We have just released this interview on the ecommerce podcast with Aaron Magness, the Business Development Manager from Zappos.

Aaron talks about the approach Zappos takes to customer service and it particularly resonated with me. One of the ways that Zappos ensures that every employee is focused on customer service is by insisting that everyone spends two weeks in the call center on the phones with customers as part of their training.  This is a fantastic investment - making sure that everyone at Zappos understands their customers – how they interact with the company, what they like and what they don’t.

Aaron talks about the huge growth that Zappos have had. This has mainly happened by word of mouth, fuelled by their outstanding customer service. He mentioned that one of the drivers for expanding their product range beyond shoes was that they noticed people searching for other product categories in their site search. This is another very good reason for paying close attention to what people are searching for on your site. Not only can you use it to improve the conversion rate of people who are searching and for keyword research for search marketing, but it also gives you continuous feedback about other products customers expect to find on your site.

There is plenty of other useful information in the podcast. Particularly interesting is the way Zappos have embraced Twitter – both to communicate within the company but also with their customers.

Over the past few months we have been upgrading our infrastructure to provide improved redundancy to our customers.  Specifically we’ve enhanced our geographic redundancy so there is now no single point of failure.

We’ve always had redundancy – so that if a server fails then there will be no interruption to the service of our clients. This is absolutely necessary because servers can fail – particularly disks. However we used to be vulnerable to a whole data center going off line. The data centers we use go to a lot of effort to ensure that they don’t go off line – they have multiple internet connections, a lot of redundant power systems, and lots of security. However even if they guarantee 100% up time – it doesn’t mean that you always get 100%. And despite all of these efforts we have had our data centers go off line for short periods. When this happened our customers experienced a temporary loss of service (while we execute our disaster recovery plan) and even a small loss of service is unacceptable to us so we have been looking for a solution. This upgrade is a major part of the solution.

The technique we use to achieve the geographic redundancy is the same as that used by many of the big players, like Google and Microsoft- but as far as we can tell not by our competitors – like Mercado (what’s left of them now belongs to Omniture), Atomz (now run by Omniture), ThanxMedia, or Celebros. Now if one of our data centers goes off line then the others will take the load and we will continue providing service to our customers.

This change is transparent to our customers and costs them nothing extra. It is part of our effort to continuously improve our service. Web site owners need to know that their search and navigation is going to be running continuously. Last week Evan Schuman predicted that e-commerce site crashes will soar this holiday season. This upgrade will help ensure that our customers’ sites will function continuously.

In case you missed it, last week the National Retail Federation (NRF) released the results of an ecommerce survey conducted by Shopzilla® for Shop.org, which show that a majority (56%) of online retailers expect holiday sales to increase at least 15% this year over last. While the number of retailers expecting that level of sales growth is smaller than last year (77%), the announcement highlights ways retailers are trying to drive more sales, like offering free shipping and other promotions.

The survey also revealed that retailers are improving areas of their ecommerce sites that can ensure a positive customer experience, like site search, in order to capture their share of online purchases:

“In addition to free shipping promotions, many retailers have rolled out new website features to improve the customer experience. Features like improved site search, which 42.9 percent of retailers added or improved since last holiday season, will help customers navigate sites more easily. Other features like product video (42.6%) and customer reviews (32.7%) can give shoppers more information to make buying decisions…”

These findings are very much in line with our own ecommerce survey, which we released last month. Our survey showed that a great majority of retailers viewed site search as critical in strengthening brand visibility and improving the customer experience – in fact, 91% of the retail companies we surveyed cited site search as critical, very important or important to their online businesses, while 54% said that adding new site search capabilities resulted in an increase in sales; 44% experienced greater conversion rates and 40% cited better customer satisfaction.

We’ve said it before, but now is absolutely the right time to make necessary improvements to your site search and make sure you don’t miss out on the mass numbers of people who will be spending money online this year. It will not only help you get through the holidays but will continue to have a positive impact on your business going forward – and why not take advantage of the busiest shopping time of the year to give your customers the best online experience possible?

I wanted to send out a note of caution for those of you who may be talking to someone from one of our competitors, Thanx Media. Take what you hear from them with a grain of salt. We are getting mounting evidence that they are not being truthful to our customers and prospects.

By way of background, Thanx Media started selling Endeca on demand in April this year. Endeca’s search and navigation software is a good fit if you want to own the software, you have a capable IT team that can install and maintain it, you are prepared to pay hundreds of thousands of dollars and you are not in a hurry (Rugs Direct said it took months to install Endeca). Endeca can’t be that easy to set up, even for insiders – Endeca’s chief scientist and co-founder recently admitted that he wasn’t “quite ready to figure out how to install and maintain an Endeca instance” for his blog.

A lot of our customers are very faithful. They forward emails and voice mails from our competitors and we’ve even sat in on some of their sales pitches that our customers couldn’t be bothered listening to. This is where we have seen the Thanx Media reps being untruthful:

• They exaggerate about their customer numbers. You can see in this job posting they imply they have 400 customers, whereas in this press release they claimed 28 new customers 6 months after they started selling their service. I’m guessing ThanxMedia have closer to 28 customers – it’s Endeca who have the 400 odd.
• They overstate the wins they have had against us. In April (just after they launched) they were claiming in emails to our customers that they had won many SLI customers when I doubt they had any customers at all.
• They are uninformed about our capabilities. A new customer expressed surprise that we were able to implement faceted search in the way that we did – the Thanx Media rep had told him that we wouldn’t be able to.

I know sales people can sometimes be economical with the truth to get a sale. But when it comes to this, the Thanx media reps seem to be having an economic crisis . I’m guessing that this is a reflection of the pressure they are being subject to. It smells a little of desperation to me. Endeca may be one of the enterprise search companies that Stephen Arnold suggested was in trouble - they did have to raise more capital earlier this year.

Endeca is an enterprise software company. Thanx Media is trying to fit the square peg of enterprise software into the round hole of Software as a Service. Mercado tried this and it didn’t work.

I welcome competition – they help keep us on our toes and ensure that we strive to provide the best service. My own ethics dictate that we should be engaged in honest competition and our business model encourages this. If we can’t deliver what we promise then our customers will see this in our free trial, before they have paid anything. This approach is working well for SLI. If ThanxMedia is talking to you about SLI, all I ask is that you talk to us to hear a different perspective.

We’ve just posted the next episode of the ecommerce podcast: an interview with Brian walker from Forrester Research. Brian describes the services that Forrester supplies to the online retailers and some of the trends that he is seeing. Online retail is still growing and in this economic situation is one of the few bright lights in retail. It is growing and Forrester are forecasting that it will grow at 12% this year over the 2008 holidays.

Brian also talks about the popularity of reviews and how they can act as a retention mechanisms. One if the major issues that retailers have when they implement reviews is the moderation of the reviews.

Brian recommends focusing on usability as one of the most cost effective things that retailers can do. It’s not too late to make changes that will have an impact for these holidays.

Well known venture capital firm Sequoia Capital made a now famous presentation to their portfolio companies titled “RIP: The Good Times”,  warning these companies about the seriousness of the economic crisis and the need for them to become cash flow positive before they need more capital.

This has been widely circulated and cited and now potential customers of venture backed companies are being warned to ask about their financial stability. This has prompted me to write this blog post assuring our existing and potential customers and partners that SLI is in a fantastic position at the moment.

We are cash flow positive and don’t need any more capital to survive or to grow further. SLI has a pure software as a service (SaaS) business model. This is good for our customers because it means that they don’t have to pay a huge sum up front and we do almost all the work. It is also great for us because it means we get recurring revenue across all of our customers (which now number in the hundreds). Being cash flow positive, this revenue gives us a very solid base from which to operate the company.

Interestingly the SaaS model means that we have a very strong incentive to focus on customer satisfaction. In order to keep our solid base of recurring revenue we need to keep our existing customers happy. This is why we have an internal policy ensuring requests from exiting customers should always take precedence over those from prospective customers. This is also one of the motivations behind our aim to continuously improve our service. In a survey we did earlier this year 100% of the customers we surveyed said they would recommend us to other website owners looking for a search.

Even in these difficult financial times we are growing strongly. Last quarter was the best quarter we’ve ever had in terms of new customers and the first month of this quarter was the best month we’ve had in over a year. We expect that most of our customers’ business will continue to grow and we are still hiring staff and investing in improving our service. Our situation has been helped by the demise of one of our competitors, Mercado and by the extremely poor attention to customer service of some of our other competitors. There is speculation that other search companies are struggling.

SLI Systems has been around since 2001. We have built the company on very little capital (we received more revenue from our customers last quarter than we have received from our investors in total). If you are considering using our services then you can be assured that we will be here for many years to come.

SLI Systems CEO Shaun Ryan speaks to Melissa Campanelli of eM+C about the importance of Site Search within an ecommerce site http://www.emarketingandcommerce.com/podcasts.

As we highlighted in a previous post, we recently conducted a survey of 322 retailers asking them about the tools they give top priority to when it comes to online marketing. We were happy to find that site search and SEO are two of the top three technologies of choice for retailers today (email marketing was the third). What we didn’t mention was that, as an incentive to take the survey, we offered a $200 Apple gift voucher to one lucky winner.

We’re happy to report that Michelle Thomas of Zappos won the survey drawing and is the recipient of some new Apple merchandise.

In addition to completing our survey, Michelle’s colleague, Aaron Magness has been kind enough to accept our request to be featured on an upcoming eCommerce Podcast. In the interview, we hope to uncover a bit about the online marketing strategies Zappos has implemented to help them become the recognizable brand they are today. Stay tuned…