Triangle Business Journal

David Chapman

Web Marketers Still Have Much to Learn

While Wall Street has richly rewarded e-commerce companies for developing strong brand identities, the millions invested in those companies will be squandered if their customers switch their attention, and their spending money, to the next heavily marketed Web site coming along.

With market analysts estimating that e-commerce sites are turning over 60 percent of their customers every 6 weeks, you would expect that leading sites would be rolling out aggressive e-marketing programs to increase their site’s stickiness.

That’s clearly not the case, according to a recent study by Rubric (a provider of Web-based marketing applications), which evaluated the “sticky” factor of 50 leading e-commerce sites. The study evaluated how leading sites marketed to see how they attempted to retain ad-hoc purchasers and build loyalty.

The most significant were:

• E-commerce sites are not proactively promoting and cross-selling products.
• 47 percent of the sites did not ask buyers if they would like information on related products and promotions.
• Only 16 percent of the sites sent a follow-on e-mail offer within 30 days.

On a scale of 1 (unappealing) to 5 (very appealing), buyers ranked the follow-on offers at 2.9 (somewhat appealing). In one follow-up offer, women’s clothing was presumably mistakenly marketed to a man, who had not purchased women’s apparel.

E-commerce sites did not attempt tot build on-going customer relationships.

When buyers took advantage of a follow-on offer, only 25 percent of the sites recognized the buyer as a repeat customer. Only 1 site allowed the purchaser to schedule a purchase reminder e-mail.

E-commerce sites are not effectively communicating with customers.

While 57 percent of the sites provided a self-service way for customers to check the status of their order via their Web site, 40 percent did not respond to the e-mail inquiry. One company left a voice mail indicating that an e-mail reply was forthcoming but it never arrived.

Buyers indicated that personalization and effective cross marketing can influence their propensity to purchase.

Ninety percent of the buyers indicated that personalization would increase their likelihood to purchase from a site again. Ninety-four percent said that they would be more likely to respond to offers related to their purchase and interests.

In summary, the study found that leading e-commerce sites are missing a large opportunity to increase their “stickiness” and profitability by not effectively re-marketing their own customers. It found that the sites are not personalizing offers and are not leveraging the Internet as an interactive and personalized medium.

While the sites made it relatively straightforward to buy online, the experience was like shopping in a retail store, without the service.

Here are key strategies for building “sticky” online customer relationships.

• Use lights-out interactive marketing to proactively cross-sell, up-sell or re-sell.
• Apply database-marketing principles of targeting and segmentation.
• Use personalization to broaden and deepen relationships.
• Use continuous relationship marketing to build customer loyalty.
• Implement closed loop measurement to evaluate the “stickiness” factor.

Chapman is president of 919 Marketing, a Triangle- based marketing and public relations consulting firm. He can be reached at (919) 557-7890.