October 22, 2014

Sam Mallikarjunan of HubSpot: 60% of Ecommerce Marketers Aren’t Measuring the Fundamentals

With Google’s recent acquisition of shopping analytics firm Rangespan and the announcement of ecommerce juggernaut Alibaba’s IPO plans – alongside Amazon.com’s seemingly daily announcement of big news – the world of ecommerce is changing rapidly.

Sam Mallikarjunan, head of eCommerce Marketing for HubSpot, shared with me his thoughts on what’s going on in the space, how its evolved over time, and what small ecommerce players should be doing to compete in this quickly moving area.

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measuring ecommerce fundamentalsSmall Business Trends: Can you give us a little bit of your personal background?

Sam Mallikarjunan: Primarily, my job is to generate leads of eCommerce companies and send them to my sales team so they can work with them on implementing inbound marketing.

We actually run our own shop where we sell apparel, books and other things. We test a lot of the things we talk about. I’m also the author of the book, “How To Sell Better Than Amazon.”

Small Business Trends: Speaking of Amazon, I had an opportunity to talk with Rick Ayre, the guy that designed their first website.

Even in the early days of eCommerce, there was a huge premium put on writing great content in order to, as Rick says, captivate and entertain a potential buyer. Fast forward 20 years or so, here at HubSpot, which is a company well-known for inbound marketing and content, how different is it today compared to 20 years ago when you look at the importance of content to eCommerce?

Sam Mallikarjunan: It’s fundamentally the same, but different in some respects. When eCommerce was growing and Amazon was one of the first really big, successful companies in eCommerce, the people making purchases online tended to be early adopters. They tended to be risk takers; tended to make decisions quickly.

As the market penetration of eCommerce is growing, more people are hopping online who have a longer research process. What’s changed is the ability to bring people into the website. So websites used to be this skyscraper where you had one front door, the home page, and people had to go through many floors to get to where they’re going.

The increasing prominence and accuracy of search engines, as well as social recommendations and social sharing, has made it so a website now is more like a three-storey building with thousands of front doors.

So, although the fundamentals haven’t changed, the execution’s changed a lot and also the demands of the customers.

Small Business Trends: Just recently, Amazon announced the ability to use a hashtag to tweet and have a product that has the Amazon product link in that tweet get automatically thrown into a shopping cart. Is that a big development when it comes to eCommerce shopping?

Sam Mallikarjunan: It’s a really interesting thing. Amazon’s trying to get a lot better at owning the customer experience.

One of the interesting things about making people connect their Twitter account to Amazon is Amazon then gets lots of rich behavioral and psychographic data about the customers. They now can connect a shopping record to somebody’s social activity.

You could already do that in the past. If you had somebody’s email address, you could hit Twitter’s API and if they used the same email address for Twitter, you could connect those two contact records and get a holistic view of that person. Amazon’s taking that to the next level by increasing the accuracy.

Small Business Trends: How do you think small eCommerce operators are doing in areas of conversion, optimization and testing?

Sam Mallikarjunan: I think eCommerce marketers have been lulled into a false sense of security by our own success. Most have sales that are growing just because eCommerce itself is a good idea.

What eCommerce hasn’t done is innovate in the areas of inbound marketing. They’re still very heavily focused on things like pay per click and on-page SEO, and under-invest in things like testing optimization, lifecycle marketing and lifecycle management for the customers, as well as a holistic approach to the customer.

Small Business Trends: Can you talk a bit about landing page conversion rates?

Sam Mallikarjunan: When you’re doing A/B testing, particularly when you have limited resources, the key is to focus on variables that are the most disruptive or have the most leverage. The easiest win is usually A/B testing emails.

In terms of landing page and product detail page design, most product detail pages have a terrible Add to Cart button. It’s grey, blends in with the background.

We’ve had customers before, all they did was A/B test the Add to Cart button and they improved the conversion rate of the product detail page by 1,500%, which is a huge amount.

Small Business Trends: Are there any real easy quick-fix things? Maybe one or two that eCommerce operators could concentrate on?

Sam Mallikarjunan: Yes. The biggest change I want eCommerce companies to make is to stop thinking transaction and average order value alone, and to start thinking customer acquisition and customer lifetime value. It changes how you approach everything.

Small Business Trends: Where can people download the eBook, but also the different resources you guys have around this area?

Sam Mallikarjunan: You can go to HubSpot.com/ecommerce. You’ll find a bunch of resources there.




This interview on measuring eCommerce fundamentals is part of the One on One interview series with thought-provoking entrepreneurs, authors and experts in business today. This transcript has been edited for publication. To hear audio of the full interview, click on the player above. 

4 Comments ▼

Brent Leary


Brent Leary Brent Leary is a Partner at CRM Essentials and organizer of the Social Business Atlanta conference. Brent serves on the advisory board of The University of Toronto CRM Center of Excellence, writes the Social CRM column for Inc.com's technology site, and blogs at Brent's Social CRM Blog.

4 Reactions

  1. Thanks for speaking with me Brent! I enjoyed our conversation and I hope your article inspires more marketers to start solving for the customer (and life time value) instead of just solving for the transaction.

    • Sam I thoroughly enjoyed our conversation! Thanks so much for participating in our interview series. Truly awesome information and insight. I’m picking up a copy of your book too.

      Thanks again!
      Brent

  2. Great article very insightful. Lifetime value of the customer is very important especially when it comes to investment in social media and content. It’s tough to sell social and content services when a merchant is used to the immediate returns of AdWords. How do you help a SMB understand LTV and what can you do to show more value in the short term?

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