Positioning yourself in e-business!

Paradoxically, though Internet users want to buy, or at the very least choose, many types of goods and services online, businesses must be practically dragged kicking and screaming before they finally establish an efficient online presence. Many companies falsely believe that e-business has not lived up to its promises. They will be surprised to learn that contrary to popular belief, online sales figures have never stopped rising, even while the Internet bubble was collapsing. Moreover, the sales forecasts made by specialists, such as Forrester in 1996, were thought to be exaggerated when if fact they all turned out to be wrong in the opposite sense. In reality, they had almost all under-estimated future sales by nearly half.(1) When I attend business cocktails, I often hear entrepreneurs making statements such as this, “E-business is not profitable. I know what I’m talking about because I invested $30,000 and have not seen a single dime in return.” Business people who say such things probably did business with suppliers who focused only on technologies and not on business objectives. For these entrepreneurs, it easier to believe that e-business is inefficient than to admit that they made an investment without establishing any prior strategies or planning.

Attracting customers

One step that facilitates setting up an efficient web presence is to have the ability to acquire customers. On the web, customer acquisition is achieved chiefly via search engines. These engines are the preferred tools of Internet users to search for information, products or services. For this reason, it is of utmost importance to appear in the first pages of these search engines if you want to have any hope of receiving a visit from Internet users who do not know your company and of having them include you in their decision-making process.

Though there are several regional search engines in Quebec, they receive only a tiny percentage of visits due to the fact that the engines of choice in this province are the same as those preferred everywhere else in the world: Google and Yahoo. This is why it is crucial to be well positioned in the result listings of queries entered on these two sites. “Referencing” is the term used to define the various methods to get positioned on search engines. A number of different techniques and strategies exist to get a web site referenced. Note that this positioning can also be a technical or paid service. When a company has efficient referencing and has a site that is well positioned compared to its various online competitors, customers show a clear preference to do business directly with that company rather than with intermediaries.

Grabbing customers’ interest

Once an Internet user is on your site, several elements are necessary to help them navigate the site, build their confidence and enable them to carry out a transaction online or via other distribution channels (i.e., via a store branch, telephone service, sales intermediaries, etc.) Though the decision-making processes of Internet users may vary drastically from one industry to another, in most cases they will be primarily interested in the content of the site rather than in images displayed on the site. In addition to site content, various search functions,(2) navigation aide tools, decision aid tools, promotional offers and other value-added functions will satisfy customers. A company’s web site must provide visitors with information and, at the same time, make their lives easier.

Building loyalty and customer retention

How can a business secure a second sale? Undoubtedly, the best way is by establishing a customer database and a process to fill it with information. A database is a computer file that stores all relevant information about your customers. It is a good idea to also include which method you used to obtain their authorization. Using a database for marketing purposes is a crucial strategic asset for any company. Even if a business cannot envisage having need of such a list, it should, without exception, begin the process of collecting both the permission of customers and their personal information. This way, when companies finally do find a need for such data, their database will already be brimming with precious information. What can a company do with such a database? It is the key ingredient to any follow-up marketing campaign based on e-mail processing software, an activity that is widely known as relationship marketing. Databases are also very useful for supplying information to customer follow-up software such those used for CRM (Customer Relationship Management) purposes. Lastly, there two other aspects of e-marketing that you should focus on. This first is viral marketing which consists of a series of online activities or functionalities that encourages Internet users to spread information about you to their circle of friends. The second is affiliate marketing which makes it possible for your various partners to redirect Internet users toward your site in return for compensation when a transaction is made thanks to their efficient online references. As you can see, there are many online elements that enable companies to attract customers, grab their interest and build their loyalty. Which of these elements are implemented in your e-business strategy? The answer to that question may be the key to increasing the profitability of your online presence.

(1) - PowerPoint presentation by Jacques Nantel, director of HEC Montréal's RBC Financial Group Chair of E-Commerce, at the Professional Marketing Research Society, April 2004.

(2) - To find out more about online value-added functions, I invite you to consult: Pratte, Nantel, Brunet and Lamarche, Online retail trade in Canada : Department stores, Adviso Consulting/RBC Financial Group Chair of E-Commerce, Feb. 2004, section 3.1.3.1 p. 43 to 47