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    Estimating Demand Impact And Conversion Rates

    December 30th, 2008

    I was recently working on an interesting project where I was estimating the demand impact of a change that we had implemented to our site.  Without getting into the details, a change was made so that the customer would be less distracted during their shopping experience.  This then – hopefully – keeps the visitor more engaged with the site and if everything else goes well, they will then buy.

    The tricky part is that the likelihood to convert changes at different points on the site, though it is a bit difficult to get it.

    For example, if all a visitor sees is the homepage, they are going to convert at some percent.  Assume 10% for easy math.  If a visitor doesn’t bounce – meaning come to the site, see one page, and leave – say the percent to convert increases to 20%.  If the visitor then sees a product page they are now going to convert 30% of the time.  And finally if they enter the checkout process they will convert 40% of the time.  The point is that the level that the customer is at in the site changes the likelihood of conversion.

    This seems like it would be a very obvious thing, and to a certain extent it is.  The key component here is not that these differences exist and you know about them.  The key is taking that knowledge into account when making an estimate for demand impact of a change.

    If visitors have all of these different conversion points and a change is made that causes 1,000 visitors to not leave the site you need to take these conversion points into account.  Saying that the 100 more people will buy (using 1,000 visitors * 10 % conversion from homepage) is just as misleading as saying that 400 people will buy (using 1,000 visitors * 40% conversion rate from checkout pages).  When making a demand impact, make sure that you include a few inputs for these different areas.

    For example: 100 visitors * 10% + 300 * 20% + etc.  As long as the percents add up to 100% and the visitors add up to your total you are in good shape.  You can then take this number times your average order value and you now have a demand estimate.  Note that you could even take this a step more and apply a different average order value to people who have been in different areas of the site.  For instance someone who is shopping for Outerwear or A laptop will probably have a different average order value then an individual looking at flip-flops or computer cables.

    Ultimately you can segment this to any level that you are able to get.  Just make sure that the work that you put into arriving at the final number is worth it – especially if you are using the Omniture Excel Client.  Make a judgement call.  If it is just going to be small dollars or you really just need a ballpark then take the 1,000 visitors * 25% or something like that.  It is a guess, but it should be an educated guess.  Each different analysis will require varying levles of confidence.

    Have you done anything like this before?  How did it go?

    This has been a Thought From The Cake Scraps.

    IGN Insider FAIL

    December 17th, 2008

    I said I was going to post about this, and true to my word, I will.

    While viewing my credit card statement online I noticed a charge from IGN Insider (no link as a disservice to them) – a service I had signed up for last year to get some info.  Silly me.  Anyway, I did not want to pay for it again.  All the info is out on the internet and is FREE.  Just look for it.  As a side note, that is why I forget that I even had this account.

    Needless to say they were not helpful at all.  In fact, the ‘customer service’ provided very little of that.  Here is a company that just doesn’t get it.  Instead of just giving me back my $20 and sending me on my way they just hid behind their Terms of Service and basically told me to shove off.  Being polite the entire time – normally good but just aggravating when they have no intention of helping you.

    You can find the whole dialogue below.  Each paragraph is a different speaker.  Paragraph breaks in the actual communication have been removed to conserve space.  Let me know what you think.

    Me: I have canceled my account with IGN. It was just charged to my card. There was no e-mail receipt, there was no notification that the payment was coming due. Nothing. I am outraged that IGN, who clearly has a means to contact me, would just charge my card without any verification. That is just poor. Please remove the charge from my account. As it has only been days since the charge there is no reason that this would be a problem. Regards, David

    Them: Thank you for taking the time to contact us regarding your subscription account. I am sorry for any delays responding to your support request. We do see you have already turned off your auto billing (cancelled) your subscription.It will remain open until the end date described on your cancellation confirmation email. A renewal email was sent to this email address on 11/27/2008. Sorry you missed this email. All of our subscriptions renew automatically, We offer it in our Terms of Service twice during the subscription process and you agree to it while subscribing. We appreciate your email however we do not issue refunds for subscription services except in the case of demonstrated fraud.  Kind Regards, Julie

    Me: I think it is sad that instead of providing customer service you cower behind a ToS. In a world where each individual now has a voice via blogs, Twitter, Facebook, and other social media you would think customer service would be paramount for a company like yours. Instead you are content to take your $20 – nothing but a drop in the bucket for you – and let me share my poor experience with the entire internet community. It no longer takes a newspaper to pick up a story, but an individual. Your response, while I’m sure technically correct, completely misses the mark of providing customer service. Given my experience with what you term ‘customer service’ I am sure this will fall on deaf ears to you, but perhaps not to the many that will read of my poor experience. I strongly believe that you are making a poor choice for your company, but at least you have $20 more in the bank. So shortsighted. Also, per your statement that an e-mail was sent, I did not get anything. I checked both my inbox and my spam folder – which has e-mails prior to 11/27 in it – and found nothing. Since I don’t delete anything from my inbox, I just archive it, I am more than a bit skeptical that the e-mail was sent. When I do a search for IGN in my mailbox the only communication prior to me filing this issue was the day that I originally subscribed to IGN insider. Can you verify it went out? Also, why would I not get an e-mail informing me of my payment (the day my card is charged)? Thanks, David

    Them: Hi David, We do appreciate your feedback regarding our refund policy. I can confirm that an email was sent out on 11/27/2008 to We apologize if you missed this email. I”GN/GameSpy Services Annual Renewal Notification It’s been a great year!We hope you’ve been enjoying the past year with us. We’re sending you this email to remind you that your annual subscription is scheduled to renew on December 11, 2008.” During the original purchase it is agreed that the subscription is auto billed. Unfortunately, we do not send out renewal invoices. A renewal notice is sent out. Please let me know if you have any further questions. Kind Regards, Julie

    So in summary they appreciate my feedback but will not do anything to show it.  They tell me that they did send the e-mail and that they are sorry that I missed the e-mail.  So let me make this clear: I don’t delete anything from that e-mail address and I rarely even check it therefore if it is not in my inbox and not in my SPAM folder (which had e-mail prior to the date they claim they sent it) then I did not get it.  Then Julie includes the text of the e-mail they claim to have sent as if it is either a) “verification” or b) “helpful” of which it is neither.  She then states AGAIN that I agreed to it in the original purchase.  I never argue this point.  All I wanted was some notification that it was happening!

    Needless to say I am not very happy with IGN or IGN Insider.  So I ask you, what are your thoughts?  Was I over the top?  Not angry enogh?  Or should I just not care?

    This has been a Thought From The Cake Scraps.

    Gary Vay-Ner-Chuk Responds

    December 12th, 2008

    If you have not watched a video by Gary Vaynerchuk you are doing yourself a disservice.  The man is amazingly passionate about what he does.  I wrote about how great he was at building brand, but it really hit home today.

    This guy cares.

    I have heard him say it may times on garyvaynerchuk , at winelibrarytv, and at a few things I have watched/listened to him on ustream: “Care about your people.”  He says that he responds to every e-mail he gets.  The guy has tens of thousands of people (last I heard about 80k a day) watch his wine show.  DAILY.  The guy gets several hundred e-mails DAILY.  He can’t respond to it the same day but he does respond.

    Today I got verification.  I sent him an e-mail.  It was 10 days ago and his response could have fit inside a @TheCakeScraps on Twitter, but he did respond.  Amazing.

    This guy has personal brand equity.

    This has been a Thought From The Cake Scraps.

    MBA Brands During Recession

    December 10th, 2008

    So what does a brand mean during a recession?  That is the real question.  Does your brand gain or lose value in a recession? Have you positioned yourself to be seen as a “luxury” that can be done without, a “value” brand that everybody needs, an “affordable luxury”, or as a brand that “is worth the price” because your customer doesn’t have to repurchase every week?

    Certain companies have stood by their luxury brand – such as A&F – and that has not yielded the greatest results.  On the flip side you have Wal-Mart that is doing very well because of how they have positioned themselves from day one.  Both brands are sticking to what they feel their brand stands for, which makes sense for Wal-Mart and takes guts (and deep pockets) for A&F.  It is interesting to note that Wal-Mart has tried to position itself as more like a “Target” in recent years and now they are back to the basics.

    How does all of this relate to what I term “MBA brands”?

    With the economy as it is companies are going to hire “Smart people who get things done“, not just anybody.  They are focusing the available resources so that every dollar is well spent.  Efficiency is key when resources are limited.  These are basic statements that I think everybody should be on board with.  That leads me to my next point:

    MBA brands, the school you are attending for an MBA, become more important as the economy declines.

    Let me break it down how I see it.

    When everything in the economy was good, companies loved to hire the MBAs and were basically going under the assumption that a certain skill set was going to come with somebody that had an MBA.  There was, and is, a premium placed on the top schools and companies were not always willing to fork over the extra money.  Companies, overall, had the school of thought that an MBA is an MBA.  Sure one may be slightly better than another, but not all that much.

    In a down economy there is much talk of people going back to school because they no longer have a job.  Clearly this will saturate the market with MBAs.  How does a company filter out people?  There are many criteria, but I think that the brand of the MBA will increase in importance.  The brand of a top MBA program tells a company that this person is, in essence, “guaranteed” to be a quality candidate for the job – at least in terms of experience and skills gained from an MBA.

    I think this is interesting because it is fundamentally different than how people spend their money during a downturn.  They tend to do away with the brand they normally pick in favor of the store brand or “Sam’s Choice” sort of goods.  They are willing to sacrifice a little quality to get more with the money they have.  The “Great Value” peanut butter is basically the same as “Jiff” but costs less.  Why not get it?

    With a company, the company is going to put an increased focus on the quality of the MBA more so than in the past.  The brand, both your individual brand and other brands you carry with you, such as an MBA, will make or break deals.

    This has been a Thought From The Cake Scraps.

    A Little Politics With Peter Schiff

    December 9th, 2008

    As I have said previously, I don’t want to get into politics much on this blog because often times it can be just a downward spiral.  That said, I just think these two videos are too perfect.  Thanks to Church of the Customer Blog for the first one.

    I voted Libertarian in the most recent election and Bob Barr picked Peter Schiff as his economic adviser.  If you have the time – and if you don’t, make it – watch some of the interviews below with Peter.  I have not done proper research to say if I agree on all fronts with Peter Schiff, but I think it says a lot that the Libertarian candidate had this guy as his economic adviser.  You have 4 years to research; perhaps it is time to break the two party system.

    (Link to YouTube here)

    Below is an expanded view of one of the interviews.

    (Link to YouTube here)

    In the second video, at the end, they take what Peter is saying completely wrong.  It is quite clear he is trying to say that when there is a family people would rather spend time with the family then at work, male or female, but specifically females that are in late pregnancy.  If that is wrong then I think we have a bigger problem.

    This has been a Thought From The Cake Scraps.

    Build Your Brand

    December 5th, 2008

    Just watched a video over at one of my favorite, and rather recently discovered, websites and this guy nails it.  There is no barrier to entry in building your own personal brand in today’s world.  It will not happen overnight, but it will happen.  Build your brand over time by branching out and create value.

    Take something as simple as Twitter.  I started Twitter not that long ago and did a post about my thoughts.  I started with almost nothing.  Slowly I have found people that are interesting and followed them.  Some are individuals, some are companies.  Most have a blog or site of some sort that I can read to find out more about them.  Some I started following on Twitter because I read a post that was interesting or enjoyable.

    I must say that it is an odd feeling to develop these friendships over Twitter.  I read what they are up to, some even follow me back.  And now, just like that, we have a faux dialog between us.  We may not be directly taking to each other, but I still know what is going on with them.

    I still take the position that I don’t what my Twitter feed to be inundated with lots of meaningless junk.  I still try and make my updates interesting.  A comment on something I just found, a link, a question posed to people, a quick response to someone else’s question or comment.  These are the things that I find most interesting and, therefore, try to keep my updates in a similar fashion.

    What do you use Twitter most for?

    This has been a Thought From The Cake Scraps.

    Sales Over Scarcity

    December 2nd, 2008

    With Black Friday here and gone I am left with the very simple question the I would think is in the minds of many brand managers, “Do we promote sales over scarcity, and how does that impact the perception of our brand?”

    Clearly on Black Friday there is a scarcity of products.  People are out to get the great deals, though I didn’t think they were all that fantastic.  There is only a certain amount of every product in the store, or at least only a certain amount at that price.  The issue is how this impacts a brand.  If there are limited quantities, people are more apt to think that the item is better.  If there are limited quantities and some are already gone – or in the process of being taken – a consumer is ever more likely to want to buy the product.  Scarcity, or the perceived scarcity, creates a demand for the product.

    Even Lands’ End, the company I work for, has employed this concept in our “On The Counter” area of our website.  There are limited quantities of the items put up each week and then discounted throughout the week even more.  But, when an item is out it is still displayed with a “Sold Out” where the price should be.  It shows that the other items may sell out as well, so get yours now.

    This tactic is a great way to drive sales at all levels, but it does limit sales.  If you are sold out of an item, clearly you cannot sell more of it.  If you create scarcity around a product then you are, by the very nature of scarcity, limiting sales.  It is important to think about that when using a strategy that promotes scarcity over sales.  On the other hand, if you always have something then there is no urgency for the customer to purchase that moment; that is sales over scarcity.

    Think about how your brand is positioned and ask yourself, “Which is the better fit, sales or scarcity?”  The answer may change depending on the time of year, but every time it is changed you are impacting how people view your brand.

    What do you think is better, sales or scarcity?  Let us know in the comments.

    This has been a Thought From The Cake Scraps.

    Thoughts on Black Friday 2008

    November 25th, 2008

    I do love a good Black Friday event, but it appears that this year stores are coming up a bit short.

    To be fair, I am only looking at Wal-Mart.  That is really the only store that will have a sale of any type in my area.  Yeah, I live in ‘that town’.  But I also hate the huge lines at the major stores.  It just isn’t worth it for me.  Never has been.  But if it is your thing then go for it.

    Anyway, even though I have only really looked at Wal-Mart I think that they are usually a good gauge of how Black Friday deals will be overall.  If Wal-Mart cannot put on a good show then we are in for some trouble.  The exception might be for the kids.  They do have lots and lots of cheap stuff that will appeal to kids.  So maybe you don’t find something for yourself, but pick up something for the kids.

    The other thing that I noticed is that the deals, in terms of items offered, are very similar to last year.  Maybe it is like that every year and I have missed it.  All I know is that Wal-Mart seems to have TVs, some okay console bundles, okay movies deals, a GPS unit, and computers on sale.  Same stuff, new day.  I guess it is still a deal.

    I will do some more browsing on because I really like how they lay things out. (Leave a comment if you have a site you really like)  Perhaps some deal will show up there.  I am looking to buy a laptop, but I want it to have bluetooth and not be totally tiny.  Battery life is also a plus.  I will have to do a bunch more research to figure out what is truly a good deal.

    I want to spend my hard earned money retailers, give me a chance!  I’m still pulling for some great on-line deals to pop up.  TigerDirect has had some great ones already.  I hope others join in!

    Will you be going out on Black Friday?  If so, where and why?

    This has been a Thought From The Cake Scraps.

    Are Antiques Getting Less Common?

    November 21st, 2008

    In this post I return to the topic of virtual goods. I have previously written about virtual goods and how I don’t particularly get them. Clearly there are many reasons why a person would buy such a thing, but I thought that Fantasy7 did the best job making an argument that when you buy a virtual good, such as a gift on Facebook, you are really buying an experience for whomever you are buying it for. Fantasy7 did not look at it so much as a gift of property, but a gift of enjoyment to the gift recipient.

    This does make sense in a lot of ways, but the financial side of me is not yet done kicking. This time I will stay away from video game objects, virtual gifts, and other such things. I will go after a major market: digital music.

    Understand that I don’t have anything against digital music. I love my iPod Shuffle as much as the next person.  I love the ease of use, transfer, and search capabilities of a mp3 library.  My issue is the future.  What happens when you no longer like an artist and you want to get rid of the CD?  There is no garage sale.  Amazon cannot help you. eBay cannot be there for you.  You simply cannot sell the CD when you are done because it is just a file.  Even if you take the money aspect out of this, you cannot share (legally) your music with anybody.  So really when you spend that money, you had better be buying for the experience for the song rather than the song.

    But really this is expanding beyond just the music world.  There are audio books, books for a reader like Kindle, entire video games, movies, pictures, etc.  Basically anything that people can figure out how to get on-line, they are putting on the internet.

    What does this mean to the world of artistic photography?  Can you really justify paying for an digital copy of a piece or artwork when it takes nothing to create the same thing.  There are no numbered prints; I can just print my own.  The artwork is the artist’s brand and with digital distribution they have no control over their brand.  As for DVDs and CDs, whether you like to admit it or not, there is a certain sense of pride to have a DVD filled wall or shelving unit.

    What do you think?  Is the age of Antiques Roadshow dead?  Will there be anything to pass onto the kids for the items I am talking about?  If not, does that say anything about this generation?

    This has been a Thought From The Cake Scraps.

    Redbox Is For Me

    November 17th, 2008

    This story starts 2 days ago.  I recently had some great things happen at work and so I wanted to celebrate.  I headed over to Walmart (did they drop the dash?), the starting point for any real celebration, and picked up some beers and then headed over to the movie section.

    Keep in mind that I have not purchased many moves since my days on eBay when I made buying and reselling a hobby.  I counted on my awesome roommate for movies who had a great collection, Netfix, and newsgroups.  I also don’t really rent movies because I don’t like to pay for something that I don’t have afterwords.  See my post on virtual goods to see if you agree.

    Anyway, I was lamenting my purchase of several movies at work when a co-worker informed me that he just found out that there was a Redbox at our local Walgreens.  My response was a woefully uninformed “What the hell is that?”  He explained it to me, gave me a photocopy of some codes he had copied down for a free rental and here is sit less than 24 hours later having already watched 2 movies that I wanted to watch and didn’t spend a dime.

    So now that you are this far into the post, you may be wondering what Redbox actually is.  Basically it is a movie vending machine.  Not a new idea, but still awesome because it is a network.  You can return a rented DVD to any Redbox location.  The other point that is puts this from “cool” to “freaking awesome” is the cost.  One dollar a night.  You can’t beat that. Oh wait, except with codes that can be used once per credit/debit card you have.

    So I was already sold and then I decided to see if they were on Twitter.  They are.  More awesome.  Can it get better?  Oh yes.  They give out codes for free rentals on Monday.  With all of these codes one has to wonder how the heck they even make money, but I am sure there are a ton of people that never look for codes before buying.  I always do; its just my nature.

    I couldn’t help but spread the good word from my Twitter account @TheCakeScraps at which point a friend took the opportunity to point out that @redbox doesn’t have the greatest selection.  I can’t speak to that.  I don’t even know what was released this past week, or any week, because I just look for movies that look interesting.  I admit that there are movies in the case that kind of make me think “who the heck would want that movie.  Some just look like crap and no surprise that confirms my suspicions on many of the titles such as Beer For My Horses which is clocking it at a whopping 3.8/10.0.

    That said, I would highly recommend that people look into this.  My Redbox is a block away and it takes, literally, 5 minutes to go get a DVD and get back.  I doesn’t have the selection of a Netfilx or local rental store, but the price is right, free DVD codes abound, there are no hours on it – if it is an outside machine – and there is no monthly fee.  Check this service out.

    On a side note, and in closing, I want to say that if you work at or own a company that employs a lot of people – such as a manufacturing plant – or in a place that has high traffic you should really look into this.  I was a little disappointed because I found out that I can’t just buy one and make money from it.  I have to own the place that it is going.  Too bad, I would have thrown up some money to put one in somewhere and taken the chance to get some money.

    What about you; does this seem like something to look into?  Would you use it or is streaming video coming too fast and Netflix is too big, and who knows what else?

    This has been a Thought From The Cake Scraps.