Small Businesses beware, Google is poaching your customers!

Posted on by Billy Tucker

While pondering the implications of the Contextual Ads in Gmail I put myself in the position of an unsuspecting small business owner, and was amazed to learn just how focused Google was on introducing my customers to my competitors!

The Google ad platform does an incredible job of identifying an email’s context and finding the highest paying, or most clickable ad to match that context. In a setting like Gmail that means digitally reading the email from the Subject Line to the Body of the email to the Sender’s Signature, using that collected data to identify the email’s context and then finding the most suitable set of advertisers to display when the Gmail-using recipient is reading the email.

Here’s an example, check out the ads on the right (Also note that clicking on “More about…” will open a page with multiple Landscaping ads):

clip_image002

Gmail’s advertising engine is devastatingly effective here having served ads that are not only relevant to the subject of the email, but also to the geography of the recipient, making the ads a very potent way for those advertisers to “poach” the sender’s customers. But where does that leave poor Grassy Bass Landscaping? By sending a quote to a potential customer I have inadvertently surfaced a number of competitors, hardly seems fair! One way to minimise the impact of Google’s poaching prowess is to avoid building context through the subject line or body of the email, right now it doesn’t look like attachments are read so use the attachment to describe the work instead. That’s not ideal, but it may just avoid Gmail surfacing your most aggressive competitors right next to your mail.

Any small business that thinks Gmail is just another harmless, free webmail product should think again, it’s your competitors’ dream ticket to finding your customers after you have done all the hard work, adopt it as your own email provider at your peril.

UPDATE : In the Virtual Revolution, broadcast in the UK on the 15th February, the presenter raises these same concerns about Google’s approach to Privacy and Advertising Everywhere, some interesting perspectives here – Gmail is discussed at 1:44sec. [Note that this link will be broken if this video has not been authorised by the publisher]

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Australian Retailers are frozen in time, what they need is Online support.

Posted on by Billy Tucker

In a previous post I said that “Pricing alone will never lead to a long term strategic advantage, only service quality and inspiration can” – something similar to a quote today from CEO of Masters, the challenger hardware-retail brand from Woolworths.

Don Stallings commented: “more than half the people shopping for whitegoods at Masters hardware stores use smartphones to check competitors’ prices… to get those sales over the line in a traditional store, customer service and the personal touch had to be of the highest quality. [at] Masters [we have] spent as much on training staff to deliver customer service as on the rest of the business”

Meanwhile, across town at Myer, Bernie Brooks laments that “[the] customers’ propensity to purchase is not improving” so they are “pinning hopes on their midyear stocktake sale”

Sadly, I suspect a slash and burn approach will not be the answer long term, unless Myer fancy jumping onto JC Penny’s EveryDayLowPrices strategy? (The downside of which I blogged about earlier).

Myer + Myer One Loyalty club have the bones of a very defensible Retail strategy when Multichannel is fully embraced; where Lifetime Value, upsell and cross sell are key and are driven by what is already known about each customer segment, customer cohort or even, individual customer. But each retail touchpoint has to be aligned to the vision of “lifetime customer value is king”, something that may be easier to achieve when the business is built from the ground up with no technical or cultural legacy, sadly Mr Brooks doesn’t have that luxury.

“Discount heavily and I will love you right now, inspire me with insights and ideas and great service and I will love you for ever”

Microsoft Socl, nice try, but not quite right.

Posted on by Billy Tucker

SOCL

I still have a soft spot for the Bellevue Behemoth, I enjoy a Windows Phone 7 after all! Yet I can’t hide my disappointment with their new G+/Pinterest competitor So.cl having logged in for the first time today.

There was a time only a few years back when a Consumer Preview or Beta could be rough-as-guts bad – and early adopters would still evangelise the intent even though they had to cut the execution some slack!

However I think the world has moved on. Looking at innovation through a Lean Startup lens it feels appropriate to cut features in favour of capability when time to market is important. Yet what Microsoft have done with So.cl is enabled 100% of the product features at the expense of capability, in fact, I get errors at pretty much every turn!

In such a competitive market, when trial, adoption and subsequent user engagement/feedback is so critical, I think Microsoft are about the blow the advocacy available from that first wave of geek-adopters as a result of their surprisingly poor execution, a potentially fatal blow for a Network-effects dependent platform.

As an innovator the formula to success seems straightforward, annoy fewer customers than you delight and your advocacy will grow.

Sadly, Microsoft are engaging on a very dangerous battlefield with So.cl, I imagine their their enemies are moving in for the kill already. Another Wave anyone?