The following was originally posted on the REThinkWine blog in Feb 2008. Thanks to IBG for the repost rights.

Found an interesting chart today on marketingcharts.com defining the top online retailers by conversion rate.  This chart shows the total percentage of visitors to a website who completed a transaction during their visit in the critical December timeperiod. All I can say is “Wow”. Check this out:

First, to refresh any memories, a website conversion rate is the percentage of visitors to a website who took a desired action – in this case, placed an order. So, from this info, it appears that nearly 30% of all visitors to thepopcornfactory.com placed an order in December! It should also be noted that retailers only qualified for evaluation in this list if they had a minimum of 500k page views in a month. That’s a lot of popcorn transacting across the web. 

Again, wow.

I’ve been in the direct, online business for many years now. I have certainly spent my share of time obsessing over my own conversion rates, and how to increase them. I’ve hired agencies to help. I’ve tested different variables to help encourage purchase. I’ve implemented multiple promotional strategies (Free Shipping! 50% off! Buy this NOW!). All paid off in different ways, and I’ve felt relatively successful with my efforts, but never to the tune of 30%!

I have a new personal goal.

So how do you improve your conversion rate?  And what is it that’s driving such high numbers for these sites? I think it’s a number of factors – all of which must play together truly move the needle. Here are my 5 suggestions to start you along the path of improving your conversion rate:

1) Know where you come from.
Do you know your own conversion rate? You better, if you want to improve it. Use Google Analytics or other analysis tools to define (and monitor) your conversion rate.

2) Grab a friend
Grab a friend who may be unfamiliar with the nuances of your website and ask them to help you ‘experience’ your website. I suggest you ask them to do two exercises. And don’t forget to watch the entire process. Literally, stand over them – and DO NOT coach them along!

1. Ask them to visit your homepage and experience your site. Don’t tell them to shop. Don’t tell them to read. Just see what they do. We’ve talked a lot with our clients about the importance of having an easy and intuitive navigational path for our clients (see an earlier post by Ben Chinn, our Director of Web Design & Development: http://blog.inertiabev.com/index.php/2006/10/09/site-structure-and-navigation/), as well as the importance of asking for what you want with headlines and ‘Calls-to-Action’ on the part of the visitor. Both of these efforts can have the desired effect of leading your visitor through your website – ideally to YOUR desired end. Did your friend follow your desired path throughout your website? Did they ‘see’ and act on the things you intend your visitors to? Or did they miss key messages entirely?
2. Ask your friend to visit your website now with the goal of purchasing a specific product. Start them at your homepage, and watch the path to purchase. Did they get lost? Struggle to find the right page that the product would be on? Did they find the product and the ‘buy now’ button with the minimal number of clicks? Ask them what information they would want to see in order to make that purchase (price, label, tasting notes, reviews). Did they find what they needed? Did it take a few minutes or many minutes, and a lot of ‘back button’ usage?

3) Resolve to Test and Measure
It’s ok to fail. Seriously. That’s what testing and optimizing is all about. Set a plan for what you want to achieve (in this case, higher conversion rates), list all of the potential tactics for reaching that goal, and get started. There are a number of things you can test: headlines, promotions, graphics/images, positioning of information on a webpage, the order of your navigational links, etc. For each tactic tested, watch “before and after” results. Did things improve or get worse? If they got worse, great! You learned what doesn’t resonate with your visitor. Another item off your list…

4) Take Baby Steps
Don’t throw out the baby with the bathwater. Just because your conversion rates may be lower than you like, and the shopping experience of your ‘friend’ was clunky, doesn’t mean your entire site needs to be overhauled. Commit to taking baby steps to learning about improvements in your conversion rates. Implement small changes at a time, and measure their impact. Learn what helps your visitor along to purchase and what doesn’t. And give yourself some time to learn. Commit to testing something over at least a week, if your visitor traffic is significant enough to give you ‘usable’ data. If it takes a month to get a real read on results, then give it a month.

5) Be Relevant and Meaningful
Your visitor is going to engage with you, and continue to engage with you if you provide something relevant and meaningful to their needs. Think about your own online shopping experience. When you need something and a site has it, that’s relevance. But when you make that relevant product or information entirely MEANINGFUL to them, you’ve now started a relationship. How do you make things meaningful?

• Watch how visitors move through your site. Which pages do they spend the most time on? This can give you an idea of the type of content your visitors are most interested in. Finding a lot of activity on your Recipe’s page? Put it up front! Make it easier to find your Recipe pages, add a link to this page from relevant product pages.
• Watch what visitors are purchasing. Likely the bulk of your sales are on products you’re well known for, have greatest distribution on, and/or highlight the most on your website. But if a sleepy Zin that’s getting no play on your homepage is actually selling fairly well, it’s telling you to give it some presence. Try it out. Suggest to visitors that this is a “Customer Favorite”, and post any reviews that you can get from your customers on that product.
• Don’t forget about your follow up marketing, as well: Email. Once you know what people are purchasing, and where they are going on your website, send emails that demonstrate this. I buy a lot of products on Amazon.com. And, at least once a month I receive an email suggesting other relevant products. This makes my experience with Amazon more meaningful to me. I buy. They suggest. I like that. 

What are you doing to stimulate conversion rates? Have you ‘experienced’ your website? Are you bringing something meaningful and relevant to your customers? Think of it this way: if your website was achieving a 15% conversion rate, what kind of sales would that translate to? Do the math. It's inspiring!

Again. Wow.

The following are a few "quick win" considerations to help refresh - or perhaps even jump start - your winery direct-to-consumer efforts in 2010. None of these cost very much to implement, but the return on each can make a big difference to your brand presentation, the experience your customer's have with your brand/s, and even your revenue bottom line.

eCommerce

1.       Imagery getting stale? Refresh your product and general site photography.
o   For site uniformity, and a user experience that’s easier to browse through and digest, make your product images consistent; i.e. all category page images are label close ups, all product page images are full bottle shots with no context in the background.

2.       Get back to basics. Review your site for the fundamentals: clear information, brand alignment, easy navigation, engaging content.
o   Take a look at other successful winery and retaler websites. Now, review yours. Do you have clear navigation on every page? Clear descriptions of your products? A non-cluttered, brand-aligned experience? Pretend you’re a consumer looking for information. Can you easily find what you’re looking for?

3.       Let your customers speak for you. 67% of shoppers spend more online after recommendations from online community of friends (Internet Retailer, September 2009).
o   If you’re not already doing it, simply ask your club members what they thought of the latest shipment and post their comments on your website. Or, ask tasting room visitors to fill out a product, event or tasting room experience comment card and post their responses.  Don’t forget to ask permission first.

4.       Get social.
o   If you’re not testing the waters on Facebook, Twitter, YouTube or the like, give it a go. Engage in at least one social media community and participate frequently. Start a conversation with your customers and see what happens.

5.       Refresh your email templates.
o   Look at the email templates for the major e-tailers; nearly all have a similar format (logo placement, navigation, header placement, body structure).  Now take a look at yours. Time for a refresh? Develop 2-3 new templates for the following messaging types: 

1. Multiple product marketing
2. Messaging/events announcement
3. Featured or single product promotions

Wine Club

1.       Tackle credit card expired and declined rates.
o   Enlist someone in house to track and manage declined and expired credit cards in your wine club list. Spending just 2 hours a month on this task can make a big difference. For larger clubs with greater turn, consider outsourcing. Even a 10% improvement in your expired/declines can mean critical dollars to your bottom line.

2.       Get to know your club members.  
o   Survey your club members, both during and after they leave your club.  There are a multitude of online survey providers out there – all easily used and managed. Find out why they joined, what they like about the club, what they would be interested in seeing more of, what products are their favorites, what types of events they would be interested in participating in. And after they leave – thank them for being a member and ask why they left. Use the information to adjust your Wine Club program and marketing outreach.

3.       Surprise and delight.
o   Do something unexpected for your customers at least once in 2010: Send a mid-year thank you card hand signed by the winemaker, or send a personal birthday wish to your club members. Surprise them with something relevant to your winery or brand and give your customers a reason to remember you outside of the normal shipment frequency.

Tasting Room

1.       Help your staff engage.
o   Not everyone is a natural born salesperson. Your tasting room staff may be engaging and witty and fun in the break room, but entirely different in front of customers. They might be overselling your wine club, and under-whelming your visitors. Help them out with training. Write scripts and role play. Take a field trip to other tasting rooms and discuss their experiences. Lead brand discussions so they understand and feel empowered. Give them the tools they need to become better salespeople.

2.       Ask for the email address. Your customer list is your most valuable marketing asset. Leverage every opportunity to grow it.
o   If you’re not already capturing or asking for the email address during the sale or wine club sign up process, do so. Incentives are common, but not mandatory. If you’re having trouble capturing emails, offer 10% discount on their next purchase when providing an email address, for instance.  Let the customer know that an email will be sent to them with the applicable discount code (this will help validate correct addresses).

3.       Refresh your merchandise.
o   If you’re offering incremental merchandise in the tasting room, is there an opportunity to refresh it? Better display it? Improve signage to provide better information on the products? Is your merchandising relevant to your brand or wines? This is the environment in which you’ve asked your customers to experience your brand and engage. Create an inviting and engaging environment in which to allow your customers to experience your wines… and use non-wine merchandise to upsell.

Read a compelling blog post earlier today on the usage of coupon codes and disruption to the check out conversion process. Read the blog here. The point made by the author is that the omnipresence of the "redeem coupon code here" box during the check out process is training customers to expect a discount on products - therefore degrading the value offered for both the product itself, and ultimately the brand.  I know I certainly disrupt my own check out process when shopping online to open a new tab in my browser and search for any codes I’ve missed.  Some brands I can easily find discounts for, and generally these same brands allow for multiple promotion code application. So, I’ve now gotten the free shipping offer, a 15% loyalty discount, and another 10% I found online. Yikes for the brand. Yeah for me!

Over the last year (or perhaps slightly longer), I've begun to see eTailers actually marketing their coupon codes on the TOP OF EACH PAGE of their website, essentially using the code as their "merchandising" effort to drive conversion to purchase.  It's the holidays currently, so discounts and incentives are the norm, with eTailers activating them automatically.

Ask any eTailer (and even more so in this economy), and they’ll tell you that discounting and/or free shipping is simply the “cost of doing business on the internet during the holidays”. Outside of the holiday season, Banana Republic and all of their sister brands offer promotion codes front and center on their sites consistently:

15% off with any purchase of $50 or more. Click here for promotion code!

As well, I’m reminded as I browse their site that I receive free shipping as a LUX MEMBER, at all times. And further, everyone knows you can always find a discount for the Gap or Old Navy. So, now I’ve racked up the discounts and Banana is happy that I’ve converted to purchase.  But this behavior not only reduces their margin, and degrades their brand value, but likely doesn’t even pay for itself.

• Have these web marketers gotten lazy about learning which products are most relevant or compelling to their audiences, allowing them to neglect traditional merchandising tactics and instead flash discount codes (i.e. wave money in front of the customer’s nose?) to try to entice the sale?
• Have the product merchandisers gotten lazy in their quest to find or develop products which their customers will find value in?
• Have the business owners gotten lazy about their pricing strategies, neglecting to build and HOLD pricing models which demonstrate value for their products vs. the competition?
• Or, have the customers simply won with their demands to get discounts on products?

Likely one or all of the above.

One of the most critical tasks in brand management is in retaining the value inherent in your brand. Consider what you’re doing to that value when turning to discounting in exchange for the short term sale. What does this say to your customer? What does this say about the value of the product? More on brand management to come.

Happy shopping!

MarketingSherpa recently published a mini case study on how wine.com has increased their average conversion to purchase rate and order size by overhauling the product recommendations found throughout the shopping process for its visitors. I led marketing for Wine.com in 2000, and we were doing similar personalizations with our email marketing program at the time. I'm surprised it took them this long to catch up on the site - especially with all of the recommendation engine providers out there. But then again, we continue to hear stories about the lack of personalization in product recommendations that even successful ecommerce brands are doing, so I guess it's not a surprise that wine.com is only now catching on? (Disclaimer: I worked for Wine.com, the former Virtual Vineyards. The current Wine.com evolved out of eVineyard.com in 2001).

Read the full text here.

I also spent a few years marketing for Smith & Hawken,and during that time we outsourced a recommendation engine for our ecommerce site - providing the product recommendations that you commonly see down the right hand side bar of product pages.  The results showing in these sidebars were products that other consumers had purchased in their basket along with the item showing. It made sense to follow the community recommendation path: "Customers who bought this, also bought this". There was one main problem with this engine: Customers don't always purchase in "rational" pairs (i.e. Candleholders with a candle, two books by the same author). The results were that our sidebars would therefore show "irrational" results. Customers viewing a candleholder would be shown a $500 teak bench, or potters soil.  We quickly abandoned this vendor - finding that a more manually handled, intuitive product recommendation, was more successful in upselling the customer and increasing their cart size. But even this was only a subjective recommendation - and one which didn't take into consideration the needs, likes or past shopping or browsing behaviors of the individual customer.

Wine.com is incorporating both community-led recommendations, along with product and geographical profiles for their merchandise (wine flavor attributes, wine producing regions, as well as which states the specific SKU is available to distribute into), to provide these  recommendations to their consumers. The recommendations are provided in the following format:

o Customers who viewed this item also viewed...
o Customers who bought this item also bought...
o Products ultimately purchased by customers who viewed this item...
o Customers who searched for "xxxx" ultimately bought...
o Top sellers in this price range...
o Items related to search "xxxx"...

But none of these yet speak to true PERSONALIZATION. The first 4 recommendations are based on other customer behaviors. the 5th based on a price range filter, and the last may likely be the most relevant, if they are leveraging robust product attributes to create the recommendation. However, they are not identifying for the specific customers which products would be most relevant based on THEIR interests, taste preferences, purchase behaviors and needs. The opportunity lies in associating not only very robust product attributes (for wine specifically, flavor, aroma, regional, varietal, etc. identifiers), with personal interests and tastes identified through a variety of means: preferences stated, purchasing data, personal reviews given, browsing behavior and relevancy scoring. The goal is to make a product recommendation be RELEVANT to their preferences and needs, MEANINGFUL in the context of their current needs, and to their individual profile, and TIMELY, delivering a recommendation which makes sense right now.

NetFlix has developed perhaps the most successful recommendation engine on the market in terms of relevancy. In fact, they ran a contest with a $1M prize for anyone who could produce a recommendation engine that could best theirs. As far as I know, no one has won yet. However, NetFlix does not have an engine that delivers on the MEANINGFUL and TIMELY part of the equation.

Of course, experts like Amazon have perfected the product attribute equation. The Smith & Hawken products we distributed through Amazon.com were associated with literally hundreds of attributes - but primarily to ensure that customers found what they were looking for in their search algorithm. They have also mastered the community-led recommendations and product review-based recommendations. But again, do they truly deliver a RELEVANT,  MEANINGFUL and TIMELY recommendation for me?

Think about it. Who's nailed it yet? Anyone? Would love to hear your thoughts.

I can't read German, but I know what a strawberry looks like and will (nearly always) smell and taste like. Calling themselves a "virtual taste search engine", Aromicon  presents a simple video representation of the tasting profile exhibited by each of the wines on their site. Innovative way to present? Sure. Will it help wine consumers find wines appealing to their tastebuds any better than the attribute-specific search filters available on sites like wine.com? Maybe not. Certainly more fun, though.