This document discusses fixing leaks in business operations to improve profitability. It outlines how examining where customers are lost throughout the customer journey can help businesses understand how to increase conversion and repeat purchases. The benefits of fixing leaks include deeper customer understanding, higher customer satisfaction, ROI and profits. Common areas where leaks occur include online sales processes, in-store sales, telephone orders, fulfillment and repeat purchases. Fixing leaks requires analyzing customer data and forming a cross-departmental task force to identify issues and implement solutions.

1. Ron Ryan & Associates
Fixing The Leaks
Improving Business Profitability
Ronald D. Ryan
President
e. ron@realemail.net
1 Copyright @ 2012, Ronald D. Ryan t. 888-398-1624

2. The Truth About eCommerce.
“We are all on the
Internet. And on
the Internet, we
are all plumbers.
Some of us deal
with big leaks,
others deal with
small ones, and still
others design and
lay new pipes. But
in the end, we’re
plumbers whose
pipes carry
customers,
information, and
money.”
2 Copyright @ 2012, Ronald D. Ryan

3. Agenda – Fixing The Leaks
• Who can benefit from fixing customer ‘leaks’?
• What are the benefits from fixing leaks?
• Where can you find the leaks?
• How can you get started?
3 Copyright @ 2012, Ronald D. Ryan

4. Who Can Benefit?
“Slump? I ain't in no slump... I just ain't hitting.”
- Yogi Berra
4 Copyright @ 2012, Ronald D. Ryan

5. Quick Quiz
 Do your customers use the Internet to find your location(s)
or phone number?
 Do your customers place orders over the telephone?
 Do your customers visit your web site or Facebook page
before they decide to buy?
 Do your customers contact you, or place orders with you (or
your competitors) using the Internet?
Who
Can Benefit?
5 Copyright @ 20102 Ronald D. Ryan

6. Quick Quiz (continued)
 Do your customers use the Internet to find your location(s)
or phone number? Yes.
 Do your customers place orders over the telephone? Yes.
 Do your customers visit your web site or Facebook page
before they decide to buy? Yes.
 Do your customers contact you, or place orders with you (or
your competitors) using the Internet? Yes.
No matter what size of company you manage,
the answer is usually ‘Yes’ to most of
these questions.
Who
Can Benefit?
6 Copyright @ 2012, Ronald D. Ryan

7. Are You
Acquiring,
Converting
And Keeping
Customers
As Effectively
As You Would
Like?
7 Copyright @ 2010, Ronald D. Ryan

8. What Are The Benefits?
“You've got to be very careful if you don't know
where you are going, because you might not get
there.”
- Yogi Berra
8 Copyright @ 2010, Ronald D. Ryan

9. Typical Customer Flow
Internet You Need To Model This
Online Sales
Process
Fulfillment Repeat
In-Store Purchase
& Service
Sales Center
Off Line
Advertising
What
9 Copyright @ 2012, Ronald D. Ryan Are the Benefits?

10. Copyright @ 2010, Ronald D. Ryan
Key Concept #1
Know Who Is Leaving And Why: Knowing the number of
customers who visit your store(s) or site(s), convert to sales, and
make repeat purchases is important. Understanding how many
What
10 Are the Benefits?
you lose at each step in the process and why, critical.

11. Improving These Metrics = Easy
Money…
Conversion and repeat purchase rates shown are for
discussion purposes only. Rates in your business will
vary by product, process, customer type, time period,
Sales Center or and season.
Retail Store
1 in 4 or 5 buy
Fulfillment & Service
8 or 9 out of 10 Keep
What You Sold Them
Repeat Purchase (Or
Renewal)
Between 5 and 9 Out
of 10
Copyright @ 2012, Ronald D. Ryan
What
11 Are the Benefits?

12. Copyright @ 2012, Ronald D. Ryan
Key Concept #2
Complete The Circle: Improvements in conversion
and repeat purchases have a huge impact on
What
Are the Benefits?
12 profitability. Copyright @ 2010, Ronald D. Ryan

13. Repeat Purchase Cycle
Online Sales Center Fulfillment Repeat
Process Or Store & Service Purchase
Most People Call,
Drive or Log on to
Make A Repeat
Purchase. But Not
Always From You.
What
13 Copyright @ 2012, Ronald D. Ryan Are the Benefits?

14. Most Profitable Repeat Purchase Cycle
Online Sales Fulfillment Repeat
Process & Service Purchase
For most companies, online or
automatic repeat sales are the most
profitable sales of all.
What
14 Copyright @ 2012, Ronald D. Ryan Are the Benefits?

15. Copyright @ 2010, Ronald D. Ryan
Copyright @ 2012, Ronald D. Ryan
Key Concept #3
Angry no more: Moving repeat sales online
lowers acquisition costs, increases customer What
15 satisfaction, and improves profits. Are the Benefits?

16. Story Problem:
A. If each visitor to your site costs you $5.00 to attract, and for
each 20 visitors you sell one product, what is your acquisition cost
per customer?
B. For extra credit: You improve your web site. What is your
acquisition cost per customer going to be if you sell 1 customer
for 10 visitors?
C. Double extra credit: What if you buy 25K leads per month
and the cost of improving your web site above in B is $100K.
How long will it take you to make your $100K back?
What
16 Copyright @ 2012, Ronald D. Ryan Are the Benefits?

17. Story Problem:
A. If each visitor to your site costs you $5.00 to attract, and for
each 20 visitors you sell one product, what is your acquisition cost
per customer? Answer: $100.00
B. For extra credit: You improve your web site. What is your
acquisition cost per customer going to be, if you sell 1 customer
for 10 visitors? Answer: $50.00
C. Double extra credit: What if you buy 25K leads per month
and the cost of improving your web site above in B is 100K. How
long will it take you to make your $100K back? Answer: 1.6
months.
What
17 Copyright @ 2010, Ronald D. Ryan Are the Benefits?

18. Copyright @ 2010, Ronald D. Ryan
Key Concept #4
Easy Harvest: The ROI from changes that improve
conversion and repeat purchases is often very high. What
18 The time to payback is very short. Are the Benefits?

19. Why Study The ‘Leaks’ -
 Deeper Understanding of Customers
 Higher Customer Satisfaction
 Higher ROI
 Lower Acquisition Costs
 Higher Profits
What
19 Copyright @ 2012, Ronald D. Ryan Are the Benefits?

20. Where Are The Leaks?
“You Can Observe A Lot Just By Watching.”
- Yogi Berra
20 Copyright @ 2012, Ronald D. Ryan

21. Online Sales Process
Sales Center Fulfillment
Online Sales Repeat
or Retail
Process & Service Purchase
Store
Common • Right Traffic But Wrong Products/Services (or Vice Versa)
Problem • Difficult Customer Info Requirements For Purchase
Areas: • Inconsistent Look & Feel At Order Processing Page
• Confusing Interface With Poorly Articulated Funnel
• Incomplete, Missing, Or Hard To Understand Call(s) To Action
• Poor Follow-up To Non-buyers
Copyright @ 2012, Ronald D. Ryan
Where
21 Are the Leaks?

22. In-Store Sales Process
In-Store Fulfillment Repeat
Sales Process & Service Purchase
Common • Poor Outdoor Signage and Lack of Curb Appeal
Problem • Right Traffic and Location But Wrong Products/Services (or Vice Versa)
Areas: • Inappropriate In-store Merchandising and Product Placement
• Inadequate Sales Staff Knowledge, Training and Monitoring
• Confusing or Unappealing Store Layout & Organization
• Long Checkout Lines
• Non-existent Follow-up To Non-buyers
Copyright @ 2012, Ronald D. Ryan
Where
22 Are the Leaks?

23. Telephone Order Process
Online Sales Repeat
Call Center Fulfillment
Process Purchase
Common • Confusing And Inconsistent Value Proposition from CSRs
Problem • Inadequate Scripting, Training, & Monitoring
Areas: • Poor Sales Systems And Support
• CSR Compensation Not Aligned with Company Profit Model
• Inadequate Customer Information About After -Sales Process
• No Systematic Follow-up To Non-buyers
Copyright @ 2012, Ronald D. Ryan
Where
23 Are the Leaks?

24. Fulfillment Process
Sales Center
Online Sales Repeat
or Retail Fulfillment
Process Purchase
Store
Common • Misleading or Inadequate Sales Descriptions
Problem • Confusing Delivery Process
Areas: • Confusing Packaging, Paperwork, and Business Reply Envelopes
• Unresponsive Customer Service or Support
• Difficult or Complicated Returns Process
• Inadequate Satisfaction Monitoring
Copyright @ 2010, Ronald D. Ryan
Where
24 Are the Leaks?

25. Repeat Purchase Process
Online Sales Sales Center Fulfillment & Repeat
Process or Retail Store Service Purchase
Common • No Easy or Automatic Means of Repeat Purchase
Problem • Incomplete or Inadequate Reseller Follow-up
Areas: • Wrong Channel Follow-up
• No Satisfaction Monitoring or Feedback System
• No Customer Level Tracking of Purchases, Preferences or Needs
• Inability to Adapt Offer To Changing Customer Needs
Copyright @ 2012, Ronald D. Ryan
Where
25 Are the Leaks?

26. It’s All Connected
What You Do Affects What
Here Happens Here
Online Sales Sales Center Fulfillment Repeat
Process or Retail Store & Service Purchase
• Clear Value Proposition On Web Site
• Product Descriptions, Educational Content on Web Site
• Call Me Buttons In Sales Sequence
• Pick up Merchandise At Store
…All Result In Lower Costs And More Sales In Sales Center or Retail Outlet
Where
26 Copyright @ 2012, Ronald D. Ryan Are the Leaks?

27. It’s All Connected
What You Do And Here Affect What
Here Happens Here
Online Sales Sales Center or Fulfillment Repeat
Process Retail Store & Service Purchase
• Properly Set Customer Expectations Regarding Product/ Service
• Info on Contractual Post-Sale Requirements (e.g., Signatures, Returned Forms)
• Defaulted (Profitable) Product Choices
• Defaulted (Profitable) Payment Methods and Billing
…All Result In Higher Customer Survivorship
Where
27 Copyright @ 20102 Ronald D. Ryan Are the Leaks?

28. It’s All Connected
What You Affect What
Do Here And Here And Here Happens Here
Online Sales Fulfillment Repeat
Sales Center
Process & Service Purchase
• Great Experience
• Value Proposition And Brand Promises Fulfilled
• On-going Sense of Community
• Easy Repurchase Process
• Easy Referral Process
…All Result In Higher Repurchase and Referral Purchase Rates
Copyright @ 2012, Ronald D. Ryan
Where
28 Are the Leaks?

29. Where To Go For Data?
Online Sales Process: Web Analytics and User
Testing
Sales Center & Retail: Recorded Calls, Telephony
Data, In Store Traffic, Mystery Shoppers
Fulfillment & Service: Complaint Log, Returns
and Cancellations Data
Repeat Purchase: Repeat Buyer Profiles & Surveys
of Defecting Customers
Copyright @ 2012, Ronald D. Ryan
Where
29 Are the Leaks?

30. How Can You Fix The Leaks?
In theory, there is no difference between theory and
practice. In practice, there is. - Yogi Berra
30 Copyright @ 2012, Ronald D. Ryan

31. But Isn’t This Just Common Sense?
“Constant “ But we can’t The Reality:
Improvement afford to do this Discipline Is
Should Be Part of now; we’re in Difficult To Build
Our Culture” survival mode.” & Maintain
Yes. How
To Fix The Leaks?
31 Copyright @ 2012, Ronald D. Ryan

32. How To Get Started?
Leadership
Outside Inside Task
Commitment
Consultant(s) Force
<Either Way>
Start Here And
Work Your Way
Out
How
32 Copyright @ 2012, Ronald D. Ryan To Fix The Leaks?

33. Why Bother With A Task Force?
 Multi-departmental point
of view
 Objectivity
 Independence and
intellectual honesty
 Customer focused rather
than department focused
How
33 Copyright @ 2012 Ronald D. Ryan To Fix The Leaks?

34. Make Sure You Are Looking With New
Eyes
If it ain’t is
broken don’t
go fix it!
How
34 Copyright @ 2012, Ronald D. Ryan To Fix The Leaks?

35. 6 Sigma Ninja’s Helpful But Not Required -
A Check List For Change Teams
 Smart – big picture person
comfortable with ambiguity
 Understands company and how
it works
 Analytical - not afraid of
numbers
 Plays well with others - is well
respected by peers
 Has strong domain expertise in
his/her field
 Willing to work hard
How
35 Copyright @ 2012, Ronald D. Ryan To Fix The Leaks?

36. How To? Buy Books Not Dogma
Customer Analytics
• How to Measure and Improve In-Store Buyer Experience (Underhill)
• How to Measure and Improve Internet Experience and Ecommerce (Kaushik)
• How to Measure and Manage In-Bound Call Center Customer Experience
(Cleveland)
Customer Satisfaction Measurement And Management
• How to Conduct Meaningful Satisfaction Surveys (Hayes)
• Net Promoter Score (Reichold)
• Experience And Interaction Economies (Pine, Gallup)
• How (Nudges) Can Affect Buying Behaviors (Thaler, Sunstein)
Process Improvement
• Six Sigma (Pande et al.)
• Lean (Womack, George, Seddon)
• Reengineering (Hammer)
No Single Approach Does It All How
36 Copyright @ 2012, Ronald D. Ryan To Fix The Leaks?

37. Where Should You Start?
Repeat
Online Sales Purchase (Or
Process Fulfillment Renewal)
Call Center 8 or 9 out of10
1 in 20 Between 5 and
1 in 5 buy Keep What You 9 Out of 10
Buy
Sold Them Buy again
How
37 Copyright @ 2012, Ronald D. Ryan To Fix The Leaks?

38. The Higher You Start In Your Funnel, The Greater
The Impact Of The Change…
Online Lead
Generation &
Sales
Sales Center
Fulfillment
& Service
…But also the more controversial, risky, and
difficult to measure.
How
38 To Fix The Leaks?
Copyright @ 2012, Ronald D. Ryan

39. Where Should You Start?
Repeat
Fulfillment & Purchase (Or
Online Sales Service Renewal)
Call Center
Process 8 or 9 out of 10 Between 5 and
1 in 5 buy 9 Out of 10
1 in 20 buy Keep What You
Sold Them Buy again
Start with a system or process you control. Fix it first. The
further back in the value chain you start, the safer you will be.
How
39 To Fix The Leaks?
Copyright @ 2012, Ronald D. Ryan

40. Summary
 High ROI
 Falls straight to the bottom
line
 Requires little investment
 Improves customer
experience and brand
 Makes the world a better
place.
40 Copyright @ 2012 Ronald D. Ryan

41. Appendix
41 Copyright @ 2012, Ronald D. Ryan

42. Payback Calculation
Purchased Leads Cost Per Lead Acquisition Cost New Customers
25,000 $5.00 $125,000.00 1,250
12,500 $5.00 $62,500.00 1,250
Old Conversion 5%
New Conversion 10%
Per Month Savings $62,500
Investment $100,000
Time To Pay Back 1.6
42 Copyright @ 2012, Ronald D. Ryan