This makes it easy to monitor the web for mentions of your brand — or for mentions of your competition, or your key execs, whatever — via a RSS reader.

I use Google Reader for RSS. Here are some of the searches I’ve set up to scan blogosphere, the news wires, Technorati, and Twitter:

(click image to enlarge)

Simple, relatively comprehensive, and free!

• Monitor Your Brand With HowSociable.com Monitor your brand across 22 social media sites. ...
• The New Distinction: “Housefile vs. Aquisition” Meets “Brand vs. Non-Brand” Even from a previous buyer, an order following a non-brand search is likely incremental....
• Search Tip: Brand vs. Non-Brand Results For many search advertisers, paid search ads on the retailer’s brand name (Brandname”, Brand Name”, BrandName.com”) generate 20% to 50%...

When push comes to shove there are just two reasons:

1. To make more money immediately. The idea is to generate enough from incremental sales to pay for the cost of the offer.
2. To make more money in the long run. Whether introducing a new product or service in the hopes that repeat business will cover the initial losses, or turning over inventory to clear shelves for new merchandise, the idea is that losing money (or realizing losses) short term will be worth it in the end.

For simplicity, let’s focus on the first type of offer.

Suppose Fred runs a coffee stand, and on a typical Tuesday he sells 200 cups of coffee at $1 per cup. To keep the math simple, let’s say each cup costs him $0.50 in materials. On a normal Tuesday he makes $200 in revenue on $100 worth of materials, so $100 in profit.

Fred wants to make more money and thinks by slashing the price he’ll attract more business. He cuts the price to $0.75 per cup and sure enough, sales skyrocket to 300 cups. At the end of the busy day, Fred is bummed out. A $25% price cut lifted sales 50%, yet he actually lost money. His revenue went up to $225, but cost of materials went up to $150, leaving him with only $75 in profit.

Fred realizes he made a mistake. Of his normal 200 customers 150 of them buy from him every day, rain or shine. Same faces, knows them by name. What if instead of cutting the price across the board, he only cuts the price for first time customers?

This changes the math dramatically: he makes $75 in profit on the 150 cups sold to his regulars and $37.50 in profit off the 150 sold to new customers for a total profit of $112.50.

What Fred learned is that his regulars don’t need an offer to buy. Since giving a discount to these folks essentially increases the cost of the promotion, it makes it that much harder to drum up enough incremental business to make the offer work.

Now, if the discount raises average order size sufficiently even selling to the people who would buy anyway could make sense. Let’s run those numbers. On $100 in sales Acme has $50 in COGs. A 10% discount means what was $50 in margin drops to $40 ($100 - 10% * $100 - 50 = $40). Interesting! A ten percent discount cuts profits by 20%.

If we then ask: how much does the AOV need to increase to break even on this discount? the answer is more surprising still: AOV needs to increase 25% to pay for that 10% discount to a sure fire buyer.
{A $125 order before the discount has the same margin as $100 order without the discount. Essentially, you’re selling $62.5 worth of merchandise for $112.5 which yields $50 in margin}

That’s a pretty high bar, and most catalogers find that giving discounts to their most frequent buyers doesn’t make sense financially. Instead, they give discounts to those who are least likely to buy without the offer which makes the threshold much more manageable.

Fast forward to the online world. To whom do retailers email offers? To the folks least likely to buy, or the folks most likely to buy? It’s the latter. Most of our email files are made up of buyers and we flood their in-boxes with discounts.

What about our coupon friends? Most retailers offer discounts (via affiliates) to anyone who does a search on their brand name. Who are those people who search for a retailer’s trademarks? Loyal customers walking through the door to your online store.

Seems to me that this is backwards. Giving discounts to the folks most likely to buy without them, rather than to the folks who haven’t decided where they want to shop makes promotions less likely to generate profits in the short term or the long term. We not only raise the bar for short-term profitability, we condition our best customers to wait for an offer.

In an Internet Retailer article, Tracy Tee, co-founder of Delight.com talks about how Tweeting offers to those who follow Delight.com on Twitter has been hugely profitable. I wonder about that. She’s sending offers to folks who are such rabid fans of Delight.com that they follow them on Twitter!!! How many people would wager that a hold out test might prove those offers to be profit eaters?

Am I missing something?

• Microsoft offers $44.6B for Yahoo I wish Yahoo and Microsoft all the best. But combining two organizations with serious problems in search wouldn't yield...

Or do they?

Over the years a number of other service providers have approached us offering to refer their clients to us…for a fee. They usually want us to return the favor and refer our clients to them. Usually these deals are structured that the referring party collects some percentage of the revenue generated by the party that got the customer.

In the early days of our company, we signed a couple of these deals with companies we held in high regard. We figured: we need to get the word out, and we’re too cheap to buy advertising; we won’t refer our valued clients to vendors who aren’t good at what they do, that would be wrong, but if we like the other company, what’s the harm?

We only did a couple of these deals and terminated the last of them two years ago. Ultimately we found that most of the prospects referred to us weren’t a good fit for our services, and, we found that we really didn’t have any interest in pushing particular vendors on our clients. There were all kinds of headaches associated with which clients were really referred by the other party versus companies we were already speaking with and vice versa, but moreover, it just didn’t feel right.

To our thinking a company serves the people who pay them. We have no interest in serving anyone other than our clients. Indeed these deals strike us as a conflict of interest. Are we recommending said vendor because we think they’re a great choice for our client, or are we trying to make a buck off a referral? We don’t want to be in that business.

It seems that these deals are increasingly prevalent, and the number of firms seeking mutual referral deals with us keeps growing. It’s also become clear that many of these deals are non-exclusive. In other words, we might be one of many PPC firms recommended by said vendor. That raises the question: which firm is at the top of your list? The answer: the one that pays the largest commission. This starts to look very much like affiliate marketing in B-to-B services and for the same reasons we don’t think much of affiliate marketing as it’s practiced, and we don’t like commissioned sales, we don’t like this trend either.

Third Party vendor rankings work pretty much the same way as far as we can tell, but that doesn’t bother me as much. Most folks probably recognize that the rankings track closely to the amount of advertising the vendors buy and that’s to be expected. Profit making trade organizations need to take care of their advertisers and/or paid clients because they are their principal source of revenue.

But I don’t think the scope of these mutual referral networks are well understood. Seems to me folks aught to come clean and say: “Hey, I think the world of company X, but you need to be aware that they pay me a commission for referrals”.

Rest assured that if RKG speaks highly of another vendor it is because we think highly of them. You can also rest assured that if you ever hear someone say nice things about us, it’s not because we’re paying them to do so — we aren’t.

All in favor of transparency say “Aye”!

• Marketing Carnival: Smart Billboards We're hosting the marketing carnival this week and next. Jeff Larche of DigitalSolid and Ilya Vedrashko of MIT's AdvertisingLab discuss...
• Smart Bidding Requires Smart Clusters My monthly column for Search Engine Land in case you missed it....
• Video: Customer Centric Paid Search Marketing Providing searchers what they really want also gets retailers what they really want: more sales. ...

Have companies trained their employees to behave like rats? When I think of commissioned sales I can’t help thinking about those rats. “Be nice to the next person who calls and I’ll give you a treat!” What ever happened to the notion of: “Do a good job for the company because…it’s your JOB…, because you take pride in your work…, because you’re not a rat”?

The cynic will say: “Behavior modification works.”

Sure it works. But with humans the rewards and punishment don’t have to be immediate. Paying fair salaries, praising good work, and respecting the opinions of the people you work with goes a long way. Promoting and giving raises to people who’ve earned them, and dismissing those who don’t meet expectations establishes a much stronger, forward looking culture. There are tangible benefits to this type of system as well:

1. It doesn’t generate fights over who gets the credit. It may be annoying when a co-worker claims credit for one of your good ideas, but not nearly so much as if it takes money out of your next paycheck. Well run companies know who their stars are and aren’t fooled by the pretenders.
2. It doesn’t provide incentive to cheat the system. Every company with a commissioned sales force can give a long list of frauds employees have perpetrated to make a buck.
3. It doesn’t require the company to create elaborate mechanisms to prevent 1 & 2.
4. It keeps folks focused on what’s best for the company. For example, consider the hostility with which commissioned sales folks greeted websites and in-store kiosks.
5. It recognizes that there is such a thing as a bad sale: whether it’s signing a client who has unrealistic goals, or selling too much computer to a senior citizen who just wants email. The short term benefits are vastly outweighed by the long term consequences to your brand.
6. Like MBO goals in general: what’s right for the company isn’t always factored into the goals and usually can’t be. The “right” thing isn’t always cut and dry, and often changes depending on the circumstances. How many times have you seen companies role out unprofitable promotions at the end of a fiscal quarter just to hit some bogus top line goal? Stupid, but very common.

I will probably be accused of being “old school”. Guilty. Undoubtedly, someone will point to case studies showing MBO goals leading to tremendous performance improvements. I don’t find that compelling logic. If a company hires poorly and/or manages poorly perhaps retraining staff with immediate carrots and sticks will raise performance levels, but that doesn’t mean it’s the right way to manage.

By hiring people who take pride in their work — encouraging them to do what’s right for the company, compensating them for consistently performing well, and firing those who perform poorly — quality people will rise to the challenge.

Clearly, this won’t work in every business. Paying fruit pickers by the peck makes sense, as migrant workers can’t develop long-term loyalties, and the goals really are pretty easily defined. But I don’t think it makes sense to treat professionals like migrant workers.

Indeed it strikes me that much of the commissioned sales/MBO garbage simply serves to “eliminate the need” for prudent management. If employee compensation is based strictly on meeting objectives then management doesn’t need to think about hiring, and doesn’t need to provide expensive training or supervision. Hire bunches, let them cannibalize each other; the strong survive, the weak quit and the management doesn’t need to go through that icky business of firing people.

Maybe this works financially in the short term, but what happens to a company’s brand in all that mess? Maybe no one cares anymore? When the goal is simply to inflate a top line and sell the company for a quick profit, maybe reputation doesn’t matter.

I prefer to work for a company built to last for generations, and I think customers and clients can tell the difference, too.

• Treating Customers Right: Removing Nuisance Fees at Hotels.com Kudos to Hotels.com eschewing bad profits and dropping their nuisance fees....

This is isn’t a big deal for online retail yet, but it will be, in the next 6 to 18 months.

Today, HTML markup is about how data should be presented. By tagging elements on a HTML page with standard class names, microformats are about what data mean. Microformats will form the foundation of “Web 3.0″, aka the Semantic Web.

Google is starting with microformats for people (hCard) and reviews (hReview).

It seems clear Google support for the SKU microformat (hProduct) is coming soon, as there’s already documentation for it on Google WebMaster Central.

What will this mean to online retailers long-term?

• The first retailers to add hProduct tags to their product pages will enjoy an early sales advantage, as Google will present their products first because of the extra data.
• The advantage will be short-lived, as large retailers and standard e-commerce platforms will quickly jump on the band wagon.
• Retailers will chafe at the simplicity of the format. hProduct doesn’t encompass shipping, tax, bundled pricing, or even UPC. Argh. When Google miscategorizes or misprices your product atop their SERP, get ready for additional customer service calls.
• hProduct markup is essentially a product data feed, albeit with limited fields. Google’s current product search hasn’t gained much traction, but widespread hProduct data will help Google disintermediate the shopping comparison engines.
• Long term, hProduct markup will increase consumer perception of Google-as-store, eroding weaker retail brands (see “search engines atomize retailer brands”, halfway down this post.) Building a strong well-defined brand is key.
• When Google presents more SKU-centric multi-merchant data on the top left of the page, paid search on the top right becomes more crucial to get your link in front of shoppers. The paid search core competencies –optimal bidding, extensive keywords, and solid “why-shop” copy — become even more important.

What should online retailers be doing about this today?

I’d recommend keeping a close eye for mentions of hProduct on the WebMaster Central Blog.

I’d also recommend planning to add hProduct tags to your SKU pages, probably by late ‘09 or early ‘10. (Here’s the link the Google hProduct documentation again.)

For better or worse, this is where online retail is heading, and your marketing and merchandising teams will benefit from being there at the beginning.

• Eight Important Online Retail (and Marketing) Policy Issues Scott Silverman of Shop.org talks about internet privacy, interstate collection of sales tax and other issues facing online retailers....
• Online Retail Stats: CyberMonday 2008 vs. 2007 One day isn't an entire retail season, but I thought it interesting to compare CyberMonday 2008 to 2007....
• IsabellaOliver.com Overcomes 3 Key Challenges of Online Retail Videos Because they overcome the typical (and non-trivial) challenges with such panache, it's worth your time to check out to the...

We’ve followed the principle that one great programmer is worth 100 mediocre programmers. That approach has borne tremendous fruit, but it does make finding folks challenging.

We’re a LAMP (Linux, Apache, MySQL, Perl) shop, and while we prefer folks with some Linux background and some database skills, primary language is not a concern. A great programmer can learn perl.

We practice Object Oriented design and test-driven development.

If this sounds like you, or someone you know, please drop us a resume! Charlottesville Virginia is a beautiful place!

Also, have any of you had success hiring engineers through head hunters?

• In Software, The Interface Is The Product Too many online retailers lack IT agility, despite having great developers. Why? How much blame should be placed on their...
• Early Praise For Yahoo From Our Engineers Our engineers are really pleased with the support, docs, and architecture of the Yahoo new platform. We're optimistic and think...
• Software As A Service: Pick Your Own Storage Wilson's suggestion: allow users of a web app to decide where their data are stored....

“We like your company but we prefer to shop online,” I said. “May we get off your mailing list?”

Totally true. My household has great RFM scores for all of these companies, but we shop almost exclusively by web.

All of the customer service reps were courteous, friendly, and polite. No problem getting off the mailing lists.

None asked me if I wanted to sign up for email.

We’re already signed up for LE email so perhaps the CSR knew that and skipped the question. Maybe. But we’re not on the email list for the other three.

Maybe they assume all NOMAIL callers are angry and would be annoyed by an email request. In 2009, I think that assumption is overly broad.

Small marketing opportunity lost.

• Internal Blogs: Less Email, Blogging Training Wheels, Link-sharing, BizCulture We run an internal blog where all employees can post, and it is working well for us....
• Libey: Catalog Reinvention Turns A New Page Thoughts on Don Libey's interesting 12/11/06 DM News column....
• JCrew’s “Email Me Less Frequently” Option J.Crew offers an interesting option on their email opt-out page: "keep me on your list, but email me less frequently."...

• http://projects.flowingdata.com/walmart/
• http://projects.flowingdata.com/target/

Random thoughts:

• Good data visualizations are rare.
• Both firms have been expanding for over 40 years.
• Walmart grew methodically by region. Target bounced around.
• Walmart is everywhere. Not news, but still mind-boggling.
• All those leases to cover!

Hat tip: Paul Kedrosky

• Apple Fonts Are Target; Microsoft Fonts Are Walmart Where does your brand fall on the practicality vs. style spectrum?...
• Walmart.com Runs Obama & McCain Videos Walmart.com is promoting Obama and McCain videos from the homepage. ...
• Target Gift Cards Also Cameras, Night Lights, Thumb Drives, etc. A new twist on gift cards this season from Target....

Here’s the gist of matchbacks: if customer gets your marketing message and then orders, the marketing message was responsible for the order. Logical, yes?

No. To establish incrementality, you need a holdout cell to find out the fraction of similar prospects who would ordered anyway. The benefit of the campaign is the sales lift between recipients and control, not total sales to the control.

Here’s Jim Novo talking incrementality at HSN. (Read the whole post to learn the equivalent of SEO for DRTV.)

When the campaigns included coupons, the redemptions were absolutely huge. That’s good, right? Well, in a word, No. Think about it. There was barely any lift in sales at all, yet huge numbers of coupons were redeemed. Meaning?

This means that virtually all the coupons were redeemed by current customers, and the coupon / response did not change their behavior. They bought at the same rate as they would have without the coupon. It means we gave a ton of margin away in addition to the cost of the Campaign, and generated no increase in Sales. We literally would have been better off (financially) by doing absolutely nothing.
–Jim Novo, Marketing Productivity Blog

Here’s Kevin Hillstrom giving a hypothetical from the recent election.

Traditional multichannel marketing was proven as viable via the matchback algorithm. Folks would mail 26 catalogs a year, then take credit for all of the online and retail orders from customers receiving the catalogs.

Mail and holdout tests seldom defend this style of analysis and attribution.

Try this one on, for size. If we believe that matchback analytics are accurate, then the Democratic Party could have sent 60,000,000 postcards to prospective Democratic voters two weeks before the Presidential Election — and then matched each vote back to the postcard. The Democratic party could prove, via matchback analytics, that the postcard was responsible for the election results, right?!
– Kevin Hillstrom, MineThatData

In these challenging economic times, with an abundance of overlapping marketing messages and rampant discounting, campaigns need to show incremental lift, not just sales.

• DMA Search Engine Marketing Certification Program: Audit Your Paid Search Campaigns If you're interested in auditing your paid search campaigns but haven't the time to do it yourself, give my colleague...
• Holiday Sales: Mon 12/11 Still The Largest Of Sales Day of 2006 Last week we predicted Monday December 18th would top Monday December 11th as the largest sales day for our clients...
• Voters Are Searching But Candidates Aren’t Responding: Google & Yahoo Political Paid Search Advertising by ‘08 U.S. Presidential Campaigns FOR IMMEDIATE RELEASE: November 13, 2007 Contact: Steve Bosley The Rimm-Kaufman Group Phone: (434) 970-1010, x 105 steve@rimmkaufman.com PAY-PER-CLICK SEARCH...

Here is Google’s FAQ on this migration, and here is an extremely helpful Google page providing known bugs and workarounds.

Q: What Feedburner bug did RKGblog encounter?

A: We got 502 and 503 errors on our primary RSS url, feeds.rimmkaufman.com/rkgblog. We use a FeedBurner (FB) service called MyBrand to preserve our domain in our feed URL. If you are not using MyBrand (you should be), then migrating from old FB to the new Google account is just pushing one button. If you are using MyBrand, you also have to follow the instructions on this page on adding a CNAME so FB has DNS authority to serve that subdomain for you.

The bug is that the feedburner.google.com/fb/a/mybrand page doesn’t work as you’d expect. To make it to work, you first need to hit the deactivate button, then hit activate. Deactivation is the magic step. Be sure to note your feed-specific domain name(s) before deactivating, as doing so will clear the text field. Once you ‘deactivate’ and ‘reactivate’, add the CNAME as per the instructions, wait for the DNS to propagate, and flush your local DNS cache, all should be working.

Q: Why use FeedBurner at all?

A: I can think of eight reasons to use FB for RSS.

• SmartFeed. This sends the right flavor of RSS based on the requester’s user agent string.
  • Is this still relevant in 2009? Unsure.
• BuzzBoost. This is a Recent Posts widget.
  • Nice, but we’ve seen homepage loading delays because of this. We’ll be replacing the FB widget on our homepage with a static include, generated hourly by a trivial cron script.
• Bandwidth. FB fetches RSS from your site when pinged, then FB handles all the requests for your feed from the outside world. Free bandwidth.
  • Nice. Thanks, Google.
• Adserving. You can use Feedburner/AdSense to insert ads into your feeds.
  • We don’t put ads in our RSS. Thus, not relevant to us.
• FeedBulletin. Provides a RSS feed on the fetch health of your feed.
  • Useful. We could use our Nagios system to monitor our feed availability, but FeedBulletin/FeedMedic is already there.
• Site analytics. FB used to provide very nice site analytics for blogs. They just dropped those in favor of Google Analytics.
  • Sigh. I found the FB data, presentation, and UI far better than the GA replacement. I miss those clickable french fry charts.
• Email. Feedburner can maintain an email list of people wishing read your RSS via email.
  • Useful and appreciated. Be aware that migrating this list elsewhere could be difficult, as discussed here.
• Subscriber counts. This was FB’s strength, imho. FB grabbed subscriber data from the user agent strings of the various ‘bots taking its feeds, then aggregated subscription and reach counts for each publisher, time period, and feed item. Rick Klau discussed FB data collection here. Note FB counts can be manipulated.
  • While some suggest weak methods to approximate FB stats, I don’t know of any good alternative to FB for subscriber and reach data. Unfortunately, FB’s counts have been fluctuating wildly recently, causing some to question their usefulness.

Q: Why MyBrand? Why serve RSS from your own domain?

A: FB says MyBrand “allows publishers to showcase their feeds by serving them from their own domain.” While there may be slight branding benefit here, the key issue is transportability. If your subscribers are signed up through a FB url, you can’t easily change that without losing subscribers. By having your feed URL on your own domain, you can move on and off FB (or anywhere) as needed.

Every company with a blog or a RSS feed should ensure that their feed URL is on their own domain. No exceptions.

For example, RKGblog lives at feeds.rimmkaufman.com/rkgblog. That looks like our servers, but we’ve delegated the feeds-dot subdomain to FB by setting a CNAME on our DNS machines. Requests for that URL go to FB servers, which return our cached content and tally our stats. You can see this by pinging feeds.rimmkaufman.com: the response comes back from ghs.l.google.com.

If we wanted, we could direct that URL back to our Wordpress RSS URL, taking FB out of the loop. Our subscribers wouldn’t notice any change.

Q: Do all Feedburner publishers have to migrate from old FeedBurner to the new Google-login Feedburner?

A: Yes. The switch is mandatory by Feb 28, 2009.

Q: Are RKGblog’s Feedburner subscriber and reach counts still fluctuating? Are they still half their prior levels?

A: As of 1/26/09, yes to both.

Q: Are there any good alternatives to Feedburner?

A: I don’t know of any myself, but I’m not a RSS expert. Please comment below with suggestions. I’m especially interested in alternative feed analytics options.

Q: What is the DNS cache, and how does one flush it?

A: DNS maps names like ‘www.rimmkaufman.com’ to IP address like ‘216.197.64.53′. Your local machine keeps a cache to save time. When working with DNS, you need to clear your cache to see your changes immediately. To dump the DNS cache on a windows box, pull up a DOS window (Start > Run > cmd) and enter ‘net stop dnscache’ then enter ‘net start dnscache’. On a linux box, use ‘/etc/init.d/nscd restart’.

Update 1/30/09

FB seems to be working fine. Our feeds appear stable. Reach and subs counts are still half their early January levels. Suspect the halving will be the new normal.

• Feedburner To Google Account Transfer Considered Harmful: We Advise Waiting Feedburner users: we recommend delaying migrating to Google Accounts as long as possible, as the current process is broken....
• Gossip: Google Buying Feedburner? Vecosys reports rumors Google is buying Feedburner. ...
• Did Your RSS Counts Drop After Migrating to Google Accounts? Our RSS subscriber counts are down 50% and our reach numbers down 60% after migrating from Feedburner to Google. Is...