Tuesday, January 27, 2015

Are you really a digital strategist?

It's quite funny to me to see the term 'Digital Strategy' appear in job descriptions for roles across the online world, including those I now help clients fill.
Note: it's even funnier to see what some candidates actually think constitutes the creation and delivery of a Digital Strategy and in-turn make them a Digital Strategist.

I therefore thought it would be useful to highlight those activities and approaches that I believe a digital strategist might use in their role.
(Of course, it would be easy to start listing out all the things they are not, but then that list might turn out to be quite long.)

So here's my list:
  • Think strategic
    Always keep the vision of what digital technologies, processes and marketing can do for your organisation and how this change applies to the company aims and objectives. This means that you have to understand the end game, but also how you are going to close the gap between that and whatever you have now.
  • Align the digital strategy to the business strategy
    No strategy exists in a vacuum and yours can add the most value when it aligned with the other competing needs of the business.
  • Champion the digital strategy
    The best person in your organisation to be the digital champion is you (and your team, if you have one). Your managerial peers will need a central senior person they can consult with who 'gets this digital stuff' and can help them. This doesn't mean you suddenly need to exhibit youthful enthusiasm or a stoic 'all knowing' air - you just have to be approachable and communicative to all level. It also means you are the senior stakeholder who works with the different business units to help them contribute to the digital strategy.
  • Own the digital roadmap
    Having the vision and strategy is one thing, having a plan of how this will be achieved (including the key milestones, dependencies and other influencing initiatives across your organisation) is something else. The creation and management of this plan is a key artefact in the communication of how your end game is going to be delivered.
  • Grow internal digital capabilities
    You are not going to achieve your goals by yourself and you therefore need to build the required expertise within your company to take digital forward. Growing individuals and digital teams doesn't necessarily come naturally to everyone, but you can also help across different functions by outlining what skills and experience are needed in both the short and longer term

Monday, January 26, 2015

Probably the best placed online advert

Back in 2010, there was a viral video going around from on-board a cruise ship during a bad storm. The clip gave various shots, including a passenger area, where people are flung about.


However, it wasn't the online video that gave me to biggest laugh, but the advert posted alongside it. Advertising the services of EuroTunnel, which runs under the English Channel and avoids the stormy waters above it.

If this was done on purpose... it was brilliant placement.


Saturday, January 24, 2015

Align your Digital Strategy and Business Architecture

Your Digital Strategy should be a vision and roadmap of how customer-facing online content, functionality and technology initiatives will be implemented and managed across your organisation.
But so far there is no common framework for describing the creation and delivery of a digital strategy. 
Note: I'm not too sure why this is, the discipline of digital is now pretty mature. Perhaps it is because online covers such a wide range of subjects from tactical digital marketing techniques through to programmes that transform businesses and create significant customer channel shift. 

Business Architecture is a description of an organisation's structure, usually in terms of governance, services and information.  The Business Architecture Guild (somewhat nebulously) describes it as "a blueprint of the enterprise that provides a common understanding of the organization and is used to align strategic objectives and tactical demands". The discipline is full of strange terms such as TOGAF, OMG & Zachman and there are a number of approaches used to describe an enterprise / business architecture. Each of them trying to align the technical architecture and practices with the larger organisational strategy. 

However... what is clear to me is that very few organisations align their digital strategy with their business architecture. Which means that the two are possibly working in silo'd isolation or at the very least not joined up in thinking, delivery and (more worryingly) in their representation back to the rest of the business.

Hasn't the time now come to correctly align the two?

Monday, January 12, 2015

Building a high performance digital team

I've been in this digital game a long time (in dog years, I should have been put out of my misery by now). I've therefore been part of and have personally built-up teams of digital specialists on both the agency/consulting side and as part of client organisations. From a crack development unit that managed to construct a financial services website from scratch in just a few weeks, through to a digital marketing department (starting with just one member) that managed a multi-mullion pound acquisition budget… I've hired, fired, seconded, acquired, procured and borrowed people from all manner of disciplines. And yes, building some wonderful and useful online stuff in the process.

I've therefore listed out the factors that I think are needed in the creation and development of a high performing digital team (plus to help me, I have also asked the team at one of my current clients to add their suggestions too).

A ‘can do’ attitude:
“I've done so much with so little for so long, I think I can do anything with bugger all!” was once the line mentioned to me by one team member over a decade ago. This partly sums up the sort of ‘can do’ attitude that can make all the difference in a smaller team. It is often not the tools, the processes or the technology that makes the difference, it is the mental approach of the individuals.

Tenacity:
Yes sure, the phase “work smarter not harder” is often used in management circles, however sometimes you just need a team to bear down on an issue and work at it for a while. This can be especially true when the work in question is a little more mundane or repetitive (e.g. when proof reading content or carrying out user acceptance testing – thanks JM!)

Ability:
I know this kinda goes without saying, but I did want to mention it. Working with a bunch of smart people who not only know their onions, but also can develop their skills and experience on the project (without affecting it) is usually a pleasure.  

So what do you think? Have I missed anything?

Thursday, January 8, 2015

Customer Journey Catherine Wheel

In an earlier post I explained how the Customer Journey for an organisation should not be a linear progression, but a cycle. To illustrate this I used a simple piece of ready-made clip art from PowerPoint and quickly inserted this into my content.

However, given a bit more time, I have now pulled together a better diagram to illustrate what I mean.


In this diagram I have used the same 5 segments to show the cyclical path a user takes (Awareness, Interest/Desire, Action, Experience and Advocacy). But I have also added an inner section that represents the running of Internal Process and an outer ring that represents the tasks that customers perform.

I've used various and more specific versions of this diagram in previous consulting work for clients, but I think this diagram represents a more generic approach which can be adapted as the need arise.
The only real problem I now have is… what do I call it?

For the time being, I think I'm going to use the term Customer Journey Catherine Wheel. A diagrammatic version of the popular firework that hopefully explains the round and spinning nature of both this model and the physical namesake.

What do you think? Is it a silly name? Can you come up with a better one?

Tuesday, January 6, 2015

The Customer Journey should be circular

A lot of different approaches are used for mapping the Customer Journey (the ‘soup to nuts’ depiction of your customers’ progress from unaware & unknown person to satisfied patron). Many typically show the path along different states of customer engagement, with the AIDA (Awareness, Interest, Desire & Action) model being a tried & tested one that has stood the test of time – I've also referred to it a lot in this blog over the years.

But as we know, one person’s advocacy can be another’s awareness. And especially with online communications (and especially Social Media) now able to facilitate near-instant feedback about an experience or product, the ratings given by one customer can heavily influence a lot of other people to either find out more and alternatively it can put them off for good.  Or to put it another way, your customers are one of your greatest assets and in most cases they should not just be part of your retention activity, they should be used to fuel your acquisition activity too.

This advocacy therefore means that rather than the Customer Journey being a line from awareness through to the experience of the product or service, it becomes a circle looking something like this:



Awareness:
The phase of the customer journey where a person becomes initially aware of something and wants to find out more.

Interest & Desire:
I've merged the two AIDA model phases into one here, as things get incredibly blurred (and with some products such as consumer electronics, brand devotees jump straight from awareness to intense desire). This is also the phase described by Google as the Zero Moment of Truth and can be the period when a multitude of inputs from all channels are considered.

Action:
This is the goal, the purchase, the sign-up, the commit phase. You get the picture…. (The First Moment of Truth)

Experience:
This phase is when the customer actually experiences their purchase and realises the value of what they have procured. (The Second Moment of Truth)

Advocacy:
Here is where a customer reviews your service and rates the service you have provided. They can do it on your site or on any number of review and feedback sites, or can use social media platforms to voice their satisfaction or disdain. It is therefore these comments and sentiment that in my opinion keep the customer journey cycling around.

Monday, January 5, 2015

User Experience and Customer Journey – do you know the difference?

As the processes and techniques of digital and multi-channel delivery become more widespread and well-known in organisations, it’s not uncommon that teams, stakeholders and clients become familiar with the terminology used too.  However I quite often hear the term “User Experience” (or “UX” for short) mixed up with the term “Customer Journey” and I think it’s time I clarified things. So here’s my thoughts on the two and why they should not be confused.

User Experience:
From my perspective User Experience is the science (and art) of creating functionality and information that helps the user to carry out particular tasks. In the world of websites and native mobile device applications (apps) this revolves around: understanding users & their needs, mapping user flows through key tasks, creating wire-frames, designing the interface and testing it to ensure it does what it should as well as it possibly can.

Customer Journey:
This is wider task of mapping the entire path of the customer from start to finish E.g. from a point where they are not the customer and perhaps not even cognisant of your product or service, through to the stages where they have become a customer and beyond. There are a lot of different models for how this customer journey can be represented, but regardless it is useful to map this journey for your business.

So do the two cross-over? Yes, in my opinion they definitely do and in fact I believe you cannot properly create the ideal User Experience unless you properly understand the Customer Journey. By this I mean that any UX work done needs to know where it fits in the wider picture of things, what the situation is for the user beforehand and what the end goal is.

For example, if you are creating the interface for a ticket vending machine at a sports ground, it would no-doubt help your UX resource to understand why the user is there, what they should (or shouldn't) have done previously and what they are going on to do. In this example, the creation of the vending unit is not to raise awareness, to educate or to entertain, it is there to help the customer who may already have purchased a ticket to get it printed out as efficiently as possible so that they can go and have the bigger experience they have paid for.

Either way, I suggest that to truly deliver the best for your customers you need to create both and validate them in as many ways as possible, both before and after you have delivered. 

Tuesday, December 23, 2014

What to do when the C Suite doesn't engage with Digital

Does your organisation have an executive board that fails to grasp the changing tide of digital transformation? Do the senior people at the top of your organisation still either ignore or just pay lip-service to the need to evolve people and processes into the 21st Century? (Note: It is much harder to get buy-in from a company board who think they are already implementing online technologies and practices, when in reality what they are actually doing is bolting digital onto what they currently do or just "updating our website")

If your C Suite isn't fully engaged with Digital, here's some suggestions to help move things forward and into the 21st Century.

  1. Deliver quick wins Nothing impresses like delivering upon a promise you have made. No matter how small the actual task (a microsite that taps into a new market, an online marketing campaign that builds acquisition in a novel way, a website change that your Finance Director has wanted for ages) they all go a long way to showing just how little things can mean a lot. 
  2. Have an implementation plan It's one thing to have a 'wishlist', it's another to have a 'roadmap' of when these things will eventually move online and it's a different matter entirely to have a plan of when these different initiatives will be delivered. Even if things change (e.g. other dependent project don't land when they should) you should still keep your digital implementation plan up to date. 
  3. Understand how much it costs and what benefits you want to achieve It may be that you need to build a value model for the complete Digital business transformation, or it could be that you just need to build one or more business cases for the roadmap of major improvements you want to deliver. Either way, work out the cost and the return that digital change will bring to your organisation. 
  4. Be clear on what you want from your execs Whether you need wider business direction, clarification on key deliverables or feedback on your ideas, get the input of the senior team. After all, they haven't just been put there, they probably earned their position through effort, innovation or understanding of what to do next. You may find that a few clear explanations on what you want and how you plan to improve things may be sufficient to get the buy-in you need.

Monday, December 15, 2014

Are you a digital driver or just a passenger?

Are you the person leading the digital change in your organisation, or are you just along for the ride?
I've now seen enough digital transformation initiatives to know who is driving from the front and who is not. It becomes quite clear after a while (especially if you are frequently involved with similar types or style of programmes) to identify the leaders and passengers in online change initiatives.
So here are my tips on how to recognise these two types

Digital Leaders:
Typically these people have the vision or initiative to start the digital revolution within an organisation. They may be the technical person that creates the overall enterprise solution that enables a shift away from analogue processes to online ones, or the executive who drives forward the business case or rationale for sweeping channel shift. They may also have a number of different roles across a project, either stepping into different positions where necessary or act as the project manager in the absence of any other leadership.

Digital Passengers:
These are the people that try to align themselves to a digital change project without actually having any responsibility (yet will be first to claim all the credit when change does start taking place). They will understand that 'digital is the next big thing' but will not have had any real experience and yet claim to be knowledgeable when stakeholders or executive sponsors are in the room.They are also most easiest to identify by their repetition of a small number of key facts they have picked-up along the course of the transformation, possibly even getting them wrong over time.
Or put more esoterically... Just because a person is standing in the direction of movement,  it doesn't mean they are actually going that way.

Thursday, December 11, 2014

Put your business in beta

Do you want your organisation to succeed?  Do you want your company to survive the constant digital wave of transformation?
For quite a few years now I've been steadily preaching the mantra "test and learn" (in reality its a kinder and more palatable way of saying "change or die"), which in some sort of simple Darwinian way highlights to my consulting clients some key points:
  1. It is OK to make mistakes
  2. It is fine to experiment on a regular basis
  3. You need to measure what works
  4. You have to ignore what doesn't
This is typified by a business that sees the advantage of releasing functionality and features in ways that make a difference, whilst setting user expectations that things will change. In other words, a business needs to embrace a Beta delivery approach.

Beta, named after the second letter of the Greek alphabet, is typically the software release that is complete in functionality... but may still have significant bugs or issues. However, it is also usually the first accepted release version that can be presented to a limited set of users or customers.

But why do organisations succeed when they adopt Beta releases? (Especially when compared with the professional and stable delivery of a considered and considerably tested set of functionality.)
Perhaps it is because a public Beta release gives a lot of quick and useful feedback on what does and doesn't work for your target audience. Perhaps it is because those companies that are prepared to take the risk of an online beta release are also more likely to be innovative. And perhaps it is because any organisation that can even consider  Beta release better understands the digital landscape and the possible ways of finding success in the modern economy.

Monday, December 8, 2014

Are we too reliant upon Google?

In my posting at the beginning of this year I wrote Never bet against Google in 2014, I explained that despite the search giant’s mantra of “Don’t be evil”, its very size and might in the online world meant it was highly disruptive in anything it did.

I also stated that:
What this means is that betting against Google in anything it decides to do is an unwise move. 
A year on I still stand by this comment and furthermore have started to ask myself the question of whether digital marketing and online business as a whole has now become too dependent upon Google.

To paint the picture of its huge role, here’s some typical examples of its use in my life:

  1. Search
    The current industry figures state that Google has an approximately 90% share of the search market in the UK. For me, that’s a lot closer to 100%.
  2. Gmail
    Now the biggest global email service, I use Gmail for all my work emails. 
  3. Android
    The open source mobile operating system runs my phone and integrates with my Gmail, calendar and contacts.
  4. Analytics
    This free service helps my consultancy’s clients (and me) track a range of visitor, usage and conversion statistics. Even to the point of being able to provide inferred insight about user demographics and preferences.
  5. AdWords
    Provides a (mostly) cost effective means of raising awareness, building traffic and re-marketing to your target audience. If someone is searching for something, then it stands to reason that they might be receptive to seeing an advert about something associated with that term. The fact that advertisers only pay when a prospect clicks on an ad means it is possible to quickly identify interest, track budgets and optimise promotions to get the best ‘bang for your buck’.
  6. Maps
    I use this service more than I initially realised. From looking up locations, to finding directions on my mobile phone and also as when used as a ‘mash up’ (when a map is integrated with other data services) on any number of other sites, such as a store locator on a multichannel retailer’s site. I bet most of us use Google Maps a fair bit more than we realise.

Overall for me there is one reason why I have adopted these products … it is because they are so useful. And therefore any new entrant to any of the areas that Google has a dominance in will not just have to provide them for free (obviously with the exception of AdWords, which is free to the person clicking on the ads, but costs the advertiser) but will have to provide a better user experience somehow…

But all these services have not just become second-nature in my use of them, they have also pushed out other products or services (anyone remember: Freeserve, PalmOS, mapquest.com , etc ?). The list of dotcom and technology casualties caused by ‘The Big G’ are proof that this company doesn't just enter a sector, it tends to own it… with perhaps the exception of Social Media, which Google has never really cracked, despite the different tools it has released over the last few years. Orkut, Waves and even G+ haven’t really reached the tipping point that they were hoped to achieve, despite being popular in specific user groups or even countries.

So are we really too reliant upon Google now?

In my opinion we are. However, I personally don’t have a problem with this right now, because on top of the usefulness argument:

  • I don’t have to pay for a lot of things I would have done I the past
  • The products and services provided work (the robustness of their service is only noticeable when there is very seldom outage)
  • They work at scale (10 Million visits a day is the current free limit in Google Analytics. A figure only breached by the biggest of sites)

And based on these factors… I’m happy to be a reliant and supportive customer.

Sunday, November 30, 2014

Black Friday - The Farce Awakens

So that was the first full-scale Black Friday that the UK has ever experienced.  And what an event it was.

Stories of in-store wars, bargains snatched from the hands of those who waited patiently in line for hours and police arrests for fighting at 24 hour supermarkets have been written about and told over the last few days. The British shopping masses have been shown as a brawling uncultured rabble, who would happily trample others underfoot just to get their hands on a discounted television for themselves... that they probably would not have purchased anyway.

Previous pre-Christmas sales have now been overshadowed by the dark lord of post-Thanksgiving sales bonanzas that we have willingly inherited from the USA...without any of the thanks or the giving we are supposed to have at this time of year.

If this is the beginning of a new saga in retail... then part of me wished I lived a long time ago and far away.

Friday, November 28, 2014

#blackfridayfail - eCommerce sites struggle under high volumes

So, Black Friday fever really looks to be kicking in, as a number of websites seem to either be having issues or are down entirely.

Argos

As of writing, the multi-channel catalogue-based retailer claims to be "experiencing a very high volume of visitors"

River Island
Apparently failing to cope with the pressure of the pre-Christmas bargain hunters, the fashion retailer seems to be having a few issues delivering a homepage.


Tesco

Although this site is up right now, at certain points late last night the UK's biggest retailer was only able to display a waiting page


Thursday, November 27, 2014

What does Black Friday mean to the UK?

It seems to me that the use of 'Black Friday' as a retail promotional tool is now everywhere in the UK. From Glasgow to Manchester and Plymouth to London it seems to have sprung up from almost nowhere just few years ago into a few days of serious high street and online discounting.

But why is it especially this year that a lot of UK retailers have embraced an American holiday?

Here's a few suggestions:

1. The high street needs to stimulate sales
Following a mild autumn, a lot of people have not raced out to the shops in September and October to buy items such as a new Winter wardrobe (if you don't believe me, ask your peers if many have bought a big coat recently).Consequently year on year takings are down across a number of sectors, including clothing.
2. Autumn sales aren't a new thing
Discounting around this time isn't a new concept and many stores have been having 'mid-season sales' for decades. Yes, a lot of retailers have been dropping prices of specific products and ranges in mid-to-late November, it's just that...

3. Black Friday sounds cool
It's good to give something a catchy name and it seems that yes black is indeed the new black.  I suggest the fact that it refers to the day after the US commemorate a harvest festival celebrated by the Pilgrim Fathers in 1621 is pretty irrelevant to the average Brit.

4. The UK is becoming more and more American-ized
As reflected in: the recent growth in Halloween over this side of the pond, the increase in Seattle style coffee shops that sell huge capacity cups of caffeine and the gradual use of "Tuxedo" (an American club that adopted the use of the black suit and tie) over the "Dinner Jacket".

5. The Internet is reducing cultural barriers
I first noticed the use of 'Black Friday' on Amazon.com about a decade ago, when just like today, I couldn't find anything interesting to buy on the site. The increasing use of global eCommere sites like Amazon, eBay and the like have created a boundary-less society that is only too happy to embrace different retailing concepts.

Which leads me to a slightly cynical further idea... Could it be that Black Friday is just another ploy adopted by savvy retailers across the globe to get rid stuff that would never have shifted at full price anyway?

Wednesday, November 19, 2014

What does Direct Traffic actually mean?

Website Analytics (e.g. Google Analytics) provide a lot of insight into digital user behaviour, including what keywords they are typing into search engines, what pages they are arriving on and the locations they are coming from.

However all too often I have seen visitors coming into a site as Direct Traffic pretty much ignored or understated as a source. For example if all other digital marketing sources come to 80% and analytics says Direct is 30%, I've heard clients say “Oh, let’s just make Direct 20% and show how good my paid for efforts are"… rather than looking at why a site is showing 110% inbound traffic.

But I think we all need to stop and reconsider this approach, take another look at direct sources of visitors and assess the value that they bring.

Although we tend to take this as "the visitors who type the URL direct into the browser" - this is not the full picture. It is also includes:
- bookmarked visits
- those campaigns that are incorrectly tagged
- those visits where the referrer data is not available (e.g. those coming from an https source, such as a secure site - which may even be your own site itself )

Note: There is even the suggestion on some forums that Google Images has been a source of direct traffic because it creates visits from links that are not traceable.


Friday, November 14, 2014

The Importance of Keywords in Digital Marketing

Keywords have a huge influence across many areas of online marketing. They help to drive the correct traffic from organic positions in search engines, which in-turn need to be optimised through SEO efforts (white hat only of course). Keywords also form the fundamentals of any pay-per-click activity done across Google, Yahoo/Bing, etc.

Keywords therefore have a big impact wherever they are used online and you should make sure your keyword strategy is:

1. Planned in advance of any major digital work, taking care to analyse and understand the terms and phases your target audience is really using (not just those your client thinks they should use)

2. Incorporated in your onsite efforts, such as: Page titles, Meta Description and body copy (including semantic headings & structure)

3. Communicated to other parties, such as your PR company and external copy writing / translation agencies.

4. Reviewed and updated on a regular basis, to ensure you are still getting the required traffic and conversions. This is an evolving situation after all, where new sites and efforts are always changing.

Friday, October 31, 2014

Stupid things said in October

Since it is the end of October (and a Friday),  I thought I'd let you all read some of the daft, incorrect and just plain wrong things I have heard people say this month:
  1. Our contact centre isn't 3D Secure right now
  2. Why are we building our site so blind people can read it?
  3. We need a business case written for something that won't happen.
  4. If I could go forward in time and see what I needed to do, then I would come back and tell myself not to do it. (Oh hang on, it was me that said that!)
  5. If you build it, they will come back again
  6. I know the figures haven't changed... But can you send me the latest version?
I can't wait for November....

Tuesday, October 28, 2014

Google Wallet or Apple Pay - the UK is waiting

I moved away from using Apple and the iTunes ecosystem a year & a half ago and I went back to Android. I thought the devices and flexibility offered by Google's open operating system and Play Store was a better choice than the locked down offering from Cupertino. 

The only thing the whole Google ecosystem was missing in the UK was a decent mobile payment solution. It's been a gap in the British eCommerce chain since the retirement of Google's Checkout product was announced 18 moths ago and Google Wallet was described as the successor.
But since then we have been teased and tantalised.

According to the Google Wallet website:
"Google Wallet is an easier way to pay in stores, pay your friends and pay online.
Shop in stores with all your loyalty, offers and gift cards in one place. Send money to friends and they can spend it instantly with the Google Wallet Card."
But I'm still waiting for Google's payment offering to extend beyond North America.

So, with the recent announcement of Apple Pay, I have to admit I felt a twinge of jealousy... 
as it looked like UK Apple users were going to get a mobile payment system before UK Google users. But it looks like this could be another year away, despite Steve Perry, Chief Digital Officer of Visa Europe, going on record as stating  "We are working closely with Apple and with other member banks to bring this new service to market in Europe."

In short.. neither payment service looks like they will step out out of their comfort zone (the USA) for some while... despite other services such as Zapp, Pingit (by Barclays), PayPal and others marching forward.

Or maybe that's both Apple & Google's strategy... To see which product or vendor looks like winning out in Europe and further afield... then to swoop down and buy them.

Monday, October 20, 2014

British consumers spend more online

According to respondents to The 2014 Parcel Deliveries Usage and Attitude Survey carried out by consumer delivery specialist Hermes, British consumers are now spending substantially more online than those in France and Germany.

Apparently twice as many Brits (27%) have shopped online in the last three months compared to the French (14%) and the Germans (10%).

This confidence in online retailing is also refelected in a greater proportion of each nation planning to use eCommerce channels next year than they did this year. With 42% of British consumers now planning to shop online over the next 10 months compared to 30% of French and 28% of Germans consumers.

One of the more facinating insights in the report is that us British customers are using mobile devices far more to buy items online... 23% compared to 9% and 11% for French and Germans respectively.

However, the most interesting fact from an International eCommerce perspective (something that I've been increasingly focusing on for my own consulting clients) is that home-grown sites are doing a Stirling (pun intended) job of attracting foreign custom, with over a third of German and French shoppers stating they have now bought from a UK online retailer... even beating American and Chinese sites to claim the top spot.

More information is available here:
https://www.hermesworld.com/en/press/press_releases/pm-detail-hermes-ltd-uk_27136.html

Thursday, October 2, 2014

5 questions to ask your new SEO agency

So let's imagine you've recently hired a new search engine optimisation agency to improve your organic position in the popular search engines.

Before you actually engage with them, here are a few important questions you should ask:

1. Does the SEO agency understand my business?
Or again more specifically, do the people actually working on my account understand what my organisation does, its products or services and what it's unique proposition or selling point is?
There will almost certainly be some initial familiarisation with your offering or processes, but first check that this agency gets what you do and has a firm understanding of who your competitors are.
Note: The counter to this issue however is when you hire an SEO agency that knows your industry very well and already has a number of your competitors as clients in this market sector... are they really able to provide you with a unique and perhaps innovative approach to on-page and off-site optimisation?

2. How much of my monthly retainer is for actual work?
Or more specifically, how much of what you pay for is agency 'padding' in the form of 'Project Management', 'Account Management' or even worse... 'Administration & Reporting'?
(Note, most SEO tools these days have quite decent automated reporting functions. So sending out a regular report is just a case of configuring the reporting service once).
In one situation I saw last year, where my agency won the SEO business, The outgoing agency managed to fill over 60% of its monthly SEO retainer with non-specialist staff. Nice work if you can get it....

3. Who is actually doing the work?
It's a pretty good bet that you had a smart(ish) new business person put together the proposal that you accepted. Or if the agency is a smaller one, then it may well be the owner or other senior person that wrote the document that won them the work. But will this person be the one actually working on your account day-to-day or will it be a junior person they may not even have mentioned in their credentials? My guess is that in most SEO agencies it will be the latter that does the hard graft most of the time (not the 'Head of Search' or 'Head of SEM Services' you were promised)
Note: If it is someone you never get to speak to, then reconsider hiring them. And if it's 'someone in their [not this country] office' then get concerned quickly, really quick....

4. What tools & techniques do you use?
Some SEO agencies like to keep the tools and techniques they use a secret to their clients. I guess they feel it adds an air of mystery to the complex art of search engine optimisation. As far as tools go, there are a few good ones out there that the majority of agencies use for most of their clients. Also make sure that you are not being charged extra for these tools, the costs for them should be included in your retainer.
Note: Some of these tools use propriety indexing technology to work, whereas others need to link to your own site's Webmaster Tools accounts. Neither is wrong, but be prepared to grant them access in the same sort of ways you've granted them access to your website analytics package.
As for the techniques used... you should have full transparency about what they are doing and the rationale for doing it. However, if they mention the act of buying links... run a mile!

5. What do you want me to do next?
Getting started with a new agency is usually a process of learning, testing, evaluating and refining. Expect the agency to ask to speak with other stakeholders or 3rd parties in your business (e.g. PR company, website development agency and product / catalogue managers if you have an eCommerce site). Having an SEO firm that is not just technically competent, but has decent organisational skills can be a rare find. Also make sure that you have regular review sessions booked in the diaries. Even if these are done over the phone / Skype or webex... your business, the competition and most definitely the search engines change all the time.