Yet again we have had an example of the single biggest pitfall in building an online business. The unfortunate thing is that many times this pitfall must be explored in the business building process. But note I said explored, not depended upon.
The platform on which you run your business must not wholly depend on any other sellable platform. Time and time again we have seen eBay sellers collapse because of a change in the structure at eBay. We have seen a proliferation of affiliate websites fail to even get started because they are selling the same crap every other affiliate is selling.
The most recent example hit a personal friend of my very hard. Kevin Harmon is noted as one of the top 20 sellers on eBay. His recent blog post details the frustration at eBay have allowed Buy.com to come in a list a LOT of competitive products at NO LISTING FEE. Listing fees make up a large portion of Kevin’s expense in selling on eBay and although he sells hundreds of thousands of products on eBay each year, he has never been afforded this type of opportunity. Fortunately, he has diversified his revenue substantially in the past couple of years, but had this event happend just 2 years ago he could be facing a business closing event.
My company experienced such a pitfall recently. We sell management services for pay-per-click campaigns. Google Adwords does not provide any incentive for us to present Adwords as an option to our clients. However, it is so extremely effective we would be remiss not to advise and direct our clients to this resource. Google advised us that the best route to monetize this relationship was to establish a management fee based on the service. We did. Now 3 years later, Google has decided that if a client is spending $5000 or more per month in a trackable conversion format (mostly ecommerce), they will assign that account a “Google Team” to guide that account to greater returns. I think that’s wonderful for the client, but it sucks wind for me. Here I have spent time and effort elevating this account to this level and we just beginning to reap the internal rewards of that relationship and we get scooped by Google. Lesson learned. Within 2 months we had completely revamped the way we handle 3rd party services and our intermediary consultative role between them and the client.
Be aware as you build your online business. As you navigate the thousands of options available to you, keep in mind your own responsibility to build your brand and your direct client base.
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Categories: Google, Add ons, Business Management, eCommerce
I believe one of the scenarios (in a future world faceted with scenarios) will be the transparency of the Internet in daily use. As usage becomes more ubiquitous, sitting down at a computer will be less prevalent.
Bill Gates put it on the line last month when he announced he was preparing Microsoft for voice interaction to the Internet and that he believed more searches would be done by voice than by typing in the next five years. Think of the implications of keyboard independence…
I believe you will also see a movement of conscious non-adopters who were called Luddites a century ago. These technology uninitiated and expatriates will be those who philosophically don’t believe in the surrender to technology on some fronts. Each advancement in technology has fostered them, but given the all-encompassing nature of the next 5-10 years (adoption rates should hit 90%+), these people will be much more prevelant in the next decade. Perhaps they will be my daughter’s generation of hippies.
eCommerce is experiencing a significant surge and will continue to do so in a down economy. This process of disintermediation via the Internet is going to change how retail is done today. Currently, Wal-Mart can still offer you many good deals in their stores, but a new class of price challenge eCommerce sites will challenge that leadership. Shopping, today considered a necessity, will become more of an experience (think Starbucks) wherein retailers (mostly small, local or at least seemingly so) will be all about creating the “third space” in their unique shopping environment. If you just want quantity of goods, go online. If you want true experience, come to our store. The ancillary businesses associated with eCommerce will also thrive in the next decade. We will see improved shipping and logistic services as well as an “increase” in postal mail usage (it still works!) even though that thought runs counter to email marketers ideas.
Another significant trend will be the migration of TV from broadcast to the Internet. Its unacceptable in our modern times to be bolted down to a television schedule. Just like the music industry, the television industry must adapt to this pending usage. They are already making shows available on-demand and this trend will continue until broadcast goes the way of HAM Radio. The ancillary businesss here will also thrive. Apple TV is leading the way here. Microsoft has been trying to penetrate this market for a decade but arrived painfully too early to the party.
One trend I’ll call right now - the return to the one parent in the workforce. The other parent will be at home with the kiddos and generating income part-time via an Internet interface. A report came out this past week stating that now over 75% of new mothers are breast feeding. A generation is rising that is valuing family SIGNIFICANTLY OVER money. As a product of the Reagan years and GenX, even I clearly see this trend. The rising generation of parents will be largely debt free, good savers, good income earners and family people. Prepare your marketing strategies.
Where I am most curious to see how things develop is in the Internet’s role in consumer commodities. We have already seen that nearly all real estate purchases are in some way Internet influenced. Will that filter down to steaks and potatoes?
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Categories: Uncategorized
This is an area of business operations I am personally beginning to learn a lot about. We have spent the last 4 years building a firm that works very closely with small businesses. There are distinctions in service needs and allowances for those businesses and they can be grouped.
Specifically for our web marketing business, we have found the following groups:
Brochures - some clients simply use the web as a brochure and very seldom make changes to their sites. They have decided to work with us for hosting because we are local and we are available if they do need an edit or an email address change.
Web Assistant - these clients do a combination of tasks involving the web from newsletters and events to regular updates to their sites. Typically we are acting to assist their efforts on their site.
Web Business - mostly eCommerce, but also large organizational sites, the web business client represents more of a partnership relationship. We work very closely with these clients with online business planning and strategy.
Each segment of our client base has different needs and requires different levels of attention. Where a brochure client might spend $500 a year with us, a web business client could easily spend $50,000 a year or more. We certainly can not institute a formula company wide that would address the varying needs of these two disparate clients.
Hence, customer segmentation. Traditional customer segmentation is a demographic decision based on gender, location, etc. So our split actually leans more towards customer-value segmentation because we are seeing trends not based on who a client is, but on what services they prefer. Understanding these preferences is helping us improve our business and increase the value for each type of customer.
We have done several things over the last few months to better understand and service our customer base:
Customer Census - we conducted a geographic census of both current and former clients to gain insight into where our customers live. This is a traditional customer segmentation move, but it yielded some unexpected results.
Revenue Analysis - we researched our revenues over a 12-month period and looked for trends and opportunities. It was amazing to see the Pareto Principle in play in our small firm. Nearly 80% of our business comes from 20% of our clients.
Service Offering Review - armed with this data, we did an intense review of our service offerings and discovered opportunity to improve. A lot of opportunity. Its given us some serious work to do over this next year. Our biggest lesson was that we did not have the diversity of services for the client to express their preferences.
Marketing Review - a better understanding of our clients and their impact on our business has helped us shape our marketing efforts. One discovery from the census was learning most of our clients are located very close to our business, hence our recent initiatives to more actively engage in our community. We learned several other lessons as well.
I don’t know if there is a specific time that customer segmentation starts to make sense other than the point where you know your firm is being stretched thin. We never experienced a segmentation effort with my previous firms. We had very large clients, but very few of them and they were all in the same industry. I believe each case, we were already very targeted to start with, so the segmentation question never came up.
Personally, I have found customer segmentation to be liberating. I have strong sense of responsibility to my clients and I feel guilt and stress when I suspect we are falling short. Using segmentation has allowed us to more clearly define the customer experience based on what they have let us know they prefer it to be. We still have a lot of work to do, but we have plan and it is underway. That is a relief in and of itself.
We have found the segmentation has been extremely beneficial to us and our clients and we expect to continue to refine it over the coming year. I also expect it will be a regularly reviewed item in the future.
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Categories: Business Management
For most small businesses, the only thing they think about when it comes to shipping is cost. But there are some great resources out there on how to improve not only your bottom line, but to improve your business operations and client relationships with best practices shipping techniques.
Mark Taylor is the Shipping Coach and on his blog regularly provides tips and advice for small business shippers. This is a great blog to add to your RSS feed and monitor as he delves into the finer points of shipping and logistics.
I have a few tips of my own that I regularly promote to my clients:
- Use branded packaging - this can range from a sticker with a logo on it to a custom printed envelope or box.
- Include an insert in your package - even a printed sheet offering this month’s sale items is better than an empty box. I’ve encouraged some clients to print catalogs strictly for inclusion in their shipping. It makes a first-time customer a second-time customer and that is significant.
- Give a return visit incentive - offer a promotional code to come back and make another purchase. The more effective codes are those having expiration dates within a reasonable replacement or add-on time for your product line.
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Categories: eCommerce
From eMarketer
FEBRUARY 26, 2008
Here comes the “Precision Shopper.”
Any retailer who isn’t using the online channel to promote offline sales—as well as online sales—is missing a sizable opportunity.
”Today, online consumers think nothing of shopping across a retailer’s stores, Web site and catalog,” says Jeffrey Grau, eMarketer Senior Analyst and author of the new report, Multi-Channel Retailing, “As a consequence, online product research is driving more in-store sales than online sales.”
Last year, eMarketer estimated that store sales influenced by online research totaled $471 billion. Comparatively, retail e-commerce sales were only $136 billion.
Looked at another way, for every $1 in online sales, the Internet influenced $3.45 of store sales.
Read entire article…
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Categories: eCommerce
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