MarketingSherpa Blog

The US Supreme Court has ruled that if a company does not have a physical location (a store, office, warehouse, etc.) within a particular state, that state can’t require the company to collect and remit sales tax on customers located in that state. For decades now, many state legislators have floated ideas about changing that law because they “lost” millions of dollars in potential tax revenues.

First, the catalog and TV direct response advertisement industries fought back via associations, such as the Direct Marketing Association and the Electronic Retailers Association. New state taxes were unconstitutional; plus, they placed an unfair requirement on merchants not located in that state. Who wants the burden of bookkeeping and paperwork for different state taxes across the United States?

I’ve actually experienced this first hand because Sherpa has had employees in many different states, and their home offices were considered to be “business premises,” so we had to collect and disburse local taxes for many states. Each had different rates, paperwork styles, red tape and typical errors. It was very much like having to deal with many different versions of the IRS. Can you say “massive pain”?

When the Internet took off, state legislators immediately saw it as a new area of taxation. Early attempts were beaten off by the same logic and by lawyers who stopped states from harassing direct mail and TV merchants. However, as you may know, since June 1, the state of New York began requiring state taxes from all ecommerce sites with affiliates based in New York state.

They’re estimating $50 million to $70 million in taxes per year. The costs, including battling lawsuits filed by such merchants as Amazon.com, not to mention the paperwork involved dealing with thousands of merchants, won’t be negligible.

Key: if this works, and if New York manages to keep and enforce this legislation effectively, you can expect dozens of other states to follow; many might do so in time for the 2008 holiday rush. Who cares about federal law when it’s a recession year? And ecommerce should be bigger than ever this year because of gas prices. Who wants to drive to shop when they can surf at home?

Some merchants, including Overstock.com, are reacting by cutting their affiliates in New York until the law changes. Presumably they did the math and figured the cost of paperwork was greater than the profits they make from accounts brought in by New York affiliates. If the New York law stays on the books, the problem then comes when dozens more states start asking for taxes too. Should Overstock cut affiliates in every state?

According to Sherpa data, ecommerce sites rely on affiliates for roughly 45% of revenue. Although there are tens of thousands of active affiliates in the US, for most, it’s a part-time income. Roughly 1%-2% of affiliates are responsible for the lion’s share of all that merchant income. Will we see merchants begging their most profitable affiliates to move from state to state in order to flee the newly enacted taxes?

I can’t say whether the new law is right or wrong. The world has changed profoundly since federal law was written; now, brick-and-mortar stores are in competition (and cahoots) with websites. It almost doesn’t seem fair that a retailer who has taken the extra risk, expense, and trouble of launching a brick-and-mortar store in my state should have to deal with more tax administration than an Internet retailer should.

However, it also doesn’t seem fair to use affiliates as the loophole to zap taxes through. In my mind, affiliates are icons of the type of entrepreneurialism and clever small business ownership that has made this country great. They are also actual residents of the states in question. How can it be right to crush the livelihood of your own state’s residents to get your hands in the pocket of a business several states away?

If law changes, it should be on a federal level. And affiliates should not be affected.

If you want more info, my friend Shawn Collins at Affiliate Summit Inc. has been tracking the matter closely. He’s also working with colleagues to consider forming an industry association for affiliates. A guy worth knowing.

Affiliate Marketing Blog by Shawn Collins:
http://blog.affiliatetip.com/archives/new-york-affiliate-tax-recap/

Embedding video — you should try it.  You can use any one of the millions of videos on YouTube to liven up a blog post for nothing. Just copy the “embed” HTML code, paste it into a blog and bam — content that doesn’t cost a dime.

YouTube’s TOS says you can embed videos in a blog as long as you’re not:

Read more…

I recently talked with Natasha Funk, research director for Terra Networks. She has some interesting demographics to share on the online U.S. Hispanic market. We mostly talked about a content-engagement study Terra conducted with comScore.

Read more…

You’d think we’d know everything about Baby Boomers by now, right?  Wrong.

Here some insights about the demographic you may not know. I came across them while completing a  case study about marketing to Baby Boomers. Read more…

Ten years ago this week, innovative marketers tested adding the first call-us buttons to their websites. Results were delightful –- so much so that early testers, including several divisions of IBM, rolled out call-us buttons to more of their Web pages.

Yet, beyond a certain circle of best-practices-type marketing organizations, call-us buttons never really took off the way they should have in the larger world. I’m not sure why –- possibly it’s because the buttons cost next to nothing to implement, don’t use razzle-dazzle technology and aren’t as cool and sexy as videos, search ads or viral campaigns. In the ceaseless marketing march toward Web 2.0 hipness, call-us buttons got left in the dust.

Well, now that we’re in a recession (which we are no matter what the government proclaims), it’s time to add a call-us button to your site improvements agenda. You don’t need razzle-dazzle or the latest great thing. You need what works –- what’s proven to increase responses quickly, cheaply and effectively.

How call-us buttons work:
You add a button (or form) to every page of your site (or to landing pages), which prospective clients might abandon because they have questions they need answered to continue. It works best on considered-purchase page paths –- something expensive or complicated that folks may want to talk to a human being about before making a decision to buy or to add your name to the vendor shortlist for the boss’s consideration.

The button lets people request to be called by an expert service rep who can answer any questions they might have. It’s not a chat box –- some folks don’t like chat at all, and others feel it’s too annoyingly “slow.” It’s also not a sales-rep-will-call offer – nobody wants to be sold. They want to be assisted.

You can set up the button, so that your call center calls immediately (the faster the better, just like chat; no one wants to sit waiting) or at the time each user asks to be called. If you have business clients, be sure to ask for extension. If you can operate only during limited hours, state the hours upfront on the button and include a cross-link to a Web form for questions during off-hours. Make sure someone actually responds to the Web form (a shocking number of companies do not).

Start with a small test that measures what percent of visitors to one page with a highly visible call-us button actually use it. Also, measure what percent of those calls result in a favorable activity (anything from a request for more information to a direct conversion.) And, consider having the reps making the calls ask folks to hang on the line for a brief satisfaction survey at the end (“Was this helpful?” or “Would you be more likely to buy from us as a result of this service?”). This will give you the call volume and results measurements you need to create projections and sell your management team on a rollout.

Last, don’t abuse the phone numbers you receive. Calls should be placed based on prospects’ wishes. If they didn’t ask you to call again, don’t. Otherwise, people will quickly learn to never click on a call-us button again.

Why do people prefer call-us buttons to picking up the phone and reaching out to you? They’re sick and tired of automated phone systems, on-hold wait time and being passed from person to person while trying to find the right expert to answer a question. It’s a pain in the neck to get through to most companies these days. Call-us soothes the pain point.

Every time you overcome a pain point that’s a barrier between you and a prospective customer, your sales rise. The only question is by how much.

Were you one of the Few, the Proud, the call-us-using marketers of the past decade? Please post your comments below. Tell the rest of us how things worked out.

I recently interviewed a B-to-B marketer who had completely revamped her webinar strategy to generate a 400% increase in attendance. One change they made was to eliminate events in July and August, when they’d seen generally low interest from their prospects and customers.

Her theory: People tend to take a vacation in the summer, or else find the nice weather just too enticing to sacrifice an extra hour in front of a computer.

Read more…

The new iPhone has me thinking about mobile marketing. After stewing over the differences between PC and mobile, a big difference hit me: GPS.

GPS enables sharp geotargeting. You can use IP addresses to target ads to zip codes, but that’s pretty broad. GPS-enabled phones can pinpoint a customer within a matter of feet.

Read more…

E-catalogs that are navigated with a ‘virtual thumb’ in the turn-the-page sense have been a hot topic among marketers for quite some time. Do they produce sales? Are they worth the effort? What’s the point of an e-catalog when you have ecommerce?

I have searched high and low for a data-based, Sherpa-worthy Case Study on this very subject. The fact is, proving e-catalog activity creates sales with rock-solid data is difficult. Marketers who think they work only want to talk estimates or anecdotally. Read more…

Choosing the right title for white papers and webinars can mean the difference between catching your prospects’ attention and being overlooked in a sea of competing ecommerce content. For some ideas on creating titles that get attention, check out the homepage of the popular social bookmarking site Digg.com.

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I’ve worked for brand-driven companies and for A/B test-driven companies. Each was equally snooty and disdainful of the other.

To summarize, brand marketers thought A/B testers were pointy-headed geeks, while A/B testers thought brand marketers were bubble-headed blondes. Luckily, the twain didn’t often meet … until now.

Instead of relying on “fuzzy” data from focus groups, awareness studies and Nielsen ratings, brand marketers now are inundated with detailed numbers from every campaign that touches the Web, email or mobile in some way. Once you have numbers, testing to improve results is the logical next step.

As for A/B testers, the plethora of cheap, do-it-yourself online response vehicles has lowered the barriers to competition. Now anyone can launch a direct response campaign to your marketplace without first investing hundreds of thousands of dollars in printing, postage, fulfillment and media costs. Suddenly, a strong brand is the only safe harbor to launch your merchant ships from.

In practical terms, this means political battles are beginning to rage in marketing departments across America. Whichever side you’re on — brand vs A/B — someone else on your team is evangelizing the other direction as the best way to beat the recession.

Who’s right and who’s wrong? Hate to say it, especially as a chief proponent of measurement in marketing, but brand should always win.

Brand is so critical, in fact, that every company must assign a Chief Brand Evangelist who has *veto power* over any and all proposed A/B test ideas. Test all you want, but never test outside of brand guidelines … unless you are considering changing your entire brand positioning as a result and the CEO has been brought into the picture.

It’s that serious.

You see, I’ve worked for A/B testing companies and brand-driven companies. The brand-driven companies could sell almost anything within their brand far more easily than the testing companies could. The brand’s fans would line up to buy anything that brand had going. You could A/B test your brains out from here to kingdom come, but all those incremental gains year after year would never add up to the sole selling power of a strong brand.

Of course, the gold is having a strong brand with a team that’s able to A/B test, within guidelines, to improve results for it. That’s a company worth investing in.