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Netflix: How Customers are the New Shareholders

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If you haven't followed the Netflix debacle, here's a quick overview:

  1. In July, Netflix announced it was raising prices on accounts that have both streaming and DVD rentals from $9.99 to $15.98. This actually reflected separate pricing for each service ($7.99 each). Customers were outraged.
     
  2. Netflix almost instantly lost hundreds of thousands of subscribers and was expected to lose a million total - mostly from the DVD-only side. By mid-September, the Netflix stock price was down 20%.
     
  3. Immediately following the stock sell-off and mass cancelation spree, CEO Reed Hastings sent a letter to all subscribers  explaining the reasoning behind the split. The company would be split into two entities, one for streaming (Netflix) and one for DVD's (Qwikster). That quelled some anger but others persisted.
     
  4. Today, amidst the continuing outcries, CEO Hastings announced that there would be no split and the Qwikster initiative would be killed off.

Now how's that for customer complaints turning the tides? Even ten years ago if a company made a major change like this you would have to assemble a small army of protestors and march on their headquarters to get a company to reverse course. Not anymore.

With Facebook, Twitter, blog comments, customer forums, and other social channels you can instantly create an army of a million or more who share your viewpoint. Protesting consumer brands can be incredibly viral. And Netflix' price increase and service changes are no exception.

Here are a few lessons to take away from Netflix' errors:

  1. Test, test, and test again. If you are a public company with a market cap of 5.8 billion dollars, test the Qwikster concept on a small segment of your subscribers. Keep it private and see how many from that group cancel their account as a result. It's insane to think that you would split your company with little input from your customer community. Granted, you're raising prices and that won't go over well anytime. But you never mentioned the split at the time so there was no correlation to the 60% price increase.
     
  2. Don't raise prices 60%. I used Netflix before they offered the streaming service and hung it up after I realized that I could only rent two movies every 8-9 days. That's three days in the mail, 2-3 days at my house, and another 3 days back to Netflix in the mail. Do the math and you can only get 4-6 movies a month. 

    About this time, Blockbuster offered their unlimited DVD rental plan for around $15 per month (2 or 3 DVD's out at a time). I could actually rent movies, watch them, and pick up new movies on my way home. I cut out six days between each change-up. Then they raised prices on this service to $24.99 per month. I dropped out. $15 of entertainment per month was worth it. A 60% increase to $25 was not. Perhaps Netflix should have read their business history books before they made the same change.
     
  3. Honest Communication. ​Netflix has been stuck in a reactive course of action since July. This would have been much simpler if they were more open and honest about their price increase and stagger the plan. Perhaps something like this:

    "Dear Netflix friend, we are working hard to provide you high quality entertainment at a competitive rate. While our costs have risen over the last several years we've kept your fees unchanged. I sincerely wish that we could continue these rates but for us to continue providing great service and great entertainment, we must raise prices to cover our increased costs. We won't do it all at once. Instead we'll make those increases over the next six months to a year and here's what they will look like....."


    See the truthful, planned nature in the response? It's proactive and addresses the issues honestly and straightforward. There will still be repercussions but you will have an informed customer base behind you. Those that love the service might even stick up for you.

With the new power of social media channels, and the potential of major influencers to raise a fuss more quickly than ever, I don't see why any company with an informed customer base would make major changes to their services without testing the waters first. The mass fury of Netflix customers could have been avoided  if they had an approach that was less of a "screw them, they'll deal with it" approach and more of a "hey, we need to make some changes and would like to hear your feedback first" approach. This is all goes back to the 2nd website marketing pillar, engagement. Talk with your customers through the most active channels and don't puke your plans all over them without expecting a backlash.

Customers are the new shareholders. Through social channels they can make your world an awful place to live if you don't provide a good return on their investment.

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Steve Jobs: 1955 - 2011

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As a high school junior in 1985, my family purchased our first computer, a Macintosh.  Little did I know at that time that twenty-six years later, I’d be writing a blog (heck the word didn’t exist yet) about the Mac and the founder of the company that introduced it, Apple.  Since that time, Steve Jobs personally has had a hand in revolutionizing the world of technology as well as at least five different industries:

  • computers - Apple II (1977) & Mac (1984) personal computers, Mouse (1984) , iPad (2010)
  • phone – iPhone (2007)
  • music – iPod (2001)
  • retail – iTunes Store (2001), Apple’s App Store (2008)
  • motion pictures – Pixar (1979, purchased by Steve Jobs in 1986)

Steve Jobs was a visionary and one of America’s true innovators.  And whether or not you feel he should be mentioned in the same class as Thomas Edison or alongside great American entrepreneurs like Henry Ford, Andrew Carnegie, or Walt Disney, it is clear he had a huge impact on our culture and our world.  I know he had a significant impact on my life.

In the past decade or so, my own family has grown up on Apple products that have been favorites on Christmas morning.  But it is still fun to think back to my first Apple purchase.  I don’t remember a lot about that first product, but I do remember using that Mac to create fake IDs with my brothers and our friends.  We were shocked by how easy it was.  Thanks Steve.  

Steve Jobs In Tribute to Steve Jobs:

"Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become."

- Steve Jobs, 2005 Stanford Commencement

The Crazy One – Steve Job’s Tribute (1 minute)

Wired Video Tribute (3 minutes)

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Social Media is Not an Acquisition Tool

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Social media is not an acquisition toolI'm sure this topic is going to rattle the cages of some self-proclaimed social media gurus, or social media ninjas (as some call themselves). There was a time, just a couple years ago, when many of these social media consultants proclaimed that traditional marketing and advertising was dead and that social media was the new way to reach your target audience. They were wrong.

We've had several years to gain insight into the power of social media and the best way to use it. What we've learned is that it isn't about customer acquisition. It's more about connecting with and supporting your existing customer base.

We are in a world where big corporations can take on a more human role by distributing connections to customers throughout their company and not leaving this job to just the marketing department, or just customer support. If you've never read Jay Baer's blog Convince and Convert, you should. One of his most recent posts is about using social channels for engagement and not blasting out more spam that  will simply be ignored.

If you're using Twitter, Facebook, and Google+ to only blast out deals and promotions, then you're blowing it. But if you're using these social channels to connect and interact with your customer community in a way that engages them as more than a customer then you are working the right angle. I'm not going to get into what you should be posting about but just keep in mind that your promotions and deals are ok as long as they aren't the bulk of your conversation. One quick way to get ignored or dropped is to come across as always trying to get the next sale.

Perhaps you're thinking, "But ACME Corporation (fill in the company name) gained 43 new customers with a social media campaign last summer!" ok, I doubt it, but let's say this was true. Just because your son has a swoopy haircut doesn't mean he's going to be the next Justin Bieber. Chances of that are next to nothing. And the chances of your company successfully acquiring a whole swath of new customers from your social media efforts is also as abysmal. Can it happen? Sure! But probably not in the way you hope.

Social media, more and more, is recognized as a powerful way to connect with your customers in ways never before possible. Use it as a way to engage people who already know and trust you and you'll get a whole lot more bang for your buck.

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The Sweet Life of a Website Cookie - Crumbles Revealed

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Most people probably don't know this but every time you visit a website a "cookie" is placed on your computer. Not the type of cookie shown in this picture (which is one of my favorites - white chocolate chip macadamia), but the type of cookie that helps website owners track information related to their visitors and improve the overall user experience.

Here's how they work

A cookie is simply a character string representing a key/value pair (e.g. "visitorID=23498EFDAB323"). These key/value pairs are sent back and forth between your browser and the website's server with every request.

Most cookies contain user preferences (i.e. language, local branch/store, layout, etc) as well as unique identifiers to track a visitor throughout the website.

Marketpath uses cookies frequently for tracking visitors, online customers and current orders, among other things. Upon my visit to marketpath.com the following visitor id cookie was added:

MPVisitorID=ed9f81ea-1d2d-451c-bc4f-f7352ed63ed9

MPVisitorID is the name of the cookie and the long ugly alpha-numeric string is the ID.

Cookies are safe

Since cookies are just bits of text they cannot be executed like a virus and are not considered to be a virus. But they can present other challenges by transmitting personal information in plain text if the connection is not encrypted.  

As is our standard practice, we never store or transmit personal information via cookies. The id shown above is a unique identifier that contains no information outside our system. It is the same as your library giving you an account number of "1232154". Outside of the library's internal database "1232154" means nothing.

Most websites share the same practices because nobody wants to be cited for privacy issues. There are poor developers out there, though, that unknowingly choose to store personal information in cookies which can lead to those cookies being readable by others. Any plain text sent to and from your computer can be intercepted by anyone on the Internet with the tools and know-how.

But most browsers warn you if you are at risk of passing personal information, so you should pay attention to this and let website vendors know if you see these messages. Website developers don't often test for every possible combination of pages, products, and results which may lead to an occasional misidentification of security issues. As long as developers don't store personal information in cookies and only pass that information in secure page requests, you will be ok.

Cookies are also only limited to the domain of the request. If you browse to marketpath.com/home any cookies created or retrieved from that request are limited in scope to marketpath.com. We cannot ask for cookies stored from google.com because the browsers (at least the big dogs - IE, Chrome, Firefox, and Safari) will not allow it. If you're still using Mosaic then you're on your own!

Third-party cookies

Third party cookies are cookies created by outside domains, often ad services such as Google, Bing, or Yahoo, but used on your website. These cookies help the ad services recognize the ads you've seen and potentially personalize the ads displayed based on your browsing habits. These adhere to the same safety concerns as regular cookies but aren't controlled by the website including them.

More resources

​Here are several sites where you can learn more about cookies.

http://en.wikipedia.org/wiki/HTTP_cookie

http://www.microsoft.com/info/cookies.mspx

http://support.mozilla.com/en-US/kb/Cookies

http://www.allaboutcookies.org/

Although cookies are a fairly simple technology, you may have some questions about them. If so, please post your question(s) in the comment area below.

 

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5 Lesser-Known Benefits of Software-as-a-Service

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Since the idea of Software-as-a-Service (SaaS) has been around for quite a few years, the benefits have become pretty well known.  The SaaS proponents stand behind the lower cost of entry, the speed of implementation and availability of the software (not installed).  I wanted to dig a little deeper and take a look at some of the lesser known benefits of the Software-as-a-Service model.

No IT Staff Necessary

No IT Staff NecessaryMany small to medium sized business don't have internal IT staff, which makes them a perfect candidate for SaaS adoption.  In the world of web content management systems, an often-used alternative to SaaS is the Open Source platform (Joomla, Drupal, Wordpress ,etc).  While these programs have their place in the market, they are often written for "geeks" by "geeks".  We have helped numerous companies and organizations migrate away from these platforms after they have become frustrated with their supposedly "easy-to-use" open source system. Without internal IT staff, simplicity should become a major factor in the decision making process.  

Frees Up IT Staff Time

If you do have the luxury of having an in-house IT staff, they are probably strapped for time and bogged down with multiple duties.  Off-loading some of the workload of maintaining a web hosting server and a website is a quick, and usually cost-effective way, to make your IT staff more effective.  Utilizing an easy-to-use, SaaS content management system allows your marketing staff to take control of the most powerful marketing tool at your disposal, your website.  Keeping your IT staff out of your marketing efforts is essential to your online success. 

Eliminates Frustrating Maintenance

SaaS products can be quickly and easily patched and upgraded by the company responsible for the software, eliminating time-consuming maintenance for the customer.  Because SaaS products are built around one central core, applying a patch to it remedies any problems that may be occurring for all of the users.  There is no need to worry about software versioning, expensive updates, or in-house hardware problems.   

Less Learning Curve (Typically)

Easier Learning CurveBecause SaaS products are web-based, users typically latch onto them faster than installed software.  We all use the Internet every day, whether it be for browsing, shopping, or connecting with people, we have all become accustomed to web-based interfaces.  SaaS products piggy-back off this familiar look and feel, making the learning curve much less intimidating.

Never Out of Date

Subscribing to a Software-as-a-Service platform grants you a free pass to each and every update that is released for the software.  You can rest assured that you are getting the latest technology each and every time that you log onto the system.  This allows you to focus on completing your tasks, not wondering if the system will work.

Which SaaS products do you utilize?  What are some of the pros (or cons) that you see in the service offering? 





 

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Is Your Form Killing Your Conversion Rate?

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Simple Web FormThe purpose of most well-crafted business websites is to convert visitors into sales leads (or customers, if your site is ecommerce). There are many aspects that go into engaging your website's visitors and convincing them to give you their information. Some of these aspects are easy to modify and test, like the placement, size and color of call to action buttons. Others are a little more difficult and costly, such as an overall website design change.  However, the element that your site relies on to convert visitors to leads, the form itself, may be hurting your website's ability to do its job.  Is your form actually discouraging visitors from filling it out?  Here are a few elements of your web form to check.

Too Much Required Information

New visitors to your website don't necessarily trust you yet, so don't expect them to give you the keys to the castle.  Chances are you don't need to know all of the information about a potential customer to start a conversation about your product or service.  If you can get away with just learning their name and email address, perhaps a phone number, then go for it. 

Too Many Form Fields

Even if you're not requiring each form field to be filled out to submit the form, seeing a large form can be discouraging.  Does knowing a client's location really help you prior to speaking with them?  If not, eliminate the field all together and see if the amount of submissions increases.  Try this with other fields that may not be necessary (Fax number, address, multiple phone numbers, title, etc.).

Budget/Invasive Questions

Eliminate the "How much is your budget for this project" question.  Yes, qualifying leads is important; however, this goes back to the trust issue of your website and a potential client.  Chances are they don't want to tell you how much money they have until they've at least talked with you.  There is a good chance your budget question has discouraged a qualified lead from contacting you. Check out this case study done by ClickTale that shows a 20% form abandonment rate due to a budget question.

The takeaway from this article should be a desire to test new formats for your web collect forms to increase conversion rates.  Test, analyze, rinse and repeat until you have found the perfect balance for your web form. 

Do you have experience testing your web forms?  If so, what are your favorite tools?  Leave your feedback in the comments below.     



 

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Google +1 Coming to an Algorithm Near You

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Google +1Earlier this week, Wired.com ran a story about Google exploring the integration of the +1 button data into their search ranking algorithm.  While this is something that most of us in the industry have expected since the launch of the +1 button, it is the first time (to my knowledge) that Google has confirmed it.  


This isn't the first time, however, that Google has looked at social signals as ranking influencers.  They have already begun to use the data received from Twitter to help determine rankings for websites.  Facebook, on the other hand, hasn't allowed Google to have access to its data, which may be one of the reasons why the +1 button was created.  

So, is this Google's plan to force everyone to utilize the +1 button?

In a way, yes.  Google's never-ending search for data has led them to the social sphere.  With people constantly tweeting, liking, and +1'ing, Google can gain more insight into the quality of the websites they are ranking.  Hopefully, as the social influences show their importance, Google will begin to tweak the amount of importance they place on links, especially coming from lower PageRank sites that run rampant with link spam.  

Is this a perfect solution?

No.  Google will need to combat the creation of fake profiles used for +1'ing purposes.  They have already shown their intentions for their new social network, Google+, by allowing users to report fake profiles, but this system may need overhauled if the +1 button becomes a major influencer to their rankings.  Black hat SEO's will relentlessly attempt to scam the system, just like some link building services do today.

Lots of Ranking Factors
Keep in mind there are lots of ranking factors, not just the +1

Where does this leave you, the site owner?

Google changes their algorithm all the time.  Most of these changes are minor, but some aren't.  At the end of the day, you always know that Google is trying to rank the highest quality sites for the terms they deserve to rank for.  Add relevant content to your site, interact genuinely through social media, create landing pages for marketing campaigns, and make sure your website can convert visitors to customers.  Remember, you are the expert in your industry, act like it...but in the mean time I'd go ahead and add Google's +1 button to be safe.

Here are the instructions on how to do it: http://www.google.com/webmasters/+1/button/         

 

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4 Reasons You Need a Mobile Website

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Mobile Websites from Marketpath CMSA mobile website or mobile ready website is simply an internet site optimized for viewing on mobile devices or smartphones such as the iPhone, Android or Blackberry.  Because mobile gadgets are smaller than computers (with smaller screens), full websites are often difficult to view and navigate via mobile devices. 

Mobile websites provide a better way for consumers to learn about your organization when they’re on-the-go and typically consist of a “stripped down” version of a website, with less information, prioritized or more important to the mobile user.

Visit the Internet Marketing Dictionary for a detailed definition of a mobile website.

 

So why should your organization develop a mobile site?

1) Because your current site doesn’t work well or look correct on mobile devices

I mentioned this briefly above.  And while it may be obvious, it is also the most significant reason you should consider a mobile site.  Maybe the fonts are too small, or the images too large, or the navigation and layout are too complex or awkward.  Roll over menus that work and look great when viewing from a computer, might be tedious or impossible to use via mobile.  Or, possibly, the site downloads painfully slow on a mobile device.  Regardless of the reason, if your prospect or customer can’t easily use your site or find what they’re looking for (without getting frustrated), they may just try your competitor’s easier to use mobile site!

2) The needs & behavior of a mobile web user are different from a traditional Internet user

While it is critical that your site be easy to view and navigate via mobile, it is also important to realize how mobile users are different from traditional computer web users.  Phone or mobile users are often away from their home or office (or at least away from their computers), with less time to spend surfing or looking for information.  Many times, they have a goal in mind and are looking for very specific information such as a location, news or event, contact, map, product, or schedule.  And often, they only have a few minutes to find what they want.

Because of these differences, your mobile design needs to focus on simplicity, presenting prioritized content that is relevant for the mobile user.  The Mobile Marketing Association suggests a less-is-more design philosophy for mobile web sites, focusing on the 3-5 most important reasons someone will visit your mobile site, and making those items visible upon entry, at the top menu level.  Eliminating side-scrolling and reducing down-scrolling also enhances ease-of-use via mobile.

Mobile Websites and Mobile Marketing3) Mobile internet use is growing rapidly!

Whether you like it or not, more and more people will be accessing your website via mobile devices.  In fact, as of last month (July 2011), 50% of all connections to the internet are from phones and mobile devices.

Microsoft Tag recently developed the infographic to the right to summarize the explosion of the mobile web, which is already a large market, but growing more rapidly by the minute.  If you are still skeptical as to the importance of the mobile web, I’ve included a number of interesting statistics.

  • 70% of the world’s population now have a mobile phone; 87% in the U.S. (per Experian)
  • U.S. children are now more likely to own a mobile phone than a book, with 85% of kids owning a phone as to 73% having books! (National Literacy Trust)
  • 55% of US consumers who purchased a new phone in 2011 bought a smartphone, up from the 34% last year (Nielsen)
  • 38% of US consumers owned a smartphone as of May 2011
  • Daily internet usage via handheld devices jumped from 29% in 2009 to 43% in 2010
  • In the last year Google has seen a 400% increase in the number of mobile searches
  • The #1 access method for local information is now the mobile browser

Despite the growing importance of mobile, less than 5% of businesses have mobile enabled websites today.  In fact, 50% of small businesses have never even checked the appearance or functionality of their site on a Smart Phone!

4) It’s fairly easy to create a mobile website

Assuming the functionality and content from your current site are up to snuff (you know what they say about ASS-U-ME), creating a mobile website is reasonably easy.  This is especially true with tools like Marketpath CMS, or other web content management solutions, that allow you to leverage both your existing website content and content management processes, without having to start from scratch or add new processes to update your mobile site.

Marketpath allows you to easily manage your mobile websites within Marketpath CMS, updating content for both your regular and mobile sites at the same time, while delivering to traditional and mobile formats.

So why not give mobile users what they want and enhance your brand equity and reputation at the same time?

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Marketpath Named 2011 Innovation of the Year Finalist

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Marketpath named Techpoint MIRA Award finalist for 2011 Innovation of the YearMarketpath is excited to be named as one of three finalists for the 2011 Innovation of the Year Award as part of Techpoint's 12th annual Mira Awards initiative. The Mira Awards, which recognize excellence and achievement of Indiana's outstanding technology industry performers, annually include some of the technology industry's leading companies and individuals.

Marketpath is being recognized this year for a comprehensive internet marketing solution for automotive dealers, developed in conjunction with DriveVelocity, a Marketpath partner who specializes in marketing automation for the auto industry. The solution, branded "Customer Relation Automation," seamlessly integrates a dealer's website, campaign management, and CRM into a cost-effective and measureable solution to dramatically enhance the dealer's communications and marketing. The groundbreaking system seamlessly integrates previously disparate systems and processes, to drive customer interactions and enhanced service, while more clearly measuring results. Customer Relation Automation communicates and gathers data at key touch-points, providing a personalized, multi-channel experience for a dealer's prospects and customers, adding value and enhancing their experience throughout the customer life-cycle.

Congratulations also to Exact Target and i2iConnect, the other finalists for this year's Innovation of the Year Award. Stayed tuned until May 7th, when the winner will be revealed at the Mira Awards Gala. Marketpath looks forward to developing more innovative web marketing solutions in the future.

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