Profiting from impulsiveness

Impulse purchases are rising because Web sites become more convenient each year, because customers grow more confident in Web purchasing, and because product delivery keeps improving. Pure online businesses, such as music downloads where delivery is immediate, inspire the most impulsive purchases. Think about how online trading has rocked the securities industry in the past ten years. Time was, buying or selling stock was a big decision, one not made very often. Advice was frequently sought from a stock broker, a financial advisor, or even friends and family. Buying or selling an investment usually received careful consideration.


What happened when investments could be bought and sold online? Everything changed. First, there was huge competition over the lowest fees charged for each sale and over the simplest customer experience, and the trustworthiness of the electronic broker. But that was only the beginning. Completely new needs began to emerge. Brokers began to compete on the information available—real-time quotes, investment analysis, and portfolio management tools. And then day traders emerged—the ultimate impulse purchasers in the electronic brokerage business. They are highly sought-after customers because the churn in their accounts brings in large fees. They are the high rollers of the brokerage business.
This kind of change is underway in music today, as brick-and-mortar retailers that first came under attack from CDNow and other Web retailers now also fear Apple iTunes, the music download store. Digital commerce and digital delivery inexorably result in more impulse purchases at lower prices. Where someone formerly thought a bit before trooping to the store to buy a $15 CD, now they think nothing of downloading a single song for 99¢. You can see the same shift underway for books, and can imagine it affecting many other industries as the years go by.
What does this shift to more impulsive purchases mean for Web marketing? First off, it means more of your business shifts to the Web, but it means much more than that. Impulse purchasers want different things. A day trader is not looking for the same brokerage features as a conservative investor. People buying CDs are more likely to choose by artist and by album, while folks downloading tunes for their iPods are choosing a song. As your business moves from offline to online commerce to pure online, you might see similar shifts in customer needs that drive your Web marketing strategy.

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Mike Moran

Mike Moran is an expert in digital marketing, search technology, social media, text analytics, web personalization, and web metrics, who, as a Certified Speaking Professional, regularly makes speaking appearances. Mike’s previous appearances include keynote speaking appearances worldwide. Mike serves as a senior strategist for Converseon, an AI powered consumer intelligence technology and consulting firm. He is also a senior strategist for SoloSegment, a marketing automation software solutions and services firm. Mike also serves as a member of the Board of Directors of SEMPO. Mike spent 30 years at IBM, rising to Distinguished Engineer, an executive-level technical position. Mike held various roles in his IBM career, including eight years at IBM’s customer-facing website, ibm.com, most recently as the Manager of ibm.com Web Experience, where he led 65 information architects, web designers, webmasters, programmers, and technical architects around the world. Mike's newest book is Outside-In Marketing with world-renowned author James Mathewson. He is co-author of the best-selling Search Engine Marketing, Inc. (with fellow search marketing expert Bill Hunt), now in its Third Edition. Mike is also the author of the acclaimed internet marketing book, Do It Wrong Quickly: How the Web Changes the Old Marketing Rules, named one of best business books of 2007 by the Miami Herald. Mike founded and writes for Biznology® and writes regularly for other blogs. In addition to Mike’s broad technical background, he holds an Advanced Certificate in Market Management Practice from the Royal UK Charter Institute of Marketing and is a Visiting Lecturer at the University of Virginia’s Darden School of Business. He also teaches at Rutgers Business School. He is a Senior Fellow at the Society for New Communications Research. Mike worked at ibm.com from 1998 through 2006, pioneering IBM’s successful search marketing program. IBM’s website of over two million pages was a classic “big company” website that has traditionally been difficult to optimize for search marketing. Mike, working with Bill Hunt, developed a strategy for search engine marketing that works for any business, large or small. Moran and Hunt spearheaded IBM’s content improvement that has resulted in dramatic gains in traffic from Google and other internet portals.

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