Archive for the ‘Marketing Resources & Tools’ Category
Does offering a deal attract new customers? Yes.
A poll of consumers by customer satisfaction firm Foresee Results found that 31% of deal shoppers were new customers. Respondents to the Foresee poll described themselves as:
- Frequent Customers – 38%
- Infrequent Customers – 27%
- Former Customers – 4%
- New Customers – 31%
In another study of businesses by Utpal M. Dholakia of Rice University, respondents indicated that fully 80% of deal buyers were new. Perhaps the discrepancy is one of perception, Dholakia’s study polled businesses, while Foresee polled consumers. Business owners may perceive all but the most frequent of customers as new, while in fact the number of deal buyers that have never tried a business before is much lower. Either way, the majority of deal buyers are not regular customers, and a solid percentage are brand new.
After purchasing a deal, do consumers come back? Not really.
Businesses, according to Dholakia’s study, say that only 20% of consumers return to a business after cashing in on a deal. On the other hand, consumers say that they will return. In a survey of consumers by Lightspeed Research, 65% of deal buyers said they had returned to businesses. The discrepancy can be explained by the fact that consumers return to some of the businesses they visit, but not all. Factors such as quality of service, location and price presumably influence their likelihood to return.
Does my target customer purchase deals? Probably not.
According to the Foresee study, deal purchasers are reasonably distributed across age ranges and income levels, with a skew towards women (59%). But a recent AdWeek/Harris Poll broad sample of all consumers found that 20% of respondents had purchased deals on occasion, and only 4% had purchased deals frequently. 48% knew about daily deals, but hadn’t purchased one. This points to the fact that deal shoppers are a small subset of consumers overall. Deals are a good (perhaps necessary) way to reach that subset, but most of your target market doesn’t buy deals.
How will offering a deal affect my bottom line? Positively, if you do your homework.
Dholakia’s study found that 56% of businesses made money when offering a deal. That means they not only gained some new, long-term customers and built awareness, but they actually made money in the process. The factors contributing to success or failure vary widely by industry and the particulars of a deal being offered, but we’ve tried to identify some of the more important ones below.
So, do daily deals work? It’s a coin toss.
In the minds of businesses who’ve done daily deals, it’s pretty divided. A MerchantCircle study found that 77% of businesses who’ve tried deals plan to offer one again, while only 48% of Dholakia’s respondents answered such. MerchantCircle members tend to be online-savvy, while Dholokia took pains to gather a broad sample, which may explain the difference.
It’s early days yet for daily deals, but on the whole businesses’ experiences have been neutral or positive. Merchants are still learning how deals fit in to their marketing, and how to structure deals so they don’t break the bank. There is also more competition between deal providers, which will be good for both consumers and businesses in the long run. It is worth noting that consumers have no particular loyalty to Groupon or LivingSocial, and many local or niche deal providers are offering better terms to businesses. For now, Groupon and LivingSocial will reach more consumers, but you may actually be better off starting out with a deal vendor that has less reach. The worst horror stories tend to involve massive numbers of deals being redeemed at unprofitable rates. It is a good idea not to bet the farm on your first deal, as you are likely to learn valuable lessons that will help you structure and target future deals.
Here are some of the factors that lead to deal success:
- Give consumers a reason to come back. Provide great service, great products and/or an innovative new offering and they are likely to come back again and again, and pay full price.
- Tie a deal to a new product or service. Since many deal purchasers will already be familiar with your business, this is a way to get more value from them as well as new customers.
- Time your deal in the off season. If your business experiences seasonal ups and downs, do a deal when you are likely to break even or lose money anyway.
- Structure your offer so that consumers are likely to spend a lot more than the value of a deal. The economics get a lot better for you if people end up purchasing 2X or 3X the face value of the coupon.
- Fixed costs are high. Businesses who have high fixed costs and low incremental costs per customer are finding deals very effective.
Some good articles/resources on the topic:
- Doing the Math on a Groupon Deal, Jay Goltz, New York Times. Describes in detail the economic factors that determine deal success, with examples.
- Grouponomics, Felix Salmon, Reuters. Discusses the business model of Groupon as well as its effectiveness for merchants.
- How Businesses Fare With Daily Deals: A Multi-Site Analysis of Groupon, LivingSocial, OpenTable, Travelzoo, and BuyWithMe Promotions, Utpal M. Dholakia, Rice University. This is an absolute must-read for anyone looking to understand deal economics for businesses.
- Is Groupon Bad for Small Business?, Vinicius Vacanti, TechCrunch – a level-headed view of deal economics, with tips for how to structure deals.
- Daily Deal Calculator – great tool for calculating deal profitability, from deal aggregator Yipit.
Nico Brooks is a data geek who struggles to get his head around marketing problems, but he always enjoys the struggle. Two Octobers is an internet marketing company that provides marketing services and strategic consulting to businesses selling to local markets. We wrote this because we are in the business of helping marketers make prioritization decisions based on data. We hope it is helpful and would love to hear your comments!
With this in mind, we recently created the CPA Bid Calculator.
The calculator takes some of the concepts described in my previous post, and makes it easy for marketers to apply them when making budget and bidding decisions. It is primarily intended to give marketers a better feel for how conversion data can (and can’t) be used to set optimal bids.
Have a look, kick the tires. Is it useful? What features would make it more useful? I’d love to hear your feedback.
I will add the disclaimer that I am not a programmer, so I was definitely learning as I went. We plan on working on more tools to help with optimizing online marketing campaigns. In particular, my friend Dusty Candland and I are talking about creating a free, open-source bid optimization toolkit, and he is a programmer, a damn good one to boot. We worked together at several companies building bid optimization tools, and have some ideas for how to improve that mousetrap. If you like this idea, please let me know in the comments below, or on Twitter or elsewhere. We’d love it if other people wanted to work on the project too.
Before I get to them, let me introduce the bread machine problem. Bread machines are great, I’m told. You put a few ingredients in, press a button, and voila!, steaming hot bread comes out. Bread machine advocates will say, “no, it’s not as good as fresh bread from a bakery, but that’s not the point. It’s easy and beats bread that comes out of a bag from the grocery store.” I can’t argue with that.
As a designer of a different sort of appliance, I think I have an idea of what goes through the minds of bread machine designers.
If we just add these settings, people will have more control over the bread they make!
Yeah, but we are not building this for master chefs, it has to be dead simple for our market.
I’ve encountered that problem countless times when designing software. Too many knobs and levers and you’ve lost most of your market, too few and you are helping people achieve slightly better than mediocre results.
So, back to the people who changed my thinking. Each used software I had a hand in designing. First, came Teddie Cowell. He was the epitome of the power user, haranguing me weekly for features and always saying, “I don’t need documentation, just let me see the algorithm.” Then there was Tushar Balsara. His chant was, “API’s API’s API’s!” He used our tool, but was trying to plug it into his own vast and complex system for data analysis. Last was Brendan Kitts. He took our software, asked all the right questions, then built his own. Crafty bastard.
These are the kind of guys who, given a bread machine, will have it out on the table in days, with bits dissasembled and settings overridden. More importantly, these are the kind of guys who produce the very best results in online marketing – I know that because I saw what they were doing for their clients. They made me realize that trying to fully-automate marketing will always produce mediocre results. Building tools that are simple for the user will inevitably lead to the bread machine problem.
Marketing automation is hard because every business has different goals, and advertises in different media, and collects data through different means. On top of that, opportunities are always changing, with new ad products and marketing channels being introduced every day. In my experience, the best solutions usually entail smart hackers like Teddie, Tushar and Brendan, and cobbled together tools with some home-built stitching in between.
If you are a business, don’t trust a vendor that tells you their tool will manage it all for you. Look for the crafty hacker. Most of the time he or she can be found at an agency that also builds tools, or a tool builder that also provides agency services.
Bread photo credit: avlxyz
From a local business standpoint, reputation management activities include:
- Review monitoring and negative review mitigation
- Monitoring of brand name mentions on other sites
- Management of business listing information on directories and local search sites
Some of the tools below help with all of these activities, and others are specialized to just one. The tools listed here were selected out of several dozen that we reviewed. To make the final cut, a tool had to be useful, easy-to-use and free. If you have a favorite that we didn’t include, please comment below.
Quickly search social media for mentions of your brand or related keywords with SocialMention
SocialMention searches a variety of social media sources to provide a comprehensive view of how you are being talked about in social media. The interface makes it very easy to drill down into specific channels such as blogs, Twitter, photo sharing sites, etc. You can also set up alerts to notify you of new mentions. One drawback is that it is not locally-focused at all, so it may not work as well for you if your business name is used elsewhere on the web. I did get quite a few false positives when trying various local business names. By “false positive” I mean a mention of your business name that is not actually referring to your business. This is a common setback of monitoring tools, particularly if your business name is not particularly unique. SocialMention is also a great tool for monitoring keywords that are topically relevant to your business.
Grow your online network with HootSuite
Hootsuite is for general-purpose social media management versus reputation management specifically, but it is remarkably feature-rich for a free tool. And monitoring is only useful if you can add people to your network and engage in conversations, which is what HootSuite is all about. You can use the tool to monitor wall posts in Facebook, @replies in Twitter and various other social network activities. You can also post and schedule updates in Twitter, Facebook, LinkedIn, and several other networks. And if you have a blog, you can have Hootsuite automatically push new blog post notifications to your networks via RSS integration. You can also set up HootSuite to monitor for keyword mentions in Twitter.
Make sure you are showing up with GetListed.org
GetListed.org is a simple, easy-to-use tool for checking to see if you are listed in major local directory sites. It shows whether your business is listed in Google, Yelp, Bing, Yahoo and Best of Web and indicates whether the listing has been claimed. It has links to get signed up, and tips for how to optimize your listings.
Get a dashboard view of your online business presence with Marchex Reputation Management
This one may not be free for long, but it is right now. Of the tools listed here, Marchex is perhaps the most powerful from a local business standpoint, though Yext Rep is pretty comparable. The tool provides a dashboard view of reviews of your business, mentions of your business and listings in several major directories. To find mentions, they have indexed a great number of locally-oriented sites, and show fewer false positives than any of the other tools I tried. I also like the clean, intuitive user interface, and their help section has great tips for local businesses.
Manage conversations and monitor your listings with Yext Rep
Yext Rep and Marchex Reputation Management are similar in many respects, so you will probably want to choose one or the other. Yext Rep is brand new, but given how powerful it is now, it could quickly lead the pack if Yext continues to add features. In comparison to Marchex, Yext Rep monitors more directory sites for listings, but fewer local media publishers for mentions. And while Marchex provides an analytical view of your business presence, Yext Rep provides a more conversational view. Mentions show up very much like the status stream in Facebook and Twitter, and you can reply to some networks directly from the Yext Rep interface. I recommend giving both a try and seeing which you prefer.
Honorable mention: Google Alerts
Google Alerts is not quite as easy-to-use as the other tools mentioned here, but it is a very powerful tool for monitoring of brand or other keyword mentions. Here is a post I did a couple of months ago describing how to use Google Alerts for monitoring: Reputation Management: 1% Perspiration, 99% Google Alerts
A few other related blog posts:
I wrote on the Local Matters blog yesterday about the value of monitoring online conversations for mentions of a brand or business in comparison to buying broadcast advertising media. My argument there was that monitoring and responding to mentions of a brand has the same person-to-person connection and comparable costs as customer service calls. And I believe that monitoring and responding to online conversations is money better spent than most broadcast media. Any time someone is talking about you or your business, you have a chance to promote what you do and add value to the conversation. That is worth a lot more than buying an ad that doesn’t talk back.
But for most local SMB’s, I wouldn’t recommend hiring a call center or paying for a reputation management service. Unless the scale of your business is such that people are talking about you frequently throughout the day, outsourcing is probably overkill. But I do recommend setting up some Google Alerts. Google Alerts are a free and incredibly powerful way to keep track of what’s being said about you, your business and important topics in your industry. Google Alerts work a lot like Google search, but only notify you when new things come up, and you get results via email or an RSS feed.
Setting up a basic Google Alert is very straightforward. For example, if I wanted to monitor for mentions of Thomas Edison, I would go to http://www.google.com/alerts and create an alert.
By setting the type of the alert to “Comprehensive”, this alert will search the web including news media and blogs for the phrase “Thomas Edison”. Like Google.com search, it will find results that have the words “Thomas” and “Edison” in the text, but not necessarily together. If I want to only find results that have “Thomas Edison” as a phrase, I put quotes around the search term. That’s the basics. Google offers more detail on their Alerts help page. Now for some recommendations for how to set up alerts for your business.
First, while you can create an alert and have it sent to any email address, I recommend that you create a Google account if you don’t already have one. This will give you the ability to manage alerts, along with various other advantages. It will also result in alert emails being sent to the Gmail address that is created as part of your account. But you can still receive alerts at another address by setting up forwarding on your Gmail address. To do this, open Gmail and click “Settings” in the upper right-hand corner. Then click on the “Forwarding and POP/IMAP” tab. From there, select “Forward a copy of incoming mail to,” and enter your email address. This will deliver all alerts to the email account you specify. You will still need to log in to your Google account to add or edit alerts, but you don’t have to worry about checking another email account.
Second, use Google’s advanced search options to refine your alerts. Unfortunately, Google didn’t build this in to the Alerts interface, but most advanced search options also work in Alerts. The easiest method I’ve found is to build queries on the Advanced Search screen, then copy them to Alerts. As you are building a query using the form fields, a properly constructed query will show up at the top of the screen, which you can select and copy. Unfortunately, some advanced search options don’t work. Notably, there is no way on the advanced search screen to add region to the query even though you can specify a region in the form. Strangely, you can add a “location:” parameter to News alerts, but this is undocumented and doesn’t work for web or blog search. Using the “location:” parameter, you can specify any two-letter state abbreviation and some countries. For example, if you want to limit your News Alert to search New Jersey news sources, you add “location:nj” to the query. For more than you probably want to know on the undocumented (and documented) features of Google Search, the site Googleguide.com is a great resource.
Using advanced search features, here are examples of alerts Thomas Edison might set up for his business:
- Comprehensive alert for: “thomas edison” ”menlo park” OR inventor –high -school
Since Thomas Edison is a fairly common name, this refines the name search by only including pages that also have the phrase “menlo park” or the keyword “inventor”. And since there are a lot of high schools named “Thomas Edison”, it also excludes pages that include the words “high” and “school”.
- Comprehensive alert for: link:ge.com
This alerts to any new inbound links to ge.com.
- Comprehensive alert for: “edison electric light company” OR “edison general electric” OR “general electric”
This alerts to any mentions of one of Thomas Edison’s companies.
- Blog alert for: “ac current”
Thomas Edison was a vehement opponent of alternating current, and would surely have wanted to know of any blog mentioning it, so that he could proselytize his preference for direct current.
I have found that sometimes I need to tweak my alerts by adding and excluding keywords, to prevent getting too much information. For example, you may need to put the town your business is in as a keyword if your business name is fairly common.
Lastly, I prefer to view my alerts as RSS feeds in Google reader versus getting them as emails. This is too big a topic to cover here, but if you are already subscribing to RSS feeds in Google Reader, iGoogle, My Yahoo, Netvibes, or another RSS reader, you may want to give it a try.
The value of an idea lies in the using of it. – Thomas A. Edison
Below I have pulled out some choice statistics from the study relating to small business marketing and in particular social media. The number of small businesses who are using social media has doubled in the last year! While small businesses have been slower to adopt social media than big companies, they are starting to catch up. I believe this harkens a sea change in consumer habits, as social connections are strengthened between local consumers and local businesses. Mass marketing benefits big brands and big box stores, because it favors price as the common denominator across all consumers. But social media benefits businesses that are owned and operated by people who live in the community, because it favors social connections between individuals.
- “The incidence of small businesses having a social media presence has doubled from 12 percent to 24 percent in the past 12 months.”
- 70% of small businesses who use social media believe the medium has met or exceeded expectations.
- 50% of small businesses who use social media say it has used up more time than expected.
- 46% of small businesses have a web site – down from 50% a year ago.
- Marketing & innovation was second to capital access in affecting overall competitiveness. Workforce, customer service, computer technology and compliance were all less important factors.
- Referrals from existing customers are the most effective source of new customers.
Oh, and unrelated to marketing, but I couldn’t resist pulling this statistic out as well:
60% of small business owners are highly satisfied and 33% are somewhat satisfied with their jobs. Only 43% of the overall population are satisfied with their jobs. Source for the latter: The Conference Board.
And if your own a small businesss, Google Maps loves you just as much as Walmart. As long as you can validate an address, you can create a listing in Google’s Local Business Center.
Also keep in mind that what you put in your listing affects whether or not it will be found when people search Google Maps. Use keywords in your description that reflect how people search, and make sure to select all categories that apply to your business. And you can use additional fields to list brands carried, services offered and other search-friendly content. In addition to its success on the web, Google Maps is the most popular local search application on the iPhone and on Android phones. This is going to be an increasingly important way to get your business found.
The site has a strong promotional angle as well. Shane is explicit about the fact that he will promote each participant “through (his) Blog, Twitter, Facebook, and Flickr”, but participants also have an interest in promoting oncemany. As the year progresses, a community of participants and their close connections will naturally form around this project. If you are a local business, this is a great opportunity. Just the photograph and the link are well worth the cost. Any other visibility you get out of it is icing on the cake.
(And yes, I’m thinking about buying a day – October 2nd, naturally – I just need to have a good story to tell.)
Of recent reads, I recommend Inbound Marketing, by Brian Halligan and Dharmesh Shah, the creators of Hubspot.com. The book is basically a comprehensive survey of online marketing techniques, with an emphasis on low- or no-cost methods, which I like. It is targeted at a business marketer who doesn’t have much online marketing experience, but I still found it very helpful for the fact that they have laid everything out in a clear, step-by-step approach. It reads like a course in Digital Relationship Marketing 101.
Reading now: Guerilla Marketing. Would love your recommendations too – I run a lot.
This is a handy way to browse around looking for sites that provide good opportunities to create in-bound links, inbound links being a primary factor in search engine ranking. I also found many sites that feature vibrant discussions among expectant and nursing moms, which is Bosom Buddies’ target market. By joining these conversations, Bosom Buddies can extend their reach well beyond their own web site.