Many companies are so focused on developing products and running their business that they ignore the growing need for a compliance management strategy.

According to the Verizon 2012 Data Breach Investigation Report, 92% of data breaches were discovered by third parties. This statistic tells me that most businesses only focus on compliance management when customers or partners tell them about a breach that has already occurred, or even worse, they see themselves on the news. By that time, however, it is already too late.

According to the same report, 97% of those attacks were easily avoidable. But if you’ve ever had to prepare for a compliance inspection, you know how easily it turns into a frantic scramble. So let me repeat: 97% of those attacks were easily avoidable. It’s not rocket science, it’s just sound business. Compliance directives encourage companies to act responsibly towards their customers, employees and business partners; to consider their environment and shareholders.

Source: 2012 Verizon Data Breach Investigation Report

Consequences of a Compliance Violation

Remember the reason your customers, business partners and employees hand over their personal information and/or confidential business data to your organization. It’s because they trust you.

If their data is stolen because you don’t have the proper security measurements in place, then it’s you who must face the potential consequences. These consequences include hefty fines and penalties. And don’t forget the legal costs, the loss of reputation and the loss of your stakeholders’ trust and loyalty. Ultimately, you may face the possibility of losing your business. So, while the upfront costs of compliance might seem too much for your business at first, consider the ultimate costs if you don’t comply.

Requirements of an Effective Compliance Program

There are a number of compliance and legal issues of which you need to be aware (e.g, Foreign Trade Act, Payment Card Industry Data Security Standard (PCI DSS), SOX, Data Privacy, IT Compliance, Competition Protection Act, etc.). Although it appears to require a lot of work to create an effective compliance program, it doesn’t cost a fortune. You just need to keep the following seven points in mind as you build your compliance strategy.

1. Establish a tone from the top that supports compliance. Management participation is a crucial aspect of a compliance program. A strong commitment from upper management is necessary for your organization to effectively develop and implement a working compliance program.

2. Evaluate compliance directives and risks based on the products, services, markets and countries with which you organization interacts. Before starting a program, it is necessary to conduct a compliance risk inventory and assessment. This way, you can examine the risks your business could potentially face. Ask yourself questions like, “What troubles hit other companies in my industry?”  “Where did my company almost fail?”

3. Study industry standards. Examine best practices as well as public comments and discussions about the compliance directives and risks you have already identified. You don’t have to start from scratch because most compliance directives are widely discussed and are available to the public.

4. Authorize external sources like consultants, lawyers, regulators, insurance companies or service providers. Use external sources like those just mentioned as a resource for guidance and for answering compliance questions. You can also use them for transferring the risk or part of the responsibility to a third party.

5. Train employees. Compliance training is essential not only to maximize employee compliance with laws and rules but to also minimize the risk of fines, litigation and adverse publicity due to non-compliance.

6. Involve compliance staff (e.g. compliance manager, security officers, data protection officers and legal) in the development  process of new products and services to fully address the risks associated with these products and offerings.

7. Ensure the effectiveness of the program. Support an effective compliance audit function that identifies new or changing compliance issues. The audit should have the frequency and intensity commensurate with the organization’s complexity and size.

Keystone: By acting diligently and creating complete transparency within your organization or business, you invariably discover and resolve many hidden risks, saving you and your organization from easily avoidable losses.

Daniela Hagen is the Compliance Manager at cleverbridge, AG

Please leave a comment to share what security measures you’ve implemented and what dangers you’ve discovered lurking around.

Along those lines, we present an infographic from BackgroundCheck.org that tells the story of Verizon’s “2012 Data Breach Investigation Report” which explains how breaches occur and provides steps for protection.

The first alarming piece of information is that the vast majority of attacks were not that difficult to execute and 97% of them were avoidable with simple controls. Also, the victims were generally not the ones who first discovered the breaches. But, even when discovered by third parties, these breaches weren’t noticed for weeks.

Although we’ll be posting about security compliance in the near future, towards the end of the graphic you can check the ”Where should mitigation efforts be focused?” section for Verizon’s recommended actions on how to protect your organization.

Source: BackgroundCheck.org

Japan is the perfect opportunity for software vendors and e-commerce professionals looking to expand their global reach.

Writing about Japan, critic A.A. Gill said, “Today, even in the slough of a prolonged depression, it’s still the second biggest economy in the world, with a GDP as large as Britain’s, France’s and Germany’s combined. That’s astonishing, not least because Japan is about 1 1/2 times the size of the UK with twice as many people and only a third of its land habitable, yet it has no natural resources to speak of.”

Market Size

Japan has 128 million citizens compared to the United States’ 300 million and Germany’s 82 million. Japan also has the most amount of fixed and wireless broadband subscribers in the whole world, second only to the US, as indicated in these charts from the OECD.

Source: OECD

Source: OECD

As you can see, the Japanese have over 100 million wireless subscriptions, about 17% of the total global number. But do Japanese people shop online? If we take a look at this chart from Forrester Research, we see the US online retail market is expected to grow with a compound annual growth rate (CAGR) of 9.16%.

Source: Forrester Research

In a separate Forrester report we see that the Japanese market is expected to grow at a higher rate (9.6% [CAGR]) than even the US market.

Source: Forrester Research

According to these reports 80% of Japan’s citizens are online and 70% of those people are shopping online. Additionally, 7% of mobile users make monthly purchases with their devices.

Once you decide to enter the Japanese market, there are four key elements to keep in mind if you want to ensure success: web design, payment methods, product testing, and customer support.

Localize Web Design

Localizing web design is not as simple as translating the words. For example, here is an American version of the 7-11 homepage:

7-11 US

If one were to simply translate the text on the page the result might look something like this:

7-11 Japan Translated

And yet, if one visits the Japanese homepage for 7-11 they see this instead:

7-11 Japan Localized

The lesson here is that translation does not equal localization. Japanese people have a different design aesthetic than the West and any localization projects must be proof read by a native industry expert.

Localize Payment Method

Besides the page design, Japanese customers also require certain payment methods. While credit cards are widely used in online transactions, software companies must also allow visitors to pay with the Konbini method.

If you are unfamiliar with this type of payment, it works like this:

• A customer orders a product online.
• The customer is given a receipt to print at home.
• The customer has six days to go to a convenient store and pay with cash, after which the product is then sent to the customer.

Allowing Konbini payment method provides online shoppers who do not use credit cards a chance to buy your software. It is convenient for them and provides little risk to you.

Localize for Product Testing

The last thing you want is for a customer to encounter errors because you didn’t test your product on locally manufactured computers. Just because your product functions well on a Sony VAIO does not mean it will function properly on a Toshiba DynaBook or a Panasonic Let’s Note. An additional point to bear in mind is the language of the error message. Since English fluency is rare amongst Japanese natives, you must make sure that the error message is in Japanese.

If you don’t test the product in Japanese hardware environments, and if your error message is in Japanese, you risk upsetting the Japanese customer who expects an error-less experience and is not hesitant to go to online forums claiming they have been scammed by your company. The solution that prevents these types of errors is to test, test, test on all the different platforms.

Localize for Customer Expectations

The image above has been translated from an actual Japanese website.  It effectively communicates which times of which days are the best and worst times for a customer to call in for support.

Notice the average waiting times. It indicates that Japanese customers expect immediate response times; measured in seconds, not minutes.

But there is a more subtle message here. The red blocks show the company is managing their customers’ expectations by informing them that there are certain times where they can expect to wait longer than is preferred for a representative to pick up the phone.

As we said before, the Japanese have a high expectation for quality service. By explicitly providing information on what levels you can and cannot provide, you minimize the risk of offending your customers.

Keystone: Entering the Japanese e-commerce market requires more than translating your website into a foreign language. It requires localizing the entire customer experience, from how your software performs works on native machines to how you provide support.

While the case for combining geomarketing with a discount pricing strategy and social media based marketing makes sense for brick and mortar operations like Dunkin Donuts, I would argue that for digital products, geomarketing is best utilized for localizing web pages.

A basic understanding of geomarketing, for example, leads a company that wants to sell to Japanese customers to localize their website into Japanese. Now, localizing isn’t merely translating words on a website. It means providing visitors with language, currency, payment methods, and a design aesthetic familiar to them.

Essentially, by analyzing customer behaviors in light of geographic location businesses can segment visitors and target them with relevant messages.

The good news is that location based marketing is getting easier because more people, especially smartphone users, are giving apps their location, and technology is making geomarketing a less expensive alternative to other marketing channels like SEM.

I leave you to ponder the following question in the comment section: How else, besides providing localized content, can geomarketing be used to sell software?

Source: KISSmetrics

Be sure to let us know what kind of topics you would like to see addressed in our monthly wrap up of all things e-commerce.

Practical eCommerce | 3 Basic Ways to Improve PPC Advertising – Anyone selling software online wants to guide traffic to their shopping carts, and PPC advertising is an important method for accomplishing this goal. This post teaches advertisers how to create better ROI on PPC advertising by using Google’s new contextual targeting tool, managing customer expectations and developing a willingness to adjust in the face of external changes.

Ars Technica | Nintendo plays catch-up, will offer downloadable versions of 3DS, Wii U retail games – Nintendo finally decided to enter the digital download arena, far behind Microsoft’s Xbox or Sony’s Playstation stores. And one point of interest for software vendors in general is the DRM restriction Nintendo imposes on these purchases by limiting play to the first device on which the game is downloaded.

What do you think of Nintendo’s DRM decision? Does it encourage customers to buy more games, or lead to customer frustration?

Social Media Examiner | 5 Tips for Moving Social Media Leads Into the Sales Funnel - Social commerce continues to be a concern of anyone selling online, but the question this post seeks to answer is, “Can we monetize our social media following?” In doing so, we learn the need to test our understanding of our sales funnel, encourage soft conversions, and nurture leads differently than traditional channels.

How do you nurture social media leads? We’d like to hear your thoughts.

Forbes | Top 7 Web Design Mistakes Small Businesses Make - A back-to-basics piece for a small business going online. The main point here is just because you’ve built a valuable product, doesn’t mean that your target audience will automatically see that value. Or know how to navigate the sales funnel. So what you want to do is target a specific audience, simplify the conversion process, and, if you haven’t honed your designing skills, find the people who have.

Wired.com | ‘Pottermore’ Breaks All Retailers and Rules (Except Apple’s and Region Restrictions) – An interesting take on the affiliate / reseller relationship seen through the lens of Pottermore, J.K. Rowling’s Harry Potter e-store. Instead of allowing Amazon to pay “wholesale” prices on Harry Potter e-books and charging whatever they want to the consumer, shoppers are forcibly redirected to Rowling’s hosted carts to purchase from there. One outcome of this business model is that US readers will still be unable to buy the UK versions of the book.

Is this a case of an Apple-esque attempt at maintaining digital rights? Let us know what you think in the comment section below.

Games have the highest percentage of use out of any type of mobile app. From the bed to the bathroom to the bus, people play games everywhere.

Gamers are frequent users as well: over half of smartphone owners play games on their devices at least once a day and over half of mobile gamers play for an hour a day.

So, how are businesses leveraging this information? Surprisingly, they’re not making people pay for games, per se. Rather, companies are offering free games and driving revenue through in-game purchases and advertising.

Additionally, gaming is moving beyond the realm of games and into gamification. According to Gartner, “By 2014, more than 70 percent of Global 2000 organizations will have at least one “gamified” application.” Why? Because everyone loves playing games. Games can provide what industry experts call M³: motivation, momentum and meaning.

If you sell games, tell us how your business compares to the data in this infographic. Or, if you sell other kinds of software, tell us how you plan on gamifying your product.

Source: Business Degree

Anything we do to make consumers choice easier and less time consuming is critical. If businesses fail to make choice easier, consumers simply buy from vendors who do.

The question is: Are your products and services easily understood and easy to buy?

Most products and services are complex. When I use the term complex, I mean that more than three things need to be clearly understood before the buyer will be confident enough to make a decision to submit payment. This complexity represents the majority of products and services. All too often when researching a product or service online we give up because the learning curve takes too long or is too complicated. By default, we turn to trusted advisers (peers, friends, family) to help recommend a specific product or service. Unfortunately the product or service that our trusted advisers recommended was great for their situation but not for ours.

The goal is to make our products and services easy for consumers to buy.

Businesses are addressing this problem by fine tuning their websites and adding more and more pages of text and images to try and make it easier for consumers to buy. But in the distracted world we live in, consumers are no longer reading; they are skimming websites hoping to make informed buying decisions.

So, how do you make the buying experience better? How do you keep buyers engaged longer?

Here are five reasons you should consider using video to communicate with consumers.

• Cisco predicts that 91% of all Internet traffic in 2014 will be for video
• 60 hours of video are uploaded every minute, or one hour of video is uploaded to YouTube every second.
• On average, 80 million hours of video are consumed globally each daily
• Marketing Sherpa states that 76% of people find video to be influential in their purchasing decision
• Forrester Research states that online video is second only to word of mouth in strength of influence throughout the buying cycle

Interactive video is best way to simplify a complex purchasing decision. Since consumers do not want to read and would prefer to be lead, consider using a person in video to help consumers make the right choice. It’s simple, easy and most importantly, respects the consumer’s time. “Interactive” means that the consumer chooses what information they want to consume to get what they are looking for.

Take a look at this example of interactive video that we produced for Lenovo, “Choose the Right ThinkPad for You”

Lenovo is the world’s third largest seller of computers. This interactive video is focused on helping consumers to choose the right product. The goal of this interactive video was to guide the online buyer to be able to choose the right ThinkPad for their specific use.

The experience is simple and easy. Based on the buyer’s requirements, they can select from three recommended models. Once the consumer chooses the right ThinkPad for them the video launches the e-store to complete the purchase. If they choose to go back, the video remembers where they left off so they do not need to start from the beginning again.

This type of buying experience is exactly what busy consumers want. The online experience is much more pleasurable as it is active and the consumer remains in control at all times. It is a great example of what most online experiences will become. So if you want to sell more effectively online then you should investigate using interactive video.

Keystone: Interactive video engages the online shopper and simplifies their decision making process by helping them choose the right product for their needs.

Pete Callaghan is our Guest Blogger this week. Pete is the CEO of HuStream, a creator of Social Videos for websites.

We know that the social media sphere is growing with an eight fold increase of social network users in the past seven years just as we know that these users love to talk about their favorite (and not so favorite) brands online.

Source: Monetate

So how can we leverage this knowledge?

According to this infographic, brands should leverage the time consumers spend on social networks by allowing social logins and facilitating social sharing.

Social Login

In previous posts, we argued that requiring customers to create accounts before allowing them to purchase your product is a tricky practice, but sometimes, it may be in your best interests to have customers login to their accounts before they submit payment. If you are going to require logins, make sure to provide your customers with an option to login through facebook.

Social Sharing

This infographic also recommends paying attention to your customer’s voice. A majority of consumers use social media to read and provide product reviews, which they say impacts their buying decision.

By allowing consumers to use social logins to further their social sharing, you are creating an opportunity for consumers to spend more time on your pages. Take advantage of these opportunities to learn more about your visitors in anticipation of their return to your website.

Do you incorporate social logins in your online strategy? Let us know below.

Retargeting is the process of tagging every visitor to your website and then displaying your ads to those visitors on other sites in the display network. If you are new to retargeting, I highly recommend  starting with a Google remarketing campaign, because it targets prospective customers who have already expressed intent in your brand. If you get stuck at any point in the implementation process Google has written a how-to guide for setting up remarketing campaigns.

However, before you get started, you will need to work out a strategy on how to segment your lists. Lists should be segmented according to a user’s behavior on your site: they can be as broad as tagging every visitor to your website or as narrow as a targeting different visitors at different stages of the trial and buying process.

Retargeting the Casual Visitor

For your most general campaign, target visitors to your website who did not add any products to the shopping cart. The most important step is to add converted users as a negative audience at the campaign or ad group level under “Exclusions.”

Add converted users as a negative audience

This campaign is the broadest targeting method. Therefore, you will want to set the bids low on this campaign because these visitors have the lowest potential of converting. However, this campaign is a great opportunity for branding messages. In your PPC ads, you want to convey that you are a reputable brand.

Retargeting Trial Download Users

Users who complete “mini-conversions,” such as a free trial or a download, should be targeted with messages to upgrade to the full version of a product. For example, if you offer a 30-day free trial of your software, deliver ads to individuals during and after the trial period and encourage them to purchase your product. It’s even possible to stage different ads as the trial period counts down. Here’s an idea for a campaign:

• Days 0-14: Ads focused on building brand recognition to increase reputation and stay in front of the customer’s mind
• Days 15-30: Educational touch points to reinforce product selling points
• Days 31 – 60+: After the trial expires, this may be a good time to offer a discount to motivate these indecisive customers.

Setup a new remarketing list for each stage that you want to target. The good news is that you can use the exact same tag by selecting from “existing tags,” but for each stage, change the cookie duration and list name. After each list is complete, create an ad group for each stage, using the current stage as an included audience, and the earlier stage as a negative audience. This will ensure that you aren’t overlapping audiences and confusing your trial users.

Create an ad group for each stage

Compliment your drip-marketing campaign (which includes sending promotional emails to registered trial users) with targeted messages. I recommend aligning these efforts to give a solid one-two punch!

Retargeting Shopping Cart Deserters

You can also target users who start the shopping cart process but don’t purchase. Shopping cart abandonment occurs for a multitude of reasons, from the customer simply getting distracted to the product price being too high. Testing your ads is vital in determining what draws them back to the cart. Is it a coupon code or merely the reminder that your product is the solution?

At this point in the conversion funnel, there is no doubt that the user is interested in your product, so you can afford to bid higher on this campaign as long as you measure the ROI.

Retargeting Existing Customers

Regularly remind your reliable customers of all the other great products that you offer. Target these people either to upsell a product upgrade or to cross-sell a complimentary product.  This retargeting list would consist of users who visit the final step of your sales funnel: the confirmation page.

If your company offers subscription products (including software, online games or SaaS products) to generate recurring revenue, you can set up lists with different cookie durations to aim the messaging at key points in the billing cycle. Use the steps in the Trial Download section of this post to avoid overlapping messages.

Best Practices

• Avoid stalking people! The most common complaint among users targeted by retargeting campaigns is the feeling of brands following them around the web; in other words “stalking” them. Trust me, you don’t want to go down this creepy path, as over-saturating users can quickly cause negative feelings towards your brand. A simple remedy to this situation is to set a frequency cap on your ads. This can be done in the Campaign Settings by day, week or month.

Frequency Cap

• A/B test ads to see what converts best. By default, Google AdWords sets the ad rotation to “Optimize for clicks” which is not conducive to testing – you will want to change this in the Campaign Settings to rotate ads more evenly.

• The landing page must be consistent with the offer in the ad If you’re paying for this traffic, don’t make the mistake of sending targeted searchers to untargeted pages. Send the potential customer to a landing page that has a straightforward sales funnel.

• Create banners in many different colors, themes, messages and sizes. Also, be sure to refresh your banners often, especially if you designate a long cookie life.

Keystone: Retargeting should be a strategic component of every online marketing plan whether you’re looking to drive prospects back to the shopping cart, increase trial downloads or subscription renewals, or even just to promote awareness of your brand.

Are you using retargeting campaigns in a creative way to drive users to your shopping cart? What have you found to be most successful?

Jessie Kleino is the Online Advertising Coordinator for cleverbridge

Why is abandonment increasing? Take a look at this week’s E-commerce Eye Candy from KISSMetrics for insight into the problem.

Savvy consumers are on the lookout for the best product at the most reasonable price accompanied by the most superior service. They know what they want and they know someone somewhere is going to provide it at a reasonable price with excellent service.

Click on the image below for the full infographic to see why customers are fleeing your site and what you can do to get them reconsider.

Why do you think shoppers are leaving your carts and how do you entice them to return? Let us know in the comment section.