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 Show Date: 1/28/2008
 Segment 3 Ė Building Complete Product Lines Ė Dr. Ralph Wilson

Colette: Weíre speaking with Dr. Ralph Wilson of about the elements you need to build a complete product line.

Colette: Dr. Wilson, just before our break we were talking about testing. I think thatís a word we canít say enough, test, test, test, test. Itís one of the most important things in any business. Can you tell us a little bit more about how you can use testing with up-selling and cross-selling?

Dr. Wilson: Well, one thing thatís happened in the last couple of years is the emergence of the Google website optimizer tool which is free and allows you to do simple AB split testing. Split testing basically is you have one form of a webpage here and you have, thatís type A and then type B has one simple change from the other, and you test to see which produces better. So, with that Google website optimization tool you can test product pages, landing pages, all sorts of things. The difficulty for smaller businesses is if we donít get enough traffic to those pages and enough sales from those pages, itís difficult to get enough information to be statistically valid.

Chris: Right.

Dr. Wilson: But itís important to be thinking in terms of which is working better. Even if youíre getting kind of anecdotal information.

Chris: Yeah. Weíve seen it Ralph, here, over the many years that weíve had our Worldwide Brands website up, weíve seen this. Just one or two simple words on a page can change conversion.

Dr. Wilson: Yep, the headline especially.

Chris: Yes.

Dr. Wilson: Makes a big difference, big difference.

Chris: Yeah.

Colette: One technique you had mentioned earlier about sending traffic straight to sectional pages, Iíve heard Google optimizer is a great tool in ways to do that where youíre offering all your different product bundles and different product lines, you know, up-selling and cross-selling, straight to those sectional pages.

Dr. Wilson: Yeah. Iím not sure that website optimizer is the tool that will do all that for you, but thereís a product, kind of a higher end product that Mercado puts out. They produce search systems for larger online retailers. So when someone does a product search on the particular website they come up with products, merchandise in such a way they get higher sales. But one of the things Mercado, and Iím sure some of its competitors, has built in is when someone comes to the site with a particular keyword thatís either searched on or comes from a pay per click source, when they see that word it will create a landing page designed for someone coming with that keyword, so that it will not only show the product that they think youíre looking for, but several that you might be looking for.

Chris: Right.

Dr. Wilson: Itís harder for small retailers to be able to do that, but the larger retailers will find that that kind of software will start to bring them some real benefits.

Chris: Right. And you know, the small retailers following all the advice that youíve been talking about so far will become larger retailers and be able to use that functionality.

Dr. Wilson: Yep. Let me give you an example of up-selling that Iíve used on my site for some time. Iíve since 1997 have offered a publication called Web Marketing Today Premium.

Chris: Yes.

Dr. Wilson: And so when people are interested, because Iíve written a number of ebooks about various aspects of online marketing and sales, so they look at the ebook and then at the bottom of the page it says, you can buy this ebook for only $14.95 or whatever the price is, but for only $49.95 you can get this plus twelve other ebooks.

Chris: Right.

Dr. Wilson: Now, you say, gee, youíre giving so much away. Well, itís true, I am, but itís only electrons.

Chris: Yes.

Colette:/Dr. Wilson: (Laughter)

Chris: (Laughter) Right.

Dr. Wilson: And so instead of leaving my store with $14.95 sales total they leave the store with $49.95 sales total.

Chris: Right.

Dr. Wilson: And itís not a way of deceiving people, itís actually a way of leading them to a huge opportunity, is the way I look at it at any rate. But this idea of up-sell really increases the sales total.

Chris: I would have to agree with you when youíre talking about your website and your ebooks Ralph. You were out there when I started Worldwide Brands which was eight or nine years ago.

Dr. Wilson: Yeah.

Chris: And you were the only person that I could find at that time who was trustworthy, you know, in the market. And everything that youíve written since then, all your materials, are fantastic and we always recommend them to people.

Dr. Wilson: Well, thatís very kind, thank you.

Chris: Well, no, I want to get that point across, because people need to understand that is a wonderful source of information. So we highly recommend that everyone check it out.

Dr. Wilson: I get upset about people that are trying to take advantage or trick or cheat some way or another to get to success. I donít think you have to.

Chris: No. you know, but so many people tell you that you need to. You know, itísÖsome people think, or most people think that you need to cheat just a little bit to really make money, but you donít.

Dr. Wilson: I know.

Chris: You donít. Itís just honest information, straight forward businessÖ

Dr. Wilson: Because it creates respect and those people will be back again and again and again because they trust you.

Chris: And how many people have we seen between the two of us that have come up over the last eight or ten years, have been out there selling junk, cheating people, and they disappear within a year or two at the most.

Dr. Wilson: Yeah, yeah.

Chris: You know, theyíre gone. You build a business like your business and like our business where we actually tell the truth and we do what we say weíre going to do and weíre around forever.

Dr. Wilson: Yeah.

Chris: So, letís jump into small business. You were talking about Mercado and you mentioned the website software and so forth. Do all small business carts allow you to cross-sell and up-sell or are there limitations?

Dr. Wilson: I was looking here a few months ago at that question and what I found was nearly all the ones that try to stay up to date and improve their carts are offering cross-selling. I mean, there are a few shopping carts out there, typically some web hosting service will provide them free. Well, you know, if you want free you get free (laughter).

Chris: Right (laughter).

Colette: (Laughter)

Dr. Wilson: Typically those are ones that donít have an economic reason to improve their software and, therefore, donít.

Chris: Yeah.

Dr. Wilson: But the ones that you have to pay something for, typically thereís enough cash flow in those shopping cart businesses that they can hire a staff that will keep improving that product over the years. So cross-selling and related up-selling is there in nearly all the shopping cart programs whose names are well known out there. Now, some are more flexible than others. Some are more automatic than others in the way they do this. But I looked at, well, MIVA Merchant, LaGarde StoreFront, Yahoo Merchant Solutions, ShopSite Pro, Monster Commerce, osCommerce, and several knockoffs of osCommerce, and a number of the leading carts out there you can do this. Typically, whatís involved is an online store is run through a database. Now, the small stores that sell one or two products donít worry about this, but if youíve got 100 products you typically are doing the modifications to your store in, say, an Excel spreadsheet or an Access database and then uploading that database to your store on a regular basis so it will include the updates.

Chris: Right.

Dr. Wilson: Well, whatís involved with cross-selling is there will be a field for every product that will allow you to list similar products that you want to show up, or accessories or whatever, that you want to show up when that product is displayed in the product page. So you can associate, using that field, you can associate one product with several other products.

Chris: Yes.

Dr. Wilson: Then when you upload that file to your online store, those other products will be mentioned or shown or maybe a little thumbnail will be shown on a product page. What Iíve found is itís not quite as typical to have the flexibility to show all this stuff in a shopping cart. Some small business online stores have that sophistication, but most donít.

Chris: Right.

Dr. Wilson: But on the product pages itís very common and not all that hard to do. I mean, you have to take the time, for each product, list the associated products in your database. But once thatís done, then itís pretty straight forward.

Colette: You know, Dr. Wilson, what kind of results can a seller expect from emphasizing cross-selling and up-selling in their store?

Dr. Wilson: Well, itís going to vary, Iím sure, from store to store. But I would think that at least 10%, maybe 20%, increase in revenue would result from using those kinds of techniques well.

Chris: Thatís nothing to sneeze at.

Dr. Wilson: Well, no, itís not. It could be more in some cases, but I think that those kinds of numbers are quite reasonable to see happening. You have to work at rolling this out through your entire store and work at it. But hey, the nice thing about cross-sell and up-sell is without increasing your marketing expense, that is, you know, pay per click ads to get people to your store, for example, youíre increasing your sales total. When you increase your sales total you increase your profits.

Chris: Thatís right.

Dr. Wilson: So this is big.

Chris: Yeah, it is. Itís so important for people to understand these things. So many people, unfortunately, we see, start an online business and say, well, I tried to sell this and I canít sell it, so online business doesnít work, forget this.

Dr. Wilson: Yeah, I know, Iíve met those people too.

Chris: Yeah. Then you see the people who, boy weíve met so many of them, who just build these from nothing. They start with a couple of products, a few products, and they build these phenomenally varied stores, but within the same product lines, you know?

Dr. Wilson: Yep.

Chris: Like a camping store, for example, and they just carry some unique items, some standard items, some low cost, some high cost, theyíre bundling, theyíre cross-selling. They just get the concept.

Dr. Wilson: Yeah. You still get these people that want to make money on the internet without any work.

Chris: Yeah, yeah.

Colette: (Laughter)

Dr. Wilson: And it doesnít work that way.

Chris: (Laughter)

Dr. Wilson: Now, the beautiful thing about the internet is itís a huge marketplace. Itís huge.

Chris: Yes.

Dr. Wilson: But you still have to work and work hard to stay ahead of your competitors and really offer to your customers what will motivate them and encourage them to buy and then have good quality to give them when you sell it to them.

Chris: Absolutely. What would you say criteria would be for good cross-sellers and up-sellers? We talked about considering items that donít have good profit margins.

Dr. Wilson: I donít quite get your question Chris.

Chris: Um, say criteria for good cross-sellers and up-sellers, for example, I mentioned loss leaders earlier on.

Dr. Wilson: Right.

Chris: What do you think about using a loss leader, for example?

Dr. Wilson: Oh, I think thatís a tremendous idea, particularly if you got a good buy on it yourself (laughter).

Colette: (Laughter)

Dr. Wilson: You donít want to lose money.

Chris: You know what we tell people is that you can find liquidated products within your product area and if you find a liquidation on some items you can use them as a draw to bring people into your store.

Dr. Wilson: I think thatís great. And I think this is a matter of learning. I mean, we try something and we find, well, that didnít work. So you try something else and, oh, that worked.

Chris: Right.

Dr. Wilson: And you just keep building this. One thing I want to encourage people in this new year of 2008 is stretch yourself, try something new. Experiment with some of the cross-selling, up-selling techniques that weíve talked about. Try on a little basis and then roll it out a little bit bigger as you see it working. But stretch yourself, donít do the same old thing you did last year.

Chris: Right, and get into testing.

Dr. Wilson: Yeah.

Chris: It all goes back to testing.

Dr. Wilson: Another one of my philosophies is every year cut off the bottom 10% of your business.

Chris: Yeah, yeah.

Dr. Wilson: So the stuff that isnít working, just donít offer it anymore, get rid of it. And then add the things this year that are really you see as growth items.

Chris: Thatís such a good point so very simply put, that it seems like it should be obvious, but itís not. It seems like, oh yeah, okay, sure. But itís something that you have to actually say to realize.

Dr. Wilson: Well, weíre afraid of getting rid of things sometimes.

Chris: Yeah, yeah.

Dr. Wilson: But to succeed, we need to keep moving.

Chris: Right. And keep moving we will. That is our time today with Dr. Ralph Wilson of Ralph, thank you very much for being here, always a pleasure.

Dr. Wilson: Hey, God bless you and what youíre doing for folks too.

Chris: Coming up next, our Product Source of the Week segment, when Product Sourcing Radio continues. Iím Chris Malta.

Colette: And Iím Colette Marshall.

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