Time to Remodel the Kitchen?

Although determining full and realistic corporate valuation is a task I’ll leave to people of sterner stuff than I (since Facebook went public, not many could begin to speculate on the bigger picture of even small enterprise valuation), I’ve recently been working with a few clients whom have reminded me of why one sometimes needs to remodel.

Nowadays, information technology is often seen as a means to an end. It’s a necessary evil. It’s overhead to your real business. You joined the technological revolution, and your competitors who didn’t, well… sunk. Or… you entered the market with the proper technology in place, and, seatbelt fastened, have taken your place in the market. Good for you. You’ve got this… right?

I’m a software system architect. I envision and build out information technology. I often like to model ideas around analogies to communicate them, because it takes the tech jargon out of it. Now that I’ve painted the picture, let’s think about what’s cooking behind the office doors.

It’s been said that the kitchen is the heart of the home. When it comes to the enterprise (big and small) your company’s production might get done in the shop, but sooner or later, everyone gets fed business processes, which are often cooked in the kitchen of technology. In fact, technology is often so integral to what many companies do nowadays that it’s usually hard to tell where, in your technology stack, business and production processes begin. Indeed, processes all cycle back around, and they almost certainly end with information technology again.

Truly, we’ve come a long way since the ’70s, when implementing any form of “revolutionary” information technology was the basis of a competitive advantage. Nowadays, if you don’t have information technology in the process somewhere, you’re probably only toying with a hobby. It’s not news. Technology graduated from a revolutionary competitive advantage to the realm of commoditized overhead well over a decade ago.

Ok… ok… You have the obligatory kitchen in your home. So what?

If you think of the kitchen in your home as commoditized overhead, you probably are missing out on the even bigger value an update could bring you at appraisal time. Like a home assessment, due diligence as part of corporate valuation will turn up the rusty mouse traps behind the avocado refridgerator and under the porcelain sink:

• Still rocking 2000 Server with ActiveX?
• Cold Fusion skills are becoming a specialty, probably not a good talent pool in the area, might be expensive to find resources to maintain those components.
• Did you say you can spell iSeries? Great, can you administer it?
• No one’s even touched the SharePoint Team Services server since it was installed by folks from overseas.
• The community that supported your Open Source components… dried up?
• Cloud SLAs, Serviceability?
• Compliance?
• Disaster Management?
• Scalability?
• Security?
• Documentation…?
  • Don’t even go there.

As you can see… “Everything but the kitchen sink” no longer applies. The kitchen sink is transparently accounted for as well. A well designed information technology infrastructure needs to go beyond hardware and software. It considers redundancy/disaster management, security, operating conditions, such as room to operate and grow, and of course, if there are any undue risks or burdens placed on particular technologies, vendors, or even employees. Full valuation goes further, looking outside the walls to cloud providers and social media outlets. Finally, no inspection would be complete without a look at compliance, of course.

If your information technology does not serve your investors’ needs, your CEO’s needs, your VP of Marketing and Sales’ needs, as well as production’s… but most importantly your customers’, your information technology is detracting from the valuation of your company.

If the work has been done, due diligence will show off the working utility, maintainability, security, scalability, and superior added value of the well-designed enterprise IT infrastructure refresh.

To elaborate on that, a good information technology infrastructure provides a superior customer experience no matter how a customer chooses to interact with your company. Whether it’s at the concierge’s counter, in the drive-through, at a kiosk, on the phone, at your reseller’s office, in a browser or mobile app, your customers should be satisfied with their experience.

Don’t stop with simply tossing dated appliances and replacing them. Really think about how the technologies work together, and how people work with them. This is key… if you take replacement appliances off the shelf and simply plug them in, you are (at best) merely keeping up with your competitors. If you want the full value add, you need to specialize. You need to bend the components to your processes. It’s not just what you’ve got.  It’s how you use it.  It’s the critical difference between overhead and advantage.

Maybe the Augmented Reality Kitchen won’t provide a good return on investment (yet), but… there’s probably a lot that will.

Multi-Touch Attribution Campaign Tracking with WebTrends

This article is a follow-up to the webinar

All web analytics platforms have some way of tracking marketing campaign performance usually out-of-the-box or with a little bit of set up. Generally they all do a pretty good job of this and provide key reports to make important business decisions about which campaigns to invest more money in, which to reduce spending on, and which to get rid of altogether. But often these decisions are made without insight into the whole picture. Why? The answer is simply because most campaign reports are set up in the industry standard way of attributing all conversions to the last or most recent campaign clicked. This is and has long been the industry standard, but it is time for a change as this method ignores the fact that people often go through multiple campaigns before converting.

So what other attribution options are there? And why wouldn’t I want to attribute conversion credit to the most recent campaign? – There are typically 3 options for campaign attribution:

1. Last Touch (Most recent campaign)
2. First Touch (Original campaign)
3. Multi-touch (All campaign touches)

Technically there are two options for multi-touch attribution. One option is to give full credit to all campaign touches and the other option is to give partial credit to each touch. For example, if 3 different campaign touches resulted in a sale of $30 you could credit each touch with $10. But for the purposes of this article we will focus on the full credit option. As for the question “why wouldn’t I want to attribute conversion credit to the most recent campaign?” – this is not really the right question to ask. The better question to ask is, “Do I have the best possible insight into the performance of my marketing campaigns?” The answer to that question is almost always “no” if you are only analyzing a single attribution method. So rather than replacing industry standard last touch reports, adding first touch and multi-touch to your arsenal of reports is the best course of action.

Fortunately for WebTrends users, there has been a great method for gaining insight into all campaign touches for quite some time although a little work up front is necessary to gain the full power of this. If you are already doing basic campaign tracking within WebTrends then the visitor history table is already turned on and with minimal effort you can set up two new custom reports which report on the first touch campaign and all campaign touches respectively. To do this you need to make use of two features of the visitor history table and create two new custom dimensions, one based on WT.vr.fc (the fc stands for “first campaign”) and another based on WT.vr.ac (the ac stands for “all campaigns”). Once you have the dimensions set up you create custom reports using those dimensions and whichever metrics you want applied. To make things easier, copy the existing campaign ID report and just change the dimension to base the report on.

The “first touch” report ends up looking nearly identical to the existing campaign ID report but the rows of data will be different since the revenue and other conversion credit is applied to the first campaign that referred the conversion as opposed to the last.

The “all touches” report is where you’ll notice more differences. You will see some or many (depending on the date range you have selected) rows of data that have multiple campaign IDs separated by semi colons. To view only the data that contains multiple campaign touches just filter the report by a semi colon.

So what do you do with this information? What does it all mean?
Spending some time with this new data will likely reveal some patterns you never had insight into before. For example, you may notice certain campaigns appear to perform poorly according to your traditional last touch reports but the same campaign’s performance as a first touch is much better, or vice versa. Since the first touch report is so similar to the out of the box campaign ID report it is fairly straightforward. The only difference is that the first touch gets the credit. The all touch reports are more complicated though. What I find most useful about this report is the ability to determine a campaign’s total reach and compare it to its absolute reach.  Take for example campaign ID 32. In the above screenshots you will notice that this campaign ID has $63,441 attributed to it as a last touch campaign, $35,839 attributed to it as a first touch campaign, and $82,036 attributed to it when you search for it in the all touches report (See fig. 4 below). What this data is telling us in this particular case is that:

• $63,441 in revenue was most recently referred by campaign 32
• Only $35,839 in revenue was initially referred by campaign 32
• But overall campaign 32 at least partially referred $82,036 in revenue

As you can see, there can be very significant differences in campaign performance depending on how you look at the data. Taking the easy way out and looking only at a single attribution method can lead to less than fully-informed decisions being made about your campaigns. What if you were relying solely on first-touch reports in this example? That could lead you to reduce your budget on campaign 32 when in reality it was performing much better than your first-touch report told you.

Ok, so all that is well and good but manually analyzing campaign IDs one at a time is a lot of work! Yes it certainly is using the methods I just provided as examples. But there is a much better way to approach this. Taking things a step further we can export each of these reports and combine them together in Excel using the campaign IDs as our key values. What we want to end up with is something like the following which will allow us to analyze first, last, and multi-touch all within a single interface.

In part two of this article I’ll show you how to set this all up in WebTrends. But for now, follow the steps discussed in this article to get these super handy reports in place so you’ll be ready for the next part.

Is Your Web Analytics Program on Solid Footing? (Part 2)

In Part 1 of this topic, I covered four of the top ten fundamentals in building a strong web analytics platform. In this post, I will discuss the remaining six pillars.

5. Develop Actionable Campaign Tracking

In a previous post, I talked about tracking all of your campaign activity. A campaign is any method, whether paid or organic, that gets visitors to your site. Some of these activities include pay-per-click, banner ads, email, newsletters, blogs, articles, social media, classifieds, forums, referral partners and affiliates. In the other post, I provided recommendations on how to set up Google Analytics and Omniture to provide you with a methodology to create and track the performance of all of your campaigns. When done properly, you can determine how well these campaigns do in bring not only visitors to your site, but qualified visitors who become customers or leads for your company. Once you know the value of your campaign efforts, you can provide recommendations on which campaigns work and which ones do not, letting your organization optimize its marketing budget.

6. Evaluate Your Data Quality

The expression “garbage in, garbage out” applies to your analytics program. If the quality of the data you are processing is suspect, the quality of the reports will not be any better. Some of the items you need to pay attention to include:

• Filtering of internal and development partner traffic
• Exclusion of images, spiders, bots and external site monitoring services from being counted as visits and page views
• Merging together same pages with different URLs (case differences, “www.” vs. no “www”,”/ index.htm” vs. “/” at the end of a home page or path)
• Removing query parameters from same page names
• Testing and verifying your tagging structure and data collection to make sure you are capturing all the data you think you are. Make sure that all pages are tagged and that custom tags fire properly.
• Ensuring that all tag parameter variables are accounted for, even if you have no data for a particular parameter
• Ignoring currency formatting on e-commerce data that is passed in your tracking code
• Testing all other JavaScript on your site. Any JavaScript errors that occur on a page before your analytics tag will prevent that tag from being executed.

7. Avoid Information Overload

Some organizations go a bit crazy when collecting web data. For example, I’ve seen a client set up a traffic variable that collects an internal search term and then combines it with the page where they went on the site. Yet no report was being used with this information (nor should it have been). Enabling all the parameters you have available can increase the overhead on your analytics tool, and can sometimes cause you to hit limits on the amount of data that can be processed. If any data that you are collecting (other than out-of-the-box) data does not serve a purpose in relating to your KPIs (business goals), then stop collecting it.

8. Set up an Optimization Process

Once you have your analytics program running smoothly, it is time to add an optimization process to it. This involves selecting any aspect of your metrics that can use improvement. For example, an easy win would be to reduce the bounce rate from targeted landing pages, or reducing the exit rate from pages that should lead to a call to action. Longer term, you will want to improve the performance of campaigns to lower your cost per lead or sale, to reduce the fallout rates in your conversion process, or to increase page views or reduce calls to your call center, and so on. Items that can be tested include landing pages, conversion funnel pages, forms, body copy, headlines, offers, colors, graphics, processes and segmentation.

The optimization process starts by implementing a tool that will let you conduct A/B split testing and multivariate testing. Since this is more advanced topic and requires strategic planning and execution to administer properly, you will either want to work with your optimization tool vendor or a company like Edgewater Technology to show you the way. To do this effectively, your organization will want to create a team that merges strategy, technology and creativity together. After you run a given test, analyze your results, make the recommended changes, and test again.

9. Understand How to Measure ROI on Activities

The end goal on any phase of testing is to increase your ROI for that cycle. But, how do you measure that? It helps to understand the ROI formula. Basically, it is the gain from an investment minus the cost of the investment, divided by the cost of the investment. Suppose for example, you have a baseline of an average of 10,000 orders per month from 434,000 visitors. That is a conversion rate of 2.30%. If your average revenue per sale is $50, your total revenue would be $500,000 from these visitors. If, through your optimization efforts, you raise the conversion rate to 3.1%, your resulting number of orders would be 13,454, for a revenue total of $672,700, or a difference of $172,700. If it cost your company $50,000 to make these improvements, your ROI would be ($172,000 – $50,000) / $50,000, or 245%. Note that this ROI was based only on the gross revenue, and does not factor in the cost of goods or services sold.

10. Implement an Analytics Roadmap

Just as a builder uses a blueprint to help guide his team, your web analytics program should also use a blueprint. At Edgewater Technology, we call this a “road map”. It is designed to help move your organization from simply collecting web data to building a comprehensive reporting platform that gives you a 360 degree view of your customer. In this road map, some very important questions are answered, including:

• Where is your analytics program now?
• Where do you want your analytics program to be?
• How will you get there?
• What are the goals of the various stakeholders?
• What data to they want to see?
• What data are you not collecting?
• Is your collected data accurate?
• Do you need to integrate online data with offline data?
• What challenges will you face in getting to your goal?
• What specific tasks does your team need to do to get there?

Once you have a road map, you will be able to break down all the required tasks and determine what level of effort is needed to implement your analytics program.

Summary

By understanding the fundamentals needed to build a strong web analytics platform, you will be able to provide reliable data that supports your company’s business goals and provides you with actionable insights that can be used to optimize all aspects of your web program.

Understanding Multichannel Analytics

While web analytics can give you a pretty accurate picture of how well online buyers respond to online marketing activities, it fails to tell you anything about how your online marketing affects offline purchase behavior and how offline marketing affects online behavior. If you website has a 3% conversion rate, what about the remaining 97% of your visitors? If you send out 50,000 coupons and get a 2% direct response rate, what about the other 98% of those who got the coupons? Is there a way to measure what they do? Enter multichannel analytics.  Multichannel analytics is a process where all marketing channels are analyzed to develop a more complete view of visitor behavior.

The Four Marketing / Purchase Quadrants

While there are four quadrants of multichannel analytics as outlined in the figure on the right, this post will discuss the two online/offline combinations shown in red. I will briefly explain some of the issues regarding multichannel analytics, some methods of tagging offline marketing and offline purchases, and show you some of the benefits.

The biggest problem with tying in offline efforts or offline conversions is lack of a common point between the two. You have two different databases, one of online data and one of offline data. Unless you have the equivalent of a primary key, you cannot join the two data sets together. Imagine a customer walking into your store or calling your order link and giving you their unique visitor cookie. That would make it fairly easy to tie in their online behavior to their offline purchase. You would be able to track what brought them to your website and what they did before coming to your store.  Unfortunately, in the real world we cannot tie these efforts together, so we need to develop solutions. Solutions for both of the red quadrants will be discussed as they relate to the multichannel analytics integration process, as shown in the following figure:

Tracking Offline Marketing to Online Purchases

There are two solutions to tracking your offline marketing efforts. The first solution is to use vanity URLs in your offline marketing efforts. For example, if you go to DellRadio.com, you will be redirected to a dell.com URL that has some tracking code. In the URL string, you will see a parameter titled “cid”, which is used by SiteCatalyst as a campaign ID. Thus, any purchases from visits to DellRadio.com will be credited to their radio campaign.

You can do the same thing with all of your offline efforts. Put vanity URLs on your newspaper or magazine ads, in your mailers and coupons, on billboards and other forms of display advertisements. Use specific vanity URLs in your radio and TV ads, and simply have your IT department do a “301 redirect” that converts these vanity URLs into coded mainstream URLs that your analytic tool can process.

The second solution to the offline marketing effort is to promote the use of tracking codes in your offline media such as infomercials. Someone watching the infomercial can either call the phone number or order online. If they enter the promo code on the website, you will know that the order was the result of the TV ad. However, what this will not tell you is the percentage of those who came to the site from the infomercial but did NOT buy. If you simply want to allocate revenue to an offline marketing effort, a promotion code will work well with any offline media that drives traffic to your main URL. Within your analytic package, you would tag the code entry as an event, and then look at the revenue that is associated with each event (specific code for each offline activity).

Tracking Online Marketing to Offline Purchases

Now that you have a way to track how your offline efforts work to get visitors to your website, how do you measure what they do when they don’t order online?

Capture Visitor Intent

If your business is both online and retail (physical store), you can measure intent to come to the store by tracking results of your store locator and directions links. By setting these as goals, you can then see what searches were done by visitors who have expressed intent to come to your store. To help capture the buyer while he or she is in the buying mood, some stores like Barnes and Nobles offer the ability to enter a zip code to see if a book of interest is available at a local store. If so, the customer can reserve it online and go pick it up right away. If you can offer this type of service, you need to tag this event so it can capture what brought the customer to the website, and be able to tie in the physical purchase (offline) to the online marketing that resulted in the purchase.

Generate Campaign-Based Coupons for Offline Purchases

It is also possible to have your website generate a unique coupon ID that can be for the particular product that was searched.  By creating an ID that represents marketing segmentation (campaign type, campaign source, media placement, keywords, and so on), you can store this information in both your analytics package and your store database. If you use a campaign translation file for your analytics platform, you will want to include the same campaign ID as a prefix to your coupon. The same coupon concept also applies to service businesses such as insurance, reservations, home and professional service businesses, etc…, where you give the prospective customer a coupon ID that they can use to get a discount. If your business takes orders or inquiries over the phone, you could have your site coded to include the coupon code next to the phone number on all pages. By tracking the redemption of these coupons, you can compute a click-to-store conversion rate, and factor in offline revenue that was attributed to specific online marketing campaigns. This will give you a higher ROI and perhaps provide justification for more web-related investment.

Implement Phone Number- Based Tracking

Unique tracking phone numbers can also be used to measure the impact of your online marketing efforts to offline purchases. A service like Voicestar provides these tools. You can place trackable phone numbers on your site, or use services like “Click to Call” and “Form to Phone” options. Their system has an API that lets you get data right out to your analytics tool and dashboard. Tracking phone calls is very important, as it is human nature to still want to talk to someone on the phone before making a purchase decision. When using a phone tracking service, or even if you have a block of your own phone numbers to use, it is important to not have the phone numbers as a part of the static content. The phone numbers need to be integrated with an algorithm that can associate the phone number with a particular campaign.  To further tie in the visitor to the phone number, a cookie should also be set that relates to the tracking source. Thus, if the visitor leaves the site, and comes back at a later time, the initial campaign that brought him or her to the site will still receive credit for the sale.

The biggest drawback to this type of campaign tracking is that depending on what level of detail you want for your marketing segmentation, you can end up needing dozens or hundreds of phone numbers. This can possibly become expensive and difficult to manage. Instead, you can create a 3 or 4 digit “extension” that is tied to a web-related order number, and when someone calls the number, the phone operator asks for the extension. This has no incremental cost to implement.

Another phone tracking service is offered by Mongoose Metrics. Their service integrates with most web analytics tools to create an automated URL postback after each call is made.  You can perform the same type of analysis, ecommerce conversion and segmentation that you would from any other page to be analyzed. You can see instantly how well your online marketing activities are generating online revenue.

There are many ways to implement phone-based tracking, and they all require integrating your site code with your analytics platform and your backend system.

Utilize Site Surveys to Understand Buying Behavior

Another way to gauge consumer intent is to use online site exit surveys. Companies like iPerceptions, ForSee and others can provide you with surveys that your site visitors can take regarding their online experience. You can ask about the likelihood of them making a purchase offline, and how much their online experience would influence their buying decision. On your online order forms and lead forms, you can also ask the question, “How did you hear about us?” in the form of a drop-down select or radio buttons. Include your offline marketing methods as choices. If the online traffic source is “direct entry”, then you can assign credit for the sale to the way the customer said they heard about your site.

Assign Values to Online Leads

If your business model is to let visitors fill out a form to be contacted by an agent or representative, there are a couple of different ways to tie success (revenue) to a campaign. Some analytic packages let you assign a dollar value to goal conversion pages, such as filling out a request for information form, a pre-application, or other form of customer contact. This dollar value is based on two factors – the average close rate of online leads, and the average dollar value of each deal. For example, if your company closes 15% of all of its leads, and the average deal is worth $500, then the value of each lead is $75 (15% of $500). Thus, your web analytics package can compare that value to the cost associated with generating the lead, and the nature of actions that lead up to it (pages visited, items downloaded, actions taken, and so on). If your analytics tool is set up to give credit to the first campaign touch point (PPC campaign, banner ad, referral site, etc…), you can still assign credit for the lead to the original campaign, even if the visitor does not convert until a later date.

The drawback with this method is that you are dealing with averages as far as the value of a lead. With average lead values, you cannot measure if a particular campaign brings in a higher-value customer than does another campaign. You can, however, get an average picture of how effective your online campaigns are right within your web analytics tool, without having to import any external data. For many organizations, this will provide much more insight than they are already getting about their offline purchases. It does require fine tuning the value you are using as the average lead value, based on your close rates and average dollar value of a new customer.

Track Campaign IDs with Lead Form Submissions

An alternative to this is to create an offline method of tracking online campaigns when a form is submitted. Your campaign code that you use in your web analytics package can be stored in a cookie and submitted as a part of your lead form. If all these leads are entered into a database, the campaign code can also be entered, and later receive credit for an eventual sale. The exact dollar value of the deal can then also be assigned to the campaign, just like for an eCommerce site. The integration of the online and offline data would then need to be done.

Reaping the Benefits of Multichannel Integration

So far, I have touched on some of the ways to “tag” offline marketing activities so they can be read by your web analytics program, and how to tag offline behavior that is due to your online marketing efforts. However, to put it all together requires access to all the data, both online and offline, plus an integration plan that combines strategy, technology, business logic, web analytics data, BI data, implementation, analytics and other disciplines to provide the desired results. One of the benefits of a multichannel analytics integration is that you will be able to obtain actionable insights, such as these (some are industry-specific):

• Enhanced ROI – Once you are able to assign additional offline revenue to your online marketing efforts and online revenue to your offline marketing efforts, you will see a higher ROI, enabling you to justify additional spending on both your online marketing and other web efforts, such as site testing and optimization.
• Retail Merchandising Decisions – If your business is retail, your online data can be mined to see what items tend to be purchased together, enabling your retail operation to group these same items together for in-store customers.
• Upsell Opportunities – If your offline customers tend to respond to particular upsell opportunities when they call in or get called back, you can use this information to target similar online customers or visitors, based on data that can be stored in tracking cookies.
• Re-marketing Intelligence – If you know what online customers come back to your site to buy later, you can use this knowledge to market similar products or services to your in-house mailing or phone list.
• Additional Retail Outlets – If you see a significant request for retail outlets in areas that you are not currently serving, you can have the data you need to consider expanding your physical presence.
• New Promotional Activities – If you know that your online visitors express an interest in finding a store based on looking at particular products that they want right away or that tend to be expensive to ship,  you can create geo-targeted online campaigns that are designed to get more buyers to your store. This can also work well for seasonal or event-driven items (snowstorm, hurricanes, extended deep freeze, etc…), where the need for a product is now, not 7 to 10 days from now. By tracking these click-to-store visitors, you will be able to measure the success of these campaigns.

Hopefully, this post will give you some insight into how multichannel analytics works, some of its challenges, and how it can benefit your organization.

6 ways to get your web presence and infrastructure in shape for 2010

In this lingering recession, everyone is looking for new ways to better position themselves to compete and grow revenue. A lower level of consumer and business spending will require efficiency, careful optimization and leverage of low cost assets and methods. It’s time to get into shape! Here are 6 ways to revamp and strengthen your web sites and infrastructure on a modest budget:

Revamp your web strategy for a web 2.0+ world.

The internet world has dramatically changed in the last 3-4 years. Social networks, user communities, user generated content, twitter, the iPhone and other mobile devices, GPS and location aware devices and the other components of Web 2.0 completely altered the way businesses and users communicate and transact online. Each of the Web 2.0 components come with their own set of opportunities and challenges. They provide new channels that enable communication at a fraction of the cost while demanding a new approach to openness, transparency and interactivity. Regulatory, security and governance concerns are not always easy to address. Chart a path in these new waters by rethinking your Web Strategy and redefine the role that the web and other digital channels will play in the company’s future and put a plan in place for its execution.  

Implement a social media strategy and measure its value

Social media tools are a great way to build honest online relationship with customers and other audiences. Doing it right is not always easy. A social media strategy will force you to think through and define where to be and what is to be communicated, set the tone and nature of interactions, set guidelines on how to respond to negative feedback, factor in legal and regulatory implications, address intellectual property and security issues and many other aspects need to be thought through. In addition, measuring the impact of these activities is not always easy. Building a model that can assess and provide value guidelines is very important. 

Reduce costs by Leveraging open source and Cloud web infrastructure components

We have a client who recently came to us asking advice after a planned $3M Oracle e-business implementation turned into a projected $15M 3 year project. We recommended they look at OfBiz and other open source e-commerce frameworks. Open source enterprise level software , SaaS and Cloud Computing have matured to the level that major organizations are leveraging these low cost scalable solutions to build a robust infrastructure that can replace big investments in hardware, software licenses and data centers.  

Take control of your content – Deploy a Content Management Solution

For many companies, fresh content is key to repeat visits. As sites scale, managing and maintaining them becomes an expensive and difficult task often dependent on IT or external resources. Content Management Systems (CMS) provide business users with the ability to modify and update sites and global structures that make graphical changes easy to implement. They also provide ability to segment users, add personalization and social features such as Blogs and community without the need for additional software and services.

User Experience Redesign

If your website has not gone through a redesign in the last 3 years, chances are that it looks dated. What looks fresh and relevant changes all the time and the key in the last few years has been incorporation of user engagement and interactivity, quality content that speaks more directly to the users, content targeting and using sites as relationship building tools rather than one way communication streams. Sites need to add rich content, video and mobile support as well as dynamic interfaces. All these changes contribute substantially to improved website ROI

Optimize sites for goals and conversion

It’s crucial that every marketing and search dollar is well spent. To do this, websites need strong web analytics so that sites can be continuously optimized to maximize conversion and be careful to avoid the main pitfalls. Web analytics capability allows businesses to test new ideas, layouts and promotions and to quickly refine them to drive sales and traffic as well as optimize search and marketing spend. With Google analytics and other low costs services, setting great analytics does not have to mean big bucks.

Enterprise e-Commerce on a Shoe String Budget?

Image courtesy of Flickr

While inexpensively built and operated mom and pop e-commerce websites are as common as snow in New England in January, is it possible to build and operate an enterprise grade e-commerce site on a shoe string budget? E-commerce at an enterprise level is not simply slapping a shopping cart to your website and calling it e-commerce enabled. The demands of an enterprise solution may require:

• Integration with legacy systems
• Integration with supply-chain systems
• Support for multiple currencies and tax codes
• Multiple store-fronts
• Profile and history driven offer management
• Integration with a content management system
• Business user control over promotions and pricing
• …and more

Challenges of integration with existing systems alone are daunting enough never mind the fancy e-commerce functionality that is often considered vital for competitive differentiation. No wonder why starting an e-commerce venture or an upgrade is considered a seven figure expense. The cost of an enterprise grade e-commerce product alone can easily account for twenty to forty percent of the budget. The other option is to go with a hosted or SaaS based approach and avoid capital expense for software and infrastructure – not a bad approach for testing the waters but in the long run, charges and fees can really add up.

A well executed e-commerce site can provide great returns on the investment by generating new revenue streams, enhancing existing ones, or reducing operational expenses – and that can’t be too bad for the budget or your career. However, in tough economic times the challenge becomes harder as getting approval for large complex projects becomes difficult and even the approved budgets can get slashed. If your budget gets cut, is there a way to still implement enterprise grade e-commerce? Can an open source e-commerce solution be the answer to the “do more with less” mantra? Is open source e-commerce ready to play with the big boys in the enterprise domain? Let’s explore these questions and the capabilities of the open source e-commerce solutions.

Let’s start with a common misconception that an open source e-commerce product requires significant customizations and the cost of customizations more than offsets any savings from not having to pay license fees. Implicit in this assumption is the notion that a commercial product requires little or no customizations. However, the real-world experience shows us that this is not the case. Even the best commercial products cannot be used out-of-the-box unless you decide to adopt their look and feel and their model of e-commerce. The cost of customizations can add up just as rapidly in a commercial product as they can in an open source one. Therefore a prudent approach would be to adhere to the industry standards and best practices and use out-of-the-box functionality in areas which are not competitive differentiators. Heavy customizations should be limited to the aspects of the website that are true differentiators and result in a unique user experience. This guiding principle applies regardless of the decision to use an open source or a commercial product.

There are a lot of inexpensive and open source e-commerce products out there; however, most of them are nothing more than a simple shopping cart. They are only suitable for the most basic needs of a simple web site. However, Apache OFBiz and Magento are two promising contenders that break from the pack and compete in the enterprise space. In this article we will primarily focus on OFBiz.

Apache OFBiz is actually an integrated suite of products that does not only include e-commerce capabilities but also provides support for accounting, order management, warehouse management, content management and more. An enterprise e-commerce implementation cannot exist as a point solution. It has to integrate and work well with other back office processes and applications. OFBiz’s integrated suite can be used to automate and integrate most back office functions. Even if you decide not to use the built-in functionality it can still be integrated with other existing systems albeit with more effort and cost. It provides enough e-commerce functionality out of the box to match most enterprise needs and the rest can be customized if needed. Here is a summary of our assessment of OFBiz:

Technical Capabilities

#	Criteria	Rating	Comments
1.	E-commerce capabilities	B+	Provides Robust e-commerce capabilities OFBiz e-commerce capabilities include: catalog management, promotion & pricing management, order management, customer management, warehouse management, fulfillment, accounting, content management, and more.
2.	Sign-on and Security	B	Granular and robust security framework The OFBiz security framework provides fine grain control of the security including multiple security roles and privileges. Roles can be used to control access to screens, business methods, web requests (URLs), and/or entire applications.
3.	Technical flexibility & ease of use	B	Very flexible but complex  OFBiz is an application development platform that can be used to build applications and as such provides a tremendous amount of flexibility.  The use of the entire framework (which includes the database, an Object Relational Mapping (ORM) layer, business object layer, scripting support, and UI tools) is optional.
4.	Integration with other apps and locations	A	Multiple integration methods  OFBiz business services can be exposed as services and accessed by multiple methods including Remote Method Invocation (RMI) and XML Web Services.  Integration directly with the OFBiz Relational Database is also possible.
5.	Scalability	A	Highly Scalable  Java systems are highly scalable provided a production architecture that is designed to support heavy load.  A load balancing device and redundancy at the web, application and database servers can redundancy and scalability.
6.	Relational database integration	A	Support for all major database platforms  The most popular OFBiz database platforms are PostgreSQL and MySQL (both of which are open source).  OFBiz has also been tested with Oracle, DB2, Sybase, and MS SQL Server.  The default installation uses an Apache Derby database which is not recommended for production use. Our research indicates some problems with MS SQL Server database – this should be investigated further prior to selecting that database platform.
7.	Skill Set to support	NA	OFBiz framework and application are based in the following technology components: XML Web Development: HTML, CSS, AJAX/JavaScript, Apache Java Development: Java, JSP, Freemarker, BeanShell, Tomcat application server (possibly) Database Development and Administration: MS SQL Server (possibly), SQL, JDBC Long term support of the application would require knowledge and familiarity in each of these technology sets.  While these technologies are mainstream and skills should be readily available in the future, skills and experience with the OFBiz framework that is built upon these technologies may not be.

Business Position

#	Criteria	Rating	Comments
1.	Financial stability	B	OFBiz is a “top level” project in the Apache Software Foundation.  The Apache Software Foundation provides support for the Apache community of open-source software projects. The Apache projects are characterized by a collaborative, consensus based development process, an open and pragmatic software license, and a desire to create high quality software that leads the way in its field.
2.	Maturity of product suite	B	Open For Business (OFBiz) was initially launched in 2001.  In early 2006, the project went through the Apache Foundation’s “Incubation” process to review projects for quality and open source commitment.  OFBiz was promoted to a top level Apache project in December 2006.The community for OFBiz is very active.  The major web posting board receives between 20-40 postings per day relating to OFBiz.  The original contributors are very active in monitoring these sites and sharing knowledge.
3.	Reference Accounts	B-	Total number of installations is unknown due to the nature of open source software. The OFBiz websites lists more than 70 companies that use their software. However, there are very few marquee names.

Implementing an enterprise e-commerce solution can be expensive and complex process that requires analysis and investment in people, processes, and technology. While it would be insincere to say that an enterprise e-commerce solution can be implemented on a budget in the ballpark of a mom and pop e-commerce store, the budget can be significantly reduced by:

• Carefully crafting business requirements
• Adapting the business model to match industry’s best practices
• Reducing and carefully planning data migration and application integration
• Keeping the customizations to a minimum
• And using an open source e-commerce platform

OFBiz provides a viable open source e-commerce stack that can be used to implement enterprise grade e-commerce. When combined with good implementation practices and solid execution the combination can result in slashing costs by twenty to forty percent — which sometimes can make the difference between getting funded or getting shelved.

Globalization and Localization of web sites

Many companies that sell products or services internationally are finding themselves in a familiar dilemma, should their web presence be global or local?

While a global site is easy to control and maintain and can ensure consistency in branding and content quality, it can not address local culture, interests and variation.

I’ve come across an interesting view on the site of the Localization Industry Standards Association www.lisa.org

They see Globalization as a process with 2 parts

• Internationalization which is the process for defining applications and sites to work in every market
• Localization which is the adaptation of the International framework to local needs and

And the process as:

I agree that the best approach in most cases is to plan for the site and application to work anywhere and then build in enough flexibility for local control and adjustments.

The challenge in this approach is that defining international requirements and anticipating all local variations is very expensive and time consuming. So what should a company that is expanding internationally do? Here are a few questions and guidelines to consider:

• Scope of localization: how are you products or services different around the world? Is it exactly the same product (jewelry tableware for example) or does a local audience may have preferences that will impact selection and availability of products (fashion and cosmetics). If the products need to meet local regulations, standards or laws (220V or 110V for consumer electronics, Material Safety or FDA approvals for Chemicals and Drugs) or if products include attributes like language that will make them market specific (Books and CD’s). In each case, a single catalog for all products will provide the easiest way to maintain master product data but sites level of granularity may be determined by the variance in offering. It may be truly global, regional, country or language specific.
• Centralized or Distributed management. Who will maintain content, details, specs etc. in local languages? Do you assume that a product is not released until all languages have been updated? Do you allow a default language to remain until a local language become available? Is this the responsibility of a central translation group of does it goes downstream to the local group to translate? (If you are thinking about machine translation, don’t. This technology is still not ready for prime time and will drive off disappointed customers)
• How local should you go? to create a true sense of local site and service, certain adjustments may be needed to the site so it does not look like the translated version of the global template. Does the site has local news and events? Is there editorial content from local sources? Are reviews and communities local? Does the interface adapt to local language without cutting words or providing headers in English? Are local conventions like time format, date format, calendar, currency, address, name formats etc. are specific or generic?
• Build from scratch or retrofit? While substantial amounts have been invested in current web and e-commerce infrastructure, allowing for globalization and localization is not an easy retrofit and in many cases it will be faster and cheaper in the long term to build a technology foundation that is designed to support these issues. Technology issues to consider:
  • Separation of content from the display. There should be no text or images in pages and no parameters in queries. Many CMS systems support localization and handle pages this way by default but custom build CMS systems rarely do.
  • Support for UTF-8: databases and management tools as well as search engines must support UTF-8
  • Caching and Performance: a system must be designed with advanced caching to avoid extensive load on the database for rendering local editions
  • Support for variable length and right to left interfaces. Different languages have very different word length and even orientation. How will interfaces that were designed for exact size look?

While these are not simple questions to answer and resolve, creating a global experience with local flavors and details can substantially impact the ability of a company to succeed internationally.

A new e-commerce 2.0 buying model

A just released survey of the top 40 e-commerce sites asked users to rate their satisfaction with the buying experience. Of these top 40 sites, only 2 exceeded 80% satisfaction and most are at 70% or less.

E-commerce 2.0 requires taking existing best practices to a higher level. Technical and social changes of the last 8 years have to be accounted for.

1. Prevalence of web 2.0 attitudes I wrote about earlier
2. Influence and communication circles are expanding. Like in the classic AIDS commercial, every customer you touch, you have the potential to touch their friends and their friends’ friends. Now at internet speed.
3. Social Web. Using the internet is not a solitary experience anymore. People surf together, buy together, twitter all day and share everything.
4. Web applications are expected to be faster, sleeker and with a rich user interface
5. Available anywhere. With improved browsers in phones, the phone with its small and limited browser is fast becoming a popular and growing way to surf the web.
6. Data, data everywhere. The proliferation of interaction channels is making it harder than ever to collect and analyze it.
7. Service orientation: whether you call it web as a platform, software as a service, service oriented architecture or just web services, web applications are expected to be social too.

Has the cognitive buying experience changed? How should all these changes affect the forward thinking enterprise?

The classic AIUAPR model (Awareness, Interest, Understanding, Attitudes, Purchase, Repeat purchase) can be expanded upon to include the web 2.0 concepts and create a solid backbone for the e-business 2.0 infrastructure. David Mercer in his book Marketing has laid a great foundation adding a few very relevant steps into this process

 

Susceptibility addresses the set of activities that promote a brand and makes the consumer susceptible to the advertising that brings specific brand and product awareness.

Understanding is added to the Interest as research and comparison are becoming an essential step in the purchasing decision

Legitimacy is ever more important as identities of sellers have to be credible enough to result in a transaction. A strong off-line brand name, heavy advertising or good seller feedback on eBay will make it easier for customers to trust the seller.

The Repeat purchase step was divided into the components that determine if the customer will come back

Experience encompasses the shopping experience, satisfaction / experience with the product or service and even the experience with customer service. As more sites and tools allow customers to share their experiences, the impact of positive or negative experiences is magnified beyond the immediate circles and is kept for posterity.

Loyalty is the culmination of all brand efforts to make you a frequent customer who is loyal to the brand and is a brand ambassador to others.

David Mercer also suggests adding Peers and Vendor activities in parallel to the customer process and examines how they influence the decision making process

 

Peers

Customer

Vendor

 

 

While this model greatly expands the basic AIUAPR model it addresses the reality e-commerce 1.0

In e-commerce 2.0, a few things change:

1. Communications are not one sided. Every communication is interactive where data and opinions get exchanged.
2. The Peer group definition had expanded to include everyone accessible through the internet that has an experience or an attitude/opinion towards the brand, product or service.
3. As such, it is not enough for the Vendor to try and manage customer experience as they become peers, you need to manage and have specific information and communication plans for the peers as defined at every stage.

The new model will look something like this:

It includes on top the customer, peer, and vendor relationships

On the other it looks at the customer lifecycle from e-awareness to e-commerce and e-service. Each one of these buckets includes the actions and interactions in the phase.

On the bottom it has the funnel that collects all possible data from all these interactions and processes it as analytics, to be fed into the systems and decision processes that will improve the next iterations.

E-commerce 2.0 high level map

 

What I think differentiates this model from traditional e-commerce models:

1. Peers. The influence of peers as part of a social network or even opinions of strangers expressed in blogs and communities or review sites had increased tenfold and has to be acknowledged and managed.
2. E-marketing is evolving into e-awareness as marketing and PR work together to create awareness to brand and products.
3. Analytics need to be collected at many different levels. Customer actions and interactions not just on our site but through the awareness and service channels. The interactions with the brand can provide great data as to cause and effect and ROI

How to profit from the Long Tail: catering to savvy consumers

A new article by Anita Elberse in the Harvard Business Review is challenging some of Chris Anderson’s conclusions regarding the importance of investing in the long tail (for a short description of the long tail theory please see here

The article titled “Should you invest in the long tail?” is based on research into buying patterns of digital media like movie rentals and song downloads.

While Mr. Anderson puts emphasis on the long tail as accounting for approximately 25% of total sales and encourages companies to spend resources building the long tail and directing users there, Elbrese cautions against it. She shows that the cut-off point happens early, the tail becomes very narrow quickly and that the hits at the head are still the main drivers of business. In her conclusions she recommends to invest only minimally in the long tail as it contributes little to the bottom line.

One of the more interesting insights in the article, is the observation that light users of these services consume almost exclusively hits, while more savvy consumers venture into the long tail but are not always happy with what they find.

In short:

The bars of the chart show that the higher the decile, of course, the more customers rent titles within it. Note that the average number of titles shipped is much higher for customers of titles in the lowest decile than for customers of titles in the highest. Heavy users are more likely to venture into the long tail, but they choose a mix of hit and obscure products.

It seems that more attention should be given to the different behaviors of user segments as to marketing and tools that support them.

• First time users or light users should be directed to the hits table where in over 90% of the time, they’ll find what they want.
• Heavy users should be taken to the hits area but with recommendations and more options to explore.

Is the key to making a user a heavy user lays in the ability to introduce them into a broader set of options and by expanding their horizons making them a more profitable consumer?

Neither author addresses this question but in many cases, this is the right thing to do for long term audience cultivation and the right strategy for profiting from the long tail.

If movie buffs are the best customers of a movie rental business, invest in making movie buffs hip and in expanding the cinematic understanding of hit buyers. These passionate buyers have a disproportionate influence in the websphere and investing in providing tools for finding gems in the long tail and the context and support of users with similar tastes can help make the long tail profitable. By pushing consumers up the savvy line, they will increase their purchases and venture down the long tail making it a very worthwhile investment.

If, on the other hand you are a producer of long tail products, focus you marketing efforts on the savvy consumers and their exposure. It may be that the unexplained bump in the 6^th decile is where the hits of the niche market reside.

In a different take on the long tail, John Hyde of LeftClick has a great example of the long tail as it reflects in SEO terms

It shows that as the search terms used become more specific, it reaches a smaller audience. No surprises there but the opportunity, as in the discussion above is for provider of specialty solutions to make sure they tag and use the specialty terms savvy searchers will be using.

Remember, the savvy consumer is your best customer and they are the ones who appreciate and consume the long tail.