Make eBusiness Part Of Your Sales Strategy Brendan Hughes 2010

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Presentation I gave to the Sales Institute of Ireland on making e-business part of your sales strategy - looking back at my time working for http://vhi.ie, http://fbd.ie and http://nononsense.ie. Wednesday 17th February 2010. Discussion held afterwards with Michael Veale of http://buy4now.ie and Shenda Loughnane of http://ican.ie. For more visit http://brendanhughes.ie


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  • Seth Godin’s new book – “What matters now” gives an analogy of the evolution of Finches on the Galapagos islands as an example of how capitalism will not die, but adapt. I like to take this example to illustrate how businesses that succeed online are continually adapting to the new rapidly changing marketplace and are looking quite different at the end of the process. Darwin landed on the Galapagos islands and discovered 13 different varieties of finch. Each had very different features and at first looked completely unrelated. On closer examination it was seen that they all decended from a single species of finch, but over centuries had adapted to the various habitats they had settled in. The shape of their beaks for example had changed to accomodate the type of flora that was found on the particular part of the island the birds were found on. Many organisations that have moved from traditional bricks and mortar type business and that have succeeded online now infact are almost unrecognisable from the original company that they were… or at least what they do online looks very different to what they do offline e.g Ryanair, AerLingus E.g. Paddypower E.g. NoNonsense Different business propositions, different product/service offerings, different distriubtion, different processes, different pricing, different marketing…. And they are continually changing and adapting as the marketplace continues to evolve What is the opportunity in this new marketplace? In 2008, 36% of Irish people shopped on the Internet, compared with just 14% in 2004, In 2008 48% of irish business managers purchase or procure directly via the internet In 2008 E-commerce accounted for 12% of enterprises' turnover in the EU27 In 2009 29% of all companies’ turnover in Ireland were via e-commerce in 2009 (21% in 2008) (11% internet, 18% edi) Competitor Analysis What are your competitors good and bad at doing online? What are players in other markets good and bad at doing online? What are the best Internet offerings in other sectors good and bad at doing online? Market Analysis What is the size of the market available to you online? How is the market changing and how will those changes impact on you? What changes in other markets do you need to take heed of to ensure you are prepared for when they hit you? STATS: - E-commerce accounted for 12% of enterprises' turnover in the EU27 in 2008 Eurostat, January 2010 In 2008, 36% of Irish people shopped on the Internet, compared with just 14% in 2004, with the latest rankings putting us slightly above the EU average of 32%. The greatest concentration of online shoppers in Ireland is among 25-34 year olds at 52%, followed by 35-44 year olds (44%) and 16-24 year olds (34%). Travel and holiday accomodation 21% Tickets for events 12% Music and film 10% Books and magazines 9% Clothes and sports goods 7% Electronic equipment 5% Eurostat, March 2009 48% of irish business managers purchase or procure directly via the internet 49% research products or services Amárach research, September 2008 - 32% of all companies’ purchases were transacted via e-commerce or edi in 2009 (25% in 2008) (16% internet, 16% edi) - 29% of all companies’ turnover in Ireland were via e-commerce in 2009 (21% in 2008) (11% internet, 18% edi) http://www.cso.ie/releasespublications/documents/industry/current/isse.pdf - Across a range of online searches, more than 70% of products sought by Irish consumers were only available from cross-border providers. European Commission, October 20093 Uk - Overall, 40% of merchants are predicting an increase in online revenue of up to 20% in 2010. One third expected growth of over 20%. CyberSource, 2010 The value of monthly payments processed by Irish e-commerce transactions company Realex grew by 45pc from €538 million in January last year to €781 million in January 2010. SiliconRepublic, Feb 2010 http://biology.unm.edu/ccouncil/biology_112/Summaries/Natural_Selection.html
  • A quick thought on undertaking market reviews. While I tend to spend time looking at what my competitors are doing in this space and what other businesses in the same sector are doing in other countries… I spend far more time looking at what best of breed e-commerce organisations are doing worldwide. So when I started looking at the insurance sector, I realised that most of the insurers I came across, regardless of jurisdiction, had simply taken existing paper-based underwriting and transferred that to the web. I discovered that I had far more to learn about what works online by looking at other sectors where the use of the web for sales is far more advanced Travel and tourism – Ryanair Music – iTunes Tickets - Ticketmaster Books – Amazon Electronics – Dell, Apple Department stores – Walmart, Target.com, These organisations are spending millions each year on usability and process improvement. Understand what they are doing and how you can make use of what they have learned. There are standards, often unwritten, but they set the bar for customers’ expectations of what GOOD looks like. Innovate by bringing these learnings on to your website. We took the best of e-business processes from other sectors and turned our own sales model on it’s head. So instead of asking customers their life story before we even give them a price, we can give them a price in less than 10 seconds. Look at best of breed across all sectors: Top e-commerce websites in Ireland: Top e-commerce websites worldwide: Top e-commerce websites in your sector? http://www.flickr.com/photos/flyforfun/2598924601/in/set-395680/
  • As you move from retail, face-to-face or telephone into web you start to encounter new challenges in multi-channel distribution. Channel cannabilisation Channel conflict Different levels of service on different channels Customer’s not experiencing joined up customer service OPTIONS to consider: Integrated web/call centre? (FBD, VHI) Customers expect to be served in integrated multi-distribution Higher value of brand Sharing of costs Less legal implications But Potential of channel conflict (internally and customers playing one off the other) Technically requires single view across all channels Aligning processes can be difficult Same products available across all channels – not always appropriate or practical Sub brand to differentiate Direct? (BMIbaby) Possible channel conflicts Lower level of trust But Still channel conflict Added complexity of possible legal implications New online brand? (NoNonsense) Eliminates channel conflict More touchpoints in market to address new specific segments But High cost – set up Low awareness – marketing Losing agent channel? Legal issues Doubling on documents/processes – replicating entire business Other brands – Whitelabel? (Insurance sold through Banks, Supermarkets, Airlines websites) Other brands’ customers Benefits to organisation: More touchpoints into target markets Competitive differentiator over pure-plays in particular on education around complex products and purcahse decisions Efficiencies can be generated through tharing of processes, technology and information Increased cross-sell opportunities Benefits to customers: - In the customer’s interest – not all customers want to shop online… depedning on the customer and the type of product. Improved cutomer experience by giving choice Better understanding of customer, by being able to collate more information from different sources – better loyalty Challenges for organisations: Culture change programme to shift from product or funtion focused approach to customer focused approach Organisations structures to support - Aligning separate channels management, staff, systems, processes and OBJECTIVES - Are the targets and sales bonus structures optimised… how do you avoid the conflict between channels? Increased complexity of understanding customer behaviour in the industry and the business IT system integration Identify and agreeing the relative priorities of each channel for each product/customer type 77% said the agent was neither knowledgeable about their particular query or about the website itself. Tealeaf, 2009 If they start online, can they be seamlessly be looked after on the phone and then potentially go back to the web? Is the phone number easy to find. Are the agents familiar with the website? Are there options – phone/email/im/chat/skype/co-browse? Incentivise online purchase? http://www.flickr.com/photos/jitze1942/3060005964/ http://www.flickr.com/photos/fishyfish/390622629/
  • You think you understand your customers currently. What is important to the them. The factors that go into their purchase decisions? The process they take? This can be very different online… More price conscious Expect to get it cheaper online Easier to shop around Easier to compare products Easier to read reviews Easier to get other’s opinions Less patient 1% of time is spend in the purchasing, the rest of the time is spent researching or asking others. What are the steps that customer go through to make a decision? Search engines Company websites Review websites Social media (Twitter,Facebook ) What is the thought process? Map it out Verify it before you build anything Implement it as the customers wants it http://www.flickr.com/photos/fncll/135465558/
  • Pricing online is also different. Customer expectations of what they should pay for and the price they should pay are different. Start with lowest and allow people to add on: e.g. No Nonsense Time based: e.g. Ryanair/ Airlines e.g. Paddy Cosgrave Long Tail Most retail outlets can store a limited number of product lines, and typically only stock the best selling lines. Online, retailers are stocking much greater quantities and thus cater for more niche ranges. e.g. Amazon Long Tail Phase 2 - Give the widest range of the same product options at different prices: e.g. Amazon Marketplace Expecting Added value: Offer Free Delivery – spend x to get free delivery Over a third (34%) cited free delivery as the most important factor in their last purchase decision; 10,500 visitors to 30 top retail websites in the UK (e-Consultancy, 2008) Worst of All - FREE: The business model behind many websites is that the core functionality is free, but for increased levels of service you have to pay. Newspapers Airlines Social networks
  • Have you noticed that the product you actually buy online is often not the same one you set out to buy. This happens in all purchase environments, however online retailers that succeed are proactively engineering the purchase decision to maximise share of wallet. e.g. Ryanair Go in to buy a flight for €1, but by the end of the experience you have spent perhaps several hundred euros on “ancilliaries” that are built into every possible step of the process – from the very first screen right through until you step off the plane at your destination. e.g. Amazon Through it’s “ personalised recommendations” based on your previous purchases “ customers who bought this, also bought” “ frequently purchased with this book” Amazon is doing the exact same thing. At each point in the process, drawing your attention to other items that you might be interested in, plus: Minimum purchases for free delivery also encourage to go back and increase basket size e.g. No Nonsense – Insurance - Start with the base product – third party – the minimum legal requirement At each step, providing additional cover options, payment options all directed at maximising share of wallet Retailer: customer will have spent more than they might have otherwise Customer: love this process as they love being in control http://www.flickr.com/photos/bopuc/188052580/
  • We’re trusting people, at least when it comes to internet transactions. Some 70% of Irish people think that internet transactions are either completely safe or rather safe. That puts us sixth-highest in a survey of the EU-27 countries. Only Finland (84% say safe), Denmark (82%), Sweden (78%), the Netherlands (78%) and the UK (76%) are more confident. Eurobarometer Confidence in the Information Society report, May 2009 However that leaves 30% that do not trust online shopping – fear of fraud, uncertainty about whether the goods / services will be delivered. 87% of people surveyed are not convicned that the Internet is completely safe. 13% - completely safe 57% - rather safe 18% - not really safe 6% - Not safe at all 7% - unsure Eurobarometer, May 2009 Tacticts to building trust: Security symbols – 3 rd party certification logos – e.g. Verisign Local phone numbers, Local postal addresses (not po boxes), Rapid responses to emails. Some companies actually hide their other contact details - 50% would never purchase anything from a site which doesn't provide these details (e-consultancy 2007) Professional design No errors Brand awareness (offline) Make returns/refunds policies transparent and not onerous on customers – they don’t like to do it either Be upfront about delivery prices and all t’s and c’s Ensure data protection and security from hackers (Bord Gais, Boards.ie etc) are adequate. Reputational damage can be huge. http://www.flickr.com/photos/jfchenier/428825569/
  • Speed and Simplicity We used to rely on “covnenience” as the driver for time-pressed customers (commuters) to come to our online stores. However I believe that “efficiency” is the new imperative – customers are doing far more online, with probably the same amount of time on their hands and are used to being able to transact things really quicklty and easily. If you cannot deliver on speed and simplicity then customers will just go elsewhere – incredibly impatient and intollerant. Speed – See blog post 2007, Amazon discovered that with every 100 milliseconds increase in the load time of pages on their site sales decreased by 1%. Amazon introduced a “golden one second rule” – no webpage should take more than one second to load. Google, learned that by cutting its home page size from 100KB to 70-80KB, thereby decreasing upload time, Google Maps’ traffic went up 10% in the first week, and an additional 25% in the following three weeks Simplicity Design – white space - Google – world’s largest website, more funtionality and services than most and yet when you go to the homepage it remains the epitomy of simplicity. LESSON – do one thing and do it well. A constant challenge for bricks and mortar businesses online is the need to have “everything on the homepage”. Steps – we used to believe in a three-click rule – Three clicks was an acceptable amount to get users to the page they wanted. Once again Amazon set the bar with the introduction on ONE CLICK CHECKOUT – eliminating all the unncessary steps for customers who know what they want. Steps: Check your download times and compare against your competitors Be ruthless with your home page – eliminate anything that is not driving sales Review how many options you are giving people on each step of your purchase process…. 11 other things customers can do execpt proceed to purchsae… http://www.flickr.com/photos/14degrees/440515255/
  • People trust other people (42%) more than they trust the information on your website (33%) Edelman, 2010 74% of people are influenced by the opinions of others when buying products. 47% of the 1,000 shoppers polled said they look to on-site reviews when making a decision.  Research from Manage Smarter (September 2009) ENGAGE: Discusssion on other forums/websites/blogs and what others are saying… are you intervening where there are negatives – see them as opportunities to address customer queries and to be seen to be responsive, customer focused… External - Trip Advisor Social media – twitter, blogs Bulletin boards On Site On site product ratings and reviews Testimonials Drive using email – post sale http://www.flickr.com/photos/striatic/2135057566/
  • 79% of marketers state that email marketing is either “important” or “very important” of their marketing mix However only about 30% are personalising those emails to the customers who are receiving them. (Marketing Institute, 2009) Big QUESTION – what customer triggers are you using to determine what and when to send emails each customer? 1. Set-up customer email preferences to support event dates, allowing customers to tell you when something special is happening. Use automated emails and dynamic content to tailor messaging to the customer e.g. if a customer has given you his Mum’s birthday, make sure the content contains gifts relevant to the mum. 2. Based on Dates of birth or other data you capture as part of the sales process 3. Timed based on their last failed transaction – insurance renwal 4. Timed Warm reminder – got a price, offer an added incentive a few days later – special offer 5. Behavioural - Based on what they clicked on in previous email – viewed a particular product, send them another one with a special offer on that product 6. Make sure your emails have viral triggers – send to a friend Consider: SPAM DATA PROTECTION
  • Just over 90% of marketers are spending some of the budget online, with 47% of the sample investing more than a tenth of their total marketing budgets online There has been a year-on-year growth in use of online marketing, with only 30% of the same sample stating that they spent more than a tenth of their budgets online last year The survey found that marketing managers were more likely to divert budget away from direct mail, press advertising, magazine advertising and PR campaigns to online marketing. Almost 37% of respondents had moved spend from direct mail, 32% of the sample said they had moved from press, 30% Criteria that were considered either “very important” or “important” were: • Optimising the campaign’s reach (92%) • Lowest cost marketing channel (89%) • Targeting and segmenting (85%) • Measuring responses (87%) • Capturing customer information (75%) Amas, December 2009 In the UK, 19% of total advertising spend in 2008 was Internet based Internet Advertising Bureau, 2008 Online Options: Display / Banner Search engine Video (youtube, RTE, etc) Interactive Games Facebook YouTube – invideo text, pre-rolls (Alchemy 867,000 views in one day) http://www.flickr.com/photos/aussiegall/286709039/
  • 60% of your traffic can come from Google. And it’s mostly free. SEO is the second most popular with 48% usage level by marketers Amas, 2009 According to Eoin O’Suilleabhain, e-channel developer, Bord Gáis Energy, over 30,000 new customers in the first 30 days of the campaign were directly attributable to Google Adwords advertising alone. “ Within 30 days of launch over 30,000 sign ups were attributable to Google AdWords advertising and the most impressive measurement of our online channels was the conversion of over 100,000 customers via the Big Switch website in just four months, which rates as one of the most successful online campaigns in Ireland to date.” Prosperity.ie, 2010 Trust in online search engines 34% Trust in a company’s own website 33% Edelman Trust Barometer, 2010 Search engine optimisation - inbound links from other (authoritative) websites - regulalry updated content - Relevant content to key search terms - Don’t foget about the long tail – less competitive AdWords - CPC Quality score can bring down the price – if more people click on your link because the TEXT in the ad is appropriate to the search term. Google wants more clicks even if they get paid less per click. Target geographically http://farm4.static.flickr.com/3547/3497941641_6e067ddaac_t.jpg
  • Benefits over text ads; Visual Rich media Interactive Can Target To particular websites Demographics - Age profiles Geographics Content Behaviourally CPM Networks are cheaper 2 cpm versus 10 cpm 15% rebate to agency CPA - Cost per sale models http://www.flickr.com/photos/31216636@N00/3253842434/
  • Is web a key call to action? Leads to greater visitor numbers Improves conversion – because of trust element AMAS MII Survey Dec 2009 Second-Screening - a growing social trend - This is the act of watching traditional television while simultaneously going online with a laptop computer (or even a mobile phone) e.g. the Apprentice – unseen clips Bord Gais: When measured it became clear that TV advertising had an almost immediate effect on search volumes and site traffic, indicating that more and more people are surfing the web whilst watching TV. One of the major lessons learned is that an effective online channel can continue to drive conversions well past working hours when combined with effective TV placement. http://www.flickr.com/photos/amagill/26273015/
  • 150,000 Irish people on Twitter Barryhand.ie, Jan 2010 1.2 million on Facebook, age profile Can advertise to profiles Mulley, ?? 5,000 bloggers Marketers in Ireland using social networking and blogs - 44%. Amas, 2009 Customers who experience problems when conducting transactions online are sharing these experiences on social media sites; 13% this year compared with 8% in 2008. 75% said their choice of retailer was influenced by what they read on social media sites, while 56% avoided a particular company after reading a bad review. The reverse can also apply though, with 52% declaring that they chose a particular retailer after reading good reviews.  If there’s a problem with the website 35% will call a call centre, but 48% will tell family and friends. Tealeaf, 2009 Most trusted source of information is: Conversations with employees of the company: 46% (42% globally) Plus Conversations with friends and peers trusted 42% (37%) Social network sites 30% (16%) Blogs 24% (18%) Edelman, 2010 WHY? Establishing expertise and reputation Voice for your staff/customers A more human face to your company Crisis management – filling the vacuum Generating sales leads – 39% of business bloggers say that they generate sales leads through their blogging http://www.flickr.com/photos/peasap/2088444066/
  • Sales rep calls ` http://www.flickr.com/photos/ellasdad/457521627/
  • Moblie internet is now accessed by: 24% of males 39% of 15-24 year olds 25% of ABC1s 44% of students ComReg Quarterly Key Data, released June 2009, ComReg Consumer ICT Survey, Q2 2009 Mobile operator 3 reports that 43% of mobile internet usage on its network is going to just two sites – Facebook and Bebo. Other top destinations are Google, YouTube and RTÉ. Other reports cite a broad range of services being used, including financial services, eCommerce and location-related services such as maps and route planning. Amas, 2009 Daft.ie Allianz Car Insurance Travel insurance Applications Quote, pricing but complete elsewhere BASICS: Make sure your website actually works on a mobile Develop a mobile website Develop mobile apps – iphone, android, blackberry http://www.flickr.com/photos/stellar-yelly/2371049279/
  • Funnel Have you targets for each stage in the sales process? Analyse inbound links – trackable links from all campaigns – visits/sales/retention -Track enquiries/sales/customers to the original source…Measure ROI on each activity and loyalty of different types of customers Page level analytics – understand each step in the process and where people are leaving. Monitor trends and changes over time – product changes, pricing changes, competitors changing, marketplace changes… Sometimes you need to drill down even further: field level analytics – average time to complete a field – is there one field that takes longer than others. Optimise the customer journey. Experiment with A/B and multivariate testing programmes if you haven’t done so already. Expert usability reviews Usability audit – real cutomers sitting in front of your website for the first time http://www.flickr.com/photos/olibac/560079597/
  • Make eBusiness Part Of Your Sales Strategy Brendan Hughes 2010

    1. 1. Making e-Business Part of your Sales Strategy Presentation Brendan Hughes , Director of Market Development, Weedle Panel Discussion Michael Veale, CEO, Buy4Now Shenda Loughnane , Managing Director, ICAN 17 th February 2010
    2. 2. Adapt to the new marketplace
    3. 3. Learn to fly
    4. 4. Review your distribution models
    5. 5. Understand customers online behaviour
    6. 6. New types of pricing strategies
    7. 7. The Process is the Product is the Price
    8. 8. Establish trust without face-to-face
    9. 9. The efficiency imperative
    10. 10. Ratings & reviews
    11. 11. Email - targetted, relevant and timely
    12. 12. Online advertising
    13. 13. Search engine mechanics
    14. 14. Banner/display advertising
    15. 15. Integrating with offline advertising
    16. 16. Get social
    17. 17. Get Linked In
    18. 18. Go mobile
    19. 19. Analyse Everything
    20. 20. Discussion

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