Dismantling e-business myths (Part IV)

The top ten most common e-business myths continued…

In Parts I and II, we presented the following myths:

1. E-business is having difficulty recuperating from the dot-com slump
2. B2C companies corner the majority of online sales
3. E-business = online sales
4. Informational sites generate no business spin-offs
5. It is dangerous to use your credit card online
6. The web is an image-based medium
   

Myth No. 7: An efficient and profitable Internet presence necessitates hefty investment

A web development budget can entail a few thousand dollars, but it can also involve much higher amounts as well. The sums or efforts invested in any web operation can only be profitable if the company begins by setting its business objectives. One can evaluate the profitability of a web presence in various ways, yet all measures of the efficiency of a web investment must be done using previously identified metrics. The web is in fact one of the mediums that is best-equipped and efficient in terms of performance metrics. Therefore, it is essential to first know why your company wants to be online and what objectives it would like to obtain via its web presence. Once these steps are completed, it will be easier to identify the tools that will enable you to measure your virtual and financial performance (tangible and intangible); and therefore, calculating the returns on your investment will be easier as well. A web presence can in fact be very efficient, profitable and cost only a few thousand dollars. However, a detailed study of the business processes to be digitized, careful planning of the activities to be developed and attentive management of the implementation process are invaluable skills that will be needed to achieve this ideal scenario.

An example

A florist would like to build his local clientele’s loyalty and increase sales. To that end, the florist gives a questionnaire to in-store customers, inviting them to subscribe for a value-added tool that will remind them a week in advance of family members’ birthdays or of upcoming holidays. Next, the florist uses an e-mail application to contact customers a week prior to the dates of any birthdays they entered or of any national holidays or celebrations (e.g. Secretary’s Week, Mother’s Day, Easter, etc.) to remind customers that an important date is approaching. Also included in the florist’s e-mail is a “tell a friend” function that is designed to increase the merchant’s clientele base (for national holidays). The florist could verify the impact of his e-business activity by verifying the e-mail open rate and by watching how this open rate evolves with each mass mailing. The florist could also include in the e-mail an exclusive offer to validate the impact of these mailings on sales (e.g. 5% discount for customers who print the e-mail rebate and present it in-store). At year’s end, the florist will be able to easily compare the operating costs of this activity vs. the gains generated, both tangible (sales) and intangible (e.g. increased notoriety or customer satisfaction expressed in clientele’s comments). This type of operation demands only minimal investment, it does not necessarily require a web site and it can generate profits in the very short term. What is required, however, is prior consideration, planning, performance metrics and a certain understanding of various e-business mechanisms.


Myth 8: Operating a transactional site is the only way to make online sales

The web is about much more than having your own web site
There are a plethora of activities that can be done on the web. Many of these activities can take place on free or inexpensive portals. For example, you can sell nearly any product on a site such as eBay.com without having your own web site. You can also sell products or services on a number of vertical industry portals (vortals). For instance, APCHQ (Association des professionnels de construction d’habitation du Québec) has recently launched their go-affaires.com portal where entrepreneurs and professionals in the construction industry can post their needs, products or services at no cost. Many other vortals offer similar services. There are also a variety of permanent databases that keep a listing of all the companies that take the time to subscribe. For example, you can sign up for free on Quebec’s ICRIQ site and Canada’s Strategis site. Many buyers, businesses and consumers regularly visit these lists to find potential new contacts, products, services or suppliers.

On the web, you can have your own business space in a virtual shopping mall (e.g. Magasiner.sympatico.msn.ca//, Vitrineq.com/, etc.). You can also enter different forums that discuss companies and the pros and cons of doing business with them (e.g. tripadvisor.com), or you can even create your own web log (blog) and share your passion for your business with the community.

This article was originally written in French and have been translated by Wendy Wolbert .