Yesterday eMarketer analyst Jeff Grau wrote an article called Where Have All the Online Travelers Gone? The article said “Customer dissatisfaction with online travel agencies (OTAs) stems specifically from unfriendly booking engines and navigation tools” and that this is turning them back to travel agencies to get the expertise and personalized service they miss.

I believe this dissatisfaction in travel is indicative of a bigger dissatisfaction with business, both big business and online business. People want the feeling they got when they walked into a mom and pop travel agency, clothing boutique or hardware store. We all want the owners to intimately know what’s on their shelves and which products our neighbors have found most useful. “Try this glue for wood and plastic”, “I suggest this hammer for your smaller hand.” But as business went online, they tried to substitute this intimacy with merchandizers and marketers. This just clogs the pipes between the sellers and the buyers. Stop trying to “merchandize” everything online. Let the shoppers stock the shelves. For travel, let fellow travelers show which resorts really are a great place for a “romantic vacation.”

You’ve heard me say it before… don’t rely on those folks who are willing to provide explicit feedback. You want to know what everyone thinks, not just those that might have an agenda behind their review or are just really peeved.

Baynote Product Recommendations enables our customers to more effectively merchandise their products across their entire site. However, many ecommerce vendors invest heavily in their merchandisers to create complimentary and comparative products to increase conversion rates and average order values.

Today I had an enlightening conversation with one such vendor. He spoke highly of his merchandisers and explained their extensive knowledge of the business. He questioned the need of a recommendation engine when he had access to such experienced merchandisers. Point well taken. This continues to be a hurdle for many recommendation companies trying to break into the ecommerce industry. Lets move the conversation away from an “either or” scenario. Combining your experienced merchandisers with automated intent driven recommendations incorporates the knowledge of your business experts with the collective intelligence of your website visitors.

We’ve spent many resources on our merchandising console within our reporting interface Baynote Insights to facilitate this goal of “merchandising harmony.” For the last few months our clients have been combining our recommendations technology with their merchandising expertise to deliver an enhanced user experience while increasing conversion rates and average order values. Why substitute when you can combine?

Before going to eTail East which was this week in DC, we at Baynote were a little concerned that attendance would be down given the economy and the high cost of travel.  Attendance was only slightly down from last year and the enthusiasm was high for both pure-play eTailers as well as with the online people for brick and mortar retailers.

During the Advanced Search Forum, when asked if there were any activities they were doing in 2008 that they intended to scale back in 2009, there was silence.  It seemed that everyone there was still doing anything they could to improve the customer experience and get the right message to the right person. I canvased several people privately and asked them if their high level goals were changing - few described any sort of retrenching, some said efficiency and automation were becoming more important.  The idea of putting the collective intelligence of site visitors to work, as Jack Jia has described it “let the mob run the store”, seemed to make sense to everyone.  It appealed to those trying to do more with less as well as those trying to bring the right social technologies to play on their sites.

Interestingly blogs themselves are still up for grabs regarding how and when and why they should be used.  Barbara Mousigian of CDW commented in the session on Customer Experience, that people were frequently distracted by blogs as the latest shiny object to add to their site.

I asked our CEO Jack what his biggest take-away was from eTail.  He said that businesses still haven’t figured how to create a connection with customers the way business could when mom & pop stores dominated.  They put so-called experts in charge…marketers and merchandizers in the world of eCommerce.  But this isn’t the same and the gap is still great.  Shopping on the web is still, in its essence, a lonely experience.  But what was cool at eTail, was people acknowledged the gap and were actively looking to fill it….not haphazardly with the latest shiny object but with the best practices and technologies already proving themselves in the marketplace.

This morning, MediaPost’s Marketing Daily posted an article on the decline of email marketing effectiveness. JupiterResearch recently completed some research on permission-based email marketing. While email continues to be a heavily used means of communication, users have become increasingly skeptical about promotional email.

Turned Off Users

The JupiterResearch document claims that email users’ likelihood to make an on-line or off-line purchase as a result of promotional emails has declined 7% over the last year. While an increase in popularity of other communication mediums such as text messaging and social networking certainly have an impact on these numbers, email marketing success is still within arms reach. The top reason for email users to unsubscribe continues to be a lack of relevance, followed closely by excessive emailing.

Here are a few tips to increase the success of your email marketing:

1. Test Different Layouts - A/B and Multivariate testing have been important methods used to determine the layout that will most likely lead to a conversion.
2. Tune into your users - The content of your email must relate to your users, quickly. Promote content that users will find most relevant, but not too frequently.
3. Foster Product and Content Discovery - Whether you are sending event-triggered emails like invoices or promotional emails like new product lines, provide popular or complimentary products that allow your users to discover new products and content that could lead a conversion.

For Information about how Baynote enhances email marketing, click here.

Let your website do the targeting

The instance a user lands on your website, they begin communicating with you. Its not always loud, but if you are listening this will become clear. They speak with their bounce rates, exit pages, entrance pages, site search terms, mouse movement, and many other web actions. This communication is not necessarily a function of generation, but one of context. By trying to focus on who your users are, which is expensive and typically inaccurate, you can lose focus on what really matters, their context. A user’s context drives their intent, and being tuned to that allows you to unlock the Collective Intelligence of your website. No marketing team or focus group with demographic data will be able to match the insight gathered from the collective intelligence on your website.

A Collective Intelligence Powered Site

So what does a site that is powered by its collective intelligence look like? This site will bring the right content to the right users as soon as they land on a website. Each page will recommend the content or products that will most likely result in a successful conversion. Search results will be tuned into the context of the search and reflect usage of the results by monitoring successes and failures of searchers. The Search Marketing strategy of the website will pivot around the keywords used by the users that are driven organically from Google and used in the site search. Landing pages will be dynamically created with the content or products found most useful by users and will update real time to reflect these shifts. eMail marketing campaigns driven by site observations will include clusters of products and content within the same context to increase engagement. Marketers will utilize reporting of the website’s collective intelligence to drive mutli-channel strategies including offline and mobile channels.

Automatic, not Autonomous

Harnessing the collective intelligence is not about creating an autonomous website. It aids marketers in providing a complete user experience that will create customer loyalty and bring users back to the site for future transactions. Solutions that harness the collective intelligence of your site must provide reporting and management interfaces that allow you to apply business rules and push promotional content or products. This mechanism allows you to maintain control of your site while using the collective intelligence to automate laborious and intensive data-driven tasks.

Discover Context, not Identity

Leveraging collective intelligence on the web is about understanding the context of your users through observing their interactions with your website, not their identity. By not requiring demographic information, the act of gathering your site’s collective intelligence is not perceived by your customers as an invasive practice. Therefore, this contextual approach is not only an effective and powerful targeting technique, but it keeps your brand intact by maintaining the trust of your users.

Mark Benioff, CEO of Salesforce.com, is widely known for his rivalry with Larry Ellison, but above all he is known for his controversial statement “Software is Dead.” While this might be incredibly zealous, there is some truth to it, but I would like to rephrase this statement: Software as we know it is dead. Software-as-a-Service (SaaS) solutions provide great benefits like automatic updates, low maintenance, and increased mobility. However, SaaS begins to really shine when it is served as a platform. The old model of selling packaged applications is being turned upside down.

Web Applications like Baynote Social Search are excellent at solving a specific problem across many different types of businesses. However, the power of Social Search is only possible because of the SaaS platform that drives it, the Collective Intelligence Platform(CIP). SaaS platforms drive powerful applications that can be custom fit or designed specifically for a designated use through the API. A robust platform will provide access to relevant data which in turn can be used to develop valuable applications. As companies continue to differentiate their product offerings, custom software solutions become increasingly necessary while making it difficult to create “one-size-fits-all” web applications. Today data is the most valuable commodity and SaaS platforms, like the Baynote CIP, provide companies with the tools necessary to build applications with highly relevant data.

Were you just asking yourself about where you can find out about the most effective online merchandising techniques? Well what do you know? Mike was just talking about exactly that last week with Jason Billingsley, Co-founder and VP of Innovation at Elastic Path. Mike and Jason’s webinar is available here if you’d like to listen, but while you’re there you also might want to check out the EP Blog if you like keeping up on all the latest eCommerce technology and trends without all the work. They recently just posted an interesting discussion about how men shop online- which apparently isn’t much different than how they shop in stores: quickly and without trying anything on.

CIO Insight recently posted the results of a pretty interesting survey a few weeks back. As you can see the hottest category on the survey is collective intelligence, or as explained: “technologies that gather and present ‘wisdom of the crowds.’” One of the interesting things about the survey is the demographic of those that voted. These IT executives are the decision makers that will help decide the fate of the technologies of tomorrow. IT adoption is possibly the most relevant factor in determining what will be the most important technological developments in the years to come. This, I believe, is a poll that should not be taken lightly. After attending the Crowd Sourcing event a few months ago, it was quite clear this trend was moving in the upwards direction.

Capturing the expended energy of users on the web and using it to drive content delivery is a logical step in the evolution of the web. It seems IT directors have acknowledged this opportunity to leverage the users of their sites and will likely continue to adopt these technologies to enhance the user experience and cut costs by eliminating more expensive processes previously utilized.

Have you ever wondered how an entire colony of ants can find their way to a food source? Or how internet marketers apply the same principle to make contextual recommendations? Or how merchants automatically promote certain products to super specific customer segments? If you haven’t already then I bet you do now! You can find out here at iMedia Connection’s featured article written by our very own Mike Svatek.

This week was a big first for us here at Baynote with the debut of our premier webinar, Bond vs. Barbie: The Dynamic Positioning Imperative with Stanford consulting professor, Tom Kosnik. In the webinar, Tom discusses the shift in branding strategy from the concept of durability and the never-changing “spy-chic” persona of James Bond to the dynamic positioning of Mattel’s multi-cultural, multi-profession Barbie. All in all, the webinar was a hands-down success and much thanks goes out to Tom for his time and expertise. If you might have missed the live broadcast but would still like to know how you can dynamically position your company brand, download the webinar in its entirety here.