Over the last year I’ve worked in eTail selling everything from patio heaters to jukeboxes. eTail – like offline retail – is a highly competitive industry. ‘Little things’ can quickly become big things that end up differentiating multi-billion dollar success stories from defunct domain names available for cheap on an Afternic domain auction. As someone aptly put it: “retail is detail.”

So I’ve compiled all my observations of best practices in eTail into one post – and one uber-scoring system. Because everyone loves 100 point scoring systems, I’ve magically made all the points add up to 100! Here’s how it works. For each of the best practices below, rate your eTail business. Important note: be honest. For example, having a “contact us” email link does not give you all the points on customer service.

As a general framework, there are four primary categories and 11 sub-categories that determine online retail excellence. These are as follows:

  • Marketing with the sub-categories of online customer acquisition, offline customer acquisition and retention;
  • Merchandising with the sub-categories of pricing, product acquisition and user experience;
  • Technology with the sub-categories of IT and development;
  • Operations with the sub-categories of customer service, sales and fulfillment.

Now, without further review, here’s the categories and the eligible points for each. Add up your points along the way and check your score when you get to the end.

Marketing – Online Customer Acquisition

  • Do you have comprehensive coverage on all major search engines, comparison shopping engines, and marketplaces like eBay and Amazon? (up to five points);
  • Do you have tracking and reporting in place such that you can adjust your ad spend in real-time? Does your tracking take into account keywords or precise placements, phone orders, and cancellations? (up to two points);
  • Have you actively tested or are currently participating in all types of online customer acquisition including PPC, banner ads, email, affiliate, SEO, and eBay? (Up to two points).

Marketing – Offline Customer Acquisition

  • Have you actively tested or are currently participating in all types of offline marketing channels, including catalogs, direct mail, TV, radio, newspapers, or magazines? (up to two points);
  • Do you track offline conversions through your reporting? (up to one point);
  • Do you created dedicated landing pages to convert offline advertising online? (up to two points).

Marketing – Retention

  • Do you measure lifetime value as a key metric? (up to five points);
  • Are at least 20% of your purchases from repeat visitors? (up to five points).

Merchandising – Pricing

  • Are your prices consistently as good or better than your competitors? (up to five points);
  • Are your prices – including shipping and handling – good or better than your competitors? (up to five points).

Merchandising – Product Acquisition

  • Have you researched distributors and secured the lowest wholesale prices for your products? How confident are you that you have the best deal? (up to three points);
  • Have you contacted manufacturers to see if it is possible to order directly, and if so, have you been successful? (up to two points);
  • Do you have all the top brands in your category? (up to five points).

Merchandising – User Experience

  • Do you frequently conduct user experience testing, either through focus groups, with online tools like Google’s Website Optimizer, or through user surveys? Do you act on these tests and consistently improve your conversion rates? (up to four points);
  • Do you enable users to sort or search products easily? (up to two points);
  • Do you have a dedicated user experience specialist? (up to two points);
  • Does your site have customer ratings and reviews? (up to one point).

Technology – IT

  • Do you have site uptime with six nines (99.9999% uptime)? (up to five points);
  • Is your load-time at or above your industry’s average? (up to three points);
  • Have you implemented scalable and redundant systems to handle growth and traffic spikes? (up to two points).

Technology – Development

  • Does your tech team deliver features on-time and with minimal errors? (up to five points);
  • Does your Web site have the same or better technology than your competitors? If your competitor launches a new feature, can you rapidly replicate this feature? (up to two points);
  • Do non-technical business owners have a well-defined and effective process of communicating feature requests to the tech team? (up to three points).

Operations – Customer Service

  • Do you have a dedicated customer service department? (up to two points);
  • Does your company live by the credo “the customer is always right”? (up to five points);
  • Is customer satisfaction a key metric you measure? Do you consistently improve your customer satisfaction? (up to three points).

Operations – Sales

  • Do you have a dedicated sales department? (up to three points);
  • Can your sales team communicate with customers via online (live chat, email) and offline (phone, fax) methods? (up to two points);
  • Do you measure your sales team’s performance and constantly optimize against your sales metrics? (up to two points).

Operations – Fulfillment

  • Do you offer online tracking of customers’ orders? (up to two points);
  • Do you offer multiple shipping options? (up to two points);
  • Do you offer gift wrapping? (up to two points);
  • Do you have a customer-friendly return and exchange policy? (up to two points);
  • Do you consistently meet or exceed delivery times? (up to two points).

Here’s my scoring system:

80-100 points: Congratulations. You’ve built a scalable, customer-focused, technically outstanding eTailer. You have the means to compete with Amazon head-to-head and you have developed an online retail site that will stand the test of time.

60-79 points: Not too shabby. You’ve clearly created a company that has a lot of strengths, but you’ve also got some areas of improvement. The good news is that you are close, the bad news is that close only counts in horseshoes and hand grenades, so get to work!

50-59 points: You can probably survive for some time by focusing on arbitrage opportunities. In other words, as long as you can continue to find niches that haven’t yet been discovered by better-managed or more-organized competitors, you’ll be able to keep making money online. But bear in mind that this isn’t a long-term strategy – you can be opportunistic for ever!

40-49 points: If you are making any money right now, I’m impressed. But the bad news is, it won’t last. Either your technology will implode, or your bad customer reviews will catch up to you, or you’ll take a big loss in marketing that will push you too far into the red. Time to find a new day job!

39 points or less: If you’ve got a good domain name, think about selling it to the highest bidder.

I’d be curious to know how folks score. Send me a comment with the results!

1 Comment

  1. MrPeugeot January 6th, 2008

    I would suggest adding the following as well:- Can you effectively support multiple coupon/dollars off promos to incent different customer groups to purchase/repurchase?- Do you allow your customers to pass through incentives to their friends to virally build your active customer list?

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David Rodnitzky
David Rodnitzky is founder and CEO of 3Q Digital (formerly PPC Associates), a position he has held since the Company's inception in 2008. Prior to 3Q Digital, he held senior marketing roles at several Internet companies, including Rentals.com (2000-2001), FindLaw (2001-2004), Adteractive (2004-2006), and Mercantila (2007-2008). David currently serves on advisory boards for several companies, including Marin Software, MediaBoost, Mediacause, and a stealth travel start-up. David is a regular speaker at major digital marketing conferences and has contributed to numerous influential publications, including Venture Capital Journal, CNN Radio, Newsweek, Advertising Age, and NPR's Marketplace. David has a B.A. with honors from the University of Chicago and a J.D. with honors from the University of Iowa. In his spare time, David enjoys salmon fishing, hiking, spending time with his family, and watching the Iowa Hawkeyes, not necessarily in that order.