1. Amazing though it may seem, apparently websites don’t want to achieve dedicated users who stay a while and actually use the site! According to marketing guru Seth Godin:

    “Any website that attempts to improve time spent on every page (or pageviews for that matter) is just wasting time. What matters is intent. Permission. Action. Retention. Likelihood that ideas get spread. Clickthroughs.”

    I think this is simplistic and user experience and satisfaction and ability to achieve what he/she wants all definitely contribute to the results Seth mentions, but unless there is demand (and while the majority think like Seth Godin), it seems unlikely the analytics sector is going to change.

  2. Thanks Vicki, I wasn’t aware of Seth Godin’s revelations. Y’see, I was brought up on a diet of statements like “it costs X dollars to gain a customer and 1/8 of that to keep them”. Am I old fashioned now?

    And if a customer can tell the supplier whats wrong they won’t tell another 20 people. Actually try 10 million today. So that’s probably out of date too.

    Oh and these old chestnuts: online community participants visit a site 9x more, stay 5x as long, have 4x the un-aided brand recall than similar services (e.g. search engine) cost between $0-10 to acquire versus $10-400 of traditional marketing and their peer2peer support are 5x-10x more cost effective than phone (technical and customer) support. OOPs, they are new statistics from a McKinsey report. *ends sarcasm*.

    But y’know I’m not a big fan of Simple Seth at the best of times …
    …but I do love my wiki Heh. :

    It is claimed by Reichheld and Sasser (1990) that a 5% improvement in customer retention can cause an increase in profitability between 25% and 85% (in terms of net present value) depending upon the industry. However, Carrol and Reichheld (1992) dispute these calculations, claiming that they result from faulty cross-sectional analysis.

    According to Buchanan and Gilles (1990), the increased profitability associated with customer retention efforts occurs beceause:

    * The cost of acquisition occurs only at the beginning of a relationship: the longer the relationship, the lower the amortized cost.
    * Account maintenance costs decline as a percentage of total costs (or as a percentage of revenue).
    * Long term customers tend to be less inclined to switch and also tend to be less price sensitive. This can result in stable unit sales volume and increases in dollar-sales volume.
    * Long term customers may initiate free word of mouth promotions and referrals.
    * Long term customers are more likely to purchase ancillary products and high-margin supplemental products.
    * Long term customers tend to be satisfied with their relationship with the company and are less likely to switch to competitors, making market entry or competitors’ market share gains difficult.
    * Regular customers tend to be less expensive to service because they are familiar with the processes involved, require less “education,” and are consistent in their order placement.
    * Increased customer retention and loyalty makes the employees’ jobs easier and more satisfying. In turn, happy employees feed back into higher customer satisfaction in a virtuous circle.

  3. Ah Laurel, I have to agree with you and I suspect Seth wasn’t thinking of interactive sites when he wrote that. I’m certainly no expert but it seems to me that what he calls “retention” (and all the rest of it too for that matter) is going to be achieved in different ways for different types of products or services and therefore web sites. I don’t think there’s a hard-and-fast rule here.

  4. …that what he calls “retention” (and all the rest of it too for that matter) is going to be achieved in different ways for different types of products or services and therefore web sites. I don’t think there’s a hard-and-fast rule here.”

    Absolutely viki. Sometimes I talk to companies about NOT bringing the online community inhouse “where they can control it”. Let it be. If people are evangelising your product and creating fansites, discuss other strategies for working with them, perhaps with little or very lowkey support. Think Mentos giving away 10,000 packs of Mentos (or whatever the figure was) for the Coke/Mentos user generated *explosion* videos.

    But perhaps another view is that whether a company believes there is value in user generated ads, citizen reviews and peer2peer support about their product, and whether or not they choose to participate in those distributed communities, is irrelevant. The consumer decides if they want to create something around that brand, what to say and how to say it. And responses to user generated content such as Coke’s “this is not part of the brand personality of our product” is simply laughable.

    And if a Seth Godin walked into a marketing strategy meeting and said, these humorous videos created by consumers about your product and these anti-product, anti-advertising and anti-marketing sites and communities(think antizerocokemovement.com) don’t affect your bottom line (both sales and brand perception)”.. well, I’d be surprised. Ignore ’em at one’s peril.

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