Couldn't agree more, Dennis. Another approach to increase conversion would be to proactively reach out to prospective customers who are clearly facing challenges with the order process, while on the company website. Either way, adding to the top line is all important!
Love the Tom Foremski example!
I’ve kept quiet about SocialCRM largely because I prefer to defer to those who know much more than I do but also to watch how this particular fashion statement develops. We seem to have reached a point where definitions, however poorly drawn, are more or less settled:
“CRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.”
Once again I sense the industry has fallen into the ’social’ trap leaving it soul searching for something better but stuck with a moniker enough people have picked up upon to make change at this point almost impossible.
From what I can gather, SCRM seems to be something to do with finding customers who can end up as advocates for whatever it is the company is selling. Tom Foremski has a much better way to look at it through the lens of one of SCRM’s defining technology planks:
Social media is great at strengthening ties between people but is it the right place for businesses? All that relationship building and engagement is not because a business wants to get to know Jane or John better, as a friend or relative would, it wants to sell more of its product or service. That’s a far different agenda from most people’s engagement in social media.
At parties, people will avoid that person that is selling something. Friends that invite their friends to tupperware parties, or multi-level marketing, are tolerated for a while, but not for long. Similarly, companies that use social media as sales media must understand there is a time and place for it, or they risk harming their brand.
How true. But then I started to wonder whether the current fashion wagon is looking the wrong way. I wonder for example why and despite the fact I get asked to fill in many online registration forms it is only a tiny few that follow up. Even then they rarely use the right language.
Of course all this social media stuff is entertaining and I’m sure it has its place in business but should we not be fixing more fundamental problems? If, as we’re told, more business is going online then shouldn’t we be worrying more about where technology is succeeding or failing rather than assuming a social fix will…err…fix things?
Now and again I’ll hear that web analytics is one of the innovation spots that yield a good bang per buck. Yet rarely do I see much said about what this means and why it should be top of mind. Until most recently.
Back in 2005 I met with Charles Nicholls. If the name is vaguely familiar then you’ll know he has been a part of the broad business intelligence landscape for what seems forever. We first met in 1996 when I was preparing a labs test on BI tools. In 2005, he was showing me how in-memory analytics could help prevent fraud. That’s a big ticket item if you’re Mastercard but even with great technology sometimes you just can’t get attention. And so it was with his nascent company SeeWhy. We quickly lost contact. Despite the potential, it is difficult to hold people’s attention on something that’s inherently technical and which has a relatively narrow focus.
The other week Charles pinged me out of the blue talking about the irrelevance of Facebook’s privacy problems in an online world where advertising is only part of the answer to achieving business value. He was saying that it doesn’t matter whether Facebook continues to mess up. We could have a long discussion about that one.
What matters from Facebook’s perspective is how effective its advertising model is likely to be in driving sales. That was a lead into a discussion about what happens assuming someone clicks on an advertisement and is persuaded to start into the buy process. It turns out that while the top half dozen or so reasons why people abandon online shopping carts are reasonably well known, there are a myriad of potential behavioral issues in play. Now we’re talking my language and recognizing the diversity of human experience that continues to leave technology inventors with long to do lists. In an email to me, Charles said:
The shopping cart abandonment rate for ecommerce brands is currently 71 percent. More than 7 out of 10 customers that start a shopping cart process fail to complete it. And during 2009, 88 percent of U.S. online customers abandoned at least one shopping cart…that’s 136 million people.
Courtesy of SeeWhy
Referring to research undertaken by Forrester and confirmed in SeeWhy’s recent survey results (see above), conventional wisdom would have brands believing that abandonment can be fixed by tuning the checkout process. Yet a crummy checkout process is not among the top reasons why people abandon. Solving the problems requires:
Following up on abandoned shopping carts enables you to tackle the bigger behavioral issues: what can you do to increase the conversion rate for those customers when they are not yet ready to buy or those with an issue on price?
This is where remarketing is absolutely essential. Website visitors that have just abandoned a shopping cart are your very best prospects. After all, they almost purchased…but didn’t quite.
Something stopped them.
Experience tells us that it’s better not to try and second guess the reasons why website visitors abandon shopping carts — there are just too many potential and unique circumstances outside of your control.
[My emphasis added]
If you want to be among the top 10 performers then:
For the Top Ten, it’s not about SEO or page views or making a sale, but, rather, it’s about making the second, third, and fourth sales to the same customer. It’s about building customer loyalty and driving profitability for their companies. In the process, they get the highest conversion rates in the industry as their customers come back to buy again, and again, and again.
[My emphasis added]
Charles tells me that once SeeWhy changed its focus from real-time fraud detection to real-time abandonment analysis and remarketing action capability, the company took off. “We’re really busy,” he said during our call with something of a chuckle. That sounds better to me than banging your head against SCRM brick walls.
Courtesy of SeeWhy
While it is fun to be looking for the next big thing in whatever definition of CRM takes your fancy, I’m wondering whether attention is going in the wrong direction. At least for now. If Charles is correct then while there may be a place for the social in making those next sales, fixing what we already use should take priority. Loyalty seems to figure highly in both Charles’ world and that of the SCRM pundits. I’m not seeing the connections being made by those punting the SCRM line.
If we’re to move beyond process efficiency as a way to help the bottom line, should we not be concentrating on those things that add to the top line and which can be deployed now? That’s what gets my buy side instincts excited.
