Ron Ryan Associates Fixing The Waterfall Web V 3

Fixing The Leaks Improving Business Profitability

Ron Ryan & Associates

Copyright @ 2012, Ronald D. Ryan 1

Ronald D. Ryan President e. [email protected] t. 888-398-1624

mailto:[email protected]

The Truth About eCommerce. “We are all on the Internet. And on the Internet, we are all plumbers. Some of us deal with big leaks, others deal with small ones, and still others design and lay new pipes. But in the end, we’re plumbers whose pipes carry customers, information, and money.”


Agenda – Fixing The Leaks • Who can benefit from fixing customer ‘leaks’?

• What are the benefits from fixing leaks?

• Where can you find the leaks?

• How can you get started?



Who Can Benefit?

“Slump? I ain't in no slump... I just ain't hitting.” - Yogi Berra

Quick Quiz

Copyright @ 20102 Ronald D. Ryan 5

Do your customers use the Internet to find your location(s) or phone number?

Do your customers place orders over the telephone? Do your customers visit your web site or Facebook page

before they decide to buy? Do your customers contact you, or place orders with you (or

your competitors) using the Internet?

Who Can Benefit?

Quick Quiz (continued)


Do your customers use the Internet to find your location(s) or phone number? Yes.

Do your customers place orders over the telephone? Yes. Do your customers visit your web site or Facebook page

before they decide to buy? Yes. Do your customers contact you, or place orders with you (or

your competitors) using the Internet? Yes.

Who Can Benefit?

No matter what size of company you manage, the answer is usually ‘Yes’ to most of these questions.

Are You Acquiring, Converting And Keeping Customers As Effectively As You Would Like?



What Are The Benefits?

“You've got to be very careful if you don't know where you are going, because you might not get

there.” - Yogi Berra

Typical Customer Flow You Need To Model This

Online Sales Process

Sales Center

In-Store Fulfillment & Service

Repeat Purchase

Internet

Off Line Advertising


What Are the Benefits?

Key Concept #1 Know Who Is Leaving And Why: Knowing the number of customers who visit your store(s) or site(s), convert to sales, and make repeat purchases is important. Understanding how many you lose at each step in the process and why, critical.

Copyright @ 2010, Ronald D. Ryan

10


Improving These Metrics = Easy Money…

Sales Center or Retail Store

1 in 4 or 5 buy

Fulfillment & Service 8 or 9 out of 10 Keep What You Sold Them

Repeat Purchase (Or Renewal)

Between 5 and 9 Out of 10

Conversion and repeat purchase rates shown are for discussion purposes only. Rates in your business will vary by product, process, customer type, time period, and season.

Copyright @ 2012, Ronald D. Ryan 11 What

Are the Benefits?

Key Concept #2 Complete The Circle: Improvements in conversion and repeat purchases have a huge impact on profitability. Copyright @ 2010, Ronald D. Ryan 12



Repeat Purchase Cycle

Online Process

Sales Center Or Store

Fulfillment & Service

Repeat Purchase


Most People Call, Drive or Log on to Make A Repeat Purchase. But Not Always From You.


Most Profitable Repeat Purchase Cycle



Repeat Purchase


For most companies, online or automatic repeat sales are the most profitable sales of all.


Key Concept #3 Angry no more: Moving repeat sales online lowers acquisition costs, increases customer satisfaction, and improves profits.


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Story Problem: A. If each visitor to your site costs you $5.00 to attract, and for each 20 visitors you sell one product, what is your acquisition cost per customer?

B. For extra credit: You improve your web site. What is your acquisition cost per customer going to be if you sell 1 customer for 10 visitors?

C. Double extra credit: What if you buy 25K leads per month and the cost of improving your web site above in B is $100K. How long will it take you to make your $100K back?



Story Problem: A. If each visitor to your site costs you $5.00 to attract, and for each 20 visitors you sell one product, what is your acquisition cost per customer? Answer: $100.00 B. For extra credit: You improve your web site. What is your acquisition cost per customer going to be, if you sell 1 customer for 10 visitors? Answer: $50.00 C. Double extra credit: What if you buy 25K leads per month and the cost of improving your web site above in B is 100K. How long will it take you to make your $100K back? Answer: 1.6 months.



Key Concept #4 Easy Harvest: The ROI from changes that improve conversion and repeat purchases is often very high. The time to payback is very short.


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Why Study The ‘Leaks’ -


Deeper Understanding of Customers Higher Customer Satisfaction Higher ROI Lower Acquisition Costs Higher Profits


“You Can Observe A Lot Just By Watching.” - Yogi Berra


Where Are The Leaks?



Sales Center or Retail

Store


Repeat Purchase

• Right Traffic But Wrong Products/Services (or Vice Versa) • Difficult Customer Info Requirements For Purchase • Inconsistent Look & Feel At Order Processing Page • Confusing Interface With Poorly Articulated Funnel • Incomplete, Missing, Or Hard To Understand Call(s) To Action • Poor Follow-up To Non-buyers

Common Problem Areas:

Copyright @ 2012, Ronald D. Ryan 21 Where

Are the Leaks?

In-Store Sales Process

In-Store Sales Process

Fulfillment

& Service Repeat

Purchase

• Poor Outdoor Signage and Lack of Curb Appeal • Right Traffic and Location But Wrong Products/Services (or Vice Versa) • Inappropriate In-store Merchandising and Product Placement • Inadequate Sales Staff Knowledge, Training and Monitoring • Confusing or Unappealing Store Layout & Organization • Long Checkout Lines • Non-existent Follow-up To Non-buyers



Are the Leaks?

Telephone Order Process

Online Sales Process Call Center Fulfillment Repeat

Purchase

• Confusing And Inconsistent Value Proposition from CSRs • Inadequate Scripting, Training, & Monitoring • Poor Sales Systems And Support • CSR Compensation Not Aligned with Company Profit Model • Inadequate Customer Information About After -Sales Process • No Systematic Follow-up To Non-buyers



Are the Leaks?

Fulfillment Process


Sales Center or Retail

Store Fulfillment Repeat

Purchase

• Misleading or Inadequate Sales Descriptions • Confusing Delivery Process • Confusing Packaging, Paperwork, and Business Reply Envelopes • Unresponsive Customer Service or Support • Difficult or Complicated Returns Process • Inadequate Satisfaction Monitoring



Are the Leaks?

Repeat Purchase Process


Sales Center

or Retail Store Fulfillment &

Service Repeat

Purchase

• No Easy or Automatic Means of Repeat Purchase • Incomplete or Inadequate Reseller Follow-up • Wrong Channel Follow-up • No Satisfaction Monitoring or Feedback System • No Customer Level Tracking of Purchases, Preferences or Needs • Inability to Adapt Offer To Changing Customer Needs



Are the Leaks?

It’s All Connected


Sales Center

or Retail Store

Fulfillment

& Service Repeat

Purchase

What You Do Here

Affects What Happens Here

• Clear Value Proposition On Web Site • Product Descriptions, Educational Content on Web Site • Call Me Buttons In Sales Sequence • Pick up Merchandise At Store …All Result In Lower Costs And More Sales In Sales Center or Retail Outlet


Are the Leaks?



Sales Center or

Retail Store

Fulfillment

& Service Repeat

Purchase

What You Do Here

Affect What Happens Here

• Properly Set Customer Expectations Regarding Product/ Service • Info on Contractual Post-Sale Requirements (e.g., Signatures, Returned Forms) • Defaulted (Profitable) Product Choices • Defaulted (Profitable) Payment Methods and Billing …All Result In Higher Customer Survivorship

And Here


Where Are the Leaks?


Online Sales Process Sales Center


Repeat Purchase

What You Do Here And Here And Here

• Great Experience • Value Proposition And Brand Promises Fulfilled • On-going Sense of Community • Easy Repurchase Process • Easy Referral Process …All Result In Higher Repurchase and Referral Purchase Rates

Affect What Happens Here


Are the Leaks?

Where To Go For Data? Online Sales Process: Web Analytics and User Testing

Sales Center & Retail: Recorded Calls, Telephony Data, In Store Traffic, Mystery Shoppers

Fulfillment & Service: Complaint Log, Returns and Cancellations Data

Repeat Purchase: Repeat Buyer Profiles & Surveys of Defecting Customers


Are the Leaks?

In theory, there is no difference between theory and practice. In practice, there is. - Yogi Berra


How Can You Fix The Leaks?

But Isn’t This Just Common Sense?

“Constant Improvement

Should Be Part of Our Culture”

“ But we can’t afford to do this

now; we’re in survival mode.”

The Reality: Discipline Is

Difficult To Build & Maintain

Yes. Copyright @ 2012, Ronald D. Ryan 31

How To Fix The Leaks?

How To Get Started?

Outside Consultant(s)

Leadership Commitment <Either Way>

Inside Task Force

Start Here And Work Your Way

Out



Why Bother With A Task Force? Multi-departmental point

of view Objectivity Independence and

intellectual honesty Customer focused rather

than department focused



Make Sure You Are Looking With New Eyes

If it ain’t is broken don’t

go fix it!



Smart – big picture person comfortable with ambiguity

Understands company and how it works

Analytical - not afraid of numbers

Plays well with others - is well respected by peers

Has strong domain expertise in his/her field

Willing to work hard


6 Sigma Ninja’s Helpful But Not Required - A Check List For Change Teams


How To? Buy Books Not Dogma Customer Analytics • How to Measure and Improve In-Store Buyer Experience (Underhill) • How to Measure and Improve Internet Experience and Ecommerce (Kaushik) • How to Measure and Manage In-Bound Call Center Customer Experience

(Cleveland)

Customer Satisfaction Measurement And Management • How to Conduct Meaningful Satisfaction Surveys (Hayes) • Net Promoter Score (Reichold) • Experience And Interaction Economies (Pine, Gallup) • How (Nudges) Can Affect Buying Behaviors (Thaler, Sunstein)

Process Improvement • Six Sigma (Pande et al.) • Lean (Womack, George, Seddon) • Reengineering (Hammer)

No Single Approach Does It All Copyright @ 2012, Ronald D. Ryan 36


Where Should You Start?

Online Sales Process 1 in 20

Buy

Call Center 1 in 5 buy

Fulfillment 8 or 9 out of10 Keep What You

Sold Them

Repeat Purchase (Or

Renewal) Between 5 and

9 Out of 10 Buy again



Sales Center

Fulfillment

& Service

…But also the more controversial, risky, and difficult to measure.

Online Lead Generation &

Sales

The Higher You Start In Your Funnel, The Greater The Impact Of The Change…



Where Should You Start?


1 in 20 buy

Call Center 1 in 5 buy


8 or 9 out of 10 Keep What You

Sold Them

Repeat Purchase (Or

Renewal) Between 5 and

9 Out of 10 Buy again


Start with a system or process you control. Fix it first. The further back in the value chain you start, the safer you will be. How

To Fix The Leaks?

Summary High ROI Falls straight to the bottom

line Requires little investment Improves customer

experience and brand Makes the world a better

place.


Appendix


Payback Calculation

Purchased Leads Cost Per Lead Acquisition Cost New Customers

25,000 $5.00 $125,000.00 1,250

12,500 $5.00 $62,500.00 1,250

Old Conversion 5%

New Conversion 10%

Per Month Savings $62,500

Investment $100,000

Time To Pay Back 1.6


Ron Ryan Associates Fixing The Waterfall Web V 3

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