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Chapter 15; E-Commerce 1Copyright 2002 Prentice Hall Publishing Company

E-Commerce and the Entrepreneur

E-Commerce and the Entrepreneur


The Internet: Changing the Face The Internet: Changing the Face of Business of Business

The most successful companies embrace the The most successful companies embrace the Internet as a mechanism for transforming their Internet as a mechanism for transforming their companies and for changing everything about companies and for changing everything about the way they do business.the way they do business.

In the world of e-commerce, size matters less In the world of e-commerce, size matters less than speed and flexibility.than speed and flexibility.

The number of online buyers is growing The number of online buyers is growing rapidly as people become more convenience-rapidly as people become more convenience-pressured and gain confidence from their and pressured and gain confidence from their and others' online purchase experiences. others' online purchase experiences.

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E-Commerce and Small BusinessesE-Commerce and Small Businesses

Survey: 3 out of 4 small businesses do not yet Survey: 3 out of 4 small businesses do not yet have a Web site.have a Web site.

Small companies account for more than 50% of Small companies account for more than 50% of all retail sales in the U.S., but they generate all retail sales in the U.S., but they generate only 9% of online retail sales. only 9% of online retail sales.

By 2003, small companies will generate just 6% By 2003, small companies will generate just 6% of online retail sales. of online retail sales.

Why?Why?


Benefits of Selling on the WebBenefits of Selling on the Web Opportunity to increase revenues, both on and offline.Opportunity to increase revenues, both on and offline. Ability to expand into global marketsAbility to expand into global markets Ability to remain open 24 hours a day, seven days a weekAbility to remain open 24 hours a day, seven days a week Capacity to use the Web’s interactive nature to enhance Capacity to use the Web’s interactive nature to enhance

customer servicecustomer service Power to educate and informPower to educate and inform Ability to lower the cost of doing businessAbility to lower the cost of doing business Ability to spot new business opportunities and capitalize on Ability to spot new business opportunities and capitalize on

themthem Power to track sales resultsPower to track sales results


Factors to Consider Before Factors to Consider Before Launching into E-CommerceLaunching into E-Commerce

Web success requires a company to develop a plan Web success requires a company to develop a plan for integrating the Web into its overall strategy.for integrating the Web into its overall strategy.

Developing a deep, lasting relationship with Developing a deep, lasting relationship with customers takes on even greater importance on the customers takes on even greater importance on the Web.Web.

Creating a meaningful presence on the Web Creating a meaningful presence on the Web requires an requires an ongoing investmentongoing investment of resources – time, of resources – time, money, energy, and talent.money, energy, and talent.

Measuring the success of a Web-based sales effort is Measuring the success of a Web-based sales effort is essential to remaining relevant to customers whose essential to remaining relevant to customers whose tastes, needs, preferences and behaviors constantly tastes, needs, preferences and behaviors constantly change.change.


12 Myths of E-Commerce12 Myths of E-Commerce

Myth 1: Setting up a business on the Web is Myth 1: Setting up a business on the Web is easy and inexpensive.easy and inexpensive.

0%

5%

10%

15%

20%

25%

30%

35%

4 to 8 9 to 12 13 to 24 25 to 52 More than 52

Number of Weeks

Time Required to Develop an E-Commerce Site



Myth 1: Setting up a business on the Web is Myth 1: Setting up a business on the Web is easy and inexpensive.easy and inexpensive.

Myth 2: If I launch a site, customers will Myth 2: If I launch a site, customers will flock to it.flock to it.

Myth 3: Making money on the Web is easy.Myth 3: Making money on the Web is easy.

Myth 4: Privacy is not an important issue Myth 4: Privacy is not an important issue on the Web. on the Web.



Myth 5: The most important part of any Myth 5: The most important part of any e-commerce effort is technology. e-commerce effort is technology. Myth 6: Strategy? I don’t need a strategy Myth 6: Strategy? I don’t need a strategy to sell on the Web! Just give me a Web to sell on the Web! Just give me a Web site and the rest will take care of itself. site and the rest will take care of itself. Myth 7: On the Web, customer service is Myth 7: On the Web, customer service is not as important as it is in a traditional not as important as it is in a traditional retail store. retail store.


The Importance of ServiceThe Importance of Serviceon the Webon the Web

Study: 75% of Web shoppers who fill their on-Study: 75% of Web shoppers who fill their on-line shopping carts become frustrated and leave line shopping carts become frustrated and leave the site before checking out.the site before checking out.

Reasons:Reasons: Site too slowSite too slow Site looks unprofessionalSite looks unprofessional Site does not take credit cardsSite does not take credit cards Checkout area too hard to findCheckout area too hard to find No return policy postedNo return policy posted

What Web Shoppers WantWhat Web Shoppers Want

Retail Customers Business Customers

1. Competitive prices1. Competitive prices 1. On-time delivery1. On-time delivery

2. Well-designed presentation2. Well-designed presentation 2. Competitive prices2. Competitive prices

3. Good selection3. Good selection 3. Well-designed presentation3. Well-designed presentation

4. Reliable shipping4. Reliable shipping 4. Good selection4. Good selection

5. On-time delivery5. On-time delivery 5. Easy ordering5. Easy ordering

6. Easy ordering6. Easy ordering 6. Valuable product info6. Valuable product info

7. Customer support7. Customer support 7. Customer support7. Customer support

8. Valuable product info8. Valuable product info 8. Reliable shipping8. Reliable shipping

9. Posted privacy policy9. Posted privacy policy 9. Posted privacy policy9. Posted privacy policy

10. User-friendly navigation10. User-friendly navigation 10. User-friendly navigation10. User-friendly navigation



Myth 8: Flash makes a Web site better.Myth 8: Flash makes a Web site better.

Myth 9: It’s what’s up front that counts. Myth 9: It’s what’s up front that counts.

Myth 10: E-commerce will cause brick-Myth 10: E-commerce will cause brick-and-mortar retail stores to disappear. and-mortar retail stores to disappear.

Myth 11: The greatest opportunity for e-Myth 11: The greatest opportunity for e-commerce lies in the retail sector. commerce lies in the retail sector.

Myth 12: It’s too late to get on the Web. Myth 12: It’s too late to get on the Web.


Approaches to E-CommerceApproaches to E-Commerce

Online shopping mallsOnline shopping malls Storefront building servicesStorefront building services Internet service providers (ISPs)Internet service providers (ISPs) Hiring professionals to design a custom Hiring professionals to design a custom

sitesite Building a site in-houseBuilding a site in-house


Key Strategies for E-SuccessKey Strategies for E-Success

Your efforts must be Targeted, Integrated, Your efforts must be Targeted, Integrated, Interactive, and Intimate.Interactive, and Intimate. Consider focusing on a market niche.Consider focusing on a market niche. Develop a community.Develop a community. Attract visitors by giving away “freebies.” Attract visitors by giving away “freebies.” Make sure your Web site screams Make sure your Web site screams

“credibility.”“credibility.” Consider forming strategic alliances.Consider forming strategic alliances. Promote your site online and offline.Promote your site online and offline. Make the most of the Web’s global reach.Make the most of the Web’s global reach.


Designing a Killer Web SiteDesigning a Killer Web Site Select a domain name that is consistent with Select a domain name that is consistent with

the image you want to create for your company the image you want to create for your company and register it.and register it. ShortShort MemorableMemorable Indicative of a company’s businessIndicative of a company’s business Easy to spellEasy to spell

Be easy to find.Be easy to find. Give customers what they want, not what you Give customers what they want, not what you

want to sell them.want to sell them. Develop a simple design.Develop a simple design.


Designing a Killer Web Site Designing a Killer Web Site (con’t.)(con’t.)

Establish hyperlinks with other businesses, Establish hyperlinks with other businesses, preferably those selling complementary products.preferably those selling complementary products.

Include an e-mail option, telephone number and a Include an e-mail option, telephone number and a physical address in your site.physical address in your site.

Allow customers to order offline.Allow customers to order offline. Give shoppers the ability to track their orders Give shoppers the ability to track their orders

online.online. Offer Web shoppers a special deal all their own.Offer Web shoppers a special deal all their own. Assure customers that their online transactions are Assure customers that their online transactions are

secure. secure. Keep your site updated.Keep your site updated. Have a FAQ page.Have a FAQ page.


Testing & Measurement:Testing & Measurement:Basic Thoughts & GuidelinesBasic Thoughts & Guidelines

(Conventional & Online)(Conventional & Online)

It’s a “Continuous Process of Refinement.”It’s a “Continuous Process of Refinement.” Measure results before full commitment.Measure results before full commitment.

Always test something.Always test something. Across media types: Across media types: TV vs mail vs Internet vs phone vs PRTV vs mail vs Internet vs phone vs PR Within media types: Within media types: Site vs site. List vs list. Mag vs mag.Site vs site. List vs list. Mag vs mag. Segments within a media: Segments within a media: Different locationsDifferent locations Positioning/Image: Positioning/Image: Message, benefit, competitive advantageMessage, benefit, competitive advantage Creative: Creative: Headlines, sizes, graphics, copy, componentsHeadlines, sizes, graphics, copy, components The Offer/Deal: The Offer/Deal: Price, discounts, guarantee, shipping, giftsPrice, discounts, guarantee, shipping, gifts The Relationship:The Relationship: Bouncebacks, clubs, loyalty programs Bouncebacks, clubs, loyalty programs

Measure/quantify results.Measure/quantify results. Don’t forget to “Code” responses.Don’t forget to “Code” responses. Get “Audience Size.”Get “Audience Size.”


Testing & Measurement Testing & Measurement (con’t.)(con’t.)

Get your reports daily.Get your reports daily. Third-party sources: Third-party sources: ipro.com and spss.comipro.com and spss.com In-house sourcesIn-house sources

Profile your visitors:Profile your visitors: Demographics, psychographicsDemographics, psychographics Registration, warranty, surveys, ballots, service Registration, warranty, surveys, ballots, service

requestsrequests Don’t make major decisions on minor results.Don’t make major decisions on minor results. Remember that the Internet is a test in itself.Remember that the Internet is a test in itself.


Metrics: Tracking Web Results Metrics: Tracking Web Results # of Impressions# of Impressions # of Visits/Click # of Visits/Click # of Pages Visited & Visit Length# of Pages Visited & Visit Length First Time versus Repeat VisitorsFirst Time versus Repeat Visitors Most/Least Visited PagesMost/Least Visited Pages Entrance & Exit Pages Entrance & Exit Pages Most/Least Popular Visit TimesMost/Least Popular Visit Times Best/Worst KeywordsBest/Worst Keywords Best/Worst PathsBest/Worst Paths Which Browser UsedWhich Browser Used Referring URL Referring URL (links, ads,etc.)(links, ads,etc.) Users’ DomainUsers’ Domain


Ensuring Customer PrivacyEnsuring Customer Privacyand Site Securityand Site Security

Customer PrivacyCustomer Privacy Take an inventory of the customer data collected.Take an inventory of the customer data collected. Develop a company policy for the information Develop a company policy for the information

you collect.you collect. Post your company’s privacy policy prominently Post your company’s privacy policy prominently

on your Web site and follow it.on your Web site and follow it. Site SecuritySite Security

Virus detection softwareVirus detection software Intrusion detection softwareIntrusion detection software FirewallFirewall


Internet Business ModelsInternet Business Models Consumer-Targeted vs. Business-Targeted vs. Middleman-TargetedConsumer-Targeted vs. Business-Targeted vs. Middleman-Targeted

Supplemental versus Stand-AloneSupplemental versus Stand-Alone

WebsitesWebsites Online BrochureOnline Brochure Customer Service: Technical support, product Customer Service: Technical support, product

ordering, locator.ordering, locator. E-Commerce: E-Commerce:

» Selling various products/servicesSelling various products/services» Selling the site as a product itself: Info, education, Selling the site as a product itself: Info, education,

entertainment, tools entertainment, tools Sells subscriptions -- Sells subscriptions -- MySPXMySPX Portals & Virtual Communities – Portals & Virtual Communities – BlackVoicesBlackVoices.com.com Selling ad/banner space on the siteSelling ad/banner space on the site

Employee or Supplier Service (Intranet)Employee or Supplier Service (Intranet)


Internet Business Models Internet Business Models (con’t.)(con’t.)

Consumer-Targeted vs. Business-Targeted vs. Middleman-TargetedConsumer-Targeted vs. Business-Targeted vs. Middleman-TargetedSupplemental versus Stand-AloneSupplemental versus Stand-Alone

Email – [email protected] – [email protected] Auctions -- EBay Auctions -- EBay BLOGS -- MayItPleaseTheCourt.netBLOGS -- MayItPleaseTheCourt.net Hybrid: Combinations of the aboveHybrid: Combinations of the above


Best Internet Products/ServicesBest Internet Products/Services

Competitive advantage(s)Competitive advantage(s) Mailable, drop-shippable, downloadableMailable, drop-shippable, downloadable Line extendibleLine extendible Easy to describe and/or photographEasy to describe and/or photograph Easy to install, assemble and useEasy to install, assemble and use Potential customers are internet savvyPotential customers are internet savvy Reliable suppliersReliable suppliers Lends itself to repeat businessLends itself to repeat business Sufficient mark-up per unitSufficient mark-up per unit


Internet Marketing System ComponentsInternet Marketing System ComponentsMarketMarketplaceplace vs Market vs Marketspacespace

Marketing Mix ActivitiesMarketing Mix ActivitiesProduct Selection & PricingProduct Selection & PricingSite Merchandising: Design & Content/EditorialSite Merchandising: Design & Content/EditorialSite Distribution/MarketspaceSite Distribution/MarketspaceSite PromotionSite PromotionCustomer Service/FulfillmentCustomer Service/Fulfillment

Technical Infrastructure ActivitiesTechnical Infrastructure ActivitiesHardware/softwareHardware/softwareService Providers & SuppliersService Providers & SuppliersDatabasesDatabases

Administration ActivitiesAdministration ActivitiesHuman Resources & PayrollHuman Resources & PayrollAccounting & BudgetingAccounting & Budgeting


Online Promotion TechniquesOnline Promotion Techniques


E-ZINE MarketingE-ZINE Marketing

FreeZineWeb.com •An excellent eZine resource with links to promotional tools, products, and specific eZine categories, as well as other online marketing tools.

ClickBank.net •Offers $2 ezine ads and guaranteed visitors to your site! They have a subscriber base of over 248,000 and 143 ezines. Prices are:

•1000 Guaranteed Visitors - $79.95 •500 Guaranteed Visitors - $42.95 •250 Guaranteed Visitors - $22.95

Source: Wes-State Mortgage


E-ZINE Marketing E-ZINE Marketing (con’t)(con’t)

•E-Zine Ad Source Directory •provides the category, description, circulation and cost to advertise for thousands of ezines.•Articles are an excellent free marketing tool. Write and submit articles for eZine owners. If one of them chooses an article from you, it could reach hundreds of potential customers.

•IdeaMarketers.com •A forum to share your articles with 1,000's of internet users.



E-Classified Ad SitesE-Classified Ad Sites

•Yahoo!Classifieds •Business Solutions Classifieds •Best Mall Classified Ads •Five Star Classified Ads •A-Z FREE Classifieds •ClassifiedsForFree.com •FREE Software for Posting Classified Ads to Over 200 Sites!

•Classifinder •1AmericaMall •The ZAP Directory •NetClassifieds •Classifieds 2000 •VeryHOT.com

Classified Ad Broadcaster •Offers more than 2,000+ sites where you can place your classified ads as many times as you like, automatically and for free.

Other classified as sites:



Newsgroups/UsenetNewsgroups/Usenet

Newsgroups are niche markets of individuals Newsgroups are niche markets of individuals interested in the same topic. Participate in interested in the same topic. Participate in newsgroup and bulletin boards your target newsgroup and bulletin boards your target uses. Be subtle in promoting your business.uses. Be subtle in promoting your business. GoogleGoogle Yahoo!Yahoo! America OnlineAmerica Online Microsoft NetworkMicrosoft Network



Banner Ads and Pay-Per-ClickBanner Ads and Pay-Per-Click

Placing banner ads can be expensive for Placing banner ads can be expensive for popular sites. However, you can offer to popular sites. However, you can offer to exchange banners with smaller sites.exchange banners with smaller sites.

By purchasing pay-per-click ads, you may By purchasing pay-per-click ads, you may be able to control your ad costs.be able to control your ad costs. GoogleGoogle OvertureOverture payperclicksearchenginespayperclicksearchengines



Submit your URL to the top Submit your URL to the top Search EnginesSearch Engines

Search Engines are the core of Internet Marketing. Search Engines are the core of Internet Marketing. Submit your URL to the top engines. To appear on Submit your URL to the top engines. To appear on their first pages, you need to have a site loaded with their first pages, you need to have a site loaded with “keywords.” “keywords.” Click HereClick Here for additional info on this for additional info on this topic.topic.•altavista •AOL Anywhere •excite •Google •HOTBOT •InfoSeek | Go.com •looksmart •LYCOS •MULTIMETA

•Northern Light •overture •PLANET SEARCH •c|net Search.com •SearchKing •NBCi •WebCrawler •YAHOO!



Search Engines: Search Engines: Submit Your URL/Web Address YourselfSubmit Your URL/Web Address Yourself

The following are direct links to some major site The following are direct links to some major site submission pages:submission pages: AOL SearchAOL Search ExciteExcite Galaxy.comGalaxy.com LookSmartLookSmart InSiteInSite WebCrawlerWebCrawler Starting PointStarting Point



Search Engines: Search Engines: Use a Service to Submit Your URLUse a Service to Submit Your URL

Free-Search-Engine-Submission-Service.comFree-Search-Engine-Submission-Service.com Submit your site to 30 top search engines for freesSubmit your site to 30 top search engines for frees

SearchEngineWatchSearchEngineWatch.com.com Tips about internet search engines & search engine Tips about internet search engines & search engine

submission.submission. Magic-City.comMagic-City.com

Get a TOP 20 ranking in the major search engines. See Get a TOP 20 ranking in the major search engines. See Click Here to learn how.Click Here to learn how.

eSiteBlast.comeSiteBlast.com Provided by Overture.comProvided by Overture.com



Advertise on Advertise on Local/Regional/National Local/Regional/National

Portals/Yellow PagesPortals/Yellow Pages

Digitalcity.comDigitalcity.com Citysearch.comCitysearch.com Webguideyourcity.comWebguideyourcity.com Vacationweb.comVacationweb.com Major sites like Yahoo, Lycos and Excite Major sites like Yahoo, Lycos and Excite

also offer (higher priced) advertising. also offer (higher priced) advertising.



BLOGSBLOGS

Set up your own blog that shares your Set up your own blog that shares your thoughts about topics of interest to your thoughts about topics of interest to your targets. Visit and participate in blogs targets. Visit and participate in blogs created by others regarding similar topics.created by others regarding similar topics. Blogger.comBlogger.com Salon.com/blogsSalon.com/blogs


Email ListsEmail Lists Using Your Own ListUsing Your Own List

This is by far the best way to promote your business online and This is by far the best way to promote your business online and offline.offline.

Offer your prospects/customers something to entice them to give you Offer your prospects/customers something to entice them to give you their e-mail addresses? For example, offer to send them periodic their e-mail addresses? For example, offer to send them periodic updates on new products and services or create a free newsletter.updates on new products and services or create a free newsletter.

Purchase Syndicated ListsPurchase Syndicated Lists 247media.com247media.com Doubleclick.comDoubleclick.com

Spamming: Don’t send unsolicited emails. Spamming: Don’t send unsolicited emails. However, contacting people who have given you However, contacting people who have given you “permission” “permission”

or or “opted-in” “opted-in” is NOT considered spamming.is NOT considered spamming.



Promoting Your Website Offline Promoting Your Website Offline Include Your URL on stationery, cards, sales letters, Include Your URL on stationery, cards, sales letters,

brochures, flyers, press releases, TV/radio ads, print ads, brochures, flyers, press releases, TV/radio ads, print ads, packaging, product shipments, specialty ads, event packaging, product shipments, specialty ads, event sponsorships, trade shows, inserts, samples, and signage. sponsorships, trade shows, inserts, samples, and signage.

Put your URL on your answering machine’s recorded Put your URL on your answering machine’s recorded message. If someone calls after hours they may be able to message. If someone calls after hours they may be able to get the answer they want on your website. get the answer they want on your website.

Use a "Signature" which includes your URL in your emails Use a "Signature" which includes your URL in your emails and on your faxes.and on your faxes.

Announce to/remind your current customers about your Announce to/remind your current customers about your URL. It’ll provide them another way to do business with URL. It’ll provide them another way to do business with you. Offer them an incentive to use it.you. Offer them an incentive to use it.



Martha Stewart Does It All:Martha Stewart Does It All:Targeted, Integrated, Interactive, andTargeted, Integrated, Interactive, and

Intimate Marketing Intimate Marketing

24 Martha Stewart Books24 Martha Stewart Books ““Martha Stewart Living” MagazineMartha Stewart Living” Magazine ““Martha Stewart Living” TV ShowMartha Stewart Living” TV Show ““Martha Stewart Living” Newspaper ColumnMartha Stewart Living” Newspaper Column ““Martha Stewart Living” Radio ShowMartha Stewart Living” Radio Show ““Martha Stewart Living” CatalogMartha Stewart Living” Catalog Martha Stewart Personal AppearancesMartha Stewart Personal Appearances ““marthastewart.com” Web Sitemarthastewart.com” Web Site

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