What did actually surprise me was, according to MYOB, less than one third of New Zealand businesses have an online presence, but those that do earn significantly more than those that don’t. I am genuinely surprised there are two-thirds of New Zealand businesses that still do not have an online presence, and approximately 70% of those do not intend to get online. Another thing that does surprise me is by how little the Internet is actually contributing to the bottomline of New Zealand businesses (by MYOB’s estimates, 5-9%).

There are a few things that I am really interested in:

• Why is the contribution to growth, for those who have a website only estimated to be between 5-9%
• Why are so few businesses leveraging from the power of the Internet to generate greater revenue and profit

Why do websites only make a small contribution to bottomline growth?

A significant reason why the contribution to growth is low is because there is insufficient investment, or the right investment in an online presence. There is still the prevailing view that websites are cheap and that all you have to do is buy a template (or get a free one!) and you’re away laughing.

Generally speaking websites are not cheap, especially if you want them to make a significant contribution to your business or organisation’s growth. A website is a distinct channel, it has to be planned in the very same way as you would the opening bricks and mortar store. This not only includes the design of the site and its content, but the paths to conversion, understanding that conversion takes place in the mind of the visitor and not on the webpage.

Some owners have invested heavily in the design of their site and have still not generated a commensurate return on investment. This can be because little effort has gone into generating a profile of who the ideal visitor/prospect is. It is highly likely that a number of web developers have gone beyond their competencies in advising their clients, when in actual fact they are only designers. anyone contemplating the development of a website needs to ensure they have full compliment of skills and expertise in developing a website, not just a designer.

This really does tell me we are still along way from leveraging obtaining the best results from the Internet, which I think reflects both the lack of understanding and investment in this sales and marketing channel.

Why are so few businesses leveraging from the opportunities the Internet offers?

The world is changing. What worked five years ago are probably less likely to work now. People search and find people and businesses using the Internet. The Yellow Pages are less and less relevant and the Internet is more and more relevant. If you want to be found you need to be found where people are looking.

I had been in contact with a builder who wanted a website to promote his business and put himself on a level peg with others in his trade. After a while he decided he did not need to because business was going very well and there was no shortage of customers. Further, he felt, word of mouth as pwerful and worked very well for him. I agree word of mouth should not be overlooked, but it is just part of the overall marketing mix.

People are also becoming sceptical and not as willing to make direct contact without doing some “due diligence” first. In most cases this will be by undertaking a search for the person or organisation concerned. If you are not there, you are just not there.

Do websites work?

Whether you like it or not the Internet and websites are hear to stay. It is how a growing majority of people interact, get thier news, stay informed and do business. If you are not there, you simply “are not there”.

In the development of websites it’s very important companies not only make a sufficient investment, but channel that investment to where they will get the best return on investment. It is not just about design, it is about content, process and understanding the psychology of your visitor and ideal customer.

Websites can and do generate a return on investment. It is up to website owners to become smarter, by getting not only good developers and designers on board, but strategists and conversion experts who can optimise the success of the site to generate higher returns. I think if all New Zealand business got a website the economy could grow by at least 15%.

Lets take an example and look at the numbers. A restaurant offers a daily deal of a $20 lunch discounted to $8. From that $8 the restaurant owner will have to pay the daily deal website for promoting the deal and doing all the work behind the scene. I don’t know what these costs would be, but it’s imaginable their slice will be 50%. That leaves the restaurant owner with $4 – and that might just be the cost of the ingredients.

The restaurant owner has a shortfall of the costs of labour and the other costs of keeping the restaurant open during that lunch period. Not only that, the daily deal patrons are taking seats from full paying patrons.

do daily deal websites offer an opportunity to generate long term business?

The restaurant owner has got a massive marketing challenge. The loss-making leads that arrive at the restaurant (wanting a $20 lunch for what might just be the cost of the ingredients) have to be converted into repeat business, because it’s only in the repeat business that the owner is going to be able to re-couperate costs and generate a long-term profit.

In this case, I don’t think it likely that the restaurant owner is ever going to break even. Maybe ok if you’re doing a fire sale and want to exit the businesses.

what motivates buyers?

There can be no doubt that buyers are motivated in the first instance (it’s cheap!), but after that we have to look at other reasons why they’ll continue to come back. Many will say it’s to do with loyalty. I think loyalty is a 1980′s concept. People aren’t loyal, they probably never have been. What people are is habitual. People (all of us!) form habits very easily. It’s part of our natural instincts and is one of the reasons we have survived this long on the planet. We find out things that work and then repeat that behaviour over time. Often we don’t know why we continue to do the same thing. if we are asked, we’ll justify it, but that won’t necessarily be the reason.

Every now and then we’ll develop new habits and break old habits. In order to retain customers the marketer needs to give reasons about why retaining that habit is better than starting a new habit, or (in the case of developing new business) why forming a new habit is going to be better in the long run than retaining the existing habit (ie buying from your competitior).

can an $8 lunch change a habit?

Let’s get back to our restaurant example. Can an $8 lunch change a habit? We’ll that depends. I’m sure that some people will probably return as full paying customers of the restaurant if they find the meal lives up to their expectations and the service is great. But many others will have had their habits already formed by the daily deal websites that shoot out cheap deals everyday.

The daily deal websites are creating new habits of cheap deals and cheap dining. The people who come to your restaurant from the daily deal website are ultimately not your patrons, rather, they are the patrons of the daily deal website. So, beware!

The first article in the newsletter was LAQC’s (Loss Attributing Qualifying Companies), which is something I’m not interested in at all. The second item of news was a forth-coming seminar about ACC levies – mildly interesting, but not much to make me do too much about it.

Ok, let’s talk straight. Email newsletters are not a very well understood part of the online marketing equation. That’s the reason why many businesses won’t integrate them as part of their marketing strategy. But the fact is email marketing can be a very effective form of communication and marketing. Where it fails to achieve its objective is where it’s lacks direction and specificity.

I bet the reason why you junk a lot of your email right now is because you are not interested in it. However, I bet, if there is an interesting subject line, you’ll at least open it. And, if that subject is continued further, there’s a fair chance you’ll read it.

It’s all about interest – my interest as a reader. You give me something to read that I’m interested in now,  offers me a benefit, or saves me from some real or perceived pain, I’m going to read it.

So, rather than sending out one dull and bland email, it would well be a better idea to send out two relevant emails to two targeted lists.

In this case how could this company immediately improved its newsletter?

First, by sending out two newsletters. The first newsletter would have been sent to people who have an LAQC. the subject line for this could have been, “How to prepare for law changes for your LAQC”. The second newsletter should have been sent to business owners responsible for paying ACC levies. A possible subject line for this newsletter might be, “Changes to ACC levies that might cost you dearly” (if that is what it was all about!).

Email marketing is a very effective form of communication and making targeted offers to your customers and prospects. messageMaker is a very effective email marketing application that’s both simple to use and track your marketing campaign results.

Let’s make some qualify statements right at the start:

• You will never really know about what drives any result on your website without testing and measuring. Anything other than that is both guesswork and speculation;
• Not all sites are the same, a lead generation site is different to an e-commerce site and therefore where to place the emphasis will be different.

Although there are a good number of elements that could be tested with the objective of optimising the conversion rate, there are four page elements that are easy to focus upon and potentially drive the biggest conversion rate change. These are:

1. Headline copy: This is the first thing people see when arriving at your page. Does this headline have what it takes to create forward momentum in the mind of the visitor?
2. Body copy: Does the body copy answer the objections in the mind of your visitor? Body copy length has become an issue upon which many people have become hung up on. The rule of thumb you should go by is that it should be as long as required to answer the questions in the mind of your prospect.
3. Images: Images need to be appropriate and support the body copy. They need to be relevant and appealing to your channel you are targetting.
4. Forms: Forms are a fact of life on a website, whether you are trying to generate leads or sales. The form layout must relevant to its function. The information you seek to gather must be relevant, not in your eyes, but in the eyes of the prospect.

your target market

The astute among you would have picked up on a few words – “relevant”, “channel”, even the word “prospect”. Online conversion can only take place if you have carefully matched the right channel with the right offer. A common error is to think that generic web pages are always going to be appropriate to drive to0. This is too often seen in the case of pay-per-click marketing, where marketers have the unique advantage of being able to drive specific traffic to a unique webpage. Such an approach provides to ability to create greater relevancy abd therefore higher conversions.

I was reviewing the operation of a recruitment agency. Right in the header it had this nice, cosy statement, written in a hand written font, “The way we see it, A CV is a road map, but the real value of people and the true insights into their potential comes not in an interview, but in a conversation. So register here and and contact us to have a chat.” It really sounds warm and touchy-feelly, doesn’t it.

But before we get all carried away, the reality doesn’t quite deliver on the promise. For when you do apply, you’re told that “whilst we would love to be in personal contat with every applicant, we may be unable to do so due to high applicant volumes.”

But a promise is a promise, isn’t it? That promise is part of your brand, and by not honouring it the credibility of your brand is on the line.

how do we know the ‘open rate’?

The first thing to note is that open rates may not be totally accurate. This is because of how open rate is measured, and without someone looking over the shoulder of all your message recipients to see what the actually open and read, there is, at present, no better way of measuring the open rate.

Open rates are measured by inserting a little 1px by 1px transparent graphic into the body of an HTML message. This little graphic is stored on the server. So when the recipient opens up the email this image, along with any other image you have added to your newsletter is called from the server, and bang – we know that this individual recipient has opened your email.

okay, that’s the theory, but how does it work in practice?

We don’t live in a perfect world and there are a number of things that can cause this statistic to be wrong. Here are a number of things that can result in your open rate to be under what it actually is:

• Some of your recipients may only be able to read a plain text version of your email
• Some recipients who receive your HTML version may choose not the download the images as the email can be read well and meaningfully without it

Over the years email clients, such as Mozilla Thunderbird and Microsoft Outlook have become a lot more rigorous in what they download, and images (which may have malicious programs embedded in them) are one of those items that email clients request the permission of the recipient before downloading.

how can you improve the open rates of your email marketing campaigns?

The first rule of email marketing is “don’t dispair!” Treat each campaign as a learning exercise and let the numbers tell the story. Besides the open rate statistic, you will also be able to track who and how many people have clicked on the links in your emails. This will give you very good information on what is ‘pulling the people’.

There are a number of elements that have an impact on the success of any email marketing campaign. These are:

• Email Capture (the form we use to build targetted mailing lists)
• Open Rate
• Click-thru Rate
• Landing Page

What we are concerned about right now is the open rate.The elements that directly affect the open rate are the envelope fields and the relevance of the offer to the mail list. The envelope fields are made up of the:

• Subject field of the email
• From field

When someone goes to their email, they have in front of them only two pieces of information: the subject of the email and who it is from. What will motivate that person to open your email is a:

• Subject line relevant to their needs and motivations at that particular time, and
• Perceived sense of urgency or risk related to the passing of time.

What the email marketer is attempting to do is create a compatibility between the offer and the motivations of the recipient, wrapped in a meaningful sense of urgency. This also implies that the offer (the reason form the email) is relevant to the recipient.

It seems strange that with only two fields (the subject and the from fields), most email marketers will only use the subject field to appeal to the recipient to open the email. What we should attempt is use the subject line to express benefit and value, and the from field to support the subject line, thereby increasing relevancy.

The web page is a medium for us to engage with the visitor (prospect), to answer their concerns that naturally arise upon arriving. There will be some universal concerns, such as where am I, what can I do and can I trust this site. But there will also be particular concerns, depending on whether the site is an e-commerce site or one designed to generate leads.

conversion – it’s a process

Conversion is not a single act, but a series of steps. By understanding the nature of conversion, it makes it easier to understand and engage with the prospect at each stage. The objective of the online marketer to move the prospect forward (create forward momentum) to the next step and minimise leakage along the way. Creating forward momentum can only occur if the anxieties of the prospect are quelled at each step of the process.

The number of conversion steps will vary depending on the channel source and the objective. For example the number of conversion steps for purchasing online or registering for a newsletter are different, the anxieties in the mind of the prospect are different. However, in order to get the sale or lead each conversion step along the way must be completed in a way that compels the prospect to move forward.

A common mistake in the case of a shopping cart is to assume that because a visitor has added an item to the cart it will then be taken forward to payment. There are still at least two further steps along the way in which the visitor has to proceed through before the product has been purchased. The objective of the online marketer is to ensure that there is sustained forward momentum for the visitor to continue.

It is interesting to note that in those final steps to “getting the online sales”, about 60% of shopping carts are abandoned. While some of this abandonment is due to poorly designed shopping carts, the major factor relating to abandonment is related to how well the online marketer engages with the prospect to answer anxieties.

At each step in this process different different anxieties will surface in the mind of the prospect that must be addressed. For example, is this a good quality product, will I be happy with it, can I trust this website. Each of these anxieties need to be addressed.

There is an arsenal of means by which a online marketer can overcome these anxieties and maintain forward momentum. This includes the use of appropriate testimonials from others who have bought the product, and who have expressed praise for the level of service and speed of delivery. Further, a guarantee and a clearly expressed returns policy can help. Further options that can be used are adding incentives to move forward.

One of the big cons dished up by various web design companies and online marketers is that if we want to be successful on the web (ie generate lots of online sales and leads) you need to practice “website persuasion”. In fact, I’ve just done a Google search on this phrase and found there were 2 million results.

To me this shows that these people have no real understanding of the sophistication of their market. People do not want to be persuaded on the web. The tactics of persuasion ended with the death of the last snake oils salesman. I am sure if you ran an advertisement copied from a newspaper from the ninteeenth century for some miracle cure you would get no response. And yet these are the types of persuasive tactics being promoted by many web development companies and online marketers.

While I would fully concure that there are still a number of unsophisticated buyers online and that you cannot totally cure people of their own folly, but most people are sophisticated and cynical. They have seen it all before. They will not buybecause your words drip with honey. They want proof, credibility and third party validation, perhaps by the way of  testimonials.

Buyers are in control

Buyers don’t want to be sold to, they want to be in control of the buying process. Therefore persuasion will not work. Buyers want you to engage with them. This is because people do not buy from websites, they buy from people. Buying is an act of engagement, even  on a website.

Of course, this does not mean that a landing page should not have the means to buy, subscribe or register. In fact and landing page is a very specific page on a site where you would expect this to happen. However, you cannot force people to buy from you.

Persuasion can often lead to the creation of confusion in the mind of a prospect, because what they want is clarity and for you to demonstrate a clear reason to buy (or take a specified action).

Clarity is pivotal to online success

The best way to be successful on the web and in website conversion is to ensure that you understand your market and can offer them a product or service that they want and to be able to meet and understand their concerns, fears and anxieties that are particular to that specific channel. You don’t need persuasion, you need clarity.

I was recently reading a blog about email marketing and branding. It was, as you might well imagine, written by a designer. The crux of the blog was that if your email newsletter was not carefully designed and branded it would not get read and would summarily be dismissed to the delete folder.

A rather bold statement to make and it made me wonder upon what foundation these claims were being made.

I say this because, while email marketinging can be very effective, there are a number of challenges that the email marketer faces, and the branding/design is but but one. I might even be bold enough to say that design and branding might even be a minor consideration. This is because for most email clients you have to actively turn images on to view the branding and design of an email, and if people are anything like me (read: lazy) they won’t necessarily turn images on the read the email.

If you are relying on the branding and design of your email to achieve the objectives of your email, then you may as well pack your bags and go home.

Before we move on let’s get it clear what I am saying. I am not saying that all email marketing should be plain text. What I am saying is that wrong to suggest only emails with images and branding will achieve the goals of the email. There are many examples of email marketing that are only in plain text/simple html that generate for their owners a healthy revenue and achieve their conversion targets.

I think this should bring up a note of caution for those involved in or considering email as a marketing and sales strategy. You need to be cautious about engaging the services of designers who have little understanding about email marketing. we should call these people “little picture” designers. This is opposed to the “big picture” designers who understand that their’s is just one part in a much bigger game.

Email marketing carries with it a number of challenges if it is to be an effective comunications and marketing tool. The first challenge that it faces is being opened by the recipient, this means that the enevelope details (subject and from fields) need to be used creatively and in a way that is specific to the subject of the email.

Once you’ve got through that challenge, it comes down to the message you are delivering. If the message you are delivering has very little to do with the envelope details, there’s a high probability that you will severly irritate your reader and the message will be deleted. The content of the email must be specific with a single call to action.

As an email marketer, you will be interested in three main statistics:

1. Open rate
2. Click through rate
3. Conversion rate

There are a number of tools and services you can use, but you might like to look at messageMaker as an email marketing application. This tool can be either self managed or managed on your behalf.

It appears the underlying assumption is that once the traffic starts arriving they will naturally start buying or registering – no questions asked!

Unfortunately, the reality different. People may be attracted in coming to your site because it is listed high in Google, but on arrival they are confronted with many obstacles that prevent them from either buying or registering.

There can be many on page factors that make it difficult for people to perform the action you would like them to do. For example, there can be a lack of congruence (continuity) between the search engine listing and the page (in other words what you have promised on the search engine listing, is not what is obvious or delivered on the page). Further, a page may have too many conflicting options that make it difficult for visitors to select from. Or, the process for purchasing may be too difficult and confusing. It is always a bad assumption to make, that because the page looks good, it will perform its function and convert.

I see no point in optimising a page for search engines, if no effort has been made to optimise the actual landing page so that it becomes easy for a visitor to not only fulfill their objectives in coming to the site, but also yours.

I am sure I have said this in a previous blog, I can see no point in undertaking search engine optimisation on a page if it currently performs poorly in terms of conversion. Getting more visitors to the page will not increase the conversion rate when there are inherent on-page issues that first need to be corrected and tested.