Academicians and Smarts

The president of the board of director of Boyner Holding Cem Boyner says in his speech titled “Executive Power” he gave for the Retail Days 2005 event:

“For a long time I believed that business development was the most important part of the business.

I guess I changed my mind.

In retrospect, I saw that the strategy and business development was just 5% of the business, the execution was 95% of the business. Therefore, everything comes down to people in the end .If they ask me to make a choice between knowing and doing, I would definitely vote for doing .Power has now become the ability to execute”

When we look at the first 100 biggest revenue making companies, we see that none of them is in Turkey. One day those great companies will come to Turkey.

We are at the very beginning of the road and the online commerce will come to a level that we could never even imagine. We will need qualified, experienced people in the field of e-commerce. The work force is not at the required level and they can only learn on the job in the online sector. Our academicians who read stuff on the books and never took part in the business can only teach our young people some “theories”.

If the world moved based on the academician egos and complexes, how many of the above mentioned project could be online now? If it is not the execution but the theory, would there be a facebook or twitter today?

In our days where everything gets faster and grows around execution; we witness that not the ones who know but the ones who can execute can come to a place.

There is an old story. One day, the teacher comes into the class and says the topic of the lesson is “Waltz”. He tells all about Waltz concepts and theory. He talks about its history and philosophy. He mentions how it is done and what it is. The lesson ends. He asks his students if they understood. The students say that they did. The teacher plays a Waltz tune and says “Do the waltz then”.

As long as we cannot change our academic, theory based mind set in our educational institutions, our young ones will go on learning their jobs on the job. Because unfortunately, the ones who do not know the execution of the business will not be able to teach the business. Of course we should be setting aside some very precious teachers who gave their hearts and years to e-commerce following the dynamics of the industry closely by attending seminars and activities.

Social Media

Nowadays, the only social media we talk about is facebook. It is a topic that you can talk for hours without requiring much conversational currency. Like football… Everyone is a trainer. We can have opinions about every match, even every position. We can even say that the trainers don’t know any football when we criticize them. Having an opinion about social media is so similar to that.

While people who gave their years to human and social psychology, motivation, group dynamics and communication techniques do not know this business, every digital advertiser who use facebook comes out as a social media trainer.

We open a facebook account for your firm. We will put there all the marketing related sayings, visuals and products. People will “like” them. Then it will be like we use the social media as a marketing tool. From that moment on we will be the writers of the book on social media.

It is that easy, launched like it is such a big deal that others would think that there are people doing their masters degrees on it, that it is a special field of expertise at universities in our country.

In the seminars, a social media worker is invited to talk about social media. He gets up and starts talking about facebook. All examples given are based on facebook. The founder of the facebook is presented like a hero who won 3 wars or added another theory to the relativity theory. He talks about Twitter a little.

I understand if we called a person who really worked for facebook. He would be talking about his firm, its advantages and how to use that platform more effectively. We listen to him respectfully and even ask some questions.

If the topic is social media, it does not mean facebook. Facebook is a social media tool. Social media is the sum of all the platforms found on the internet where many different people and communities exchange or follow ideas, experiences, contents, in other words make their voices heard.

We are in the danger of losing more than half of the social media trainers if one day comes that facebook no longer exists .

As much as it is correct for a firm to follow social media for managing its reputation and its tools for communication, it is as much wrong to say “we wrote the book of social media” and talk about facebook only. This is also misleading for the young friends who made a new entry into the sector.

How Can We Find Foreign Investors?

We cannot say that we are good at producing as Turkish people. We don’t read, we don’t research, we have an opinion almost about anything with just the stuff we hear around us and on newspaper headlines. But we are very good at imitation.

Example: E-commerce got real big man!
How did it get big? We produced some platforms, copied from abroad under the name of shopping club, not personalized platforms that sell with lower profit margins when they cannot be sold with extreme margins. Like it wasn’t enough, we fooled ourselves and people around with the comedy of Occasion sites. We copied and copied like an amoeba. We were fooling ourselves at the beginning of the 80s by saying “We start a new age”. In the end, the inflation stated the new age and we could remedy our charisma by erasing 6 zeros.

Example: There are 40 million internet users in Turkey.
You must have never been abroad or served for military my friend. You are counting the brothers on shopping leave in Sarıkamış as internet users too. Because, anyone who can open Google, who can play backgammon on Msn or Facebook are doing e-commerce. They all have credit cards .They use PayPal, they are even potential users of PayU. There are only 15 million proper user in Turkey at most, just like there are only 15, give or take, original e-commerce projects.

Should we be pessimistic then?

Absolutely not. Right now, the e-commerce is warming up. Occasion sites and fake private shopping sites are converting Sarıkamış users into real internet users slowly. We should thank all the project leader for the risks they take to provide that important benefit without taking into account of the shallow comments of know-it-alls.

Until today, all the internet projects we sold to the foreign investors were copied from abroad anyway. It could be a rightful style to inspire from a beautiful model and copy it and make it work in our country. But we took it too far lately and started to do exactly the same of them .Zizigo.com is the last point of copying we have arrived nowadays. It kind of makes you say oh no Lebron James. It is an exact copy of the vertical e-commerce model pioneering American company Zappos.com. The guy set up the site. Developed an original model and sold it to Amazon.com and we did not wake up. We haven’t even heard of it. When he wrote its book, then we understood that we should not have copied it and took action on that topic that we are successful.

I don’t know if zizigo.com will make big revenues or bring an important vision in our e-commerce with its projects or not. But when amazon wants to make another investment in Turkey. We will show zizigo, the cybernetic tissue copy of zappos, with pride and say “No need to do it again, we have it done already here”. I mean we could at least change it to say “sepetim” instead of chechout/chart or “üyelik” instead of customer/account/create/.

The Law of e-Commerce

It was the beginning of 2000s. President of the Consumers Association of the period had asked me to be a speaker at a seminar they organized in order to inform consumers on the Internet and e-commerce. I accepted with great happiness. Because all the people who invested on internet and trying to do something were being stopped. Internet was perceived as a boogey man, people did not want to give their credit cards on the internet, they did not, could not access internet. In 2003, the growing use of ADSL, would be the biggest turning point in our country regarding internet .

I was participating in technology programs on CNN Turk and Kanal D, I was talking about internet and sahibinden.com my vision and what we would do in the future. During that period, I took a lot of technologies and applications in use which are still in use today.

At the event of the Consumer association, I had talked and exchanged ideas with 2 lady officials authorized by the Prime Minister. We were dreaming of todays. You cannot understand if you did not live the difficulties of those days. This law expected to be issued soon will make us more in line with the truths of the internet era and be more responsible towards the users of technology.

The “Law on the Regulation of Electronic Commerce” presented to the parliament on 27.12.2010 aims to grow e-commerce, protect consumers and people who perform transactions on the electronic environment, especially make the commercial operations on internet much more safer and transparent. In my opinion, this is the second turning point regarding internet in our country.

To simply mention, the important topics in the bill are as follows:

-For the commerce transactions on the electronic environment, before the buyer enters the payment information, to prevent the buyer from making a mistake, the seller will have to present the total amount along with the clauses of the agreement in an open manner.

-For the electronic environment commerce, the seller will have to present information about its commercial and professional operations.

– The content and the rules of campaigns like discounts, presents, promotions and activities will have to clearly specified. The user will access the information about participating in them easily and the rules will have to be crystal clear with no room for doubts.

The commercial electronic messages like SMS, telephone, fax and e-mail will be sent to the users only upon their consent is taken before. Additionally, the users will have the right to reject receiving messages whenever they want to without showing any reason.

– The commercial electronic messages will show the access information like phone no, e-mail address that provides the users’ identity. (Receiving those advertisements purposed electronic messages by craftsmen and tradesmen is accepted as a requirement of their business lives. That is why they are left out of scope.)

-Service providers will be responsible of saving and keep safe the personal information they collect in the scope of the performed transactions. They will not share those personal information with third parties without the approval of the related person and they will not use it for any other purpose.

Click the link below to see the bill exactly.
E-Commerce Bill Draft

Mezzanine System and B2C Warehousing

Growing interest in the commerce over the internet and the growing market, brings the idea of “let’s sell something over the internet” in the minds of everyone. They think they can make it just by creating a nice website. But then are you going to keep the goods in your home to send to the customers my dear friend?

Let’s make a simple calculation:
Your site gets 100.000 entries every months.
Your conversion rate is 1,2 (there are 1.200 orders)Your cart amount is 50TL (1.200×50=60.000TL)

Your company will need a warehouse for its 60.00 TL worth of revenue. 1.200 deliveries a month means 1.200 boxes. You can only keep the empty boxes in your home. Besides, we haven’t even mentioned the returns and changes yet.

The warehouses of the retail stores are designed by B2B principle. Multiple products are placed on the pallets, changing place with the help of forklifts and pallet trucks.

For example let’s say we have a retail firm with 10 stores. We will send 20 notebooks to each store and notebooks are placed 50 pieces on each pallet. We create a delivery request for 300 notebooks. (50 pieces x 6 pallet = 300 pieces) We took down those 6 pallets with the help of forklift and bring them to the loading area.

But it is not the same for e-commerce. The warehouse has to run with B2C principle. To create the order of 1 customer’s 1 notebook in the loading area, we will have to take down the pallet of 50, take 1 notebook from it and then put the pallet up again. In this case, when the operation takes up a little, there will be a bottleneck. If we think that in a typical warehouse there are 9m high shelves, naturally we cannot put every item in an easily retrievable place. If we place every product in easily retrievable spots then we will need so very big an area. In which case our cost of warehousing will be exponentially bigger.

The Mezzanine system is system developed for easy storing and retrieval of the small products. This way, the product collectors make the optimum use of the height of 9 mt. They can access the storage places with ladders without the need for a forklift.

How to Buy a Dodge Viper on the Internet?

A close friend of mine bought a house in US two years ago. I even stayed at his house while I was doing my tour around Orlando, Miami and Key West, thanks for that. Before he left he said “Cengiz, checkout my new car”.

He bought that 10-cylinder red legendary car on eBay and he would see it for the first time near the sidewalk of his house in Miami. How could he buy such a special car on the internet without having any reservations?

He was in Turkey, the car he wanted to buy was in Texas and his house was in Miami.

Is the car clean? Will it give me problems? For that kind of questions there was autocheck.com . The cars were rated according to various criteria on eBay. They were even presenting an additional service over inspectmyride.com where he could get information about that special car. If that was not enough, he could join carfax.com and learn the history of that car. He could see the times that the car was in the service, which its previous owners were.

The main problem was that the car was in Texas and he had to transfer it to Miami. That was thought of too: gigamoves.com was presenting alternatives over the internet for transferring a Dodge Viper from Texas to Miami in how many days under which conditions. Now the logistics was done too. As I always say: Logistics win the wars and e–commerce.

He made payment by paypal. He even paid it in 3 installments. If he did not have sufficient credit card limit, he could get different credit options with one click over terravistasoftware.com .

The process did not end there. He could make his auto-insurance by visiting autoinsurance.com in case of something happens to the car while it was in Miami.

But how can we trust anything to purchase a car in Ankara and get it transferred to Istanbul?

Those projects will come to life sooner or later.
We say: “There is nothing left to be done on the internet”.
But yes there are, there are a lot. We have a long way to go.

Time or Money?

*Cassie Mogilner and Jennifer Aaker at Stanford Graduate School of Business, developed a series of experiments to understand what is the reference to sell something top people: is it money or time? The “Lemonade Stand” was one of those experiments.

They designed 2 different banners and made the kids do the sales of the lemonade:
“Spend a little time and taste our lemonade”“Spend a little money and taste our lemonade”

391 people between ages of 14 and 50 stopped to buy lemonade. The price of one glass of lemonade was between 1 and 3 dollars. In other words “ whatever you feel like paying” model. Right after the lemonade sale, the customers filled in a survey form. For the banner with time, the rate of stopping was 14% and the average price paid for a lemonade was 2.50$, while for the banner with money the rate of stopping was 7% and the average price paid for a lemonade was 1.38$.

The philosophy that promoted time attracted more customers and made more money than the one promoted money.

The researches reviewing the data agreed that promoting time builds a more personal relationship than promoting money and they are trying to see how it will affect the shopping instinct of people to buy an iPod, tv, trousers, perfume etc if messages of time and money was communicated by performing the other 4 experiments in their labs.

The reviews show that when there is a personal connection is established, people tend to buy more and spend more .The Time message connects with experience in human minds and this experience recalls the time that the person have spent/will spend with the product and creates an automatic personal connection .Money does not have the same affect.

On the other hand, for the products not-really-needed like luxury cars, this case invokes the “having” instinct in human nature. For some people, may be not many, this overcomes” experience”.

  • If we know about our target customers well enough we can direct them towards shopping by using the time/experience and hidden personal link in it.
  • We can use money triggers for the ones who act on prestige and owning.
  • If we do not recognize our target customers well enough, then we can direct them by using emotional and personal communication tools, stay away from the materialist triggers that associate with money.

The e-commerce sites, always promoting the cheapest and the most advantageous, do ever take the personal connection seriously?

*Cassie Mogilner and Jennifer Aaker (2009) “The Time versus Money Effect: Shifting Product Attitudes and Decisions through Personal Connection” Journal of Consumer Research, 36 (August), 277-291.

Where Is He Looking?

A man suddenly stops and starts looking at the roof of a building in a crowded place. Then what? Other people stop and start looking at the same place wondering what he was looking at. It was neither what was there nor why the man was looking at there. If he looks you look too! That is the rule.

Then instead of thinking what where on a web page design, let’s put wherever the people look for what.

From Left to Right – The habit of reading defines the way we look at the screen. According to that the eye scans from left to right and from top to bottom.

Towards the Center – People ignore the things that are not directly linked to the logo, space and cursor. This habit urges them to move towards the middle of the screen.

Attention Shift – the person looking at a computer looks immediately to the point where there is big photograph ( esp .human face) or a moving application (video, animation). The brain focuses on that point by leaving the normal scanning process.

What is Where? – People mostly look for the logo at the top-left, search bar at the middle-top and help page at the top-right. In fact people think that they would be there. It is of no use to leave out the general brain-person habits for just to create a difference, it annoys the user and harms the brand perception.

James Breeze not only proves those ideas by using Eye tracking application but also that the user looks at the place where the photographed face looks at.

The user looks at the middle of the page first, then the photograph and then wherever the photograph looks. What do you think, to promote an important information, rather than putting flashing applications around, we put a human face and place that info wherever that face looks at ?

After Sales

The rats in a maze run faster when they get close to the food (Hull-1937).

This is the first research on target-tendency affect. Theory shows that getting closer to the target heightens the motivation. *Ran Kivetz, Oleg Urminsky and Yuhuang Zheng stated a research thinking that this theory tested on animals, could also work on humans too. In the end, they were right.

-The wish to reach to the target increases as the target point gets closer.

-The thought of taking a step, even if it is not real, triggers the perception like in the coffee card example.

-People who are part of a reward program become more positive than the others. They become more interactive and start using sales channels, contacting customer representatives if necessary.

– And more importantly, when the goal is reached, all the elements of motivation becomes zero . This point here, is seen as where most customer losses can happen. It was a victory of motivation when we won the match with a last 4.5 second basket point against Serbia in the World Basketball Championships. We lost the cup and the final under the relaxing affect of that victorious feeling.

At the moment we complete a purchase besides the feeling of victory, the question of “Did I do the right thing?” comes to our minds, known as Cognitive Dissonance, (the fact that our id is always on alert to protect us from making a bad decision)

Customer Information Flow has a big importance to the positively influence the decision process and it increases its importance at the time of performing the purchase. Potential customer asks around. Makes internet searches. Then decides and put the product in his cart and pays for it.

Everything ends when he see the message “Your order has been processed successfully”. Right at that moment you need to re-start everything. Managing the loss of motivation of the customer who reached the target, directing and leading them gets deadly important. The customer should be informed on everything that could pose a problem now or in the future. Even the customer should be asked for more information with a more visionary point of view. This is the place for one question surveys.

*Ran Kivetz, Oleg Urminsky, and Yuhuang Zheng, The Goal-Gradient Hypothesis Resurrected:Purchase Acceleration, Illusionary Goal Progress, and Customer Retention, Journal of Marketing Research, 39 Vol. XLIII (February 2006), 39–58.

Motivation Techniques

I was creating excuses to go to a cafe in the evenings while I was planning the web operation for Tchibo. Besides testing different coffee types, I was trying to have an idea by watching the customer base of the coffee brands.

 

If you are to implement a web operation for an existing brand, you have to know very well about that brand’s smell, texture, customer perception in short its position. Spend time at their stores. Learn all the processes of the operation. Also, definitely see what and how the competitors are doing it.

 

At this time I met a nice application of Caffe Nero. The card to win a free cup of coffee. They put small stamp on your card for every coffee you drink and when all the spaces are stamped on your card, you could have your free coffee by presenting them this card .It was very smart to place the game in marketing and showing a goal and using the motivation to reach that goal. Advergame was created for this purpose anyway.

 

But then I thought something else. Instead of giving that empty card to the customer, it would be more motivational giving the card already stamped on 1 or 2 spaces. It was an example of “A long march starts with the very first step”.

The teachers explain the lessons and after 2-3 months the lessons accumulate. The students only study at the times of exams and finals, they don’t study in between. Then the final exam date approaches. The students cannot start studying because there are already a lot of lessons accumulated. The road ahead gets longer and longer. The lessons get bigger and bigger. However, if there are small quizzes in between, they can answer the questions while the lesson is still fresh in their minds and get good grades, that will both increase the motivation and the success rate of the students.

Now let’s look at the two different examples of free coffee card. In both examples, to drink a free coffee you need to buy 10 coffees. Cards will be stamped every time the customers drink coffee. Card 1 is empty. On Card 2, there are 2 stamps already made. Here, the feeling of not wanting to lose what he owns and completion of something already worked for influences our subconscious. Even though both cards require 10 more coffee stamps, card 2 motivates better.

The same is true for the surveys we encounter on the web sites. Nobody answers 10 questions, 20 or 30 questions surveys. Nobody has time much time anymore nowadays. However , if we ask just 1 question every time our user visits our website, at his following visit we bring the previous question and his answer even, how nice will it be? Wouldn’t it be more effective if we don’t ask all the questions at once?

When to as these questions is also another sensitive matter. Let’s evaluate this in the coming days.