October 10, 2011

Death Spiral: Search

Pay close attention to search activity, especially among existing customers.


When your business is about to enter the death spiral, customers lose confidence.


And when customers lose confidence, they head to Google to compare prices, to compare brands.


Carefully analyze the percentage of search orders that come from existing customers.  If this percentage is increasing, and your new customer counts are within 10% of last year, it is time to hold a meeting.


Pay attention to non-branded terms ... you don't want a high percentage of these terms being purchased by existing customers, this means that your customers don't even understand your merchandise assortment.


Pay attention to branded terms ... if the percentage skews higher and higher among existing customers, it means that customers are losing confidence in your brand.


Use search as a signal ... a signal that your business may be entering the death spiral.