Business musings...

This marketing email from Tom Tom amused me, primarily because of the choice of image of a skier teetering on the edge of cliff.

Whilst this email is in fact advertising speed camera alerts, if you compare the image of the skier with the image from The Telegraph showing the BMW of a driver who was facing a dangerous driving charge having blindly followed his sat nav to the edge of a cliff in West Yorkshire until it was teetering on the edge, I’m sure you will be able to spot the unfortunate similarities.

The joys of image selection! Always something to bear in mind.

Whilst not a ‘cutting edge’ idea, the concept of conversion rates is an extremely powerful one.

Your sales conversion rate (as a percentage) is basically:

([number of sales generated] / [number of interactions with potential customers]) x 100

Whether for online shops (where your sales conversion is the number of visitors who make an order) or for more traditional businesses (where the sales conversion may be the number of telephone enquiries you win business from), the general principle is the same.

I’ll show you the calculations and let you see for yourself.

Current position for this year
Number of website visitors = 500,000
Number of orders = 10,000
Conversion rate = 2%
Average spent per order = £20
Total value sold = £200,000

Increased sales – same conversion rate
Number of website visitors = 550,000 (10% increase)
Conversion rate = 2%
Number of orders = 11,000 (1000 extra orders)
Average spent per order = £20
Total value sold = £220,000 (increase in sales value of £20,000)

Same sales - increased conversion rate
Number of website visitors = 500,000
Conversion rate = 3% (increased by 1%)
Number of orders = 15,000 (5000 extra orders)
Average spent per order = £20
Total value sold = £300,000 (increase in sales value of £100,000)

For every company the figures will be somewhat different, but the concept is still the same: converting your existing potential customers is often more lucrative. The beauty of conversion is that it doesn’t have to cost you anything in trying to find new customers. They have already found you; it is now your chance to turn them into customers.

As cool things go, a flying car is certainly one of them! If you’ve got the cash to splash, then this should certainly be on your list…

Being able to fly and drive certainly opens up your options for commuting! Think of the time saving – that’s got to be worth something!

Church of the Customer picked up the flying car a while back and suggested it was prime material for word-of-mouth marketing: it’s a great idea and if people know about it, they’re likely to talk about it.  People want to talk about cool stuff to their friends, family, colleagues, anyone who will listen. However, people can’t talk about your idea if they don’t know about it and if the channels for communication aren’t easily available, and that’s what Church of the Customer picked up as the problem with the flying car. The company who had the idea (Terrafugia) weren’t making it easy for people to connect and share their excitement about this great product. Ben McConnell (who wrote the original blog) also suggested videos, social media, Twitter etc. to increase participation and help generate word of mouth.

The flying car company now at least have some videos.

In Ben’s most recent post, ‘The flying car flies’ (which includes the first video above) he suggested a multi-media fest, including videos on the front page, to help get people excited and to create a buzz; along with the code to embed the videos to help us bloggers!

However, I’d go one step further.

To create a real buzz you need a real sense of participation. At $194,000 anticipated retail price (when it goes on the market) that’s going to be out of reach for most of us and therefore limit the sense of being involved.

If however Terrafugia were to offer 5 lucky winners the chance to go for a drive/flight in the flying car by entering a special competition, then I’d be excited (especially if they flew me over to America for the prize – I’m based in the UK!).

Then, if they then offered me an extra chance to win for every one of my friends who also entered the competition, I’d happily suggest they entered – for my sake as well as theirs!

At very little cost to them, they could generate huge marketing and PR opportunities.

Within a short space of time you would have generated a buzz and a sense of participation far beyond what could be generated by YouTube and social media assistance alone. Combine the social media, YouTube and an exciting competition and you’d get something that was greater than the sum of its parts!

ps. If  you’re a member of Terrafugia and you’re reading this, you can sign me (and all my friends) up for the competition!

The Google AdWords concept is very simple: connect a customer who is looking for something with a company that is selling something. The better the match, the happier both parties are.

But for people who are less familiar with Adwords and the technology behind them, this concept can sometimes be quite hard to visualise and understand.

Last week, I was attending an initial meeting with a client to explore whether they would like me to update their Google Adwords campaign and drew a brief sketch to take with me explaining how Google Adwords works as a marketing concept. They loved the sketch and we found that it really unlocked the concept in a way that just wouldn’t have happened with words. So, I thought I’d share the pictures with you here…

(To view the full size image, just click on the picture. Depending on your browser settings, you might need to click on the picture a second time to get it full screen width.)

I’ve had a number of conversations with businesses regarding the ’social media phenomenon’; the general feeling is that they should be on Facebook and the like because it’s the ‘in thing to do’ but really, they’re not sure why!

It’s still all about customers

At the end of the day, it was and always has been about customers. A business can’t survive without them. It needs ways of engaging and connecting with both existing and potential business.

Social media doesn’t change this basic business principle. Social media provides a new communication channel for customer-to-customer and business-to-customer.

Therefore, the same rules still apply…

1. Go where your customers go
All social media sites have ‘contexts’. They generally have a defined purpose; function; knowledge focus; or social context. Understand this and you’ll have your answer to whether you should be involved in any particular social media site for your business.

For example, if a social media site has a primarily American social context but you are in the UK selling to the UK market, then it won’t help you much!

Similarly, if it is a car support site and you sell gardening equipment, then that’s not a good start.

Just do a bit of research and then use your common sense.

Here is a list of over 400 social media sites to get you started. It has some categorisation but you’ll need to do a bit more work to identify those that are appropriate for your company or charity.

2. Appropriate communication
Appropriate communication will depend on many factors. It will depend on your business type; on whether it is business-to-consumer or business-to-business; and on how it is appropriate for you to relate to, and communicate with, your customers.

For example, if you tend to have a more formal business-to-business relationship with your customers, Facebook may be the wrong context; you could come across overly familiar and customers may not wish to share at that personal level with you.

However, if you sell to consumers, Facebook may be just the right communication channel. People represent themselves on Facebook (not their employer as they would in B2B) so if they care about your product or service they may well sign up to be associated with you or any groups you create.

It’s a whole new world

Social media may seem daunting at first, but the first step is to give it a go. Sign up for something and start learning. The more you do this the more natural it will become. Before you know it you’ll feel right at home!

Want to find out the other sites that link to your website? It’s easy when you know how! Here’s how you do it:

1. Go to http://siteexplorer.search.yahoo.com. In the top bar fill in your own website URL [1] (e.g. http://www.yourwebsite.co.uk ).
2. Click on  ’Explore URL’ [2].
3. Yahoo will generate a list of websites [3].
4. Click on ‘Inlinks’ button [4].
5. Choose ‘Except from this domain’ [5] and ‘Entire site’ [6].
6. Voila! You have your list.
7. You can also export as this list as a TSV file [7].
8. If you sign up for a free Yahoo account you’ll also get additional tracking features.

What do I do with the list?

There are various things you can do with this list; it is essentially free market intelligence!

1. By allowing you to understand who is interested in your site, the list can help you to better tailor the content of your site to those people/organisations.
2. You might find that there new opportunities to explore if some of the links surprise you.
3. Use the list to check your market positioning and check that you are described accurately by those linking to you.
4. Do the same check with your competitors, which might provide you with an interesting comparison. If they’re ahead of you online, it may be a way of getting new ideas of how to develop your organisation and website.

Tips kindly provided by Hugo Russell from iCentrum at their Social Media Drivetime event.