Gamer Joseph Kim Rocks E-commerce
These are the times we live in. Times when one of the most substantial, intelligent and interesting e-commerce and content marketing articles I’ve read is by game developer Joseph Kim.
Kim’s 12 Critical Mobile Monetization Concepts is a tour de force and it is only the first of a planned three-part series. Before we examine why Kim’s ideas are so GREAT and applicable to e-commerce let’s review our current ecom situation:
- Online commerce continues to show healthy growth even as brick and mortar flatten.
- Conversion rates at most ecommerce websites are between 3% to 6% *.
- Schwans.com is highest converting ecom at 42%.
- Ecom’s past is about traffic, its future will focus on conversion.
Teams I’ve managed made more than $30M online. The “secret” is understanding the delicate balance between push and pull, trust and challenge any website must create. Ecommerce websites are games complete with sets, characters and stories.
This post is about how e-commerce has more in common with video game development than most realize. Here is Kim’s explanation of game development CSFs (Critical Success Factors) apparently being mastered by a Japanese game development company:
- High Ass ARPU: Claimed $12 ARPU (average revenue per user) – this was a strong indicator that there was a meaningful way that DeNA was designing monetization in their games not found outside of Japan
- User Psychology: Revealed their concept of user stress (“stress and release”) and the role of user frustration to monetization
- User Clusters: Advocated different treatment for different “play styles.” Third party analytics companies such as Playnomics and Playhaven only recently implemented segmentation and targeting by user types… but this can be taken much further.
Think of “ARPU” (average revenue per user) as AOV (Average Order Value or the average amount purchased on an ecommerce website) and you can begin to see how ecom and games are siblings.
The real interesting idea is #2. “Stress and Release” recalls the research of Amy Africa. I saw Amy present at the Conversion Conference last year and highly recommend you attend if she is presenting at a conference near you.
Amy discussed the “fight or flight” nature of conversion. She shared an example of watching a buyer square up, lean in and get ready to fight as they made an online purchase. Buying something online is NOT a natural act, so presentation, language and imagery must be crafted to calm buyers “fight or flight” dinosaur brains.
Content & Commerce
Post Google’s Panda and Penguin algorithm updates the need for quickly improving ecommerce heuristics (time on site, lower bounce rates, increases in pages viewed) is beyond clear. Pages without social support, high bounce rates and no rank hurt more than help.
Interestingly e-commerce teams seem slow to fully appreciate Google’s new demands.
In a recent Content Marketing Institute study fully 90% of B2B companies indicated content marketing was a top priority. B2C ecommerce websites came in at 88%. Granted we lack tools to fully understand how traffic generation leads to content marketing monetization, but ecom teams lag because the right brains creative side and the left brains engineering don’t live comfortably in many e-commerce websites.
Think Like A Gamer
Here is one of my favorite sections from Kim’s brilliant post:
User Flow refers to a user’s activity path within a game. The core idea of this concept is to embed monetization points within a user’s set of activities. Whether within the core loop or whatever other activities the user engages in, you should design monetization calls to action where the user actually goes in app.
The point is that we cannot just rely on the user to tap within shop to monetize the user.
Think of your e-commerce website like a game. Are there rewards on each page helping visitors know how to “level up”? Is there just the right amount of “stress and release”. Is it EASY to buy? Here is another great quote from Kim:
It’s amazing how some games do as much as possible to not take your money. Once your shop has been designed, try to perform the following exercise:
Go into the shop and purposefully find ways of spending money.
How much are you able to spend?
At what points in the game can you continue to spend?
“Shop volume” speaks to the potential for your shop to monetize users based on the breadth (types) and depth (number, repeatability, and quality) of products in the shop.
Breadth: There should be an interesting mix of types of products and categories in the shop
Depth: In each shop category there should be a good mix of soft and hard currency items. Further, there should be a number of items that users really want to buy at every stage of user progression (e.g., by level, etc.)
We all know the truth of Kim’s note. We’ve visited online retailers who make it hard to buy. Some sites hide their Calls-To-Actions as if they are treasures. Some websites are so “high design” you can’t figure out what, if anything, is being sold (or what action you, a potential buyer, should take).
Confused buyers so many things, conversion is NEVER one of them.
High design comes from our fear of being “used car salesmen”. Read Daniel Pink’s To Sell Is Human, include a large CTA with high contrast (red or orange) and then take Kim’s test. How easy was it to buy from your website? How much is it easy to buy? Are you teasing links or swamping them? Does your ecom website tell a coherent story or is it all about PRICE?
E-commerce & Semantic Web
Web 3.0 and the “semantic web” will bring new design logic. We won’t design static pages. Page and content presentation is based on “If, Then” logic (much like a video game). If a customer came from Google on keyword X then show hero image Y and fill a dynamic zone with product mix z.
If a visitor is a “helper” archetype, a returning customer who has purchased products from A & B categories then show hero image Helper 3 with new cross category merchandising. Since variables on a single visit can slouch toward infinity we will use our personas, segments and archetypes from email marketing to craft our Web 3.0 semantic web logic.
If Web 3.0 e-com design sounds like video game development you win a cookie.
Practical Semantic Web Application Now
Thankfully I don’t have to beat last year’s numbers anymore as I did everyday for seven years as a Director of Ecommerce. The CATCH-22 of e-commerce is you can’t win without getting outside your usual approach and getting outside the norm looks like a sure way to lose. Here are some ways your Internet marketing can begin to ready for the Web 3.0’s “Semantic Web game”:
- Use HTML5 and CSS3 to create a small dynamic zone on your homepage.
- Create a “Read the cookie, fire the creative” business rule for the dynamic zone.
- Keep the dynamic zone out of Google (for now).
- Test the business rule with 3 to 5 keywords.
- Test the business rule with 3 to 5 traffic sources.
- Baseline heuristic and monetary measures with and without the zone.
If your conversions with the dynamic zone don’t go up 5x change your creative. Start small by only presenting dynamic content in defined conditions. Fill the hole for everyone else and keep those “non-dynamic” visits out of your test KPIs except as your baseline or B condition. Define “conversions” generously (more time on site, more pages viewed and signing up to your list are all valuable “conversions” these days).
What are your REALLY DOING? By thinking about what content to fire to a customer’s persona, keyword grouping or traffic source you begin to think more like a video game developer and less like a uni-directional ecommerce merchant who wants to sell something.
Your desire to sell something is or should be clear. Your job is to make BUYING fun, relevant and trusted. Strongly urge reading Joseph Kim’s full 3 part series. I will post links here as he continues to write:
12 Critical Mobile Monetization Concepts (part 1 of 3)
* Ecommerce conversion rates depend on time of year and what products being sold and by whom. Trusted websites with substantial direct marketing support such as Schwans.com may convert a much higher % of their traffic. Schwans doesn’t need to shotgun traffic to their website since they have a substantial installed base of customers for their home delivered frozen food. No matter what your website’s current conversion rate the biggest return is usually found in increasing conversion by even a fraction because selling better to existing customers who love you is how your website can convert 4 out of 10 of its visitors like Schwans.com.
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