Online Sales vs Phone Sales

Tomorrow, World Vital Records will begin building its call center under our new manager Scott Spencer. He worked at MyFamily.com (now The Generations Network) from 2003-2006.

We are planning to hire 10-15 people in the next few weeks (part time and full time) to do genealogy sales, support and coaching. (If you know someone who might be interested, please use the Contact Me form on my blog, and let me know about them.)

Scott will be recruiting, hiring, and training individuals who can successfully sell our products (and our partners products as well), but also who understand the unique characteristics of the genealogy market, and who won’t use high pressure tactics that have no place in this business. In fact, we are anxious to hire call center employees who love genealogy and love helping others. Scott has worked previously with a number of very skilled genealogists who worked at the TGN Call Center, before TGN cut its call center staff dramatically and focused on trying to have as many sales and renewals as possible be handled online.

Until now, nearly all of our revenue has come from online marketing. Our World Vital Records Quantcast chart shows how our traffic has grown dramatically this year. Our sales are growing, but we are planning to more than double our current sales volume by the end of the year, and while online marketing will provide a lot of that growth, we think our call center will add a great deal to our capabilities.

I wonder what percentage of other internet companies sales come from their call centers? I love the Internet Retailer Top 500 annual report, one of the best reports in the industry, but I don’t think they have any way to track phone sales. But surely someone has compiled such a report. (If you know of one, please comment.)

Business analysts talk about “high tech vs high touch.” Online transactions are high tech. But some industries and some types of customers need “high touch” more than others, meaning that they need great customer service and support–a human element. Many B2B companies can build global supply chain management software that pretty much automates all their interactions with their suppliers and customers. This can dramatically increase profitability, as many of the unnecessary human labor costs are squeezed out of the business.

But family history is a hobby that engages millions of people that often need a real person to guide them in their research and to encourage them in their sometimes difficult quest. Most genealogists tend to be older and some are tentative about technology. Just attend your local genealogy society meeting and you’ll know what I mean.

I have a friend in his 40s who attended a genealogy society meeting back east a few years ago, and he reported to me that he was the youngest person there. That didn’t surprise me, but then he told me that his father was the second youngest person there!

In a recent month, 16% of our sales came from checks that were mailed in to our company. How many online businesses do you know that have customers writing checks and sending them in? Is this because family history customers are wary of online transactions, or is it because they’ve been using checks to pay bills and buy things for 50 years, and old habits are hard to break? Probably a combination.

But for customers who are used to asking questions, getting phone support, and talking to a real person when making a purchase, we are excited to build a customer friendly call center and to interact with hundreds of genealogists, societies, and libraries every day.

In addition to increasing our sales, and improving our customer satisfaction, we will use our call center to develop a great deal of “customer intelligence”–a knowledge of what our customers want.

Many companies fail to understand their customers.

Just this week I had two terrible experiences with credit card companies who have an automated phone system that makes it virtually impossible to reach a human. I had cancelled a card back in February, and I’m still getting billed for it, and I can’t pay my bill online because I had cancelled the card (and they disabled online payments) but they keep putting in finance charges, even after I paid the entire balance by phone last month (and had to pay $14.95 for paying by phone). It’s like I can’t pay the balance down completely without having either a payment fee show up on my bill the next month or a small interest fee show up. I feel like I’m stuck in Hotel California, “you can cancel any time you like, but you can never leave.” Finally I reached a human, and he said I had to call back the next day because he couldn’t tell what my late fee would be until tomorrow when the computer calculated it for him. Arrrrrgh!

I remember the day when my brother Curt asked the 12 or so VPs at MyFamily.com (back when he was CEO in about 1999) how many of them had spoken to a customer in the last 30 days. No one raised their hand.

From that point on, I made it a practice to have phone calls with customers regularly. When I became VP of Marketing in 2001, I required my team to go to the call center weekly for several hours and participate in customer phone calls. It made all the difference in the world for our marketing team to actually listen to customers firsthand, and to know what questions they were asking, what they loved about our products and services, and what they hoped we would improve.

I helped start a company in 2005 that had a great online offering, selling mp3 related supplies and content, but had no first hand interaction with customers. I really tried to convince the CEO to set up a mall kiosk where we could interact with dozens of customers every day, and find out what they wanted in person. It didn’t happen. The company focused only on online sales and marketing, because retail was “too expensive.” Without qualitative feedback from actual customers, without knowing the reasons why they were making a purchase or why they would not make a purchase, I think the company lost touch with its customers and went on to make some strategic product and marketing mistakes that would have been prevented had we been highly involved with our customers.

Scott Spencer is going to help World Vital Records make sure that we are highly involved with our customers and highly responsive to their needs.

Scott is a strong leader who brings with him experience in call center operations along with a great passion for genealogy. His background consists of managing inbound/outbound sales and support teams to overseeing the quality assurance department at The Generations Network (formally MyFamily.com). Before joining TGN in 2003, Scott worked as an outbound sales supervisor on the American Express account at Convergys Corp. where he assisted in the development and success of key programs.

He later joined the supervisor ranks at TGN’s Member Services department where he managed the inbound sales and support department for Genealogy.com, which TGN acquired in 2003. He went on to manage the Quality Assurance team where he played a vital role in supporting the company’s vision, while gathering valuable member feedback essential to providing a world class customer experience.

Scott again joined forces with the operations team in 2006 as the Assistant Manager of Inbound Support. Scott worked hand in hand in supporting the inbound operation which consisted of customer retention, sales, welcome call, and technical support teams. During his tenure at TGN, Scott spearheaded many key projects that impacted the growth and success of TGN’s Member Services.

When not working, he enjoys spending time with friends and family, as well as fly fishing the beautiful waters of Utah.

Understand Your Customer Better Than Anyone Else

Our top priority at World Vital Records is understanding our customers needs. A VC friend told me recently that if you choose a market and understand your customers’ needs better than anyone else, and meet those needs, that you will be successful.

In addition to monthly usabilty tests of our web sites, we now have a panel of 783 customers who are willing to answer any questions that we ask them. The first question we asked is what kinds of records they want us to add to our web site. Our next question will be what countries they want us to gather these records from.

We are also studying our site analytics regularly, doing A/B testing on our outbound email campaigns, and have begun using Google Website Optimizer so that we can test various landing pages in real time to see which ones perform best.

We have found by analyzing our customer database that 72% of our paying subscribers are women and 28% are men. Using Quantcast, we have a good glimpse of the demographics of our site visitors, what other web sites they tend to visit, and what keywords they are searching for.

Quantcast is an extremely useful tool and it will only get better. The founder of Quantcast emailed me recently and told me how many pixels they are tracking on a monthly basis. Their open system (where webmasters can opt in for validated numbers) will make their system better with time. As more media planners use their site to design interactive marketing campaigns, Quantcast will be able to play a key role in the ad selling process, and take a slice of that pie. To build audience, they’ll continue to make their audience measurement and demographic information free.

I love this service.

Quantcast is extremely valuable to understand all the companies in an industry. We can use Quantcast to learn the demographics of visitors to Ancestry.com or any other genealogy web site. Ancestry’s users tend to be over 45 years old, and more female than male.

I can start to see differences in audience composition and determine who is strong in what area. For example, World Vital Records already has a lot of users from a variety of ethnic groups, whereas Ancestry.com’s audience ranks high on Caucasian but low on most other ethnic groups. As we launch international databases and search engines, perhaps this gap will only widen.

We can use Quantcast to find hundreds of genealogy sites that are potentially good partners, where cross promotion could help us and them.

If you have not yet started using Quantcast, I suggest you set aside a few hours to do so, and write down all the insights you gain about your competitors and your customers, and what other sites they visit and what other interests they have.

In the traditional direct marketing industry you can use a service like Claritas which can provide you with a customer segmentation report if you provide them with the mailing addresses of your customers. They can answer questions like:

* Who are my customers?
* What are they like?
* What do they buy?
* Where can I find them?
* How can I reach them?
* How can I keep them?

They also have Data Enhancement services, which they describe as follows: “Claritas can help you learn all about your customers – their demographics, lifestyles, and consumer behaviors. We can append Claritas data to your customer file of names and addresses to give a richly detailed profile of what your customers are like and why they buy from you.”

Quantcast is providing a combination of Alexa/Hitwise/Comscore-like data along with free Claritas-like data. I’m a little surprised that it’s not getting more buzz than it is. I have found a few good posts on Quantcast, including this post on Rojo.com that says it may be a valuable tool for advertisers, and potentially an acquisition target for Google, but that it has been self-funded and may not have a business model fully figured out.

I suppose if it had venture backing then it would be getting a lot more media coverage than it is. Or maybe the company is lying low and perfecting its service until it is ready for prime time.

I blogged earlier this month about how Quancast is the best free tool for internet marketers in years, and I stand by that claim. The more I use it, the more I like it, and the more potential I see for it.

But back to our topic … understanding your customer. One more practice that we are going to start at World Vital Records is requiring all our executives to have regular phone calls with customers.

I remember when my brother Curt Allen was CEO of MyFamily.com and he asked his executive staff of 12 people how many had spoken to a customer in the past month. If I recall correctly, not a single hand went up. He was making a strong point that when a company is growing fast, it is easy to lose touch with the customer.

So when I ran the marketing department, not only did my staff each visit our call center every week to be involved in customer phone calls, but we also started holding group discussions with our customers to find out what they liked and didn’t like, and what they wanted us to do next.

It is so easy to get busy with housekeeping and putting out fires that you can completely neglect speaking with customers.

We are also planning to attend many, many national, regional, and local family history events. Not only are the people at these conferences the nicest people you’ll ever meet, but they are so incredibly knowledgeable–some of them have been doing family history for decades, so they have so many insights and ideas for what would make their job easier.

A consultant friend of mine told me recently that third-party surveys are far more accurate than those conducted by a company itself because customers will be more honest with third parties for some reason. What do you think? I remember we hired Wirthlin Worldwide to do a major customer survey for MyFamily.com back in 1999 and the results were incredible.

Blogging keeps me in touch with internet entrepreneurs, but not with the family history community yet. I think I’m going to keep this blog focused on internet entrepreneurship and marketing (due to popular demand!) and start a new blog that I’ll probably publish at Worldvitalrecords.com that will focus on family history topics.

Bill Marriott claims that his new blog will help him do on a global scale what he has been doing for years: talking to the customer.

What are your topic 3-5 techniques for staying in touch with your customers and really understanding their needs? And how has this helped you achieve success in your business?

Please share….

Note: I have not been involved as an employee of MyFamily.com (now The Generations Network) since February 2002.

Online Retail Grows by 20% This Year to $211 Billion

Shop.org just released its ninth annual ecommerce study. It projects $211 billion in ecommerce revenue this year, up from $176 last year.

The forecast $211.4 billion includes travel, a category valued with revenues of $73.4 billion in 2006. The top non-travel categories include computer hardware and software ($16.8 billion); autos and auto parts ($15.9 billion); and apparel, accessories and footwear ($13.8 billion). Cosmetics and fragrances ($800 million) and pet supplies ($500 million) are expected to experience over 30 percent growth in 2006, more than any other categories. Pet supplies is a new category tracked in this year’s report.

Integration between online and offline activity is key for retailers who report 22 percent of offline sales are influenced by the Web. Retail Web sites are also a viable channel to reach new customers; 38 percent of online customers are first-time buyers.

Amazing.

Speaking of online retail, I just saw an Inc. Magazine profile of the largest internet shoe retailer. It turns out the entrepreneur running Zappos.com, is Tony Hseih, who sold LinkExchange to Microsoft in 1998 for $265 million (I was a huge user of LinkExchange–it was one of our best sources of traffic in the early days of Ancestry.com). Zappos.com had $252 million in online shoe sales last year, and they are obsessive about great customer service.

I love this quote:

We have to untrain employees’ bad habits from previous call centers, where they’re trying to be more efficient by minimizing the time they talk to the customer. If someone is looking for a specific shoe and we happen to be out of stock, we have employees direct those people to competitors’ sites.

Another Inc. Magazine profile describes how Utah entrepreneur Morgan Lynch built Logoworks into a successful online business. Revenue last year was $7.3 million.