Definition – The Postal Rule

What happens when a retailer posts the wrong price online? They hide behind the postal rule:

The law states that contracts become valid once they’ve been sent through the mail. Online retailers appear to have adopted this for their terms and conditions, with the contract formed once goods are despatched, rather than at the point where a shopper pays for it.

I got this from a post at e-consultancy but am not sure if this only applies to UK retailers.

Definition – Departure Trend

Departure Trend is any sudden unexpected event that can be used by marketers for promotion. Examples:

– An unexpected warm day in Chicago in mid November might be a good time to promote high ticket items
– A sudden winning streak by the Detroit Pistons might influence fans to buy more
– News of lead poisoning in toys might make people Google phrases like “lead free toys”

Definition – Take Rate

The amount of people taking you up on a given offer on your site. Take rate is used to measure micro-conversions. These can include:

– Newsletter subscriptions
– Downloadable materials such as ebooks
– Case studies
– White papers
– RSS subscriptions
– “Add to Friend” links for social networking sites
– Up-sell and cross-sell offers added to shopping cart

Also see: About this blog

Click Tolerance

Click Tolerance is the number of clicks a user is willing to invest on your site before abandonment. This number varies by site, brand, product price point, retailer type (multichannel or not), customer segment etc.

The quick and dirty formula to derive your website’s ‘Click Tolerance’ is:

Click Tolerance = [(Total number of clicks on site) – (total number of clicks leading to ‘call to action’ pages) ] / [(total number of site visitors) – (number of abandons at homepage)]

For a marketer this is valuable information because it gives a measure of how effectively the website is driving customers to conversion. For example if your website has a Click Tolerance of 5 this means a customer who visits the site is not willing to invest more than 5 clicks to get to their end objective. Using this data marketers can reorganize site architecture and improve conversion.

Another benefit of Click Tolerance is that it indirectly measures brand repute. If all your eCommerce variables are held constant an increase in Click Tolerance indicates an improvement in brand repute, on the other hand, a drop would indicate reduction in brand repute.

Examples of poor use of Click Tolerance

Almost all eCommerce retailers have “add to wishlist” on product detail pages. In a world with infinite tolerance this would be a great idea. But if your web site’s calculated click tolerance is 5 driving unnecessary traffic to this link just pulls clicks from “add to cart”. “add to wishlist” cannot be used by someone who does not have a registered account on your site. The work around, it turns out, is easy, just replace “add to wishlist” with “add to wishlist (needs registration)”. This prevents unnecessary clicking by people uninterested in registering.

Another example.. home page

Look at the gifts guide section at the bottom right of the screen…here a user can select ‘gifts for him’ ‘gifts for her’ etc but clicking on the image takes you to the same inner page. This is a 1 click leak.

An example of good use of Click Tolerance

For product recommendations allows users to test swatches before drilling in. For the shoes in the image below a user can try different color options from the root page itself.

Definition – Defection Latency

I shop for movies at Blockbuster only.  I am fully aware of Netflix and have heard great things about it, plus I hate the Blockbuster store experience and yet I only shop there.  This is what we call defection latency.  1 bad experience isn’t enough for me to leave, neither is 12 but at some point after that I will defect permanently.

Here is the lesson for Blockbuster: when the head of strategy sees the store layout and thinks ‘boy this is shitty’ but then looks at sales and sees that Netflix has hardly caused any defections this doesn’t mean the store isn’t really shitty and that customers don’t like Netflix, it simply means they’re taking time to shake off a shopping habit that’s been with them for 12 years.