“If you leave me now”: How to hold on to e-commerce customers (Webinar)

Chicago’s 1976 cheesy chart-topper echoes the mournful cries of e-commerce retailers as their expensively-won customers fail to return to purchase again. With an average of 89%* of customers leaving after one purchase it really is “Taking away the biggest part of me”.

In a short webinar we bring together two experience e-commerce executives to discuss ways of keeping customers loyal, and returning to buy again. Here’s a clue: it’s not repeatedly sending marketing emails.

Agenda:

Examining the strategy  behind the customer retention strategies of major ecommerce vendors including Sony, Philips and others.

• Looking after the important customers – we show how 7%** of ecommerce customers drive more than half the revenue
• Using an open source KPI as a benchmarking tool: the Net Promoter® Score
• Making customers feel like VIPs – involving them in service improvements

Learn practical examples and hear some little-known facts, and put your questions to the experts.

About the presenters

• Jos Williams, international e-commerce expert: Former Director of Philips eShop Europe, currently with GetLenses.co.uk.
• Adam Dorrell, CEO CustomerGauge, former Director of SonyStyle Europe and Dell.com.

This webinar is now archived (30 minutes): watch it here

The presentation is available in our Download area.

(first broadcast Tuesday 19 July 2011)

 

*/** based on anonymised retention numbers/RFM data from 10 major ecommerce clients (CustomerGauge)

Real Time Customer Feedback Done Right

Net Promoter Score, Verbatim Comments on a Digital Sign.

Inspired by the “crawler” (or news ticker) on SkyNews and CNN, or maybe by the “Calls Holding” message boards in call centres, we proudly present the new CustomerGauge Real Time Feedback Screen. It’s designed as a digital sign (a new buzz word that as far as we can tell means “giant plasma display” and a spare PC running Firefox or Safari). Ideal for placing in your marketing department, lobby, canteen or even boardroom.

We pack a lot of information on this screen. As a CustomerGauge client, you can survey your customers continually. As comments and scores come in they are displayed in the upper part, on a sliding carousel of the most recent comments. All the relevant transaction information is shown next to the comment.

In the “lower third” we show the Net Promoter Score® for the current week, past week, month and year to date, plus sending stats and other useful information.

It is the latest iteration of our display board, and is designed to:

• understand the “zeitgeist” by reading customer voice in real-time
• help react immediately to customer comments
• motivate staff

For CustomerGauge b2c clients, it’s a simple low cost add-on. Let us know if we can show you more.

NB: Can’t see the Flash image above? View it on YouTube.

A Simple Customer Rescue and Reward Plan

We’d like to share a short 6-step plan for customer retention, based on some years working in e-commerce. We’re going to find some key customers that you can rescue, and others that you can reward. Then help you reach them and increase sales.

Step 1. Segment your customer base. Rank your customers by amount of spend, then make the cut at a suitable point – somewhere like 10 – 20% of your total customers.  You’ll probably be aware of the 80-20 rule (sometimes named the Pareto rule) which helps explain how a small number of customers are responsible for much of the sales (20% customers drive 80% sales). In the case of e-commerce, it’s often more extreme. We found on some sites that around 10% of the customer base brought in 50% of the revenue (and even more profit if you take into account acquisition costs). When you do the analysis, you may find it’s just a few hundred customers who make a sizable contribution.

Step 2. Identify your loyal customers. Survey your customers using the Net Promoter® Score question. You can find out how to do it in our 2-minute guide to the Net Promoter Score.   Ask “Would you recommend us to a friend of colleague?”, with a 0 – 10 scale. Use the results to understand who in your customer base are “promoters” or “detractors”. You may get up to 30% of your customers responding, so this is a very good way of dividing up the base. Don’t forget to ask for customer comments.

Step 3.  Draw up the matrix. See the chart above. On one axis, plot customer spend (or value). On the other, loyalty. In the top boxes you should have a manageable number of customers who represent a sizable portion of business, divided into those who would recommend you (promoters) and those who would not recommend you (detractors).

Step 4. “Customer Rescue”: Find the customers who are most at risk from defecting: High value customers that scored low ratings. If you do nothing, you risk losing repeat sales, or lose them to a competitor. At worst, they may warn their friends from buying from you. By reading their comments you can understand what the issues are. Don’t waste time – divide up the numbers and get your team on the phone to them within 24 hours of harvesting their comments. Failing that, personal emails will do. Acknowledge any problems, apologise if needed, and ask what it will take to put it right. Often, customers will make allowances for errors – and if you can surprise them by over-delivering on a fix, you may even turn them into evangelists.

Step 5. “Customer Reward”: Identify the high spenders who rate you highly. These are customers who are likely to make a repeat purchase, and with luck, bring you new customers. So give them the tools to do so. In the excellent book  Creating Customer Evangelists (Huba/McConnell) you can get some good ideas on how to turn customers into referral machines – offer new product information, ask for product feedback, give small gifts. Surprisingly, there are more effective actions than  financial incentives.

Step 6. Automate and track the progress. This retention model is not a one-off task – the successful companies bake these process steps into their sales DNA, and monitor which actions are most successful, while reducing the number of detractors. Keeping a customer is far cheaper than finding a new one.

Do the hard work, easily

Yes, you can do all the above steps using manual analysis. You can do it for next to nothing with low cost survey tools, if you have spreadsheet skills and plenty of time.

However, there is an easier way: CustomerGauge automates all the steps for you: segmenting, surveying, reporting, closing the loop. By integrating with e-commerce systems, CustomerGauge can survey every transaction with the Net Promoter Score question, and can often reach 30% response. Thanks to special reporting, the system automatically ranks customers (and repeat orders) by value, showing results in real-time, and providing call- and email-lists for actions. CustomerGauge even tracks open customer issues with internal workflow, and reports on returning customers.

Now all you have to do is come up with some creative ways of keeping your best customers recommending you to others!

Learn for free

Our upcoming webinar  “Learn how to increase customer loyalty and grow online sales automatically” on 10 Feb 2010 has additional resources on how to keep customers. Details/sign-up here.

.

Free Webinar: The “Loyalty Robot”: Learn how to increase customer loyalty and grow online sales automatically

(How a handful of customers can make or break you…)

One of the surprising secrets of e-commerce is that a small number of customers account for a large amount of sales. In fact, on a recent sample of large sites, just 7% of the customers accounted for 50% of sales revenue. For most e-commerce sites, this means if a few hundred customers decide to return or leave, it can make a big difference to hitting sales targets. In this webinar, aimed  at e-commerce professionals, we promise you will pick up some useful tips to improve customer retention.

• How to identify and segment your top spending customers
• Learn how to save money on acquisition and grow revenue from existing customers
• Build a “Loyalty Robot” to automatically develop repeat business

Adam Dorrell (Managing Director of CustomerGauge) and Melanie Otersen (ex- SonyStyle online store, Europe) will outline how to succeed using a customer loyalty strategy, and show real-life examples with impressive  revenue growth.

Wednesday, 10 February, 2010.
Starting time:   17.00 Europe (Amsterdam, Paris), 16.00 London, 11.00 AM New York
Duration about 30 minutes. Free of charge, but limited places.

Mail for more info.

Register now!

Automatic Post-Sales Marketing for e-Commerce – Webinar

How automatic surveying can be used to increase customer loyalty and help grow online sales.

Boosting revenue from existing customers costs a fraction of the money spent on SEO and customer acquisition, yet many companies have not yet implemented automatic “Post Sales Marketing” (PSM*) to understand customer sentiment. With this webinar, you can learn how top e-commerce companies like eBay, Zappos, Philips and Sony are using loyalty measurement based on the industry standard Net Promoter® Score methodology to survey every customer transaction. This helps them continually improve service, and retain more customers.

In this 30-minute presentation, Adam Dorrell, CEO of CustomerGauge and former Director of Sony’s online store SonyStyle Europe, will explain how companies can implement PSM. Companies can:

• Automatically survey every customer
• Use the industry-standard Net Promoter Score methodology to learn from customers
• Score what works best, and change your business in almost realtime
• Segment out VIP customers
• Save money on acquisition and grow revenue from existing customers
• Reduce returns and dissatisfaction
• Real life examples showing how to grw revenue from retention customers by 25%+ a year.
• Demonstrate a “Marketing Robot” that can identify automatically contact your customer “Promoters” to boost sales

Adam will give resources to help ecommerce companies of any size benefit from this methodology. He will show practical solutions from the no-cost spreadsheet solution, as well as the professional application CustomerGauge which is designed to be integrated into the major e-commerce systems, including DigitalRiver, SAP etc.

Wednesday, September 23, 2009.
Starting time:   17.00 Europe Summer Time (Amsterdam, GMT+02:00), 16.00 London, 11.00 AM New York
Duration about 30 minutes. Free of charge.

Register now!

*Post Sales Marketing: Understanding and satisfying needs and wants of existing customers after a purchase

Manufacturer D2C e-Commerce – The M20 Summit, Amsterdam, 14 May

Today we announce our 3rd industry-wide round table event for Manufacturers selling Direct to Consumer (D2C e-commerce).

Our two previous events focused on customer experience and combating fraud. Attendees included Sony, Nike, Canon, Philips, Nikon, Adidas, Reebok, O’Neill, Tommy Hilfiger, NS HiSpeed, ABN Amro, Electrolux and Google – a guest list of top brands that’s led me to boldly call this event the “M20 Summit” (“M” standing for Manufacturers).

Like the recent meeting of world leaders, we’ll be tackling the three burning issues that face all manufacturers: Channel Conflict, Understanding Metrics and Building the Right Infrastructure. Aim is to share industry best practice and allow networking with colleagues.

We have three great speakers:

• Manager European Web Sales, Canon Europe: Handling Channel Conflict
• UK Country Manager, AT Internet and formerly Retention Manager SonyStyle: How to decode  Web Analytics and boost conversion
• SVP Marketing, ModusLink: World-Class end-to-end customer experience with a connected infrastructure.

The venue is is close to Amsterdam Centraal Station. Lunch will be served with plenty of opportunity to meet colleagues in the industry.

The meeting and lunch is kindly sponsored by ModusLink*

3rd Manufacturers D2C E-Commerce Round Table: M20 Summit

Thursday 14 May 2009, 10h – 14h

Amsterdam NL

Strictly for qualified management professionals in leading e-commerce merchants.

There is no cost to attend

Please register here

ModusLink is a supply chain business process outsourcing company connecting click to buy with fulfillment, eliminating channel conflict, lack of visibility and losing touch with the customer.

* * * * * * * * * * * * * * * * * * * * *

Note: Following the main meeting we also plan smaller discussions, including the inaugural session of the European Risk Network (to help combat fraud). You are welcome to join – we should finish at 16h.

Links:

Manufacturers D2C Ecommerce Group, LinkedIn

Never Was So Much Decided For So Many By So Few

“By cutting prices, you are upsetting our customers,” I was told when I presented the sales results of the company’s direct sales division to the UK sales director, “and they are threatening to not buy from us“. I probably should have been more polite, but instead I pointed out that he surely was confusing his retail partners (to him, customers) and end consumers (who buy from retailers). It didn’t help our relationship – let’s face it, nobody likes a smart-ass.

Consumer Electronics companies have for years dealt with the Power Retailer Oligopoly – a few powerful chains controlling 60 – 80% of the market. Over the years, this has evolved into  cozy manufacturer-purchaser relationships (especially in Europe) based around golf, annual dealer trips to sunny locations and other “boys club” activities. Despite investigations from the UK’s Competition Commission in the ’90s which eventually led to the prohibition of Recommended Retail Pricing, strong linkages between retailers and major brands still exist.

An article about the success of the iPhone reminded me of how destructive this relationship can be. In “Apple Proves… It pays to be late And ignore the mobile networks“  Andrew Orlowski explains how Apple managed to beat large companies full of clever people who devoted years of planning and expenditure to make a mark in the smart phone market. Ironically, Apple, by coming late to the market could buld a product that consumers wanted, not network executives.

He writes that in the mobile phone business “the customer isn’t you or me, or the billion and a half other phone users in the world. Phone manufacturers have only 800 customers, of which only around 200 really matter: these are the gentlemen from the networks. And one of these stroppy customers can demand changes that cost the manufacturer millions, or cause the cancellation of product lines in which tens of millions have been invested.” According to Orlowski, the network executives decided the “butterfly” design Nokia introduced with the 6800 was too complicated, and that disabling Wi-Fi and charging high prices for data was good for all of us.

Apple, with their close customer relationships (half of their business is direct via internet or own shops) understood that they could offer features consumers wanted, not the telcos.

But with Consumer Electronic companies still mostly dragging their feet on embracing a channel model that includes direct-to-consumer sales, I fear that the best product innovations are still hidden from us.  I wonder how many times  a Retail Purchasing Executive decided to  kill an interesting CE product because of his or her prejudices, or because their business model did not allow for such a price point?

The moral is that CE companies may be iPhoned out of business by not listening to the voice of the customer.

There are solutions to breaking the Power Retailer addiction: You can upset Retail Buyers. Get some help from the Manufacturers D2C Direct to Consumer Support Group. And CustomerGauge will help you measure and understand customer sentiment, and create innovative products.

Pic and Quote: The Few

Net Promoter News: Philips "Revenue follows NPS", OSG Billing 72, NPS-OPS Linked-In joiner

Serge Acker, Senior Director Philips Flagship Store, presented a state-of-the-union address on the Philips webstore at ceBIT last week, to a gathering of hi-tech companies at the DigitalRiver Consumer Electronics Conference.

Following a movie-trailer like taste of the impressive new webstore, Acker highlighted some recent successes (and a few pitfalls) of the recent store migration. Philips were “late to e-commerce” he said, but “determined to do it with excellence“. Success was down to having a clear vision for direct sales, fighting internal battles (especially over channels), a dedicated team, and doggedly measuring the Net Promoter Score (NPS). He gave an example of the importance of customer experience for Philips (“50% of electric shavers are bought as a gift“), and made the point that CE companies today are not just selling televisions any more, they are selling a service.

Answering a question on whether dealers were upset by Philips selling to consumers, Acker said that dealers had lived with direct sales for many years (See also “Retailers Expect Direct Sales“). Customers want choice – some wish to buy direct. He added that selling direct creates “noise” and provides lots of detail in product presentation that ultimately benefits dealers.

The Philips online store Net Promoter Score (as measured by CustomerGauge) had helped them improve customer service, improved products (with voice-of-customer feedback) and grow revenue. Acker had earlier stated that “If we could only do one thing on their Top Ten list, it would be the Net Promoter Score“, and his last piece of advice to the appreciative audience was “Build your NPS, and revenue will follow.”

Contact DigitalRiver for presentation details.

Some other Net Promoter News snippets:

Outsourced invoicer OSG Billing Services announced on its site and by press release that it has achieved a Net Promoter Score (NPS) of 72 percent.

“As a service-based company, OSG Billing Services takes a great amount of pride in receiving such an impressive score,” said Ron Whaley, vice president of sales and marketing. “We are excited to have this metric to measure our customer satisfaction…” Source: Billing and OSS World

There is a new Linked-In group called NPS Ops (Net Promoter Score), set up by Seth Harbaugh of Utah-based service provider DirectPointe. His aim is to openly discuss process improvements, performance documentation and trends in the improvement arena of Net Promoter Score. Joining request should be submitted on the site.

Channel conflict is over; Retailers now "Expect Direct Sales"

Matti Heikkila was described by a former Nokia President as “Rock and Water”, for his ability to charm people to work together while politely guiding them to his point of view.  In his 30-plus years at Nokia he worked during the time of  five CEOs, and held various posts including Data Division Export Director, GM of Global Accessory Business and finally running the direct sales operation. He is hugely entertaining; modestly recounting stories from the growth of the mobile business, and has much to tell about organising channels and internet sales. He is now the Chairman of eChannels, a consulting company that works with major brands to help them sell direct.

It’s with my “Manufacturers D2C” hat on that I meet Matti at ceBIT, where he is presenting case studies and “how-to” on reducing channel conflict. He recounts how Nokia had evolved their e-commerce solution, launched before the dot-com boom in 1999. Nokia had watched the PC direct-sales models carefully, deciding to learn about the direct-to-consumer sales model, and “get some practice” so that if there was a sudden shift to online, they would be ready.

The dot-com crash of 2000 meant that plans for further developments were scaled back, and the corporate online sales learning  evolved into an extranet for Nokia’s partners to buy online.  “It helped us scale,” said Matti, “and meant that we could expand our sales without the need to grow the local sales force massively, especially in the Middle East markets”. He added that Nokia found the productivity gains were significant.

In 2007 Nokia launched the direct-to-consumer store, to sell handsets, accessories and software downloads. Matti had to deal with many issues internally to start the initiative – chiefly with the perception of channel conflict (more later) but also internal competition from other projects. Matti said “Nokia is a democratic company – and several managers had started up e-commerce activities – so alliances had to be forged to bring differing initiatives together, or to terminate some projects”. This Darwinian approach was typically played out in a gentle, Finnish way: ”The culture is forceful, but respectful.  Nokia allows strong internal competition, but you need to behave!” he added.

Handling channel conflict opened his eyes. In many instances, the reasons why a local e-commerce initiative had failed had been down to long, comfortable relationships between the senior country executives, and dealers, many lasting a number of years. No one in this circle wanted the possible trouble of a direct sales initiative which could affect the  channel equiibrium, so facts (and emotions) were presented to prove “it could not work here”. Matti’s tactic was to go further down the organisation to speak to managers, salespeople and and finance people, and understand the real facts and issues (here is where you can understand how his “Rock and Water” name came about). Presented with the truth, the executives agreed to the corporate “multi-channel” strategy.

In one case, the termination of the existing e-commerce relationship was actually a relief to a channel partner in one large country. Operating it on behalf of Nokia, the initiative had been started early, and the platform was outdated – but there was not an easy way out. However, when the Nokia D2C strategy was rolled out, it improved and clarified the relationship.

Protect the Brand, Sell Direct

I asked Matti why Nokia took the decision to sell direct. His answer “Number one: protect the brand. With so many partners online it’s essential for brand owners to set the right online marketing examples, to guide retailers and gently control the material available”.

Next reason is “Two way communication. The new social media activities, especially in  switched-on target markets mean that the brand (and product) is talked about, positively and negatively. A manufacturer needs to be part of that conversation – to listen, and sometimes to contribute”.

This leads onto Matti’s most controversial stance on channels: He sees conflict as a result of “direct v. channel partners” as a largely Web 1.0 phenomenon. “In the 2010’s, channel partners  will expect or even demand that a manufacturer has at least some direct sales activity. Web enabled sales is very important for the channel partners.”

“The last 10 years has been eChannels 1.0 – it was all about sell-out  to channel partners and consumers – manufacturers just followed the etailers, and there was little or no customer data feedback” says Matti. “We will see eChannels 2.0 next  – manufacturers will find ways of having two-way dialogues with consumers through brand communities, direct feedback or social media. They will listen, improve products and services, and in turn share that with the channel. Strong brands will lead the channel, and will communicate customer needs and expectations as a result of this conversation. Manufacturers who do not have some form of direct contact will be left behind by partners who will expect an improved level of communication.”

Matti goes on “Switched on affiliates, bloggers, twitterers or other plugged in networkers will become channel partners, able to get into niches that no-one else can serve. They will operate with no stock, and live on sales commissions from recommendations. And this channel demands a level of engagement not based on personal contact, but on rapid, effective and deep communications with manufacturers. You had better be ready with intimate details of your product specification for example, on recycling (for “green” bloggers), performance (gaming geeks) or industrial design (for the fashion sites). Gaining their loyalty will be key.”

Matti summarises: “Direct sales can help the whole channel – transparency, and efficiency benefit everyone – that’s why I believe that channel conflict is over, and  partners will start expecting direct sales as part of the mix”. I observed his audience of manufacturers nodding heads in agreement, so expect this trend to increase.

To find out more, Matti’s site is echannels.fi. We have some Manufacturers D2C articles on the enGaugement site  including our Direct Sales Toolkit, and the Manufacturer D2C group is on Linked-In.

EU Court slaps eRetailer over fee for faulty used laptop

A case that was settled this week in the European Court of Justice (ECJ) in favour of the consumer concerned a German distance retailer that tried to charge a buyer who returned a second-hand laptop for the eight months of use she had had from it. The retailer said that the woman had got eight months of use out of the €278 second hand laptop before the screen stopped working. The ECJ ruled that Germany is NOT allowed to have a law allowing the charge for use.

Know the law

The case should be of interest to Manufacturers selling directly to consumers as it once again underlines the care that should be taken in managing the communication of contract terms and return procedures to consumers, and the handling of returning goods. A consumer could easily embarrass a brand owner who tries to impose too-tight return considerations.

Online retailers cannot reclaim some of the purchase price of goods even if they are returned after a long time and have given the user some benefit, an advocate general of the European Court of Justice (ECJ) has said.

Return period of seven days (plus three months…)

Buyers can return goods and get a full refund in the first one to two weeks of ownership of goods, said advocate general Verica Trstenjak. That right can last for months if the seller does not send the buyer the right paperwork correctly outlining a buyer’s right to withdraw from a contract. Retailers are barred from imposing charges and penalties on people returning goods.

“The only charge that may be made to the consumer because of the exercise of his right of withdrawal is the direct cost of returning the goods,” says Article 6 of the Distance Selling Directive. “For any distance contract the consumer shall have a period of at least seven working days in which to withdraw from the contract without penalty and without giving any reason,” says the Directive.

Even though the right of withdrawal need only last seven days under the Distance Selling Directive, but if the retailer does not inform the customer of the right properly then it lasts until seven days after that information is provided for up to three months. German law says that that right does not expire until the notice of the right of withdrawal is provided to the customer, which is why the German woman could still exercise it after eight months.

Trstenjak said that she recognised retailers’ concerns that some people might take advantage of the Directive’s protections, but that this was no excuse to erode everybody’s rights. “The fear of abuse by individuals may not generally result in the protection of rights guaranteed under Community law being restricted for everyone,” she said. “For that reason alone, a provision such as the one at issue cannot fall within the discretion of Member States.”

Source: OUT-LAW.com

Online sellers should carefully check terms and conditions of return on their site, and compare them to the Distant Selling Regulations. In the case of doubt, you should lean in favour of the consumer. An excellent guide is also available on the OUT-LAW site.

Next Page »