The Current US Economy and Opportunities for Canada Tourism

[Posted by Diane Clarkson]

I had the opportunity to attend Canada e-Connect last week in Toronto. This is Canada's e-Tourism Strategy Conference presented by the Tourism Industry Association of Canada. Mobile marketing and social media were two of the most popular topics both on the agenda and in conversations among delegates.

Certainly the most repeated conversation I had was about how the economic environment in the US will impact Canadian tourism. Beneath gloomy economy clouds, there may be some optimism for Canadian tourism with the possibility of Americans heading above the 49th parallel to seek the beauty of the Great White North and its' favourable exchange rate.

American travelers will not, however, be a "if you build it, they will come" situation. Canadian destination marketing organizations should consider the following to attract American travelers:

1. We found last year that 15% of US travelers began their online research without a clear destination in mind. To reach these undecided travelers, travel marketers should incorporate lifestyle segments (i.e. family, gay and lesbian) as well as activities (i.e. skiing, theater) into search marketing and optimization strategies.

2. Mapping and destination content should be developed with the personas of online travel researchers who have are familiar with the area as well as those with no knowledge of the area's geography.

3. Photographs are extremely inspirational and should appeal to lifestyle segments (i.e. include seniors, families, etc) and travel planning cycles. Specifically,  photo selection should reflect that travelers plan ahead: photographs of snow today will not inspire people dreaming of sun in a few months.

4. Microsites aimed directly at American travelers will allow targeted content that can include topics such as driving distance from US cities, visa and border information, etc.

One theme from Canada e-Connect is certain: the Internet has never been a more important channel to the tourism industry on both sides of the border.

Person-to-Person Lending Evolves and Devolves Simultaneously

[Posted by Brad Strothkamp}

Is it me or is there at least one major announcement in the Person-to-Person (P2P) lending space every week?

This last week had two:

• Fynanz shuts down. Fynanz, a student lending person-to-person lender, shut down last week.  A note on their site states "Due to market conditions, at this time we are not accepting new members."
• Pertuity Direct emerges. Pertuity Direct emerged on the person-to-person scene today with a model of person-to-person lending (and more importantly investing) that make the process more palpable - more on that later.

Here is my view on person-to-person lending:

PROS

• They are actually lending money to consumers that need it.  Unlike banks, consumers my actually be able to get a loan from a P2P lender
• They offer compelling rates both to borrowers and lenders.
• The investing (lending) side of the house is evolving into a model that is clearer and simpler. Pertuity Direct has an interesting investor model.  Investors don't fund individual loans (like with Prosper), but instead buy into one of two mutual funds. The funds differ in the types of borrowers and loans that make up the portfolio. Fund #1 - borrowers with 720+ FICO,  Fund #2 borrowers with FICOs 660 to 720
• It is a unique lending process. Crossing traditional lending with the aspect of community is unique.

Cons

• Few consumers know these lenders exist.  Forrester published a report around Person-to-person lending that showed that just 10% of US on-line consumers had heard of ANY P2P provider.
• Few consumers apply for loans on-line let alone apply with firms they have not heard of (a requirement of P2P lenders). In the US in 2007, just 16% of consumer that applied for a home equity product did so online versus 32% for a product like credit card.  Throw in the fact that P2P lenders are not well known brand name, and the potential market willing to apply for these loans online becomes very small, very quickly.
• It is a unique lending process - As on-line bill payment has shown us in the past, consumers are often unwilling to change habits and the change that happens happens very slowly.

Unfortunately, the cons outweigh the pros at this point.  Until that changes, the P2P market will remain a niche market utilized by only the most savvy of Internet users and investors. 

So what will be the sign that P2P lending is poised to take off?  I believe it will be when we see at least a quarter of consumers applying for loans online and/or we see a larger percentage of consumers utilizing comparison shopping sites. Forrester data has shown that consumers willing to do these activities tend to be longer tenure, savvy net users. The precise audience best suited for P2P lending.

Search Engines: A Simple Way To Better Understand Consumers

[Posted by Brad Strothkamp}

A large portion of a Forrester analyst's job is keeping tab on hundreds of different Web sites. During my Web site travels over the years, a few truths have become evident:

• You can tell a lot about how a company is organized based on their Web site
• Too much sales content is written or developed by individuals that have never sold anything
• Sites often suffer from lack of understanding of how consumers make product and service choices.

The results of these truths are often Web sites that are driven and designed by opinions about how consumers shop versus actual hard-facts.  When I came to Forrester from Wells Fargo nearly five years ago (eek!), I made it my personal goal to try to provide some tools and data for clients to make more rational Web site decisions.  During this search, I happened upon a free source of information that any Web site manager has access to that can give you a good sense of the mindset of the consumers.

It's search data.

Yes, the same information you use to buy search keywords on Google or Yahoo! can be used to make better site decisions. Simple searchers on Google Adwords search tool reveal insightful details about how consumers think about products. 

Here are a few examples:

• Financial services: A search on "credit cards" yields interesting insights.  First of all in the top 30 search terms, there are absolutely NO provider brand name (e.g. (Blank) Bank Platinum Rewards VISA).  What you do see are a few distinct term categories including customer segments like consumers with less than perfect credit searching for "bad credit credit cards" or consumers that are interested searching for particular types of cards searching for "free credit card" or "no fee credit cards"
• Retailing: A search on "luggage" reveals that brand names are more important to the category as there are terms like "Samsonite luggage" appears high among the results.  Additionally luggage features are important as there are also terms like "carry-on luggage" and "leather luggage"
• Travel: A search on "hotels" reveals that factors like destination are important with search terms like "las vegas hotels". Additionally, types of hotels are important with terms like "luxury" and "cheap" as well as desire for hotel deals with terms like "last minute hotels" and "hotel discount"

So what does all this mean?  It means the next time you are unsure of the right words to use on a page or how best to set up navigation on your site there is a free and easy resource to conduct some primary research. While it may not solve every problem, it will help keep your site focused on what aspects of your product are important and the words consumers use to describe the products and services they are interested in.

Your 2009 To-Do List

[Posted by Chad Mitchell]

My colleagues and I continue to receive questions from eBusiness managers about prioritization in 2009.

There are 3 common questions:

• What should we do to survive and succeed?
• What should we do first?
• Does my priority list make sense?

Allstate is currently running an ad about getting "Back to Basics." The spot states that "after the fear subsides" people enjoy the small things such as home-cooked meals and time with family. "And the basics are good."

eBusiness and channel managers should follow this logic and focus on the fundamentals.

Here are my thoughts on getting back to the basics in 2009. Call it a honey-do list for eBusiness and channel managers:

• Focus on retaining profitable customers - In a Q1 2008 Forrester survey of CMO's (well within the economic downturn), improving customer retention and lifetime value were ranked in the bottom 3 of the top 9 CMO marketing objectives. Amazingly, CMO's were still focused on acquisition, product development and brand awareness. That is upside down and backwards at the same time. Focus on retaining profitable customers by evaluating key metrics like total products per customer, late payments, and total customer service inquires.  Then "cut the fat" because not every current customer is profitable.  Convert single account owners to multi-product customers with email marketing retention programs and personalized x-sell product recommendations on the Web.  Stop investing in marketing or customer service time on unprofitable customer segments.
• Improve the multichannel customer experience - Many companies are restructuring marketing, sales and service teams around the Enterprise Customer Experience (ECM). A senior level executive is responsible for all customer-facing channels and content. I wrote about this recently in my trends 2009 eBusiness research and shared a sample org chart from a top 5 US insurance company. The insurer has realized increases in customer satisfaction and retention after implementing ECM.  Major reorganizations take time and can be painful as many companies downsize.  eBusiness managers are also investing in enterprise search tools that deliver more relevant content from Web customer inquiries.  Better search results can reduce call center volume and improve profitability.
• Leverage analytics across the Web and all channels - The priority list is simple to create when you are measuring what is wrong within your company. Lower online conversion rates? Increased customer attrition? Increased online cost per sale ? If you don't know what is wrong, start their first. Leverage the customer data available within the Web and other channels. Web site analytics, call center tracking and other business intelligence tools are must-haves for any eBusiness and channel manager.

The prioritization is up to you because you know your business better than anyone else. These are proven strategies supported by our research from consumers and executives across several industries.

Take a deep breath...remember that the sun is still shining and focus on attainable goals. We will all be OK...some times we just need to "get back to the basics."

Do you agree or disagree?

Your Site On Drugs: The Hidden Cost Of Ad Blockers

by Brian K. Walker

Ad blockers have grown in use over the last few years as a plug-in for Web browsers. This is particularly easy for Firefox users who can easily add in the Mozilla recommended Adblock Plus add-on when downloading Firefox.

Usage stats are hard to come by. Unfortunately, Forrester has not been polling consumers with our own Consumer Technographics® product, which is otherwise very comprehensive. (I will work to change this.)

When I ask advertisers and retailers about this I often get a response along the lines of “Huh?”

So what is the big deal? A few ads get blocked, so what?

Well, based on a few informed conversations of late I think we are approaching the 5-8% range for consumers using ad-blockers. This starts to really count at that level.

There are three key reasons why this is important:

1. Missing impressions — the way the ad blocker works is that is does not render the ad in the browser. However, the ad was served by the ad server, content management system (CMS) or image directory. If you are selling or buying impressions this means you are either cheating or getting cheated. At 5% I think this starts to matter to the advertising buyer.
2. Many eCommerce sites use the same directories, or servers serving the ads, to serve merchandizing (or worse) instructional and service content. Often this is done to leverage      targeting capabilities available in the ad server, not available on the  legacy commerce platform.** This means sites are just plain broken on ad-blockers  — either the design looks terrible, or content the customer needs is just plain missing.
3. Many eCommerce sites are looking to monetize their traffic in other ways besides conversions. This  is especially true for high-traffic sites. This is bound to increase, and sites will be more and more impacted by a problematic ad-serving approach.*

Here is an example of Wal-Mart’s home page just by way of example:

So, what can you do about it?

1. Look at your site on ad blockers.How bad is it? Note what works and does not work, and programmatically address it with your team. ***
2. Short-term, change the directory path of served content that are not ads (and change the path of      ads at your own risk).
3. Longer-term, invest in stronger CMS and segregate ad serving from content serving and targeting. We have analysts who can help with this.

Let us know how we can help, and please comment on the blog with your thoughts on the issue.

Thanks, Brian

* For a good example of a site-design and execution which work well wither way, check the NYT site with and without an ad-blocker.

** Note that many of today’s leading eCommerce platforms support this capability. See our upcoming eCommerce B2C Wave report for more details.

*** While you are doing this also look at your site in multiple browsers (Recommended: IE 6, IE 7, Firefox, Safari, and iPhone-Safari) – oh, and order some things from your own site while you are at it.

If you are on Twitter, follow me at: http://twitter.com/bkwalker

MR. ROGERS’ GUIDE TO AN E-COMMERCE SLA

by Brian K. Walker

Over the years I have had the opportunity to be on both sides of the negotiations over service level agreements (SLAs) between eCommerce businesses and the hosting and service providers they contract with.  The two sides are obviously after different things, and have different goals. But as an eCommerce business what should you be looking for in an eCommerce SLA?

(Note: Want to jump to the punch line? Skip to the bottom of the post. Otherwise please enjoy our trip to the Land of Make Believe.)

First, A Trip To The Neighborhood

As a child a big part of my afternoons was Mr. Rogers, and I would get particularly excited when it was time to visit the Land of Make Believe. So, come with me won’t you? (Queue the trolley music and…)

Imagine many, many thousands of funny-looking hand puppets clicking away and shopping merrily on your site. Business is way up. You, as King Friday, are the benevolent ruler of this terrific business and Queen Sara Saturday (your CEO) is quite pleased. Things are going swimmingly and you and your merry customers are so pleased. You revise your forecast, call Henrietta Pussycat, your marketing director, and Daniel Striped Tiger, your merchandise planner, and say “Double down, we’re going places!”

Not A Happy Day In The Neighborhood

But just after you fired off an email to a million of your happiest customers and launch your big paid search buy and display advertising program things go terribly awry. First, Queen Sara Saturday calls and says her son Prince Tuesday can’t log-on to the site from his ski vacation in Vail. Then, just as you are checking into that, X the Owl, your customer service manager, hoots that his team is being flooded with customer complaints that the site is really slow and seems down. A quick check of Twitter shows that people all over the place are having big problems with the site. Finally, you jump over to your laptop. Sure enough, nada. Nothing. No site. 404. You immediately call Lady Elaine Fairchilde who is your key acct rep at the vendor you use.

Now What, Mr. Friday?

So, after much scrambling, and many conversations on the phone and IM with Ms. Fairchilde, your eCommerce platform service provider you are reassured everything is going to be resolved very quickly. You decide to wait it out, don’t panic, and reassure your management and team in turn. You even sleep soundly that night. But then when you wake up in the morning you find nothing has improved – the site is intermittently up and down, but when it is up it is slow. Something to do with a corrupt customer database and a problem with the SOAP service that manages the cart. But, Ms. Fairchilde explains, “No one told us about this campaign and this huge traffic spike. We were caught flat-footed.” This goes on for days. Your plan to double down has gone completely flat. Now you are sitting on a bunch of merchandise and have a bunch of angry, disappointed customers. So, you take the next most logical step and call your corporate attorney Peek-a-Boo Clock.  Your question, “How can we hold this company accountable? Can we recover some of the lost sales, or margin, we would have otherwise received had our site not gone kaput?”

Everyone Has Feelings

Here is where we need to get serious. “No more little ditties about how we are feeling” you say to yourself.  Mr. Peek-a-Boo calls to say, “I am afraid we are not in a very good position relative to the agreement and SLAs you reached with Ms. Fairchilde’s company”. They owe you nothing – except maybe a small percentage of the fees you own them for their services – in fact unless the site has been down more than 2% over the last 12 months, basically they owe you nothing.

The End Of Our Little Dream – What Can You Do?

OK – I apologize for the long setup. I could not help myself – I don’t have to go through editing with these posts (bound to change now). Now, let’s get to the punchline:

eCommerce businesses and the hosting and service providers they contract with are obviously after different things, and typically have different goals:

• The eCommerce business has a site and customer experience in desperate need of development or overhaul. The business leader has a goal and is accountable for getting the site up, operations humming, and transaction flowing - all tied to a revenue goal which was used to justify the project in the first place. And the next holiday-season is in the distance like a steam-whistle on a freight train running down-hill without any brakes. No time to waste.  No time to wrestle over the fine print, and the internal counsel is not often faced with questions over SLAs, so it really kind of gets skipped in the legal process.
• The eCommerce solution provider is trying to minimize risk and exposure. No service provider wants to provide an SLA that will risk their long-term recurring revenue.  Meanwhile, they also want to get the deal done. The sales people want to book the business, and the professional services people hear the same whistle coming. Meanwhile the legal counsel is much attuned to questions over SLAs and is motivated not to commit to anything.  They have all the arguments prepared.

All this often leads to SLAs being pretty “boilerplate” and based on the vendor's paper, with little real security for the eCommerce business. Hopefully all goes well, and this never comes up.

But of course the point of a good SLA is to create accountability and outline a remediation should anything go wrong. While you need to consult with your legal counsel on specifics, here is a breakdown on some common things to look for in SLAs from an eCommerce business and operations perspective:

• Ensure you are compensated for poor site performance. Remediation should include a sliding scale of performance problems, including downtime as well.
• Be aggressive on the thresholds you are willing to accept. 98% availability means roughly 14 hours down a month of unplanned down-time. I don’t think any of us would accept that. Go for 99.99% but we willing to back-down to 99.5% – that’s ~3.5 hrs of unplanned down-time per month
•  Remediation should include some percent of lost sales or gross margin. Compensation based on some sliding scale of the fees you are paying is not putting teeth into it. Develop a scale whereby the vendor has to compensate for lost sales or gross margin if things get bad enough.
• Insist on third-party monitoring tools to ensure transparency. Services from Keynote Systems, Gomez, or Tealeaf may be appropriate, and there are many lower cost services out there who can provide automated monitoring. Tip: Look for automated email or SMS alerts to notify your team of problems. Do not rely on vendor-supplied reporting, no matter how much you trust them. Their reporting may not be that good.
• Consider an index of sites to use as a benchmark. This is a way to not accept mediocrity, but also help the vendor mitigate problems outside their control. Using the same monitoring services used on your site, ping key benchmark sites and create an index. Alternatively you can use an index such as that provided by Keynote.
• Do not allow the vendor to maneuver out of responsibility for your sites performance and stability. If you ask for something, even a customization, it is their responsibility to QA and roll-it-out to production in a responsible way. They need to take ownership. If you add a third-party piece of JavaScript, same thing. If you send them a flash file or some HTML, same thing. Watch out for these exceptions in the SLA.
• Close force-majeure loop holes, and insist on failover and redundancy. Stuff happens, and sometimes it is really bad stuff which I prefer not to belabor, but in today’s hosting and cloud computing environment there is no excuse for a vendor serving the mid to enterprise eCommerce solutions marketplace (or high-scale SMB for that matter) not to be prepared for the worst. Insist that failover and redundancy guarantees be in place, and that the processes, procedures, and architectures are documented, expressed and explained.
• Be proactive with your vendor on your campaigns and traffic forecasts. Don’t make the mistake King Friday made: communicate with the vendor on a regular basis. No one wants a problem and the vendor can only be prepared if they are informed.

I hope you enjoyed this little tale and that some of these pointers are helpful, and as always, let us know how we can help.

Please add to the comments here on the blog to share your perspective on SLAs from the customer and vendor perspectives.

Thanks, Brian

On Twitter? Follow me at:  http://twitter.com/bkwalker

Or please feel free RT:  @bkwalker Guide to eCommerce SLAs:  http://budurl.com/j342

How A "Tiny" Company Is Winning Online

[Posted by Sucharita Mulpuru]

I used to swear by one of the big online photo printers. For years, this company generously let me store thousands of my pictures and printed them beautifully and inexpensively, sending them to me promptly whenever I needed. I even used this company to make novelty products like calendars, mugs and holiday cards. In the last year or so though, I started to notice some kinks; the company overhauled their eCommerce platform and my browser seemed to crash more than usual whenever I uploaded photo batches. Furthermore, it was much more difficult to navigate through my images, page refreshes seemed to take forever and I couldn’t edit any pictures as easily as I’d done in the past. I came to dread the photo ordering process.  When it came time for me to print holiday cards this year, I just couldn’t bear the frustration of dealing with my once-favorite photo company and went Googling for another. I ran across a stationery company called Tiny Prints and printed my cards with them.  I wasn’t alone. Of the dozens of holiday cards my family received this year, nearly a quarter of them (and all the best-looking ones) were all, incidentally, from Tiny Prints. This was no coincidence. They did so many things better than their competition. Here are a few of them:

1. A shipping offer. On their Google paid search ad and on their homepage, Tiny Prints trumpeted a free shipping offer to all customers. The other company? They sent me a flier with a $10 off promotion but it had expired by the time I got around to printing holiday cards. There’s not enough that can be said about the psychology of free shipping in online retail and how effective it is at driving sales. Companies like Zappos which often have higher product prices but perpetual free shipping know this well. Sixty-one percent of holiday shoppers have told us in the past that they shop online more often with retailers that offer free shipping.
2. Product search and assortment. This was why Tiny Prints won me over. I had visited no less than a half dozen other websites looking for a cardstock quality holiday card in the color pink that would let me upload two photos of my daughters. I was ready to just go to Target and buy something generic until I went to Tiny Prints. Tiny Prints had a parametric search and quick look function that efficiently let me find exactly what I was looking for, without extra clicks, without cumbersome page refreshes. Even the process of uploading photos and viewing my proofs seemed to be easier and faster here. This religious focus on a great product detail and search results experience is well-placed. In a survey we did last year with eCommerce executives, more retailers were focusing their investments on those two priorities over anything else.
3. Fulfillment. At checkout, Tiny Prints told me exactly when I would received my purchase, and by that day, I had sure enough received my package. That degree of transparency and staying true to those details matter. It engenders trust, reduces unnecessary call center contacts and helps cultivate word-of-mouth enthusiasm. One of the biggest sources of frustration to holiday shoppers every year is that shipping takes longer than expected.

In the end, I ultimately spent a bit more than what I had planned to, but that was a tradeoff I willingly made to save time and get exactly what I wanted — which are the main reasons consumers in general shop online.

Help Consumers Find Your Best Content Online

[Posted by Chad Mitchell]

The Wall Street Journal published a great set of money saving tips on December 31st in the Personal Journal.  It reminded me of examples of other content on the Web helping consumers during the recession. 

eBusiness managers are using the Web to build customer advocacy.  My colleague, Bill Doyle, has written extensively on customer advocacy and its impact on companies during the economic crisis.  Bill’s theory is simple and smart: customer advocacy builds trust and leads to improved customer loyalty. 

The Web is the perfect channel to build advocacy, yet many companies appear to hide their most relevant content.  I searched several banking, brokerage and insurance Websites today and was surprised how difficult it was to find helpful content.

Here are two examples of financial services Websites with excellent “money saving” content and challenging placement.

Insurance.com

• The Good: The comparison sites offers customers a RateWatch tool showing auto insurance price increases by state.  Consumers can click on their state and search for cheaper insurance.
• The Bad: The RateWatch tool is No. 3 on the home page content scroll.  This is a terrific tool and should be front and center.

Bank of America

• The Good: BoA offers a helpful section called Facing financial hardships?  It offers a Personal Budget Worksheet and tips for consumers facing foreclosure.
• The Bad: The section is in small font at the bottom of the page.  This should be more visible.  It helps the customer and BoA by preparing the consumer prior to the call.

eBusiness managers are helping consumers with relevant content and useful tools…it simply needs better placement.  eBusiness managers should make any content, tools or tips front and center for worried consumers.  It will improve the customer experience, build advocacy and improve loyalty.

Do you agree or disagree with this posting?

Happy New Year!