Loyalty, CRM, E-mail, User Experience and More: 2006 in Review

It’s that time of year again: time to take stock of all that was 2006, and look towards 2007. We covered a lot of ground this year. For those just tuning in, some of the highlights.

Smarter Loyalty Programs

Following last year’s 8-part series on loyalty programs, we took a look at more advanced concepts in customer loyalty. We addressed the idea that loyalty is not annual, and a “loyalty slate” shouldn’t be wiped clean after every year. Advanced loyalty programs should take into account a more cumulative view of my activity. We also took a look at shop.com’s inventive strategy for increasing off season sales, by building loyalty in the off season and providing discounts in Q4 based on purchases in Q2 and Q3. This is in contrast to most companies that do a big Q4 push, then try to capitalize on those first time users during the following year. Finally, we looked at inventive ways non-traditional companies, like those in the shipping industry, could capitalize on loyalty programs to provide better pricing and increase customer retention.

E-mail Marketing

In a series of columns, we looked at various aspects of e-mail marketing. We started by asking, Is e-mail still important?There are so many other ways to reach consumers, including both offline and online methods, that e-mail itself has come under fire, mostly due to overuse and susceptibility to spam. Assuming e-mail still is relevant, we examined how to put more of your brand in e-mail marketing campaigns, beyond just the look and feel.

When users complain about e-mail marketing campaigns, we addressed the issues that are your fault, such as not providing an easy unsubscribe mechanism (thereby increasing the likelihood users will simply mark the e-mail as spam), and the fact that e-mail interfaces don’t standardize an “unsubscribe” button, or any feedback loop at all. They simply let users mark e-mails as spam. That’s not what you want!

Perhaps the most important improvement on e-mail marketing can come from the combination of clickstream analysis and e-mail marketing. Studies have shown e-mail triggered off user actions containing information that pertains to what the user is doing now, versus what they bought in the past, is highly effective. We looked at case studies of who’s doing this well, and discussed ways you can use this type of e-mail in your own businesses.

User Experience

User experience is always a large topic in this column. This year we looked at a lot of case studies. Some companies are making great advances in user experiences, and some are falling behind the 8-ball. Of general concern this year was the fact that all Web sites and all CRM programs, must be accessible. While common sense tells us this, this year brought legal cases that made the point more emphatic. In addition to accessibility, we looked at other barriers to entry such as what happens when you ask for too much information during registration, how we deal with international users, and even how our error messages can lead to confusion.

We also looked at how the user experiences in other industries can help inform our own. Often, our own problems are already solved somewhere else.

Finally, we examined a case study (from one of our own clients) SkyMall. They launched a next-generation shopping cart/checkout system that’s far beyond the standard checkout funnel in use to day. The checkout process alone is accounting for a tremendous increase in sales and average order size. This is due to the fact that (among many advances) the user can interact with the cart and wishlist (and all options within the cart) throughout the checkout process.

Merchandising

User experience and marketing are extremely important, but if users can’t find the products and services they need on your site, it doesn’t matter how terrific your shopping cart is. Without proper understanding of merchandising, that shopping cart will remain empty. We talked about the importance of gaining trust online and becoming a trusted advisor. This makes people turn to you for guidance, and for purchases.

We also discussed creating value based on a test we did with a client. Sometimes just offering a product isn’t enough. In our test, we offered a service monthly, quarterly, and annually. Previously, the site had only offered the annual service. By offering it in smaller doses, we hoped to increase sales among those who didn’t want to spend the money on an annual service. To our surprise, the additional service options did exactly the opposite: they increased the annual subscription rate because the price was slightly lower than the other options (over the course of the year). By creating a perceived value of the annual subscription, the less expensive option increased sales of the most expensive option.

Finally, we looked at cross-selling. We started at effective cross-selling by defining terms. What’s an up-sell? What’s a cross-sell? When is it appropriate to offer alternatives to a product, and when should you list products that are related to the product (such as accessories)? Once we addressed the basics, we looked at new tools that allow these rules to operate on your Web site, and use metadata to increase the relevancy of merchandising.

Thanks for a great year

While we covered a lot of topics in 2006, 2007 will likely move the industry in areas we can only speculate about. I appreciate you reading my column this year, and hope you all keep reading next year. I’ve gotten lots of terrific feedback from you over the past 12 months, and encourage you to keep writing. Your questions and comments give me insight about what topics I should cover. If you want to know more about specific topics, or want to tell me to keep writing about certain topics, please let me know.

All my best for a happy and healthy new year.

Until next time…

jack