Do you have a disproportionate reliance on paid search? Paid search is the fast and easy way to quickly ramp up your business but you can quickly reach a ceiling where your ROI is maxed out and efficiency gains are difficult to accomplish.

In contrast a natural search program is a slower development process with almost no efficiency ceiling. I have yet to meet anyone in the retail business who believes that their natural search program doesn’t have significant have room for improvement and unlimited potential.

A typical scenario for businesses that have moved from start-up to established is an initial push for natural search optimization that is quickly displaced by an emphasis on paid search. In most cases, this is the right decision because it’s the best strategy for quickly gaining new business. But now may be the time to go back to an emphasis on natural search optimization, cash in on the incremental gains and invest in the long-term viability of your business.

Here are some pitfalls to avoid with your new natural search strategy.

1. Calculating the ROI on natural search programs is fundamentally different than paid search. Marketing dollars are spent and gone with no residual effect other than the lifetime value of acquired customers. Think of natural search as an infrastructure investment… it’s like digging oil wells and collecting monthly dividends for years to come.
2. Pull the natural search program away from the IT department. While IT may be necessary to optimize the structural foundation of your site, they reach a point where they are no longer of value. Strategy and execution belongs to those who have an intimate relationship with your product line and the ability to produce well-written, keyword-optimized metadata and content and that is of genuine value to your customers.
3. The best way to run an SEO program is in-house but it can be an incredible waste of resources if you’re training on the job. If you don’t have the SEO expertise, consider hiring an SEO expert to build processes and train staff as opposed to just outsourcing the entire program. You may also consider outsourcing the more arcane aspects such as link building.
4. Failure to leverage paid search metrics… your initial strategy should be to cover keywords that have a history of conversion and then expand the keyword universe. If you have high rankings for paid and natural keywords on the same page, the synergy will improve the efficiency for both programs.
5. Building a P&L is a bit more difficult for natural search programs because you need to compile more data and make difficult allocations that can be subjective. But if you do not measure natural search results to an identical detail level as your paid search program it will always be at a disadvantage when it comes time to justify your spending.

If you read my previous post on the Invisible Visitor, I maintained that that the route to understanding our customers is engagement. Once they become visible, you are then positioned to make strategic decisions that result in major marketing breakthroughs. So the question is not “if” you should engage but rather “how”.

I struggle to understand why some businesses come to fear their customers. Any business with even the best service standards faces an onslaught of touches with customers who have problems. This constant exposure to negatives is the only reason I can come up with for this fear. Yet these same businesses understand that turning a negative into a positive is one of the best ways to to create a loyal customer. The dedication to pursue this strategy is no easy task and requires a major commitment. Maybe this fear is just a manifestation of the weariness that comes from accommodating customers with what may seem to be unrealistic expectations.

Here’s my list of engagement tactics ranked by the quality of actionable information:

1. Requests for email input on your home page and other locations in your site
2. Blog within your domain
3. Reviews
4. Online chat
5. Search and response to blogs and portals outside your domain
6. Post-transaction online surveys
7. Post-product delivery email and package insert surveys
8. General surveys to email customer base with and without incentives

Note that tactics that are “open invitations” receive the highest quality rating. General surveys are preferred by most businesses because it makes it simple to quantify data, but they are of questionable value because they do not capture fresh information. Also, users want to be in control and do not prefer to respond to your controlled format.

I have received the best quality information with the open invitation to email. Junonia.com does a wonderful job of this by posting an invitation to email the president right on the home page. This results in a large quantity of responses and it requires a lot of effort on her part to respond in a timely manner. There is also a good deal of effort that goes into distributing it throughout the organization. But the quality of this information is invaluable and because it gets you closer to understanding your customers than any other method.

The solution to building forums that work is to define the proper set of expectations that narrow the focus to product and refer users with transaction problems to customer service where issues may be resolved in a more timely manner. For instance if you build a blog, you’re much better off inviting users to engage in the product development process.

Does your experience differ from my assertion?

Where do you go next? The next step is to classify user preferences that are unique to your business by examining paths to conversion in your analytics. Typical classifications may look like this:

• Efficiency shoppers– use navigation and search features to quickly process a transaction and may be receptive to more robust features.
• Browsers– have a tendency to click-thru many thumbnails and may be more receptive to suggestive selling.
• Investigators– have a tendency to click-thru many pages and need plenty of information to gain confidence for a purchase.
• Socializers– have a tendency to visit non-product content and use send-a-friend features, e-mail, reviews and blogs to share information (typical profile for drivers of user-generated content).
• Digiphobics– users who distrust ecommerce, have minimal computer skills and are more likely to complete a transaction over phone or fax.

By analyzing these types of segments, you will have a much better understanding of where to get bang for your buck when allocating your marketing investments. For instance, if your demographic has a high percentage of Digiphobics and you are pursuing a viral marketing program, you may want place more emphasis on off-line tactics rather that jump on the Web 2.0 bandwagon. You also need to keep in mind that you may need to approach this as an analysis of untapped segments because your analytics can only measure what exists on your site. In this case, a competitive analysis of user types is in order.

I’d like to compile comprehensive list of user preferences to share at a later date. Please comment and add to this list.

We do need to step back and evaluate where this is headed and analyze if the attempts of marketers to monetize it will ever succeed. A recurring theme I do see is the businesses that deliver the technology are making a bundle of money and the businesses that are attempting to use it to market their customer base are for the most part, experiencing moderate or no success. However, I believe marketers will eventually learn from their mistakes and do it right.

So let’s use Occam’s Razor and ask why a business would use Web 2.0 technology. I can think of 4 reasons. Please add to my list if you think I’m missing anything.

1. As a public relations tool
2. To enhance the SEO value of your site
3. To empower enthusiasts to drive new business
4. To better understand your customers

Where do you start in developing a Web 2.0 program? First, marketers need to realize that Web 2.0 is just another tool for viral or word-of-mouth marketing and this is a concept that dates back hundreds of years. Second, the tools for viral marketing will forever change but the businesses that have a true understanding of their customers and prospects have a good chance to succeed.

So I’m arguing that if you start out with the goal of better understanding your customers, you have a better chance of accomplishing reasons 1, 2 and 3. The worst mistake you can make is to start by engaging in hit-and-miss tactics that are based on assumptions of your marketing goals. Your customers have to provide the direction. See my article on the Invisible Visitor for more information on this subject.

There an exception to this rule of not starting with a tactic. It’s never a bad idea to post a blog because the cost is nominal and there isn’t much of a downside. The problem arises from the decision of how to theme your blog. How do you know what will really resonate with your customers? I would suggest putting up several blogs and test to see what really works. If none of them work, start a new series of tests based on the input from your failed blogs.

With this in mind, it’s no wonder that successful email and banner advertising is facing diminishing returns. We have taken this viable form of advertising and ruined it for all. The cacophony of obnoxious screaming has caused users to completely ignore these forms of advertising. The only reason they still survive is because these programs are so cheap that substantial returns on investment are still possible. It won’t last long.

This brings me to the title of this article: Small Acts of Kindness. Here in Minnesota, we have recently have been deluged with rain (as well as the entire Midwest). My neighbor Brad has a sump pump in his house with a drainpipe mounted a few feet above ground that was eroding the ground underneath. The pumped water was flowing right back into the foundation. I took two minutes to go into my garage, grab some PVC pipe and mount it to move the flow of water away from the house. Two days later, Brad came bearing gifts. The generosity they extended (bottle of premium gin, case of premium beer and a great bottle of wine) was worth about $80. It was a very nice gesture for my two minutes of action.

I’ll leave you with a tactic that is a small act of kindness. The next time you plan to give away a widget for a purchase of $150 or more in an email campaign, do something different. Just give it way with no strings attached. Include it as a package insert and say “thank you for being our customer”. This may not give you extra revenue tomorrow, but it may give you 10 times the revenue over the coming months.

There is also another twist on this topic on Seth Godin’s Blog where he asks “If you didn’t want anything in return, nothing at all, what’s the most generous thing you could do for your best customer, your best friend, your most important prospect?”.

The people who engage in this activity are some of the brightest and most skilled I have ever met. Yet I many times find that they really can’t get beyond the behavioral data and demographics when it comes to knowing the heart and soul of their customers. If visitors are nothing but data they are still invisible if you don’t understand their desires and motivations. Once they become visible, you are then positioned to make strategic decisions that result in major breakthroughs.

We all know that the route to understanding our customers is engagement. The discipline to do it on a regular basis is where most of us fall short. I had the good fortune to work as the Director of Ecommerce for the women’s apparel site Junona.com. During my tenure there were many accomplishments and also our share of mistakes. But the one thing we aways did right was to stay tuned-in to our customers. The owner and president as well as all of the employees kept a constant dialog and shared that information on a daily basis. When it came time to ask the question, “is this right for our customers and propects?, we almost always had the right answer.

The reason I have cited the very basic concept is twofold: 1) It is frequently ignored, 2) It is the first step to unveiling a strategy for social marketing (which I will address in future posts).