e-Commerce: Complete. Configured. Connected.
Posts tagged ecommerce
Dear Customer, Do You Want To Get Married? (Part 1 of 2)
Jun 9th
So you have launched a start up – congratulations! It’s a sure bet that you are going to make millions. There is just one small question left: how, exactly are you going to make all those millions? In recent years, we have been informed about business models which expand the ways that business owners on the Net can finance their activities – whether from sales of virtual products (Stardoll Habbo Hotel), remuneration from Google for clicks by their users; by financed searches (Incredimail, Conduit), affiliate commission fees on transactions and leads and more.
However, one model in particular refuses to disappear and is even enjoying an impressive period of renaissance, especially for business users: charges for services by a renewable subscription. This model is precisely suited for businesses that sell “software as a service” (SaaS) at a cost running from tens up to hundreds of dollars per month.
The number of companies in this segment has increased here at Plimus by tens of percent annually and, according to Gartner, the trend is expected to continue.
It is no secret that a business that bases its revenues on subscribers enjoys great advantages: built-in returning customers, the ability to forecast ongoing revenues; a database of users who can be restored to the service as paying customers and can even be encouraged to market it to others.
It is no surprise that this is the dream of many businesses. However, unfortunately for them, this is not the preferred model for the majority of users. As users, most of us have a natural distaste for a permanent arrangement of a continuing payment. It is plain as day that the charges will exceed the time we can make actual use of the service, and that we will find it difficult or forget to cancel the automatic renewal. (By the way, such concerns are justified as a significant percentage of all the automatic renewals for online services are derived from the customers’ forgetfulness or indifference. The business owners take the calculated risk of requests for credits and transaction denials in order to enjoy these repeat purchases. I have experienced very few transactions as a customer that sent me a reminder regarding a subscription that is coming up for renewal.)
It is a tough challenge for businesses to succeed with this model both for the initial purchase, changing the free user into a paying customer, and also in “prolonging the customer life span.” Of interest, as regards the prolonging of the customer life I remember well an amusing conflict during the years that I worked for the dating websites “Cupid” and “American Singles” – an industry that survives totally on subscriptions.
On dating websites, the objective of the service is to identify for the subscribers love and companionship then send them far away from the site for long-term relationships. That is to say, the better the work done by the site, the quicker the customers will leave the site. It’s absurd isn’t it?
Eldad Ben Tora,
VP of Product Management
Photo credit: http://www.flickr.com/photos/benstephenson/276931142/
Casual Gaming – Who Knew It Could Improve Cognition?
Jun 4th
Last week, there was some very interesting news about casual gaming. While some may say those long hours spent on casual gaming is a waste of time or that it turns the brain into mush, those arguments no longer hold up. I knew it! Here’s why: initial results from a new study being conducted by East Carolina University’s (ECU) Psychophysiology Lab found that casual games may have a positive effect on cognition. The study is in its sixth month of trial and currently has 40 participants who are 50 and older. Specifically for this study, the subjects are playing PopCap’s games such as Bejeweled and Peggle though the company did not commission the study.
A recent an article in Gamasutra states, “Thus far, the study’s finding [show] visible improvements in short-term cognition among the participants playing casual games — promising news for health professionals interested in ways to provide mental exercise for the aging and those with dementia-family disorders like Alzheimer’s.”
Additional findings of the study showed that participants who played casual games for 30 minutes demonstrated an 87 percent improvement in cognitive response time and an overwhelming 215 percent increase in executive functioning.
So what does this mean? Experts from ECU believe that this makes casual gaming just about as effective as other medical treatments for cognition. The longer a subject plays a casual game, the greater the impact on their overall health. So, let me hypothesize that therefore, it is important for game developers, such as PopCap, to build games that provide a “frictionless,” e-Commerce 3.0 immersive gaming experience. Limit the number of distractions or unwanted variables during the gaming experience and it stands to reason developers can have a positive impact on the gamers’ cognition… and their revenues too!
Given the 30th anniversary of Namco Pac-Man and my current focus on being a master chef in Youda Games’ aptly-titled Sushi Chef, do you think maybe if I kick my game playing up a notch I could count on always finding where I put the car keys?
Charles Born,
Head of Marketing
Photo credit: http://www.flickr.com/photos/lollaping/2853820634/
E-Commerce 3.0: A New Era of Online Retail
Jun 2nd
To reach 50 million users it took radio 38 years, TV 13 years, the Internet 4 years, and the iPod just 3 years. But Facebook added 100 million users in less than 9 months and iPhone applications hit 1 billion in just 9 months. Web 2.0 has blurred the boundaries between content and commerce. It has changed the way people engage with, produce, purchase, and consume content. As corporate brands give way to peer recommendations and lifestyle-oriented social media, consumers increasingly seek frictionless commerce – frictionless in that the transaction becomes part of the content experience.
This is e-Commerce 3.0 in action: simple to use frictionless interactions that leverage the power of a social network or from within an application, game, or content site – anywhere, anyplace, anytime. Yes, there could still be an online store front in this world (the first wave of online commerce didn’t kill bricks and mortar stores as many predicted) and e-Commerce 3.0 won’t necessarily kill the online retail storefront. However, it will change it dramatically and possibly render it obsolete or unnecessary in some markets.
Ultimately, the inevitable progression of e-Commerce is toward this distributed, e-Commerce 3.0 model. Social communities are beginning to dominate brand names and customers are already demanding comfortable and simple-to-use processes that match their true usage patterns. The vendors first to offer them will enjoy the benefits. Clearly, companies must rethink the way they engage with consumers in this new environment. And although the opportunities inherent in round-the-clock, round-the-world e-Commerce may seem tempting, the complexities of global payment processing, the marketing and sale of goods across diverse cultures, and support of a global customer base challenge even the most web-savvy companies. The emergence of commerce that is freed from the restrictions of domain and browser exclusivity will ultimately drive greater revenue volumes for all businesses and create new challenges for online merchants: the need to upgrade to e-Commerce 3.0, or risk being left behind. Friction full or Frictionless? I think the consumer is telling us the direction we need to take.
Charles Born,
Head of Marketing
Photo credit: http://www.flickr.com/photos/tracy_olson/872011539/
Death of the Online Storefront?
May 26th
E-commerce as we’ve known it is over.
Consumer lifestyles are morphing and the always-on, always-connected era is here for many. For example, who doesn’t leave home without their smart phone anymore? And, with it we can do more than just text or call someone. If we want, we can make secure purchases with always on Internet connectivity or buy a video and watch that final episode of Lost while riding the bus to work. Despite these lifestyle changes, one thing still remains the same – the transaction environment, the store front, is tied to a web browser.
However, there are forces today at play that are going to rapidly change the e-commerce landscape. The rise of the social web has created communities that are changing the online buying process, shifting focus away from brand-owned properties toward peer-to-peer recommendations on social networks. I predict in the near future we will no longer search for products and services – they will find us via the social web.
This is e-Commerce 3.0 in action – the vision to give the consumer ultimate flexibility and simplicity by leveraging the always-on, always-connected persistence of Web 3.0 connectivity. In this new world, consumers want content, not a sales pitch. The ultimate customer experience is the ability to buy anything, anywhere in the world, from any application, on any device, at any time. Simply, the “transaction,” or the selling point, must be part of the consumer’s content experience: They must be able to buy on the fly as part of a new “frictionless commerce” paradigm.
E-Commerce is changing – what does this mean for the traditional internet store front enabled by a single browser and limited payment methods? Stay tuned. There is more to be discussed on this topic.
Charlie Born,
Head of Marketing
Photo credit: http://www.flickr.com/photos/psd/4079485053/
Team Up To Grow Your Business
May 19th
You’ve got to hand it to the computer hardware manufacturers: they know a thing or two about wringing every last penny out of each sale. Go configure a laptop at Dell or HP, and you’ll find more options than you can shake a stick at. Most importantly, you’ll notice that lots of those options are not, in fact, manufactured, or even conceived of, by the equipment manufacturer.
For many online software sellers, the primary limitation on sales is the finite size of the product catalog: once a customer has bought everything you make, you run into a wall.
But think bigger: how about if you could expand that product catalog without dropping another penny on R&D? That’s what a lot of vendors are starting to move to, and it’s working very nicely, indeed. Here’s how to get in the game.
First, find a complementary vendor right here in the Plimus Community, or through your own contacts. Agree a fair commission rate for you to resell their product – 30% or so seems to be a figure most organizations can live with. Now, every time a customer buys from you, offer them the opportunity to also buy your partner’s product.
Most companies who shy away from this are quite reasonably concerned about the impact on their own sales process: what if the customer sees too many come-ons as offensive, as abandons their purchase?
You can offset this by
- Offering the upsell in your Thank You page, so that you ensure you close the deal before upselling; and
- Placing the ad for your partner’s product in a follow-up email. The attach rate will likely be lower, but it’s a great way to get into the game without taking a new risk in the checkout process.
It is very easy to execute these sorts of campaigns inside the Plimus E-Business Platform, and you have no reason not to do so – that it, unless you don’t want to maximize your profits and grow your business.
Simon Jones
VP of Strategic Solutions
Photo credit: http://www.flickr.com/photos/oakleyoriginals/2786948178/
Extend Your Game’s Life Cycle
May 12th
We all know the life cycle of a casual game in the marketplace: slow sales, followed by a huge (but short-lived) spike when you are ‘discovered’ by the gamer faithful, followed by a long tail of limited sales.
Once a consumer picks your game, the chances are they’re going to go looking for one ‘like it’ more quickly than you can push out a sequel – the laws of time/space make it impossible to keep up with the voracious appetites of the gaming consumer! So, unless you can start building games at a superhuman pace, you need to either find another way of filling your product portfolio or risk losing your relationship with your customer.
That’s ultimately why large distributors like Bigfish are able to keep building a market – the consumer returns to their site and finds more offerings. Sadly for the game developer, that can mean a deep dilution of your brand, and a complete loss of a direct business relationship.
But there’s a way to avoid this: cross-marketing. Team up with another developer or two to cross-market one another’s products from your own site, ensuring there’s more to consume each time the customer returns – and that they’ll be primed and ready for your next release.
Working together, you can reduce the time it takes to grow a new title’s popularity: simply cross-market it each time a current title is purchased. You can also maintain the volume on recent (but dipping) games, by returning the favor as new blockbusters take their place at the top of the charts.
Set up a standard business relationship, where you agree a commission for each sale of one another’s titles, and then let Plimus take on the effort of distributing revenues. This is found money for the most part – or at least money that would otherwise go to a distributor and can now be used to keep the quality of new games up.
Jason Kiwaluk
Sales Director, North America
Photo credit: http://www.flickr.com/photos/ilovemypit/2267178231/
New Network Sales Model Changes the Online Sales Game
May 5th
Traditionally, online sellers have fit into one of two models. Either they are a pure retailer, selling other companies’ products at a mark-up. Or they are a ‘factory outlet store’, selling their own products and services direct to consumers.
The second – the factory outlet stores – are leaving literally millions of dollars on the table.
Do the math. A merchant that has one product to sell, at $40 a pop and a goal of selling fifty thousand units next year has put an artificial cap of $2 million in revenue on their business. And once a buyer has put their trust in the merchant, there is nothing more to sell them – that business relationship is valueless.
To understand how much profit is being left on the table, first cast your mind back to the last time you reached the check-out at a grocery store. You’ll recall that the space around the check-out is densely packed with impulse-buy items: packs of gum, gift cards for iTunes, magazines and more. Each of these items represents a high-margin opportunity to add to your eventual bill. And that space is actually bought for the most part by the products’ manufacturers – because they know that once you have your wallet open, you’re highly likely to add another item to your basket.
Now imagine an online buyer purchasing your $40 software package. They would be more than happy to add an impulse-buy item, if you offered them one. Maybe a casual game at $9.95, a support package for $14.95, even a PC Accelerator for $20. If you could take a 30% to 40% revenue share on selling these items, your business’ revenue could increase by as much as 20% – without the need to invest in building new software.
And now imagine running a monthly newsletter to each of your buyers offering a ‘special deal’ on another partner’s product with another 40% revenue share on, let’s say, a $40 item. Assume you have a user base of fifty thousand, and a conversion ratio of just 1% – that would mean you could look forward to 500 sales per month, or six thousand per year at $16 revenue each. Combined with the promotions you offered in the purchase process, you’ve now increased your revenue potential by a full 25%.
The really good news is that you can do this right now, without any financial investment, by using the Plimus e-Business platform. With your own account in place to take care of the e-commerce for your own products, you can swiftly agree to re-sale deals with companies like Namco, Avanquest, Surf Secret and literally thousands more. And of course, you can seek partners who will re-sell your products on a revenue share basis, increasing your audience size.
Plimus merchants are seeing initial invoice sizes as much as 43% higher using Network Sales, increasing their revenues and helping them build a sustainable business for the future.
Simon Jones
VP of Strategic Solutions
Photo credit: http://www.flickr.com/photos/elvissa/823054325/
I Blog Therefore I Am?
Mar 26th
Welcome to the Plimus e-Business Blog. Thanks for taking a few minutes out of your valuable day to read about what we have to say. Hopefully, it will provoke some thoughts and new ideas about how you think about e-Business and e-Commerce. Perhaps what we write will stir you to respond. That is, after all, the purpose of a blog – to stir discussion and put some thought-provoking ideas out there for you to ponder. Maybe if we are creative enough, we just might make you smile or laugh. After all, we like to think of ourselves as a serious but fun-loving group here at Plimus. In any case, why this blog? I read somewhere recently that there are over 60 million blogs in existence, and that gave us pause here at Plimus on being clear about why to launch yet another.
In my early Internet days, I used to think that people wrote blogs, articles, newsletters, etc, out of the goodness of their hearts in order to share their wonderful experiences with the rest of us. While some actually do this, I find the vast majority have some ulterior motive. I suppose we have one too. In the spirit of transparency – our motive is fairly simple. We believe we have some unique perspectives on e-Business and e-Commence that have come from partnering with our customers. And we want to share them, talk about them, get your thoughts, and learn and grow together.
Founded in 2001, Plimus grew up in the Internet age, and as our customers grew so have we. The number is continually growing but currently 5,000 e-Commerce vendors and over 50,000 affiliates rely on Plimus as their e-Business platform. That gives us a unique view of e-Commerce including Financial Management, Copy Protection, Entitlement Management, Traffic Generation, Tracking, Customer Management, Marketing, Promotions, Catalog, and Pricing Management. We are many voices here at Plimus, so there will be many contributors, and we think this will only add to the richness of the views and content.
So, welcome! We hope you stay connected. Blog on and take charge of your e-Business destiny.
Charlie Born,
Head of Marketing
Photo credit: http://www.flickr.com/photos/7502393@N04/ / CC BY 2.0
