter, but also lesser known social networks such as ShesConnected, Boutiques, the Mommy Blog and other sites, blogs, price comparison sites and communities that attract the target females. When directing women to Kaboodle’s website, a specific landing page with relevant content to match the target group should be created. In fact, a targeted landing page strategy should be implemented. This would allow Kaboodle to set up pages which focus on different features and benefits separately. Facebook Ad campaigns (which function like Google Adwords) could be created which would drive individuals to these different landing pages (or micro sites) based on the data in their profiles and their interests (pages they are fans of or pages/sites they have “liked”). A syndication and possible partnership with certain sites could leverage all the sites’ contents and usage to members. When syndication is being used it can be automated through tools such as dlvr.it. *http://www.shesconnected.com/ http://www.boutiques.com/ http://themommyblog.net/ http://dlvr.it/
3 b) cont’d When the women have signed up for Kaboodle it is important to keep them as members by ensuring that they interact frequently. This must be done by developing many ways to engage them. One is to make sure that Kaboodle has interesting and fresh content that attracts the target group. When interacting with Kaboodle’s partners/brands this can be done in an entertaining way such as through creative content, polls, lists etc. When shopping, women like to spend time reviewing, exploring, receiving others’ input, and giving feedback before making a decision. If they have a positive shopping experience they are more likely to repeat purchase. Kaboodle can maintain consumer loyalty by responding to consumer complaints and comments and giving great customer service and short response time. Other ways to keep the customers loyal is to interact with them via rewards, giveaways, badges, VIP status, games, polls etc. If the user can create her own content (i.g. making her own polls, lists etc) it is more relevant to her and she is more likely to stay loyal. Based on users’ previous actions and available user data, Kaboodle can help users with recommendations based on purchases, reviews, “likes” (using Facebook’s Open Graph) etc. in order to tailor the content to users. *http://www.allbestarticles.com/internet/internet-marketing/marketing-to-female-consumers-on-the-internet.html http://mashable.com/2010/05/07/facebook-open-graph-ecommerce/
c) What actions would you focus on in the first 2-3 months of your marketing plan? Before doing anything else, the objectives and the budget need to be clear in order to fulfill a successful marketing campaign. It is important to conduct research (secondary and primary) to understand the target group. The target group’s needs have to be understood in order to reach these women and convince them that Kaboodle can benefit them. It is also important to look into the competitive environment and what other social ecommerce sites that possibly could attract the target group. Doing a thorough SWOT analysis and some competitive intelligence will help Kaboodle capitalize on its own strengths and take advantage of its competitors’ weaknesses. When these areas are understood it is easier to develop successful marketing strategies and tactics. In order to meet the target growth, women first have to be aware of Kaboodle and efforts need to be made to market the website. Building brand awareness can take time and Kaboodle needs to create a reputation for its community and be visible in search engines. To speed up the process and to get more clicks and consumer interaction and engagement Kaboodle can advertise through Facebook Ads and Google Adwords, but they must also make use of free marketing activities such as being active on shopping blogs, online forums and communities where users would appreciate Kaboodle’s product. By doing so Kaboodle can connect with users, suppliers, potential partners etc. to show their product, but also to create word-of-mouth credibility. This process needs to be monitored and analyzed, for example through Google Analytics, in order to see what works and what does not. It is also important to be visible in the media to gain traffic to the website and this can be done through press releases, article marketing etc. In fact, a good public relations strategy can be one of the most successful ways to create awareness and credibility for Kaboodle. By using SEO best practices, Kaboodle can enjoy more visibility in the organic search results on search engines, by developing a relevant keyword strategy. To back up the increased traffic to Kaboodle’s website, and to ensure that users sign up and use the product, incentives promoted on targeted landing pages, good and relevant content, and special “new member promotions” can be created. *http://www.mybusiness.co.uk/YcYM82totKRAKg.html http://www.plaveb.com/blog/developing-a-marketing-communication-plan-for-an-ecommerce-site
d) How will you measure success and improve the marketing efficiency over time? In order to measure success one could look at memberships before and after targeting women 25-34 and hopefully see an increase in this number. Kaboodle might have enjoyed many new memberships, but this alone is not enough. Success also means a large amount of use from the users and that they participate and are active on the website. Much of this can be tracked through Google Analytics. Since Kaboodle has many partnerships with other businesses, it must evaluate if and how these partners have benefitted from the increase in membership. Hopefully the partners enjoy increased brand awareness and sales. Kaboodle should also look at the objectives and the target percentage growth and if these were met. Kaboodle should not forget to look at the financial aspects of its attempt to reach and engage women 25-34. For example, did the investment have a positive ROI? To improve marketing efficiency Kaboodle needs to have a dialogue with the target group in order to find out what they like and what they do not like. This can be done through surveys and focus groups, but also by monitoring blogs, shopping forums, customer feedback and usage patterns. All of this data should help Kaboodle focus its marketing strategy so that it resonates with the constantly changing needs of its target customers. Kaboodle also needs to look at its advertising efforts and learn from them. For example, if the copy in one particular ad works better than another, Kaboodle needs to analyze this and make use of its findings for future marketing efforts.
Kaboodle case study Prepared by Anna Sandgren March 2011
Business Model Target Customers Revenue Stream Value Proposition Activities Consumers (No direct revenue stream; though they are the key to revenue from Business Partners) <ul><li>Easy online shopping </li></ul><ul><li>Enhanced online shopping </li></ul><ul><li>Easy access to product information through tools and features. </li></ul><ul><li>Faster shopping decisions </li></ul>Business Customers/Partners <ul><li>Online advertising </li></ul><ul><li>Commissions from sales </li></ul><ul><li>Premium services </li></ul><ul><li>Shared revenue with partners </li></ul><ul><li>Brand awareness </li></ul><ul><li>Sales opportunities </li></ul><ul><li>Assistance and programs to help build brand awareness </li></ul>
Target Growth To set a realistic goal for growth look at criteria such as:
Recommendations a) Where and how to identify target audiences <ul><li>Conduct research in order to understand target group and their needs. </li></ul><ul><li>Bring content to where women spend their time and make them aware of Kaboodle. </li></ul><ul><li>Women can be found online and offline. </li></ul><ul><li>Show solutions. </li></ul>
b) Reach and Loyalty – Social Media <ul><li>Use other social networking sites to attract women to Kaboodle. </li></ul><ul><li>Use landning sites with relevant content to the target group. </li></ul><ul><li>Syndicate social networking sites to leverage content and members’ usage. </li></ul>
b) Reach and Loyalty Social Media - cont’d <ul><li>Keep users loyal by: </li></ul><ul><li>Fresh and relevant content. </li></ul><ul><li>Interaction with brands through content, lists, deals and discounts, reviews etc. </li></ul><ul><li>Great customer service. </li></ul><ul><li>Interaction via rewards, giveaways, polls, VIP status, feedback from other users etc. </li></ul><ul><li>Use Facebook Open Graph to give recommendations based on user history. </li></ul>
c) Actions in the first 2-3 months <ul><li>Understand the target group through research. </li></ul><ul><li>Understand the competitive offerings and capitalize on weaknesses. </li></ul><ul><li>Make potential users aware of Kaboodle. </li></ul><ul><li>Monitor and analyze. Learn what works and what doesn’t. </li></ul><ul><li>Be visible in media. </li></ul><ul><li>SEO for better organic search results. </li></ul><ul><li>SEM through Facebook Ads and Google Adwords. </li></ul><ul><li>Content and promotions for new members. </li></ul>
d) Measuring Success and Marketing Efficiency <ul><li>Measuring Success </li></ul><ul><li>Look at: </li></ul><ul><li>Increase in membership. </li></ul><ul><li>Are new members using the product? </li></ul><ul><li>Do partners benefit? </li></ul><ul><li>Are objectives and goals met? </li></ul><ul><li>Positive ROI? </li></ul><ul><li>Marketing Efficiency </li></ul><ul><li>Learn from target group. </li></ul><ul><li>Learn from what works/what does not work. </li></ul>