Many of my friends have given varied reasons for its existence. While some of them agree with me that’s it’s an unnecessary gadget sitting on my car’s console, some have their own varied arguments. Some say that it gives you an idea of whether you are racing your car too much while driving and should change gears. While it does give me a good feel when the meter jumps up on pushing the accelerator, I have never been able to find a good use of the same.

There are many such gadgets which measure things which don’t really matter. I think, the same applies to business. In today’s fast moving world and with many parts of your organization getting digitized and generating a lot of data, it is fairly easy to get lost. Trying to making sense of all the data, the real things that matter are not given enough attention.

During my MBA classes at SPJIMR, Mumbai, one of our faculties in operations management used to re-iterate one thing over and over:

THE GOAL: “The REAL purpose of any business is to MAKE MONEY, NOW AND FOREVER”

Today, after quite a few years, I cannot agree with him more. To achieve the real purpose of the business – you needs a goal and milestones which are measureable metrics helping to achieve the goal.

While all metrics are useful, the important ones are few. Focusing on the most important metric would help everyone focus on the same thing.

The most important metric is the one which everyone can relate to, which everyone understands and which everyone in your organization can measure.

For a car, which RPM is of not of specific use, speed is an important metric. Your car’s performance is measured in it being achieving a speed from 0 to 100 kms in ‘x’ number of seconds. The road side signs indicate speed limits, the police with a measuring gun measures your car speed. Speed is something which can be measured easily and you can relate your car’s performance to, your cars ability to and more importantly yourself to.

Similarly for your business, the important metric is something which is REALLY important. Most businesses do have key identifiers and those are not difficult to look for. Only thing that matters is to focus solely on the key metrics and the rest of the things will fall into place automatically.

For example, for a startup ecommerce site, there can be a variety of measures available like number of page views, number of page impressions, average transaction size, average cost of transaction, no. of products categories, subcategories and more.

As a business you may choose your most important metric as the number of transactions happening per week. It is very important to announce the core metric, if possible display it on notice boards, in employee rooms boldly so everybody knows what matters.

The key metric will automatically translate into a goal which would then translate into your final goal of ‘MAKING MONEY’. In this example, if your startup website averages to say around 100 transactions per week, making that number available to all teams would help them align their internal goals to that number. The technical team might focus on how to make the website work better to achieve higher conversions – reducing page load times, enabling one page checkout etc.

The marketing team would focus on increasing the number of visitors from different sources, focus its advertising on platforms which really drive visitors which convert, the banners and advertisements on what matters and more.

The design team may come up with a more user friendly design to drive more transactions, may be a mobile interface and more.

In short, all teams will align its individual goal for the main business metric which is measured. The business metric should be well recognized by the industry and should be comparable across other businesses in the same industry – primarily in your geography of operation. It is impractical to measure miles/hr in Indian cars as everyone measures distance in kilometers here.

The key thing is to understand that while your core metric should be comparable to other businesses, it also defines your prime business goal. While Tata motors focus on cost of car and fuel efficiency, Porsche might talk about speed and luxury.

The metric may change over time. As your business matures, while the core metric is still relevant, other important metrics may emerge. For example, while in a startup phase, increasing the number of members / transactions is your prime goal, after a certain level of maturity, metrics like revenue per transaction might start making more sense.

Whatever it may be, one or two simple, measurable metric s would help everyone focus on one achievable target relevant to your business. Include the metrics in your internal and external business communications and see the difference!

The question to ask yourself or your marketing team is – ‘Is it really working?’ Most probably, the answer would be ‘It is too early to comment’. After all, organizational changes show effect only in a longer term. With most companies embracing social media, being more proactive and almost all marketing agencies having social media in their portfolio of offerings – with all sorts of metrics on how successful their marketing campaigns have been, how can you be wrong in embracing social media.

And as most businesses would say – YES, we do see the results as well. We do have a great fan following, a great number of twitter followers, customers have subscribed to our RSS feeds and they are interacting on our Facebook page as well. Our customer care executives are busy talking to customers on Facebook and Twitter – promoting deals, answering questions and it all appears to be great!

We all agree that that the world has changed. Organizations need to know how they are impacted by Social Media. Organizations work on metrics and probably the metrics you use to measure your marketing campaigns need a change as well. Your social media efforts are as successful as the overall organizational change you’d see in the longer run. Measuring success of a social media campaign using metrics such as number of fans, followers, RSS subscribers is not right. While these numbers do tell you something, they do not convey the real effect new media is having on your organization.

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The fact that traditional marketing is not effective as it used to be inspires us to try the new media. Today’s customer fast forwards commercials on the television set, ignores the advertisements on the websites, ignores everything in his mailbox which he’s not looking for and reads reviews and does a lot of research before buying anything. Yes, as an organization we do need to listen to him and be prompt in the response. My question is, with all the channels – are you really listening? Or is it just adding to the noise which does not make any sense in a longer term. Is your organization really changing with so many customers voicing their opinions, suggestions, complaints and more?

The fact remains that the way we are doing business hasn’t changed much – even though we are engaging and trying to listen to our customers. Social media is much more than a tool to soothe loud customers. It does have the power to drive organizational change and we do have some examples like DELL, Comcast and others who have really embraced it effectively. The idea is have processes and the right metrics of measurement. Trying to ‘make sense’ from all the noise and measuring it rightly is the way to drive organizational change. Social media begins with ‘Trust’ and if you can really drive the information through effective measurements to build backend systems which would ‘fix’ the problems that created negative experiences, the new media would drive an organizational change.

To remain effective in a longer run, engaging your customers to drive organizational change is what is going to ensure you remain effective.  Empowered employees, improved customer experience throughout the organization and powerful processes focusing on the right metrics is the way ahead….

While the Ecommerce market in India is still about one sixteenth of the size of the US, we are already bullish in terms of growth potential of the business. Many players like flipkart.com are already investing heavily in warehousing facilities and even in logistics to services the customers better and faster. I’ve heard that some company is building up its own logistics network across over a hundred cities in India to improve deliveries – while it sounds crazy, I think internet is all about craziness.

Customers , whether in India or US are similar – unforgiving as ever. As a consumer, one does not care about the intricacies in your business. It is whether you delivered the right product, at the right price at the right time which matters to them. There is nothing more disappointing than receiving a damaged product or something completely different than what you ordered for. While my personal experience would say customers in India are a little more forgiving, it takes a lot of time, energy and money for a company to replace the product or to deal with customer dissatisfaction.

With limited resources, the best bet would be to try to focus on a particular product category and improvise on the same. Trying to deal in all product categories would divert attention and focus and probably for a business like Ecommerce, unless you are Amazon or Ebay – it is not a right idea.

For a market like India, a particular category in itself is a multi-billion dollar category and requires deep focus and investment. For new players, mastering a particular category and building up consumer trust and loyalty in a particular vertical is far most important.

I must say those living in India are living in one of the most interesting times now. Things are changing and yes, they are changing for the better. As an entrepreneur there is vast potential around – however, if you are looking at Ecommerce as a business I’d say – ‘Grow up or Go Home’

An appealing User Experience is the key to an E-Commerce venture or let’s say any online venture.  A right UI for your website not only ensures easy navigation but enhances customer engagement and conveys a hidden message of value, quality and transparency.

While debating on your sites user experience, here are a few points which one must keep in mind:

Navigation: Is your websites navigation simple enough for a 10 year old child as well as for a 70 year old adult? Its important to understand that not all users are technology savvy. Users come to your E-Commerce site to buy things and serving what they need easily helps in better conversions.

Also, it is important to understand that not all users navigate the same way. However, there are navigation patterns for normal users for a website. Optimizing the website for the set of navigation patterns would lead to an improved user experience.

Product Search – A key thing which would differentiate your site from others is your sites ‘search’ feature. While tech-savvy users would generally use a variety of ways to find the product they want, a large part of your users would simply search for what they are looking for. Does your site provide multiple search options and lead a user to what he’s looking for easily? I’ve surfed quite a few websites – and most irritating feature of the site has been their search.
When we know that offline retail organizes the products in sections and categories, why can’t the E-Commerce site lead directly to what a customer is looking for?

Checkout – For an Ecommerce website, its very important to have a fairly optimized checkout feature. It is also important to understand your user profile when creating the payment system. While many gaming sites users would love creating an interesting profile, many etailing site customers would simply hate creating ‘one more’ profile for buying a product.
Do you have a guest checkout and a one page check out option? It is found that a simple guest checkout option raises conversions by as much as 22% for certain websites.  Know your customers and it would give you an idea whether it is worth the time and investment in creating such features.

Payments – Do not force your customers to pay via your preferred mode of receiving money. All customers have different needs and respecting them is a good way of building trust and value. For E-Commerce ventures in countries like India, Cash on Delivery options is a must.
Rewards – Everybody likes rewards, isn’t it? Rewarding your customers for certain actions would increase participation and interaction. Consumer rewards should be well planned and administered. A well planned reward system is well worth the time and investment and helps in building consumer loyalty. Also, an incentive to invite friends not only helps increase user loyalty of existing user but also the new user has some amount of loyalty because of a recommendation from a friend.

Transparency – Talk to your users. Your website is not a faceless entity but it’s an important platform where you can interact with your audience. Being transparent about product availability, pricing, showing up discounts and offers effectively, and responding to queries all compounded make a huge difference. Do you have someone to talk to me if I need to? I have a query now – can someone attend to it? You are out of stock on the product I am looking for – Would it be available in a couple of days? – are some very common questions in your customers mind. Do you and your website talk to your customers?
All said and done, Simplicity is the best policy. Remember you are interacting with a community of ever demanding audience and not just a set of users. It’s this simple thought on the back of your mind which will make all the difference.

We all know that not many of the old companies of the late nineties survived in the 21st century. I saw a similar Ecommerce craze in around 4-5 years back as well. While online buying has seen a huge surge, thanks to better internet penetration, ease of use and more trusted providers in the game, the prime question everyone is asking about is – Are we really ready for Ecommerce now? What do the numbers say? For most corporations and investors alike, especially in internet space, a 3 to 5 year break even point is either not viable or acceptable.

To add my two cents to the debate – I’d say people in India shop online for 3 primary reasons in the following order – bargain deals, better range of products and ease of use. Snapdeal and a lot of other deal ventures are doing a great job sourcing the right deals to the consumers. Whether the companies themselves are making money is another point of discussion – but the consumer surely gets an incentive to buy online / offline.

With open source technology options around, starting up an E-Commerce venture has become relatively easy – especially from technology perspective. That makes trying out ideas a little easier as well. And I think that has led to quite a few entrepreneurs jump on the bandwagon  –  just to realize that starting a website and running a business are two different things.

E-Commerce is highly capital intensive and risky, especially in India. Logistics and supply chain, payments, taxation and law operations in India are quite different than in the other countries. The prime thing is an E-Commerce business requires is consumer ‘TRUST’ – and with so many variables in the business, one surely needs a lot of commitment and dedication to build his own successful model.

Entrepreneurs with experience in the US and UK might need to unlearn a lot of things before they can successfully venture into India. That being said, having a niche category is very important. With limited funds at disposal, it is very important that one concentrates on a particular category and get foothold in that before trying out other ones. Trying to supply everything to everyone is a sure shot way to failure – yes, this does not apply to Amazon or eBay but to most of us.

All said and done, a lot of things have changed over the past decade. While changes in eCommerce scenario can be a book in itself, let me mention a few points:

• Internet speed and availability has greatly improved
• Yes, the number of internet and E-Commerce users have increased phenomenally as well
• People are now comfortable making payments online
• Logistics have fairly improved – though there’s a lot of room for more improvement
• The disposable incomes of middle class people – especially in Tier 2 and Tier 3 cities have improved. People in these cities do not have access to all branded products and that’s what is making them buy online
• The technology has also improved over years. There’s a lot of research already available on user experience, payment handling and more – easily available to entrepreneurs
• Integration of mobile devices to the pure play platform

For entrepreneurs, there was never a right time to plunge into an E-Commerce venture than NOW – however, as a word simple advice, make sure you are adequately capitalized, have a specific lesser crowded niche to venture into and have a right team with you !

After all, even if you make a 100 million $ turnover, the prime question applicable to all businesses still remains – Is your E-Commerce venture really making money?

Topspin would handle the sales of physical merchandise while the sales of concert and show tickets  would be managed  by Songkick. Digital music downloads will be powered by Amazon and iTunes.

We are seeing a huge turnaround in a way we consume media and interact with media. While the financials of MerchStore are still unknown, it would surely give marketers a huge opportunity to showcase their products and make a sale then and there.

Fans would be able to buy merchandise such as T-Shirts, toys and even download games and music from the youtube channels itself. Monetizing the Youtube channel cannot be easier than this. Earlier, many marketing agencies strived to create viral videos with an aim to generate brand awareness. While the only reliable measure for success of such campaigns were the number of views generated for the videos, now we’ll have a totally different dimension and possibly a lot of statistics to capture the success of the campaigns as well.

I believe Vimeo and others should follow the suit soon. And Ecommerce marketers, be ready for one more channel with measurable metrics J

With all the ideas, thoughts and suggestions going around increasing conversions, concentrating on repeat customers, shopping cart abandonment etc, we tend to forget that for most small and mid-sized eCommerce businesses, majority of its audience is just window shopping. I have personally worked with quite a few eCommerce portals whose more than 60% of the visitors are just window shopping.  These shops had already put around a lot of effort in so called site design, product modeling and appealing features.

How do we identify window shoppers? Bounce rate? No, that’s not right. We simply measure window shoppers by measuring the number of people spending at least 30 seconds our products pages (including the home page) and not buying. Whether these customers are just spending their time or comparing your products with other sites or may be just trying to get more info on products – these people are important. You have them on your store front – yea they are not ready to buy yet, but you do have a chance to ‘ENGAGE’ them. The idea here is to build a bond with them so that when they are ready to buy, you are the first website which comes to their mind.

If we just go back and recall, we all would have come across websites which we might have visited, found to be good and forgot about it the next hour. We would also have come across websites which we would have visited, somewhere we’d have entered our email id or some contact and we still get an update from that website regularly. Those websites would already be in our mind somewhere and when in need we might also have bought products from them. What more, the website owner may also be connected with you on twitter and Facebook. Does this make sense? If yes, the only thing the second website guys did was to ‘ENGAGE’ with the audience time and again. In India there is a line in Hindi which is very popular – “Jo dikhta hai wo bikta hai”. As a business person, one must never loose a chance to communicate, relate and ENGAGE with his audience.

As per an article in practical eCommerce – After monitoring the shopping behavior of 163 million consumers completing 2.52 million transactions, McAfee SECURE discovered that the average customer waited 33 hours and 54 minutes, or nearly two days, between first visiting a retail site and making a purchase. In 64 percent of the cases, the shopper waited at least one day to buy.
The reasons mentioned by McAfee and practical eCommerce guys are all valid and well agreed upon. However, the point I am trying to make is, how do we ‘ENGAGE’ the customers who delayed their shopping decisions for whatsoever reasons?

Few ways in which we can ‘ENGAGE’ our customers can be:

Use Newsletter effectively – I’ve come across thousands of websites who have a well build newsletter system.  However, I also find that such systems are implemented for the sake of implementation – never optimized or mostly never used. There are huge lists of online and offline customers on hand but the newsletter systems don’t make an effective use of them. Some of them use the system so much that the people in the list are continuously bombarded by ill-formatted information from the website to the extent that they put the vendor in their spam list.

Some questions to ask yourself for your newsletter are:

• Is the placement of ‘newsletter box’ optimized for collection of customer data?
• Are all your customers getting added to your newsletter system? – A very basic question but many a times we find the answer to be negative.
• Are your offline customers added to your email marketing list?
• Is your newsletter design professional as well as precise?
• How often do you send out newsletters?
• Do you have a way to monitor the performance of your email marketing campaign? How do you optimize it?

Add /  Share buttons – Most of the eCommerce sites I come across have a ‘Share’ button to share products on various social bookmarking sites. If not, may be that the starting point. But if you already have a way for your visitors to share things on other networks, here are some questions worth asking yourself:

• Placement of Add / Share buttons – Amazon places the ‘Share’ button on the bottom right corner. I am sure they would have done their due research before placing them there. However, for all small and mid-sized eCommerce vendors, I’d suggest to place the Add/Share buttons where customers are most likely to click. How do we find that? That’s what A/B testing is for

• The best thing about Add this / Share buttons is they provide you with statistics on which websites are your customers sharing your products on. It is not only important to know this but to utilize this information in the best possible way and make sharing on these websites easier

• Do I need to mention, not only your products but also your blogs should be easily shareable ?
• Blog – Have one, update it and use it to interact with your audience
• Am eCommerce website is a business entity without a real face. People just see a storefront with products, may be some opinions and reviews.
• Give a face to your site by writing a blog. Have a detailed page about yourself – share some experiences and communicate with your audience. Let your audience feel related / connected with you. Possibly, have them share experiences as well.
• This works? I bet, it does. When you interact with your audience, people start connecting with you. And needless to say, more the engagement, more the fun and more the sales
• A sincere advise – make sure that the blog is updated regularly. If you do not have time, make sure someone updates it for you.

Social Media – Is it all hype or does it make some sense?

• While marketers are trying to come up with all sorts of fancy ways to measure ROI from social media, for a small business it just means more engagement
• Answer few simple questions for yourself – do you want to listen if a customer has got a suggestion / complaint?, Do you want to know what your customer feels about your products?, Do you want to ‘CONNECT’ with your customer? , Do you think your customer might buy a pair of shoes from you if he has bought a suit? – Do you want a group of people who’ll listen when you want to offer / talk? – If answer to any of the questions if yes, social media is for you. How much time / money you want to invest in social media is absolutely up to you – For SME’s I’d say social media is the best way to ‘ENGAGE’ your audience. Do it right and you have a way to success – do it wrong and you’ll regret trying it.
• Which networks to use for social media – again depends on your audience, your investment in time / money etc.

Ownership –

A visitor is more likely to remember your site if he gets related to the site in some way. Does it mean that he becomes a customer? No. What I mean is if the visitor participates in some sort of poll, contest or may be a small freebie on your website – he’d feel better related to the website. May be saying that – “Become a member of our free shipping community today and get free shipping on your products on your next purchase” may do the trick.

All in all…ENGAGE, ENGAGE, ENGAGE and the results will be phenomenal. One more suggestion – Have a well drafted strategy…..

The mobile payments space is getting exciting and interesting. With major finance companies and banks all investing huge sums in mobile payments, I am sure in a small period of time, we’ll all be using our smart phones to make payments. Who knows owning credit/ debit cards might become a history- something similar to what happened to our beloved ‘pagers’ after introduction of mobile phones.

Apple iPhone users will soon be able to make their payments through their device in front of the contactless payment terminal. A protective iPhone case developed by DevideFidelity will allow iPhone users to make payments in restaurants, retail stores etc via Visa’s contactless payment application, dubbed Visa payWave.

Micro Payment Terminal

Ofcouse a small chip in the iPhone case will do all the wonders. Market trials of the payment-enabled iPhone are expected to start this summer. The technology will work for both iPhone 3GS and iPhone 3G. Smart phones with a slot for memory card will also be able to use the technology b y inserting the chip into their memory card slot.

The mobile payment application can be password protected and utilizes advanced security technology to uniquely identify each contactless transaction. Visa is trying out the new technology in the US, after an initial trial in Japan and Malaysia. I am not sure of the success achieved in these two countries but am sure results would be encouraging enough to roll this out on a larger scale.

Third party vendors and several startups have already been active in this space – mostly covering utility bill payments and micro payments via mobile. Introduction of these contactless terminals would seriously create a revolution in the way we transact.

I wonder slowly they’ll start allowing me to pay via key chains, may be my shoes? Ahh……too many thoughts 

Image source: http://www.2ne2.mn

She logs in and tries to find look for her friends on Facebook who can give opinions on her wishlist. She finds her two good friends Maria and Sally online on Facebook. Barbara asks both of them for their honest opinion on what she is intending to purchase. Which both her friends like what Barbara is intending to purchase, Maria things the Jewelry is not going well with the dress Barbara has purchased. Both of them, help Barbara find the right Jewelry for the dress. Barbara now saves her choice and sends it to some fashion designer for her expert opinion. The fashion designer gives her ideas and helps her make a purchase.

While the above case may not be a reality as of now, it will surely be in a few months or say years to come. The term ‘Social Shopping’ is being used more and more. Bits and pieces of these examples are already put in place by online retailers. We’ll move towards social shopping slowly and steadily and it may not be wrong to say that most of the shopping decisions would be based on social recommendations and interactions in years to come.

I am already seeing a few blogs on list of social shopping websites. While the concept is clear, we are not yet there with the implementation. Kaboodle, Woot, Shopstyle, productwiki….The list goes on.

In my coming blogs, I will put up specific opportunities which retailers can grab to shape up their eCommerce websites for the social networking landscape.

The campaign was tag lined “Wake the Beast” and invited passers-by to text START to short code 51500. The call to action signalled the lights on the car to light up and smoke from the exhaust on the poster.

The person who sent the text message received a link to the Honda’s mobile site more details about the car on his mobile. Using bluetooth technology, the person was also asked to participate in an opinion poll and was also made a part of a permission based marketing campaign.

Now that’s what I call an interest and innovative way to engage your target audience !

Wondering whether an online marketing campaign support this offline initiative or not.