One of the great parts of a trade show is being able to quickly see trends. Monetate is a single company represents new trends multivariate ecommerce platform optimization.
At IRCE 2012 (Internet Retailer Conference and Exhibition) at Chicago’s McCormick Place this week, I was able to how the cost of computing continually dropping is affecting how we merchandise (1st on line, but you know the wisdom will be carried to bricks and mortar stores as well).
One of the booths I got to see was monetate. What stood out for me was how much computing is being done in real time and in an anticipatory fashion. In essence they are taking your shopping cart system (which may, well is probably, very large) and creating variations of it for all sorts of testing. They can test by what city you come from, or if it is raining today. They can test or present based on your past history with you or how close you are to a Walmart. They can compound testing if you are a repeat customer on a rainy day in a media market that is inexpensive.
Watching the monetate’s demo, and remembering their presentation, I am reminded of when I used to run scenarios on large multimillion dollar data centers, and forget to limit the sample size to ‘reasonable number’. I would get my manager bringing my report the next day (reports only printed a few times a day, but when you busy the machine all night it takes a while) showing me the chargeback of the mainframe’s cost that exceeded both my and my manager’s cost for a year. Monetate’s system lets me create those scenario experimentation on an ongoing basis either as test or production – in real time.
What I see here is the magic of being able to move as much computing power to SaaS before the web customer shows up. It also is able to quickly identify what the identity of each visitor is. This allows responding much more like a human store clerk would. Making many decisions with ease because once you know the ‘rules’ they are easy and ‘obvious’. A store clerk seeing a visitor show up on a long skateboard is probably more interested in snowboarding then ski’s or toboggans. A customer wearing a $2,000 watch is probably not looking at the costume jewelry in the corner of the store. These snap judgements are what allow us to determine which of the thousands of cars we pass on our way to work will be a problem, and which are just going along. It is a wondrous marvel of evolution to survive in the complex world we live in. And computers can just do a fraction of it.
We have been trying to get computers to have this same ‘artificial intelligence’ for decades. And we are still a long way from it. But increasingly, we are able to in small domains define experiments that let us test and tweak what is the best way to present information or experiences for website visitors that meet their needs on their terms. Monetate is helping that become incredibly easier for online shopping.
One of the other keys I see in monetate (and similar tools), is the ability embrace Lean Startup methodology. The concept of iteration. The key is understanding that now that it your cost of experimentation is lower then analysis, the approach that is lowest cost in optimizing is different. When each computer batch run cost thousands of dollars and days of time, it was far more effective to spend more time ‘bench testing’ ideas. Sitting around and using human power to determine the best approach. But when a computer can now not only check your theory, but create a method to retest against different data (be it Texas visitor over Oregon visitor, or this months customers over last quarters customers), it is poor use of resources (especially human) to think about what the results are and ‘just do it’. Let the system or computer or software do the testing and provide the results.
The challenge will be not in saving the last CPU cycles to run one more test, but how to let our creative juices loose again to see how to continually improve the solutions we are trying to build. One of the big challenges for many in ‘corporate’ is to understand that website visitors are individuals. They need to as much as possible be treated as individuals. As we learn to look at our visitors has having different mindsets, often determined by factors we can identify, we will be able to create better experiences for our customers.
There is a whole other dimension of visitor privacy that enters into this, but I am not going to tackle that one today.
As usual, monetate’s solutions are an incredible toolset that lifts one burden from the ecommerce manager allowing a much larger responsibility to rise to the top – Looking at the world from the customer’s perspective. It was never not the top, but now there are a whole fewer number of excuses as to why we cannot focus on the customer’s view point.
Do you understand specifically what your website visitors are looking for or do you only have a generic idea? If you understand what they are specifically looking for to meet their needs, you have a much greater chance of true engagement. When you have true engagement, your odds of a sale increase dramatically, if not today, then on the next visit.
But if you don’t understand how to look at the trends and numbers, you will have a challenging time understanding what your visitors are really looking for.
That’s why retailers count how many people are coming in and how many people are coming out there also counting how many of them are actually purchasing. I have worked with over 100 different retail chains from single store retailer to office supply big box stores. They are counting by the month, day of the week, hour of the day (I know, I installed the counters that go back to the corporate databases with these body counts). They are counting how many of purchasing customers are actually signing up for the e-mail list. They’re counting how many of purchasers are return customers from previous orders. There also counting what is the average amount of each visitor’s spending. Retail stores count the numbers in so many ways you would be amazed. Just like you need to on your website. Your website is not a black box. You need to be paying attention to what’s happening.
If these types of customer engagement don’t make absolute clear sense to you, then I would suggest you go and spend some time and with brick and mortar retailers. Consider even working as a retailer. Learn how retailers convert the looky loo’s into true engagements. Yes we have all been shopping, but look at how retailers work with other customers not just yourself. Learn how retailers try to customize to the needs of each person, not a one size fits all. It is important that you learn how to look through a store or website through the eyes of a customer. It is important that you understand that the customer is always right in their perspective, and how they are looking at the world. And if you don’t understand their perspective, it will be very hard to understand why they’re not buying from you. If that same attitude of understanding is what a potential customer or visitor is looking at when they see a store and their perspective also becomes very useful.
This attitude of looking at your website comes into play in how you design your SEO and SEM. Did you need to present the right kind of signage from the street to get the customer to pull into the parking lot? Once they get inside the store, they need to see what the sign promised is fulfilled. SEO and SEM is about creating it signage from the street. You can fake a man once or twice, but once you do, they will ignore your sign for the rest of their life, because you made them cut across left-hand lane and pull into your parking lot. And they will tell their friends to ignore you or worse. You need to create a good ‘sign’ in your SEO/SEM to attract your visitors into your store. But you also need the sign to be a good indicator of what is in the store.
Just as stores don’t (at least those that survive long term) have the same layout year after year, websites also must evolve and continue to improve based on what works and what does not. This should be done as measured experiments. You can follow the models used in Lean Start-up (Eric Ries) and E-Myth Revisited (Micheal Gerber). Those experiments need tools like Google Analytics and other tools like ChartBeat. Topics of other blog posts.
Oh, not selling products on your site? I would place heavy odds that you are selling your ideas – be they the idea that your service is better then someone elses, or your idea is more important then the next bloggers. Remember to look at the website through your visitor’s eyes in the path they took to get to your website, and your pages.
There are a whole variety of purposes for a website. Some are for vanity, others to build community, some just for venting. But more then a few are about trying to build a business. Especially those website builders that are interested in search engine optimization, building a business is a very common site objective. With that in mind, I am often asked where to go to for resources on getting started.
I often start a discussion about ‘How do I start a website?’ with an exploration of what the objectives and priorities are of a website, before going into the how to.
But assuming supporting your business is your primary objective, here are a few key resources I would recommend:
- High level business plan suggestion –
MS Word Business Plan Template from Guy Kawasaki.
If you don’t know who Guy is, you should. He is a thought leader in how business should be done in this millennium. Guy started his success at Apple Computer, but along the way has become a successful venture capitalist, and therefore has sat through many many business presentations good and bad.
I am listening to Guy’s Reality Check (not Reality Bites the movie by Ben Stiller), and the book is a collection of Guy’s blog posts over the years. These blog posts and his book echo so much the experiences of many who have been successful in growing a business and getting capital investment. He has learned what works from the perspective of what it will get someone to write a check and do a deal.
This blog post is actually a collection of resources for a Pitch (to ask for investment funding) framework, business model spreadsheet and business plan tempate. They are templates and suggestions on how to structure your communication with brevity and clarity. The key takeaway I keep sharing is: most people want to know you know your stuff, and then prove that you know by being able to communicate it with succinctness and in format that tells a story to your audience. Fail to speak to your audience and you will fail to get your objectives met.
His ALLTOP.com is also an interesting tool for trying to keep up on the information firehose in a manageable fashion. I have set it as my homepage.
- I have mentioned Seth Godin a few times. His writing is light and breezy. His insights are disturbing if you have spent too much time in school. His attitude is sacastic or worse. His effectiveness is stunning. Having proven his ability to practice what he preaches (just read or listen to the stories of his writing and how it has paid his bills very well over the years), he has great authority among many in the know. His YouTubes are fun to watch as well. But the library or AddAll.com is worth a stop for reading some of his books as well. I particularly recommend Linchpin
In spite of his light and fun writing style, I think his ideas are pretty fundamental to the way the new world is. You need to be the best or plan for painful mediocrity needing to adjust to everyone else’s desires not yours. Linchpin tells the story that trying to be 2nd best or worse is hardly worth getting out of bed in the morning. Be the best – 2 ways:
- Be ‘fortunate’ enough to be the best in a ‘standard’ area of pursuit.
- Be creative enough to define your niche of being best. The key is you should be able to introduce your self as ‘the best ………’ in a way that everyone you meet knows it is the truth. That may be by geography, or creating a new market segment or reframing an existing segment. It may seem like cheating but it is not it is focusing and niching yourself. If you need to keep slicing your area of pursuit then keep slicing, but be the best.
- Here is the story of the marketing and passionate niche I was telling a few clients about. http://www.forbes.com/sites/michaelellsberg/2012/01/11/the-tim-ferriss-effect/ It demonstrates how the world of broadcast over narrow-casting has passed from an idea to theory finally as absolute law. Our markets are large enough (over 303million in US alone) and flat enough (ship most anywhere in the US 2 day for under 2 pounds, but so much is the speed of Internet) and segmented enough (how many Yahoo groups are there today, how many Meetup groups are there today in your area) that you need to look at business differently. So many business owners keep trying to get the ‘big’ publicity hit and fail to understand that most success comes from targeting the key people you want to connect with. That success from connection individually rather then exposure of many. There are other lessons, and some ideas that will not apply to you (he gets specific so they don’t match everyone everytime) but concepts are important to understand the direction the world is taking.
- Explore your business using the Business Model Canvas. I have worked with many different start-ups.
Along the way, I have built a variety of questionnaires that I found very helpful for all to understand and clarify what the real objective and strategy. I would create long documents as outlines for information gathering and initial interviews. In trying to find the secret sauce of each organization was an effort. What made them unique over the ‘next guy’. Business Model Generation changed my approach after decades. Having recently found this 1 page tool, I find it naturally replaces my flat mini-book of questions with a single sheet that is far more action oriented, less overwhelming to all involved and more action oriented.
An online tool for creating similar business model canvas is at Lean Canvas
And of course, there is the E-Myth Revisited by Michael Gerber. This is what I (as well as many other authors and thought leaders) consider the bible to entrepreneurial strategy. This book has literally fundamentally changed many business owners lives. But also positively changed the many employees and team members working for the those businesses for the better. It has helped many employees from continually beating their heads against the wall, making everyone’s life better. Understanding why so many businesses fail can be very helpful in creating a strategy to avoid the issue yourself.
Michael has created a few empires, and a whole series of books based on his E Myth model. I have read most of them (more coming out almost monthly now targeted into specific industries), but I still recommend reading this easy and targeted parable first before an industry specific volume to anchor the story, concepts and framework the deepest. I usually recommend audio format if you are short on time for most business books, but I still have not found an audio version that is as good as his written version.
What are your favorite business resources? Do you find books the correct format for learning new business models? Join the conversation below with a your comments and help a fellow business grow.
“A feature that you built and tested, but didn’t deliver yet because you’re waiting for the next major release, becomes inventory. Inventory is dead weight: money you spent that’s just wasting away without earning you anything.“ Joel Spolsky
I discovered a new tool for quick survey of the series of tubes of the web (Daily Show fun) – AllTop.com which lets you get a single feed around topics that you can create, or others have created. The ‘generic’ page led me to Joel’s blog post today.
But Joel’s thought on inventory struck me. I have different posts in ‘draft’ stage. I have different ideas in planning stages. I have different relationships in development stage – I promised to get them some useful information (by their feedback) that I have not. This inventory (or more appropriately WIP-Work In Progress) is not creating value for me, or more importantly for others. I am short-changing myself, and others, and I need to stop that.
I notice so many people I respect are not getting hung up in working on getting ‘it’ perfect, before they publish/post/deliver/share so few opportunities are missed. The value they are reflecting is important. So the question becomes, how I do that myself?
I am finally not only hearing the need for creating, sharing and niching, but delivering. Whether that means publishing, posting or just hitting send more often. Thank you Seth Godin, and the many who have preached this newer concept over the old framework of: design, develop, test, fix, retest, fix, retest, fix, retest….. deliver an outdated design for a changing world and market.
So this year there will be more posting, more ideas and consequently more mistakkes as I ‘iterate’ and continually improve. How are you going to change your models to improve this year?