Multichannel Forensics A to Z: Natural Search

We don't talk a lot about the relationship between Natural Search and Multichannel Forensics (book, study).

We have talked about micro-channels. Natural Search is the perfect complement to micro-channels.

Many times, you cannot tell that the customer arrived via Natural Search. At Nordstrom, in November - December 2006, we knew that 141,000 visitors came from one of a thousand high-ranking blogs. Undoubtedly, many of those visitors arrived at the blog after conducting a search on Google, Yahoo!, or MSN.

Our future includes a veritable plethora of micro-channels, and more important, micro-channels that include combinations of advertising channels. We'll have the customer who receives an e-mail campaign, searches on Google, visits a blog, visits our site three times, then buys something in-store. This customer will be fundamentally different than the customer who receives a catalog, searches on Yahoo!, hears about something on Twitter, visits our site three times, then buys something online.

Though the behavior is fundamentally similar (direct marketing, search marketing, social media, website, purchase), the customers are very, VERY different. Without a thorough analysis of micro-channels, we'll be unable to respond to the needs of these customers.

Natural Search is at the core of each micro-channel described above. From a database marketing standpoint, we have no choice but to build an information infrastructure that allows us to categorize customers based on past behavior, prior micro-channel behavior.

Part 4: What If Catalog Prospecting Stopped Because Of Do Not Mail Legislation?

For a recap of this series, please read part one, part two, and part three. For a view of the simulation tool used to create the scenarios in this series, click on the Multichannel Forensics Two Channel Simulation Link.

This exercise was created to give everybody, catalogers, vendors, customers, blog participants and third parties, an opportunity to understand how actual customers behave based on a simulation of actual customer behavior. The simulation ends speculation and opinions. The simulation simply illustrates how customers behave, and the business consequences that management may eventually have to deal with.

There is no getting around the fact that phone and mail volume are crippled when catalogs are not mailed. Many jobs would be lost if catalog mailings were limited only to loyal customers. Good, hard working call center staff, distribution center staff, and folks who make a living working in the catalog ecosystem (printers, co-ops, list brokers and managers, paper reps, USPS, merge/purge vendors, contact management software vendors), will have their lives interrupted if things ever get to this point. In many ways, this four part series should encourage the cataloger to partner with third party opt-out services in an effort to stem an outcome that is this bleak.

Remember, there is light at the end of the tunnel. Notice that at the end of the simulation, in years four and five, sales rebound, and profit increases. There is hope! Catalog management can follow a prescription to make sure that if things ever get bleak, the business is insulated from the dire situation illustrated in this series.


Catalog Management Prescription To Avoid A Dire Outcome

It is better to partner with third party opt-out services now than to deal with the dire consequences of this simulation later.

Test significant increases in online marketing NOW! See how far you can push the envelope in e-mail marketing, affiliate marketing, shopping comparison sites, portal advertising, banner/ppc advertising, paid search.

Do everything possible to make your site natural/organic search friendly. Contact our friend Alan now, and have his organization help you with natural/paid search strategies that insulate you from tough choices associated with the long-term prognosis of catalog marketing. His catalog marketing experience is very beneficial for making the transition from catalog to online marketing.

Test not mailing catalogs for a quarter to various segments of your customer file. At the end of the quarter, run matchback analytics on the mailed group, and the holdout group. Truly learn what will happen to your business if you were not allowed to mail catalogs.

Run Multichannel Forensics simulations (there are free links on the homepage of the blog), so that you know the long-term trajectory of your business. You may find that your phone/mail customers are very willing to shop online if not mailed catalogs, which would be highly beneficial to you!

Cultivate organic business. This is easier said than done, but is means EVERYTHING to your business. Organic business happens when customers purchase from your brand because they love you, not because you advertise to the customer. Organic e-commerce sales protect you from any catalog or online advertising issues. Organic e-commerce sales are highly profitable. In this simulation, had the catalog brand had significant and growing organic e-commerce sales, the outcome wouldn't have been as dire.

Be proactive! Test everything now! There is hope!

Victoria's Secret, Free Shipping, and Google

I am Kevin Hillstrom, host of The MineThatData Blog. I average 135 daily visitors, and have about 300 RSS subscribers. That yields about 158,000 visits a year. In the history of my blog, I only recall writing about Victoria's Secret once.

Victoria's Secret is a gigantic multichannel mega-brand that runs free shipping promotions from time to time.

So when a customer uses Google to search for "Victoria's Secret Free Shipping", why doesn't Victoria's Secret appear in the top ten results, but The MineThatData Blog appears in the top five?

Does the customer who conducted this search want to know about the actual free shipping promotion, or my opinion about a free shipping promotion?

Multichannel CEOs and CMOs: Stop arguing about the USPS and proposed postage increases. Start challenging Google to provide relevant search results. Is Google your friend? Is Google actually a competitor of yours, one that is blocking traffic that should be going to your site? Or does Google make a lot of innocent mistakes, like the rest of us? I'd put my money on the latter --- I would also challenge you to start challenging Google the way you challenge the rest of your trusted vendors, folks you've worked with for decades.


UPDATE 2007.03.18: Here's a couple of searches that produce similar results:

Nordstrom Marketing

Neiman Marcus Blog

Paid Search: New Or Existing Customers?

Catalogers enjoyed a blissful business model. They targeted the customer they wanted to acquire, or they sent catalogs to best customers, in an effort to increase customer loyalty.

Online marketing ends that wonderful fairy tale. Take paid search. You pay for a keyword. Customers click on your link, and hopefully purchase merchandise.

Who clicked on that link? Existing, loyal customers? Inactive customers? First time purchasers?

Multichannel retailers with good customer databases know the percentage of paid search respondents who are existing customers. The greater the percentage, the less effective paid search might be over time, as you simply pay Google to steer your existing customers back to you.

More important, however, is the loss of control over the growth of your online channel. With catalogs, you set aside a portion of your circulation for prospecting purposes. You strategically determine the long-term growth rate of your business. With search (especially with natural search), you don't control the long-term growth rate of your business. Google determines the long-term growth rate of your business.


Multichannel CEOs and CMOs: Your task for Tuesday morning is to sit down with your analytical folks, and learn if Google drives existing customers to your site, or new customers to your site. If Google is used by your existing customer base, you have the potential for long-term growth problems, as you may not have a healthy source of new customers to prospect to. If this is the case, today is a good time to start considering how you will find new customers.