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MarketingSherpa Email Summit 2015 - SAVE $700 - VIP PRICING ENDS THURSDAY
May 06, 2003
Case Study

Business ecommerce on a Tiny Marketing Budget: How Liquidation.com Flourishes

SUMMARY: Do you have to reach a broad-based business audience with your
marketing efforts? Liquidation.com's Asad Haroon reveals how he
manages to bring in $40 million in annual auction sales with a
tiny budget by focusing on the metrics that matter.

Includes ideas to improve your PR, search marketing, email
newsletters, and print ads.
CHALLENGE

"It is tiny!" says Asad Haroon, VP Marketing &
Partnership Programs at B2B auction site Liquidation.com. "Our
marketing budget is sooo small."

His competition is sooo big. (Ever heard of eBay?)

Plus, unlike most of business ecommerce marketplaces that focus
on a very specific niche industry (which might be easy to reach
on an tight budget) Liquidation.com's prospective marketplace is
incredibly broad.

Haroon has to reach every discount merchant, everywhere in the
world, for every conceivable type of merchandise from ten crates
of cherry red nail polish to 2,000 recently discontinued Compaq
computers.

Last but not least, Liquidation.com's inventory is constantly
changing. How could Haroon convince merchants to constantly
revisit the site to bid on auctions when they were not even sure
what they would find there?

CAMPAIGN

As the economy got tougher over the past two years,
Haroon's first line of defense was to focus on metrics. He
figured, if he could measure what precisely worked, then he could
duplicate it and stop wasting marketing funds.

He invested in building tracking programs that focused on the
conversion metrics that mattered most to the business, all
measured by the original source of the click:
- average number of auctions viewed per name
- average number of bids placed
- average number of transactions
- percent that opt in to get email
- percent that register at the site (who then may or may not
bid)

Many businesspeople like to visit a site a few times before they
commit to bidding or even registering for no-cost. So Haroon has
every initial click cookied for 30-days, so he can track their
repeats and ultimate conversion even if it does not happen on the
first visit.

The resulting measurements helped Haroon hone his outward
marketing expenditures to four specific tactics:

-> Traffic tactic #1: Search engine marketing

"We have hundreds of words on Overture and Google AdWords," notes
Haroon. Since his budget is tight, he always checks to see if
the site is mentioned high up in so-called "organic listings"
(the listings that do not cost money) before investing in a new
pay-per-click ad.

He is careful to track every single search term ad separately so
he can tell which terms' clicks turn into great customers and
which do not.

However, he also assigns a branding value to the search ads,
which is something many marketers do not think about.

He explains, "People use so many different channels to source
inventory, we're not their only source. They are constantly
searching using keywords, looking for new sources." The mere
presence of an ad next to search results may help remind and
retain current customers who might have otherwise strayed.

"We feel we have to be in front of these people all the time.
The more you use paid and unpaid search listings, you create a
brand impression. The more they see you, the more they think
you're it. In some ways that doesn't have to synchronize with
the actual size or background of your company."


-> Traffic tactic #2: Public relations

Liquidation's guerilla PR team are constantly looking for new
hooks for stories. They try to get the Company name into major
media's business coverage whenever possible, by coming up with
clever ways Liquidation.com can be linked with the news of the
day.

For example, when a huge blizzard socked the East Coast this
winter, the PR team immediately got on the phone with reporters
covering retail to suggest stories about retailers using
Liquidation.com as a fall-back to get rid of inventory because
the snow stopped customers from visiting stores.

Haroon helps the PR team out by occasionally emailing customers
asking for PR ideas. In fact, the top story in last week's
customer newsletter (link to sample below) read:

Free TV, Radio, & Newspaper Exposure

Are you an active user of Liquidation.com? If yes, please let
us know if you are interested in being interviewed by the
press. You could be profiled on CNN, Wall Street Journal, New
York Post, and/or the Washington Post as part of a
Liquidation.com story. This means free publicity for our
customers. Send email to pr@liquidation.com with your
username if interested.


-> Traffic tactic #3: Print ads

Before designing ads for the many trade magazines that serve the
discount store manager niche, Haroon and his team spread out
copies of all the magazines on a table to see what the
competitions' ads looked like.

"A lot of the ads were pretty cheesy," he notes. "They seemed to
all blend in. We tried to make our ads stand out. Our are a
little more professional because we learned one of the things our
customers appreciate is our very professional level of service.
If you want the cheapest price, you might not come to us. If
you're looking for high level service and reliability, that's the
niche and image we try to project."


-> Traffic tactic #4: Renting email lists

It took serious detective work, but after research and testing,
Haroon's team found several permission lists available on the
rental market that contained lots of potential buyers.
Continuing forward, they took two precautionary measures when
renting these lists:

o Do not rent too frequently. If you are working with a limited
number of lists (and most B2B marketers are) it is easy to
wear out a list by overmailing it. Haroon tries to space
out mailings as much as possible.

o Assume current customers are on the list too. Although
there is a way to merge/purge lists and suppress your
customer file (link to info below), most list owners and
brokers still will not do it due to security concerns. Haroon's team design and write their creative for mailings
assuming that it will be seen by current customers as well
as prospects. The last thing you want to do is peeve
customers by sending them an undifferentiated mailing.

Therefore, the creative used for external list mailings is
very similar to the creative used for internal mailings.
Most customers would simply assume this is their regular
mailing and not a prospecting piece. (Link to samples
below.)

Once traffic comes to the site from any of these campaigns,
Haroon wants to make the most of it. After testing and
measurement, he and his team focused on three specific conversion
tactics:

Conversion Tactic A. Simplifying name capture

Site registration is no-cost, but let us face it, most people
these days do not want to bother with registering for yet another
Web site.

"There was a time when we used to have a four-page registration
process. Obviously that wasn't optimal," Haroon laughs. "Now,
it's just a very simple one-page process."

He is also repeatedly tweaked the site to define which benefits
are open to the public and which are for registered members only.

It is a tough call. You have to have sexy enough public content
that visitors are impressed, but you also need to put enough of
the juiciest features "behind bars" to tantalize visitors into
registering for them.

Lastly, Haroon added a fall-back position to gather names of
people who were not ready to take the step to register. Instead,
they can simply enter their email (and only their email) to get
on the mailing list and hear about cool specials.


Conversion Tactic B. Two regularly scheduled email programs

Haroon has launched two different regular emails going to the
list. Everyone gets a general regular newsletter that contains
notes, photos and link to "Featured Deals."

Plus, every week, Haroon's team slice out a different 1/4 of the
registered user file and send them a highly targeted mailing
offering something related to their past purchases or indicated
interests.


Conversion Tactic C. Promoting "trust-building" elements

Haroon is well aware of the pitfalls of having a ".com" in your
brand name. Too many companies have gone under, taking business
buyers' trust with them.

He works with his Web design team to make sure the site looks
as trustworthy as possible.
o The home page contains links at the top, bottom and side
navigation bars to get help from customer service.
o The bottom of the home page, and many other site pages,
include the logos of the Better Business Bureau, VeriSign,
PayPal and TrustE.
o Press releases and press mentions are added swiftly to the
site's About Us section so it is not stale and abandoned the
way many B2B sites are.

"We want to get the message across that we're not going anywhere.
We're a reliable company and we've been in business for years,"
says Haroon. "All of those elements go into the customer saying
to themselves, 'This company is for real.'"



RESULTS

Liquidation.com made $40 million in sales in 2002.


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"The numbers speak for themselves," says Haroon. "Our company
size now exceeds 200 employees; and, we've crossed that barrier
that I think existed where we were wondering whether people would
see Internet auctions as a normal way to source inventory for
business."

More details:

- Conversion tracking metrics show that a small segment of
visitors bid on an auction the very first time they click to the
site, a large percent bid within the first 30 days of their first
visit, a significant number bid within 30-90 days, and then
conversions drop off sharply after that.

While Haroon could not give us any more detailed metrics on this
type of conversion, this information is enough to make most B2B
marketers rethink their sites.

How would you change your site if you assumed most people would
take up to 90 days, often revisiting several times, to make up
their minds about doing business with you?

What can you do to your home page and your email program to be
compelling for all of the different conversion personalities who
visit you? Are you compelling for first time want-to-buy-now?
Are you getting the folks who need to mull it over to return
again and again until they convert?

- Haroon's found that Google ads are costing him more per click,
but he's willing to continue investing in them (after carefully
evaluating each buy on a term by term basis) because he says it is
easier to do business with Google than Overture.

That said, he is continuing with Overture as well, and testing
smaller buys with Business.com, Sprinks, and IndustryBrains.

- The guerilla PR tactics have been a big success. The site's
won multiple mentions in the Wall Street Journal, Christian
Science Monitor, CNN and many other outlets. The blizzard story
idea resulted in 10 major media mentions alone (link to one of
them below).

Interestingly Haroon notes that some of the media attention comes
from his search marketing instead of PR. "I had a Wall Street
Journal reporter call up about a story he was doing on yo-yos
being discontinued. He found our auction on Google."

Haroon got lots of great story ideas from customers after he ran
that note in the last newsletter. One reader wrote in that after
losing his engineering job, he invested $600 in 1,200 jockstraps
sold via Liquidation.com, and now has grown it into a full-time
online ecommerce business called AllStarJock.com. That is a hook
you can plant a story with.

- The targeted email campaigns with offers sent to just the slice
of the house-list who are most likely to be interested on average
get a 20% higher open, click and conversion rate than the general
campaigns.

Haroon notes he thinks the Company has succeeded by "being very
conservative in marketing, and sticking to things that work."
However, he says longevity is the most important factor in
converting new customers these days.

"Sometimes it's a simple matter of time. The fact that you're
still around. People finally decide it's time to start doing
business with you."

Useful links:

1. Link to samples of Liquidation.com's email campaigns and a
story in a major newspaper planted by their PR efforts:
http://www.marketingsherpa.com/lq/ad.html


2. Link to Sherpa (no-cost) article on how you can merge/purge
rented email lists:
http://www.marketingsherpa.com/sample.cfm?contentID=152


3. http://www.liquidation.com

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