Avoid the Cheap Shot

Now that Christmas is over, are your holiday customers returning? If your strategy in the fourth quarter was to use a lot of coupons to induce purchases, the answer is probably no.

Smart companies focus on brand image and retaining customers based on a wide selection, great customer support and personalized products.

Petsmart.com does the opposite. On Nov. 1 I received an e-mail which read, “We value your business, so why not give us another try?” A coupon for free shipping was included.

I have learned to shop at Petsmart only when they send a coupon. Why? Because they always send one.

It would have been much more effective if Petsmart's reactivation campaign highlighted cool new bird products and news articles of interest to parrot owners like me. These qualities would have value to me long after my $10 coupon was spent.

This year, when old customers haven't purchased at your site, use all that money you poured into a data warehouse in 2001 to figure out what these customers liked, and what they did on your site.

Then create personalized reactivation campaigns based on these people's interests. Did they buy an outdated product? Tell them about the new models you have now and why they are better.

Do you sell products that are quickly used, like copy paper? Remind your customers to check their inventory and make it easy for them to reorder. Staples.com does this now through “favorite products” areas on their site, with e-mail reminders set up by users.

This information should be used for reactivation campaigns as well. Are your “reactivation target” customers in your customer service database?

Perhaps they didn't come back because they had a bad experience — maybe a product wasn't shipped or something broke. Treat these customers differently and see if there's still time to rectify the situation.

Many companies get new business with offers such as: “20% off for first-time buyers.” What happens once these customers buy something at your site? They will most likely move on to the next site that offers them a discount.

Here's the old school parallel: Almost everyone I knew in college joined every music club in existence so they could get 20 CDs for a dollar. Then they either created a fictitious name to sign up again or they took their business to a different music club to get more free CDs.

They had no sense of loyalty because the attraction to these companies was the discount and nothing else. Discounts don't engender loyalty.

Instead of wanting to attract the most people, think about attracting the right people — customers who will use your products and services and be loyal to your company because of your value to them.

Don't worry about drawing the bargain hunters — they will never make you money in the long term.

Most Web sites get a lot of hits, but there's a huge dropoff rate after that. The good consumers you want to acquire are already visiting your site, and then leaving, because you aren't providing them enough of a reason to stay.

When I needed new business cards, I searched “color business cards” on Yahoo! I chose PrintingForLess.com, not necessarily because it had the best price, but because it had the most intuitive process, provided a lot of information on how to design your card and upload it, and held my hand throughout the process.

Companies that use personalization judiciously and wisely also are on the right track. While many will argue that Amazon.com's ability to recommend products to users is primitive, no one can dispute that Amazon.com understands how to steer people back to their site based on their products, and not on discounts or special offers.

I frequently get e-mails from Amazon with recommendations for new products that I might like. More powerful, though, is that I return on my own, not just when I'm prompted by an e-mail, because I know that similar recommendations and messages will be waiting for me on the site itself.

Prior to starting online consulting company JackAaronson.com, the author was director of personalization at Barnes&Noble.com. Aaronson lectures on personalization, eCRM, direct marketing and consumer behavior, and is writing a book about the psychology of pre-cognitive consumer behavior.