I read an article recently about creating forward sales momentum with web site visitors. I love the concept.

The idea is to create site copy that leads users down a prescribed path toward a purchase. I was nodding my head in affirmation until the author stated that the path to a purchase is linear.

This is where the marketer who lives in the trenches of real life tells the marketing academic that he’s just wrong.

Momentum is great, and we should all strive to create forward momentum through our site navigation and copy.  The idea that users will follow a linear path to a purchase is just wishful thinking – nothing more.

This is an unfortunate reality that folks are only now starting to recognize.  In real life (think of yourself as an example), you enter a site. Maybe you find something that interests you.  You think it might be worth purchasing….

Then a random onslaught of questions and issues raid your mind. What if I don’t like it?  What is the return policy?  Who are these people?  How long have I been in business?  Who else has used this product successfully?  What do they have to say about it? Is it really better than this other thing? Do they offer live customer support? Is it going to break the first time I use it?

You know what I’m talking about. We’ve all experienced it. You think you may want to buy something, but you need to resolve some things first. Unfortunately for us marketers, while we CAN predict many of these issues, the order in which our users address them is not completely predictable and NOT linear.

Anyone who has spent any time with a web analytics tool watching the progression of users through a site knows this to be true. For that matter, anyone who has ever bought anything online knows it to be true. So what do we do?  How do we create forward momentum?

Here are a few thoughts.

1. There are two stages at which the user progression is generally linear: the first click or two on the way into the site and the last few clicks to consummate a purchase. Make sure these pathways are obvious, simple, streamlined, and don’t compromise trust.
2. Recognize that there is no “average” or “typical” customer.  When we attempt to speak to everyone at once, we persuade no one.
3. Develop profiles of the types of customers you serve.  The best work that I have ever seen in this regard is done by a brilliant company called Future Now. In their experience, there are typically 4-6 personas that a company must effectively address in order to maximize conversion rates online. What kinds of issues would each persona need to resolve in order to make a purchase?
4. Take this list of issues, and be sure that resolutions are well within reach on your site – and not just in your global navigation, but through text links in your copy.
5. Purchase a web analytics tool (I like Click Tracks) and watch how users progress through your site.  Which pages have the highest abandon rates? Why? Make educated guesses and refine these pages. Then watch some more. It’s fascinating.

A book could easily be written on this subject – and in fact it has.  For the best thinking available on this subject, get a copy of Waiting for Your Cat to Bark? by Bryan and Jeffrey Eisenberg.

I got a call recently from a friend whose company has developed a new consumer software application. He had been presented with an opportunity to buy banner ad exposures on a newspaper web site.  “The price,” he said, “seems pretty amazing.” (In a good way.)

The newspaper had offered him banner ads on their site at a price of $0.02 per exposure. So, he would pay 2 cents every time the banner was presented to a site user.  This seemed so cheap, he was suspicious. My reaction was the opposite.

This seems to be a common challenge faced by marketers – forecasting return on investment (ROI) BEFORE deploying marketing dollars. Yet I would argue that there are few if any cases in which ROI should not be the primary driver of marketing decisions.

Here is the very simple exercise that we undertook to determine that this apparent bargain from the newspaper was actually a BAD investment for his company.

His software product retails for $50.00.  With a software product (unlike tangible widgets), the cost is largely incurred by the company up front in development.  But nevertheless, when people order this particular software, they receive a package including a CD ROM that costs approximately $7.00 including shipping.

So, their gross profit on a sale is approximately $43.00 before any overhead expenses or recuperation of development costs are taken into account.

Now, lets suppose he takes the newspaper’s offer at $0.02 per exposure.  If things go AMAZINGLY well, 2% of people who see the banner will click through to his site. (In reality, this click through rate will likely be less than 1%.)

So, for every 100 exposures ($2.00 spent), he gets two click-throughs – for a cost of $1.00 per click.

Now let’s suppose that his site converts visitors into buyers at a rate of 2% (average to slightly above average for an e-commerce site). For every 100 visitors ($100.00 in banner ad exposures), he makes two sales – for a cost per sale of $50.00.

You see the problem.  Even with generous assumptions about click-through rates, his customer acquisition cost ($50.00 in this scenario) is higher than his gross margin ($43.00). Translation – $0.02 per banner exposure is a BAD deal for him in this case.

Were there a recurring revenue stream from the sale of this product (a subscription of some kind), maybe an argument could be made using a higher lifetime value for a customer, but in his case, the sale is a one-time event with no real potential for additional revenue.

The moral of this story – be sure you can realistically expect a positive ROI before you invest your marketing dollars.  The math is usually pretty simple.  The hard part for marketers is often simply gaining access to sufficient cost data to establish thresholds for acquisition costs (a topic for a future post….).

We’ve all heard the age-old admonishment. Don’t judge a book by its cover.

What a joke.

In a time when we are all subject to constant information overload, there literally is no time to judge a book – or anything else for that matter by anything more than its cover.

Thankfully, it appears that we human beings are intuitively equipped to make snap judgments with shocking accuracy. If you doubt this point, pick up a copy of Malcolm Gladwell’s book, Blink (The Power of Thinking Without Thinking). In it, he shares countless examples of people reaching amazingly insightful conclusions with seemingly almost no data on which to base their positions.

So why do I raise this issue?

I’m sick of selling people on the importance of design.

In an environment in which time and attention are abundant, marketers have the luxury of focusing on the substance of communication rather than its packaging. Unfortunately, outside of a focus group where subjects are being paid to concentrate, I’m not aware of many other settings in which our prospects’ time and attention is anything but DARN scarce.

So we marketers had better package what we have to say (and sell) in a way that creates the desired impression in a second or two. Because that’s all we’ve got… if we’re lucky.

Let me be clear.  Am I saying that our prospects will decide to buy on the basis of a momentary impression?

No. At least not always.

Some of us sell products and services that require careful consideration.

But the FIRST sale we make to these prospects is to persuade them to invest their scarce time and attention in learning more about what we have to offer. This sale, I would argue, is made or lost in a fleeting moment.

So what should you do about this?

STOP shaving budgets by skimping on design.

STOP passing off design to the receptionist who just learned Microsoft Publisher last weekend – and seems to enjoy it.

START identifying the seriously talented designers in your area, and engage them in your work.

The great thing about the world of graphic design, in my experience, is that you DON’T always get what you pay for.

I work with a handful of extremely talented freelance designers.  They all used to work at agencies where an hour of their time cost a client $150 – $200. They freelance now, and guess what. An hour of their time costs a LOT less.

Are they any less talented than they were at the agency? No.

Is their equipment any worse than it was at the agency? No. Often better in fact.

The design function is fueled very little if at all by the overhead of agencies. So find the talented freelancers, and work with them. You’ll be amazed by how small the incremental cost is relative to the value you receive.

And once this whole information overload thing passes, you still have the receptionist to take over design.

A while ago I wrote a post asking the question, “who is really in charge of your marketing?” My intent was to highlight the marketing impact (for better or worse) of the rank and file staffers who come face-to-face with customers.

Recently however, I have noticed something truly fascinating that I believe may very well change marketing forever.  And it forces me to revisit this same issue of who’s in charge of marketing.

This time I would ask you to consider the role of your customer in the marketing equation.  No… I’m not talking about generating referrals.  I’m actually talking about the customer as a deciding and active force in an organization’s marketing.

Recently, Entrepreneur magazine featured a company called Threadless.com.  In the words of the company, “Threadless is a community based tee shirt company with an ongoing, open-call for tee design submissions.”

Here’s the business model. And I must say – I love it.

People submit their artwork to Threadless as part of a never-ending campaign to find the coolest tee shirt designs.

The public votes online for their favorite designs.

The winning artist is paid something for his/her work and soaks up the thrill of victory.

Threadless produces shirts using the winning artwork.

The voters (and others) buy the shirts.

And Threadless sells out their inventory every time.

Needless to say, the company and its founders are doing quite well.  It reminds me a bit of the making of stars in American Idol. After millions of people vote week after week for the winning Idols, is it any wonder that their records sell when they are released?

Look at what’s happening…

The customer/community MAKES THE PRODUCT. The customer/community tells the company which one they will buy. The company listens. And the product made and selected by the customer/community sells out.

Now let’s take this concept a step further… to the realms of the seemingly absurd.

A band called Radiohead recently produced an album called “In Rainbows.” To date, it is only available from a web site the likes of which you have to see to believe. (pretty strange)

You can pre-order the CD, or you can order and download the record right now.

Now for the amazing part… The price of the record is WHATEVER YOU WANT IT TO BE. YOU DECIDE. If you don’t want to pay, it’s free.  Want to support the band?  Pay something north of zero.

MarketingProfs recently reported that the band has sold 1.2 million downloads for an average price of $8.00. Apparently scores of bands are now looking at doing the same thing.

I hardly think of myself as old-school, but this blows my mind.

The world is changing, and with it – the very fundamentals of marketing.

Start thinking about how to collaborate with your audience.

My brother in law’s family came up from Atlanta to visit last weekend.  We are both attempting to learn golf.

He pulled from his bag a coupon/voucher that I could redeem to receive one free golf club from a company called Upswing. Simply call the number on the card – cite the unique sequence number on my coupon, and a putter, driver, or sand wedge is mine for the mere cost of shipping.  How could I refuse?

Upswing is a new (three year old) golf club manufacturer based in Seattle, WA.

Give coupons out at charity events.

Head of production for Callaway.

10% redemption rate

25% conversion rate

Growing quickly

Laser logos on wedges.

50% off for charities (to raffle)

NO CELEB endorsements – saves them a fortune.

http://www.upswinggolf.com/

Why DON’T people refer?

A firm understanding of why people DON’T refer is one of the keys to getting your customers to refer business to you.

There are a host of reasons for not referring.  Maybe your product or service is no good.  Maybe your staff is rude. Maybe your customers literally don’t know any other prospects.

Let’s suppose for a minute that none of the above is true – yet people still don’t refer to you.  Let me suggest that you have not put their FEARS of referring to rest.

Let’s face it.  We are all at least a little anxious about referring friends to most vendors. Unless we’re getting a commission of some kind, most of the time, we have more to lose than to gain by making a referral. Even if we were happy with the product or service we received, the fear of a friend being stalked by a salesperson (or unhappy for some other reason) is often overwhelming.

So what can you do to put your customers’ minds at ease so that they can feel comfortable referring friends to you?

Why not start by telling your customers what will happen when they refer a friend?  The conversation may go something like this:

“Tom, as you know, most of our business comes to us by way of referral.  And we have every expectation that as our relationship unfolds, there will come a time when you feel inclined to refer someone to us. [REMEMBER THE POWER OF EXPECTING REFERRALS]

When you do, I want you to feel comfortable that you know exactly how we will handle your referral.

First let me assure you that I will personally work with anyone who you refer. And if the timing isn’t right for any reason, I will absolutely never harass or pressure them.  We haven’t gotten to this point in our growth by pressuring people, and I don’t intend to start now.

And needless to say, when we do connect with a referral, they will experience the same courtesy and integrity that we have tried to deliver to you.

Lastly, without disclosing anything confidential, I will make it a point to keep you abreast of how my conversations with your referrals are progressing.” [PEOPLE WHO REFER LIKE TO BE INFORMED OF HOW THE REFERRAL IS PROGRESSING.]

This is a pretty simple and generic explanation, but it addresses directly two concerns – the potential that a referral will be pressured, and second, that the referral source will be left in the dark as to the final result.

Clearly, the more detail you can offer on your process for handling referrals and the care you take to ensure a wonderful experience, the better your customers will feel about referring business to you. But the fact that you do this at all will cause you to stand out from the crowd of businesses that invest no thought at all in how to empower and motivate customers to refer.

Who doesn’t want to grow their business through referrals? We’d all rather sell to people who have been referred to us. The sale starts with a level of trust and familiarity that just isn’t produced by other methods of lead generation.

So why are sales people so bad at generating referrals on a consistent basis? I would argue that as sales people and marketers, most of us have over-simplified the concept of referral generation.

As I speak with sales organizations about referrals, the conversation quickly heads in one of two directions:

1. Sales people – remember to ask for referrals; or
2. Marketing people – develop a structured rewards program (MCI Friends & Family) to motivate people to refer.

I would certainly agree – you rarely get what you don’t ask for.  So, asking for a referral is better than doing nothing at all.  And people rarely change their behavior – or invest energy to assist a selling organization without incentive. But I’m convinced that this is a gross over-simplification.

I work with a financial advisory firm. I’m a client of theirs. And they are a client of mine. I was enthusiastically referred to them by an angel investor/business owner in Virginia, and after a number of meetings, I became a client. As the relationship developed (post-sale), I found myself referring friends, family, and business associates to this firm.

I hate when people refer me to financial planners.  They harass you endlessly, and you wind up cursing the bastard that coughed up your name. So why suddenly do I find myself referring people to this firm? I’ll offer five reasons:

1. I like what they offer.  And I like the experience of working with them. But that isn’t nearly enough for me to refer to a financial advisory firm.
2. They aren’t desperate. And they don’t grope me for referrals. There is an EXPECTATION that their clients will refer others, and that is made evident from the beginning of the sales process. We never reached that awkward moment well into the relationship when out of the clear blue sky I got the question, “so, do you have any friends that could benefit from my service?” (More on this in a moment…)
3. They have taken away my fear of referring friends to a financial advisory firm. How? By acknowledging that their industry has a bad reputation for harassing prospects and explaining HOW and WHY they manage referrals differently.  In short, some 70% of their business comes by way of referral, and that doesn’t happen by embarrassing referral sources.  They explained exactly what they do to follow up on referrals – and when they stop if they sense the time isn’t right. I believed them.  And they have lived up to their promise.
4. They have made it easy for me to refer to them, and I truly believe that my referrals are given a first-class experience.
5. I GENUINELY FEEL their SINCERE APPPRECIATION for my help. And it makes me want to help them more. And as I have come to find out, there is in fact a science to this.

I will dissect each of the above in detail in future posts, but for now, I’ll focus on #2. This firm EXPECTS clients to refer. And the expectation is subtly introduced in the FIRST CONVERSATION with this firm.

“The vast majority of our business comes to us by referral.” That statement is pregnant with meaning. But most notably, it suggests that the firm has happy clients. It implies that they know how to handle a referral respectfully. And it indicates that they don’t solicit just anyone and everyone to be a client.  I like it.

By the time I became a client, the subject of referrals had been woven into so many of our conversations, that I clearly understood that it was almost a part of the client culture to support this firm with my referrals.  They never really had to ask.

By contrast, how do you feel when after a few months of working together, your financial advisor asks you out of nowhere for a referral? “Tom, I hope you have enjoyed working together. Who else do you know who might benefit from learning about what I do?”

My reaction is to assume business is bad and he/she is scraping for leads. I wonder if I should look for another advisor…. The LAST thing I think about is who to refer. I have been psychologically groped without any of the requisite foreplay. And I’m revolted.

Are your sales people guilty of groping for referrals?

Lately I’ve found myself involved in a number of new branding initiatives. New companies seeking to create a compelling brand…  and existing firms trying to become more compelling by investing more thought in the branding exercise.

The topic of color comes up frequently in these projects.  Does color actually matter? Is it a significant variable in the persuasion formula?

The answer is, yes. Color does matter.

Our brains are wired to associate specific feelings with certain colors. Most of us are aware that colors can evoke certain emotions, but it may surprise you to learn that color accounts for 60% of a person’s acceptance or rejection of another person or object.
Color is actually a particularly useful instrument of persuasion. Because we don’t perceive its influence over our decision making, we don’t develop a resistance to it.

The problem for marketers is that colors each carry multiple meanings. Take the color red for example.  It’s probably the best attention grabbing color, but consider its various meanings.

To some it represents “stop.” I therefore advise marketers never to use the color red for buttons on web sites that they want clicked by their audience. To many, red represents danger. In financial circles, red represents a loss (as opposed to black for profit).

Red can represent anger and aggression, boldness, or blood. So, as you can see, when developing your brand, how you use color is a matter worthy of serious consideration.

For your next branding project (or when picking colors for your home or office), I offer this color trigger reference…

• Red: strength, power, anger, aggression, excitement, financial loss, blood
• Blue: truth, integrity, coolness, loyalty, harmony, serenity, devotion, relaxation
• Yellow: intelligence, wisdom, hostility, cheerfulness, loudness, brightness. Yellow is the first color to register in the brain and causes you to be alert and watchful.
• Green: peacefulness, tranquility, youthfulness, prosperity, growth, money, endurance, hopefulness
• Orange: sun, warmth, bravery, radiation, communication, brightness, unpleasantness, invigoration
• Purple: royalty, passion, authority, stateliness, integrity, dignity, mystique
• White: purity, plainness, coldness, cleanliness, innocence, hygiene
• Black: desperation, wickedness, futility, mysteriousness, death, evilness. In financial contexts, black may represent profit and exclusivity (e.g. the exclusive American Express Centurion card)
• Gray: neutrality, nothingness, indecision, depression, dullness, technology, impersonality

The following is a logo developed by the Private Medical Marketing Group for a company in the business of providing clinic-based wellness services for employers.
The design team chose the central color, blue for the purpose of communicating integrity to participating employees.

People who are encouraged to participate in sophisticated wellness programs sponsored by their employer are often suspicious of how information will be managed with respect to their personal privacy and whether there are ulterior motives for the employer to meddle in the health affairs of employees. Failure to address this concern can impair the effectiveness of the program.

This particular wellness offering is built on a sophisticated technological platform – communicated through the use of the color, gray.

And in this instance, the designers elected to incorporate red to draw the eye to the center of a highly symbolic icon and infuse a touch of energy and invigoration into the brand. Their belief, and I’m inclined to agree, was that the negative connotations of the color red will compensated for by its literal application in coloring an apple – a widely recognized and very positive symbol of disease prevention. (An apple a day….)

So if you thought that logo design and color selection was random…

I conduct a monthly executive dialogue with members of the Retail Merchants Association in Virginia. Business owners attend a lunch session that we call Smart Marketing, and I have the chance to watch and counsel them in their responses to our ailing economy. These days, the decision making patterns of most of them is so consistent that I find it hard to contain myself.

When the economy slows down, the ad sales people crank up.

Like your stock broker who started telling you what a great time it was to buy… buy… buy on the day after the market dropped 777 points, people selling advertising of all kinds are telling marketers that this is the time market like crazy.  The rationale – this is your chance to gobble up market share while your competitors wallow in self-pity.

Don’t take the bait. While there are cases in which it actually does make sense to increase your marketing investment when times are slow, this is far from a good rule of thumb – especially in this downturn.

In general, there are four ways that marketers can react to tough times.

The first is to follow the advice of your ad sales rep, and TURN UP THE VOLUME. What your sales rep fails to mention is that this approach works only when your competitors do the opposite.  If everyone markets louder, all you’re doing is increasing your already inflated customer acquisition costs.

The second thing the rep fails to mention is that when your consumer’s emotions and priorities shift, your message has to shift as well.

Have you seen the latest TV ad for the Cadillac Escalade? You can’t ignore the changing times.  The focus of the ad wasn’t really on the vehicle’s amenities or imposing stature on the road. It was on efficiency… Haul eight passengers at 22 MPG in the city.

If you haven’t done so already, you need to check your message for its relevance TODAY. Last year, you were selling the biggest, the best, the most elegant.  Today, you need to be selling the most sensible, efficient, economical…

Think about how to re-cast what you sell BEFORE you blow more money broadcasting a message that’s out of sync with your consumer.

The second possible reaction you might consider is to silence your marketing.

I’m equally opposed to this idea unless it is absolutely necessary for short-term survival.  It’s not the trimming of marketing budgets that troubles me. Most marketing budgets are so laden with fat that there’s plenty to trim before you nick the bone if you’re careful about it.

My concern is the downstream impact on your business.  It’s my observation that companies spend more to re-build an empty pipeline or to re-establish a presence in the marketplace than they save during periods of marketing dormancy.

This leaves only two other options… marketing smarter… and marketing differently. As you might guess, these are the approaches I’m advocating, and I’ll touch on them in a future post.

Until then… check and adjust your marketing message. Focus on your most profitable and responsive customers. And if you’re cutting your marketing budget, start with the tactics that don’t produce a measurable return.

If you’re in the Richmond, VA area, I hope to see you on January 9 for the Retail Merchants Association’s First Friday Forum. This will be my topic.