We can’t denial the fact that e-commerce or online shopping has changed our lives style and living over the past 10 year. But with the increasing of competition within e-commerce has loaded to one big problem for consumer which is choice overload. Have you ever had soo many products to choices from but you don’t know which one to choose, therefore, you end up not making a decision or choice?  Well, that is choice overload!!!

In Schwartz (2004) famous book “Nudge” he said “consumers have always had choices, but today options have exploded beyond all reason”. Many researches into e-commerce have proved that choice overload is paralysis issue that is pushing people away from online shopping to the high street, where choice overload is less. The last thing e-marketer would want is a consumer visiting their website and not making a purchase due to choice load. This brings me to the question what are e-marketers doing to the cure this choice paralysis that we consumers are facing online?

I’m pleased to say e-marketers have recognised this phenomenon, over the past years they have develop a system called “Recommendation system” commonly known as RS. Xiao and Bombast (2007) said “RS are software agents that elicit the interests and preferences of individual consumers and make recommendations accordingly”. For us normal consumers, RS support and improve the quality of our decision making while searching, selecting products and most importantly eliminate choice over load online.

Most companies such as Amazon, Netflix and Fitbay have embraced and implement this system very effectively to their advantage. Let’s look at a few examples-

Amazon

Amazon uses recommendation to personalise online shopping experience for each and every consumer that visits their website. From the circled section in the picture above, you can see everything is tailored and personalised based on customer interests from showing programming titles to a software engineer, baby toys to a new mother and books to students. With stars rated customer reviews, this evidently reduces the painful process of decision making for consumers.

Netflix

Netflix takes a different approach about recommendation system. They roulette randomly picks films and TV show for users to watch, helping to reduce choice paralysis. It also offers a filtering service, allowing people to narrow the search by director, genre, actor or keyword.

Fitbay

Fitbay is a new Danish online service that is taking recommendation system to a whole new level.  The site recommendation system only shows users clothing that will fit their body. The site gather information about the consumer by asking a 30-second survey determining their body shape and how fitted they like their clothes to be. The service then narrows down the options from a total of 2 million products. Each item is linked to a web shop where it can be purchased.

How does this system works?

Algorithms

All recommendation system use algorithms. Most of these algorithms start off by finding items or products which has been already purchased and rated buy consumers which overlap the user’s purchased and rated items. The algorithm then combines these items, then eliminates items the user has already purchased or rated, and recommends the remaining items to the user (Linden et al, 2003).  There are two mean types of algorithms used by e-marketers

• Cluster Model – this model is very effective at finding similar items purchased and rated by consumers. It does this by dividing the consumer base into segments then perceive the task as a classification problem
• Collaborative Filtering – This filtering algorithm represent the consumers as an N-dimensional vector. The components for the vectors are classified as positively rated items and negative for negatively rated items.

What is a good recommendation?

There are many ways e-marketers measure their RS success. Let’s look at a few in brief

• Click-through-rate– a good recommendation system will have a high CTR. Indicating the system is recommending products or items relating to consumers’ interest
• Total sales numbers– this indicate consumers are buying items recommended by the RS.
• Return Rates – a low return rate indicates the items been recommended relate to the consumer interest and fit for purpose.
• Customer satisfaction and Loyalty– a high customer satisfaction and loyalty mean RS is eliminating choice over load and painful decision making. (Jannach,& Friedrich, 2013).

 Drawbacks

With all these mentioned merits of RS, there are a few drawback e-marketers should consider when implement or running RS on their websites.

• Difficult and Expensive to set up – RS are very expensive to run, it requires database applications that are not easy to create and run. It takes well qualified techs who are on high salaries to operates it . Overall it needs long-term commitment, time and energy to see it success
• Gets it wrong sometimes – RS relay on technology and human input. We all know technology and human can fail sometimes. For example, Amazon hit the headlines when its RS stared recommending clean underwear to consumer who were shopping for video games and DVD
• Can increase choice overload– RS can recommended too many items for a consumer which can potentially lead to choice and information overload

Reference 

Jannach, D. & Friedrich, D.(2013). Recommender Systems. 1st ed. [ebook] Beijing,. Available at: <http://ijcai13.org/files/tutorial_slides/td3.pdf> [Accessed 30 Apr. 2015].

Linden, G., Smith, B. and York, J. (2003). Amazon.com recommendations: item-to-item collaborative filtering. IEEE Internet Comput., 7(1), pp.76-80.

Schwartz, B. (2004). The paradox of choice. New York: Ecco.

Xiao, B., Benbasat, I.(2007): E‐Commerce Product Recommendation Agents: Use, Characteristics, and Impact, MIS Quarterly, Vol 31(1), pp. 137‐209

Last blog looked how personalised email makes a business email marketing strategy stand out. It underlined how this strategy help get consumers’ attention. However, if not done properly it could easily end up in the delete folder. Today I want to look at steps businesses to take and employ personalisation well to their email marketing.

Step 1

Always have the consent of the consumer

One of the main reasons must emails get classified as junk or end up in the delete folder is because the consumer is not expecting any email from the particular business. In some states in the USA is illegal for a business to send unsolicited e-mails to individuals.  When consumers are signing up, e-marketer can simple have a default box ticked that the individual will be contacted by email.  Behavioral economics has proven that individuals are unlikely to reverses default setting due to status qua bias (Reid, 2012).

Step 2

Address the consumer by the preferred name (Please, spell it correct)

This is the nucleus of personalisation strategy. There are  ways to help get consumers preferred name. The easy way as mentioned in pervious blog was to insert a box asking consumers how they like to be called.  Always start with a greeting such as ‘Hi’, ‘Hello’ or ‘Dear’ as showed in the example blow.

Step 3

Make a link to “contact us” available in the email

Most marketing email I get has ‘noreply@………’, how do you expect the consumer to contact the business if he/she has any enquires or need assistants. On this base, a real solid relationship can’t be built. It is always important to prove an easy way for consumers to get in touch with you. It signifies you care and want to hear from them in the future. In the example below it show the market has provided a link to get in touch.

Step 4

Send a follow up Email

You have sent a personalised a ‘welcome’ and ‘thank you’ to the consumers after signing up or making a purchase. It is curtsey and a clever move to send a personalised follow up email preferable a week after to checking if the consumer is getting the best out of the product or service. This takes retailer-consumer relation a step further. This also offers opportunity to include some recommended products in the email.

Step 5

Never forget to send Birthday or Anniversary email.

It’s been a year since your consumer signed up or it’s his or her birthday, so why not send a personalised promotion or offer to celebrate the occasion.

Step 6

Segment your mailing list

Segmenting your mailing list to small groups, e.g age groups, gender or location helps you generate more suitable content for that group and get more personal as well. For example, you don’t want to send the latest female hand bag promotion to a 20 year old male student. Segmenting into group makes email target rate more realistic. Therefore is very important your sign up form allows you to obtain all the necessary information.

Step 7

Review you open rate and click-through rate

As a business you should always aim to improve. Therefore is important to review your data finding on your email marketing. This will help you to identify where you were successful and were you left short. This will assist you plan how to make your email marketing more personalised, which segmented group to target more and what subject line to use.

References

Reid,C. (2012). An Apple or a Donut? How Behavioral Economics Can Improve Our Understanding of Consumer Choices. Available: <http://www.frbsf.org/community-development/files/reid_behavioralecon.pdf>. (Last accessed 12 April 2015).

Last week blog looked at how mobile advices are changing email marketing. It was established that mobile advice has become central in consumers’ life and generating results.  But with consumers been target with hundreds of promotional e-mails and newsletters, how can e-marketers let their promotional e-mails and newsletters stand out and most importantly influence consumers’ decision making.

To understand the power of email, it is imperative to examine the communication process, which comprises four elements: sender, receiver, medium and feedback process. This blog will focus on the receiver (consumer). First of all we need to identify what types of e-mails consumers prefer. According Edialog (2011) research, 27% of the respondents preferred emails with special offers followed by vouchers (21%) and real-time tracking (21%).

With all these different types of emails preferred by consumers, the most important question is how can e-marketer  make his email on mobile stand out? For me, Personalised emails always gets my attention. As an active online shopper am always targeted with hundreds of promotional emails and most of the time I delete it to make sure I don’t miss important emails. But personalised emails make me pay greater attention to messages or promotions because it makes me believe it relates to my interests.

Personalisation of email doesn’t only help get consumers’ attention but helps build a good relationship between the businesses and consumers (Huang and Shyu, 2009). I remember when I got my first smartphone around 2008 and connected my email to it. A few minutes later I got an e-mail from Blackberry with my name on it, thanking for choosing Blackberry. I felt so special, this made produce my own positive mental picture of Blackberry and anytime I had a problem I never hesitated to email them. That is the power of Personalisation of email.

The attributes and qualities associated with Personalisation of emails are very powerful e-marketers can use it to their advantage. Chatterjee and McGinnis (2010) said that consumers’ perception of fairness increase when they are the recipient of personalised promotion or offer, because they see it as e-retailer willingness to scarify profit in other to build a strong relationship with them and this make them responds positively.

As consumers we are always looking for value for money and see ourselves as competent shopper. There is a strong believe that personalised email with promotion offers may lead to consumers perceiving themselves as competent shopper as they believe they are paying “special” lower price.

• Trust Issue?

Yes, we all know there is always trust issue when it comes to shopping online. With the increase identity and credit card fraud consumers are always careful who they give their details to. Therefore, as a consumer if I receive a personalised email from a business without me giving them my details I will be very reluctant to purchase from them. With personalised emails some consumers may feel “being singled out” and see it as attempts to influence them leading to perceptions of unfairness (Friestad and Wright 1994).

• If you going to use it use it properly

I am a strong advocate personalisation as a form of trust and professionalism, therefore is it very important to get my name right. Must individuals like me have a pet hate for misspelt name. It shows lack of attention to detail and effort.

In personalised emails, the contents have to be engaging and personal. In most personalised emails the only personalised part is the name, the content reads out like the e-marketer is talking to the rest of the world. This is not right!! The whole e-mail from the heading to conclusion has to be about the subjected consumers only.

• How to get to know consumers better

To avoid these mistakes and employ personalised email strategy effectively, you need to know your consumers better. When a consumer visits your website and signs up, this presents an opportunity to get to know them. It is  advisable for retailers to consider a box next to First/ Last Name of ‘How would you like us to refer to you?’ this can help you to refer to the consumer properly in the future.

The same goes for “what would you be most interested know more about?” this helps you to generate the right content for each consumer.  To help your strategy stands out better, you could ask for date of birth and “how often would you like use to contact?”  This will give an idea how often to email your consumer. On the consumer’s birthday, you can send a special email with personalised offer to wish them happy birthday.

Reference 

e-dialog, (2011). Email Relevance and the Proliferation of Mobile Email Use. 1st ed. e-dialog. Available: < http://www.e-dialog.com/pdf/whitepapers/ED321_EMEA_Email_Attitudes_Mobile.pdf> (Accessed 28 Apr. 2015)

Chatterjee, P. and McGinnis, J. (2010). Customized Online Promotions: “Moderating Effect Of Promotion Type On Deal Value, Perceived Fairness, And Purchase Intent”. The Journal of Applied Business Research, [online] 26(1), pp.13-18. Available: <http://file:///C:/Users/owura/Downloads/302-1175-1-PB%20(1).pdf> (Accessed 28 Apr. 2015).

Friestad, M., & Wright, P (1994), “The persuasion knowledge model: How people cope with persuasion attempts,” Journal of Consumer Research, 21, 1–31.

Huang, J. and Shyu, S. (2009). Building personalised relationships with customers via emails.Total Quality Management & Business Excellence, 20(6), pp.585-601.

We all had been targets of numerous email-marketing campaigns. In digital marketing, email marketing has being increasingly recognised as a cost-effective marketing tool and most effective because of its high response rate (Rettie, 2002) and (Niall, 2000). This initiative has been mostly recognised by businesses due it its ability to provide businesses with communication that permitted relationship building and real-time interaction with consumers (Jackson and DeCormier, 1999) over the past years development of technology has provided marketers channels to deliver email promotion and newsletters and consumers channels to access their emails. But there is one device that is making the most effective change and generating results. MOBILE!!!

In this day and age most people have access to mobile device.  With the world population estimate of 7 billion people, 6 billion have access to mobile phones (Wang, 2013). In the UK44% and 61% of households own tablet and smartphone and 56% of them assess Internet through their mobile device (OFCOM 2014). This underlines how central mobile devices is in consumers’ life style.

Over the past 3 years mobile email opens has hit the roof with almost 180% growth (Campaign Monitor, 2015). In the last quarter of 2014 alone, 58% of all opened emails happened on mobile devices, in all, 48% of all emails were read on mobile devices last year (Jordan, 2015).

With all these statistics about ever growing email opened via mobile, has it produce any results? Well, when it comes to responsiveness there was 15% increase unique click on mobile device, higher than other advices such as desktop (Smith 2015).  Experian (2013) research on the other hand, also revealed mobile had the second highest unique clicks of 39% behind desktop.

(Unique Clicks– Being able to track when someone visits a website URL. Only one visit is tracked even if the person visits the website multiple times. )

Has this yield results for e-marketers? In 2014, 27% of sales generated in e-commerce came from mobile phones email marketing (Shepherd, 2014). Another interesting factor is the decision making influence it has on consumers. In 2013, 71% of mobile purchases are influenced by email they receive (Adobe, 2013)

This signal very important message to marketers, more emphasis has to be put on the contents of the email and also make sure the content is compatible with consumers mobile device. According to Apsis (2013) survey 46% of their respondents indicated if promotional email is poorly compatible with their mobile device it discourages them to buy something from the retailer. 71% said they will delete it if is not compatible (BlueHornet, 2014).

• When is the right time to send promotional email or newsletter?

We all had unconvinced time to read email and I’m guilty of deleting emails soon as we see it.  As a student I read my e-mail in the morning and check one more time before I go bed. Apsis (2013) survey indicated other consumers carry out the same patten. 54% said they read emails on their mobile device before they go to bed whiles 49% said they read their emails first thing in the morning.

Is obvious that mobile devices are central in consumers’ day-to-day activity. Evidences proved above indicates emails open on mobile device are generating results. Therefore is important for e-marketer and retailers’ to pay more attention to their contents and make sure their contents are compatible with consumers’ device.

Reference

Adobe. (2013). Digital Publishing Report: Retail Apps & Buying Habits. Available: <http://www.adobe.com/aboutadobe/pressroom/pdfs/Mobile_Shopping_Retail_App_Usage_on_the_Rise_Infographic.pdf>. (Last accessed 12 April 2015).

BlueHornet. (2015). 2014 Consumer Views of Email Marketing Report.Available: <http://resources.bluehornet.com/resources/form/2014-consumer-views-of-email-marketing-report>. (Last accessed 12 April 2015).

Jackson, A. and DeCormier, R. (1999), “E-mail Survey Response Rates: Targeting Increases Response“, Journal of Marketing Intelligence and Planning, v.17, n.3, p. 135-139.

Jordan,J. (2015). 53% of Emails Opened on Mobile; Outlook Opens Decrease 33%. Available:<https://litmus.com/blog/53-of-emails-opened-on-mobile-outlook-opens-decrease-33>. (Last accessed 12 April 2015).

Niall, J. (2000), The Email Marketing Dialogue, Forrester, Cambridge, M.A.

OFCOM . (2014). The Communications Market 2014 . Available: <http://stakeholders.ofcom.org.uk/market-data-research/market-data/communications-market-reports/cmr14/>. (Last accessed 12 April 2015).

Rettie, R. (2002). Email Marketing: Success Factors. Available: <http://eprints.kingston.ac.uk/2108/1/paper.html>. (Last accessed 12 April 2015).

Shepherd,K. (2014). Mobile E-Commerce Hits All-Time High: New Custora E-Commerce Pulse Report. Available:<http://blog.custora.com/2014/07/custora-pulse-mobile-report/>.(Last accessed 12 April 2015).

Smith, L. (2014). The Science of Email Clicks: The Impact of Responsive Design & Inbox Testing. Available:<https://litmus.com/blog/the-science-of-email-clicks-the-impact-of-responsive-design-inbox-testing>. (Last accessed 12 April 2015).

Wang, Y. (2015). More People Have Cell Phones Than Toilets, U.N. Study Shows | TIME.com. [online] TIME.com. Available at: http://newsfeed.time.com/2013/03/25/more-people-have-cell-phones-than-toilets-u-n-study-shows/ [Accessed 30 Apr. 2015].

Last week we established how digital marking came into the picture and we underlined some of its benefits. I concluded that for businesses to experience these benefits they  start off by building Platforms.  One of the Platforms  is Social Networking.

Russell (2007) said “Social networking is the process of connecting entities together based on their social bonds or ties”.  Online social networking started late 1973 with email, the first internet person to person network. Now we all have witness online social networking grown over the years from instant messaging to social networking website like Facebook and Twitter.

Timeline of Social Networking

Statistics prove that social networking website has been the popular  platform businesses use to engage with customers. To help understand why, we need to explore some of its benefits it gives to businesses.

Social networking websites first of all are networking sites that enable users to connect by creating personal information profiles, inviting friends and colleagues to have access to those profiles, and sending e-mails and instant messages between each other (Kaplan 2010). From this definition we can tell businesses can know consumers on a personal level via using Social networking sites.  Muniz & O’Guinn (2001)point out that using Social networking website helps business with their brand creation and product or service awareness.

Let’s use my favourite movie as an example, Warner Brothers used their Facebook profile to promote the movie “The Hobbit: The Battle of the Five Armies.”  This platform allowed visitors to watch trailers, download graphics, and play games. Movie critics were not pleased with the movie. However, it generated over a $1billion during its time at the box office with only $250million budget. This shows the awareness Facebook provided played a fundamental part in the film’s success.

The Hobbit (Facebook page)

Stelzner (2011), on other hand, throw light to other benefits of social network sites, he believes it helps business gain competitive advantage. Because it improved searching rating which leads to increased traffic /subscribers to websites, qualified leads in the long run improved sales and reduction in overall marketing expenses. One significant benefit academics over look is social networking site gives businesses platform to carry out experiential marketing (Palmer & Koenig-Lewis 2009).

Social Networking Experiential Marketing 

One of the memorable social networking experiential marketing I have witness was from Oreo.  Oreo created a campaign on Pinterest and facebook called the “Daily Twist” in which Oreo lovers carved the cookie into various shapes, took a picture, and pinned it to the wall. This brought the product and firm into full view of the public for the entire work day.

https://www.youtube.com/watch?v=Z1XW96QCOK8

Why is this platform so effective? Jacomy et al (2009), Graph theory will helps us understand why social networking sites are able to deliver all these benefits. They believe it’s down to its properties such as density, centrality, connectivity, bridges and holes.  Take connectivity for an example, it has attributes such as reachability, long distance and high number of paths. Therefore is obvious for e-commerce businesses like Asos , Next or even your local corner shop to benefit from word of mouth.

Graph theory

Drawbacks

 When a business or firm is using social networking, there is a big chances a third-party would facilitate abuse of the business’  trademarks and copyrights. Using social media to promote brand, products, or services can also implicate trust, privacy and data security issues. Finally, any negative post responses to marketing campaigns on social networking can tarnish a business reputation.

References

Hemanth, V. (2012). Virtual Social Vetwork and Virtual Communities.Available: <http://www.astra.iisc.ernet.in/Pages/cst-mm/t&sd-2007/Virtual%20Social%20Networking%20-%20Vishal%20Hemanth%20V.pdf>. Last (accessed 12 April 2015).

Kaplan, A. (2010). Users of the world, unite! The challenges and opportunities of Social Media. Business Horizons. 53 (1), 1-6.

Muniz, T & O’Guinn, T. (2001). Brand community. Journal of Consumer Research. 27 (1), 412–432.

Palmer, A & Koenig‐Lewis, N. . (2009). An experiential social network‐based approach to direct marketing. An International Journal. 3 (3), 162-176.

Stelzner, M. (2011). How Marketers Are Using Social Media to Grow Their Businesses. Available:<http://www.socialmediaexaminer.com/SocialMediaMarketingReport2011.pdf>. (Last accessed 12 April 2015).

We as consumers all agree without a doubt the competition in the market place has been extremely competitive.  Big or small businesses are now taking measures to gain a competitive advantage (Grant, 2008). Some of these measures businesses are now implementing are effective digital marketing campaigns (Amaze, 2015).

Historically, digital marketing has not been top of the plans for businesses for a variety of reasons. But now for the first time investment in digital marketing is set to outstrip TV advertising spend by 2016 and its predicted that marketing leaders will spend more than $103 billion on digital marketing by 2019 (Forrester, 2014).

With all this prediction investments, underline recently businesses have seen the importance of digital marketing. The question is how has digital marketing gain so much attention from businesses over the past year?

The answer is WE, the customers and our love of using technology!!! According to OFCOM (2014)

• 82% of UK households have access to Internet
• 44% of UK households own tablet
• 61% of UK households own smartphone
• 57% access internet via smartphone

History of Americans usage of technology

(A detailed history of Digital Marketing)-  http://kapost.com/history-of-digital-marketing-technology/

We consumers are centre of businesses product or service successes.  We have become central in businesses new approaches. Grant (2008) said a business ability to build, maintain and communicate with consumers is central in gaining competitive advantage.

And this is where digital marketing comes in!!!Digital marketing runs hand in hand with technology. And most certainly technology and digital marketing together have opened new channels for businesses communicate with consumers.

There are many organisations that have embraced and used this opportunity very effectively.  A good example is Coca Cola. They have recently launch a new campaign “Content 2020” which aim to double the company’s sales by 2020 through the use of effective digital marketing campaigns. One of their successful campaigns is the “Coke PLAY”. They have created customer loyalty through virtual playground for young people aged 12 to 29 to connect using mobile devices that incorporate voice recognition and location and motion, detecting technologies for games and activities.

Communicating with consumers in a digital manner comes with benefits such as rise in consumers’ awareness about the business’ product or service, loyalty and large market share. How do businesses go about this?  Well, they start off by building Platforms that will help or allows them manage and embrace these channels. social network been one of them.

Before I end, let’s not forgo the criticisms about digital marketing. Many believe the raise of digital marketing has exposured children to commercial messages, and therefore commercialisation their childhood (Linn and Novosat 2008). Also, some initiatives are very expensive and time consuming to implement and if not manage carefully can easily tannish a business reputation.

Reference 

Amaze. (2015). Driving competitive advantage through efficient digital operations management. Available:<http://www.st-ives.co.uk/media/177689/digital-operations-management-whitepaper.pdf>. (Last accessed 12 April 2015).

Grant, R. (2008). Contemporary strategy analysis. Malden, MA: Blackwell Pub.

Linn, S. and C. L. Novosat (2008). “Calories for Sale: Food Marketing to Children in the Twenty-First Century.” The ANNALS of the American Academy of Political and Social Science 615: 23.

Marsey, D. (2010). Digitas marketers discuss consumercentric digital.Available: <http://www.medill .northwestern.edu/newsreleases/archives.aspx?id=164453>.(Last accessed 12 April 2015).

OFCOM . (2014). The Communications Market 2014 . Available: <http://stakeholders.ofcom.org.uk/market-data-research/market-data/communications-market-reports/cmr14/>. (Last accessed 12 April 2015).

Schadler, T. (2015). The Forrester Wave™: Web Content Management Systems, Q1 2015. Available: <http://www.agencyoasis.com/~/media/forrester.pdf>. (Last accessed 12 April 2015).