Don’t skip the hard parts. Whether this is market research, user research, or documenting code and setting up governance know what is enough and don’t give it short shrift.
Be realistic. Understate the expected results. Overstate the expected costs. As I have told other entrepreneurs, have at least 6 months of runway and expect things to take twice as long and your results to be half what you estimate.
As part of my series about the “5 Things You Need To Know To Create A Highly Successful E-Commerce Business”, I had the pleasure of interviewing Seth Earley.
Seth is the author of THE AI-POWERED ENTERPRISE: Harness the Power of Ontologies to Make Your Business Smarter, Faster, and More Profitable, and is CEO of Earley Information Science (EIS), a leading consulting firm focused on organizing information for business impact, with expertise in knowledge strategy, data and information architecture, search-based applications, and information findability solutions. He is currently on the editorial board of the Journal of Applied Marketing Analytics and is a former Data Analytics department editor for IEEE’s IT Professional magazine. He lives in Carlisle, Massachusetts.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I started Earley Information Science in the early 90’s. I had worked in technology previously and started the company because I saw the industry was on the cusp of some momentous changes. The internet was in its infancy and organizations were wrestling with knowledge processes and collaboration. We began as Lotus business partners — at the time the saying was “Lotus Notes did poorly what nothing else could do at all”. People were really trying to figure this stuff out and most organizations were beginning to see that they needed better ways of connecting their employees and reducing paper processes.
What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?
I remember being in a taxi and a friend of mine turned to me and said “this internet thing, it’s going to be BIG!”. People were just starting to build websites and install email. I once came across a stack of business cards when cleaning out an old file. The cards looked very strange to me and I suddenly realized why: there were no email addresses or websites on them! Talk about a time capsule. I could see that organizations were going to need a great deal of help in figuring out internal collaboration and better ways of working with their customers and the emerging technologies were confusing and complex.
Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?
There have always been challenging times. An old saying about owning your own business is that you only work half days — and you get to pick which 12 hours. We have reinvented ourselves multiple times and continue to do so. When IBM bought Lotus and people did not know how the technology worked, they brought us in to help with their global deployments of Lotus technologies. But when the technology was at the end of its life, we shifted to new tools and approaches.
Sometimes we invested in emerging areas that were a bit too far ahead of the market, sometimes we invested in promising tools that did not have the staying power in the marketplace. I never considered giving up. I always felt like the business had more potential and my goal was to realize that potential. The challenges never really go away. It never becomes “easy” — at least not for me. I am always trying to do more and push things ahead. I guess that’s the way I am wired.
So, how are things going today? How did your grit and resilience lead to your eventual success?
There are certainly market headwinds today But that said, our company is doing well and we are increasing our book of business. A few years back we started doing larger, longer engagements with our clients. This focus on larger customers and projects has served us well and raised our game quite a bit. Lots of smaller projects prepared us for the types of organizations and initiatives that are our bread and butter today — building out the data infrastructure to support challenging digital transformations. Our firm’s capabilities are quite advanced for a company our size and we have a fantastic team of people. I am very proud of the team and what they are able to accomplish — the success of our clients’ transformations costing tens of millions of dollars depends on what our teams can do and we have delivered.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that? What do you think makes your company stand out? Can you share a story?
We were called in to assist with the product information for a global industrial manufacturer. This was part of $25mm digital transformation. One of the big consulting firms was asked for a proposal and bid $250k to organize the products. This was a firm with 14 divisions and hundreds of thousands of products. One of the people on the project had attended a workshop of mine several years before when he was pursuing his PhD in library science. He could see that the $250k proposal vastly under scoped the problem and did not understand what was needed to solve the product information challenges, so called us in. Our part of the project ended up costing around $4mm.
In the end the program was an enormous success. Had the company not fixed the underlying data issues, the program would have failed because the data was a huge mess. The transformation led to a multibillion dollar increase in the market capitalization of the company. We were not responsible for all of it, but had we not participated, that value would not have been realized.
So many digital transformations fail due to this one simple element — poor data. It’s not the fun, exciting or sexy part, but it is critical. Our customers realize that and invest in that necessary foundation. Digital transformations are data transformations. No data (or poor quality, missing or incorrectly structured data), no transformation. A client recently said “your reputation here is stellar. The perception is that, yes, you are expensive but you are worth it”. I like to say we are not expensive. Failure is expensive.
Another firm told me years after our engagement that “your deliverables were the only ones that had value” — another firm was brought in to execute on our recommendations and they failed. Another firm after that failed. They tried it internally and failed. Then the CIO and his leadership team lost their jobs. Had they stayed with us, it would have been faster and less expensive. When they did get it right, it was by following the playbook we created. Another firm told me that the 18-month roadmap and governance framework was still in use 5 years later. They called it “the bible”. Five years after that I learned that they still called it “the bible”. A deliverable in our world that lasts 10 years is unheard of, but this was a structure for roles, responsibilities, structures and metrics that allowed them to evolve and still use the same decision making approach to address their technology challenges and monitor ROI of technology investments.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
There is a lot of traditional advice about work/life balance for entrepreneurs. For me, I make two things sacred — sleep and workout. I used to go with little sleep and power through it. But there is so much research about how vital sleep is to every aspect of our physical and mental health that I prioritize getting a full night sleep over everything else. It is easy to give your body short shrift and neglect the essentials. Read the book by sleep researcher Matthew Walker Why We Sleep. If there were a drug that provided all of the positive impact on our lives that sleep does — from mood, blood sugar, blood pressure, cognitive function, emotional wellbeing, weight control, even our physical appearance and skin tone it would be a multibillion dollar blockbuster. The old saying is get your beauty sleep. For anyone that has pulled an all-nighter, the alternative should be called “ugly awake”.
I also make sure that I go to my zoom boot camp classes. I don’t like working out but I like how it makes me feel. I take my physical shape for granted after 40 years of training but again, it is something I never sacrifice. People put more maintenance into their cars and physical possessions than their bodies. You can buy a new car, but success will mean very little if you end up with heart disease, high blood pressure and diabetes from not dealing with stress and taking care of yourself.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
I am grateful for all of the people who have helped over the years. Even though they may have moved on, I appreciate the work and contributions they made during their tenure. I am also grateful that the long-term team members have stuck it out and put up with me over the years. There is one person who was one of my first customers 27 years ago. She sold her business about 17 years ago and came on board to help out. She is retired and does not need to work but has come out of retirement multiple times over the years to help get us through a tough spot. I have had some bad leadership hires (everyone will in business — it is difficult to hire senior people and ensure their success) and Joyce has stepped in whenever we have had a gap. What is funny is she actually had fired us due to a team member who was not being forthright with her (he did not last) and I stayed in touch, came to a wine tasting and we developed a friendship that has lasted all of these years. I am also grateful to my wife who has a strong business background and works with leadership teams. It is very challenging to work with one’s spouse but she pushed me many years ago to prioritize on the right things which made a big difference in the trajectory of the organization.
Ok thank you for all that. Now let’s shift to the main focus of this interview. The Pandemic has changed many aspects of all of our lives. One of them is the fact that so many of us have gotten used to shopping almost exclusively online. Can you share a few examples of different ideas that eCommerce businesses are implementing to adapt to the new realities created by the Pandemic?
One thing that I have seen is organizations doubling down on the digital experience. One of our services is optimizing the customer journey by fine tuning the supporting data and infrastructure. In order to produce a truly seamless experience, a lot of elements need to be orchestrated — knowledge and insights from across the organization have to be integrated with the customer journey, the correctly structured product information management supported by sophisticated content operations. At the end of the day, it’s all about having the right information for customers when they need it so they can solve their problems and meet their wants and needs. Because the digital experience has to do more than it ever has, reading the customer’s “digital body language” using well designed and integrated technology is critical. Organizations are recognizing the need to invest in the foundation of solid processes and quality data because one cannot support the customer experience through acts of heroics. It has to be through well-coordinated digital machinery. Acts of heroics do not scale. Great customer service has to be engineered into the core experience, not bolted on as an afterthought. Why do people call the call center? Because something is not working. We have to solve those problems at the source.
In addition to putting more human resources in customer service and support, there is increasing automation using intelligent virtual assistants. Unfortunately most bots are dumb and damage the customer experience. But those organizations that understand how to apply knowledge engineering to bot design are seeing significant cost reductions while improving service. It’s not a quick, cheap or easy approach, but the benefits are there if done correctly. The key is to be very narrow in functionality, be clear with the customer about the capabilities of the bot, and always be able to quickly, seamlessly escalate to a human agent.
Amazon, and even Walmart are going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise retail companies and eCommerce companies, for them to be successful in the face of such strong competition?
They can compete. As I discuss in my book, The AI-Powered Enterprise, they can do so by listening very carefully to their customers and anticipating what they need. Think of the best sales person you ever dealt with. They knew you and your style, your preferences, your budget, what you valued. They called you when they had something they knew you would like or when there was a sale. They listened. They were knowledgeable. You trusted them. They cared and wanted to please you.
In situations like that, price may not be the most important factor. Think of the fact that two physical stores can carry the same merchandise but have a completely different looks, feel, and experience. Lighting, displays, shelving, aisle layout, naming, themes, product curation, support, service and more make the difference.
We need to have the same level of understanding of customer’s needs and preferences, and respond in real time as they go through their experience. It is a cliché to talk about understanding the customer and everyone nods their heads about understanding their customers. But how customers actually interact and behave is removed from the technology and architecture. By making that crucial connection, retail and ecommerce companies can serve their customers at a higher level and in different ways than their overseas, low cost, and behemoth US competitors.
What are the most common mistakes you have seen CEOs & founders make when they start an eCommerce business? What can be done to avoid those errors?
Innovating at a pace that is faster than they can adequately operationalize. Being able to operationalize is the key — that means documenting code, testing use cases, investing in data quality, building governance processes, measuring baselines. It does not need to be heavy weight. But it has to be there at some level.
Someone once said to me while discussing information architecture “we don’t have taxonomies, we use agile”. Those are two unrelated concepts. One is a design element and the other is a development approach. Conflating the two as mutually exclusive illustrates a lack of understanding of a foundational element that organizes information. It’s there whether it is intentionally designed or is created by happenstance.
Not intentionally designing things that are at the core means that everyone develops their own ways of naming and organizing things. That means there is no common model that people can work around. That leads to a mess. Adding too many new tools and developing at a pace and with an ambition will incur a larger technical debt load than the company can handle. Creating minimum viable products that have to be supported while trying to develop new functionality or adding new tools will slow the company down when it tries to scale. Not having enough process discipline will ultimately impede growth and adaptability .
In your experience, which aspect of running an eCommerce brand tends to be most underestimated? Can you explain or give an example?
The basic blocking and tackling. Integrating systems, maintaining systems, conducting ongoing testing of the experience, installing governance. It’s the stuff that is not exciting or sexy and no one gets glory for it.
Can you share a few examples of tools or software that you think can dramatically empower emerging eCommerce brands to be more effective and more successful?
Customer Data Platforms (CDP’s) are becoming an essential part of the ecommerce stack. This class of technology aggregates “signals” — the electronic body language of on-site and digital behavior — click throughs, responses to campaigns, purchases, etc.
These come from a range of systems and the ecommerce platform uses a CDP to respond to the digital body language just as a sales person would read the physical body language and spoken communications. They enable the ecommerce system to present the correct information to the customer at the ideal time in their journey. This might include an offer, a specific product, a piece of supporting information to advance the decision and so on. The CDP works with content management and product information management systems to provide a seamless customer experience (assuming the supporting processes are mature)
As you know, “conversion” means to convert a visit into a sale. In your experience what are the best strategies an eCommerce business should use to increase conversion rates?
Conversions happen when people find what they need quickly and without a great deal of effort. If they get stuck or frustrated or cannot do what they need to do, they leave. This comes back to the basics. If they can’t find it, they can’t buy it. Things to think about would be tree jack testing of the navigational taxonomy (the product hierarchy). We have seen 90% increases in findability, causing a very significant uplift in conversions by changing where a product is located and the context in which it is presented. Another is to test the effectiveness of product landing pages (containing a class of products) and product detail pages (containing the specific product version or configuration). If people are bouncing out on a landing page because they cannot find the exact product variations they need, it may be the way the product attributes have been designed or how the data is populated. If they are clicking through to the product detail page after the landing page and then not converting, the product detail page may not have enough information or may have missing or incorrect information. The state of data and data architecture is getting better on most sites but there are still surprising and straight forward to correct issues.
Of course, the main way to increase conversion rates is to create a trusted and beloved brand. Can you share a few ways that an eCommerce business can earn a reputation as a trusted and beloved brand?
By serving the customer well. Knowing what they want and providing it. Learning about customers in focus groups, ethnographic studies, in depth personas. Interview your top customer service and sales people and derive what it is about their magic and why customer love them. That secret sauce and those magic superpowers can be captured and replicated. It can be modeled and embodied in the technology. People may not believe that but at the end of the day, we can capture a lot of what people do in their interactions and emulate those interactions. But the systems and tools need to be trained to do so. In The AI-Powered Enterprise, I discuss how to do this in a scalable and repeatable way.
One of the main benefits of shopping online is the ability to read reviews. Consumers love it! While good reviews are of course positive for a brand, poor reviews can be very damaging. In your experience what are a few things a brand should do to properly and effectively respond to poor reviews? How about other unfair things said online about a brand?
That is a difficult one that defies a purely technology based approach. One can apply sentiment analysis to identify emerging problems and the only way to address it is to listen to the customer and respond, attempting to solve or rectify the issue. In some cases, people are just cranky or they may be doing something for some other motivation and there is no appeasement. In those cases, kill them with kindness or kill them with quality. Publicly if possible. Or do something else for the brand giving back to the community that will build good will. A little can go a long way especially with some creativity and thoughtfulness — especially if the gesture is visible to the malcontent.
Ok super. Here is the main question of our interview. Based on your experience and success, what are the five most important things one should know in order to create a very successful e-commerce business? Please share a story or an example for each.
1. Know your audience. I built a personalization architecture and at the end of the process, the marketing department could not come up with differentiated messaging because they knew so little about them
2. Focus. Trying to be all things to all people will not serve anyone very well. Once you understand that target, be laser-focused on catering to those detailed needs you have identified in item 1
3. Don’t skip the hard parts. Whether this is market research, user research, or documenting code and setting up governance know what is enough and don’t give it short shrift
4. Get the foundation right. This includes data quality and carefully designed product, customer, content and messaging architectures. (Yes, architectures, plural)
5. Be realistic. Understate the expected results. Overstate the expected costs. As I have told other entrepreneurs, have at least 6 months of runway and expect things to take twice as long and your results to be half what you estimate.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
A renewed faith in and belief in science, fact and truth. I am especially disturbed by the lack of scientific literacy in this country. People do not understand the fundamentals of reality — physics, the make-up of matter, principles of energy, biology, how life works at a physiological and cellular level, our ecosystem and biosphere, the reality of how chemistry, biology and nature interact. Our world is possible because of science; physics, chemistry, engineering, quantum mechanics. Things that are difficult to understand. But it’s OK to not understand them. It’s not OK to not believe in them.
How can our readers further follow you online? My website and social media are: https://www.earley.com/
This was very inspiring. Thank you so much for the time you spent with this!