Digital marketing expert Stuart Carlisle takes a look at how small businesses can get the most from online behavioural marketing and merchandising
- Major online retailers spend millions of dollars each year on the latest technology to ensure more of their products are visible to more of their customers
- Yet smaller retailers don't need to spend thousands of pounds on consultants to help them follow suit
- By following the key learnings of the major players, small businesses can considerably improve sales and conversion rates
The average entrepreneur could be forgiven for feeling somewhat nonplussed on hearing the term 'online behavioural marketing'. In a climate where many retailers are struggling to protect their bottom line, the intricacies of digital marketing aren't always at the top of boardroom agendas.
But with the margins of online retailers being squeezed tighter than ever and unrelenting pressure on price brought about by the buying power of major global retailers, many small businesses could be missing a trick by not embracing the concept.
The jargon of the internet is often very confusing but behavioural marketing can be very simply explained. In a nutshell, it is the personal shopping facility of a retail website. Using data captured from shoppers' previous purchases it is possible to analyse their behaviour and that of other shoppers.
What does this mean in practical terms? Small business owners can direct customers with similar buying habits to products and services which will match their needs and interests but which they may not have looked at previously.
Ultimately this improves sales and conversation rates for the retailer. Put simpler still, high street retailers always give prominence to their strongest and best selling lines in store so why should online retailers be any different?
The concept of behavioural marketing is big business in itself with major international e-business players spending billions of dollars each year in technology and manpower to hone their websites and maximise sales.
Thankfully, making the most of the techniques such retailers have developed and fine tuned over a number of years needn't be a costly or indeed onerous exercise for the average small business retailer.
Behavioural marketing: The basics
The first step in the process is to review your existing site performance. Though this may seem a basic point, many small retailers can fall into the trap of simply establishing an online sales channel and sitting back to watch the sales roll in. A cursory glance at the most popular e-business sites show that the most successful retailers are relentlessly proactive about renewing website content and targeting, meaning that websites with more basic functionality can quickly look conspicuous and out of date.
This is where handy free tool Google Analytics comes in. Essentially a means of analysing the performance of your website, the tool provides a wealth of information that can ultimately help you sell more products to more people.
Quite apart from telling you who is visiting your site and how they got there, it can provide essential data on the customer journey and which parts of it may be working more effectively than others. This is crucial as a retailer can have a very competitively priced product but if there are too many steps (or 'clicks') between locating it and purchasing, the sale can easily be lost to a competitor.
Testing, upselling, cross-selling and engagement
Once a business has used the technology to identify opportunities to correct stages of the customer process, the next logical step is to test various options. This is called 'multi variant' testing. An example of this could be a retailer who wants to analyse the impact that logging in to a website can have on sales conversion. Google Analytics can review the performance of each of the options and give crucial feedback on which is the most successful in terms of keeping the customer engaged.
Such are the benefits of the technology that major online retailers can provide customers with real time product recommendations, basket, cross and upselling of products as well as real time analytics and geographic and demographic customer profiling.
Furthermore, behavioural marketing isn't just about maximising sales from customers who are actively browsing your site. It's also designed to help recover abandoned sales by facilitating ongoing communication with users even after they have left your site. The average user visits a site up to five times before making a purchase, so this relationship building exercise couldn't be more important and is once again easy to instigate by emailing people who have been identified as previous visitors.
Working with analytical software to analyse customer behaviour and habits can seem like a daunting endeavour but small businesses shouldn't be dissuaded from further investigating behavioural marketing. With lingering concerns about the strength of consumer confidence, retailers are going to have to work harder than ever to maximise sales. By emulating their multinational counterparts, they can ensure they are well placed to meet the various challenges of 2011 head on.
Stuart Carlisle is an online marketing expert at Viking Direct, the leading supplier of office products and solutions for small and medium businesses in the UK and Ireland.
This guide is provided courtesy of Smarta sponsor Viking Direct
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