Search engines for link positioning
As they say in real estate, "location, location, location." Customers must be able to find your site and access it easily. Positioning your link well is key to attracting customers. The simplest way to do this is to register your link at all the major search engines, plus any specialty search engines that might be applicable to your site. There are several services that will register your site with multiple search engines at once. Also, very important are your site's meta-tags, the code that enable search engines to find them. Meta tags contain the key words that users may use to search for your site.
Other link propagation methods
While search engines are an important way for customers to find your web site, a company cannot rely on them alone. According to a December 2000 report by StatMarket, search engines account for only 6.86% of web site referrals. On the other hand, Internet links, such as banner ads, sponsorships, and affiliates accounted for 46.13% of referrals. Direct navigation and bookmarks together accounted for the largest percentage of referrals with 47.01%, showing that many Internet users already know where they want to go when they sign online.
Increasing the number of links to your site does not have to expensive. Swapping links (inviting other sites to link to yours in return for linking to their site) can be very effective. Joining a web ring is a more formal way of swapping links. In it a group of related sites allow users to click from one to another. A "ringmaster" controls which sites are included in the ring. Another option is self-promotion. Site owners can self-promote by posting messages at forums, message boards, and email lists with a tasteful signature file that links to their site. Nor does link propagation have to be high-tech. E-businesses can print their URL on bags, receipts, stationery, business cards, and anything else they can possibly think of. This type of offline advertising is surely an important factor for the 47% of direct navigation referrals.
Banner ads
Perhaps the most quintessential type of online advertising is the banner ad. The classic banner ad is evolving quickly. Today, web advertisers use such innovations as expandable banners that get bigger when a mouse rolls over them. The "skyscraper" ads that run vertically down an entire page are popular, as are the "pop-up" ads that appear on top of a browser when a new site is opened and the "pop-under" ads that appear underneath. The most dynamic new ads are "supersticials," media rich, sometimes interactive, 20-second pop-up ads that resemble television commercials. These innovations are seen as necessary considering banner ad's very low click-through rate. Internet users are savvier than they used to be and bored with "old-fashioned" banners. The banner ad click-through rate has plummeted in recent years. According to Nielsen/NetRatings, in 1996 the banner click-through rate was 3%, astonishingly high compared to 0.63% reported in April 1999. In May 2000, the average click-through rate on the leading banner ads was less than one half of one percent, 0.34%. However, flashy promotions are having a greater impact. The average click-through rate for a supersticial is 6% for example, and many marketers believe that media-rich promotions make an impression, even if they do not drive up the click-through rate.
Email vs. direct mail
With 60% of direct marketing costs paying for paper, postage, and printing, email would seem to be a far cheaper alternative. It only costs $0.05 to $0.10 to deliver an email while mailing a catalog costs $0.50 to $1. Yet email turns out to be one of the most expensive ways to acquire new customers, generally costing about $286 per new customer. Direct mail, on the other hand, is among the cheapest methods at $71 per new customer (source: eMarketer). In addition, direct mail is a far more effective marketing tool according to a 2001 survey of 350 households by The Pitney Bowes and Peppers and Rogers Group. One-third (34%) of those surveyed said that direct mail is the most valuable method companies use to establish and further customer relationships, the highest rated marketing method in the survey. Email was only rated the most valuable by 4% of the households. As with banner ads, net surfers have grown weary of email marketing. The New York Times reported on August 6, 2001 on a Forrester Research finding that about 40% of Internet users who have been online for 4 years or more ignore email marketing. Only 20% of those who have been online 3 years ignore email marketing. For this reason, says The New York Times, companies are finding ways to cut their direct mail marketing costs, such as including flyers in the letters and packages of partners. Yet many look hopefully towards the future of email marketing, with its low-cost, speed, and personalization, it has great potential.
While email has yet to prove itself as an effective customer acquisition tool, it can be very useful for companies interested in customer retention. Three-quarters of the marketers interviewed by Forrester for its 2000 report use email for this purpose. This tactic is popular for good reasons. Email costs only $2 per repeat customer sale with 2.5% conversion to purchase rate. Direct mail costs $18 per repeat customer sale although the conversion rate is higher at 3.9%. This is the reason Forrester predicts that 65% of email marketing dollars spent in 2004 will be for customer retention, either for increasing sales or site registrations.
Customer retention
Clearly, it costs more to attract new customers than repeat customers. Repeat customers are also more profitable because they spend more. According to McKinsey's 1999 report, repeat customers spend more than twice as much per month at a given site than new customers ($52.50 v. $24.50). In addition, repeat customers are more likely to recommend your site to friends and family.
Opt-in email
One of the best ways to keep your customers coming back is to offer an email newsletter. Internet users have become increasingly comfortable with permission or "opt-in" email. According to a 2000 study by IMT Research, 55% of the most experienced Internet users (those who have been online for 2 years or more) have positive views of the "opt-in" emails that they agree to receive. Only 16% have a positive view of spam, or unsolicited email. The study also showed that the longer users have been online, the better they are at differentiating between "opt-in" email and spam. As people become more accustomed to doing business and shopping on the Internet, email marketing will become more accepted.
Email marketing will likely be an even more important tool for online marketers in the future. However, email can be dangerous for marketers if certain guidelines are not followed. Email newsletters should only be sent to "opt-in" subscribers. There are many ways to ask people to subscribe to your list: at your web site, at trade shows, and when you make a sale, for instance. Incentives such as special promotions for subscribers and interesting and relevant content will make your newsletter more appealing to subscribers. Once a customer is subscribed to your list, it should be easy to unsubscribe if he or she wishes.
The keys to effective email marketing are focus and personalization. Allow subscribers to choose the kind of information they wish to receive. Keep several emailing lists for product notices, press releases, and special promotions for example. Subscribers should be able to choose the format of their email, HTML or text. Rather than send the message from a cold, corporate account, have the email originate from a real person at the organization. Similarly, the customer should see his or her email address in the "To:" field, not the name of an email list. Continue to personalize the content of the message using the customer's name at the top of the message and words like "you," "I," and "me." Another way to make your email more personal is to offer an email address for feedback. Read and respond to these messages. Use every opportunity to communicate with your subscribers, including subscription confirmation messages and "good-bye" messages for unsubscribers.
Another important aspect of email newsletters is quality. The impression your company makes through its email is important. Be sure to check and correct your messages before they are sent. Also be sure that your email program is properly secure and password protected to prevent hackers from breaking in. Your system should be reliable and able to handle the growth of your email list.
Web sites and customer retention
Email newsletters can attract customers back to your site, but they will have to have a reason to stay there. Therefore, you should update your content often and allow customers to personalize your site.
In addition, install a counter at your site that can keep track of customer data such as connection speed and browser type. Use this information to update and change your site accordingly. In addition, your site should be designed with your target audience in mind, providing the kind of information they are likely to be seeking. Forrester found that 90% of customers would return to a site that met their expectations and that 87% would tell family and friends about this site. Different types of shoppers will shop in different ways. For instance, technology-savvy PC gamers will prefer different features and information than a budget-conscious newbie shopper.
Hitting the bulls-eye
The target audience is extremely important for online customer acquisition. Focusing your marketing efforts is key to success. First you must seek out your target audience with banner ads and proper link positioning. You want to be where your customers are. Second, you have to hold their interest with customized email and web pages that give them the information and services they desire. When it comes to customer acquisition systems, as with so many other aspects of this new economy, it is time to think long and hard about who your company might appeal to and why.
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