Hi, I'm Howard, and I'm addicted to Startups.
I spent the last decade working in, on and consulting to startups. I burned my hand enough times to know, life's too short to build something nobody wants.
I also run FutureNow, a pioneer in the digital marketing optimization space. After 1,000 clients, I've learned to believe what they do, not what they say.
start by studying Emotions. Watch people. Interact. Communicate. Experience. Feel. Poke. Prod. Ask different questions, look from different angles. Sound daunting? It doesn’t have to be… and more tools are coming.
“Push your agency out of the way,” insisted John Nardone, chief client officer at MMA, in the day’s most controversial statement.
“They’re your single biggest barrier to measurement.”
And I thought we were harsh in our Ad:tech 1mpact presentations! Talk about impactful quotes. How about this one as well:
“I don’t need to hear from you,” snapped Dr. Don E. Schultz, professor emeritus-in-service of Integrated Communications at Northwestern University.
Speaking in an ad-barraged consumer’s voice, Dr. Schultz continued, “If I need something, I’ll go get it.”
“It’s a radically different marketplace,” Schultz continued. “The supply chain has changed to a demand chain.”
It’s no surprise to hear these stories coming from yesterday’s Yahoo Summit- we’ve spent a lot of time with Yahoo over the last year, as they’ve been very involved in promoting Waiting For Your Cat to Bark (not to mention supplying a $50 incentive to search marketers who purchase the book). They definitely have a clearer vision of the new consumer landscape. It was perhaps a tad surprising to hear so many voices echoing the sentiments we’ve offered in this space, and at conferences all over the world, this past year. What can I say, it’s a good time to be a Persuasion Architect.
These stories were just a few of the many though. I’d highly recommend popping over to ClickZ and letting the fabulous Rebecca Lieb tell you more about it.
Of course, it being Friday, you may want to read this while you’re there too…
I awoke at 7:15 this morning, exhausted from yet another weekend juggling family & friends in town, squeezing out the last 15 hours of the work week that couldn’t be fit into 5 workdays, and barely sitting down long enough to catch the Sopranos. The first thing greeting me in my inbox was the same as it is each week, Roy’s Monday Morning Memo. Talk about salience:
"Men think about it every seven seconds or so. Women romanticize it. Teenagers yearn for the weekends, when they might get a little of it… Sleep is the new sex." – Susan A. Nielsen, journalist for The Oregonian
The National Sleep Foundation has confirmed what you’ve long suspected: Americans aren’t getting enough sleep.
The culprits are:
- Email: It just won’t let us unplug from the grid. We stay up late, tapping out messages lest someone be offended by our lack of response.
- Caffeine: Our shortage of sleep has deepened in lockstep with the rising popularity of gourmet coffee. Coffee goes up. Sleep goes down. Surprised?
- Alcohol: A little wine may help put us to sleep, but it also keeps us from sleeping deeply. Alcohol robs us of much-needed rest during the night.
- Lack of exercise: Our bodies need physical exertion. The more we sweat, the better we sleep. But few of us are getting any real
exercise.- Overcommitment: We’re taking care of our jobs, our children, and our parents, then trying to squeeze out a few droplets of me-time.
Too much to do in too few hours is keeping our motors revving at redline.- Instant Gratification: We want what we want and we want it now. We make purchases the moment we can qualify for the payments because
acquiring things is how we keep score, right? Then, Impending Financial Doom keeps us anxious and chases sleep from the room. So we take a pill. Doctors prescribed drugs to 42 million of us last year who said we couldn’t sleep. Two billion dollars is what we spent for sleeping pills in 2005. But the 300 million spent by pharmaceutical companies to advertise sleep-inducing drugs had nothing to do with that, right? You and I aren’t affected by advertising.
And I thought it was just New Yorkers who spent their days this crazy but apparently it’s an epidemic. If you’re not a subscriber, you can read the rest of the memo and see what returns 5 minutes a week can bring you. You won’t be disappointed.
Today was a busy day in the office, and one in which meetings were back to back, to back. I started talking with my CFO, took a detour to meet with a potential partner, and ended the day spending time with some new (and potential) clients. Very different audiences, yet one common discussion kept popping up, and it comes as no real surprise, it comes up daily around us. The topic you ask- the difference between Conversion and Persuasion. The cognoscenti will recall we’ve been speaking and writing on the topic for some time, but it’s worth reading Bryan’s last article nonetheless. Here’s a tidbit:
The linear conversion funnel has its place. Though rudimentary and limited, it a great blunt-force beginners’ tool for online marketers with little or no metrics in place (and there are far too many of those left)…
…Instead of considering the conversion funnel by itself, we should think of it as living at the bottom end of the buy/sell process. Conversion is no longer the biggest problem facing online marketers; persuasion is.
Without persuasion, there’s no incentive for visitors to walk through your linear sales process. Unlike conversion, persuasion isn’t linear. The conversion funnel is smooth and simple, but the persuasive resevoir that feeds it is as complex and non-funnel-like as your visitors are.
Want to keep reading?
In the next edition of our newsletter, GrokDotCom, John Quarto-vonTivadar and I co-wrote a piece discussing the comedy of errors that ensues when having your report jockey advise you on business decisions. Here’s the article, hot off the press:
The Great Debate
or,
“When All You Have is a Reporter, Every Analysis Looks like A Nailâ€
Analysis doesn’t happen in a vacuum. And as we’ve said a thousand times: you can torture the numbers to confess, uh, I mean, rationalize just about anything.
Matt Belkin of Omniture blogged recently about the differences between Visits and Unique Visitors, as they relate to measuring reach and as they factor into the Conversion Rate formula. That is, Matt argues that Conversions per Visit is more important than Conversions per Unique Visitor. On occasion, we see our own clients make this sort of slip-up, so it’s worth examining the arguments on their merits.
Matt writes:
“[Measured] Visits…always. Sure, call me crazy – but my logic is actually quite simple.â€
Simple? A finer description of this approach would be simplistic. Perhaps that’s the root of the problem. Matt is clearly an intelligent guy. But from a software vendor stand-point, it’s very easy to fall into the trap of seeing the Reporting software itself as the end, rather than as a means to an end.
From a business owner’s perspective (and let’s face it, from a customer’s perspective), what she really needs is Analysis. If she could, the business owner would interview every one of those successful (and failed) customers to find out what the company did right and did wrong. Each of those customers is a Unique Visitor and it’s the totality of the unique visitor experience that caused (or inhibited) a conversion.
Reporting is often times simple; Analysis is rarely so. Reporting requires condensation into sound-bites; Analysis requires segmentation into knowledge-bites. There’s rigor involved in real analysis, wherein the software is the tool, not the talent.
Let’s look at Matt’s three reasons for preferring Visits over Visitors. As we’ll see, his blanket statements are superficially true – at least upon first glance, but that a deeper understanding illustrates just how little reasoning supports them.
Reason #1: Visits are more accurate than Unique Visitors.
Technically, this is correct, but only if your definition of “accurate†is to simply “account for all dataâ€. That’s like arguing we can reduce the crime rate simply by making Theft or Assault a legal activity. Will that make the citizenry safer from Theft or Assault? Or does it only remove those factors from the measured crime statistic?
From a data confidence standpoint, measured Visits are more likely to measure actual visits because measured visits are no more and no less than the actual visits we could measure – hence their name. However, there’s more to this story.
Measured Visits is no more “accurate†at measuring reach than is Unique Visitors. In fact, they’re far less so. How can visits possibly tell us about Reach, in anything other a relative sense? Reach is about people, not sessions. The value
of Visits in quantifying relative Reach is identical to that of Unique Visitors: the two are both apples-to-apples comparisons.
In short, measured visits accounts more accurately for actual visits, but actually provides you, the business owner, with less answers to the questions you’re actually asking. Why is tracking Visits of less value? Matt’s Reason #2 explains:
Reason #2: Every Visit represents an opportunity to persuade or convert a visitor to a customer.
Yes, absolutely this is correct, but not without some stipulations.
Do you understand the concepts of Macro vs. Micro conversions? Have you planned your scenarios accordingly, taking into account the three critical questions to
planning any persuasive system? Are you willing to optimize your scenarios for each visitor segment, summing these pipelines to have an Optimal Conversion Rate, rather than an Average Conversion Rate?
In the world of averages, every session does not represent an opportunity to persuade or convert a visitor to a customer. What every session does represent is an opportunity to persuade a visitor to decide to take an action (a micro-conversion) which brings her further into her buying process, and brings her closer to the end goal; the macro-conversion we’re looking to optimize (i.e. our revenue generating conversions).
Take for example, a visitor beginning their search for a new car online. Does Cars.com truly have an opportunity to persuade visitors to convert themselves during a single session? Imagine a scenario where our online car buyer visits once, researching various styles and brands. She comes back a few days later, narrows her search to a few targeted makes and models, and downloads their fact sheets. She returns the next day and makes her purchase. That’s three visits in the course of a week, and in Matt’s software-only approach, that’s a 33% conversion rate. How much time and effort should we spend trying to guess ways to optimize the 33% CR we’d report if we used Measured Visits as opposed to Unique Visitors?
The Conversion Rate in this scenario is the maximum it could be — there was one visitor, and she could only provide one sale. By focusing on Unique Visitors we keep our focus on the thing that matters most: a single, unique, prepared-to-part-with-money customer.
Matt continues with:
Reason #3: Measuring visits is based on fairly established industry standards
True, and that’s exactly why it has less value to you. Are you industry standard? “What do you want to be when you grow up, Tommy? “ “Oh, just average.†Is that the sort of business you’re running, to be just like everyone else? Or is your business gunning to be an Astronaut or a Fireman, or an Olympic swimmer?
It’s disappointing to return back to the world of averages. I recall a time when Amazon was the “industry standard†for online checkout processes. Many an e-tailer went belly up trying to copy their method, with similar lack of regard for the notion that maybe, just maybe, Amazon only worries about doing what’s right for Amazon.
And what industry is setting these standards anyway? It’s the Software Vendor’s industry, not your business’ industry, because their reporting tools report certain statistics more easily than others Yes, they’re doing what’s right for them. And there’s nothing wrong with that; we just have to recognize it as a limitation of the reporting tools, and stop thinking that some magical black box can substitute for rational planning and analysis.
Matt goes on to talk about how Unique Visitors are a subjective measure, one the industry can’t agree on in terms of length. He says this as if it’s a bad thing.
Our clients often ask us for benchmarks so they can measure the size of their, uh, foot. We categorically refuse. What’s a benchmark? When your system for conversion actively persuades 97% of your visitors to go elsewhere, benchmarks have little value beyond making you feel like a winner. I’d suggest a better way to make you feel like more of a winner: gobs and gobs of revenue.
The only benchmarks you should worry about are internal benchmarks. Bottom Line, how much money am I making? Am I making all that I should, given the resources I’m allocating to the process? Can I make more?
Matt closes with this gem:
“The longer your unique visitor timeframe, the more you effectively overstate success.â€
This is the purest evidence yet that you do not want to subscribe to these theories if your job, your company, or your family’s income is on the line. Instead, knowledge of your customers, and more specifically, their buying process is the real key. And, for the record, the buying process is non-linear, and is not the same across products and companies. One cannot guarantee a buying decision can be made in a single sitting, for every sale, across all the products on the face of the planet, simply because the software vendors only know how to measure one way.
We help define the complexity of our client’s sales in 4-dimensions. Not all sales are equally as complex. There’s the issue of compacted and non-compacted information, as it relates to the various handles of information your customers grab onto, and their angle of approach. The length of time you define for your Unique Visitors should be long enough to encapsulate their buying process, but short enough to take into account when they fail to convert at the macro-level. It’s tremendously more important that some simple Reporting software.
If that last paragraph found you lost in a sea of vocabulary, a life-preserver in the form of our new bookWaiting for Your Cat to Barkawaits you (but not before June 13th). You won’t be drowning for long. In the meantime, trust me, there’s nothing simple about truly analyzing your visitor behavior… unless of course you start with the conclusion and work backwards.
File under: When will they ever learn
I’m at home visiting my parents this weekend, and to meet with clients in Boston early next week. I unpacked my bag and found my jacket to be overwhelmingly wrinkled. Getting it pressed in time for Monday AM is probably an option… but so is simply buying a new jacket, and that has much greater value to me! Luckily, there’s a new Jos. A. Bank that opened down the street from my mom. A few hundred dollars later, I’m checking out and flipping through the catalog while Anthony, the salesman, is packaging up my purchases. He returns and asks if I’d like to take the catalog with me. I remark offhand, I’d love to, as I’ll probably make another order online. To which he replies:
Do NOT do that… They kill you with service fees. Take my card, if you ever need anything just come back and ask for me and I’ll make sure we take great care of you.
His sales trainer would be quite proud of his attention to service, but that wasn’t what stopped me in my tracks. Come back and ask for him? His store is 500 miles from my living room, which is conveniently where josbank.com is located. The odds of making a repeat purchase from Anthony are slim, but unfortunately for the retailer, now my odds of making a purchase at josbank.com are probably even slimmer. People largely will do what they’re incentivized to do. If I buy online, Anthony loses. Who else loses here? The retailer, as well as the customer. My guess is, this losing scenario is happening at retailers near you.
In scenario parlance, we talk about Driving Points; the point at which the potential customer was driven to engage with company’s communication. We often cite advertising as examples of driving points- online, a search engine results page (an adword, or organic result), or offline, a magazine placement, tv ad, etc. Here’s one more for you- completed purchases can be driving points for future purchases.
Here’s a thought. What would happen if Anthony handed me a different card from his business card. This card had a repeat customer code, which tied back to his employee id. This card allowed me to shop online, and waived the additional service fees. The retailer tracks which storefronts are providing the most selfless service, those which promote the global organization over their own interests, and rewards them accordinly.
The customer can now shop through whichever channel is most convenient. The salesman can now earn commissions on all sales in which his fine service played a part in. The retailer capitalizes on future revenues. Sounds like a win-win-win situation to me…
Have you missed us at the soon to be completed Ad:tech 1mpact series? We were in 10 cities… shame on you. Just to show we’re softies at heart, we’ll let you in on a little secret…
Bryan Eisenberg is keynoting the eComXpo next week, and it’s FREE, and you can attend without leaving your desk!
Ok, so what’s the catch you ask? Nothing, really. You simply have to click your way over and watch the digital presentation LIVE. There is no free access to the library that stores all the presentations throughout the Virtual Trade Show. Bryan goes on from 12 PM – 1 PM, Wednesday April 5th. We’ll be "on hand" to chat and answer questions once the session is complete. Hope to "see" you there.
Chief Marketer has an eye-opening for some, sad for others, (but hardly surprising from this corner) article on many CMOs utter lack of ability to measure what they must- marketing ROI, specifically that of the online variety. We’re getting tired of speaking over the dull roar of today’s online successes, regaling tales of traffic cost inflation (btw, Piper Jaffray reports Online Advertising to top $55 billion by 2010), but if the shoe fits…
Citing WebTrends 2006 CMO Web-Smart Report, they report 84% of the CMOs surveyed rated their organization’s ability to measure web marketing performance as having room for improvement, weak or non-existent.
“The challenge is due to a lack of consistent, goal-based metrics to
measure reach, frequency, and conversion across all online campaigns,â€
said a spokesman for Web trends.Another cause is
“the inability to target customers with relevant marketing and messages
due to siloed analysis; tools that only provide aggregated data such as
page views and visits,†he continued.
Uhh, sorry, no. Consistent, goal-based metrics? Who’s goals? Report jockeys going to start creating more canned reports that measure my goal-based metrics? Forgive me for being skeptical, but it’s not often good things are found in a can.
If that’s not enough, they go on to blame the… tools? Many web analytics vendors have created fabulous tools for reporting and measuring the data collected by the medium. What other medium provides such ready access to a wealth of statistics? Those who heard me speak last week at Ad:tech 1mpact heard the line often, clicks are people, links are decisions.
These fabulous tools we have at our disposal measure the decisions our people/visitors/customers make when they engage with our persuasive system, or rather, our advertising, marketing, and website. They’re limited in that by definition, they cannot come preloaded with our customers’ motivations included- after all, they’re our customers. We’re responsible (by we, of course, I mean marketing not simply IT) to plan the experience each of our customer segments would prefer to engage in online. What questions they would ask? What information they would require? How would they prefer to interact with our site?
In short, we’re planning what a successful scenario looks like because it’s amazing how much less of the problem these analysis tools magically become when we feed them the plan we built in advance.
Ok, well maybe that’s overstating it. Formal training is definitely a wise idea, but in the downtime between sessions, start by reading better copy on a daily basis. Take this gem, for instance:
Riding the 6 train is a lot like riding the sex train. Bodies press together. People grunt and moan. And no matter where you’re headed, you look forward to getting off.
And then there are the poles. If only hanging upside down by one foot were part of the daily bump and grind.
Guaranteed to make the commute more fun (and by commute we mean nightly romps at home), Sheila Kelley’s legendary striptease and pole dancing workout tones your tummy, bum, arms, and thighs while teaching you how to move sensually. A NYC branch of her famous West Coast studio, The S Factor, opens today.
p>Too intimidating you say? With no mirrors, tunes from the likes of Beck and 50 Cent, and lighting so low you can’t see your own ripples much less your neighbor’s hip rolls, there’s nothing to be afraid of.
Unlike the humpty dance that is the subway.
Where did I find these evocative, impassioned words you ask? From Daily Candy, of course…
Reading last week on Working Knowledge @ Harvard I came across a gem of an article from quite a collection of minds- the uber-smart author of the Innovator’s Dilemma, the co-founder of Intuit, and the Chief Strategy Officer of the Advertising Research Federation. What drew me in was this editor’s note:
Marketers have lost the forest for the trees, focusing too much on creating products for narrow demographic segments rather than satisfying needs.
Naturally, this being a Harvard pub, the editor referenced the legendary HBS marketing mind credited with popularizing the notion that people don’t want to buy drills, they want to make holes. Anyone who’s heard us speak can attest to how much we agree, and how often we’ve used his metaphor. But I was still stuck on the note, and as I continued the article, my disagreement with their collective contention grew. While I would never question their academic (and corporate) intellect, I have to challenge a few assumptions.
Are marketers responsible for creating products?
Is polling demographic subsets of a customer base the same as understanding one’s customers?
The article ultimately leads to a conclusion I’d agree with emphatically (although I find the metaphor of problem/solution more effective than their choice of job/employee)- to sell more products, marketers must better understand the needs of their customers, and how their products resolve these needs.
But the notion that understanding the customer is secondary to understanding the product is fallible- understanding the product is understanding the customer. Putting together groups of "target demographics" has no value toward understanding the customer. Considering the "typical customer" provides no insights into who the real customers are.
A marketer’s job is not to re-create and re-design the product; that’s Product Development and Engineering’s responsibility. A marketer’s first job is to:
To understand the product is to understand the needs of the customer.
