The annals of e-commerce history will remember the year 2000 as “the year that should have been.” According to research firm Webmergers.com, at least 210 Internet enterprises ran out of funding and folded last year — approximately 75% of them business-to-consumer companies.
These “dot-bombs” should have been more attentive to their burn rates and plotted a clear path to profitability with the $1.5 billion they raised in investment capital. More important, they should have been savvy enough to know that investors have always wanted a return on their investments, and always will. It was ludicrous to think the early days of e-commerce were any different.
“Faster, better, cheaper” never took on more significance than for today’s online marketers. In the wake of such flameouts as eToys, the journey to profitability must be faster and surer than ever to attract the investment community and ensure longevity.
Consequently, at online handbag and luggage marketer eBags, we feel that the concept we call Mind Over Money is one the online industry would do well to adopt. It’s been our mantra all along.
We define Mind Over Money as “the implementation of cost-effective business strategies that deliver value to both your customers and your business at every step along the purchase process — before, during, and after the sale.” A uniquely valuable online shopping experience leverages the strengths of the Internet and its technology to drive key business metrics.
Quite succinctly, this means taking full advantage of all online efficiencies where they exist and focusing on growing the three metrics that matter to the life of your brand: traffic, conversions, and database. And one way to do that is to follow the 10 rules that your brand can live by online. Here’s how we at eBags do it.
Rule #1: Connect your brand to the passion.
The eBags “What’s Your Bag?” ad campaign taps into the emotional aspects of handbag and luggage ownership. Both offline and online, the ads depict the lifestyles of both the famous (Francis Ford Coppola, Gabrielle Reece) and the everyday hero (Hal the ad exec and marathon runner, Mom the business exec) with the bags that are perfect for them. Each ad shows how their bags are making their lives just a little easier. Site visitors can view eBags advertising and read about our celebrity tie-ins too. This amortizes the cost of our advertising over a longer life.
Rule #2: Provide content that facilitates a fast, convenient, and valuable shopping experience.
As with other high-ticket, low-frequency purchases, the decision to buy a bag is highly involved. There are so many choices, so many price points, so many features to take into consideration. To expedite this process, we strive for content that is valuable to the customer on a one-to-one basis as well as to our brand.
For example, visitors to our site can search for luggage that meets their favorite airlines’ carry-on requirements. Original photography, detailed descriptions, and a comparison chart function (“Click here for other products like this”) allow shoppers to evaluate their personalized product “consideration sets” according to key criteria such as price, appearance, and product features and ratings.
Rule #3: Use your Web content to drive down the costs of customer acquisition.
We have partnerships and major content integrations with leading players within vertical markets, such as travel, that make strategic sense for the brand. For instance, the carry-on requirements of a number of airlines is value-added content for sites such as Travelocity and Expedia. By providing this content to the travel portals in exchange for links from their sites, we can attract the right kinds of consumers at a minimal cost.
Rule #4: Let your customers provide you with valuable content.
We solicit product ratings and testimonials from customers by e-mail 30 days after a purchase to post on our site. This customer-driven content accomplishes three things: It strengthens our relationship with existing customers; it provides credible content for other shoppers; and it enables us to devote staff to tasks other than creating content.
Rule #5: Grow your permission-based database as quickly as you can.
We use online sweepstakes — such as our Million Mile Give-a-way, in which users who submitted their e-mail address were entered into a drawing to win frequent-flyer miles — to gain names for our e-mail list. The online entry forms include notification that entrants are granting eBags permission to deliver them e-mails. The sweepstakes also have a viral component that provides entrants an additional chance to win for every contestant they refer to eBags.
Rule #6: Use community to drive content and commerce.
Community adds to a site’s stickiness. As evidenced by the success of our sweepstakes, visitors originate with the intent of entering the promotion but often buy a bag before leaving the site. Likewise, our Travel Community provides reasons for the avid traveler to visit our site more often. Travel Community members can create home pages discussing their travels, displaying photos, and offering recommendations about destinations. Members can also link to other members who have shared similar travels — and, of course, when the time comes to buy a bag for their trip, they’re already at home on our site.
Rule #7: Deliver value from the start and throughout the lifetime of your customers.
The My eBags e-mail marketing program maximizes the lifetime value of a customer by driving significant repeat purchases among its members. Since a bag bought today won’t be replaced for another two to five years, we need our customers to make multiple purchases that enhance different aspects of their lifestyles. The My eBags program uses predictive modeling to deliver bag recommendations based on a member’s original referral source, recent site behavior, and personal transaction history, as well as the transaction histories of others like him.
Rule #8: Find creative ways to drive traffic, sales, and permission at no or low cost.
The My eBags program also helps to lower the costs of acquiring a customer by enabling us to form partnerships with other online brands. Each partner gives the other a special offer to deliver within an upcoming e-mail as an added value benefit to recipeints. Partner offers are timed to complement the My eBags editorial calendar. For example, our September 2000 e-mails to members within the students and children profiles, which had a back-to-school focus, included an offer from SmarterKids.com. We closely evaluate the metrics to ensure that the benefits of obtaining new permissions from partners surpass the potential decrease in eBags sales among existing members. After all, consumers have only so much time and money to shop.
Rule #9: Test, test, and retest.
We continually test our offers, e-mail subject lines, and promotional periods to buyer segments, nonbuyers, and prospect segments alike.
Rule #10: Never lose an opportunity for a sale.
Every eBags employee has his or her very own home page where visitors can reap a one-time 20% savings. This grassroots-marketing program not only works to encourage trial, but it also enables our staff to address any issues that may arise. You too can get 20% off your next eBags purchase (U.S. addresses only, sorry) by typing in http://www.ebags.com/friends/lmartine and beginning your shopping session from there.
It should be of no surprise that, in the aggregate, the above rules incorporate the principles of customer relationship management (CRM). To thrive in today’s new economy, it is contingent upon all e-commerce players to optimize both the value of the customer relationship to the brand and the value of the brand relationship to the customer, at every step along the way. The Internet enables you to measure that value at all times.
Larry Martine is director of relationship marketing for eBags.com.