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You’re probably at least vaguely aware of the onrushing doom predicted when the Internet runs out of available IPv4 device addresses. That day is coming soon, as the last batch of such addresses was handed out in February, exhausting a supply of 4.3 billion. What this means in the real world is that it’s getting harder for individual devices to have their own identity on the Internet, which could make it difficult to do things from make Skype calls to share files online.
Analytics around Web data have been a standard part of a marketer’s tool kit for years now. Free tools like Google Analytics have made it easy to track basic website metrics. At the same time, the market for paid Web analytics tools is growing rapidly, and is expected to generate close to a billion dollars in revenue by 2014. Analytics has been a powerful tool even for companies not on the Web. In a Harvard Business Review publication, “Competing on Analytics,” Thomas Davenport has examined how companies gain an edge using analytics. His research, which looks at companies like Marriott, Harrah’s, and Capital One among others, highlights the role of analytics in functions ranging from supply chain and R&D to customer selection, loyalty, and service. The key to the success for many of these companies — and what companies of all sizes can learn from — has been to not only look at metrics retroactively to analyze what happened, but also to develop models to predict optimal offerings for the future. In Davenport’s words Marriott “has developed systems to optimize offerings to frequent customers and assess the likelihood of those customers’ defecting to competitors,” and the UPS Customer Intelligence Group “is able to accurately predict customer defections by examining usage patterns and complaints. When the data point to a potential defector, a salesperson contacts that customer to review and resolve the problem, dramatically reducing the loss of accounts.” This kind of analysis, known as “predictive analytics,” is still not commonly employed at Web companies, or commonly available in Web analytics tools. Most of the common analyses and tests done by Web companies treat are centered on the notion of “visitors” to their website (transactional, one time relationship with consumers, typically driven by traffic coming from search engines) rather than “users” of their service (longer term relationship, typically involves creating a user account with the Web service). For lack of better terminology, I’ll refer to these two distinct notions as “visit-centric” and “user-centric” models of the world. In a visit-centric model of the world, common metrics include “time spent,” “click through rates” and “conversions”. Free tools like Google Analytics are widely used for these analytics. In a user-centric view, the metrics tend to be somewhat different. In his post “start-up metrics for pirates,” blogger Dave McClure talks about the five steps in the customer lifecycle of a user-centric model: Acquisition, Activation, Retention, Referral, and Revenue (AARRR). Others have talked about using methods like cohort analysis to measure whether these metrics are improving for progressive cohorts of users. Not only are the metrics different, the methods for optimization that are applied in the visit-centric world don’t suffice in the user-centric world. In the former, you could run A/B tests to optimize “landing pages” and improve metrics on click-through rates and conversions per visit. Google Website Optimizer is a free tool for performing this optimization. In a user-centric world, a/b tests continue to be important. However, an important range of questions cannot be answered well, or optimized using a/b tests. For example, it’s hard to associate metrics for users’ repeat visits with the immediate impact of changes on any particular page. Some other examples of problems that are difficult to answer or solve using visit-centric analysis include: How often should you send marketing communication to your users, and who are the customers who are likely to respond positively to this communication? What actions, over the long run, help reduce user churn and increase repeat usage or increased revenue per user? If a/b tests aren’t going to be sufficient, what other analytics should companies build? And if revenues are going to materialize over a period of time, how can companies make sure they don’t wait for months to understand the effectiveness of marketing dollars spent today? That’s where predictive analytics comes in. Historical customer data, which includes behavioral, transactional and demographic data, is mined to develop a model that predicts future behavior. Analytics companies like SPSS and Prediction Impact have talked about how to use predictive analytics for developing actionable predictions for each customer and decision optimization. These methods clearly need rich data about customers, which can form the basis for modeling. The good news is that it’s possible for user-centric Web companies to have rich and high-integrity data about signed-in users who have created rich profiles. This is not true for visit-centric companies where predictive analytics runs into a lot of challenges, as noted in this post (note that all the challenges mentioned by the author implicitly assume a visit-centric model — e.g. the author talks anonymity, or the inability to tie customer data to customer attributes). It’s interesting to note that other industries that have a similar view of the customer lifecycle as the AARRR model have used predictive analytics to good effect. For instance, in the travel and hospitality industry, predictive analytics techniques have been used for acquiring customers in a cost-effective manner, for fine-tuning marketing offers that increase repeat-usage, and for increasing revenue through effective cross selling and better yield management. In the mobile industry, similar techniques have been used to reduce churn (i.e., increase retention) and improve profitability. Savvy Web companies have also started using these techniques. For instance, Facebook has used R in predictive analytics to answer questions like “Which data points predict whether a user will stay? And if they stay, which data points predict how active they’ll be after three months?” The gaming company Zynga split its analytics team into two to become more proactive about analytics; while one team does the conventional reporting, the other “tests hypotheses and creates models using statistical and analytical methods.” Looking at their success, it’s clear that many others will follow suit. If your Web service and your business model are built for repeat usage, you are probably already measuring metrics across the entire customer lifecycle from acquisition to repeat usage and revenue. By using predictive analytics, you can lower your cost of acquiring users, ensure sticky customers, and increase your revenue, just like Facebook, Marriott, and UPS. Vijay Chittoor is a co-founder of Mertado Social Deals. He was previously director of product management at Kosmix. A former McKinsey consultant, Chittoor is a graduate of Harvard Business School and the Indian Institute of Technology, Bombay. He shares his thoughts on technology at his blog.
‘Tis better to give than to receive. That’s the philosophy behind a new marketing approach that puts a new spin on the old promotional giveaway by tying the giveaways to website visits and using them as “link bait” — a means to attract links from blog sites and other third parties. It can be a highly effective strategy. When Logos Bible Software, an electronic book platform and research tool for religious texts, began offering books from the Cornerstone Biblical Commentary series, the company wanted a high profile for its new offerings. So it began giving away one of the volumes — the Matthew, Mark commentary — on its website. (The company’s Libronix reader and search platform has always been a free download; customers traditionally pay for texts.) “We turned it into an event,” says Dan Pritchett, vice president of marketing and business development. Because the giveaway was touted as a limited-time offer, something Pritchett always recommends, bloggers and others reacted quickly, posting items about the free book. “Hundreds of people linked to it,” he says. Ultimately, 9,425 people took advantage of the free download. “It was one of the most successful programs we’ve ever done.” But while offering an attractive giveaway is likely to earn you lots of links, it won’t necessarily help you meet you business objectives. Deciding what specific effect you want to achieve is an important first step that will help you determine exactly how to structure your giveaway promotion. Here are some choices to consider: Build a better mailing list: Rather than simply offering a free download, Logos gave out a coupon that would allow users to “purchase” the book from its site for a price of $0, after inputting their names and e-mail addresses. “We got almost 10,000 people to update their information with us, whether they were already customers or not,” Pritchett says. “Most gave us permission to contact them, so those are people we can go after with marketing e-mails now. We can try to sell them the rest of the series.” Associate with a trusted brand: PayCycle, Inc., an on-demand payroll service, was looking for a way to both build visibility and educate prospective customers on the sometimes intimidating subject of payroll management. Commissioning Payroll for Dummies from the Dummies series publisher seemed the most logical choice. “We considered other options, but there was a big advantage from associating ourselves with the Dummies brand, which is so well known and trusted,” explains Jane Willis, vice president of branded business. “They stand for accessibility in complicated topics, which is exactly what we were trying to accomplish.” Maximize links: Logos launched the Matthew, Mark giveaway with a blog post describing the book and the series in detail, and explaining how to download the free Libronix software. This allowed Logos to get “two links for the price of one,” Pritchett explains. “We asked people to link to both the blog post and the book.” Create viral marketing: Logos’ next free giveaway will be the first issue of the company’s new Bible Study Magazine. “One way we’re promoting the magazine is by offering a free review copy to anyone who can review it anywhere. If you have a blog, a church bulletin, a newsletter, a Facebook page where you’ll post about it, we’ll send you a copy,” Pritchett says. Thus far, he says, about 160 people have requested free copies. “We have Google alerts set up, and reviews are coming in every day.” Improve search ranking: An added value of having many web pages link to yours is that it improves your site’s search engine ranking. To get the most search engine optimization out of a link, Pritchett says, it pays to have the right “anchor text” — the actual blue underlined text where the hyperlink resides. Search engine software uses anchor text to determine the relevancy of a linked page to a particular keyword search, so a blog post that links from “click here for your free magazine” is less valuable than one that links from “Bible Study Magazine.” Taking no chances, Logos is offering suggestions for anchor text to bloggers and others who might link to its freebies. Start a long-term relationship with customers: “The plan is to mail other things over time, and invite prospective customers to our webinar series,” Willis notes. The invitation-only webinars cover a variety of business topics that don’t necessarily relate to payroll; one recent offering taught attendees how to create a public relations campaign with little financial outlay. “The intent is to reward existing customers and keep them loyal, and give prospective customers a taste of the service they would have with us,” she says. Pre-sell a new product: When Logos was preparing to launch its first Mac platform, the company knew it needed to engage with Apple users, a group that had never been customers before. So Logos created a simple widget for the Mac platform where users could enter a Bible verse number, and the widget would display the verse. This time, the company allowed the widget to be distributed widely, and to be downloaded directly from shareware and freeware sites, without requiring a coupon or contact information. “Inside the widget itself was code that checked our server every day to see if we’d released the Mac software yet,” Pritchett says. “As soon as we did, the graphic on the widget changed to an ad for our new application.” Thanks to the widget, that announcement went out to a lot of people. “Because it was free, it was picked up by hundreds of sites,” Pritchett says. “It’s been downloaded about 50,000 times.”
Hosting an Internet radio program over the past few years has allowed me to speak with some of the most successful social media communicators in the space. People like Guy Kawasaki, Chris Brogan, Liz Strauss, and Brian Clark are synonymous with social media. They’ve each amassed huge followings on their blogs and on sites like Twitter. They are recognized experts in the social media community for their ability to connect with people on a personal level, even when they’re speaking to thousands of people at a time through social channels. So if you’re looking to successfully leverage the power of social tools to reach people on behalf of your business and “move the crowd,” here are a few things successful people like those above have in common. They read One thing all the successful social media types I know do is read. In fact they are ravenous when it comes to reading, devouring up to 100 magazines a month. This includes national business publications, regional business magazines, industry trade journals, and specialty newsletters from professional organizations. Mixed in with the magazines are the handfuls of books they are reading. This typically means they are in the middle of four or five books, on an off subject with respect to their profession. I won’t even bring up the online perusing of blogs, white papers, and e-books they also take in. They do this because of their passion to know as much as they can about their chosen area of expertise, not necessarily just to blog. But the knowledge they accumulate allows them to create valuable content that attracts people to them. They listen The fastest way to get people to listen to you is to listen to them. Not just put up with the sounds coming out of their mouths, but to listen. And listening to others is at the heart of what successful social media communicators do. Listening and observing what people were talking about on Twitter was key to the success of Guy Kawasaki’s latest venture Alltop.com. Kawasaki is a Silicon Valley venture capitalist who got his start with Apple many moons ago. Through his site, billed as “the online magazine rack,” Kawasaki finds out what people are talking about on Twitter in order to create a resource page of great content on the Web on the hottest topics. Chris Brogan, president of New Marketing Labs, a new media marketing agency, has a huge following on Twitter, but always seems to be directly communicating with people when they ask him a question. And he asks people for their thoughts and opinions on a regular basis because he’s genuinely interested in what others have to say. They share What really strikes me about successful social media folks is their willingness to share the spotlight with others. Many of these folks have spent years writing to build audiences. This includes not only writing blog posts, but also answering numerous comments and Twitter “tweets” from their readers. The successful social media communicators also take time to help others by critiquing their writing to help them find their voice. They also use their blogs and podcasts as platforms to bring attention to people who are doing things they feel are noteworthy. And, in many cases, these popular bloggers will offer a few of their readers the opportunity to be a guest author. Liz Strauss, a social Web strategist and community builder who founded the business blogger conference SOBCon, gives out her SOB award (Successful Outstanding Blogger) each week to bloggers she thinks people should be reading. This might not seem like a big deal, but it is a huge honor if you think about it. It’s like an unknown getting a chance to be the opening act for a superstar, in front of a crowd you would never get on your own, but are interested in hearing you just because you’ve received a huge endorsement from someone they trust. They have fun Brian Clark is well known for his highly respected Copyblogger.com website, which helps people up their copywriting skills to better connect with audiences. The site is full of great information, but what makes Clark someone to listen to goes beyond his considerable expertise. I look forward to what Clark has to say because he’s also funny, and because he quotes lyrics from 80’s rappers Eric B. and Rakim. And while Kawasaki is a best-selling author, sought-after speaker and serial entrepreneur, he’s got a great sense of humor. And this is readily apparent if you follow his tweets on Twitter. Sure Liz Strauss and Chris Brogan are social media strategists and people look to them for understanding how this stuff works. They’re also great fun to talk to. Strauss shares her sense of humor on her blog and on Twitter to the delight of her thousands of followers. And Brogan’s self-deprecating humor is appreciated by anyone who has a chance to interact with him. So if you want to be successful with your social media endeavors, do what the experts do. Read, listen, share, and go out there and have fun! Brent Leary is a small-business technology analyst, adviser, and award-winning blogger. Leary is also host of a weekly radio program heard on Business Technology Radio. He is the co-author of Barack 2.0: Social Media Lessons for Small Business. His blog can be found at www.brentleary.com.
Discgear, a brand of CD and DVD storage cases from CD3, based in Austin, Texas, stared 18 years ago selling in malls and through distributors but has now moved its sales online to Discgear.com. Michael Brown, IT director, tells IncTechnology.com how adding a customer review feature has helped provide customers — and the business — with more information about the products. Elizabeth Wasserman: What is Discgear? What is your business model? Michael Brown: Discgear is the brand name. Our parent company is CD3 Inc. For the past 18 years, we’ve been innovating in designing and manufacturing DVD and CD storage cases. The difference is Discgear offers storage and protection but we also have software that goes along with it that helps you find things and keep your media organized. Our business model has changed over the years. We sell a lot more online than we use to. We started out as a couple of guys selling products in the mall. Then we started to go through a lot of distributors and independent retailers. Our largest partner is QVC and we have seen great success with that format. We also sell online and a lot of our distributors sell our products online. Wasserman: Why is it important to get customers involved in your website? Brown: Being in charge of the website, I wanted to stay on top of what is going on and user-generated content is on everyone’s website these days. For an e-commerce site, the best first step to get user generated content on the website is a product review. It makes sense. They just purchased something from you. Let them talk about it. People appreciate what other people like them have to say. People want to trust a company, but a company can be biased in what it says about its own products. Having a customer tell you the good and sometimes the bad about a product is a very beneficial thing to have. It became obvious that we needed to have something like this added to our site. Being the manufacturer, it also makes sense. A lot of people are starting their searches at the manufacturer’s website these days. Customers may go out and check some places for better deals, but they’re starting the search more and more at the manufacturer’s website. Wasserman: What did you decide to do? Brown: We started going around and seeing what other people were doing. We started looking at our peers and the major e-tailers that have our respect and are doing a good job. More times than not I saw Power Reviews Express on their site. That is what first introduced us to that product. We followed up with them and a couple of other review providers. But it came down to what it cost and how easy it was to start up. Wasserman: How much did it cost and what was involved in setting it up? Brown: It was nothing to set it up. And it costs only $80 a month. The cost is minimal compared to some of the other people providing that service. The setup was a snap. It has an online wizard where you upload a product feed and make some decisions about how you want your reviews to show up. You drop a couple lines of code on your webpage. Within an hour we could have been taking reviews, although we delayed that for about a week and went through and did some testing and made some changes. It’s an online service and what they are doing is managing the reviews database for you. We set up an account drop in code specific to our account on our webpage. When someone writes a review, they look it over and make sure it has no profanity and is relevant to our site and then they send it on to us. We can look at it or we can automatically have it go onto our website. There’s no overhead on our end for keeping track of the reviews. Wasserman: What have the results been? Brown: We rolled out the service on Dec. 1, 2008. We wanted to get it up before the holidays. And within the first three or four weeks we had 100 reviews on our site. We don’t have a deep product line – we have 10 or 15 core products. We saw that as a great success, and it’s given us some good feedback as well. There have been some reviews that have truthfully raised valid points and given us an opportunity to have something brought to our attention that we will probably think about for future design. It’s there for good and for bad. Thankfully, we have heard more good than bad.
What’s in a name? When it comes to getting potential customers to visit your website, the answer is — a whole lot more than you may realize. A good domain name could be the difference between crummy or phenomenal traffic to a company’s website — and the new customer contacts or sales that result. That’s leading more small businesses to buy up descriptive domain names to use in addition to their company names for their Web presence. Descriptive domain names are Web addresses that include popular keywords people are apt to type into a search engine like Google when they are looking for a specific type of product or service. For example, if you’re Joe’s Plumbing in Prescott, Ariz., you might have a website called JoesPlumbing.com. But based on the keywords your potential customers are most likely to use to find a plumber near them, you may also use domain names like PlumbingServicesInPrescott.com, ArizonaPlumbers.com or UnplugMyDrain.com — and have all three redirect traffic to your website. Domain names “are virtual real estate. They’re the front door to your business,” says Jeremiah Johnston, chief operating officer at Sedo, the online domain name marketplace. Drawing traffic without buying ads With the right domain name, you can get traffic to your website from people interested in what you have to offer without spending a lot on online advertising, Johnston says. For example, when Sedo customer Bice’s Florist wanted to expand, the Ft. Worth, Texas, company’s owner sold four stores and bought a variety of domains that matched floral terms. The result: sales increased by $1.5 million without a penny spent on Yahoo or Google ad networks, Johnston say. The highest publicly disclosed price for a domain name Sedo ever brokered was $3 million for www.Vodka.com back in 2006 to a Russian company that’s using it to roll out its products in the United States. Sedo currently has 15 million domains for sale and 900,000 registered users, according to Johnston. But many desirable domain names are available for $1,000 to $2,000, Johnston says. As with other real estate, the recession has created a buyer’s market due to a large number of speculators who previously bought up domain names and now are liquidating some of their portfolio, Johnston says. “We’re seeing some fantastic names selling for good prices,” he says. Do’s and don’ts According to Johnston and other SEO experts, here are some things to consider when using descriptive domain names for your business: Do your homework. Before spending a dime, figure out what the mostly commonly used keywords or phrases are that potential customers use to find your type of business. You can hire a SEO expert to do this, but be prepared to pay — good ones charge into the hundreds of dollars an hour for their services. David Brown, an SEO expert and host of the SEO 101 Internet radio podcast series, suggests sitting down with a friend or family member who’s a casual Internet user and asking what words they’d use for a search. “I use my mom as an example and ask her what domain names should be,” Brown says. Don’t scrimp. Domain names are cheap — unclaimed names are $10 a year to register — so don’t just buy the specific name you want. Buy the words separated by dashes and any common misspellings. Then use redirect services such as Domain Redirect or DogBark.com to bring that traffic back to your main website. Buying up typos and misspellings also blocks cybersquatters who use monitoring services such as Compete.com to track Internet traffic and buy up misspellings and hold them for ransom, Brown says. Do consider giving something away. If you buy several descriptive domain names, consider setting up generic webpages to go with them and give something away — a newsletter or list — to people who leave their e-mail address. That way you can collect information your sales staff can follow up on. Just be up front telling people that they’ll be contacted, says Dave Conklin, president of ProspectMX, a Lancaster, Pa., Internet marketing company. Don’t stop at your domain name. Once they’ve clicked through, potential customers won’t hang around a website for long if it just sits there like an online brochure. If you don’t run an online store, at least have something people can sign up to receive so you can collect email addresses to potentially convert into a sale, Conklin says.