Sunday, November 11, 2018

FIRST PEEK: Amazon 4-Star Store

This week Amazon opened a new 4-Star store (its third one ever) in Berkeley, CA, and I just had to check it out! Readers of my blog know I'm a big Amazon fan =)

The 4-Star store is located on 4th Street, a cute little commercial strip in west Berkeley that includes big retailers, such as Apple Store, Sur la Table, Z Gallerie, as well as local merchants and eateries. The 4-Star store actually replaced a Crate & Barrel Outlet I liked that closed earlier this year.

Amazon 4-Star Store, Berkeley
If you haven't heard of 4-Star stores, it's different than Amazon Go cashierless stores. 4-Star stores are manned by real people and you can check out at a normal register counter. They appear targeted towards consumers who don't want to wait for delivery, have security concerns with packages left at their doorsteps, or just want to physically see and touch a product, so they prefer to buy from a physical store.

Also, as the name implies, all the items are rated 4 stars or higher, as well as items that are new or trending based on what Amazon's website knows about shopping patterns in the surrounding area. A store employee told me inventory will constantly change based on local preferences and sales data. Yay, BIG data!!!

The store stocks hundreds, maybe 1000s, of products, ranging from books, toys & games, kitchen appliances and gadgets, home goods, consumer electronics, and of course, Amazon-branded Echo, Kindle, and Fire TV devices.

Inside Amazon 4-Star Store, Berkeley
I liked a section called Amazon Launchpad that featured products from start-ups. I actually saw the Rocketbook I bought for a friend's gift last year here.

Amazon Launchpad section
I have mixed feelings about the store layout. While it was semi-organized by department with big signage, such as "Devices and Electronics" and "Home and Kitchen," there was also lots of random stuff on tables in the middle of the store. While this created a sense of discovery, much like what has made discount stores like TJ Maxx or Ross popular, at times it felt cluttered and overwhelming.

I was really impressed by the dynamic price tags or "shelf talkers". It makes sense these are dynamic because an item's price and ratings are update regularly and I presume Amazon has to reuse these tags from the revolving inventory of items stocked in the store. The price tags are very easy to read and appear to be based on the same e-ink technology from their Kindle reader.

Dynamic Price Tag (a.k.a. "Shelf Talker")

The price tag often has 2 prices: a "regular" price and a lower price for Amazon Prime members. I was told non-Prime customers can sign up for a free 30-day trial and instantly receive the Prime price in-store.

I thought the bar codes on the left side of the price tags would allow me to scan the bar code with my Amazon mobile app to learn more about the product online, such as product details and actual reviews. But it didn't work when I tried it on a few items. So I don't think that is the intent of these bar codes, but IT SHOULD BE!

As you might expect, you can drop off Amazon returns here for free. But just know that you still have to initiate the return process online first and pick this location as a drop-off location. You can't just walk in like a traditional retail store with your receipt and expect them to process it for you in-store.

It would be cool if the Amazon site or app could check the 4-Star store's inventory and allow for store pickup if it knew I was near this store.  This would be similar to how traditional brick-and-mortar stores, such as Best Buy, Target, and Barnes & Noble, let you order online and pickup at a local store. But when I tried to do this from my Amazon app, it did not even show the new 4-Star store as a location for pickup (see below). Even if it was listed, it's not actually the same customer experience as these traditional retailers who are actually picking the product off the shelf in a specific store by searching its inventory management system. Amazon still says it will be available for pickup at your chosen pickup location in a few days, which makes me think it's still being shipped from its nearby warehouse. So much for instant gratification.

Where is the Amazon 4-Star Store on 4th Street in its App?

Overall, I liked the 4-Star store and can see myself coming back during the holidays for gift ideas because I like how it's curated. Or if I need to pop in for some cable or Amazon Essentials product. And I do like touching and feeling some products before buying. It's convenient especially for playing with the consumer electronics, which aren't just on display, but are actually connected so you can really test them out.

Happy Shopping!!!

##

Wednesday, October 3, 2018

6 Questions to Determine if You're a Data-Driven Marketing Company


Competitive companies know they must be more data-driven today. That in turn requires a combination of technology and talent.

Data management is not easy. In a recent survey, 47% of marketers said it was difficult.

Data Management is Difficult
Here are 6 questions to ask yourself to see if your company is a data-driven marketing company:

1. Is your data centralized?

I often find data scattered across an organization with any one group only having visibility into part of the customer journey. Centralizing data would also help break down data silos across systems and departments. Sometimes I find different answers from different sources, presumably answering the same question. For example, why is online sales from our CRM system different from the web analytics? There's bound to be some discrepancies due to tracking methodology. But you do need to agree on one source of truth for reporting purposes.

2. How's your data hygiene?

It's hard enough centralizing all your data and stringing it together with primary keys and join functions. But you also need to spend time on data hygiene as an ongoing maintenance plan. Data integrity is key to combatting what I call "garbage in, garbage out."  You should be routinely looking for things, such as missing data, weird outliers, and duplicate records. Ultimately, you need to trust your data before you can rely on it.

3. Are you democratizing your data?

Are you empowering the right people with the right data in a timely manner so they can make informed decisions? For example, are social media campaign results accessible by not just the marketing team, but also the PR team? Are the marketing folks who are responsible for lead gen able to access sales data from the sales team to know the quality and close rates of their leads? And vice versa.

Often times this leads to the development of a shared online dashboard, such as Tableau, that let's users drill down to the data and analysis they need. But make no mistake about gathering business requirements first to know what internal stakeholders really need in order to design the right dashboards for specific users so they are not all swimming in a sea of data! 

4. Can you tell stories with your data?

Since we were babies, we have loved bedtime stories. Guess what? Executives and managers still love stories! Can you translate data into actionable insights? In my experience, I see lots of reports that's just numbers in Excel or on slides. In a recent study, many marketers find this to be one of their biggest challenges actually.

Importance of Storytelling with Data
Here's an example of translating data into insights. Let's say you ran an A/B subject line test for an email campaign. A good analyst will report out the open rate for both versions, calculate the lift % and significance level, and determine the winner. A better analyst will have a hypothesis on why the one subject line might have won and propose the next A/B test to run and why. Give something for the copywriter/marketer to work with.

5. Do you have top down support from senior management?

This is critical to know if the culture at the company truly supports data-driven decision making. Are executives willing to invest in the tools, resources, and personnel to enable data to flow freely across the organization? Are executive ready to rely on data to make big business decisions vs. their gut/experience? Or is it lip service?

6. Do you have strong partnerships between Marketing, IT, and Analytics/BI teams?

If you don't have top down support, this one will be even harder! At the minimum, this triumvirate is required to connect the disparate data sources...or what I refer to as data plumbing. To be successful, communication and trust across these teams is critical.


If you answered yes to all of the above, CONGRATULATIONS! You're a data-driven company well positioned for the 21st century.

##

Thursday, September 6, 2018

Marketing Analytics: Why I Obsess Over Rates

I don't mean interest rates on my savings account, which is still paltry BTW. =)

I see marketing analytics reports all the time from clients that focus on absolute numbers like visits, conversions, clicks, opens. These are good to know, but I find these metrics meaningless in a vacuum. Is 10,000 clicks in a month good? It depends...

Instead I like to focus on relative metrics like calculated rates and ratios.

Rates are great to track metrics over time, to offer context, and to compare to industry benchmarks because rates are normalized. This means you can compare rates over different time periods to see if something is wrong or if something is doing surprisingly well all of a sudden. This also allows a smaller company to compare themselves to a larger company, generally speaking.

Let's look at how to use rates in common digital marketing reports to reflect the most insights.

Website Analytics

Example 1: Conversion Rates. Every website needs to have a primary goal or "conversion" event that is clearly and cleanly tagged on the website. That can be an e-commerce transaction or lead gen form completion. Everyone always then tracks the number of "conversions" each week or month in absolute terms.

Most, but not all, clients look at conversion rates. Yes! But there are multiple ways to define "conversion rate." Some define it as conversions / site visits. That's not bad and Google Analytics offers this in their standard reporting. The problem with just looking at this "start to finish" conversion rate is it does not help you identify where the leak in the conversion funnel is. Furthermore, this is often a very low number like 0.05% so it's really hard for senior management to fully understand such a metric.

What every marketer should do is also break down the customer journey into smaller bite-size paths. In the illustration below for an online lead gen site, by simply breaking the customer journey in half to calculate a Consideration Rate and a Completion Rate, you now have more actionable insights.

Purchase Funnel Rates
This helps identify where you have leakage in the funnel and how to address it. For example, if form completion rate is low, maybe your form is too long or confusing. Also, this completion rate should be easier to digest because it usually ranges between 5%-50%. So if you have a completion rate of 10%, you can ask yourself does that feel low when 9 out of 10 people bailed. Much easier to comprehend than the 0.05% conversion rate example above.

This form completion rate is also ideal for industry benchmarking because the "scope" of your metric is just a form and form completions. If you used the 0.05% conversion rate, the scope of that metric is all visits to your site for whatever reason and all the pages on your site. So it's really hard to compare apples to apples on such a broad conversion rate. Take retailers who live and die by shopping cart abandonment rate, which is the reverse of completion rate. Industry-wide cart abandonment rates are relatively easy to find and benchmark to your own cart abandonment rates.

Before moving on from this example, I wanted to mention the Consideration Rate. This is worth monitoring because if it's low, it means users are not showing any interest in your product. So you have to ask yourself questions like "Is our CTA not prominent enough?" or "Are people really not interested in our product offering?" The former can be a user experience issue, while the latter is a product or product marketing issue.

Example 2: % of Totals. This is a very simple ratio and calculation, great for providing a frame of reference. Take the classic Top Pages by page views report.

% of Total Pageviews Example

Most clients will quickly grab this data from their web analytics tool that shows pageviews in rank order, but sometimes discard the % that is often in the dashboard. I like to also provide the third column that is % of Total Pageviews because then you can better appreciate how popular a page is relative to other pages on your site. It's usually harder for senior executives to understand if 72K pageviews for the Product Overview page is low or high, but 25% of all pageviews is easy to grasp and to conclude it's very high for one page to garner.

I calculate this % of Total for a lot of site metrics beyond page views, such as % of Total Video Plays and % of Total Downloads. Again, the goal is to show if activity is concentrated among a handful of content or assets or more fragmented and distributed across all of them. If it's more concentrated, figure out what makes them so popular and do more of that!

Example 3. CTR. Clickthrough rates (CTR) are often associated with paid media ads and email links. But I like to calculate CTR for website analysis when analyzing CTA button clicks or on-page analysis to see what users chose to click on when presented with a host of options. Here's an example from a directory search results page. CTR is calculated for each link based on link click / page views. This is also a more visually appealing way to show these stats than a standard table. I also like to develop a similar slide for CTRs on the global navigation menu. One critical tip: usually you must setup custom click tags to calculate the CTRs I've discussed.

CTR Website Example
In terms of benchmarking, CTRs are great because you can compare pre- and post-launch CTRs if you redesign your website.

Email Performance

Most clients already focus on open rates and CTR. 👍 But I still see reports like this occasionally:

Email Report Without Open Rate Example
For most marketers, the opportunity here is for benchmarking rates. Epsilon publishes a great quarterly report that is free that is full of email benchmarks by industry and by types of emails (e.g., editorial/ newsletter, marketing, service)!

Last comment on email metrics. Don't forget to look at CTOR (Click-to-open rate), which is clicks / opens. CTOR is different than CTR, which is clicks / delivered. Monitoring and benchmarking CTOR can help you address issues with the content or CTA within the email body and usually rules out an issue related to the subject line.

Social Media Campaigns

Engagement Rate Example. For social media campaigns, paid or organic, one of the most popular primary KPIs is engagement rate. Most marketers define engagement rate (a.k.a. interaction rate) as (reactions + comments + shares) / posts. But if I'm a marketer, what constitutes a good engagement rate? A social media analytics tool, such as Quintly, is great for answering this question. It not only allows you to compare yourself to other competitors, but it has also created industry averages. In the example below, let's say I'm BMW USA. I can compare not only my Interaction Rate to direct competitors Audi and Mercedes, but Quintly also shows the average Interaction Rate for the Top 10 US Auto manufacturers. Quintly has other useful social media benchmarking tips on a recent blog post so I won't go into any more details here.

Quintly Interaction Rate Example

Paid Media Campaigns

Example 1: SEM & Display. Almost all media managers report out on CTR, CPC, and CPM for paid search and display campaigns. Yay! The suggestion I have here is be sure you ask your media partner or publisher who you are working with for industry benchmarks on these common media metrics. For example, your Google rep will often put together a quarterly report showing you your SEM spend, CTR, etc., relative to other advertisers in your category or industry (see example below). They will usually slice this by brand vs. non-brand and desktop vs. mobile. One caveat with these Google benchmarking reports. It will almost always show you are under-spending and under-performing because you are being compared to a Category Leader Average not the entire Category Average. Google obviously has an incentive to motivate you to spend more 😉

Google SEM Benchmark Example

Similarly, for display campaigns, find out what's the industry CTR from your vendor. If you're running rich media unit ads, find out what's a good engagement rate for user interaction with your unit in your industry.

Most digital advertisers also look at efficiency using Cost Per Acquisition (a.k.a., Cost per Conversion or Cost Per Lead). I also like to look at Click-to-Conversion rates.

Example 2: Video. For video ads, you need to look beyond video starts or plays. For sure, look at video completion rates. Or even better, look at milestones like quartiles. Below is an example of a Video Completion Rate Funnel with quartile milestones. This helps you identify where people are dropping off. For example, in pharmaceutical videos, users often drop off when the super long Important Safety Information (ISI) begins to play so I often place a milestone marker at the ISI start.

Video Completion Rate Funnel Example

For benchmarking purposes, ask your media partner or publisher for average completion rates for your industry. For example, they should be able to tell you the average completion rate for a :30s video is 30% in the financial services industry.

Summary

So there you have it. Now you know why and how I am obsessed about Rates and Ratios for my clients' marketing analytics reporting. All of the above are very simple concepts. You just need to spend a little bit of extra time in developing your measurement and tagging strategy and also on reporting. But in return, you become awesome at storytelling with data!

##

Disclosure: I am a strategic advisor to Quintly.

Monday, July 9, 2018

How Fortnite and Roblox Lead New In-app Purchase Trends

Not long ago, in-app purchases in games, usually "freemium" games, helped players advance in a game, such as accessing new levels or getting special weapons or abilities. For example, in Madden NFL, you can buy packs that include highly ranked football players to enhance your team. In Asphalt Nitro, you can buy a new or upgrade your existing race car. In Pixel Gun, you buy coins to buy weapons. You get the picture.

Madden NFL Store
We are now witnessing a massive shift in the marketplace from paying for something that offers functional, rationale benefits that give the player an advantage to more self-expressive, emotional benefits, such as how your player looks that offer no competitive advantage really.

It is taking personalization or customizing one's avatar to a whole new level and developers are making $$$!

Fremium games Roblox and Fortnite are 2 great case studies of this gaming trend.

Roblox

Roblox is a massive, multi-player online gaming platform where anyone can develop 3D games on it. The company has been around for about 10 years, but has picked up steam in recent years and supposedly has over 50 million active monthly players.

The Roblox Catalog is the main e-store that sells all kinds of things to "dress up" your character. You can mix and match different clothes, faces, heads, accessories, animations, and even shoulder pets. There are millions of items in the Catalog (237 million at the time of this post), so it's extremely rare for 2 customized players to look the same, which is cool. Roblox and 3rd-party players can offer items for sale in the Catalog.

Roblox Catalog
Roblox currency is known as Robux (R$) and conversion is about US$10 = R$800. Lots of Roblox-created items are priced fairly and affordably, including lots of free items. But when 3rd-party players sell items, the price variance can be quite huge. For example, a pair of jeans that look similar can be over-priced. But I guess that's the economics of an open marketplace.

Roblox: R$1 jeans

Roblox: R$999,999,999 jeans

For about US$5-$15, you can actually do a pretty good job customizing your avatar.

Roblox customized avatars
But nothing you buy in the Roblox Catalog actually improves your game play in the games. Within the games, developers can also sell items unique to their game, such as Jail Break, that does enhance game play.


Fortnite

Unless you've been living under a rock without Internet connection for the past 9 months, you've probably heard of Fortnite. Within Fortnite's Item Shop, one can purchase emotes (a.k.a., dance moves) and skins (a.k.a., outfits) with real money where $1 = 100 V-Bucks. Skins usually cost $8-$20, but most users get the $12-15 skins. Emotes normally cost $2-$8. Battle Passes, which are bundles of skins, emotes, and other stuff, usually cost $10. Fortnite also sells different gliders and pick axes, which one might think enhance your skills, but in fact they don't. They all function exactly the same, but look cooler -- like this Dragon Glider for 20 bucks!!! The 3D graphics and animation on Fortnite are significantly better than Roblox, but there is less uniqueness (due to less combinations of mixing and matching different parts) of your avatar than Roblox.

Fortnite Dragon Glider for $20
Fortnite has also perfectly tapped into the vanity of players. No one wants to look like a Noob (what gamers call a Newbie). Fortnite intentionally gives you a basic character that has a default skin to start that everyone recognizes, further motivating players to upgrade.

Fortnite Noob: Don't be this guy!
And then there are the emotes. Kids across the country are doing these immensely popular dances every where. Have you heard of Orange Justice? Check out YouTube for "Fortnite emotes".


Also, we're not talking about 99 cent purchases anymore. Kids (i.e., parents) are spending a month's allowance or gifts from grandma on what I consider very high ticket items. Moreover, from the parents and players I've spoken to, many are repeat purchasers. It's quite easy to spend $100 on Fortnite in a very short amount of time, compared to Roblox. And good luck spending less than $10 a pop on Fortnite! Players (and parents) are emptying their wallets faster than ever. Fortnite supposedly generates $300 million per month now in revenue. With over 40 million monthly active users, that's an average of $7.50 per active player per month. Quite impressive!

Fortnite has also employed a great psychological tactic to drive more sales: scarcity. All items in Fortnite's Item Shop are on sale for 24 to 48 hours, adding to the hype and frenzy. While some items may return later in the future, there is no guarantee.


So as you can see, Roblox and Fortnite are leading the trend towards selling purely superficial, cosmetic items to personalize your avatar, which merely gives you bragging rights among your friends and squad, but, not actually offering any real advantage in game play. And it will cost you a pretty penny to do so!

##

Thursday, June 7, 2018

Life Without Ad-supported Products and Services


Got privacy concerns? In a recent study, 63% of U.S. adults (nearly 2 out of 3 people) said they would be unwilling to give a company access to their personal data for targeted advertising in exchange for a free service. Shockingly unbelievable! Despite all the recent consumer and political fallout about consumer privacy and ad targeting, what would life really be like without advertising-supported products and services?

Let's think about that, shall we? Starting with the 800-pound gorilla...

Google Search: You could probably still use this, but without behavioral targeting and tracking, paid search ads may seem less relevant because it'll be like going back in time 10 years when results were largely based on keywords and bids from the auction model. You may think you're mostly interested in organic search results and probably don't care about the paid listings. But don't expect Google to continue investing in indexing organic results if it can't pay its employees! Here are some alternative private search engines to Google.

YouTube: Google paid a lot of money for YouTube ($1.65 billion) and they have spent years trying to monetize it. Only recently, thanks to the growth of mobile and video advertising, does this acquisition appear to be paying off. YouTube has struggled for years to get consumers to pay for a subscription. Without advertising, YouTube would essentially be gone. There is really no alternative to this platform. Even Vevo realized this recently and announced the shut down of its consumer branded sites to focus on its YouTube channels!

Google Maps: This is the most popular mapping and GPS/driving direction service.  Google has tried to sell ads based on location and behavioral targeting. Other online maps also rely on ads. So if you want to avoid ads 100%, you will need to buy a Garmin or a similar device that makes its money from hardware sales, not advertising.

Gmail: You might think Gmail is ok as Google claims it no longer scans emails to serve ads. But it is still scanning emails in the name of personalization. For example, Google knows when your next flight is leaving, and whether or not it has been delayed, based on emails you get from airlines and travel booking sites. Also Gmail has an ad product, although you may never notice the ads if you have your settings set to not display Promotions. But Gmail ads do offer advertisers lots of targeting options. Where do you suppose Google gets those signals from??? Lastly, I feel Gmail is a Trojan horse play for Google to incentivize users to create a login (and stay logged in for checking email constantly) and user profile, which in turn can be used for your login across all Google products in order to track you with more precision across the web and across devices to serve better ads within its ecosystem. If you don't want an ad-based "free" webmail service, you may have to start using your ISP's "free" email address that came with your broadband service (e.g., Comcast, AT&T). The trade-off though is the switching cost is high if you ever want to leave your Internet service provider because you will have to tell all your friends they need to email you at a new email address. That happened to me years ago when I switched from Mindspring to Gmail.

Android Phones: Know that Android-based phone you have from Samsung, LG, or Motorola? While the operating system was free to phone manufacturers, Google uses Android as yet another Trojan horse to get mobile users to use its popular ads-based mobile apps, such as those described above, that are pre-loaded on the phones to protect its dominant advertising position in desktop and mobile devices. One alternative is to get an iPhone.

...And then there's Facebook

Facebook: By now, we all know how Facebook collects tons of data about users without their knowledge in order to provide incredibly powerful targeting capabilities for advertisers. As a digital marketer, I can attest to how precise and effective their ad products are. But as a consumer, you won’t easily find another social network where all your friends are.

Instagram: Thinking about leaving Facebook to Instagram like a teenager? Not so fast, Instagram has largely adopted the same ad platform as Facebook.

WhatsApp: How about WhatsApp? The founders built the app based on privacy concerns and started out charging 99 cents a year. When you have over 1 billion users, that's not a bad revenue model. Unless of course someone (i.e.. Mark Zuckerberg) paid you $22 billion for the company 😉 If you haven't heard, the founders of WhatsApp have fought Facebook executives for a while to keep ads off WhatsApp and are leaving Facebook over this philosophical difference. And it seems ads are coming soon to WhatsApp.

All other social networks, like Snapchat, are also ad-based. So there's no alternative service at scale really. Perhaps this will lead to a renaissance when people will actually call people on the phone again or meet friends face-to-face.

Other popular ad-based services

Yelp: Who doesn't love Yelp for recommendations? The company has ads, but it has limited targeting abilities, mainly based on a user's keyword search and location. So you can decide if that creeps you out. Also, Yelp has been building out other revenue streams targeted at businesses, like request-a-quote, that is not ad-based.

News sites: Most are ad-supported, but many don't make enough money to offset their declining print revenue. Savvy papers with loyal followers, such as WSJ and NY Times, charge a subscription and some have tested micropayments per article. But if you don't like ads, your selection of news sites is quite limited.

Mobile games: Many casual mobile games are still ad-supported. Part of the reason I think that's the case is because ad platforms have made it easy for developers to integrate ad units within their game for monetization. Many don't want to charge a fee for each download, thinking it will negatively impact app adoption. (True!) Some have found success with a freemium model, like Fortnite. But selling virtual goods does require developers to work harder to figure the "hook" to get users to pay and to develop a store in the app to sell these virtual goods.

TV: TV shows are still largely ad-based. TV started that way and some could argue there is a sea change. Netflix has built a very successful subscription model with original content and zero ads. But most video on demand or over the top (OTT) TV streaming services are currently testing a hybrid model that includes a "modest" monthly subscription fee and targeted video ads. Think Hulu, Sling TV, Directv Now, and YouTube TV.

Not all hope is lost

Not to be all doom and gloom if you don't want to use ad-supported products, as there are a few companies that still offer products and services not based on advertising.

Amazon/Amazon Prime: If you're not one of the 100 million people on Amazon Prime, you should be! This paid subscription gets you so many benefits, that I can't even list them all. Go read it here for yourself. That being said, Amazon has been slowly developing a burgeoning advertising business on its site because most people start product searches on Amazon rather than Google. As this becomes a growing revenue source for them, how long before Amazon engages in behavioral targeting for advertising, much like how it has successfully mined customer browsing and purchasing data on its site for its recommendation engine and tested ad-supported, discounted Kindles?

Apple: Apple is the poster child for anti-ad-supported products, even if its legion of app developers depend on ads for monetization. Not a week goes by these days that CEO Tim Cook is not poking a stick at Facebook and its lack of consumer privacy practices. But Apple is a highly-profitable hardware and services company, not an advertising company like Google and Facebook. So product sales and subscriptions will dominate for a long, long time!

Microsoft: Many of us interact with Microsoft via its Windows and Office products. As such, it's primarily a B2B company and makes a ton of money from charging businesses and home users for subscriptions to Office and operating system licenses to computer manufacturers. And their Azure cloud computing business is growing like gangbusters that is also subscription-based. It sells some Xboxes to consumers at retail and also generates subscriptions from online gaming. It does have the Bing search engine and an ad business. But for the vast majority of consumer's interactions with Microsoft products and services, they're not really ad-supported.

Netflix: Unlike the OTT TV streaming services mentioned above, Netflix has scoffed at an advertising revenue model and is focused on subscriptions. If their stock price is any indication, they are doing just fine without ads!

Spotify: Spotify and other music streaming businesses all seem to have landed on a $10/mo subscription model. Some like Pandora still have an ad-supported "free" option. There is also talk of Spotify developing an ad business.


So there you have it. Can you 2/3 of Americans out there really live without these ad-supported services? And how much can your wallet take to keep paying for existing subscription-based services, like Amazon Prime, Netflix, Spotify, Hulu, etc.? The dollars add up quickly, don't they?!?

##

Thursday, May 24, 2018

[REVIEW] Is Square Marketing's Simple Email CRM Program Right for your Small Business?

Square Marketing launched about 3 years ago as a simple, turnkey email marketing system for small businesses. I've used it and other email marketing applications and wanted to provide a hands-on review about what I like and don't like about Square Marketing.

First of all, keep in mind Square Marketing is an intentionally simple CRM email marketing program for small businesses who don't have the time or knowledge to deal with relationship marketing. But they know it's important. It's not really for prospecting, but more for customer retention, because it is based on email addresses tied to your customer's credit card that Square may already have in its system, even if a customer has never bought from you. That's one of the beauties of this solution. You've got a lot of customer emails without having to spend time asking for it from each customer and slowing things down at the register.

What I Like About Square Marketing

Square Marketing is easy to setup! I love how they have created the most common templates already for welcoming a new customer, lapsed customer, product promotion, newsletter, and events, to name a few.

The biggest advantage of using Square Marketing is its integration with the Square POS register that seamlessly ties customer profile, campaign, and sales transaction data!

First, you get basic email performance overview metrics, like emails sent (a.k.a. Recipients in Square's language), email opens, and unsubscribes. You don't get bounce rates though.

Square Campaign Overview Report

One metric to be careful about with Square reporting is the notion of an "Attributed" sale or purchase. Square defines "Attributable Sales" as the total sales generated from customers who made an in-store purchase within 14 days of viewing this campaign, or any customers who redeemed a coupon. This is different than the offer redemption rate because it doesn't mean everyone included in this metric actually redeemed an offer. It's meant in some ways to imply that by simply reaching out to customers via email, you reminded them about your business and that might have influenced their decision to repurchase.

The usefulness of attributed sales depends on how frequent customers shop with you and if you use coupons a lot. For a cafe or coffee shop, where customers may routinely come in several times a month, I think Attributable sales is less relevant. But if you are a shoe retailer where a customer may shop less than a handful of times per year, this may mean your emails kept your business top of mind for customers, even if they didn't redeem an offer.

Now let's look at actual Coupon Performance reporting. I love how Square effortlessly tracks actual redemptions in store by just entering a unique promo code from the email a customer got or you can actually look up the customer's name from the Square POS and select the offer available to that customer. The latter is pretty darn convenient if a customer loses or can't find that email at the time of checkout.

Square Coupon Performance Report
As the above shows, you get daily-level coupon redemption by "source", where source refers to email received (blue line above) or receipt (yellow line above). In my experience, I rarely get customer redemptions from receipts. But it's a nice touch from Square, I guess.

In this report, you also get the true offer redemptions and net sales, not attributable sales like above.

One thing I like to look at is redemptions-to-open rates (RTOR). I normally look at click-to-open rates (CTOR) from email marketing campaigns, but these simple Square emails don't really have a ton of links so Square doesn't even provide any click reporting. So that's why I created my RTOR metric as a way to benchmark across my campaigns.

Areas for Improvement

There are several things I'd like to see in Square Marketing.

Promotion times: I wish you could run promotions for certain days of the week or time of day. For example, you can't run happy hour promos. Or to run weekend promos, you have to send emails out Friday night and have the campaign expire Sun night. Similarly, for weekday promotions, the workaround is to run campaigns Sunday night until Friday.

Customer drill down from redemption report: I wish I could drill down and see who actually opened an email and/or redeemed the offer from a campaign. In the example above, I'd love to click on the 18 redemptions and see a list of the names of the 18 customers. As an owner of the business or the marketer, you may not always be the one who rang up the person, but you'd like to get to know who is actually using your coupons. I don't know why Square doesn't offer this capability since it has this data and does show you such granularity when you pull up a customer record from the Customer menu. Here is a customer profile record:
Buyer Summary from Customer Profile
The top shows any current coupons this user has. Then it has some very useful RFM (Recency, Frequency, Monetary) stats in the Buyer Summary. More on RFM below.

Below that is the historical timeline of activities of the customer. This is where you can see not only when they purchased and the amount spent, but also when the customer received an email, got a coupon, and actually redeemed it. So, if Square can show this from the Customers menu, why does it not let me go directly to this view from the Square Marketing's Campaign reporting section? I also wish they added Email Open to this timeline.
Customer's historical activity

Limited segmentation within Square: In the Customers interface, you can filter your customer directory and create your own custom segments, which is cool! Here is what you can segment by:
Customer Filters for Segmentation in Square
A big Filter miss I think is including the Monetary value or cumulative amount a customer has spent with your business. I could run campaigns for the big spenders or promos to get little spenders to spend more. Square obviously has this data at the customer level because it's in the Buyer Summary above. Why can't we segment on it?!? This prevents you from employing the most common, yet powerful, segmentation out there - RFM (Recency, Frequency, Monetary).

To create a workaround for this RFM shortcoming, you can export your entire customer directory as a .CSV file and pull it into Excel. In addition to some personal contact info, you also get these useful transaction data that serve as the basis for creating RFM segments:

RFM metrics exported from Square
In Excel, I calculated Avg Spend and defined some Low, Mid, and High breakpoints for Recency, Frequency, and Monetary. And proceeded to assign my customer list to 1 of these 27 cells (e.g., High Recency, High Frequency, Low Monetary). BTW, to simplify this, you can also use 8 cells (=2x2x2), using Low and High segments.

Then I hit another snag with Square. There is no easy way to import my segmentation back into Square through the front-end interface. I had to manually sort by name and individually locate each user to assign them to the custom group I created in Square. This makes it very difficult to maintain the RFM segmentation on an ongoing basis so I have to "re-score" the customer database myself manually periodically.

Exporting item category purchased: Since I'm on the subject of the .CSV export, I wish I could export what categories or items customers bought as columns in the export file. Then I could run targeted cross-sell campaigns. For example, if you're a shoe retailer and you know a customer always bought athletic shoes from you, you can cross promote casual walking shoes or dress shoes. Because Square Marketing lets you offer discounts by item category, this is a natural desire for cross-sell campaigns.

User-defined Campaign Names: Square automatically assigns a Campaign Name to each campaign based on your subject line. While that may sound convenient, it's actually quite limiting, especially if you use the same subject line again because it will lead to duplicate Campaign Names. Below is how Square lists all your campaigns chronologically. To better organize my campaigns, I wish it allowed me to edit the Campaign Name. For example, instead of "We miss you! Come back and save 15%", I would call that "Lapsed Test 15% offer." Then my other "We miss you! Come back for a special offer" campaign would be called "Lapsed Test Special offer."

List of all campaigns in Square Marketing

Slow email preview: Before you activate and launch an email campaign, Square lets you preview the email by sending you a test email of how it will actually look. Nice feature! But I have noticed a wide variance in how long it takes to receive the test email. Sometimes over 5 minutes. This is annoying because you'd like to get the preview email instantly so you can then activate the campaign while in their campaign editor tool. Instead, I often have to save what I've done and come back later.

Losing offer details while editing coupon:
Another annoying bug I've found is often I would go in to edit a previously saved offer in a saved draft campaign, and Square loses my existing content and I have to start over. So I take a screenshot of it now before I click the "Click To Activate" button to edit the coupon, just in case.

Editing coupon offer

Better image editing features: For my custom uploaded photos, it would be nice to have some common photo editing features, like crop, brightness, contrast, etc.

No A/B testing: Ok, this request may be for advanced users and not who Square Marketing is targeting with this solution. But it would be nice if Square could randomly split an audience and send 2 slightly different emails to 2 subgroups for A/B testing. Instead, I have to manually test different offers, copy, or images serially by pausing one campaign, duplicating it, editing it slightly, and relaunching it.

Brief Word about List Sizes

List size matters and is actually how Square and other email marketing solutions like Constant Contact price their offerings! Your potential email marketing list depends on your business and the percentage of customers who pay with cash vs. credit card. That's because Square (and any solution) can't capture any customer data from cash transactions without some kind of loyalty program link. So if you have a primarily cash-driven business, your list will be smaller and the potential impact of email marketing campaigns will be likely be lower. For example, a hair salon can have over 80% cash customers, while a restaurant could have 20% cash customers. In this case, there is more opportunities for the restaurant.

Summary

Overall, Square Marketing did a solid job with a K.I.S.S. email marketing solution for small businesses. And despite all the items on my wish list above, if you're not a hard core marketer like me, but wish you could do something with customer emails, this may be right for you, depending on how large your reachable target list is!

##

Wednesday, May 2, 2018

Google vs. Amazon Battle for Search

eMarketer just released its latest forecast for the smart speaker market in the US. It shows Amazon Echo's share has fallen slightly to 67%, due mainly from gains from Google, who sat at 30%.

Source: eMarketer, April 2018

Wait! Where have I seen this 2/3 vs 1/3 pattern before? Ahh, yes, the desktop/mobile search engine market.

Source: Statistica, Jan 2018

Google has held about 2/3 of the total US search query volume on desktop and mobile for a while. And Bing/Yahoo! (or Bing/Oath I should say) has held on to about 1/3...more or less.

Google is obviously not happy to have the tables turned in the smart speaker space, especially as voice search is the next frontier for the Search category! So they are making aggressive moves for its Google Home product, including a successful launch of its affordable Home Mini.

Amazon is not kicking back either though. They keep adding more Skills each week to Alexa and striking more hardware vendor partnerships to embed Alexa.

Amazon is also attacking Google on its own turf -- Search Advertising. According to a recent Forrester report, consumers are 2.5 times more likely to research products for purchase from Amazon than any other source, including Google.

Amazon's ad business is also growing to take advantage of these Amazon search queries. In its recent fourth-quarter earnings, Amazon reported that “Other” revenue, which includes advertising, increased to $1.7 billion, representing 60% growth YoY. This will continue to grow and compete with Google's popular Product Listing Ads.

So, while there's lots of talk about the Google-Facebook duopoly, don't count Amazon out just yet!

##

Monday, March 19, 2018

6 Offline-to-Online Marketing Integration Best Practices

Despite all the doom and gloom in the retail sector, such as the planned liquidation of Toys R Us, some retailers are doing some great things in terms of marketing. While Bed Bath and Beyond (BBBY)'s stock price has fallen by over 33% the past year, its latest in-home mailer offers some great examples of O2O integration across its digital and offline marketing programs.

When I first received their Spring 2018 mailer, it is clear they are migrating to more of a lifestyle brand catalog, like Pottery Barn. It's thicker (84 pages!) and on higher quality paper stock. In the past, it was a few pages and the paper was junk mail-like paper quality.

Spring 2018 in-home catalog


1. MOBILE APP PROMOTION

Open up the first page and BBBY immediately and prominently promotes its mobile app, telling you how you can easily shop the catalog via mobile by just scanning the catalog's front cover with the app's AR scanner.
Mobile app promotion


2. SOCIAL MEDIA PROFILE PROMOTION

Also on the same page, since they're talking mobile, BBBY promotes its Instagram profile. But I'm surprised they did not also promote its Pinterest page, because home decor is so popular!

Cross promotion of BBBY Instragram acount


3. KEYWORD SEARCH CALLS TO ACTION

One of my favorite tactics is their suggestion to enter specific keywords into its website's search bar to see all the same products laid out in its catalog:

Shop the room: Search keyword cues in catalog

Close-up example of keyword: airy living room

If you type "airy living room" on its site, you see the below landing page, which is a great hand-off from the catalog. This is so much easier for consumers than trying to recall a long website URL path to manually enter in a web browser.

My only suggestion for improvement is to make the room photo interactive so if I click on an item I like, it has an anchor link on a hotspot to take me directly to the specific product description rather than scroll through the extremely long landing page with all the products listed below the main photo.

Landing page if you search for "airy living room" on bedbathandbeyond.com
From an analytics perspective, the keyword CTA is great because from your web analytics tools, such as Adobe Analytics that BBBY uses, you can see the exact search volume for each keyword entered to truly gauge how popular this tactic is! Because let's face it, no one in his/her right mind will think of entering "airy living room" without some kind of prompt =)

4. VANITY URLS & TRACKING

Throughout the catalog, BBBY has CTAs to go online using vanity URLs. Near the end, it even has one page that promotes many of its offerings online.

Vanity URLs galore from catalog page!
All these URLs resolve and redirect to longer URLs. For example, bedbathandbeyond.com/yourmove redirects to https://www.bedbathandbeyond.com/store/static/movers.

bedbathandbeyond.com/creditcard-catalog redirects to BBBY's credit card partner Comenity's website: https://c.comenity.net/bedbathandbeyond/pub/apply/Apply.xhtml?cmp=460_print_apply_catalog_201701_001

What is noteworthy here is that Comenity has assigned a unique campaign tracking code to this URL. This gets passed to its Adobe Analytics as a campaign parameter to easily and surgically track the session of a user that came from this ad placement in BBBY's catalog. Perfect! Unfortunately, BBBY does not have these detailed campaign tracking codes in the vanity URLs that drive to its own website for some reason, so that's a big analytics miss.

5. COUPONS TO TRACK IN-STORE PURCHASE

Typical 20% off coupon
As many of you know, BBBY is extremely generous with its distribution of 20% off coupons. This direct mail catalog was no exception. While the retailer thought about weaning itself off of such promotions a few years ago, it hasn't. But I'm glad to see that if you're going to offer a coupon, track the heck out of it! Here's what they are doing that more retailers need to do. BBBY's direct mail coupons have unique bar codes on them for tracking purposes. These are unique based on customers in its CRM system. When a user redeems the coupon in a physical store (or online), this tracking code is captured and BBBY knows you actually bought something in store.

But many retailers stop short of doing something useful with this insight. BBBY sends a personalized email (see below) a few days later to (1) thank you for your recent in-store purchase and (2) ask you to rate the purchase to help populate its user reviews on its website. This is a great example of tying your print, web, email, and CRM marketing campaigns together with a bow!!! All this is done without me ever realizing they matched, on the back-end, my email address from an online order I made once a long time ago to my CRM profile. I didn't have to give my name or email to the cashier in the store. It was all tied to the physical coupon seamlessly!

Thank you email tied to recent purchase
(BTW, if you didn't know, these BBBY coupons never really expire despite the expiration date printed on them.)

6. ACQUISITION INTEGRATION

Last year, BBBY bought Decorist.com, an online interior decorating service that matches a consumer with a designer to design a room together in one's style and budget. The catalog is sprinkled with new Pro Tips throughout from designers on Decorist.com and encourages readers to go to bedbathandbeyond.com/decorist to learn more.

Decorist promotion


In summary, most of this #O2O goodness can be done by any retailer with nominal investment. Marketers just need to be willing to invest in strategic planning and coordinating efforts across departments to do what's best for their brand and customers!

###

Monday, October 23, 2017

How I Became a Data Plumber

The other day I realized that big data, business intelligence, and dashboards may sound sexy in my strategy and analytics world. But all that and the insights they promise is not really possible without the less glamorous work of what I call "data plumbing." Yes, mom, all my years of schooling and work experience has led me to a career as a plumber =) Having a modern plumbing system in place is not only critical for your home, it's also essential for marketing.


Let me share a real life example of one of the many things I do as a Data Plumber. In this example, the role of the Data Plumber is to make sure all the pipes are connected end-to-end for more precise data to flow to improve tracking and optimization.

Here's a common use case: To optimize paid search campaigns, we need keyword level data for offline conversions. This happens a lot for lead gen campaigns where sales are closed offline, especially for B2B clients and B2C clients whose products or services require more hand holding than ordering a book from Amazon to close the deal.

First, I work with the media team to generate and pass a unique click ID to the landing page when a user clicks on an ad. The click ID will provide granular keyword level tracking. That's the first upstream plumbing connection from the search engine to the client's site. This is like getting water from the main line in the street to your house.

Then we need a way to pass the click ID to the client's lead management or CRM system. This is where years of experience talking "tech" with developers and "data fields" with database administrators pays off as I make the business case on why the Marketing Department needs these changes.

I visit the client's CRM team to see if they can create a field for me to house my new incoming click ID from the client's site. In plumbing speak, I need to make sure there is a faucet in the house that can receive the water from the street once I hook up the pipes under the house.

Once that is taken care of, I am off to work with the web development team to pass my click ID at the point of lead generation, usually when a user submits a lead gen or order form on the site. Normally this involves altering the API to the lead management/CRM system to capture the click ID upon form submission. Now we got pipes to allow water to go from the street to the kitchen sink!

But we're not done yet. We need a way to drain the used water back out of the house. I'm back with the DBAs and the CRM team to create a way to send us the data we need via an ETL or dropping a file regularly to a FTP server. We are creating a conversion file that passes every lead and sale with our associated click ID back to the media team's search campaign management system...ideally in real-time (or near real-time) for bid optimization, as well as reporting.

Almost there...so I go back to where I started with the search team. We create a process where they can consume the client's conversion file and match the data back to click ID. What's powerful about all this is you don't just tell the campaign management tool that a keyword led to a sale or not (which is binary), but you can also pass the amount of the sale, product type, and even the customer segment for even more insightful reporting!

Without such plumbing in place, you can optimize at the keyword level on web leads, but not sales. Now, you may find you've been spending a lot of media budget on a keyword that generates a lot of leads, but has either a low sales conversion rate or a higher CPA (cost per acquisition) than you thought because you've been optimizing to CPL (cost per lead). Or perhaps you weren't getting the quality of sales or the right customer or product sold than you thought for some keywords. That's like having hot water enter your house, but only warm, foul-tasting water may be coming out at the tap unbeknownst to you because you just saw water coming out of the tap (assuming everything was working fine), but you never felt the temperature or tasted the water to realize something was wrong.

So, there you have it. Just a day in the life of a Data Plumber. =) Actually, in this case, the above would have taken me weeks, not a day, to setup in partnership with my client, media teams, web dev teams, and CRM/database administrators. But when it's all done, it feels great!

##



Friday, September 22, 2017

Taylor Swift's UPS partnership to promote new Reputation album - WHY!?!?

Spotted a huge picture of Taylor Swift yesterday in the street. Thought it was one of those moving billboard trucks until I realized it was a UPS truck!


First of all, I think it's interesting that UPS is pimping out ad space on its trucks, like a public transit bus. I didn't even realize they had an interest in building out an ad business. Perhaps the fight with FedEx has them looking to expand to other revenue streams. It's not a bad idea for UPS to monetize that huge boring brown space across their fleet of trucks.

Some might say the UPS partnership is a good offline marketing vehicle. It's 100% share of voice. And people don't go to record stores (R.I.P. Tower Records!) anymore and even the Best Buys and Targets of the world aren't really selling many physical albums these days to warrant in-store promotions as users are digitally streaming or downloading music.

But if you're TAYLOR SWIFT, why do you even need to spend money to advertise your new album? She's world famous with reporters, radio DJs, bloggers, and her fans hanging on her every word and ready to buy her latest music!

She's recently released 2 singles, Look What You Made Me Do and Ready For It, from the new Reputation album weeks apart and both are getting lots of air play!

Not only that, but social media was supposed to be the great equalizer for artists to build direct connections to fans. And it certainly has been for Taylor. She has a huge social media fan base:

YouTube (Taylor Swift) - 1.7 MM subscribers
YouTube (Taylor Swift VEVO) - 24 MM subscribers
Twitter - 86 MM followers
Instagram - 103 MM followers

All she has to do is post on her own social media channels and call it a day.


In fact, Tay Tay is already doing it. Her YouTube channel is totally promoting her new album's drop date of Nov 10th:



It's also on the comments of her Look What You Made Me Do video on TaylorSwiftVEVO:


Her other profiles are all promoting it too. In fact, it's a great example of integrated marketing as all the channels have the same Reputation album cover photo and call to action to get her album on Nov 10th. You may recall she caused an Internet frenzy when all her social accounts went dark last month to prep and coordinate all this stuff.

Taylor has always been a very respectable, smart business woman. But I just don't get why she did this UPS deal...

###

Friday, September 1, 2017

Star Wars' Force Friday: Toys R Us vs. Target

Earlier today...way earlier, like 12:01am, was the start of Force Friday, a huge retailing event ahead of the next Star Wars movie, The Last Jedi, that would unveil new toys and merchandise associated with the new movie coming out this December.


It so happened that the shopping center I had planned to go to had both a Target and a Toys R Us that were participating in this event, so I decided to see how the 2 stores ran Force Friday. But which store should I hit first?


Toys R Us was going to be my first destination. Why? Because they had promoted a free t-shirt and poster giveaway while supplies last. So I showed up at 11:30pm and found a short line of about 15 people had already formed. Mostly adults, but I also saw a few kids way past their bedtimes on a school night!

When the doors finally opened shortly after midnight, the crowd had grown to about 50-60 people, as we all beelined through the front door in an orderly fashion. A Destination: Gateway to the Galaxy cardboard archway greeted us.

Toys R Us archway at front entrance

Inside, employees had lined up short (maybe 3 feet tall) Star Wars figures a few feet apart, pointing shoppers to the special Star Wars section for the event. It was like a Hansel and Gretel bread crumb trail.

But I, along with other shoppers, was disappointed that it was primarily just one aisle in the store. A very cramped aisle. So we had to queue up to just get into that aisle. There weren't as many new items as I would have expected. I also noticed all the workers were gathered up front at the registers. Surprisingly, none were in the Star Wars section --- likely because there was no room! But the workers didn't really engage and chat with customers about Star Wars either.

After I made my purchase, I received my free Pop t-shirt (shown below). But there was no poster =(

Free t-shirt at Toys R Us

At this point, it was 12:20am, so I ran across the parking lot to Target.


Target had been running a big "Bring Your Rey Game" campaign for Force Friday. I thought it was quite clever, capitalizing on current trends around gender equality and empowered women (e.g., equal pay for equal work, work force diversity, success of Wonder Woman movie that was also directed by a female director, Sheryl Sandberg's Lean In).



Inside the store, it was well-lit and a few large Star Wars cardboard displays cordoned off the Star Wars merchandising area.


Target Star Wars: Episode 8 display
Immediately, it was obvious this Target had more merchandise than the Toys R Us I went to. In addition to stuff I saw at Toys R Us, such as action figures, LEGO sets, and Nerf guns, Target also had video games, drones, videos, clothing, plush toys, Halloween costumes, and more! One thing I had missed somehow before today was Target had generous coupons for major purchases:



Also, Target employees who were obviously Star wars fans were working this section of the store, chatting it up with customers. There was no freebies here, but this store was running a raffle at 12:30am, giving away an X-Wing quad drone and a BB-8 playset. Sadly, I didn't win :-(


Star Wars Force Link BB-8 2-in-1 Mega Playset
Propel Star Wars T65 X-Wing Battle Quad Drone

As I walked out of Target at 12:40am, I was reflecting on my 2 shopping experiences. I expected Toys R Us to "go big or go home" for this event, given their focus on TOYS and since Toys R Us has been losing ground to Walmart and Target in toy sales. But I felt like the energy, the selection, and the staff were better at Target. 

There was probably some foreshadowing. I had called both stores yesterday to verify they were participating in Force Friday. When I called Target, the sales associate immediately said yes, they were participating and that doors open after 12 midnight only for buying Star Wars items. She explained that because the store normally opens to midnight. When I called Toys R Us, the sales associate wasn't sure, asked me if "that was the Star Wars thing", and then put me on hold for 5 minutes to ask someone to confirm. So I said, "Thanks, see you tomorrow night." She said, "No, it's Friday night." I said, "Wait, it's Thursday night, right?" She replied, "Duh, you're right." Enough said.

But this is just one Jedi's observations. All-in-all, it was a good night for my first Force Friday event!

May the Force Be With You

##