Part 3 of our Selling on Amazon series discusses Customer Experience Metrics and how they affect your ability to make money on Amazon. This article is the third in a series, following previous topics about Winning the Buy Box and Listing Your Products on Amazon. Understanding Amazon's concept of Customer Experience Metrics will help you win the buy box more.

Amazon Customer Experience Performance Metrics

This screenshot shows an overview of the calculations that, together, make up the Customer Experience Metrics. It's taken from Amazon's Seller Central in the Reports, Customer Metrics section. Each green box represents a particular one part of the criteria Amazon uses to gauge a seller's performance on their site. For each criteria, Amazon also supplies a target value/percentage that a retailer should maintain.

Order Defect Rate

The first metric tracked by Amazon is called the Order Defect Rate. This metric is actually a roll-up of several statistics. The first is the Negative Feedback Rate. A few weeks after a customer on Amazon places an order, Amazon asks them to rate both the product and the retailer on a scale of 1 (least favorable) to 5 (most favorable). The feedback for the retailer determines this part of the metric. Negative feedback is any review with a rating of 1 or 2; 3 is considered neutral, and 4 and 5 are positive. The Negative Feedback Rate is the number of orders with negative retailer feedback divided by the total number of orders, all within a given timeframe. So if you sold 1000 orders, and 15 of them received negative feedback, then your Negative Feedback Rate is 15/1000, or 1.5%.

The second criteria that makes up the Order Defect Rate is the Filed A-to-z Claim Rate. Amazon's A-to-z program is a method of resolving disputes between third-party retailers and the end customer. This rate is calculated by the number of orders that resulted in the customer filing an A-to-z claim divided by the total number of orders in the same timeframe.

The third and final portion of the Order Defect Rate is the Service Chargeback Rate. If a customer issues a chargeback through their credit card company for any reason other than fraud. Some examples are delivery of a defective or damaged product, failure to refund the money for a returned product, or the item was not received. The Service Chargeback Rate is NOT affected by chargebacks where fraud is claimed, such as the cardholder claiming that they never placed the order. Amazon absorbs any costs of fraud-related chargebacks. The Service Chargeback Rate is calculated as the number of orders with a service-related chargeback issued by the customer, divided by the total number of orders.

Any order with one or more of these problems - negative feedback, an A-to-z claim, or a service chargeback - is considered a defective order. The entire rolled-up Order Defect Rate is the number of orders with any of these defects, divided by the number of total orders within the same timeframe. If a given order has more than one defect, such as negative feedback and an A-to-z claim, it counts as only one defect. As an example, assume you had 1000 orders during December. Of those 1000 orders, 9 had only negative feedback, 2 had an A-to-z claim, 1 had both a negative feedback rating and an A-to-z claim, and 1 had a service chargeback. That results in 13 order defects, or 13/1000 which equals 1.3%.

Pre-Fulfillment Cancellation Rate

The next metric tracked by Amazon, after the Order Defect Rate, is called the Pre-Fulfillment Cancellation Rate. This represents how many orders you as the retailer cancel before shipping the order. Typically this happens when an item is sold that you no longer have in stock. If you are a multi-channel retailer, this is an easy thing to happen - the last item sells on Amazon, but before that order makes it into an order report, you sell the same last item on your own website or in your store. Since you can no longer fill the order on Amazon, you cancel it. This is a pre-fulfillment cancellation, because you cancel the order instead of shipping it. The Pre-Fulfillment Cancellation Rate is the number of canceled orders divided by the total number of orders within a given timeframe.

Late Shipment Rate

Amazon expects retailers to ship orders within a given timeframe. Additionally, they expect retailers to notify Amazon through Seller Central that the order was shipped, and to provide tracking information to the end customer. If an order shipment notification is more than 3 days later than the expected ship date, the order is considered late. The rate is calculated by the number of late orders divided by the number of total orders.

Note: the default lead time is 1-2 days. This is the number of days between when the order is placed and the time expected to leave your warehouse. If your expected lead time is greater, you can specify this in your inventory upload file in the leadtime-to-ship column, if available.

Post Ship-Confirm Refund Rate

Before you confirm that an order has shipped, if you cancel the order, that is considered a pre-fulfillment cancellation. However, after you confirm that an order has shipped, if you cancel it and issue a refund OR if the item is returned and refunded, this qualifies as a refund. Reasons for refunds tend to be more varied than reasons for cancellations (which are almost always due to stock issues). Amazon still tracks refunds as part of the overall measure of performance.

Performance Targets

Amazon Metrics and Targets

For each of these targets, except the refund rate, Amazon provides a target value that retailers should try to achieve. This image shows the rates for one merchant, with the targets displayed under the label for each row.

The target rates are:

• Order defect rate: < 1%
• Pre-fulfillment cancel rate: < 2.5%
• Late ship rate: < 5%

What difference does it make?

If you're wondering why you should care, the answer is that these numbers can greatly affect your bottom line, particularly if you are a high-volume dealer on Amazon. Better scores raise your ability to win the buy box. Additionally, excessively poor performance may affect your ability to sell on Amazon at all. For example, toy retailers may be prevented from selling during the lucrative holiday season of November and December if their performance isn't good enough.

Fortunately, Amazon emails these metrics to you every two weeks so that you can easily monitor your scores. They are also available in Seller Central under Reports < Customer Metrics, linked to from the top navigation.

Welcome to Part 2 of our Selling on Amazon series. Previously we talked about how to compete with other Amazon retailers by winning the buy box for your products. Today, let's back up a little and discuss how to get your products onto Amazon in the first place. Amazon offers three basic ways to submit your listings: the Add a Product tool, Seller Desktop, and a flat-file upload. Let's look at each of these, and then talk about ways to improve your automation of the process.

The Add a Product Tool

When you are approved to sell your products on Amazon, you are granted access to their Seller Central web interface. Seller Central allows you to control most aspects of your business as conducted through Amazon: listing and de-listing products, managing your orders, providing shipping notices, collecting payment from Amazon, viewing statistics and reports, and managing your Amazon storefront, policies, and promotions. Under the Inventory tab, you'll notice a link labeled "Add a Product". This process begins with a simple form that allows you to located the product already on Amazon, which is necessary due to Amazon's single product page per product. (If the product doesn't already exist on Amazon, you can create a new product.)

Amazon's Add a Product Tool

After you enter your search terms, Amazon will return with a list of products in their catalog that match your search. Click the "Sell Yours" button beside it, fill in your information, and you're off.

This is great for a couple of products, if that's all you have. But sooner or later you realize that by the time you've listed all 3000 of your products, you'll be dead - and your range of products will have changed a couple of hundred times anyway. After all, most of us have products come and go from our catalog all the time!

Seller Desktop

Amazon Seller Desktop

Seller Desktop is a free desktop application that gives you a GUI for listing your products. It is almost always quicker than doing them one-by-one through the Add a Product tool. With Seller Desktop, you can list products, create variations, and upload everything to Amazon when you're ready. However, if you work on a Mac you're out of luck: Seller Desktop is for Windows only. It's also pretty slow when you upload your listings, especially if you have a large catalog.

So while Seller Desktop is much better for larger merchants than doing products one-by-one, you'll also want to take a look at the flat-file upload.

Upload Products via a Flat File

Here's where my saving grace came in when we first starting selling on Amazon. I realized that with the first two methods, I was basically reinventing the wheel when it came to my data. I already had almost every piece of data already in my shopping cart catalog. If I just made some custom fields to fill in the missing data (like a certain format for recommended ages, the UPC code, and the vendor SKU) then I could export everything from my catalog into a tab-delimited flat file and upload that to Amazon in one fell swoop. Hallelujah!

The flat-file format is pretty daunting, so this might be easier than it sounds. The format depends on the category of items that you're selling and the revision number of the flat file format. The format I use has 92 (yes, NINETY-TWO) individual columns. And many columns have a very limited set of allowed values. But we used a feed module to easily generate this file. Once the definition was originally set up, the click of a link was all it took to produce the file. Then we logged into seller central, uploaded the flat file, and waiting while Amazon processed it. (Usually inside of an hour.)

Moving to True Automation

A single pain point still existed for us, though...inventory management. When the holiday shopping season begins each year, our own website and our sales on Amazon start competing with each other for our inventory - and if something sells out on one site, we want to make sure we don't oversell it on the other site! Up through last year, we were uploading inventory-only flat files and just dealing with errors when they occur. This year, (warning: plug coming) we've got an automated feed management service call FeedExact, something NetBlazon has developed in house, that will sync up the inventory on a schedule we determine. Perfecto!

Obviously, the method you choose for managing your products on Amazon will depend on the size of your catalog, how frequently it changes, your budget, and your patience level. Fortunately, we have options, so it's just a matter of finding the one with the fewest pain points for your business. Here's to happy retailing on the world's largest e-commerce site.

Stay tuned, our next post will be about understanding seller metrics and how they are affect your ability to reach customers on Amazon.

So you've decided to hock your wares on Amazon.com? Amazon can be a great sales channel for retailers of many types of products, because they have BIG visibility, loyal customers with a perception of security behind the site, and a well-defined technical platform to support third-party retailers. However, there are several things that you need to learn and absorb if you are going to sell on Amazon. This post is the first in a series about selling on Amazon.

One of the most important things you need to do as a third-party retailer on Amazon is referred to as "winning the buy box". To understand this concept, let me back up and explain how products are sold on Amazon. Let's say we have a product such as the Human Body Floor Puzzle (shown below) that is sold by a number of different retailers, and possibly also by Amazon themselves. Instead of having an individual product page for the same item for each retailer, Amazon combines them into a single product page .

Amazon Product Page

When a customer visits a product page, the most obvious thing about making the purchase is the "buy box" on the right side of the page near the top. It features a quantity dropdown box and an "Add to Shopping Cart" button. Most customers who wish to purchase the product will make that simplest selection. When they do, the sale is given to the retailer who is currently "winning the buy box" - in the case of this example product, that retailer is The Clanton Company (as seen in the middle of the screen under the green "In Stock" status).

So how do you win the buy box? According to Amazon:

Customers can add products into the shopping cart through multiple paths. One of those paths is by using the Add to Shopping Cart button (in the "Ready to Buy" box, or the "Buy Box"). One merchant "wins" the Buy Box. There are multiple factors that we take into account when we select the winner of the Buy box these can include Price, Availability, Volume, Refunds, Customer Feedback and A-to-Z guarantee claims. You can take steps to increase your chances of winning the Buy Box.

In most cases, it appears that the buy box for a particular product rotates among different vendors who currently have the item in-stock, so unless you're the only one selling the item, you're shooting for a win "percentage" - the number of times you win the box divided by the number of pageviews for this product.

There are some key things you can do as a retailer to increase the percentage of times you win the buy box:

1. Focus on your pricing. The ability to win the buy box is based on the combination of the product price and the shipping price. Simply lowering your price for the product and raising shipping costs to cover the difference won't help you win the box.
2. Make sure you keep the item in stock! If you are out of stock, you can't win the buy box.
3. Maintain good customer feedback. This is mainly your basic customer service considerations. Ship quickly, keep your customer informed of the status, make sure you ship the correct item, and don't accidentally list a product as in-stock if it's not.

That's basically it. Certain categories have lots of retailers, so if that's the case, you may need to keep an eye on your competition daily. When you manage your inventory and look at listings, you can see the lowest price being offered by your competition. Amazon also provides tips on encouraging feedback. With practice and diligence you can increase your percentage of buy-box wins.

Watch for our next installment when we discuss different ways to listing your products on Amazon.

Cisco Adler, in his new eBook "The Landing Page Bible", offers an answer to the "Internet age"-old question of who controls a company's website: IT or Marketing. Rather than involve technical resources and attempt to revamp a section of the corporate website (or the entire thing!), Cisco suggests companies focus online marketing initiatives on landing pages, which can be more agile than a company's main website.

The Landing Page Bible

Adler's argument is a good one. Landing pages, whether they are the result of a click from a PPC campaign, an email blast, printed advertisements, or other sources, need to be written and rewritten, designed and redesigned, all based on significant analytics and testing of their conversion and ROI. A good landing page can stand on its own and be tweaked ad infinitum to achieve its desired goal. Even if it passes traffic directly to the main website, the initial page a potential customer sees needs to do a good enough job of selling the product or service to convince the customer not to immediately go elsewhere, or "bounce".

Convinced yet? If so, it's time to take Cisco's advice on building the best landing page possible. Cisco is an expert in landing page design, providing optimization services to clients through his firm Adler Interactive. Prior to founding his company, he was vice president of marketing and communications for Belmont Abbey College. During his tenure he completely rebuilt Belmont Abbey's online initiatives. He has developed landing page strategies for companies throughout numerous industries and is a passionate believer in the value of high performance landing pages.

The number one thing to remember, according to the book, is to STAY FOCUSED. The landing page's headlines, imagery, and copy should all focus on the single most important benefit the user can receive by purchasing the product or service you're advertising. Beyond that, you should also address your writing to a single person. Don't focus on a group of users; instead, have a one-way conversation with the exact person reading your page, to convince them to make a purchase. From there, make sure your page addresses common objections to purchase, backs up its claims with statistics and facts, and avoids hype.

Once you have the landing page designed and written, read back through and then get it out there! According to Cisco, "If good is the enemy of great, then perfection is the enemy of online marketing." You can spend hours tweaking the copy, changing the image, and playing with position and color. But the longer it takes to publish the page, the more sales you are losing. The maneuverability of a single landing page allows it to be tweaked as needed after you publish it.

What other nuggets can you glean from the book?

1. How to organize your bullet points
2. How to increase the number of visitors that submit your landing pages' forms
3. What to put under your form's button
4. How to choose an image that conveys your message, instead of distracting from it

The best part is that the book also gives more cutting-edge ways to improve your landing pages. Cisco effectively discusses the use of video, prospect segmentation, content creation, and testing strategies. A bonus section at the end of the book gives you 5 Ways to Improve ROI.

Overall, "The Landing Page Bible" is an easy read, with a topic that is both well-covered and clearly explained. Cisco leaves you with the enthusiasm that you CAN actually increase your conversion rate, and a roadmap for finding the sweet spot on your landing page design. For those who don't wish to handle landing page optimization in-house, Cisco's firm Adler Interactive offers landing page optimization services to help you increase lead generation and conversion rates.

FREE DOWNLOAD - Read the first 5 chapters for free by downloading the sample from http://a.adlerinteractive.com/LPBReviewNetblazon

Many Miva Merchant users are familiar with Chuck Lasker and the various ways he's been involved in the Miva community over the past several years. We caught up with him at the 2009 Miva Merchant conference to ask him ten questions about his new endeavor, MerchantTutorials.com. Find out how he got started with Miva Merchant, what MerchantTutorials.com is all about, and how you can subscribe to the service to learn how to do more things with your online store.

1. Order Management Software - If your sales have grown beyond a few orders a day, or if you have to manage backorders or drop-shipped orders, you may benefit from order management sofware. I covered this briefly back in February in the post titled "Using Order Management Software". Once integrated, this can be one of the easiest ways to stay organized. It also helps with data mining (for example, to see how much you make or lose on shipping costs).

   My favorite? Shipworks by Interapptive is simple and powerful.

   

   Shipworks Main Screen

2. Site Search - No matter how many card sorts and usability studies you perform ("yeah, right?" you might think!), the categorization on your e-commerce site will never been good enough that some customers don't find the need to use your search form to find products. Most shopping cart software packages offer basic search capabilities. But when you need to do more, look outside - to hosted search solutions. They tend to offer more features and do a better job converting sales.

   Read more about Site Search packages in "Hosted Search Solutions for Ecommerce Sites".

   Recommended: SearchSpring for being incredibly feature-rich while remaining reasonably priced. They also offer a 30-day trial.

   

   SearchSpring on PennStateInd.com

3. CRM Software - Getting a new customer is much harder than keeping an existing one. So don't run the risk of ruining your reputation - even among an audience of one - by failing to follow-up on customer service requests. Handling customer service by email can be dangerous. If multiple people handle service requests, they may not know who's covering which problems, or what has been done in the past by a different CSR. Add on a CRM system to handle these issues.

   I offer two recommendations in this category: InverseFlow, a helpdesk ticket system, which I love for its simplicity; and SugarCRM for all of the features it offers.

   

   InverseFlow

4. Email Marketing - Often, email blasts can have a great return on investment, as you have a targeted list of people who are either previous customers, or who have not bought yet but have already shown interest in your site. But it's good practice to outsource this task, not to handle the email distribution in-house. Email marketing companies specialize in using best practices related to email handling, staying on top of important issues such as CAN-SPAM compliance. You also don't want to run the risk of having your own email servers blacklisted if you do something incorrectly when sending out your newsletters.There are a number of hosted solutions for email distribution, at a number of price points.

   The two I've known about the longest are Vertical Response and Constant Contact. However, the ones I've used more recently are actually among my favorites in this section. For lower budgets, I like iContact. It's easy to use, fairly easy to integrate, and reliable. For those who have a larger budget, I recommend Bronto.com for their additional features, particular their reporting and analytics functionality.

   

   Bronto Email Marketing

5. Accounting - Most of us probably started out handling our "books" with nothing more than our checkbook register and Microsoft Excel. But once is enough when you have to prepare your income tax statements based on nothing more than these tools and a box of receipts and statements! This is when it becomes a really good idea to invest in an accounting package (and a file cabinet). For most small businesses, this means Quickbooks. Quickbooks tends to be one of the easier accounting packages to get used to, and because it's so widely used, there are often "connector" software tools that can get data from your shopping cart into Quickbooks. In the software, you can reconcile your accounts, send invoices , issue credit memos, and so on. And come tax time, it makes life so much easier. Businesses that go beyond the "hobby" status - especially if you're looking for investors or want to sell the business down the road - should consider Quickbooks Enterprise due to its audit trail and additional security features.

1. Be Transparent - In a medium as anonymous as the Internet, the concept of transparency means being clear about who you are and your motives and goals. Transparency is especially important on ecommerce sites. Customers want to know that the people behind the site are honest and trustworthy, not someone who's using the site as a front for fraud. One way to do this is on your "About" page. Identify the person or people behind the business, including a brief background as it pertains to the business (education, career, etc). A picture is a great benefit, because visually-oriented customers can develop a sense of the people they are doing business and communicating with. Video is even better!
   

   About Page from Melissa and Doug

2. Start a Blog - Publishing a blog takes commitment, but it's a great way to show your business personality to customers, and to show them that behind the site is a living, breathing business. Frequently-updated content also shows commitment, a kind of "TLC" to your audience. Allow comments, too, so that you can start a conversation back-and-forth with readers of the blog.
3. Use a dedicated SSL certificate - They are relatively inexpensive and typically require very little work on your part. When customers see your site go from http://www.yoursite.com to https://site12345.somelargehost.com/yoursite/whatever during checkout, it can be disconcerting. On a related note, make sure that your checkout pages don't include content that is not loaded securely, because a warning message will appear.
   

   Avoid Security Warnings

4. Use Security Badges - Demonstrate security with standard graphics that customers have come to expected. Credit card icons show that you have taken the time to select and integrate true payment-processing into your site, instead of relying solely on Paypal or checks by mail. Many SSL certificate providers offer badges that customers can click to confirm that the site uses standard encryption. Take that a step further by signing up for McAfee or Controlscan, which also offer site testing measures. Traditional businesses often display Better Business Bureau window stickers or Chamber of Commerce plaques; there are equivalent BBB and Chamber images that accomplish the same thing on ecommerce sites.
   

   Credibility Badges from Newegg.com

5. Phone, Email, Live Chat - Make it easy for customers to contact you using a variety of methods. Publish a phone number - a toll-free one if possible - in a prominent location on all pages, and try to answer calls during business hours. If you can't always answer it, return voice messages quickly. Use a live chat service for customers who don't want to interrupt their surfing to look for a phone, or offer contact forms on every page that are quickly answered by email.
   

   Crutchfield offers a variety of contact methods

6. Display Customer Testimonials - Gather customer testimonials and publish them on your website. While it's ok to ask customers for testimonials, don't make them up; people can spot fakes pretty easily. Offer a single testimonial on your homepage, and link to a page of additional testimonials.
   

   IDWholesaler.com shows one testimonial on their Homepage

7. Publish Store Policies - Publish your policies and link to them from your sitewide footer and within your help section. At a minimum, you should publish:
   • a privacy policy covering customers' personal and financial information
   • a return policy outlining what products can be returned and what the process is
   • shipping policies that describe what carriers you use, what the lead or fulfillment time is, and whether you guarantee shipping delivery dates
8. After The Sale - Follow up on your promises and thank your customer for their business. A customer's first order with your store solidifies (or demolishes) any credibility created on your actual ecommerce site. Offers customers a fair price and a good shopping experience, and many will return. When you make a mistake: Explain, apologize, and offer to make amends.

Day two of the 2009 Shop.org Strategy and Innovation Forum got started with brief talks by Fiona Swerdlow, Head of Research at Shop.org, and an overview of the eCommerce Forecast 2009-2013 by Brian Walker of Forrester Research. After these discussions, the keynote for the second and final day began - and it turned out to be one of the most inspirational business and marketing talks I've ever attended.

Bob Thacker, OfficeMax.com

Bob Thacker is the Senior Vice President of Marketing and Advertising for OfficeMax.com, and he overflows with creativity and enthusiasm that is surprising and fresh. His talk centered around phrases such as his "cornfed philosophy" and "be mature but never act your age", and he followed up each saying with substance, stories, and in many cases, video. Prior to OfficeMax, Bob spearheaded several wildly successful partnerships and campaigns with Target, such as their Michael Graves' partnership and their "It's a Wonderful Life" Christmas theme that was Jimmy Stewart's last appearance (a voice-over) before his death.

"If you don't have big bucks, you better have big ideas." When OfficeMax began to market their printer ink refill station, they waffled over a conventional approach and one that was riskier - bus stop images of women's tattooed backs. The tattoo approach was chosen and it was a huge success, leading the way for the world's largest rubber band ball and their teenage reality show "Schooled" on ABC Family.

"Look before you leap, but then LEAP!" was the phrase Bob used to introduce a segment about their ElfYourself website. The website reached the high-water popularity mark of the 55th most popular website in the world, due primarily to viral marketing and the phenomenal reactions people had to faces of themselves and their loved ones pasted onto dancing elves. But the most inspiration part of the talk was based on the idea that "brands are like people; they have to have heart". OfficeMax launched a campaign to provide school supplies to teachers, in a drive to "erase teacher-funded classrooms." When an idea has the ability to both promote a brand and alleviate a problem, you know you have found something great.

The State of the Economy: The VC Perspective

To be honest, I expected to be texting and twittering throughout this talk, since I'm not in the place to personally care about venture capital...however, the discussions were fascinating. The session was moderated by Brett Hurt, CEO and Founder of Bazaarvoice, and the panel was made up of Tom Ball of Austin Ventures, Jeremy Liew from Lightspeed, Satya Patel of Battery Ventures, Amanda Reed from Palomar Ventures, and Cyriac Roeding of Kleiner Perkins Caufield & Byers.

Brett admitted to tossing out a softie question to the entire panel but got great results to the question "How bad is the economy going to get?" Fortunately Tom believes that the economic downturn will have less of an impact on the online sector than it will for traditional retail. Satya, however, thinks it's time to hunker down, as it will take time to loosen the credit market, and we probably won't see an upswing until 2010. Cyriac echoed Bob Thacker's idea that fear kills creativity, and reminded us that this is a time to drive change, and that although retailers may need to streamline business, it's still a time to think big.

When asked whether 2009 will be the year of mobile retailing, Amanda explained that this was true in the capital venture world, where investors are extremely interested in mobile technology ideas. But she believes that we're at least a year out before mobile retailing becomes an action item for retailers. During the Q&A session, a conference attendee asked what Amazon's optimistic Q4 numbers indicated for the rest of us, and Jeremy responded with an inspiring idea that all of Amazon's wonderful technology is currently available to those of us without R&D departments and was likely present in the Expo Hall of the conference!

Case Studies

After another excellent lunch, three panels of retailer case studies were on the schedule. The first, "Innovation in a Downturned Economy: Pure-play Retailer Case Studies", gave attendees several core ideas to think about. The panel was moderated by John Squire of Coremetrics and included presentations by Marc Katz of CustomInk.com and Tomima Edmark, President of the Andra Group, with the complementary websites HerRoom.com and HisRoom.com.

Marc began with a joke that his company not only has no research and development team, but that he doesn't even own a mock turtleneck or iPhone! But his website showcased brilliance in simplicity. CustomInk.com sells custom-printed t-shirts, and their design application is beautifully simple. They are also brave enough to show "uncensored reviews" of their company and service right on their homepage. They also do a fabulous job of telling their company story (straight down to a photo of the green couch that has been with them since day one) and engaging customers in a community with idea such as a photo contest.

Tomima described how women hate to shop for lingerie, citing factors such as unhelpful salespeople, and then gave her sites' goals of developing a shopping experience that is better than the one in a store. Her site features lots of photos, including extra shots of bras in larger sizes, overlays of different shirt styles to see whether a bra is compatible, and even video bounce tests for sports bras! She is very focused on protecting the company's intellectual property, but the most astounding fact that stuck with me was that the sites are entirely self-funded and were profitable after only eighteen months.

"Driving the Living, Breathing Store: Retailer Case Studies of Innovations in Delivery Dynamic Content" was up next, moderated by Kelly O'Neill of ATG Commerce with panelists Ronit Weinberg from Diane von Furstenberg and Kate Forbes of QVC. Ronit described how the goal of the DVF website was to develop content that engaged customers and developed an online community. They added a news feed, two blogs, and a 9000-fan FaceBook page. They also connected with fashion-oriented bloggers, developing relationships within the blogosphere, while generating content that helped secure brand equity, instead of focusing solely on selling as part of their site. Kate discussed QVC's marketing strategy relating to Fashion Week, one of the "POW Events" they do once a month. Because QVC was originally a TV-based medium, and still maintains that as a large part of their sales, they felt the need to maintain a consistent theme across multiple channels. QVC also utilized FaceBook, YouTube, Twitter, and blogs to create a sense of urgency among its customers.

The last panel of the session, "Leveraging Your Most Valuable Asset: Creative Ways that Retailers can Make Consumer Information Actionable", featured Jennie Carlson from Levi Strauss & Co. and Sam Taylor of Oriental Trading Company, and was moderated by Nick Pahade of GSI Commerce. Jennie showed videos and information about the eye-tracking and other usability studies that Levi's did prior to their 2008 site redesign. After finding that users were very focused on images, they redesigned their leaf category pages to be image-intensive. They then took satisfaction surveys to prioritize other planned improvements and to establish a baseline prior to the redesign. Sam showed the attendees some terrific ways that negative customer reviews have positively affected their business, after reestablishing the use of customer reviews after his predecessor canned the idea. They take the reviews further, offering a top-rated products promotion on the homepage, and even featuring content from the reviews in their printed catalog. Oriental Trading Company took the time to read every 1- and 2-star reviews to improve their service and product line. Sam said that if a site "disappoints a customer, they will never come back and will tell ten people about their bad experience." He ended the conference with the following "Top 5 Recommendations" for all of the retailers of the Shop.org conference:

1. Commit the necessary resources to do customer ratings and reviews right.
2. Embrace the negative review.
3. Leverage online data in other retail channels.
4. Personalize your content by customer segment.
5. Let your best customers generate your content for you.

Well said and done! Thanks to Shop.org for a wonderful conference.

The 2009 Shop.org Strategy and Innovation Forum kicked off today at the Gaylord Palms hotel in Orlando. The convention is filled with the top names in ecommerce, a variety of vendors, and a small but fun and elite crowd of attendees.

Avinash Kaushik, Author

Day one of the annual Shop.org Strategy and Innovation Forum was great from many perspectives, not the least of which was the first keynote presentation from Avinash Kaushik, author of Web Analytics in an Hour a Day. Avinash is a popular blogger and speaker whom I've wanted to see for awhile now, and during his presentation, "Moving Beyond Faith Based Initiatives: Lower Risk, Innovate, and Be Great", Avinash displayed his depth of knowledge, generous nature, and humorous wit. His talk described three kinds of innovation: incremental, where one steadily improves over time; incremental with side effect, which is similar to the first but also encompasses an "aha" jump in performance due to some key factor; and transformational, where the model reflects an unnatural and rare, almost immediate skip from low-return to high-return. From there, his talk focused on the second innovation, the incremental with side effect module. Two examples were, in evolution, the benefits provided by opposable thumbs, and online, the development of the Google Adsense program that opened a monetization path to virtually all online content providers.

The subtopic that I found most interesting was the idea that companies need to "Fail Faster". Not all ideas are good ones, and the faster you can recognize the poorly performing initiatives, the faster you can fix or eliminate them. He also said that many websites suck because of the "Hippo" - that decisions are made based on the Highest Paid Person's Opinion, and not on hard, quantifiable test results.

Finally Avinash recommended several tools to ecommerce managers wishing to expand their data reporting, understanding, and knowledge base: 4Q Surveys, Google AdPlanner, and Google Insights, as well as a robust analytics package such as Google Analytics or ClickTracks.

Alfred Lin, Zappos.com

Zappos.com is best known for its reputation when it comes to online customer service. Their COO and CFO, Alfred Lin, gave the second keynote presentation, titled "Building a Brand that Matters One Employee at a Time". In it he described some of the ways that Zappos focuses on building a solid relationship with their customers. All orders receive free shipping, and many are "surprise" upgraded to overnight shipping at no cost to the customer. Zappos also pays for return shipping, and offers a 365-day return policy. However, one of the most revolutionary ideas they implement is that they pay their employees to quit! At the time of this conference, the current payout (during the Zappos 5-week training program) is $2000 to any trainee who doesn't feel like it's the right job for them. No questions asked.

Zappos' figures are outstanding. At over $1 billion in sales in 2008, they carry 900,000 skus, 200,000 styles, and 1200 brands of shoes...and they are expanding into clothing. They currently employee 1500 people, and they foster a corporate culture in the same dedicated manner with which they build customer relationships.

With this kind of success, a discussion by Lin about building a retail brand comes with a lot of experience behind it. Here are his key factors for building your brand:

1. Vision: It needs to be bigger than yourself. Does it have meaning? Once you have your vision, chase that vision, don't chase the dollar. (Hopefully that implies that the dollar will follow!) Zappos often asks interviewees, "What would you do for 10 years if you didn't make a dime"?
2. Repeat Customers: In order to attract customers to make a repeat purchase, Zin recommends picking two of the following three factors: great product, great service, and low prices. Then focus on those two. Don't focus on the third one; you can't do them all.
3. Transparency: Be real and you have nothing to fear. Zappos exposes daily sales data to all customers, including brand data to individual vendors. They also discuss their business and culture on Twitter, Facebook, and via blogs.
4. Culture: Corporate culture should be based on commitable core values. Some of Zappos? "Deliver WOW through service." and "Be adventurous, creative, and open minded."

(Unfortunately, Zin didn't exactly answer my question during the Q&A session about where smaller businesses can focus on creating stronger customer relationships without cutting too far into their revenue. My thought is to reduce your shipping and packaging costs as much as possible, and pass as much of those savings along to your customer as possible. Someone at my table pointed me in the direction of Mail Express; if you've tried it, please leave a comment about your experiences.)

McKinsey & Co.

After lunch, Josh Leibowitz and Alex Tenessa from McKinsey & Co. talked about "The Multi-Channel Shift: How Consumer Behavior Will Change in the Next Economic Recovery". Unfortunately, this was a presentation that made at least one Twitterer remark, "I think I may need to get under table and suck my thumb now." Their models don't predict a quick turnaround for the recession that began in 2008 and looks to plague us for the foreseeable future. We're all hoping for the "battered but resilient" prediction over the "long freeze" one!

However, they did identify six trends that online retailers should consider:

1. The shift to value is here to stay.
2. The aging consumer (over 50 years of age) will capture over 50% of online spending.
3. The online channel will continue to capture sales
4. Product and service development is key
5. Science will replace art
6. Prepare for a "winner take all" scenario

In 2009 customers will resort to more one-stop shopping, they will wait for sales and discounts to make a purchase, and they will buy more generics over brand names.

Hung Le Hong - Gartner Research

Hung Le Hong from Gartner Research was another of my anticipated talks, though it turned out not to be what I expected. "Disruptive Business Models for Web 2.0" was more about cross-channel selling that social networking, AJAX, or reflective logos. Then again, it's time we talk about something more substantial. Hong discussed online sales for local pickup, and identified a spectrum of implementations, from Wal-Marts 7-10 day-later pickup to higher cost but more efficient and productive models.

Hong also talked about the use of mobile technology for ecommerce and offered the following statistics:

• 25% of people use mobile technology to check prices
• 25% check store locations
• 22% look for promotions and deals
• 16% actually make a purchase
• 12% transmit payment

Another tactic Hong discussed was the use of Twitter and related tools for "short shelf life" promotions, the online equivalent of a K-Mart Blue Light Special.

My favorite quote came from this session: "The Web 2.0 customer will use Web 2.0 ways to spend less."

Panel Sessions

The day completed with 3 panel sessions. The first was "The eCommerce Platform of the Future" with Sally McKenzie of Ecommerce Consulting and Brian Walker from Forrester Research. They discussed platforms and the challenges of "re-platforming". Then was a great talk on "Focused Ecommerce Investing: Smartly Stretching Your E-commerce Dollars While Still Innovating for Differentiation" with Lauren Freedman of the e-taining group, Peter Cobb of eBags, Kevin Churchill from Patagonia, and Bradford Matson of Bluefly. The day ended with "How International Expansion Can Help Retailers in a Downturned Economy", moderated by Troy Brown from Demandware and featuring Michael Amar of AGORAD, Jake Bailey from Overstock.com, Jim Okamura of J.C. Williams Group, and Michael Ross from eCommera Limited.

Most online businesses set up email lists of some sort, then proceed to just send out emails. This document will show you, from the perspective of the person RECEIVING the emails, what mistakes many people make. Avoid these mistakes to ramp up your email list to profitability.

1. Putting an unsubscribe link at the bottom of your email. Why is that bad? When a subscriber wants to change their email address, what do they do? If you expect someone to unsubscribe one email address, then go back to your site and resubscribe with another, that's expecting a lot. The best thing to do is have "Manage your subscription" link that takes them to a page that they can unsubscribe, change their email address, and even change which lists they subscribe to. Then, have an "Quick Unsubscribe" link next to that.

   Another thought here - I have signed up as a member of forums, and then gotten emails. When I wanted to change the email address or unsubscribe, I clicked on "Change subscription info" and it asked me to sign in to the forum first. If I don't remember the forum login info I used when I created my account, I simply CAN'T get in to change my email address or unsubscribe. So, of course, I just report the emails as spam. I've had this happen at least four times that I can think of.

2. Making too much information required upon sign up. You only need their email address. You might want their first name, so you can personalize their email, but even this should be optional. Don't require postal address, last name, and especially phone number. Requiring a phone number will cut your signups by at least 80%. And don't require fields that are silly, like Title (Mr., Mrs., Ms.) or birthday. Why make it hard? Take as an example The Venetian, a casino in Las Vegas. Here's their signup form: https://secure.venetian.com/APPS/EmailSignUp/. It requires birthdate, but they have to for age verification. But it requires Title! I clicked submit without my Title, and it gave me an error message. So the first thing I get in my email relationship with The Venetian is a beep and popup error message. That's not a good start.

3. Making unsubscribing difficult. Let's look again at The Venetian. In their emails there is an unsubscribe link. It goes here: http://venetian.com/APPS/Unsubscribe/. In order to unsubscribe, I have to enter my email address. If I have multiple email addresses (I have 12), I have to remember which one I used and enter it. So what do I do instead? I hit the Spam button in my email program to make them go to my Spam folder to be deleted. Simple for me, but it also sends a notice to my Spam filter company that The Venetian's emails are spam. Too many of those, and you get banned, especially from AOL, where it’s almost impossible to get removed from a spam list. Instead, make it easy to unsubscribe. Do you really want someone on your list who doesn't want to be? I suggest putting an unsubscribe (or at least Manage Subscription) link at the TOP of every email. It is MUCH better to lose a few subscribers easily, than to get Spam-reported.

4. NOT unsubscribing when someone requests unsubscribing. ProFlowers... If you ever sign up for their emails, expect to be on their list for life. I have unsubscribed at least five times from their lists, and they still keep sending. So I keep reporting them as spammers. Unfortunately, they're so big, and not enough people are reporting them, apparently, that I still keep getting them in my inbox. I absolutely hate ProFlowers now, and will NEVER do business with them again.

5. Sending to people who may not know how they got subscribed. Do you auto-subscribe all customers? Do you have a "free report" that you send people, but don't mention in the signup form that they'll be subscribed to an email newsletter? If you send ongoing emails to these people, you may be a spammer.

   You don't want people to get emails who don't WANT to get emails, do you? So, for customers, in checkout, just say, "as a new customer you will be subscribed to our newsletter. You can unsubscribe at any time." Or, better yet, have a check box in checkout for "Subscribe." Finally, you can have a subscribe form on the Invoice/Receipt page so AFTER they have happily sent you money, they can subscribe.

   If you send to customers without a specific subscription notice/form, I suggest sending them an email invitation to subscribe. You're allowed to do that without it being spam, since they've done business with you. Take the last email newsletter you sent, and, ABOVE it, put a paragraph that says, "As a new customer with XXX, we'd like to invite you to subscribe to our newsletter and receive Special Sale Notices, Coupons, new product info, and more! We promise not to overwhelm you with emails, and you can unsubscribe at any time." Have a link to subscribe. Send it only once.

6. Too many emails. I once signed up for TigerDirect emails. It must have been during an experiment, because I got at least one email a day, and sometimes two, for about a week. I finally unsubscribed. It was over a year until I resubscribed, and now they're only about once a week. So, while experimenting with what would happen with overwhelming emails, they lost me for a year. Remember, people get between 20 and 200 emails a day. We're ALL overwhelmed. Why would you want to become a negative contribution to that feeling of being overwhelmed??

   If you have "daily updates," or "new product notices" that might be daily, have multiple levels of subscriptions. Let people decide how frequent they'll get emails. Some people want to know everything right away, especially online shopping addicts. But most don't. Have multiple email lists, "daily, weekly summary, monthly" and let them choose. And NEVER violate the frequency. If I pick monthly, and I get them weekly, I'm gonna spam-report it.

7. Too few emails. Hey, doesn't that sound like the opposite of (6)?? Yep. If I sign up for email newsletters in January, and I don't get anything until May, I probably have forgotten I signed up. At that point, I think it's spam, and, you got it - you're being reported as a spammer.

   Remember, emails don't have to be huge. At a minimum, send a text email at least once a month keeping in touch, with something basic like a special offer, new product notice, or even a "Happy Mother's Day" mention. Check out Hallmark - there's a holiday about every day now, so there's always SOME excuse for an email. If you drop the ball for more than 3 or 4 months, you should probably send another invite to resubscribe. In the very least, at the TOP of your email, in bold, say, "You Subscribed to this List because you wanted xxxxx" to remind them that they did, indeed, subscribe. Keep in mind that, while YOU are obsessed with your business, most people forget you even exist most of the time.

8. No deals or coupons. I sign up for emails from local restaurants a lot. Sometimes, I'll get emails that tell me about new menu items, or encourage me to celebrate a holiday at their restaurant, but NO offer! There's no call to action! Why do I care about Don Pablo's having Cinco de Mayo if it doesn't mean I get 10% off or a free Margarita? After two or three of these email ads, usually all pretty and graphical, I unsubscribe. Why would I want someone to just send me ads? If I liked ads, I wouldn't fast forward through them with Tivo.

9. Too many deals and coupons. I did it again - contradicting my previous point, right? This one really isn't too bad unless you create expectations of discounts. I'll tell you a quick story. A company I worked for started doing email newsletters. In each newsletter was a 10% off coupon that was good for one week. Since it was every time, what do you think happened? Sales disappeared for the three weeks that there was no coupon code. Then, the email would go out and we'd get pummeled with sales at a discount. Customers expected the same 10% discount off everything, and waited to get the code to order. After a bunch of these, there was no turning back - people expected their 10% off coupon code. So, the only solution was to extend the expiration period to the full month, and then accept that our income was reduced by 10%.

   How do you balance (8) and (9)? By offering discounts and deals off specific items or services, changing it each time. Focus on your newest items, or even some of your lesser sellers. Have a clearance every now and then. Change it up, so people don't expect anything in particular in each email, but still they have a reason to stay subscribed.

10. No confirmation emails. When I subscribe to a list, I'm never 100% sure it worked. Too many online scripts are broken. So let people know they succeeded with an email saying so. Tell them on the Success page that they will be receiving an email confirmation. This way, if they don't get one, you might already be in their spam filter and they can white-list you. Tell them how to white-list you.

    Some people say you should "double opt in." This means that your system would send a confirmation email with a special link. If the subscriber does NOT click that link, the subscription has not completed. Some systems will send a second attempt in 24 hours. This is certainly the safest way to avoid spam-reports. However, expect about half the people to not click the link for some reason. If someone doesn't get the confirmation email because of a spam filter, they will simply assume that you just aren't sending any emails. It's up to you whether you want to do this, but it's not necessary in my opinion.

Conclusion. Clean up these mistakes and you’ll increase subscriptions, decrease unsubscribes, and overall have a more positive email relationship with your customers. One final point of advice… I suggest using a service, such as iContact (http://www.chucklasker.com/icontact), instead of sending emails from your own server. Not only are the emails easier to manage, more professional looking, and bounces are taken care of, but you’ll also be better off if people click the Spam button on their email programs. If you’re using your own server, it might get banned easily. But iContact is able to handle the big spam-protection-companies much better. Give them a try with their free trial, I believe you'll find it’s worth the price.

This article was guest-written by Chuck Lasker of MerchantTutorials.com.