Adapting your business for e-commerce
CEO of Actinic Chris Barling on how to make your website a more powerful player
How is your company website? Is it looking fresh, nice and easy to use, optimised to prime traffic from search engines and generating healthy sales conversions from visitors?
Unless your core business is online, and perhaps even if it is, then the honest answer is that it’s probably not ticking all of those boxes. The truth is, while most businesses now have a website, few are using it as a vibrant contributor to revenue.
If you’re one of the offending companies that got a site thrown together at the height of the dotcom boom because you felt you should and have hardly touched it since, you’re quite simply turning business away. Alternatively, if you’ve invested heavily in an all-singing all-dancing show-pony of a site that’s a wonder to look at and a nightmare to use, you’re probably turning business off.
Either way, it’s time to make some crucial changes because operating your website correctly offers you the potential for a hugely effective shop window and revenue generator. According to analysts Verdict Research, one in four UK consumers now purchases goods online. That means one in four of your existing customers – and one in four people who are not your customers but could be.
The likelihood is you’ll be able to either sell from your website directly, or at the minimum, generate business channelled through a more traditional route. But you have to get it right – and that means right for you and right for your customer. It’ll also involve as much focus as any other part of your business. Cut corners, and at best it’ll continue to be little more than a white elephant; at worst, it’ll lose you customers who expect better.
Selling on the internet shouldn’t involve stepping into the dark – the same business rules apply. Here’s how to ensure your successful offline business principles translate online:
Assess you suitability
Not every product or business model is suited to the internet. Products that need to be touched, tasted or smelt are among the hardest to sell on the web, and trying to force customers into an unsuitable way of buying will smack of desperation and simply won’t work. That said, products such as perfumes – where repeat purchasing of the same product line is the norm – often sell online very well and there are actually very few products or services that can’t be either sold or positively promoted via a website when positioned sensitively.
Products and services that are not fixed-price but involve some degree of negotiation are also hard to sell on the internet. But again, even if you cannot sell directly from your website, the internet is a great way to provide information to your customers and prospects outside normal business hours – or add value and build customer loyalty. The key is to maintaining a realistic sense of what you can credibly offer.
Attack a niche
The internet is no longer new, and unsurprisingly the majority of business opportunities are already being exploited. There’s nothing wrong with aiming high, but be realistic about competition from established dominant players in your market and try to find a niche where you can play to your strengths. It’s likely you’ve taken such an approach- be it better customer focus, flexible payment terms or a particular line of focus – to establish a foothold offline. Apply the same strategy when attacking the online market. How will you stand out from the big boys? Why should someone buy from your website instead of Amazon?
Leverage your existing brand
The obvious place to start differentiating yourself online is by taking your existing customers onto the internet – basically, making your successful offline brand work online. The vast majority of companies that have successfully transferred business online have used their existing brands, with Tesco and Argos being prime examples.
Your existing customers know and trust your brand, and they will be key to your success online. So unless there are strong reasons for doing otherwise, your website should be built around your existing brand and reflect its values. Ideally, your company name should also be your domain name – your ‘www’ address. In some instances this won’t be possible, but it’s worth exploring how much it’d cost to buy any owned URLs or, alternatively, to use the name of any recognisable product brands.
Provide adequate resourses
Research conducted by my company, Actinic, found businesses solely based on the internet are more profitable. The reason is clear: they’re committed to focusing 100% of their resources online. Consequently, the level of profitability you achieve with the online arm of your business will reflect the effort and investment you put into it.
In turn, the least profitable thing you can do with the internet is ignore it. Many companies have been put off by the time and effort the internet seems to demand and responded by doing nothing. It’s very likely the majority of those are losing market share to competitors not so intimidated.
Like any venture, trading online requires a certain level of commitment and investment to succeed. If you have plenty of resources, or external financial investment, you have the potential to start big and grow fast. Alternatively, you can start small and grow from there. Either way, you must ensure that technical resources, staff time, finance and marketing are adequately budgeted if you are to achieve your targets.
Invest more in promoition than technology
This doesn’t mean splashing cash where it’s not needed, though. One of the prime factors in generating online profit is spending money where it’s going to be felt, not where it’s just going to look pretty. Technology is a means to an end. So is good design. Having a functional and professional- looking site is important. But remember, your website is a showcase for your products, not a web designer’s creative prowess.
It might even be the case that off-the-shelf solutions costing around £500 can do an equally effective job as an expensive, bespoke site, especially if yours is a tried and tested retail business model. Such packages are now highly customisable and are more than capable of providing front- and back-end management of sales in excess of £11m.
Whichever route you choose, make sure you get a reliable solution that will not burn a massive hole in your budget. Spend what you need to on a good design and save the rest on marketing. You can have the most functional and attractive site on the planet, but if no-one visits, you won’t make a penny in sales.
Make sure you are legal
Most rules online are similar to those offline. The main extras are international taxation and the EU Distance Selling Directive.
Under the Distance Selling Directive, you must provide full contact details, including address and phone number. You must accept returned goods for any reason within seven working days. This may sound like a burden, but if your products are up to scratch then returns will be rare. In fact, you can turn it into a positive. Tell your customers outright that you accept returns unconditionally.
You should charge VAT at your usual rate when selling to the EU, but if you exceed the individual VAT threshold for Germany, France, etc., then you should charge VAT at the appropriate country rate when selling into that country. If your customer is a non-Irish business in the EU and registered for VAT, you should allow them to quote their VAT number and be exempted from tax. You don’t have to charge VAT when selling outside the EU, such as to the United States.
Other legal obligations include ensuring your site is in keeping with the Disability Discrimination Act. The standards are fairly common sense and will ensure you’re not only a responsible seller, but also one that’s able to benefit from the £50bn spent in the UK by people with disabilities each year. For more information, visit www.growingbusiness. co.uk/dda
Get your existing customers on board
Launching a website is a bit like opening a shop in the middle of Sherwood Forest: nobody is likely to just pass by and drop in. You need to attract or pay visitors to go to your site and then turn them into buyers.
Start with your existing customers. Statistically, about a quarter of them are shopping online already; make sure they know they can shop online with you. However you normally communicate with them, whether by post, telephone or face-to-face, use the same method to tell them about your site. Put your web address wherever your company name appears – e.g. stationery, business cards, flyers, invoices ads, etc.
Give existing customers an incentive to visit your site. Try a time-limited promotion such as 10%off everything for one weekend or a free gift with every purchase – and let all your customers know about it. This way you immediately create a positive outlook on shopping with you online.
Generate new business
Search engines are the number-one source of new visitors to websites, so make sure you appear on them. The best way is to get links to your site from sites that are already listed. One way to achieve this is to offer reciprocal links to sites that are complementary to yours – i.e. relevant to what you sell, but not in direct competition. The more links you can get, the better, provided they are from sites that rank well, are relevant and have good content. They will generate click-through traffic to your site. And the more good-quality links you have, the higher you will appear on the search engines.
Find out what words and phrases people are using to search for the products you are selling. www.wordtracker.com can help you here. Weave those phrases naturally into relevant pages on your site. Use the three or four most popular ones in the home page title tag, and extensively on your home page.
To ensure you appear on the first page of search results, look at pay-per-click advertising such as Google Adwords and Yahoo! Search Marketing. You have to pay for these, but you only pay for people who click through to your site. You decide how much to pay, so you have full control of your costs. The more you pay, the higher you appear in the listings. If you’re unsure about marketing your website yourself don’t fritter your budget away on a hunch of what might work. Speak to a specialist online marketing company. Review return on investment and adjust your spend accordingly.
Don’t discount – upsell
Online customers expect value. But that does not mean you have to discount your margin away just to attract sales. The best way to add value to your customers and increase your own revenue at the same time is to use upsell and cross-sell promotions across your site. You can offer products at reduced prices when purchased with other products, use ‘three for the price of two’ types of offers and give visibility to products that are associated with other products – for example, by making sure you offer batteries with all battery-operated products. Offers such as these can be promoted in the cart as well as on the store pages.
More subtle ways of increasing sales include Amazon-style ‘bestseller’ lists and ‘People who bought that also bought …’ sells. Communicate that shipping costs can be reduced by anticipating future needs and ordering everything together.
When you deal with customers online, you have to deal with a different set of expectations. Some you can control, others you have to work with.
Customers walking into a shop expect to walk out with the goods they purchase in a carrier bag. Online, that is not an option. But asking them to allow 21 days for delivery is no longer realistic either. They expect delivery in 2-3 days, with a nextday option at additional cost. If goods are out of stock, they expect to be notifi ed. And legally, you should not debit their credit card until the goods ship. Before purchasing, they expect email enquiries to be answered promptly.
On the other hand, you are not obliged to ship out orders on a Sunday. If customers return goods, you can expect them to pay for the carriage. And if you ship outside the EU, paying local taxes is the customer’s responsibility.
Being aware of their expectations and being clear and up-front about your terms and conditions is vital to providing a good online experience and ensuring that your customers come back again and again.
Chris Barling is CEO of e-commerce software supplier, Actinic www.actinic.co.uk ,
10 tips to get your website selling
1. Set aside time. The effort needed should be less than opening a brick and mortar outlet, but it?ll need the same degree of focus.
2. Ddefine what you want to achieve. Are all your products suitable, or just a selected range? Are you mainly aiming to serve existing customers or attract new ones?
3. Plan the site. Try to get inside your customers? heads and create the experience you provide successfully offline ? then make it more convenient.
4. Research a solution. Choose a look and feel that is industry-standard and that customers will be comfortable with.
5. Put the resources in place. Make sure you have the means to fulfill legal requirements logistically and meet customer expectations.
6. Ttell your existing customers ? they are your best friends.
7. Promote your site. Invest in search engine optimisation and keyword marketing.
8. Provide a great experience. Spend time on the site and make sure it is easy to use. Try it out by placing an order yourself. Read and respond to customer feedback.
9. Monitor and evaluate. Are you delivering? Which are your best and worst sellers? Which marketing strategies are proving effective?
10. Make sure you own and control the finished site. Ensure you can amend it when you need and without extra cost.
Case study: Turning visits into sales
Company: Get Geared
Owner: Mark McCance and Georg Braun
Get Geared has proved that it?s the overall web offering, not just a fancy site that brings in sales. With just a ?1,000 investment in an offthe- shelf e-commerce website, its seen dramatic growth in its fi rst two years.
Mark McCance and Georg Braun, both executives more accustomed to the big business budgets of PC World, Wanadoo and Pearsons, launched Get Geared (www.getgeared.co.uk) in 2004. An internet-based business selling clothing and accessories for motorcyclists, it looked to profi t from the increasing number of people opting to commute our congested roads on two wheels.
Stocking top brands such as Highway 1, Vanucci and ProBiker and with exclusive UK distribution rights for the UK market, Get Geared?s progress has been rapid. It currently attracts 90,000 monthly visits with 800 orders per month, putting it on course to generate sales of ?1m this year.
Braun puts the growth down to offering a pain-free experience for customers and the ability to offer a far wider range of products than could be sold from one physical site. Major emphasis has been put on customer service ensuring positive word of mouth recommendations, while it has invested in features such as live stock availability indicators and fraudscreening technology to secure customer payments.
Braun says the company?s online success has made traditional retailers with far bigger budgets sit up and take notice. ?If you offer better choice, suppliers react both positively and negatively.
?We had a few ring up and try to persuade us not to stock certain brands, including threatening to cut off our supply routes. We didn?t change our plans, though.?