We have been posting a significant amount of content on LinkedIn and want to be sure we are connected there.
What are your big goals for 2019? We would love to chat with you about them.
We have been posting a significant amount of content on LinkedIn and want to be sure we are connected there.
What are your big goals for 2019? We would love to chat with you about them.
Amazon (NASDAQ: AMZN) should be concerned. Walmart’s (NYSE: WMT) resources are enormous. That gives Walmart time to work on their blind spot. Does Walmart leadership understand what makes Amazon so strong? Probably not. If they do, can they adopt it?
Walmart is changing quickly. We’ve all seen all their ecommerce acquisitions and a lot of new initiatives they’ve launched and tested in the last few months. These included Bossa Nova robot in stores, Mobile, Express Returns, Scan & Go, Check Out With Me, and JetBlack premium membership.
Walmart is still the largest retailer by volume. Walmart has stores within 20 miles of 90% of Americans. Yet, they correctly perceive Amazon, and others as a threat.
Walmart doesn’t want to end up like Sears. However it might.
Let’s look at two similar initiatives from Amazon and Walmart to understand the differences.
Cashier-less checkout was a big theme at ShopTalk. Nordstrom, Macy’s and other retailers are focusing resources to reduce this friction point.
Walmart executives presented their Scan & Go initiative at ShopTalk this year. Amazon launched Amazon Go in Seattle and is expanding. In e-commerce, retailers can either help customers increase their motivation or decrease the friction they encounter during a purchase. In retail, checkout has always been a significant source of friction. No one likes to wait.
In January 2018, Walmart announced the expansion of their Scan & Go cashier-less checkout experiment to 100 stores.
Their promotional video looked promising:
This is how it actually worked.
The demo was “smoother” than the actual experience. During the test shoppers could use their phones with a mobile app or a separate device Walmart provided. As you walked through the store you scan the items added to your physical shopping cart. Then shoppers advanced checkout at a special lane near their current self service checkout.
The Scan & Go initiative was cancelled. Walmart executives said they did learn from it.
What did Walmart learn? It seems like they were asking: If you reduce the friction in checkout will you sell more? No surprise! They likely weren’t impressed with the results of their test.
Walmart essentially moved an already not super popular self checkout scanner onto a mobile device. Self-checkout is an extra job for the customer no matter what part of the store they do it in. They tested the same concept but moved it to a different location in the store.
Walmart tested a variation of what they were already doing. Tweaking, improving and optimizing variations leads to a local maxima, a dead end.
Let’s examine how Amazon approaches tests to see what we can learn about innovation and testing.
Amazon Go didn’t waste time and resources testing variations. They tested a variable first.
Amazon knows that customers don’t like to wait. It’s something that will never change.
“ I very frequently get the question: ‘What’s going to change in the next 10 years?’ And that is a very interesting question; it’s a very common one. I almost never get the question: ‘What’s not going to change in the next 10 years?’ And I submit to you that that second question is actually the more important of the two — because you can build a business strategy around the things that are stable in time. … [I]n our retail business, we know that customers want low prices, and I know that’s going to be true 10 years from now. They want fast delivery; they want vast selection. It’s impossible to imagine a future 10 years from now where a customer comes up and says, ‘Jeff I love Amazon; I just wish the prices were a little higher,’ [or] ‘I love Amazon; I just wish you’d deliver a little more slowly.’ Impossible. And so the effort we put into those things, spinning those things up, we know the energy we put into it today will still be paying off dividends for our customers 10 years from now. When you have something that you know is true, even over the long term, you can afford to put a lot of energy into it.” ― Jeff Bezos
Amazon innovates with a central purpose – making things better for the customer.
Amazon, and anyone who visited a store with cashier-less checkout knows, that people aren’t excited about taking over the cashier’s job. You can see that in every grocery store, Walmart, Lowes and Home Depot that have longs cashiered lines and a handful of people struggling at the self checkout. For stores with higher margins sales people can take over the cashier’s job for the convenience of customers.
Amazon, understood that “checkout” is a lousy experience. Checkout is the variable to test.
Amazon didn’t ask how to improve checkout. They asked: would people buy more if they didn’t have to use checkout at all?
Amazon decided to innovate around replacing the checkout experience. Ironically, it was so successful that there were lines of people to try the experience for themselves.
Amazon proved that customers love their no checkout innovation. Only now will Amazon will test many variations to improve on the concept.
Walmart focused on optimizing store operations with technology.
Amazon focused on innovating on behalf of their customers.
Walmart doesn’t understand that they don’t have an ecommerce channel problem, Walmart’s problem isn’t Amazon. It isn’t even technology. Walmart’s problem is a blind spot, a lack of interest in who its customers are. Walmart is struggling to transform from being experts in products, inventory management, supply chain, and logistics to becoming experts about their customers.
To succeed in retail today you need to start with the customer, not the product.
Amazon is beating Walmart, and others, because it knows its customers and takes as an article of faith that if they do right by customers they will succeed.
How about you? Every successful business has a blind spot!
Here’s what often happens:
A business has a unique approach, or a special emphasis that separates them from competitors so they commit to it. It makes them successful.
They eventually reach a plateau.
Most businesses double-down on what brought them success.
They do what they know how to do and improve on the margins. They press down harder on the accelerator..
They get stuck in that gear.
At first their innovation gave them momentum.
And then things began to level off.
They believe in first gear. First gear is where they feel comfortable.
Metaphorically, Walmart is accelerating in first gear.
Businesses don’t have automatic transmissions! All you have to do is look at the top retailers slide at the beginning of this post.
Few companies ever find second gear.
Let us know if we can help you eliminate your blind spot. Let us work with you to innovate your way to success by reducing customers’ friction and increasing customers’ motivations.
In most instances, digital transformation looks like changing the case of the blackberry, modernizing the screen and instead of the pixelated app icons they are now crisp and shiny.
Yet the operating system is still is slow, does not allow integration from one app to the next and you can’t really add any new apps.
In order to succeed in business today, you would want to compete with a modern operating system and up to date hardware and software processes. We all know businesses that seem to be running with those.
Fortunately, we are not living in Groundhog Day (February 2th, 2006?) where every day we wake up with a pretty little blackberry in our hands every morning instead of our current smartphones. A new option is coming:
However, the reality is that most businesses today are still running their businesses like they were running on Blackberries before IOS was released. They are slow, parts of the business don’t operate well with one another. They aren’t focus on innovating new applications. Their day to day operations and processes are programmed around last generation thinking. It is not quite the experience we were hoping for and trust me, their customers aren’t loving it either. How do they expect to stay ahead of our customers when customers are getting faster than us?
It’s no longer the big fish eating the little fish, it’s the fast fish eating the slow fish.
For every billion dollar idea there will be plenty that don’t add much to the bottom line and several that just eat up resources getting launched. More importantly, there will be many that reach the disagree and commit stage. The point is that most companies are consistently striving for innovation.
What if your team could regularly produce these type of ideas and you could implement and launch them with the agility that Amazon does? Is that a process you’d like to learn?
Jeff Bezos recently announced that Amazon has topped 100 million Prime members. Amazon Prime started just like every other idea in the nearly 2000 experiments Amazon runs in a year. Let’s spend a few minutes to understand their process and then look at how you can effectively adopt it as your own.
Every test begins with a team developing a 6-page narrative memo. No PowerPoint presentations are allowed.
We’ve also learned that what’s most important to the process is the perspective that these memos take. The keys to these memos are to write them from the point of view of the customer’s benefit and to start from the end result or the final goal. This is what Amazon calls “working backwards.” It’s what we teach as Reverse Chronology in our Buyer Legends process.
It may help to think of these internal memos as low-fidelity rapid-prototypes to keep your company agile.
When you start from the end-point and craft the narrative from there, you’re not tied to the present conditions, which means you’re not tied to optimize what already is, and you also build believability for what your idea could BECOME rather than starting from what it might be right now. Prime didn’t become a billion dollar idea overnight. And there were some challenges that had to be ironed out with it before it scaled as big as it did.
So if you started just with the idea to “test” this out, it wouldn’t have been a success.
You had to start with the idea that Prime Members became Amazon-exclusive with their buying and what that would look like and mean for the company, AND then you work backward on how to make that happen.
These documents are well-researched and carefully considered. They are intended to help others in your organization fully comprehend the recommended experiment, all logistics and the anticipated outcomes. Before a meeting starts everyone sits, reads these memos and add their questions in the margins.
These narrative memos align the organization and allows them to commit with the knowledge and resources to see the test executed. Keep in mind no team at Amazon is larger than two pizzas can feed. So there are thousands of teams developing ideas on a regular basis. How many of these ideas could your teams develop regularly if they had the tools and the skills to craft these memos?
We had the pleasure of developing our Buyer Legends Process in order to train Google’s teams to emulate this rapid, customer-centric, innovation process. Like all teams, they needed to communicate more efficiently, prioritize based on well-documented ideas and improve execution time and outcomes. They required a process to provide direct communication instead of implied instructions. Since developing the Buyer Legends Process to achieve those goals, we’ve used it to help dozens of companies from startups to existing brands to be like Amazon.
Would your company benefit from more customer-centric innovation, executing with greater precision & agility and developing a growth system like Amazon’s? Drop me a note if you want to chat further about this innovation process.
Smart entrepreneurs know that in order to grow a business you must keep an eye on both being productive and being innovative. How do you continue to be reliable and efficient with your existing customers while trying to push the boundaries on providing the best customer experiences? What are the technologies, philosophies, and systems you need to have in place to keep pace with your competitors and best serve your customers?
After all, reliable service typically equals loyal customers.
In this on-demand webinar, presented by Comcast Business and Entrepreneur, New York Times bestselling author and customer experience expert Bryan Eisenberg, and Teresa Ward-Maupin, vice president of customer and digital experience for Comcast Business, uncover the best practices for improving productivity and reliability, while striving for innovation and growth.
Search Engine Optimizers (#SEO) and Search Engine Marketers (#SEM) like to throw around industry jargon. Ever feel like they are trying to make your head spin? Penguin, Panda, Possum, Hawk, these are names used for Google updates. Latent Semantic Indexing, Quality Score algorithms, schema, canonical, sitemaps, snippets, etc. It sure is easy to lose track of what really matters.
It is no surprise, we get a lot of questions about SEO. People ask us if something truly influences rankings after some SEO specializing in FUD (fear, uncertainty, and doubt) gets them worried. Large companies often have skilled SEO practitioners in-house but SMBs usually don’t.
We are not SEO practitioners. Jeffrey and I have always tried to optimize for the end searcher (relevance) not the search engine spiders. After all, search engine spiders don’t have credit cards. Our focus remains primarily on conversion rate optimization (#CRO) and customer experience since the late 1990s.
A few weeks ago I presented at my first search conference in several years, SMX Milan. The topic of relevance is again top of mind.
What do we know about relevance? A few years ago Ping Jen, the head of Bing’s Quality Score team asked me to explain relevance to his team on a webinar. Google has also been a client, we helped their own SMB Adwords team to optimize what they do.
Google has been working their way through the hierarchy of optimization since their founding in 1998. Any optimization hierarchy must prioritize visitors’ needs as they approach your site or Google you. You must do the same prioritization of your sales/ conversion goals:
I am going to keep this explanation as simple as possible.
Before Google, the search engine space was a mess. You would have to look through pages and pages of garbage results to find anything remotely relevant. Google launched with their PageRank algorithm that ranked results based on the links flowing to and from the page. That signal was used to make search engines truly functional for organizing the world’s information. It didn’t take long for SEO’s to start finding ways to game those results. Yet Google continued to enhance and optimize their algorithm.
As news of Google’s search quality spread more and more people started to use the search engine making content that was invisible previously more accessible. Google also wanted to index content that was largely unreachable and unreadable. Over time they enhanced their spiders to access different types of content (dynamic content, video, PDFs, scripts, etc.). Today you can use software like DeepCrawl to audit your site. That will determine what technical issues may be holding back your rankings.
By the year 2000, Adwords launched and Google found a way to monetize the incredible value delivered to the public. Many of the signals they used to rank Adwords ads with their Quality Score algorithm evolved to be similar to those used to rank their SEO rankings. However, as Google kept on diving deeper into their results, they realized that 10 blue links were not a truly usable experience. So to enhance their usability, they added smarter widgets to their results pages.
By 2010, Google was already working on personalized search ranking. This is where the results based on personalization factors related to the individual. This was in an effort to make results more intuitive for the individual. Last time I checked, the largest set of Column Families in Google’s BigTable are related to Personalized Search (93 columns) versus only 18 column families for website crawling information. That is nearly 5x the amount of data used to personalize the experience.
Of course, you can see a similar pattern of optimization in the way Google leveraged their paid search Quality Score algorithm. When Adwords first launched it was whoever paid most, got ranked highest. By 2005, they realized this wasn’t the best experience for searchers so they added in Quality Score as a factor and it was initially based on click-through rate of the ads. How many searchers saw your ad and clicked on it? By 2007, they made Quality Score smarter by incorporating searchers behavior on Google’s own search engine results page. Did the user click and bounce right back to the result (assuming the ad was not of great quality)? Did the user come back and refine their query. Over the next few years they kept adding more and more searcher behavior signals. They had data from all the websites using Google Analytics, Android, and Chrome to leverage as additional “online” signals. They would know how your site performed for others based on all those signals and could rank it in organic and paid search based on those user experience signals. Over the last few years, they have encouraged “customers” to share and upload offline conversion data, and other data sources as well, to close the loop.
Former CEO of Google Eric Schmidt said that Google needs to replicate results from the real world. Basically indicating that links alone are not a great ranking signal because they can be gamed online. Over the last few years, searcher behavior has evolved dramatically. We are now seeing more mobile and voice searches. Searches need to be more contextual and intuitive. Today we are finally seeing the next era of search results as Google enters the Persuasive phase of optimization. Recent reports from Wordstream and SEMRush confirm it.
These reports were so controversial, that they shocked the groups studying them. Wordstream who services over a million PPC advertisers and SEMrush, which is a must-have tool for search marketers, were actually surprised by their findings. They were trying to correlate what factors lead to higher rankings in the search engines. You should read the latest search engine ranking reports from SEMrush and Wordstream.
“What we are seeing here is that people with stronger brand affinity have higher conversion rates than people without any, because people tend to buy from the companies they already heard of and begun to trust.” – Larry Kim, WordStream
“Direct visits are fueled by your brand awareness, so building a strong brand image should be an essential part of your promotion strategy.” – SEMrush, page 42 of 55
Amazon optimized retail product search before Google did. They focused early on how to leverage the “user” data and all their purchase history to bring them a better product search result than Google would. They have been focused on this for years.
This is why over 55% of retail product searches start on Amazon today. And they captured 55% percent of Black Friday online sales. You too can be like Amazon, even if you are a lemonade stand. All you have to do is consistently deliver the experience your customer wants.
If you recognize that what the SEMrush and WordStream reports mean by “strong brand image” and “affinity” means the same thing as “Reputation” and includes being “Remarkable” today, that we have used to explain the 5 Rs of SEO for many years.
The 5 Rs of SEO are: (1) Relevant, (2) build your Reputation, (3) Remarkable, (4) Readable, and (5) of sufficient Reach.
Providing relevance to the individual is the #1 priority to the search engines. After all, they want to deliver a consistently excellent customer experience to searchers. If searchers are unhappy, traffic drops and then advertiser revenues will fall.
Want some deep insights into Google’s Quality score calculations so that your ads show up higher and you pay a lower cost per click?
“Google has tons of additional data to help them decide which ad is most likely to elicit a click from that particular user based on the time of day, previous searches and many other factors. It’s a “Big Data” prediction algorithm and advertisers would do well to apply some of these same methodologies for picking successful ads to ensure users get value from their ads, Google is kept happy, and more sales are generated.” ~ Frederick Vallaeys, Co-founder Optymyzr Former Adwords Evangelist at Google
Google claims that they use over 200 different signals for their ranking factors. I don’t doubt that, do you? I took the liberty, with Frederick’s permission to bold a couple of phrases in his quote that highlight the secret to great rankings. What he is talking about is massive personalization and leveraging multiple data sets and signals in real time to deliver what Google thinks will be the best results.
Google is now using more of their Chrome browser, Google Analytics, scanning Gmail and Android (location and app) data augmented with 3rd party purchase data. Purchase data is unconfirmed but we know Facebook uses that kind of data. These are becoming their primary factors because those factors cannot be gamed by SEOs. They provide a much better picture of what people do in the real world.
I encourage you to step back and think much bigger and more broadly about Big Data before taking an SEO’s advice about rankings to heart. While there are many great SEOs out there, many have not evolved since the early days of keyword stuffing and meta tags. They also count on you not keeping up with all the constant optimization tweaks Google does to their algorithms to keep you in FUD.
One of our clients, a $50+ million traditional retailer, recently realized that the agency they used for SEO were ripping them off. Martin MacDonald wrote about that time in My Secret SEO Strategy Guarantees Results… To summarize, he concluded that “If your business model requires that you hide techniques you are using to achieve results, you’re not selling SEO services, you’re selling snake-oil.”
What do you think Google knows about you from all the signals you might provide it based on your search query, map queries, click-through, Gmail account and other factors? If you think about all the types of datasets you can get access to when want to target ads on Facebook, do you think Google might have access to some of those or similar data sets? There is a lot of data available. I recommend you follow the links I’ve provided and familiarize yourself with offerings from Data.World, Enigma & Acxiom. What kind of data sources would you want to use if you were Google to deliver the best most relevant results for your searching customers?
This is one area the search engines have excelled in over the last number of years. They can now index and rank all kinds of content they could not do in the early days. In fact, they are even coming a long way in computer image recognition as well. There are still ways a good SEO can enhance complicated websites.
You know those scammy SEO offers you get to rank #1 for a keyword. It is very similar to those “best selling” authors who pick a new category on Amazon and dump 20 sales through in a 3 minute period to be the best selling book of an obscure category for a moment in time. You do not need to rank #1 for keywords that no one is looking for!
As Roy Williams wrote about the report’s results:
SEMrush was one of the big names in online marketing who concluded that “direct website visits” are the single most important factor in determining your SERP [Search Engine Results Page] position. In other words, they announced that Google is impressed – and will reward you with higher SERP placement – when people go directly to your web page instead of merely choosing your name from a list of search results.
It makes sense, doesn’t it? Google is effectively saying, “If this is the company people think of immediately – and feel best about – in this category, then they must be the category leader.”
It seems the key is building awareness for your brand online and offline so that when they go to their browser they type in your URL. This can be done with a combination of great advertising, strong public relations, remarkable social media and an exceptional customer experience.
Many people reading the ranking reports will make the decision that they need to ramp up their advertising to type in their website directly. However. if all those people do is find a less than remarkable experience then the signals the search engines receive are that you are less than remarkable. Sorry, advertising only accelerate the inevitable.
The type of company that is going to win at the top of the search engines is one that drives a lot of people directly to their website because the search engine is detecting all these relevant signals:
We hope you will you be creating the types of experiences that enhance or detract from your being remarkable and enjoying a great reputation in the eyes of the search engines and your customers. Your customers do have credit cards, you know?
So if you are looking to get great results in 2018 and beyond, focus on building a great brand experience. Remember Be Like Amazon: a lemonade stand can do it.
This post originally appeared on LinkedIn Pulse.
Today is the last day to grab a copy of Be Like Amazon: Even a Lemonade Stand Can Do It for $0.00.
It is available globally. Here are some links:
This week’s video we look at how an innovative retailer uses the 4 pillars of Amazon success to grow their business:
I had a chance to chat with John Lawson, fellow IBM futurist and best selling author of Kick Ass Social Commerce for e-preneurs.
I had the pleasure of being interviewed by Alex Langshur, the CEO of Cardinal Path for the Google Partners podcast on Journey Mapping: Connecting the Customer Dots.
This week we talk about the incredible business impact of a red screw.
Hopefully, you will find ways to apply Amazon’s Four Pillars of Success to your business and accelerate your business model’s flywheel. Check out the flywheel in Be Like Amazon: Even a Lemonade Stand Can Do It.
Some managers view customer-centricity as bending to every customer’s’ whim. Customers are not so irrational. They want you to succeed so you can continue to help them. The transactional customers that don’t, likely shouldn’t be your customers.
Customer-centricity means that your actions are centered on customers’ well-being as it promotes your well-being.
“Well-being” is a balance of generosity and discipline. The well-being of a child requires a balance of recreation, learning, and structure. When customers’ well-being is great they make fewer demands on your company and they are eager to engage in mutual value creation.
Recently at Whole Foods they ran out of nutritional yeast in their bulk products section. I was delighted that they gave me a complimentary packaged nutritional yeast instead. It sounds expensive, but I didn’t need to visit another store. They considered my well-being, valued my time and understood that I was a relational long-term customer.
Customer well-being requires a balance between the benefits they receive from your company and the collective costs they incur: money, time, effort and stress.
If you are looking for more examples of being customer-centric, make sure to get your preview copy of our new book Be Like Amazon: Even a Lemonade Stand Can Do It.
Customers are more connected than ever. Software continues to reduce customer friction everywhere, from customer service to fulfillment. Logistics and payment systems continue to expand what’s possible for customers. Customers expect more and better.
Retail customers aren’t delighted with retailers. They feel differently about Amazon and in both cases it’s the CEO’s fault.
All the above is true. It’s why CEOs green light new and growing investments in technology and marketing. So how can I say that retail CEOs don’t care about digital?
Digital is not just a series of new shiny objects, cost cutting tools or new media ads. Digital should be the glue that connects every part of the organization with customers. Digital should allow every part of the organization to analyze data, learn from it, and act on it. The competitive advantage is putting that customer at the center of their universe.
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We can speak at your event. Our fees are $20,000 in North America, and that includes travel. International fees are $20,000 plus business class travel, from Austin, and lodging. Contact us to discuss your event
We kick-off the workshop with a two-day onsite visit. We help you create the Four Pillar foundation for your organization. The entire process takes between 4-8 weeks and the typical investment is $30,000 – $100,000.