E-commerce Marketing Basics — An Introduction
November 28th, 2006 09:15am Julie Foster
What is finding and selling to your customers all about?
Will the core of your e-commerce website be about advertising, market trends, competitive pricing, customer service or customer centric ( niche ) marketing. Where should you be concentrating your money and efforts?
advertising studies
According to a June 2006 study conducted on behalf of the Online Publishers Association (OPA) by the Center for Media Design at Ball State University, advertising dollars aren’t keeping up with skyrocketing consumer web demand.
Despite the fact that only 8% of all 2005 advertising dollars were spent on web advertising, the internet accounts for 17% of all media consumption— behind only TV and radio, and beating out all forms of print media. Additionally, the web is the only medium that ranked in the top two for consumption both at home and in the workplace.
Not only are people logging on in record numbers, but the connected consumer is also proving to be a worthwhile investment.
— Jessica Dye | EContent - Digital Content Strategies & Solutions : September 2006 | www.econtentmag.com
Before we get any further into this introduction; I would like to make clear the distinction between advertising on the Internet and website content form and function.
For the uninitiated and many others who conduct business via a website, please be fully aware of the following. The website is generally not a good advertising medium. In fact, it is almost common knowledge that studies and research will support; the website in and of itself as an advertising medium is quite terrible.
The website is best at providing an application or serving content. Primarily the website should serve as a platform for content publishing, information distribution and e-commerce.
The other side of this distinction is the Internet can be an excellent place to advertise.
The Internet encompasses a whole lot more that just websites, even though many would equate the two. E-mail is not a website, yet it can be useful as a great Internet customer services application and provide an advertising opportunity.
According to the Direct Marketing Association - E-Mail returned a whopping $57.25 for every dollar spent on it in 2005,… In contrast, print catalogs generated $7.09 and non-e-mail Internet marketing produced $22.52.
—by Ken Magill | Direct Magazine : November 2006 | www.directmag.com
Please note the above information is regarding legitimate e-mail and not spam. Effective
e-mail campaigns are conducted by ethical professionals who use proper tools, technique
( skills ) and measurement technologies.
resume
Aside from Internet e-mail, the search engine is by-in-large a delivery application that is thus designed to provide advertising opportunities for those with the skills to optimize the website and or pay the search engines to engage in pay-per-click advertising; among other search engine technological advertising opportunities.
Search engines are not really what you would consider websites but are another Internet based application. I think you should be getting the idea that the website is not a billboard made and deployed to advertise but rather an information delivery application.
advertising can be a little painful ( ouch $$ )
Advertising is, from the perspective of a small business person about as exciting as hammering on your thumb. You get the painful sensation that it is doing little if any good. You get the bill to show for your advertising efforts ( the pain ) but you aren’t sure you can pay the dang thing with the increase in business you hoped for.
Yes, I know you have advertised before and it just didn’t do it for you. You couldn’t see any positive difference in your business. Every once in a while you decide to advertise again just to see if you can see any difference in your bottom line. The last time you advertised did you ask yourself how you were going to measure its effectiveness?
should you advertise?
Remember this about advertising if you remember nothing else. If you can’t measure it, you won’t understand it. If you don’t understand it, you can’t manage it. If you can’t manage it, you won’t use it effectively and you are wasting time and money. Your advertising then becomes a crapshoot. You might win sometimes but mostly you will just lose. And you will never understand why. Just like gambling only without any of the fun.
If you equate advertising to marketing, then yes you should advertise. Marketing involves much more than buying space within some form of media, but that is another topic of discussion.
If you don’t understand advertising and you don’t have the tools and knowledge to measure and manage an advertising campaign, then you probably shouldn’t. Ask yourself it this is an area where you have some expertise and a better than average degree of successes.
Is the prospect of doing-it-yourself and spending $500 on a chance that your advertising campaign may be successful one worthwhile? How will you know if it is or isn’t?
Oh, I get it! If a whole bunch of people buy your product or service directly after you advertise then you done good, right?
Wouldn’t it be better to spend the same $500 with half of it going to a skilled professional who knows what they are doing and the other half on their recommendations for advertising to obtain a measured result.
where then to advertise?
Where it is best to advertise really depends on many different factors. Do you have a physical business presence or an online presence or do you have both. What kind of business do you have and what do you sell?
If you intend to do-it-yourself and not seek professional help with your advertising then you must at least employ the use of these basic concepts.
SEGMENTATION
Who specifically is your target audience?
Why are they a part of your target audience?
Where will you find them?
How will you speak to them?
What are you going to say to them?
If you want to make the best success of your advertising campaign you must break your audience into the smallest known common denominator. In other words, if you know their names and addresses; then advertise to them as individuals or at least as individuals belonging to a small group of like minded people.
Identify your customers and speak to their needs and concerns. Solve their problems or provide a solution for their consideration. Don’t address your customer generically in a general way.
RELEVANCY
Put yourself in the place of the customer. You are in fact someone’s customer. How do you feel about the day to day exposure you have to commercial sales.
Besides filtering all the advertising from spam e-mail, television, radio, printed publications, snail mail and the telemarketing crowd, what sales information do you listen, consider and then respond too?
The answer of course is only those things that are relevant and interesting to you.
Your customer or potential customer is no different than you when it comes to separating the advertising wheat from the chaff.
MEASUREMENT, TESTING and ANALYITICS
In order to understand and manage the scope of your marketing campaign you have to be able to measure its performance.
You should conduct enough research into the kind of marketing you intend and then develop various tests to differentiate the results.
Having access to sophisticated analytical technology, usually provided as an application service is essential to the proper measurement and testing of a marketing campaign.
THE SALES FUNNEL
The sales funnel is analogous to a physical funnel in that the top will accommodate a greater volume entering the larger end of the process whereas a smaller volume will result at the terminating end of the process.
Generating and tracking the progression of sales prospects through various stages of the purchasing decision; the sales funnel follows the treatment and sales mechanisms whereby prospects may reach various decision making milestones as they move through the funnel to the final purchase. The sales funnel too involves the development of metrics from marketing point of contact to actual sales conversion.
Complex sales funnel models denote the measurement of that ratio of prospects entering the sales cycle at the top of the funnel against the actual successful sales conversion at the bottom of the funnel.
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Try this Interesting resource:
The Funnel Calculator
http://www.funnelcalculator.com/
closing thought
Although we have not discussed in much detail that which has been mentioned within this introduction to marketing basics, we will pour over each important aspect in future installments.
When it comes to advertising; think about what you are doing and why you are doing it. Spending hard earned money in a scatter-gun approach is a bad way to go. You don’t always have to make a sale on today’s advertising if you were able to prospect a customer that will buy next week or next month.
If thought out and planned carefully, advertising can and should provide you with incremental successes. Or at the very least you will acquire pertinent metrics that will prove their value in your next advertising campaign.
Making a sale today with advertising from yesterday’s promotion will be short lived if it is not designed to fill the sales funnel for steady and continued prospect tracking analysis and a commitment to long term marketing success.
— Julie Foster ©2006
Online Systems Development, Inc.