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Tim Peter

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March 14, 2008

Small Business Ecommerce Link Digest – March 14, 2008

March 14, 2008 | By | No Comments

So, it’s slowly becoming official: we’re approaching/in a recession/death spiral. Bummer. Ah, well. It could be worse. You could be Client 9.

We at thinks tend to take the long view on these things. And the long view is good for ecommerce. Without further ado, here is this week’s list of ecommerce links to brighten your spirits in these dark days. They might just help you compete more effectively, too.

That’s it for the week, folks. See you on the other side.

Tim Peter

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March 7, 2008

Small Business E-commerce Link Digest – March 7, 2008

March 7, 2008 | By | No Comments

Weekly link juice flowing forth and apparently ruining my website’s rankings… Ah, well. That’s the price we pay here at thinks for you fine folks learn about e-commerce and online marketing for small businesses.

  • Lots of chatter this week about the use of “nofollow” for “sculpting” traffic on your website. Michael Gray says “knock yourself out” when “sculpting” traffic on your site with a nofollow. Shari Thurow thinks you should “nofollow” that advice.

    I’m only commenting because of the point this debate raises about the value of expert advice. I don’t think either of these folks are technically wrong, at least at present*. They’re generally well-regarded and clearly demonstrate deep knowledge of their subject. So, how can two “experts” have such completely opposite opinions? Trick question. That’s not important. The real question is, are these activities worth your time as a small business? Personally, I think Search Engine Roundtable has the best approach: “why not [do it], if you have exhausted everything else you could have done on your site” (emphasis mine). Most small business websites have far bigger search engine optimization – and customer experience optimization – issues than this. In other words, know the basics of SEO. But once you get too deep into that rabbit hole, leave it to the rabbits.

  • While we’re all fired up and mired in controversy, now seems like a good time to talk about Google introducing competitive benchmarking within Google Analytics. Some folks think this is a really bad thing (I’m looking at you, Michael Gray). I think it’s less so. Google Analytics is a great program and remains so for most small businesses. Your web business decisions should always be supported by data. Right now, there isn’t another program on the market that delivers what Google Analytics offers for comparable cost, regardless of whether those costs are explicit or implicit. And, at least for now, the program allows businesses to opt out from sharing their information.

    I would recommend that you take a good look at Google’s policy and decide if it’s right for you. I would also suggest relying on a second source for analysis, if you can manage it, just in case Michael’s “Say it ain’t so, Joe,” scenario plays out. For instance, though it’s not the same type of tool as GA, you should take a look at Q4, a new qualitative survey tool from Avinash Kaushik and iPerceptions. Knowing why your customers choose to do what they do is often better than knowing what they do.

    Finally, not to pick on Michael specifically, but his logical inconsistency of taking Matt Cutts at his word on the “nofollow” thing and not on the GA thing proves my point above about expert advice. Not only can two different experts disagree. Sometimes one can do it all by himself. :-)

Enjoy your weekend everyone. And look forward to further adventures in e-commerce and online marketing next week.

N.B. – I say “at least at present” for one reason: the search engines have a long history of changing their algorithms to account for improved results (whose definition of “improved” – as ever – is open for debate), even in cases where their public statements favor a given action. Again, that’s not to say you shouldn’t do this. It’s more a question of whether it’s the most beneficial action you can take. Now, where did I leave my carrots?

Tim Peter

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March 6, 2008

Permission marketing: An interview with Jared Reitzin (Guide to Small Business E-commerce)

March 6, 2008 | By | No Comments

If Seth Godin never wrote anything else, his role in defining permission marketing alone would have made him who he is today. Jared Reitzin, CEO for a great new email and mobile marketing firm, mobileStorm, has picked up the torch, working to help small businesses go from zero to $10 million in sales using permission marketing. But Jared’s view of permission marketing isn’t just email. mobileStorm also develops direct mail, fax, and, most interestingly, mobile marketing campaigns to help small businesses connect with their customers. I recently spoke with Jared about permission marketing and how small businesses can benefit from email and SMS marketing.
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Tim: Hi, Jared. Thanks for taking the time with us. Can you talk about the role permission marketing plays in helping small business reach that $10 million goal?

Jared: It costs 10 times more money to attract a new customer than it does to keep an existing one and existing clients bring 10 times the revenue . It’s very important to build a database of customers that you can continue to market to and upsell. The great thing about doing business in today’s world is that digital messaging is an extremely cost effective way of reaching people and you can easily gauge and track ROI. However on the flip side if you are not practicing permission based marketing, it could hurt your brand and will hurt your growth .

Tim: With the emergence of RSS and “pull” media, does email marketing still have a place?

Jared: Absolutely, I am firm believer that RSS will not replace email . At the end of the day, consumers still want information pushed to them; they won’t always remember or have time to check their feeds. I do think, however, that RSS is great because your message will get delivered, it won’t end up being caught by the spam filter.

Tim: What about SMS marketing? Is this viable for most small businesses? What sorts of businesses would benefit most? Are there specific types businesses that should avoid SMS as a tactic?

Jared: When I get asked this question by a small business my answer is simple, try it out. Mobile marketing is tricky and doesn’t work for all businesses. Try and work with a provider who won’t just offer you their technology but can also help strategize your game plan. Regardless, like anything else, you should be able to look back and answer the question “did I do everything I could to make it work?”. If the answer is no, then try a few more approaches. If the answer is yes, then don’t force it. A text message interrupts someone’s day, it’s a powerful form of communication. Don’t forget it can be just as negatively powerful as it can be positive. I think retail, entertainment and event based businesses are great candidates for SMS marketing.

Tim: Small businesses need to pay attention to the value of their media more carefully than large business (given the fact that they’ve got less to spend). What metrics should matter most when using permission marketing?

Jared: If we are talking about email and you sell stuff online, the most valuable metric is the total amount of revenue you driving through your campaigns. This is why email is so powerful. You can track the whole sales cycle and even see what your customers are not doing. Also every small business should know how much it costs to acquire a new customer , and when they figure that number out and it makes sense, spend as much as they can and go big.

Tim: What kind of budget should small business owners expect to spend? What’s the minimum amount that’s realistic to produce meaningful results?

Jared: It really depends on the size of their database and if they need additional services such as consulting, support, custom feature etc… A serious small business digital marketer should have a monthly budget of at least $500.

Tim: What should small business owners look for from a permission marketing (email marketing/SMS marketing) service provider?

Jared: The service provider should be able to provide good references and case studies. They should have a good reputation and willing to let you know what IP address you will be sending from so you could do some research before coming aboard. Check out their management team and the press release section, see what the company has going on and the direction they are going. Also Google them and see what people are saying.

Tim: Jared, thanks for your time today. Keep up the great work.

Jared: Thank you very much for doing this interview with me, I hope your audience takes a few things away and becomes successful digital marketers!

[Full disclosure: I plan to use mobileStorm’s services for my email marketing going forward.]

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Tim Peter

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March 4, 2008

What is e-commerce anyway? (Guide to Small Business E-commerce Strategy)

March 4, 2008 | By | No Comments

Defining E-commerce

The last several weeks, I’ve been discussing e-commerce – mostly from the standpoint of small business. But, I think I use that term somewhat idiosyncratically. That is, my career has been built around using the web to drive action, whether that action was to learn skills, reserve hotel rooms, research stocks or report revenues. While I’ve generated over $1 billion in revenue for my companies over the last 5 years, I’ve also delivered training, sales literature and customer service. Each has helped my companies succeed. To that end, e-commerce is any action that uses the web to generate revenues or grow the bottom line You need to look at the web’s value holistically. How do you know what’s appropriate for your e-commerce group to pursue? Like this:

  • E-commerce drives a purchase action. Ideally, for most companies, this involves revenue. But, getting people to download a white paper or refer to an FAQ can be an effective method of lead generation and customer service at a lower cost. That’s a Good Thing. And it works like just like an e-commerce transaction. Just evaluate the costs of each activity relative to its benefit and its customer value to prioritize your activities .
  • E-commerce allows for precise measurement. Or mostly precise. Or some kind of precise, dammit. Just don’t tell me it can’t be measured. And don’t confuse precision with accuracy. Yes, unique phone numbers and coupons have any number of flaws. They’re not completely accurate. Bummer. They’re more measurable than not using unique phone numbers or coupons. And for those of you in my past life (you know who you are): my objection to coupons was specific to that implementation, not to the concept in general. If you can’t measure it, you can’t manage it. So don’t bother doing something you’re not bothering to measure.
  • E-commerce depends on marketing actions. Yes, email, print and search generally fall outside the scope of typical “e-commerce”. But the most successful campaigns I’ve ever run or been involved with were textbook examples of integrated marketing. Customers choose to interact with your brand in the way that meets their needs, not the way you want them to. That is, unless you ensure you want them to interact with your brand in the way that meets their needs. Failing to integrate your marketing and e-commerce activities (it happens, sadly) makes no sense. Or dollars.
  • E-commerce transactions can occur through any channel. “What?!? E-commerce only transacts on the web!” Nonsense. Foolish, really. So long as the cost of the sale through a channel is less than the revenues generated by that sale, all sales channels are useful channels. Assuming you can track that it worked, of course, and that your intent was to drive it through those channels. Sure, some channels are better than others. You can introduce friction into the process to route customers to your preferred channels. But, don’t disregard the value of using the web to drive sales in other channels, too.

So, that if that sounds a lot like marketing to you, I’d agree. But there’s one crucial part of marketing where e-commerce plays a limited role:

  • E-commerce is not the product. Well, maybe it is for Amazon. But for most companies, e-commerce is a process to get people to the product (and vice-versa). The deepest, most meaningful brand experience a customer can have is when using your product. Unless your product is the content and forms on your website, then e-commerce is only three of the four P’s of marketing (Place, Price, Promotion). Product is altogether different. The job of e-commerce strategy is to convey the benefits of that product and collect the cash. You definitely want your customers’ experience to be integrated between product and its delivery channels. But focus on your product first. Lipstick on a pig can only do so much on its own.

As we continue to look at e-commerce in these terms, I’ll be referencing items in this post as well as point you to useful resources to help with each step in the process.

Does this definition of e-commerce work for you? Let me know in the comments.

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Tim Peter

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March 3, 2008

Perfection and the craft of business

March 3, 2008 | By | No Comments

When it comes to learning, “get rich quick” is wrong. Sorry.

The Internet has made it easy to learn the basics of anything. Whether you want to know the fundamentals of SEO, social media, or salsa dancing, sites exist to help you build from the basics. But mastery of a topic takes time and – more importantly – effort. You’ll never accidentally be great at something.

That doesn’t mean you can’t accelerate your learning. You can. As Fortune notes, “The critical reality is that we are not hostage to some naturally granted level of talent. We can make ourselves what we will.” But learning is a process. And it will only happen as quickly as you are able to take information out of the world and into your head, into your hands. Business is a craft. Marketing is a craft. E-commerce is a craft. Craftsmen years ago drafted apprentices to pass along that craft and expected those apprentices to learn, to know the craft, before presenting themselves to the world as masters. But how can you learn? How can you know? The simplest way is to follow the PRRO (Plan, Research, Rehearse, Observe) method. Here’s how it works:

  1. Plan. What is your goal? What do you want at the end of your study? Not just small “g” goals. Big, clear, concrete, measurable Goals. Define what you mean by “I want to be a great marketer” or “I want to rock at SEO” before you begin. Set a target, like, “I will grow traffic and sales I get through my website by 300% in the next twelve months using SEO techniques.” (Yes, that is a Big Goal. You want to be great, right?)
  2. Research. Find out who the masters are and get your hands on everything they’ve got to say. How to find out who the masters are? Ask people. Search the topic on Google. Go to your local library and find books. Match the types of learning to your learning style. Learn best from hands-on? Develop and run a pilot program. Don’t get much from book? Take a class. Don’t take self-ascribed experts solely on their word, though. Question, constantly, whether what they prescribe works in the Real World. Your Real World. Then apply what works.
  3. Rehearse. Rehearsal isn’t just practice. It’s practice to ensure you got it right. My sophomore voice teacher used to say, “Practice does not make perfect. Perfect practice makes perfect.” Fortune Magazine calls it “deliberate practice.” The point is, if you’re not measuring whether you did it right, you’re not doing it right.
  4. Observe. Did you make progress towards the Goal? No. Why not? Adjust and Do It Again. You did make progress towards The Goal? Good. Why? Adjust and Do It Again.
  5. Repeat. OK. I left this out of the acronym. PRROR is problematic to pronounce, whereas PRRO is, well, better. But assuming you haven’t reached The Goal, you need to repeat the steps to continue to close the gap. You did reach The Goal? Good for you. Enjoy your success for a moment. Then start again on a new Goal.

Developing from apprentice, to journeyman, to master takes effort. Focused effort. Concentrated effort. Measured effort. But you’re capable of it. Look at what you’ve achieved so far. Now, take the next step. Become a PRRO.

Tim Peter

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February 29, 2008

Small Business E-commerce Link Digest – February 29, 2008

February 29, 2008 | By | No Comments

Happy Leap Day, folks. Here’s this week’s group of reading goodness to help grow your small business online.

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Tim Peter

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February 27, 2008

Why CMS sucks. (Guide to Small Business E-commerce Strategy)

February 27, 2008 | By | No Comments

I was on a panel yesterday called “I Hate My CMS” for the Internet Strategy Forum and Society for Information Management (despite the fact they keep adding an ‘s’ to my last name. Peter. Just Peter ;-). Here are the slides:

The main point is that web CMS tools need to provide:

  1. Workflow management
  2. Content management

And, in practice, they suffer from a number of issues. For instance, your product catalog might be in one database. Your images might be on Flickr. Your e-commerce engine might be somewhere else. You might use eBay as part of the fulfillment. Pulling those diverse data sources together easily to create compelling product pages designed to drive sales simply doesn’t work. Not near well enough.

What we really need is a system that can take data feeds (likely via XML) from multiple sources and expose those in a clean interface to a marketer. And allow for easy A/B testing of those pages. And do it inexpensively. Why is that so hard? Or am I missing something here?

Let me know in the comments.

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Tim Peter

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February 21, 2008

Does Ebay policy change alter your partner site e-commerce strategy (Guide to Small Business E-Commerce Strategy)

February 21, 2008 | By | No Comments

While it’s unclear whether Ebay or its sellers will end up taking a hit here, this EBay boycott illustrates the benefits and risks of using third-party partner sites as part of your small business e-commerce strategy.

No simple answer exists as to whether you should use a third-party channel or not as part of your total e-commerce strategy; however, the risks and benefits are clear:

Benefits of Third-party Partner Sites

  1. Exposure to potentially large audience – Customers often start their search for products and services on large aggregator sites. Listing your products with one of these sites gives you a larger potential audience than you might get on your site alone.
  2. Scalability – To serve the needs of large audiences, sites such as Ebay, Amazon, Expedia and Travelocity need robust server farms, far in excess of what small businesses can hope to create for themselves. Making the most of their hardware can often be a smart ploy. Even given Amazon’s recent S3 outage, you don’t get less risk with a smaller player.
  3. Low cost – Typically, large web sites like Ebay and Amazon gain significant economies of scale and can pass those savings on to you. For many businesses, the cost of a partner channel might be the least expensive – at least in the short run.

Risks of Third-party Partner Sites

  1. Greater competition for attention – Sure, listing your products with one of these sites gives you a larger potential audience than you might get on your site alone. But that’s true for the other products and services listed there, too. Ebay lists more than 14 million items at any one time. So, don’t rate the site on its potential audience. Rate the partner on volume of sales.
  2. Less control – As this Ebay flap illustrates, relying on a partner site for too many of your sales can put you at a disadvantage when they change their rules.

While the advantages of partner sites outweigh their disadvantages for most small businesses, you should run the numbers for yourself and see what makes the most sense. Partners have terrific upside and, in most cases, can make a big impact as part of your overall e-commerce strategy.

What do you think? Will Ebay’s change make you change your view of partner sites? Are there better places to look? Drop a line in the comments and let me know.

Tim Peter

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February 19, 2008

What sales channels matter most? (Guide to Small Business E-Commerce Strategy)

February 19, 2008 | By | No Comments

We’re continuing our look at Small Business E-commerce Strategy today. Last time, we looked at “Why Splash Pages Suck”. Today we’ll take a look at channel management.

Not all e-commerce channels work as well as others. When most folks think of e-commerce, they think only of their own website. Having your own website for your business is critical. But it’s not the only place to sell as part of a well defined e-commerce strategy. Let’s take a look at the three types of e-commerce channels and how you can decide which ones work best for you.

Three key e-commerce channels

Sales of your product can occur in up to three key channels. These are:

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  1. Your website
  2. Partner sites
  3. Voice-assisted web

Your website is the most important of these, by far, followed by customers starting on the web and calling you. But partners matter, too. Partners include sites like Ebay, Amazon and Etsy for retailers and manufacturers; travel agency websites for hotels; directories for service providers; and affiliate sites for most business types.

Depending on your business type, you should measure how effectively these channels work for you and tailor your e-commerce strategies around their benefit. How do you do that? By measuring the cost of each channel, the volume of sales and the amount of revenue received from each. The will tell you your profitability per channel, which you should always look at in terms of dollars, not margin. As Alan Rimm-Kaufman said over at Mike Moran’s Biznology recently, “Too many retailers focus on profit margin (a percentage) instead margin dollars (real money)…At day’s end, you don’t deposit percentages, you deposit dollars.”

Cost of channel

Every channel has a cost. Typically these include things like commissions paid to affiliates or fees paid to retail sites (think Ebay/Amazon). Some of these costs will be fixed (monthly recurring fees, for instance), while some will vary according to the amount you sell. Make sure to include your time and the time of your staff as one of those costs. For a typical business owner, divide your annual salary by 2080 (40 hours/week times 52 weeks. I know you work more than 40 hours a week, but dividing by the actual hours you work would probably just depress you. Stick with 2080. Plus, you can use the same number for you and your team).

Volume of sales

Volume of sales is pretty basic. How many sales do you receive from each channel? Most third-party partners will provide you this information readily. Phone tends to be one of the harder channels to track this for, but you can use these tips to come up with some measures.

What about the volume of traffic? Don’t assume that just because a site gets lots of traffic that your listings automatically will. You might, but you’ll need to check to see if that’s true. By focusing on sales, you’re tracking the actual value of that site to your business.

Revenue per sale

The number of sales may not matter as much as how much revenue you make from each. Here’s one place where voice-assisted web sales often show their stuff as many companies do a better job upselling and cross-selling on the phone.

Profit per sale

Finally, you can use the numbers you’ve gathered above to determine the profit from each channel, which should represent its value to your business. However, even if your own website produces a lower profit than partners, don’t surrender all sales to a partner channel. In the long run, your business depends upon your own, thriving web presence. Your own website builds a stronger brand, represents your company most effectively and isn’t subject to the whims of a third party such as raising prices or limiting selection.

Tim Peter

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February 4, 2008

Why splash screens suck (Guide to Small Business E-commerce Strategy)

February 4, 2008 | By | No Comments

A recent reader asked me some tough questions about e-commerce for small business. But e-commerce is a complex topic and each business’ needs is different. So, the best way to answer these questions is break down small business e-commerce into bite-sized chunks and look at just one feature at a time. I’ll write one or two posts each week to specific features and how they fit into a small business’ e-commerce strategy. This time up: splash pages.

Splash Pages

Many small businesses still use splash pages, a sexy graphic or Flash animation designed to highlight your business to potential customers. Don’t. They’re rude. They put your wishes ahead of your customers’. If your customer came to take a specific action (almost always the case) I’m betting watching your animation wasn’t it. And if it was, you can provide a link to a virtual tour or company presentation on the home page.

In fact, I’ve only seen a handful of splash pages that make sense. Here’s one:

Giants Super Bowl Champion splash page

Note that this appeared on giants.com the day after the Giants won the Super Bowl. Fans heading to the team’s website immediately following the game likely had only a few goals:

  • Find out who won the game
  • Read about the team following its victory
  • Purchase commemorative merchandise

The splash page in this case addresses all three issues. The team stripped their home page of any unnecessary messages by focusing, for a limited time, on the needs of its core customers following its win. And by offering a “Click here to enter Giants.com” they’re still making it easy for customers interested in other aspects of the team to accomplish their goals, too. One place the team could have done a better job is with an explicit link to more information about the team’s victory. While the entire image serves as such a link, it’s not obvious at first glance.

None of this is to suggest you shouldn’t have large graphical images to represent your company where appropriate. Hotels, for instance, do very well when offering virtual tours to potential guests. But, they have the greatest success when offering those only to guests looking for them, not by forcing them on every visitor to their site. What if the guest is just looking for a room? Why make that customer wait? Particularly when the customer’s action results in a sale. The same could be said for architects, designers, marketing firms, and retailers.

Succeeding in e-commerce always has to start with meeting your customers’ needs. Except in rare cases like the one outlined above, splash pages do nothing to support those needs. Put your focus on what’s behind those splash pages first and your customers can learn so much more about you and how to meet their needs than any animation alone can hope to accomplish.