The B2B Miss: Ecommerce Excellence

B2B ecommerce is an interesting conundrum. It has the ability to both cut expenses and drive up sales, however it rarely gets the funding or attention needed to succeed. There are exceptions of course, like Staples, that understand the massive value capture that can be made with a solid ecommerce presence. However the development of a B2B ecommerce site usually falls not under marketing, but under a sales executive, who has no experience in driving ecommerce in a way that really gets to the value available.

On the buyer side, B2B ecommerce is in high demand. Business buyers shop online in their personal lives and are very comfortable with it. In fact, research here and here (as examples) show that B2B buyers are digitally moving through the sales funnel without assistance from salespeople more and more. Sales is focusing on closing (as they should) but if your digital isn’t doing the work, you’re missing out on long-term growth opportunities. Add to that the ability for digital to personalize, which translates to upselling and cross-selling to your buyers. This drives real value that is difficult to get through a salesperson in 2015.

The world is moving and many, many businesses are missing the boat.

What is the problem? As I mentioned above, a lot of times the problem is in the structure of the company. B2B sales is under a sales team and lead by an executive who doesn’t really understand why marketing matters. But ecommerce strength comes from marketing, not sales, and requires an experienced marketer to do well. In order to excel, a business needs to bring in the skill set from outside and give them the support they need. Which takes us to the second problem: money.

It takes investment. In a time where we’re cutting costs left and right, investing in a strong ecommerce platform seems expensive. Isn’t it just exchanging one channel for another? In my experience, a good ecommerce and digital marketing arm can give you a significant lift in sales from your current customer base in addition to cutting costs over time (typically you can reduce customer service and sales team members with a good ecommerce presence). The initial bump is seen from your smaller or less important customers, because they aren’t getting the sales attention they need now. But even the bigger guys will respond as well.

Finally, the single biggest problem is that B2B executives often don’t realize the potential value of ecommerce in their business. It takes real digging to understand the costs of taking an order today versus taking one online. And it takes experience to realize how digital marketing can lift sales; e.g. why the investment should be made. This is a cultural shift in the company and a political problem over and above the first two issues. It’s more likely to change due to competitive shifts or threats than it is due to a lightbulb going off in someone’s head. Unfortunately, that means a lot of businesses are going to be eaten alive in the new digital world. That’s already happening now (taxis, department stores, even cigarettes are being eaten by digital) and will continue to happen. Is your industry next?

My recommendation is to bring in talent and invest in the plans. Early on focus on email and paid search to start supporting your sales them. Then add ecommerce and make it world-class instead of focusing on reducing the investment. Long-term it has a massive payoff for most companies. It won’t save a company with poor products, but it absolutely can drive good product to the next level. Your customers are shopping online just as they do at home. You should be there to meet them.

 

Ecommerce Acquisition: Where do customers come from?

I talk a lot to B2C ecommerce folks, both small and big. And one of the most frequent questions I hear is something along the lines of “where should I be getting customers?” Sometimes this is asked about a specific channel (should they be xx percent of acquisition?) and sometimes about the whole (how do I get more free customers?). But it’s asked a lot.

There are guidelines around B2C customer acquisition that are reasonable across most industries and most target markets. However, I would preface the discussion by saying these are averages. And like the average human, they don’t really exist. Virtually no one will fit comfortably into this breakdown, since everyone does something a little better/worse than others. However, how you fit (or don’t) will tell you a lot about your business.

Here’s what I’ve seen:

Tactic % of sales Comments
Paid Search 20 – 30%  
Organic Search 15 – 25%  
Email 15 – 20%  
Display 8 – 15% Can be higher for high margin businesses. Includes retargeting.
Direct Traffic 8 – 15% Wide variability based on offline marketing & brand strength
Affiliate 3 – 11% Trending down as affiliate loses its luster
Marketplaces 4 – 9%  
Referral Traffic 3 – 7%  
Social Media 0 – 2% Can be slightly higher, but rare

 

Almost everyone has at least one exception to this. First, Display, Affiliate and Marketplaces don’t exist for all ecommerce folks, but you can remove them and disperse their percentage over the rest. Second, retailers with strong offline marketing (commercial TV, direct mail, etc) are likely to have higher Direct Traffic and search numbers.

Other thoughts:

“FREE” Marketing: One of the biggest problems is when Free Programs aren’t making up enough of your sales. I use parenthesis around “FREE” because these all require effort and costs, but you don’t pay by the customer typically. Organic Search, Email and Direct Traffic need to push close to 50% of sales in order to help pay for some of the other programs (particularly if you’re doing Display). This is probably the number one issue I see with struggling retailers: they are paying too many tolls on their customers.

The Paid/Organic ratio: A related problem is around Paid Search versus Organic Search. Logically, these programs are in competition with each other. They are very tied together, but almost never make up the same amount of sales. I’ll commonly see a Paid Search program that makes up 30% of sales connected with an organic program that makes up 6% of sales. This means you need to work on organic. They should be closer to one another, however they rarely are very close. Google now takes up 90% of the above-the-fold space on the search page with paid ads, so Paid typically dominates by about 500 basis points.

Content marketing: Content drives the free programs, so good content can pay for itself fast (and keep giving over time). The move for ecommerce guys towards content is really a move to capture more sales through Organic, Email, Direct, Referral and Social traffic. If those five are all hurting, it’s likely more a content problem than a technical issue.

Social Media marketing: Social will not be a huge part of your sales. Yes, there are stories of ecommerce plays that do very well through social media marketing. Typically these are targeted at very young people and are very small businesses. For a medium-sized business, social is a customer service arm and an awareness play. Note that the one exception to this tends to be Pinterest. Pinterest doesn’t consider itself a social media website; they believe they are a search and shopping site. This is much more accurate. Good, helpful content on Pinterest can drive your social numbers up. But they are still unlikely to get to 5% of sales. Very unlikely.

Hopefully this is helpful. If you’re willing to share how you differ from the above, I’m glad to give you my two cents as to why you likely differ. Reach me at jay [.] m [.] allen [at] gmail. Leave out the brackets.

How Does Gmail’s New Promotions Inbox Change Email?

Google is slowing rolling out the new Promotions inbox to those who have requested it; I still haven’t heard of anyone getting the new inbox who did not request it. In case you haven’t seen it, this is what mine looks like.

Gmail Promotions Inbox
My Gmail Promotions Inbox

This is an interesting and drastic change to what we know as email. And I believe it changes the game (again) for email marketers. One stat you need to track: what percentage of my email file uses Gmail. At this point, Gmail is the only email service even attempting to be innovative. And their innovations tend to roll email marketers.

The promotions box that came out last year limited your access to customers. It essentially quarantined promos to a separate box that only gets looked at when customers are shopping. And no one (believe me: *no one*) moved your corporate promotional email to their main inbox no matter how many times you sent that email asking. But I actually think this change is bigger for email marketing.

At the surface you can clearly see that images win again. It becomes much more important to have a captivating key image in your email than to have a good subject line. Subject lines are relegated to the small type at the bottom. And that’s literally the last thing you look at. But it’s more than that. I think there are few key changes here.

First, font sizes have to go up. Way up. One main idea, expressed clearly and quickly to capture attention. Design matters. Note the Scoutmob example here – extremely well done. If you pack a paragraph of copy into your main email image, it will be unreadable.

Second, your Google+ account has to be verified. In this example only American Airlines and Scoutmob have verified their Google+ accounts. That’s why they have a nice logo in the box on the right, rather than a weird grey letter.

Third, those with compelling imagery win. This is a small section of a big inbox. Your image has to capture attention quick and hold it long enough for your key copy idea to get through. Your main image also has to be one solid image, not broken into a hundred slices.

Fourth, metrics have to change. Open rates have been used since the start of spam to measure subject line efficacy. Clearly now this is wrong. Open rates are now determined by the key idea of the email; essentially we used to use click-through rates to tell us if the content works. Now opens and clicks are judgments on the key idea and creative execution of the main image. Your brand name is larger than your subject line.

Note that several of the key spaces are blank in my inbox. Technically you need to define the main image of your email using this spec. If you don’t, Google attempts to guess at which image is the most important. As you can see, they suck at this. It takes very little time to define it; go do that now. Verify your Google+ account now as well.

Finally, if you aren’t doing photography specifically for email, I think it’s time to start testing. The new email is all about images, so the quality of your images is likely to determine open and click-through rates.  And this will help all your emails, not just Gmail accounts.

This is a way for Google to monetize the promotions page within email. Now the promos are almost unrecognizable in your inbox. Definitely a win for the big G. And maybe an opportunity in terms of marketing to current non-subscribers. Time to test; the new ad is much, much better than the old yellow faux email ad they used to serve up.

Anything I’m missing?

 

** Side note: Animated gifs don’t work. Really too bad from a marketing perspective ….