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Industry Buzz – December 2014

Hi Sellers!

Happy December! It’s hard to believe we are at the end of another year. At the same time, 2015 looks to be even more exciting – and we’ve taken the last issue of the Insight to sum up 2014 and outline some of the trends of 2015.

Enjoy this month’s hot topics:

Stay tuned for more resources in 2015. Happy Holiday Season and a joyful New Year!

How Do Black Friday and Cyber Monday Stack Up? We Look at the Data

Americans have been obsessed with shopping for great deals on Black Friday since not long after Philadelphia police coined the term to refer to the big traffic jams on the day after Thanksgiving in the 1960s. As the popularity of the internet grew in the 2000s, shoppers started turning their attention to online deals on the Monday following the holiday weekend, which was quickly deemed Cyber Monday.

But has Cyber Monday been around long enough to take away Black Friday’s holiday shopping crown? Let’s look at the data to discover what converted best this season.

Keyboards Fired Up Conversion Rates

increase in metrics by day

A quick look at conversion rates provides staggering evidence for the domination of Cyber Monday: shoppers converted 25 percent more than average on Cyber Monday, compared with a mere 10 percent lift for Black Friday. This information should instill hope in the hearts of marketers for high performance on days dedicated to online shopping, like Cyber Monday and China’s Singles Day.

Black Friday’s Still Big

Despite better conversion rates on Monday, Black Friday still won out in terms of total revenue and average order volume, but only slightly. AOV was 62 percent higher than usual on Black Friday, and only 59 percent higher on Cyber Monday, while Black Friday saw a 249 percent increase in revenue compared with 234 percent on Cyber Monday. Notably, AOV didn’t drop on either sales day despite big promotions, suggesting that people may have purchased more items to compensate for what they saved on each one.

Cyber Monday Is Mobile

increase in conversion rate by device

Black Friday experienced a modest lift of 10 to 18 percent in conversion rates across devices, but Cyber Monday really stood out with 25 percent better conversion rates on desktop and an astonishing 49.8 percent better-than-average conversion on mobile, as well as a 40.1 percent boost on tablets. Much of this increase is likely driven by email marketing, as 66 percent of consumers check their email on a mobile device.

Holiday Shopping Is a Global Phenomenon

increase in conversion rate by COUNTRY

Even though Thanksgiving is a distinctively U.S. holiday, Black Friday and Cyber Monday still saw significant boosts in conversion rate all around the world, from the UK to Spain. The more successful day varied by country, but at least a 12 percent increase in conversion rate was common. Brazil far outperformed its northern neighbor on both days, with an impressive 19.9 percent conversion lift on Black Friday and 20.20 percent better conversion rate on Cyber Monday.

The Method Behind the Metrics

Black Friday traditionally started at midnight and ran for only a day until the store closed. With Cyber Monday in the picture, many online stores now start their promotions on Friday and run them for four days, until the close of Cyber Monday. This year, many merchants stretched the calendar out even further, advertising “Black Friday Week” promotions that started the Monday before Black Friday, and running only a few special promotions on Black Friday and Cyber Monday. It’s easy to see why merchants have gone this route: the huge lift conversion that these sales provide (without sacrificing AOV) is key to doubling their daily average revenue for these two days.

Tasty Takeaways for Marketers

From our perspective, the data shows that marketers should run promotions from Black Friday through Cyber Monday, and expect higher volume traffic on Black Friday, but higher quality (that is, better converting) traffic on Cyber Monday. Your CPA (cost per acquisition) on Cyber Monday will be lower, so you can optimize your demand generation programs accordingly. And don’t neglect global audiences: only the U.S. may be sitting down to turkey, but the entire world is hungry for a deal.

Are you ready to learn more about boosting conversion rates? Join us at the Conversion XL Conference in March.

Also, check out these blogs from our friends and partners, the CRO experts:

http://www.widerfunnel.com/blog

http://cleverzebo.com/blog/

http://www.tatvic.com/blog/

Apple Watch: The Clock Is Ticking for SMBs To Make Money from the Internet of Things

Recent conversations with SMB vendors have raised the question of Apple Watch and whether it presents an opportunity for them. I thought I would capture some of the key points of our discussion in a quick blog post. (more…)

Digital Alley: The Newest Attraction on the Vegas Strip

If you’re attending Affiliate Summit West 2015 in Las Vegas, there are a slew of new attractions you’ll want to visit while in town – the new “Las Vegas High Roller” ferris wheel or LINQ, the downtown entertainment area – but the newest attraction everybody’s talking about is… Digital Alley. A new concept powered by Avangate, Digital Alley unites members of the affiliate marketing ecosystem within the digital goods vertical. Here you’ll meet and network with software and services merchants, affiliates, and technology and service providers.

Digital Alley is located in the ASW ’15 exhibit hall (Rivoli ballroom of the Paris hotel), booths #5007-#5010 and #6007-#6010. Digital Alley will be open during show hours, starting Monday, January 19, 2015 at 10 AM and ending, Tuesday, January 20, 2015 at 4 PM. In Digital Alley, you’ll find Avangate team members and partners (and lots of special offers and surprises).

Visit the Avangate Digital Alley and learn how to launch and grow new online revenue streams, fast!

You can also meet Avangate in the Meet Market at Table #109 on Sunday, January 18th from 12-6 PM in the Concorde ballroom of the Paris Hotel. Digital commerce experts will be on hand to share their knowledge on selling digital goods worldwide.

Plus, be sure to visit the Champagne Ballroom 1 at the Paris Hotel from 2:30-2:50 PM to find answers to the question, “Does (Affiliate Program) Size Matter?”. Cristian Miculi, Senior Manager of Affiliate Services at Avangate, will debate whether more is better when it comes to the number of affiliate networks, as well as provide best practices on managing a successful affiliate program.

Avangate will once again be hosting their exclusive Software Networking Dinner on Sunday, January 18, at 7:00 PM at Roy’s Restaurant. Hear why Software, SaaS and Online Services companies turn to Avangate to help them launch and grow new online revenue streams. It will be a relaxed evening with plenty of opportunities for networking and interesting conversations.

Last, but certainly not least, Avangate will launch its 2015 Affiliate Network Contest at Digital Alley. Visit Digital Alley and see all the great prizes available!

As you can see, there are lots of opportunities to meet Avangate at ASW ’15 in Las Vegas. Don’t be a stranger – drop by, schedule a meeting, and join Avangate for dinner.  See you there!

Industry Buzz – November 2014

Hi sellers!

If you thought you knew SaaS, think again. The popular delivery mechanism continues to forge ahead and break new ground in the software industry, so we’ve collected tons of tips this month to help you deal with these changes. Subscribe to our newsletter and take advantage of dedicated resources that’ll help you grow your software and services business globally.

Enjoy last month’s hot topics:

  • The eCommerce industry is evolving rapidly to digital commerce. Find out how this affects you.
  • Nearly half of consumers refuse to buy online subscriptions without a “freemium” option. What’s the key to making these buyers more comfortable with online payments?
  • The Commerce System of Record helps companies understand who’s buying from them, when that person interacts with what information, and how to best prompt a purchase.
  • The New Services Economy is redefining commerce. Discover the mandatory features for a seamless transition to digital commerce and increase long-term customer revenue and retention.
  • What’s to expect from 2015? Latest Forrester report focuses on mobile and omnichannel solutions to shape eCommerce in the coming year.
  • SaaS has had its ups and downs during these past few years, opening up the way for Electronic Software Delivery (ESD) to slowly but surely make a comeback.
  • Within the tech market, software spending remains the star category, with 8.7% growth expected in 2015, closely followed by SaaS.
  • See what everybody ought to know about customer retention and why it’s so important for every SaaS and online services company’s growth.
  • Gartner debunks 10 of the most common and misleading cloud myths that prevent innovation and slow progress.
  • Online sales in Southern Europe will increase by the end of this year, according to a recent report, and Spain is the indisputable ecommerce leader in the region.
  • Check out this cool interview with Tabitha Rivera from Ve Interactive on how you should tackle and improve your conversion rates in the new era of eCommerce.

Cool Companies Interview Series – Ve Interactive

logo_ve_interactiveTabitha Rivera is the Director of Strategic Alliances at Ve Interactive, a multi award-winning global technology company, driving online performance to maximize conversions. Tabitha is responsible for building and fostering all partner relationships with platform partners, digital agencies and affiliates. Prior to Ve Interactive, Tabitha worked in Client Services for James & Co, an executive C-Level recruiting firm. Additionally, she began her career in television news working for News 12 Bronx and WABC-TV. Tabitha is a graduate of Curry College where she majored in Communications.

Ve is a dynamic retargeting, re-engagement and re-marketing platform for the eCommerce industry designed to drive incremental revenue.

1. Platform or service? How do you define yourselves and why?

At the heart of what we do, we are a service, but the way we deploy that service is through our VePlatform. Once connected to the VePlatform, customers are given instant access to a suite of Apps that allows them to engage with shoppers in every step of their purchase journey.

It is important for us to stay ahead of the eCommerce curve, which is why we are regularly creating new Apps. We want to make it as easy as possible for our customers and be that one technology partner that delivers it all.

2. Instant gratification – a new era of eCommerce. Loved this post on your blog – can you talk more about this or other trends in the context of digital goods and services?

One trend we are seeing in digital goods and services is that they rely on trust. Today’s consumers are savvy shoppers— they do their research! These consumers will become your most trusted source if you provide the customer experience they are seeking. For example:

  • Your UX makes products easy to find
  • Your FAQs are easily accessible
  • You provide personalized support throughout their site experience from the minute they hit your home page to the minute they completed a purchase.

Consumers expect a tailored experience—this is no longer a trend, but a necessity for successful brands.

3. What other trends do you see in the way people buy that impact conversion rates?

Think Mobile— think savvy customers who know where and when to find the best deals, and think frantic shoppers who have a need-it-now mentality.

How you communicate with your customers makes all the difference. When you tailor their experience, this shows you are listening and paying attention to their needs. The VePlatform ensures customers receive an enhanced user experience by delivering highly targeted messaging, including customer service and promotional offers, based on their exhibited onsite behavior.

4. How do you look at omni-channel strategies? What do they imply from a conversion optimization point-of-view?

That’s the buzzword these days and our platform of Apps fit directly into this model. Be engaged with customers –always. This means providing the correct tools before they get to your site; once they are on your site, and even after they have left your site, driving them back to complete their purchase.

Omni-channel lets your brand stay top of mind. Where are they seeing your brand? Is it mobile? You need to know the answers to these and then be responsive. Is it online at work? Communicate what they want when they want it.

It’s also important to make sure your branding and messaging are consistent at every point in the customer’s journey. With consistency, you become a trusted brand and this leads to more conversions.

Back to the Future: Is Electronic Software Delivery Making A Big Return?

For the past couple of years, software as a service has been all the rage, with most companies adopting at least some form of online delivery for their products. That evolution has made a lot of sense, because SaaS offers a number of benefits such as fast delivery, convenient access, flexible development, and declining costs, all of which make SaaS attractive to users, developers, and business folks alike.

But SaaS has its downsides, too. Most notably, you have to be connected to the internet to access SaaS applications. While that’s not generally a problem, it can be frustrating in areas with slow connectivity, and getting things done becomes impossible when no internet connection is available. Even though these scenarios may seem scarce, they happen more often than you think – like while traveling, or even in hotels or airports that purport to have wifi but end up having unreasonably slow connections (because everyone’s using them).

Probably the biggest downside of SaaS is the loss of a rich user experience. New consumer devices – tablets, phablets, smartphones, etc – demand native applications for the best experience and engagement.

For this and other reasons, electronic software delivery (ESD) is making a comeback. ESD hearkens back to the days when we’d actually download and install files, instead of running everything through our browsers. Most notably, you can use these software applications offline, so even when traveling by train, plane, or automobile (especially a DeLorean), you can count on downloaded software to perform every task you need to get done. Also, Modern ESD applications, such as Evernote, are automatically backed up along with your computer, allowing you to access your content at any time, on any device.

With more than 50 percent of our digital time now spent in mobile apps, accessing applications from other devices can be a big deal. Ultimately, the best option may not be either downloaded apps or SaaS offerings, but a blend of both – a SaaS/ESD hybrid, if you will. Because where we’re going, we might not need roads… but we will need apps. And maybe a flux capacitor.

Industry Buzz – October 2014

Hi sellers!

Happy Holidays? It may sound early and if you are not already planning to take advantage of the holidays, we have several tips to help you make the most of the holidays. Enjoy last month’s resources to help you win in this rapidly changing market. To get it before everybody else, subscribe to our newsletter and stay up to date with latest whitepapers and webinars on how to grow your software and services business.

Here are last month’s industry resources:

The New Commerce Systems of Record Are Coming

Listen, my children, and ye shall hear – that the new commerce systems of record are here! Okay, maybe the arrival of new ways of tracking eCommerce customers isn’t quite as important as the advance of the British in 1775, but it’s still a pretty big deal for those of us in the industry. The old “One if by land, and two if by sea” adage is now being translated into more complete accountability for all the numbers, no matter what they represent or where they come from. Accountability requires control, which can be difficult to exert over lots of disparate systems.

Since Paul Revere’s days, we have accumulated scores more potential places to monitor for activity than just land or sea. These days, our customers might find out about us and our offerings from various channel partners, affiliates, social media, mobile search, and much more – or, they might arrive by a combination of any of these sources. Think about it – Facebook owns Oculus VR, Apple has introduced its new Watch and Pay systems, and Google’s giving us Glass on our faces (if we can afford it), we have many more new channels where people can interact with our content and, ultimately, make purchases.

A proliferation of channels means that we also need new ways to track and evaluate user interactions across our existing channels, brand new channels, and any others that may continue to surface. Of course, there are already many systems for tracking customers and their orders, plus any related information. However, as customer relationship management systems intersect with BPM, ERP, and myriad other systems, they can create a complex mishmash of numbers and channels that’s hard to keep track of and even harder to analyze.

As these systems, devices, channels, and options for users all multiply in response to a proliferation of new purchasing options, successful commerce will require a whole new system of record – one that can account for data from any customer touchpoint, in any format. This kind of nuanced tracking can’t be properly achieved with several siloed systems, nor with a cumbersome hodgepodge that links only certain parts of each system. Companies need a consolidated way to monitor and control variables for optimal outcomes.

Enter the commerce system of record – a completely centralized yet streamlined system that incorporates all of the data that companies need in order to understand who’s buying from them, when that person interacts with what information, and how to best prompt a purchase. The commerce system of record not only enables companies to track this information, but also change variables to influence customer behavior. Being proactive in influencing customers is a key differentiator of successful companies.

If it’s hard to understand how big the commerce system of record is, think back to Paul Revere’s lantern. Every house used to make its own light through lanterns like these. Now, we have one centralized electrical system that makes power available anytime we need it. The electrical system also has the ability to track and regulate electricity usage to anticipate and respond to expected surges – like in hot weather. That’s exactly what we need for commerce – a system that can deliver the right insights for each department, on demand, illuminating our choices and empowering us to act on the latest information.

Individual companies don’t have to have a VP of Gas and Electricity today, because all of those elements are taken care of for them, invisibly, behind the scenes. A Director of Commerce can be the person who unites multiple channels to create an information flow that guides monetization initiatives across every department. This type of centralized approach can save lots of headaches and potentially boost business, reducing the need for individual vigilance and creating a standardized system of record that allows faster time to market with customer initiatives.

With a commerce system of record, we don’t need to be as vigilant as Paul Revere, because we can rely on having a steady stream of customers, and the right tools to respond to them.

Keep Calm and Retain On

Like the original British WWII propaganda poster – Keep Calm and Carry On – inspired the British troops to keep on fighting, a similar inspirational message could be applied to SaaS and Online services companies around the world, but with a slight twist.

Retention plays a pivotal role in every SaaS and online services companies’ growth. It directly impacts customer lifetime value (CLTV) and is a key barometer of the health of your subscriber base. Companies that sell digital goods online need to understand how low authorization rates, payment failures, chargebacks and refunds impact retention and ultimately your company’s success.

There are two main reasons for churn: One, a customer no longer sees value in your service, or their subscription was unsuccessfully renewed. Payment failures are one of the top reasons of unsuccessful renewals, with customers risking service interruption due to issues into which they have little-to-no insight. Capitalizing on retention best practices is key to reducing payment failures and securing recurring revenue.

Understanding why your customers leave is critical to fine tuning your approach to keeping them. Retaining your customers requires more complex operations, tools and interactions. This is where self-service capabilities and customer engagement processes come into place, along with smarter payment optimization strategies.

Customer retention needs an inclusive, two-pronged approach:

  • Proactive Retention Strategies for Payment Failures/Processing Issues
    • Revenue Recovery for soft and hard card declines
    • Intelligent Payment Routing of payments
    • Account Updater for cards
    • Decline Salvage
  • Active Retention Strategies for Customer Satisfaction Issues
    • Self-Service Customer Portals
    • Chargeback and refund handling
    • Dunning Management

To learn more ways to Keep Calm and Retain On,

  1. Watch Avangate’s Optimize Customer Retention for the New Services Economy webinar for guidance on how to increase your retention rate.
  2. Download Avangate’s Go Beyond Retention Whitepaper, which provides best practices on how to increase customer retention and secure recurring revenue.

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