Increasing sales conversion rates offers a greater ROI than what you can get from optimizing your traffic; either from paid or earned media. The math is simple – even if many never do the calculations. Companies with higher conversion rates almost always have better marketing efficiency ratios (net contribution/marketing expenses.) The upside is that these companies make more money and that’s a good thing. The downside is that it’s hard work to accomplish better marketing efficiency ratios. These companies are led differently; they have higher levels of collaboration and higher standards of accountability.

The top performing companies consistently convert visitors to sales at rates in the double digits. They’ve been doing that for years, while the vast majority converts at low single-digit rates. The gap between the top performers and the middle of the pack continues to grow. I have two questions for their CEOs.

1a. If you sell online, do you convert at least 10 percent of your visitors to sales?

1b. If your online efforts are geared toward lead generation, do you convert at least 20 percent of your visitors to leads?

2. So do you know exactly why your company doesn’t convert better?

It can’t be that the company’s already making so much money that it doesn’t matter. It can’t be that the company doesn’t care enough about their potential customers to make sure they get exactly what they were looking for when they visit. It can’t be that someone in the company is already “responsible” for conversions so you stopped worrying about it.

If as CEO, you had a sales force that was underperforming the market leaders by a factor of 500-1000 percent, you couldn’t just point to the VP of sales. As the CEO, you would also be accountable. Of course, this assumes that you have the equivalent of a VP of sales responsible for the marketing efficiency ratio. In my last column, “Leadership for the Marketing Optimization Team,” I explained what kind of people companies need and what kind of backgrounds they should have.

What follows are the more likely reasons that companies underperform online. Perhaps the CEO still doesn’t know what factors of the customer experience impact sales. Perhaps the CEO still doesn’t know what projects or what departments to favor. Perhaps the CEO still simply doesn’t know what truly needs to be done to optimize the marketing efficiency ratio.

I’m disappointed. I feel somewhat responsible after evangelizing about accountable marketing for more than a decade. I suspect if these companies’ shareholders knew just how much money was being left on the table they would be too. Ignorance is not an excuse and in business it isn’t bliss.

Nobody has been involved in e-business for two decades. There are too many not-quite experts, over-promising tool vendors, and self-proclaimed pundits demanding attention. It’s the responsibility of executive management to create an expansive environment where learning in ongoing silos is less important than customers, and optimization isn’t a project but rather a habit of great execution.

Stop paying attention to what your peers are doing (so-called best practices) and start benchmarking against your customers’ expectations. Can you meet or exceed those expectations? Your conversion rate will be a leading indicator. Conversion rates are a measure of your ability to persuade visitors to take the action you want them to take. They’re also a reflection of your effectiveness at satisfying customers, because for you to achieve your goals, visitors must first achieve theirs.

Columnists receive a lot of feedback. As a reader of this column, you’re likely part of the choir I’ve been preaching to for years. I hope you enjoy the column and find it useful. If you agree or disagree with this column, then please direct your comments not only to me, but also to the CEO.

I rarely get new questions I haven’t written about before in this column – as I approach my 11th year as a ClickZ columnist. Yet, at SES Chicago this week, one of the attendees asked me how you go about building out a marketing optimization team. What kind of people do you need? What kind of backgrounds should they have? I know I’ve discussed this with clients but I haven’t written about it before.

First, please notice that, I did not call the team the landing page optimization team or the conversion optimization team. This organizational monstrosity is part of the we-work-in-silos-but-pretend-to-cooperate mentality that produces poor and disconnected experiences for customers. For digital marketing efforts to maintain consistency across all channels, traffic generation needs to be intimately connected to your website and if appropriate your offline experience – after all those are the experiences promised. Never forget that your website is the glue that binds all your channels together.

Jeffrey Eisenberg, my brother, likes to remind people that in our increasingly transparent experience economy marketers are no longer paid to make promises that the business has no intention of keeping. If you’re still in an organization that thinks they can promote their way to success, bail now. Experience is what matters and you better deliver better than what you promise or the world will quickly know.

Is building a successful optimization team possible? Yes! Based on my experiences working with and training successful optimization teams and the research I have seen from eConsultancy and MarketingSherpa on the topic I can tell you how to make optimization succeed.

The first and most critical position is to have someone at a Vice President or above level that is in control over conversion rates directly responsible for your optimization efforts. They along with their staff (we’ll discuss shortly) should all be incentivized directly based on their results of improving conversion rates and revenue. The KPI should relate to marketing efficiency. There are a few ways to calculate this but gross margin over marketing expenses is my favorite.

This leader should be the online equivalent of your offline VP of Sales. This executive should have direct accountability to someone in the C-Suite who supports the effort. This person should be both extremely curious and driven. This person should also possess a high degree of empathy for the customer and the customers’ experience. This person is also a competent jack of all trades with significant understanding of online marketing methods including: search engine marketing (SEO & PPC), affiliate marketing, display, social media, etc. They’ve probably been reading a bunch of the books on this list I put together. They will need to work collaboratively with all those teams and the web analytics group to segment and continuously tweak both the traffic driving efforts along with the site experience efforts.

I’m not done. This person should be comfortable working with a variety of methods of identifying insights and optimization techniques. Econsultancy’s 2011 Conversion report found that companies whose conversion rates have improved over the previous 12 months are using on average 26% more methods to improve conversion than those companies whose conversion rates have not improved.

Irrespective of the leader of the team; it is very important that the culture of your organization allow for intelligent risk taking so that this person is empowered to try radical efforts to improve conversions and not simple methodical efforts. A strong analytic background is truly not required. Nevertheless, this person should have the ability to be able to use data to tell the story of what is happening to your visitors based on that data they gather themselves or they get directly from an analyst. I can’t emphasize strongly enough how much more important it is to be connected to the narrative of the experience than the data it leaves as residue.

This is generally why most traditional web analysts don’t make for good optimization team leaders. They love the data diving but not the storytelling and brand value.

This person must also have the authority to draw upon a steady stream of talent ranging from web analysts, creative resources (designers, copywriters, videographers, merchandisers, etc) as well as IT resources in order to be able to execute on a continuous basis. Ideally there are resources dedicated to the optimization team but they can be shared as long as there is a strong value placed on prioritization and execution in the organization. This team should not exist as a vacuum within the marketing organization but should draw upon the knowledge and experience of the media team including search, display, email, affiliates and even offline media. The research shows that organizations that have more people dedicated to improving conversion rates tend to improve their conversion rate the most. Not a big surprise I am sure.

Lastly, in order to be successful you need the tools in place to have the agility to gather insights, create ads and landing pages (or paths), refine marketing campaigns and pages, launch tests, & segment and personalize web site experiences and are not restricted by the company IT department. Allow this person to be trained and train your team in the art & science of marketing optimization and allow them to create a structured approach to conversion and you can virtually guarantee you’ll squeeze a lot more conversions from all your marketing efforts.

The reality is I have only met a few dozen of these individuals who have this experience over the past decade. I’m sure there are some I haven’t met yet but they are a rare breed. These leaders are going to have to be trained and mentored in order for more companies to see the massive traction that these leaders have brought to their organizations. You can’t outsource this core competency or downplay it.  It’s a serious commitment but one that has a high payout over the long term.

P.S. Ever wonder why the leaders in conversion out-perform the average conversion rates by a factor of 500-1000%? Think compounding! For example a 5% improvement every month for a year is an 80% increase. Steady disciplined optimization is not a project it’s a core competence for industry leaders.

Our mentor, Roy Williams, described shoppers as operating in either one of two modes: transactional or relational, a few years ago. At that time some of us loafed around virtually, exchanging emails with friends, trying to complete a list of reasons that motivate people to buy things. (Thank you, Tom G. & Brett F.) More recently, we returned to compiling the list with the rest of my colleagues. Trying to understand these types of things is what drives us. It also benefits our clients.

What follows below is what we came up with, albeit likely incomplete. As you read this list, can you identify which of these motivations is relational and which are transactional? Can you see where they each fit within Maslow’s hierarchy of needs [define]? Will you help us find additional motivations?

Some of these are self-explanatory. The forces that influence whether people buy include:

Basic Needs – We buy things to fulfill what Maslow describes as the bottom of his hierarchy; things like food and shelter.
Convenience – You need something now and will take the easiest or fastest path to get it. Think about the last time you were running out of gas, or were thirsty and found the nearest beverage of choice. This could also be choosing the safe vendor (no one ever gets fired for hiring IBM), purchasing something to increase comfort or efficiency.
Replacement – Sometimes you buy because you need to replace old things you have (e.g., clothes that don’t fit or are out-of-date). This could be moving from a VCR to a DVD player.
Scarcity – This could be around collectibles or a perceived need that something may run out or have limited availability in the future. Additionally, there’s a hope to gain a return on investment, such as collectible or antiques; anything that accrues value over time.
Prestige or Aspirational purchase – Something is purchased for an esteem-related reason or for personal enrichment.
Emotional Vacuum – Sometimes you just buy to try to replace things you cannot have and never will.
Lower prices – Something you identified earlier as a want is now a lower price than before. Maybe you were browsing for a particular large screen TV and you saw a great summer special.
Great Value – When the perceived value substantially exceeds the price of a product or service. This is something you don’t particularly need, you just feel it’s too good a deal to pass up. (Like the stuff they place near the end caps or checkout counters of stores.)
Name Recognition – When purchasing a category you’re unfamiliar with, branding plays a big role. Maybe you had to buy diapers for a family member and you reach for Pampers because of you’re familiarity with the brand, even though you don’t have children yourself.
Fad or Innovation – Everybody wants the latest and greatest. (iPhone mania.) This could also be when someone mimics their favorite celebrity.
Compulsory Purchase – Some external force, like school books, uniforms, or something your boss asked you to do, makes it mandatory. This often happens in emergencies, such as when you need a plumber.
Ego Stroking – Sometimes you make a purchase to impress/attract the opposite sex; to have something bigger/better than others, friends, etc. To look like an expert/aficionado; to meet a standard of social status, often exceeding what’s realistically affordable to make it at least seem like you operate at a higher level.
Niche Identity – Something that helps bond you to a cultural, religious or community affiliation. Maybe you’re a Harvard alumni and Yankee fan who keeps kosher. (You can also find anti-niche identity by rebellion, assuming you’re pretty comfortable with irony.)
Peer Pressure – Something is purchased because your friends want you to. You may need to think back to your teen years to think of an example.
The “Girl Scout Cookie Effect” – People feel better about themselves by feeling as though they’re giving to others, almost especially when they’re promised something in return. Purchasing things they don’t need–or wouldn’t normally purchase–because it will help another person or make the world a better place incrementally is essential certain buying decision.
Reciprocity or Guilt – This happens when somebody–usually an acquaintance, or someone rarely gift-worthy–buys you a gift or does something exceptionally nice and/or unnecessary. Now it’s your turn to return the favor at the next opportunity. Examples:

• Event – When the social decorum of an event (e.g., wedding, bar mitzvah, etc.) dictates buying something or another.
• Holiday – ‘Nuff said.

Empathy – Sometimes people buy from other people because they listened and cared about them even if they had the lesser value alternative.
Addiction – This is outside the range of the normal human operating system, but it certainly exists and accounts for more sales than any of us can fathom.
Can you think back to the last time you bought something and fully explain the reason why?
Fear – From pink Taser™ stun guns to over-sized SUV’s to backyard bomb shelters–and even stuff so basic as a tire pressure gauge–are bought out of fear. So, before you go knocking “fear” as a motivator, ask yourself: Are you Y2K compliant?
Indulgence – Who doesn’t deserve a bit of luxury now and then? So long as you can afford it, sometimes there’s no better justification for that hour-long massage, that pint of Cherry Garcia ice cream, or that $75 bottle of 18-year single malt scotch other than “you’re worth it” (best when said to self in front of mirror with a wink and/or head tilt).

These are the things we’ve helped clients think about. We hope this list at least gets you started. And let us know if you need help understanding your customers motivations. It’s what we do. But in the meantime…

What do you feel motivates people to buy? More importantly, what makes them buy your product of service?

There was a surprise last minute addition to the agenda at my last presentation.  I keynoted in Oslo for the SEM Konferansen on September 22nd and then was offered an opportunity to present something brand new (lucky I was working on something brand new) to a small group on the last day of the conference. Not many people were able to attend, but  it was videotaped. The presentation you can watch was originally intended to be part of a 90 minute workshop.  The night  before I chopped it down to 45 minutes for this session. The presentation still needs work but the topic is timely so I thought you might enjoy it.

Here is a description of the session:

Think Differently: 10 lessons learned from Steve Jobs and his marketing, retail and customer experience teams

Apple’s meteoric rise to the become the most valuable company in the world has many lessons for today’s marketers. How is it they leaped into the direct to consumer retail environment only over the last few years, yet outsell most of the best retail brands by a factor of 10x per square foot. Why are they among the most loved brands? Bryan will explore 10 insights learned from Steve Jobs and his marketing, retail and customer experience teams and share with you how you should be applying these insights to your business.

View the presentation.

Let’s get right to that list….

1. Online Marketing budgets aren’t allocated to enable you do to the job right.
2. Because of #1, I am sure you could list 98+ more reasons!

Too often the C-Suite has not figured out that your digital marketing (I include web, email, mobile & social here) activity is the glue that binds their brand together. They miss that online is that initial first impression before most people even decide to step into your physical store. So it demands that online live by the metrics but rarely gets the benefit of those squishy soft “brand” dollars. It’s 2011 and digital marketing and digital experiences are still way too often treated like the red-headed step child of traditional marketers. These digital marketers are expected to perform at incredible efficiencies which are never expected nor demanded from their traditional marketing counterparts.

As I stated in my last column, Conversions: Who’s Job is it Anyway; in the offline world there is a VP of Marketing and their counterpart the VP of Sales, but no such thing exists online. That column elicited a comment from a reader stating that you can’t “really offer an employee 8 hours per day 5 days per week and a good paycheck just for conversion optimization (CRO).” He went on to babble about how he would rather see a PPC manager or an SEO manager do CRO as part of their job.

Let me start by sharing the ugly truth! Most PPC accounts are a mess. We’ve audited many of them looking for conversion optimization. At best they need tons of work just to get them to a satisfactory level . Nevertheless, at least they seem to hit most of the core metrics at least in part because the media has still been wildly misattributed. Most of the PPC managers don’t have the additional bandwidth to simply maintain their account efficiently but yet you want them to have the time and learn the vast range of multi-disciplinary skills needed to do conversion optimization? Huh? Digital marketing is pretty complex work.

Most SEO managers are in the same boat. Just ask any consultant or Search Marketing platform vendor who has worked across enough accounts and they’ll tell you how 95%+ of all accounts are a mess. Oh yeah! The same is true of web analytics analysts as well.

These aren’t simply my opinions – go talk to them.

Now ask anyone who has ever been in the online optimization business and you’ll learn the same thing for each one. The budget to launch new websites or new campaigns tend to be healthy but what might be left over to improving the campaign or website after launch is worse than anemic.

To wring out significant returns on your investment, optimization must be an ongoing part of your daily marketing activities. It has to be a habit. So if you’re aiming to come to a point where you’re “finished” with optimization, you’re missing the point. Optimization is not a project, it is something you do daily to maximize the revenue of your marketing efforts.

Over the last few years the job of the conversion optimizer has been aided by the explosion of applications and services to help you improve your website or marketing efforts. Many of these services are low cost or even free! I often recommend that companies should get good at free first, then pay for a more robust solution once you have adoption.

A big excuse for the lack of optimization was the lack of access and resources to the tools. Web analytics, A/B & MVT testing tools, personalization tools and even usability studies were expensive, that is no longer a valid excuse.

For years I have blogged a yearly list of these tools. Three years ago I published my first blog post listing 33 free tools to improve your website, the following year it grew to 69 tools, last year it mushroomed to 99 free & low cost tools to improve websites and marketing efforts. This year I wanted to publish over 120 tools when Jeffrey asked me if I was out of my mind! That was my clue that it was time to launch a website dedicated to online marketing tools. You can check out the website at http://www.WebsiteTestingTools.com.

These tools allow a CRO specialist to spend his day gathering insights about your customers and your campaigns, identifying opportunities for creating new landing pages, developing new hypothesis for tests, figuring out how to segment and target your customers effectively and how to improve each and every one of your marketing campaigns. If you only have a handful of campaigns you may not need a full time employee but any business doing more than a couple of million dollars in online revenue probably does and the larger the company the more resources that will be needed.

The only excuse for not optimizing vigorously now is just being too lazy, ignorant or worse to prioritize the optimization of your efforts. I know that this column might hit a nerve. So if you’re a CEO or a senior executive who has been sent this then I have one question – when will you take optimization seriously?

I just presented the keynote at the European Conversion Summit in Frankfurt, Germany. It was the best attended conversion-oriented conference I’ve attended to date. In a discussion with the conference organizer, André Morys, about the number and backgrounds of the people attending, André apologized that Germany was at least two years behind the United States. Baloney! I told him I couldn’t agree and that I was very impressed with the number and quality of people in attendance.

Nevertheless, I told André the biggest obstacles his conference and his company face when focusing on conversion. How many people in the room actually have “conversion” in their title? For search conferences, you have directors and managers of search; PPC managers. At social media conferences, you have those whose titles include social media or community. At web analytics conferences, you have marketing analysts.

But who owns “conversions” in your organization?

Do a search on Indeed.com for a job listing with:

“search” – 165,252
“search engine”- 11,467
“SEO” – 7,966
“SEM” – 4,592
“PPC” – 1,996
“social media” – 29,170
“online community manager” – 17,401
“web analytics” – 16,691
“conversion optimization” – 2,348
“landing page optimization” – 907
“multivariate testing” – 885

E-commerce managers may be responsible for revenue; merchandisers for the product selection and presentation; user experience and development teams for the experience; and analytics for measurement, but it’s unclear who owns the crucial multi-disciplinary function of conversion.

I have seen a handful of companies with individuals who have conversion in their title but they are quite rare. In those companies that do, their conversion people have access to tools and resources that demonstrate a very different corporate metabolism than those that don’t have them. These companies are also passionate about being customer focused and data driven, testing continuously, understanding lifetime value, and are quick to act. Most companies aren’t structured to make conversions a core responsibility. They may assign “conversions” to the PPC manager or even the director of analytics, but they only look at it from their narrow vertical and they aren’t given the resources needed to gather the insights, to create and modify landing pages, and to set up personalization and go beyond landing pages into complex testing of customer paths.

An Econsultancy study found that 48 percent of companies do not think they have direct control over conversion. In fact, this is why most companies spend about $92 to drive visitor traffic but less than $1 to convert them.

When my brother Jeffrey and I first began evangelizing for conversion optimization in the late 1990s, most companies had dreams of the “new economy” and accompanying fantasies of “eyeballs” being the most important metric; we naively saw this as a C-suite responsibility. Today, most organizations have many people responsible for driving traffic but virtually no one responsible for converting that traffic into revenue. In the offline world’s equivalent, there is an executive responsible for sales (conversions) and an executive responsible for marketing, but online marketers have no counterpart.

We do know how and why this responsibility has escaped the C-suite’s notice – they don’t understand that they can control conversion. How else can you explain the average e-commerce conversion rate at 3 percent while market leaders consistently convert 15 percent and upwards?

The C-suite doesn’t know how to get their organizations there, and there aren’t really a lot of people out there with the skills and experience to train departments to become masters of the various disciples required of conversion optimization. Most are afraid to raise their hands and ask the right questions out of fear of demonstrating ignorance. It isn’t all their fault.

Online success and the meteoric growth rate the online channel has enjoyed masked the need to “grok” conversion. But as today’s paid traffic experiences cost inflation and as traffic continues to fragment with the growth of social media channels, companies are coming to the realization that conversions can’t be ignored.

In my first ClickZ column on January 8, 2001, I wrote:

For all that’s being written about various marketing strategies, success in e-business, as in any business, isn’t about marketing or about design; it’s about sales.

Ultimately, it’s about the conversion rate: the percentage of visitors your site can turn into buyers. Lots of dot-coms have turned into dot-bombs because even though they spent tons of money on “sexy” designs and tons more driving traffic to their sites, they overlooked the tiny fact that they needed to sell to visitors once they arrived at the site. The sad thing is, many of those visitors would have bought happily and could have left delighted.

Many struggling dot-coms would be successful if they woke up to e-sales, and many failed dot-coms would still be around if they had done the same. Don’t get me wrong. Marketing is an essential part of the e-commerce equation. Marketing paves the way for sales. But it’s only where sales and marketing overlap that buying happens.

Are conversions and sales your job? If so, please introduce yourself.

If not, what are you doing to increase your conversion rates, and do you wish your company would and could do more? Please let me know in the comments below.

Building an optimization culture is hard and it seems that it might be getting harder. My friend Avinash Kaushik, the analytics evangelist at Google, recently shared an important stat and his observation on Google+:

Only 22% of companies have a strategy that ties data collection and analysis to business objectives. Down from 25% last year. [Source: Econsultancy Online Measurement & Strategy report http://goo.gl/OGscu]

The problem is not the tool. The problem is you and me and our management.

Think of it another way: 78 percent of companies are just hoping for success by guessing how well they are at providing their customers quality experiences. While we may all be suffering from data diarrhea, making decisions based on analysis of our metrics is just unclear, and they fear failure. Some call this assumption marketing. For over a decade, I’ve called this a symptom of accidental marketing.

One key question is why did the numbers go down from 25 percent last year to 22 percent this year? My answer stems from a simple economic theory that holds true in most marketplaces. The rich get richer! It happens in finance, it happens in SEO with the Filthy Linking Rich, and it happens in data-driven cultures. Companies that have a culture of analytics and testing seem to pull in those individual talented people who show up at the odd company and get frustrated that they have no impact or value there. I have seen this countless number of times with friends in this industry. It’s frustrating, like pushing on a rope.

When leadership’s ability to focus on optimization is dysfunctional, they keep relying on the next “big idea.” They favor long CYA meetings instead of managing to the metrics that impact their business. They continue to do business largely the way they have for the last 20-plus years, even though everything around them tells them the world has changed. Meaningful change is not just releasing a cool mobile app and launching a new HTML5 website. It’s not the medium but a management and business cultural issue that needs reexamining.

As Marc Bruns commented on Avinash’s post:

The fact is becoming an optimization culture is hard. In my experience, implementations of any kind of data-driven metrics, analytics face the hurdle of an ‘irrational exuberance bubble’ when they begin … early on it seems like it will be easy to change the world, the tools seem so powerful … but then people, politics and turf battles enter the picture; [when times get the least bit tough] management tends slips [sic] into old habits, ‘the old shoe is comfortable.’

I’ve harangued many and even written before about what it takes to build optimization into your business culture. What’s the first step?

Focus! Pick your key performance metric and get your team obsessively focused on continuously improving the marketing efforts and time spent achieving those numbers.

Web analytics industry pundits have suggested that the key to success is better investments in people and process and less on tools. That’s wonderful! Nevertheless, neither of these matter if the investment isn’t on changing culture first.

So companies bring in the tools and assign someone inexperienced to start distributing reports and they start to believe that they are data driven. Surprise! There’s no profit from having a web analytics report; you make money from making changes and experimenting based on the insights available from the data. In order to do web analytics correctly, it needs to generate a to-do list for you.

However, as Philip Walford, another commenter on Avinash’s post adds:

You’ve been scrupulously data-driven in identifying where problems and inefficiencies are located, but now you have to switch and start to hypothesise about why those problems and inefficiencies exist. Two entirely different disciplines: rare to find them in one individual, almost impossible to find them in one organisation.

It is this sluggishness of corporate metabolism to change that has allowed many in the retail industry to forfeit their sales to Amazon.com, which now dominates approximately 30 percent of all U.S. e-commerce.

Noted author Stuart Wilde says “Poverty is restriction and as such, it is the greatest injustice you can perpetrate upon yourself.” Are you condemned to be data rich but optimization poor?

I don’t think it is because companies don’t care or haven’t tried. Are the tools to blame? Partially! First and second generation tools flourished by the promises of riches to come by just tracking the data. Many invested significantly in these tools, but couldn’t find the people to support it. Now many free tools exist and more people are used to using these tools. I’ve always said get good at free and then pay. So are free tools the answer? Nope! Just because someone knows how to use the tool, doesn’t mean they can “convert” management into a data-driven culture.

It’s increasingly harder to hire truly qualified candidates; not that many exist in the first place. When my brother Jeffrey and I built our agency, we’d hire young college graduates who displayed tremendous amounts of curiosity and trained them in our processes and they were turning out insights that rivaled their high-priced MBA alternatives. Training certainly is one option, but it doesn’t work if it cannot be evangelized throughout the whole organization. It fails if all it does is make one or two optimization/analyst employees smarter, because in the long run, those employees will find work elsewhere.

Will you commit to optimization riches or will you remain poverty stricken? Isn’t it time to focus on what the numbers are already telling you?

P.S. If you are a business that is committed to driving a data driven/optimization culture, please reach out to me I have a handful of individuals looking for great opportunities to bring their talent. If you are a business that wants to become data driven and optimization focused let me know and I will see how we can help you.

I originally published Accidental Marketing on ClickZ September 10th, 2001. How much in our world has changed in the last decade? Has your organization changed to make sure they aren’t doing any accidental marketing? What are the obstacles holding organizational change back?

Here is the article as it appeared when I first wrote it:

—————————————–

No, no, that’s not the title of Seth Godin’s next book. “Accidental marketing” refers to a pervasive Web-based trend that is focused on the “how” of marketing but not on the “what” or the “why.” It’s frightening to watch people get all excited about new technology that allows them to perform miracles and then track the results of their miracles with thousands of metrics — when those miracles have little or nothing to do with actually converting traffic or closing a sale. I’m no Luddite, but I often don’t know whether to laugh or cry when I read about these brilliant new marketing tools.

So what’s wrong with the greatest and latest marketing tools? Nothing at all is wrong with them per se. However, I’d like you to picture the following scenario. You and I decide to get into the entertainment business, perhaps making movies, since I hear you can make big money from it. We find some investors, buy some great real estate for the studio, buy all the latest equipment, negotiate awesome distribution deals, contract with some high-priced talent (how about Tom Hanks and Julia Roberts — let’s not spare a dime), then spend like mad on advertising for a movie about… how wall paint dries differently in different climates.

Can you imagine how unsuccessful we would be? It’s not the tools of the trade (the “how”) that would cause us to fail but rather the “what” and the “why.” The two questions that we failed to ask are, “What will people perceive as valuable enough to pay for?” and, “Why can we provide it better than the competition?”

It’s obvious, at least to most of us, that even if we buy the same basketball shoes as Michael Jordan, that alone won’t give us his abilities. Great marketers, like great athletes, aren’t born that way; they are trained to develop their natural abilities and hone their skills. Persuading people to take action is both an art and a science requiring lots of intelligent planning by professionals trained in the fundamentals of marketing and in exactly how marketing needs to be done to support sales.

Here’s the definition of marketing according to the American Marketing Association: Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. Did you notice how broad that definition is? Is that what you think of when you think of marketing? In most companies, the marketing department is dominated by either creative or analytical personalities. Instead of looking at the marketing process as a holistic strategy concerned with the objectives of the larger business, the process becomes tactical and emphasizes analyzing or separates it into parts. It’s this sort of myopia that is the leading cause of accidental marketing, which is getting customers in ways that have nothing to do with, or even in spite of, your marketing program.

By now you may be anxiously thinking, “How can I tell if my business is practicing accidental marketing?” As you continue to read, be brutally honest with yourself about your responses to the following questions:

• What came first, the idea for your product or service, or the understanding that there was a market need that needed fulfilling? If you answered the idea came first, that’s a big red flag.
• Who are your customers?
• What do they really need?
• What benefits (not features) of your product or service satisfy the real needs of your customers?
• What about your product or service is unique, and how can you answer the customer’s question, “Why should I buy from you?”
• What other options does a customer have to buying your product or service (including doing nothing at all)? Are they better options, or worse?
• How does a customer make a decision to buy products or services like yours?
• What does your customer need to know before he or she will buy from you?
• How does your customer perceive not only your product but also your company versus your competition?
• What is the process a customer goes through before buying your products or services?
• What is the value of your product or service to the client? (This is not the price.)
• What would a customer say if a colleague asked him or her to recommend your product or service?

If you and your marketing department don’t have detailed answers to all of the above questions easily rolling off your tongues, then you are most likely engaged in accidental marketing.

Also, if you have one or more of these symptoms, you are engaged in accidental marketing:

• More effort is spent discussing how things look than what they convey.
• More effort is spent tracking metrics than understanding what they really show of customer perception and customer behavior.
• More effort is spent explaining what you offer than listening to what your customers want.
• More effort is spent attracting prospective customers than figuring out how to convert them to customers.
• More effort is spent attracting new customers than keeping existing ones.
• More effort is spent looking for and implementing the latest and greatest technical gimmick than adapting time-tested persuasion principles that have been proven to work.
• Marketing doesn’t talk to sales or doesn’t respect its input.

Whether “accidental marketing” becomes a buzzword any time soon really doesn’t matter. What does matter is that those who persist in practicing it won’t be around long — and those who don’t won’t miss those who do.

I was recently discussing online retail with a colleague  and the challenge online retailers face in proving their value to their traditional brick-and-mortar counterparts. It made me wonder why no ecommerce platform (that I know of) has added the ability to send a shopping cart to someone’s mobile phone.

Imagine you are on the Nordstrom website and you are looking at a number of outfits but you don’t want to commit to purchasing them until you can touch and feel them or even try them on. You click on a button on the website, provide them with your email address or mobile phone number and the ecommerce platform sends you a QR code with the contents of your cart. Maybe they can even schedule when they can come in to try the outfits and they could be all ready for them if not then they can just stop by one of the retail locations, walk up to a staff member to have the QR code scanned and then they could bring you the outfits you selected. This allows you to close the loop from online to offline. You could even offer them incentives to show up to a store at a particular time or day.

QR code use is growing and this may make it grow even further.

Do you know anyone trying this yet? Are you willing to be the first?

P.S. Feel free to scan in the QR code in this post

Let’s play a little game of what if…

You have the choice in building your organization; you can:

A. Recruit and hire some of the world’s best analytics, customer insight, marketing and testing team members.

B. Recruit average team members but provide them with superb technology and processes.

Many industry pundits would agree (including myself) that you must invest in people before tools. But is it just talent that is required or having the man hours available to get things done that matters?

A. For example, imagine you had a testing team consisting of some of the best in the industry (you could hire Tim Ash, Avinash Kaushik & me) to run your analytics and optimization team. However, if your organization is like most organizations we could only test 2-5 things a month. Don’t get me started on why this happens.

Or

B. Your team had the processes to eliminate many of the traditional bottlenecks and was able to knock out and complete 30-50 tests a month using better processes & tools (yes, these exist today). Of course, these tests would still have to be intelligently designed not just random tests (and this comes from learning appropriate process).

At the end of 2 years which team do you think will drive more incremental revenue, team A or B? Should your goal in your organization be focused on talent or on being agile?