How Much Whuffie Do You Have In The Bank?

November 24, 2009

Whuffie is a concept that was developed by Corey Doctorow is his sci-fi book Down and Out in the Magic Kingdom.  Doctorow created a world where the economy has grown beyond cash currency as we know it today.  Instead of money, the currency of his world is Whuffie, a “reputation currency”, similar to what we sometimes call social capital.  You earn Whuffie by being nice, helping people, and adding value by providing access to ideas, talent, and resources. I believe that, in the world of ecommerce, Whuffie drives business.

Down and Out in the Magic Kingdom by Cory DoctorowCharles Andres introduced me to this book in a comment on my blog last week.  The book is available as a free download or free podcast, costing only Whuffie.  You can also buy it in the traditional form from Amazon if you aren’t quite there yet.

Tara Hunt has built a following by developing a guidebook of how Whuffie applies to the world of social media marketing, called the The Whuffie Factor.   Tara breaks down the process of earning Whuffie into 5 basic steps.

  1. Stop talking and start listening to your customers.  (I might add that you must also prove to them that you are listening by providing feedback and adding value to their thoughts).
  2. Become part of the community that you serve.
  3. Create amazing customer experiences
  4. Embrace the Chaos!  Entropy is growing, so you better learn how to ride the chaos wave!
  5. Find your higher purpose.  Figure out how to give to the community and still be profitable.

The more I read about the Whuffie economy, the more I recognize that embodies the raison d’être for web-based marketing for ecommerce success.  Historically, retailers were successful by becoming an integral part of the local economy.  Merchants were known and trusted as part of their neighborhood, and merchandising was done to accent the best features of products for sale.  Whuffie was transparent: We knew the seller, we touched the product, and buying was a great experience.   Alternatively, if none of the above was true, say the store was run by a grumpy sales person that we didn’t trust, the business never survived.

The Grateful Dead foreverFor successful marketing online, the challenge, as we know, is how to scale that hands-on reputation and value beyond the local neighborhood.  The concept of Whuffie embodies this goal. Cory Doctorow gives away access to his books, making profit on his higher purpose of explaining his philosophy in live talks and future book sales.  The Grateful Dead figured this out long ago by listening to the fans’ desire to tape and trade their concerts (an amazing customer experience), thus creating a aura and community that has transcended well past the death of Jerry, selling more tickets and albums along the way, and spawning an entire genre of music (a higher purpose) that rides on the chaos of musical improvisation.

Traditional marketing and advertising can drive great short term results.  Well developed TV and radio, or paid placement ads, can drive short term business, and are valuable to jumpstart awareness of your brand.  But once you gain this awareness, the only sustainable way to keep it is to rapidly move to a Whuffie currency.  You need to think about how to engage that customer, add value, and keep them involved with your product.  In other words, scale with Whuffie.  Thus, the challenge becomes:

  • How do you listen to your customers, and encourage them to listen to you?
  • How do you engage them in a community which serves both you and their purpose?
  • How do you engage them to make them enjoy visiting and buying on your site?
  • How do you move that relationship to serve a higher purpose while earning profit?

The good news is that today, with Twitter, Facebook, and other social media forums, we now finally have the tools to implement these efforts.  We can talk and share with our customers and community.  But these tools do not replace or embody the underlying Whuffie, they’re just the checkbooks and credit cards of this new economy.  The Whuffie itself has to be earned, and that can only happen with hard work and genuine focus on your business.

The formula is simple… 5 easy steps described above. The tools are available, Twitter, Facebook, and other forums.  All you need is the awareness of your business’s value, the passion to involve your customer community, the dedication to make it work for you, and some serious investment of Whuffie to drive great sales results.


Here An Affiliate, There An Affiliate, Everywhere An Affiliate, An Affiliate…

November 4, 2009

Here An Affiliate, There An Affiliate, Everywhere An Affiliate, An Affiliate…  Can you say that 10 times fast?

Every time I talk with a company about strategies to grow their business, the idea of developing an affiliate program is a major element of the discussion.  Why not?  It should be a no brainer, right?  They can make money “off of us” simply by sending customers our way.  And with Twitter and social media, this should be easy, right?  Well…maybe.

In these days of Twitter, Facebook and social networks, it’s easy to get your name out.  You’ll even get some good references and mentions, and there is clearly value in building a cadre of Twitter followers and Facebook fans.  But when it comes to driving business, these social media relationships are pretty informal, almost like flirting. Flirting is ok for branding. To develop a productive partner or affiliate program requires the development of intimate working relationships that go beyond the casual.  When you give them the attention they need, affiliate partners can truly share in a win-win relationship.

handshake 1

Everyone wants to be an affiliate, and we all want them.  It’s relatively easy to set up a program with Commission Junction or Linkshare, where sites can simply sign up to be your partner. However, once you launch a program you quickly learn the challenge.  Unless you pay careful attention, you’ll generally find that 80% of these “partners”  will end up costing you more than they return in value.  Some of them will start bidding up the price of your brand name for paid placement (despite your contract terms to the contrary).  Others may create a scam which results in a lot of purchases, followed by a lot of returns.  Others will simply be needy and require too much of your time.  But alas, there will be a few who can truly help increase your sales.

So how should you move forward?  Although it’s tempting, don’t just accept anyone to be an affiliate. Having a lot of affiliates may create links to help with SEO rankings, but they will cost you in terms of time, energy, and risk of control of your brand.  If links are your goal, you’re better off creating your own feeder sites.  Only accept affiliates whose sites make sense to you, meaning that they are a portal of products like yours, or they sell complementary products, and they can bring unique value to your sales process.

Once you identify them, it is important to stay in touch with your key affiliates. They are, in fact, another sales channel.  Thus, they need to have insights into your business, new products, and special deals.  Before the internet, annual partner/affiliate sales meetings were important. (My wife even knows this, as she’ll always remember how we had to cut our honeymoon short so I could make it back for one of these events!).  Today, you don’t need big events,  but you still need to be available and communicative.  For major (meaning they sell a lot) partnerships, face to face meetings are still important.

I also believe that to make an affiliate program work well, you need a dedicated internal affiliate sales manager.  This has to be someone who is creative and resourceful.  The manager needs to provide feedback and let your partners know how they’re doing, and hopefully how big a check they are going to get each month.  Affiliates often have unique ideas of ways to sell your product.  Your manager has to have the knowledge and judgement to be able to either go with the vision, or explain why it is not acceptable.  Ideally, you are as key to the affiliate’s income stream as they are to yours, so they need to know you are available when they need you.

At the end of the day, the success of an affiliate program has more to do with quality than quantity.  A properly managed affiliate program can drive tremendous new business opportunities your way.  A poorly managed program will just eat up your energy and time, with little or no sales results.


The Ecommerce Expertise Blog

October 24, 2009

Ecommerce Expertise Blog

Welcome to the Ecommerce Expertise Blog.

My professional focus is on helping companies improve their eCommerce presence and sales results.  I have expertise in the technical aspects of eCommerce implementation, site optimization to improve conversion, and the application of 20+ years of marketing experience to new social media tools and processes.  That said there are plenty of blogs and articles that talk about how to do this.  From time to time, I’ll post links to articles or write about tips to improve your site.  But I’d rather use this blog to discuss the more esoteric applications of life and business experience to improving web presence and results.  So here we go!

Steps to an Ecology of Ecommerce (with apologies to Gregory Bateson)

Throughout my career, I have been struck by the challenge how to embody proven experience to innovate into the future.   One of the most enlightening books I ever read during my teen-twenty self discovery years was Gregory Bateson’s Steps to an Ecology of the Mind.  It was there that I first internalized the concept of embracing entropy, or evolving disorder and change,  as the way of the world.  Bateson argues that probability favors disorder.  To me, success in business (and life for that matter) is the ability to find patterns to build on the growing disorder and complexity, view every change as an opportunity, and thrive on the edge of innovation.

This doesn’t mean that you can’t survive if you ignore the entropy and the exploding connections that surround you.  Here’s a simple analogy. Think about operating a car (and I am careful to use the word “operating” rather than “driving”).  At its most basic, operating a car today is the same as it was driving a  Model T Ford.  You push the gas to go, the brake to stop, and use the steering wheel to direct where you want to go.   I drive a Mini Cooper S.  The Mini is a retro design based on the original British Car first developed in 1959.  In its original incarnation, the Cooper was a British response to the Volkswagen, a basic box with minimal features, and one simple gauge in the middle of the dash to tell you how fast you are going.  Today’s Mini looks similar, and someone who drove a 1959 Cooper would have no problems acclimating to the new car.  BUT…think about what’s in this new car:

The Old and The New

The Old and The New

That one gauge in the middle now has a speedometer, gas gauge, indicators for the traction control, maintenance indicators, a thermometer, a readout of my fuel economy, and little lights to warn me that I haven’t paid attention to the gauge that tells me I’m out of gas.  It’s surrounded by buttons for the electric doors, electric windows, automatic air conditioning, 3 airbags (which we never want to use), even an “openometer” to tell me how long the convertible has been open.  So what’s the point?  I can drive without any of these features, but to fully operate the car and maximize the experience, I need to manage all of these instruments and features.  Only then can I gain full utilization of the machine.  Someone who drove a Cooper in 1959 would absolutely feel at home in the new car, with its familiar features.  But in many ways, that familiarity would blind him to the marvels of the new technology, and prevent him from recognizing the capabilities of the newer tools.  They would only realize half of the experience.

So how does this relate to eCommerce business?  As the operator of a store, all you really need are the basics that merchants have had forever:  merchandise to sell, a way to take money, and a way to deliver the goods.  Eventually, with the assistance of big brother Google, you will be found, and you will probably sell something.  But how do you truly optimize your efforts?  You need to become aware of all the instruments and tools which surround you, and how to use them.  You need to learn both the internal widgits, such as comparison features, add-ons etc., but also all of the tools that can extend your reach into the internet.  You need to grow beyond the familiar, and embrace the entropy of all the new tools that your competitors are using to be found!  But you also need to take a holistic approach, and build on your own skills.  The ultimate winner is the merchant who can leverage  the “best practices” of the new social media tools and eCommerce techniques to build on what their years of experience has taught them in their gut.  To do this successfully often requires some coaching, passionate debates on what might work, but ultimately taking calculated risks based on the expertise that you surround yourself with.  Often, you need a guide or coach to help you see what’s new around you.  Don’t be afraid of what they can show you.  Only by embracing these new capabilities, but still keeping your hand on the wheel, can you hope to explore new ways to grow your business, and become the best in your field.