Five Circles of Relationship Marketing on the Web
Web Marketing Today, Issue 51, December 1, 1998
What is Web marketing anyway? Buying a few banner ads? Perhaps, but that's only the beginning. Let me introduce you to a structure that can help you see exactly where you are in your marketing efforts.
Web marketing isn't primarily a numbers game; it's a people-serving activity. You won't do very well at Web marketing until you begin to see the vast number of people on the Web as real individuals, each with needs, desires, and preferences. If you can approach marketing as a way of helping people meet their needs, you will not only have a much more compassionate approach to people, but you will win many, many customers. View Web marketing as building relationships with people. The closer they approach, the stronger a relationship you can build.
Take a look at this chart to see where I am going with this.
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Sphere |
Their Needs |
Your Goals |
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1 |
The World |
Where in the world can I find what I'm looking for? |
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|
2 |
The Community |
I hope I can learn something here, and find someone I can trust who know what he is talking about. That guy contributes regularly to the discussion. I wonder where his website is? |
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|
3 |
The Website |
Aha! Here's some good information. I can gather information about the products and prices that this vendor offers. I wonder what kind of company this is? Can I trust them with an order. |
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4 |
The First-Time Customer |
I'm finally ready to order if I see the right product at the right price. I wonder how soon they'll deliver. Is my credit card info safe here? Are they a fly-by-night company? I hope this works. I don't want to go through all this hassle again. |
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|
5 |
The Regulars |
Great. My product came today. That didn't take long. Everything's here. A nice signed note from the owner -- nice touch. Next time I need something, now I know right where to go. |
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1. The World
You know that lost feeling -- lost in Cyberspace. Say you're looking for a production-quality cassette deck on which to record tape masters. Where do you start? AltaVista and HotBot index more web pages than anyone else. So you put in +"cassette deck" +record and hope for the best. Thousands of pages answer this description, and nothing seems very much like what you're looking for. You search the first three pages of listings until you get frustrated. Then your eye is attracted by a banner ad: "Quality Recording Supplies. Acme Low Prices. Click here." You click and you can tell you're at the right place. You're delighted!
Now put yourself in your customer's shoes. Her need is to find your products and services easily. This isn't just your desire, it's her desire, too. How can you make it easier for her? Perhaps by purchasing some keywords on the search engines. Perhaps by search engine positioning. Your job is to attract her attention. "Over here!" you shout with your link, and hopefully she'll hear you and click.
Way too many business people stop here. Spend a few dollars on advertising and get them in the door, is their attitude. But successful marketers know this is only the beginning. I look at Web marketing as a series of concentric circles. The outside circle is the largest where you are trying to market to the widest possible number -- The World -- to attract some. As you move into the inner circles, the number of people decreases, but the chances of make a sale increase. The circle is widest at The World, but begins to narrow down to a more manageable size at The Community.
2. The Community
If you've understood the Web as an anonymous place, think again. People want to know and be known. Chat rooms are a huge draw on the Internet for just this reason. You may not be able to tell if Tweetie Bird in the chat room is a guy or a girl, of course. People are looking for relationships, but they don't let you know their real name until they're sure you aren't some kind of vulture about ready to pounce on poor Tweetie Bird. Anonymity reigns until trust takes its place, but the Web is about communication, and communication is about relationships.
I don't think chat rooms work very well for most businesses. Apparel manufacturers of trendy Gen-X fashions may find that chat marketing works for them. The Community for most businesses, however, is a discussion list (let's call our fictitious one Audiophile-L), that attracts professionals and serious hobbyists. If you've been subscribed to Audiophile-L for very long, you begin to recognize the names of several people who comment often. Some stand out for their rudeness or stupidity, others for their obvious competence. For example, you see Ernest Boyle's name pop up again and again, and through his comments you feel like you're getting to know him. You look at his e-mail signature and find the URL http://www.acme-boyle.com. Click, and you're there. You've just moved from The Community to The Website.
Ernie understands the value of getting to know the community. If you have a local business, one of the first places you go to get acquainted is to the local chamber of commerce. You're eager to let people know about your business. Maybe you host a mixer so the community can meet you on your turf and get used to coming in your doors. On the Web, business mixers take place through discussion lists and newsgroups. If you're ambitious, you could host one of these communities yourself. It's a lot of work, but it'll certainly bring business your way.
People are seeking community. They want to trust. They want to form relationships. A community spells safety to them. You market to these people by building their confidence in you. When you provide good quality, non-pushy information they begin to trust you. From trust come relationships, and from relationships comes business.
Action Step: Identify the communities on the Web where your most-likely customers might gather. Find a way to be visible in these communities.
3. The Website
Your goal for The World and The Community has been two-fold: to build some kind of trust relationship, and to get them to your website. Once they have arrived on your cyberturf, don't blow your opportunity. What they find there will help build a relationship with you.
Let's face it. The Internet is information driven. People come to your site for one reason -- to get information. I've been to sites where information is sparse or hidden behind registration doorways. These siteowners seem to be afraid of saying too much, of giving away too much information. "I want them to telephone me," these siteowners will tell you. That's their excuse for having a thin site. Dear friend, people won't telephone you unless you give them plenty of information to build their trust in your competence. If they don't find the information they're looking for on your site, Click! They're gone on a quest for that information elsewhere. Offer lots of free information and they'll see you as a trusted information provider. Now, and only now, will they call you, if that is your goal.
Here's the principle: free information attracts people, but developing a sense of trust is what moves them to enter into business relationships.
Trust-Builders
So you "get it" and provide a lot of information. What's next? Trust-builders. Trust relations aren't built by any one thing, but by an accumulation of visual and written clues that your visitor picks up as she survey's your site.
- An attractive, well-designed site says that you are an established business, not some fly-by-night operation.
- A physical address, phone number, and e-mail address say that you welcome communication.
- Featuring recognized brands transfers confidence in those brands to you.
- Photos of the owner and employees declare that you are real people; you're no longer some anonymous faceless site in the Internet zone.
- Clearly stated shipping and return policies indicate that you've developed established ways of dealing with problems should one arise.
- Clearly stated prices show you have nothing to hide.
- Up-to-date information says you haven't deserted the site to let it twist in the wind.
Some siteowners are under the illusion that they can run a business on the Web with ease and little effort. Wrong. You must work very hard on your site, since you have only one chance to build a positive relationship with your visitor. Remember, one click and they're gone.
You have several marketing objectives (yes, these are marketing objectives) at this stage of the relationship:
- Provide so much good information that they're impressed and want to return.
- Get them to bookmark the site. How? Ask them to, and use a bookmark graphic to remind them.
- Give them a reason to leave you their e-mail address. People who have visited your site at least once are self-selected as having an interest in what you offer, so these are your prime prospects. In exchange for their e-mail address, offer something of perceived value -- a contest, a give-away, the inside scoop on sales and specials, more quality information in a monthly newsletter, whatever. But get them to give you their e-mail address. I found that when I provided an opportunity to subscribe free to Web Marketing Today newsletter on every page of my site, that my subscriptions went up substantially. Now I offer two opportunities on every page -- one in the left menu and one at the top and/or bottom of every page -- and the subscription rate has doubled or tripled.
- Let them leave with a good taste in their mouth, and trust in their heart. Most don't purchase goods and services on their first visit to your site. Don't expect they will. But if you make them want to come back, you've done your marketing job.
Notice that site design is not really for computer geeks. It is for marketers, who design a site carefully and purposefully to build a relationship of trust. Don't delegate control just because someone knows HTML; retain that as a marketing function. Web marketing is not about computers but about communication.
Until now (except sometimes in The Community), communication has been mostly one-way, from you to the customer. But if you allow customers to contact you with a mailto-link or response form, you start to learn about a customer's particular needs, and can begin to respond to them as individuals and personalize the relationship. What's more, once you have obtained an e-mail address, continued communication can now be initiated at your discretion, rather than only when the customer happens to remember you on her own.
4. The First-Time Customer
We've moved closer to the center of the circle now, to the first-time customer. Of course, a few people will make a purchase the first time they visit your site, but most won't. For many online stores the conversion rate -- the percentage of visitors who make a purchase -- is probably somewhere between 0.5% and 5%. But don't be dismayed. Those who give you their e-mail address could be as high as 25% to 30% if you make it worth their while. Now you have a list of people who are quite likely to purchase from you. This prospect list is gold. Use it to build a relationship of trust with them over time.
Let me use my own business as an example. Every month I get several calls asking me to sell my list of 53,000 subscribers. My prospect list? Not a chance! If I break faith with my subscribers, I have blown the relationship entirely and you wouldn't trust me any longer. Web Marketing Today, I'm sure you've guessed, is my prospect list, and my goal is to move you from being a free subscriber to a paid subscriber of Web Commerce Today (our excellent sister publication for those who are trying to learn to sell products directly over the Web, http://www.wilsonweb.com/wct1/).
You might use your newsletter list to let subscribers know about what's happening in your industry, specials you happen to be running, contests, etc. Your goal is to get them to visit your site again and make a purchase. This may take several months of hearing from you regularly, but eventually they'll come to trust you, and when your offer coincides with their need, they'll click on a link in your online newsletter, make a purchase, and, bang! you've got a first-time customer.
Consider, for a moment, the "acquisition cost" of a first-time buyer. Let's say that your conversion rate is 1% (the percentage of visitors who make a purchase), and that you've attracted visitors at 25 cents apiece using some kind of pay-per-click system. It takes 100 visitors at 25 cents to produce one purchaser, so the acquisition cost of a first-time buyer is 100 x $0.25 or $25.00. (Amazon.com's acquisition cost is about $8.50.) Observe how important it is to increase your conversion rate (and if you subscribe to Web Commerce Today we'll give you tips on how to do just that -- shameless plug). With this scenario, if you can increase your conversion rate to 5%, your acquisition cost drops to a more manageable $5.00.
5. The Regulars
Your final goal is to move your First-Time Customers into the group of repeat purchasers, the "inner circle" of golden customers -- The Regulars. There is only one way to do this: take extremely good care of your First-Time Customers. If they feel pampered, watched out for, and treated royally, you've made a friend for life. This is how you build a relationship with them. But if their order is shipped late, or if your customer service is mediocre, they will decide, "I won't shop here next time," and you've lost your golden opportunity.
I say golden, because your acquisition cost for The Regulars has already been paid. They cost you very little to maintain.
You continue to nurture the relationship through your e-mail newsletter. If you can develop a system that tracks what they've purchased and what they're interested in, you can even do some one-to-one marketing to their particular interests.
Your customer is happy, too. You've solved a problem for her. Now she doesn't feel at a loss on where to shop for a particular kind of product or service. She knows. She feels secure in that, and if you treat her right, she'll remain loyal to you and tell her friends about the wonderful site she's discovered.
You've received refrigerator magnets, pens, and Christmas cards from businesses where you shop? Of course, it costs them $1 to $2 for each item they send, but this is very low compared to the acquisition cost of a new customer. They are deliberately building a relationship with you that they desire to continue and deepen over the years.
How Does This Impact Web Marketing?
This IS Web marketing. Notice that the kind of marketing is slightly different with each different group. It's the cumulative effect of marketing to each of these five groups that makes your online business successful.
So go ahead and buy a few banner ads for your site. It'll make you feel good, and bring in a few visitors. But know that banner ads are just the beginning to forming that vital relationship with your customer. When you understand that each different kind of marketing is vital to develop and cement a golden relationship, then you've grasped what Web marketing is really all about.
Read additional articles from Web Marketing Today, Issue 51, December 1, 1998
