I’ve got a book coming out about CRO — Conversion Rate Optimization — which involves testing your websites and landing pages as an essential tactic, so I thought I’d tell you a story about two well known brands who failed to test, and lost millions because of it.
It was the year 2000 and the two big brands looked around them and realized things were going to change. Microsoft realized that software in a box was going to move into the cloud. Office Depot saw the same writing on the wall and realized that it would mean aisles of software in boxes, representing significant revenue, drying up and vanishing. What to do? Bingo. Start selling software as a service in the stores. So, they created something called bCentral (yep, the official press release is still out there) — a package of website creation, scheduling, and ecommerce tools — then hired a cadre of sales and ecommerce consultants in 20 different major US cities to sell the services and consult with clients.
How do I know about all this? I was one of those hired as a bCentral consultant. And we were treated royally — flown down to Boca Raton, Florida to Office Depot headquarters for a week of classes, cocktail dinners, training and speeches from leaders of both companies. The CEO of Office Depot met us all personally, and gave a speech. The companies spent millions just on fixtures. In Portland, Oregon the massive metal display was two stories high and featured an amazing for its time, 40-inch, flat-screen TV monitor (that size flat-screen display cost about $8,000 in those days). Just to get the display into the store, a truck had to stop traffic in Portland on 6th avenue to unload the metal fixtures.
There were ample content and sales collaterals including videos with professional actors that ran on the large screen display. Signage and sell sheets were on the built in shelving, and the same information and more interactive demos from the big screen that hung above our heads were running on four flat screen displays plus two more interactive kiosks. You could walk up to a kiosk and learn more about doing business online, or ask one of the consultants staffing each bCentral area.
After six months, the effort failed. Here are five reasons for the costly failure, based on what these two industry giants, with their best brains on the project, forgot to test:
- Am I in front of the right target audience? Short answer — no, in this case. I told the project manager in Boca Raton that business owners who would make decisions to purchase such software did not do the shopping at Office Depot very often. Mostly lower level staffers shopped for their company business supplies in the stores. Later, once they realized this analysis was true, we were asked to make outbound sales calls.
- Am I positioned correctly? We were supposed to be positioned as separate business sales consultants, but the displays were lodged at the head of the computers for sale aisle. Many times we would walk up to a prospect in the store who had been staring at the large screen with the actor pitching bCentral business software next to other bCentral signage and brochures and ask, “so, are you thinking about doing some business online?” Usually customers looked startled and responded, “No? I’m wondering how much does this flat-screen display cost?” It wasn’t for sale, but we were in the computer aisle in a store that sold monitors and computers, not in a separate office-like location like where the H&R Block tax people met with clients in stores, for example. D’oh.
- Is this the right message, to the right “persona”, right now? We’ll never know if the video and flyer messaging could have been more compelling — no tests were done. We know that the decision makers who might purchase the software services we were selling were seldom in the store, and instead office managers and other staff did the shopping for their company. What if the content had been geared as a first pitch to someone farther down the chain — an office manager “persona”? Maybe something like, “take this back to the boss and explain how your company can find more customers,” could have worked. We do know that the content supplied did not convert enough customers to continue the program.
- Is the product mix right for our audience? About half way through our “experiment”, on our weekly conference call with the Microsoft managers, they announced that they would be discontinuing the online web building software (a precursor to WIX and even CMS solutions like WordPress) in favor of asking our customers to buy (cost not covered) Microsoft FrontDesk web creation software in a box. Further, all of our client’s site setup work would be lost. Gone. Hours of work lost. This did not go over well. Don’t get me started about Microsoft’s arrogance, but let me just say thank God for FireFox, Google Chrome, and all of the other competitors in the free market system that have broken Microsoft’s pig-headed dominance of same.
- Have we timed our messages correctly, sent them to the right list, and used the best calls to action? Today, that testing could be done with a good email program. During the bCentral Microsoft-Office Depot project, 10,000 direct mail postcards were mailed to prospects in Portland, Oregon. An event company was hired to come in and set up balloons and special signage in the store in anticipation of at last a 1 percent response (100 prospects visiting the bCentral area of the store). Opening day promotional give-aways and specials were rolled out. When was opening day on which all this money was spent? On the Saturday of Cinco de Mayo in Portland. There were a lot of people at the river waterfront Cinco de Mayo festival. A total of three people showed up in the store. Game over, man.
Fast forward. bCentral is a forgotten, retired brand. The software aisles in Office depot have wound down. Microsoft has no real play in business SaaS solutions. Could it have been different? Would this project have been a long-term success with more testing? I’m not entirely sure because it was probably a vision a few years ahead of its time. But I know that with the right series of iterative testing we would have been able to convert more qualified visitors to leads and customers, right away.
Two major take-aways:
- Even huge companies with millions to burn can launch a business concept without proper testing… and fail.
- Content alone will not make the sales effort for your products or services a success.
This experience and others from the trenches formed the motivation for me to write, The Marketer’s Concise Guide to CRO.