Kikabink News

The New York Times reports that, in just a few weeks, orders for both business and consumer tech products have collapsed, causing technology companies to lay off workers.

How serious is this? Serious enough that tech executives are comparing the situation with the dot-com crash in 2000, when hundreds of companies disappeared and nearly a fifth of all Silicon Valley jobs were lost.

Source: Ashlee Vance, “Tech Companies, Long Insulated, Now Feel Slump”, The New York Times, November 14, 2008

As quoted in Clickz, research firm Javelin Strategy & Research predicts that nearly 20 percent of all online purchases during the holiday season will be paid for using alternative payment methods.

In its report, “2008 Online Retail Payments Forecast”, the research firm quoted such alternatives as prepaid or gift cards, eBay’s PayPal, and eBillMe, an online banking service, as being major winners over the holiday period.

Evidently, the ‘credit crunch’ will see online shoppers to cut down on their use of bank-issued credit cards, while increasing their use of store-branded credit cards and alternative payment methods.

Of the $42.8 billion expected to be spent online during the holiday season, Javelin estimates that or $7.8 billion or 18 percent will be paid using alternative payment methods. By 2012, this is expected to increase to one-third of all online transactions.

Source: Enid Burns, “Consumers Want to Pay Now for Online Purchases, Not Later”, The ClickZ Network, November 11, 2008

Heads up to everyone in the financial information niche: according to BizReport - which quotes a comScore report - people can’t get enough of financial websites right now.

comScore’s report says that the financial news/research category grew 10 percent (8.8 million users) from August to September 2008. The big financial sites with the largest increases were:

1. Guardian Business (141 percent)
2. Sky Money (122 percent)
3. CNN Money (103 percent)
4. Bloomberg.com (60 percent)
5. Telegraph Money & Business News (56 percent)

Source: Kristina Knight, “Report: In tough times, consumers turn to financial websites”, BizReport, November 11, 2008

A recent MarketingSherpa case study is instructive for anyone selling a high-priced subscription or membership based product or service, and wishes to boost renewals.

MarketingSherpa profiled Corbis, a photo licensing agency, which was having difficulty handling the renewals of its content licenses.

The solution? To introduce a process for identifying licenses about to expire and allow sales representatives to target those account holders with about-to-expire licenses and persuade them to renew. Sounds simple… but Corbis had licenses covering 4 million online images with varying types of licenses as well as varying license periods. Around 7,000-10,000 image licenses were expiring each month. And at the time only about 2.5 percent of those licenses were being renewed.

Corbis developed a renewal program that used automated emails to remind clients that their licenses were about to expire, and gave a prioritized list of account holders to sales reps who could then contact the relevant members. While this is relatively easy to set up in most off-the-shelf membership scripts, it’s not so easy when you’re a large company and need to modify existing technological infrastructure.

Essentially, the steps which Corbis took - and which YOU can model, especially if you’re running an expensive membership program - are as follows:

1. Automate the sending of reminder emails to members whose membership is about to expire;
2. Automate the sending of emails to you (or your staff) about the members with accounts about to expire (e.g. by email). Ideally prioritize account holders based on renewal value or other relevant factors; and
3. Call those clients (in order of priority).

Corbis’ automated email efforts resulted in doubling its online renewal rates – from about 2.5 percent to 4-5 percent. The follow-up calls further boosted renewal rates to 10 percent in some locations.

What I find particularly compelling is the use of follow-up phone calls. So many Internet marketers seem averse to contacting their customers by phone… but if you have members paying, say, a few hundred dollars per month, isn’t it worth it?

Source: MarketingSherpa, “How To Double Renewals with Triggered Emails and Sales Reps: 6 Steps”, MarketingSherpa, November 6, 2008

Do online shoppers prefer fixed-price third-party sites such as Amazon.com… auction sites such as eBay… comparison shopping sites such as Shopping.com, rebate sites such as eBates, or any other kind of online shopping channel?

Well, according to research by Piper Jaffray, no single mode of shopping dominates when it comes to online buyer preferences. Respondents to its study preferred fixed-price third-party sales most, followed by going directly to a retailer’s website, then search, auction and comparison sites… but not by significant margins:

• Fixed-price third party: 23 percent
• Direct-to-retailer: 22 percent
• Search: 19 percent
• Auction: 18 percent
• Comparison: 18 percent

Source: eMarketer, “Online Buyers Use Many Channels”, eMarketer, November 11, 2008