If you're like many Australian marketers a significant part of your online budget is currently being spent in reaching prospective customers... driving traffic to your Web site... filling your sales funnel. In fact Australian business spent in the order of A$620 million in 2005 (60% growth over A$388 million spend in 2004) on banner advertising and Search Engine Marketing (SEM) and are expected to spend in excess of a staggering $700 million throughout 2006.

Dropping customers into the funnel is a critical part of the sales journey and generally, a function, marketers perform quite well. We're probably not so well-renowned, however, for converting prospects into customers... especially in the online channel. Which means a significant portion of marketers’ budgets are going up in smoke.

We're all aware of the financial benefits of the retention of existing customers, in contrast to the acquisition of new ones. And therefore if the objective of our acquisition strategy is to acquire with the intent to retain and grow, then we need to convert a significant portion of qualified leads. The dirty ROI acronym seems to be raising its ugly head again!

So how do we move prospective customers through the sales journey and past the narrow neck of the funnel?

Firstly, we need to understand the different types of customers we have and what their characteristics are (segmentation).

Secondly, we need to understand why these people visit our Web site. In terms of the acquisition activities, what stories are driving them to the Web site and what are they expecting from this experience?

And thirdly, now that we have the traffic, we need to understand how our visitors interact with the Web site.

People visit our site with varied intentions. For example, a person may come to our Web site in order to:

• Research a product or service
• Research in order to compare prices
• Buy a specific product or service based on prior research
• Browse without intent to buy

People who visit the Web site with each intention generally exhibit different behaviour. Therefore, if we can link that behavior with a specific segment we can understand how to best guide each segment along the customer journey and identify what barriers are preventing us from a sale.

Consider a 'financial services' Web site where there is great diversity in product offerings. We might consider segmenting people by 'sex' and 'age' (which can be triggered by the person 'self-identifying' via a number of means such as specific 'age-related' content) and then refine the segment based on prior interaction.

So, for example, if a 35 year old male looks at content related to travel insurance then it is more than likely that he may also be interested in additional home insurance given his absence from his home. This being the case (and assuming we have also qualified that he is in fact investigating this insurance for himself), we can serve up an offering that not only meets his insurance requirements but additionally removes the barrier of time-consuming and confusing product comparisons based on age, sex and other variables.

We have provided him the most appropriate and efficient solution by simply 'listening' to his actions and in doing so we have a greater opportunity to convert.

Listening to our customers is the critical path to conversion. Sam Walton, legendary founder of Wal-Mart, said it best, "Whenever you get confused, go to the store. The customer has all the answers, and all the money.

It's pretty simple really, and the key to good marketing. In terms of online marketing, all we have to do is gain the insight and understanding of the customer's journey by 'listening' to the data captured by our customers’ interaction to understand what’s happening now, combined with our end goals, to determine the barriers to sale.

If we know what the barriers are, then we can remove them.

Labels: Process and Methodology, Web marketing