Top 10 Strategies for Launching a Successful E-commerce Site
Published in Smart Solutions
With dot-com failures on the rise, you might ask whether it even makes sense to spend time, money, and resources to create an e-commerce site for your company, or to expand or enhance an existing site. Although new e-commerce start-ups may carry a lot of risk, extending a traditional business with e-commerce capabilities can still make a lot of sense. Done right, an e-commerce site can generate additional revenue as well as enhance brand name awareness and recognition for your company. In fact, in some industries, not having e-commerce capabilities can actually have a negative effect on sales and market share, making your company seem technologically backward and not in tune with the times.
If you’re planning to move into e-commerce this year, or expand your current system, here are some high-level considerations to think about as you develop your strategic plan:
1. Synchronize your strategies. Assuming you’re starting your e-commerce venture as an extension of an already existing business, your first step is to determine how e-commerce fits into your overall strategic plan, synchronizing your e-commerce and traditional businesses so that they complement rather than compete with each other. Even if you decide to create a separate business unit to handle e-commerce activities, often a good idea considering the rapidly changing e-commerce environment, you still need to ensure that you’ve developed all the efficiencies and synergies possible. Determine your core strengths and use them to choose the e-commerce business model that’s right for you. The majority of the most successful e-commerce sites are extensions of established brick-and-mortar companies. For example, Staples.com grew out of the Staples chain of physical store locations; Land’s End.com developed from an already operational mail-order business.
2. Check out the competition. Knowing what your competition is doing, and whether it’s working or not, is a vital initial step. Spending time upfront analyzing the e-commerce strategies of all your major competitors can have big payoffs later on. Look at your competitors from both a business point of view and a customer point of view. You obviously need to know what business strategies they’re using, how successful they are, and the technologies on which they’ve based their site. Yet a customer’s perspective is important too. Let’s say your company specializes in outdoor gear. Visit your competitors’ sites with a target customer in mind: for example, a 25-year-old woman who wants to buy a new backpack for a hiking trip in the Sierras. What would her experience be at each competitor’s site? At which one would she most likely make a purchase? Use customer demographics to learn ways to make your site more appealing to your target audience than that of your competitors.
3. Focus on the customer. It’s evident that customer-centric e-commerce sites are the most successful. How you approach your target audience may differ depending on whether your site is business-to-business (B2B) or business-to-consumer (B2C), but the goal of designing a site that both meets your customers’ needs and generates profit is the same. Think back to the target customers who were your focus when you analyzed your competition and take it a step further. What do your customers want and how can you meet this need? Understanding the basic concepts of customer relationship management (CRM) and applying them to your e-commerce site can make the difference between a dot-com success and failure.
Your site’s overall concept and business model aren’t the only issues here. Site design can also play an important role in enhancing the quality of customer experience. Design your site with the customer in mind and consider carefully before implementing any complex or extreme designs. Although flashy animations and cutting edge graphics may be appropriate for certain sites, in most cases what your customers really want is an attractive, uncomplicated site that’s easy to use. They want to be able to go to your site and find what they’re looking for quickly without having to wait for large files to download (not everyone has high bandwidth yet) and without having to click through repeated pages and links to reach the information they want. Having desirable products at competitive prices may lure site visitors, but a positive customer experience and highly usable site can keep them coming back.
4. Get personal. Use web personalization techniques to further emphasize the one-to-one customer relationship. Done properly, personalization benefits both businesses and customers. The business gathers relevant customer intelligence and demographic data and customers receive personalized service and convenience.
To see personalization in action, take a look at the Amazon.com website. Amazon greets you with personal recommendations (based on previous purchases or ratings you entered on previous visits) and even provides a special tab for your own “store.” When you find what you want to buy, the site “remembers” your basic information so that you don’t have to re-enter it.
A survey taken by the Personalization Consortium last year indicated that 73 percent of consumers prefer that a Web site remembers information about them. Of those, 62 percent actually dislike having to enter any personal information they already provided on a previous visit. The problem with personalization, however, is when it becomes too invasive—finding the appropriate balance is a crucial step in creating any e-commerce personalization strategy.
Many out-of-the-box e-commerce systems now include some level of personalization functionality, which can often be expanded with more sophisticated personalization solutions if desired. If you require more than basic personalization (dynamically generating content based on demographic information), you can move toward a solution that offer concepts such as collaborative filtering, which personalizes content based on an analysis of one site visitor’s preferences and actions as compared to other site visitors with similar preferences and actions. Beyond this pattern matching personalization strategy, even more advanced systems can use statistical probability algorithms to deliver personalization based on an analysis of variables such as a visitor’s actions.
Some levels of personalization can be implemented immediately, but others (such as making recommendations based on past purchases) need to mature over time and be phased in. One thing to consider, however, in setting a phased approach is that it’s often more costly to retrofit a non-personalized site than it is to design one from scratch. So even if you don’t implement all your personalization strategies at once, it makes sense to consider them in your long-range plans from the start.
5. Know that content is king. No matter what products you sell, customers evaluate your site on the information it provides and how you present it. It’s what makes your site “sticky.” You need a site that’s clean, clear, quick, and easy to navigate and offers true value to your target audience. Even if your main goal is to create another channel for selling your products, merely setting up an online store isn’t enough. You need to create a community among your customers, an online gathering place where they automatically go when they need information on topics relating to your products.
For example, if you manufacture bakeware, you want to create a content community for baking enthusiasts that also provide easy online ordering for your bakeware products. If you create educational toys, you want to target your content to parents and perhaps teachers as well. Although services exist that provide automated news feeds and mass-generated content on particular topics, it’s the unique content that will attract and keep customers. Content includes not only articles, product features, and news about your topic, but also other community-building tools such as bulletin boards, chats, interactive learning features, webcasts, and more.
Email announcements and newsletters are another way to inform your customers about new content—and products—available on your site. Be sure, however, to enable customers to opt in to your electronic mailings by offering subscribe and unsubscribe options. Nothing will lose customers faster than sending them large, frequent mailings that they don’t want.
Take a look at Microsoft’s website for an example of a site that offers a true community to its customers. Obviously, the ultimate goal of Microsoft’s site is to encourage the sale of Microsoft products. But the vast amount of useful content it contains creates a clear distinction between a strictly e-commerce site that offers online ordering and little more and one that builds a true community among its customers. Good content is the added value that makes your customers remember you, value your site, and keep coming back.
6. Make it safe and secure. Ensure that no customer ever needs to be concerned about security or privacy at your site. Although the comfort level among the general public on using credit cards online has increased dramatically over the past few years, you can’t afford to have even one potential customer slip away because of online security fears. The potential loss of privacy is another deterrent to online sales. You need to clearly let your site visitors know that you won’t barrage them with unwanted email or sell their name, address, or other personal information. Although selling customer information can provide the lure of profit potential during uncertain economic times, doing so can seriously jeopardize your relationship with your hard-earned customers. According to a Personalization Consortium survey, 58 percent of respondents indicated that a privacy policy displayed on a site would be necessary before they would share personal information. Creating a solid privacy policy and posting it in a conspicuous place on your Web site can help you convert cautious site visitors to customers.
7. Get technical—and understand it. Verify that the lead technology person on your e-commerce implementation team both understands the latest e-commerce technologies and can clearly explain the technical and business benefits to everyone involved in the project. There’s a lot to consider—hardware, software, network, security, and compatibility issues among them—and the best technical solution (in other words, the latest and greatest technology) isn’t always the best business solution in every case. Whether you’re a small business using the e-commerce functionality of Microsoft FrontPage, a mid-size company using the more robust power of Commerce Server 2000, or a large corporation with a highly custom solution, there are a plethora of technical issues to address. It’s easy to get wowed—new advances in broadband, payment, and wireless technologies for e-commerce are evolving at a rapid pace. Yet it’s critical to understand how these technologies would work for your company and within your current infrastructure, and to remember that technology is only one piece of the e-commerce puzzle.
8. Get back to basics. Verify that all the business infrastructure basics are there—transaction and credit card processing, tax handling, shipping, fulfillment and more—and that they all work easily and efficiently. If you’re developing e-commerce capabilities as an extension of an existing business, a lot of this infrastructure might already exist such as warehousing and shipping mechanisms. But in many cases, you’ll need to reevaluate and often reengineer your existing business processes to work well with your e-commerce operations. The advantage here is that is done properly, these efficiencies can generate operational cost savings.
9. Learn from others’ mistakes. Analyze other sites with potential that ultimately failed. One well-known example is that of Webvan, the online grocery delivery service once available in many U.S. cities. One of the most highly visible e-commerce launches in 1999, it provided a valuable service and usually executed its service well. Customers could select from a wide array of grocery and household products—from everyday items to gourmet goodies to organic produce, choose a half hour time span for delivery, and wait for a delivery person to unload the groceries in their kitchen. The concept and execution were good, yet Webvan went bankrupt within two years after spending over a billion dollars. The reasons for its ultimate failure are many, but its demise offers an important lesson. Don’t just analyze poor e-commerce sites that were doomed to fail. Analyzing those that were poised to succeed, but didn’t, can offer far more insight.
10. Create a traffic jam. Even well-known companies need to drive traffic to their websites; for lesser know companies, it’s even more crucial to have a comprehensive Web publicity program in place. Solid search engine placement is an obvious first step. If search engine ranking is going to play an important role in your overall Web marketing strategy, you need to design your site to be search engine friendly. Using keywords and META tags is an obvious first step, but they are a science unto themselves and it may take some effort to ensure that they generate the best results with your target search engines. Ongoing research and site analytics will help your fine tune your site to generate even better search engine results.
You also need to consider the impact of your site’s design on search engine rankings. Do you need any changes or workarounds to compensate for frames, dynamic content, or Flash animations? And finally, there are other, even easier ways to generate awareness of your e-commerce site. An obvious step that overlooked more often than it should: display your company’s website address prominently on all your printed materials—letterhead, business cards, marketing materials, advertisements, signs. Wherever your company name appears, your Web address shouldn’t be far away.
Note: Original article contained detailed resources section.
