December 14, 2009

Inefficiency

The best reason to dig into Online Marketing Simulations (buy the book, purchase via Kindle, or buy a digital download) is to find inefficiencies in your business.

Here's the deal. The vast majority of online marketing focuses on "easy conversions".
  • SEO --- close to free.
  • E-Mail via batch-based campaigns --- close to free.
  • Promotions --- free shipping, % off, GWP, PWP.
  • Paid Search --- expensive, but better when coupled with a promotion.

There are what I call "hard conversions". These are the conversions that happen the old fashioned way, when a customer finds your product so compelling that they cannot resist it. Hard conversions often lead to loyal customers.

So the goal is to find hard conversions that lead to long-term value. That's not easy. But that's what the OMS methodology enables you to do.

See, you'd rather get half of the clicks if it means that those customers are worth double or triple the value of easy conversions, right?

I'm here to tell you that Online Marketing is inherently inefficient. The entire ecosystem, and the Web Analytics solutions that measure the ecosystem, create a giant feedback loop based on easy conversions. It's easy to see how the conversion funnel worked via Google Analytics.

Now try to use Google Analytics to measure the five year simulated trajectory of your business, based on the customers who fall through the purchase funnel and eventually convert. Or Omniture. Or Coremetrics.

We use Online Marketing Simulations to find inefficiencies, seeking to optimize the long-term health of our business. Those who use Online Marketing Simulations have a clear competitive advantage over those optimizing the business based on conversion rates.

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