In fact there is no secret but five areas on which the result of an e-commerce project depends. If you properly care for all of them, your success is guaranteed. If you are perfect in a few of them, your chances are much greater but there is no guarantee.
For the sake of clarity, I understand success not only as high product or service sales volumes but also as clients’ satisfaction and loyalty.
Area 1: Brand
A pillar of marketing communication; any actions will always be taken in the context of a brand with its history being created and reputation being built at the same time.
Even a best prepared product will not be received well by the market, if there is no trusted brand behind it. Best if it is reputed and if it has got no own history yet, it should at least be well designed.
Components of this area are:
- name – naming has already become a marketing field
- visual identification – (CID) – logo, colour use, typography etc.
- story – the concept of a brand, which is to be communicated by all branding actions
- image – features a brand is associated with in reality; these characteristics do not always agree with the story
- promise – values which the buyers expect form the products of a given brand (e.g. high quality)
- history – the age of the brand, its offer, market position and clients’ opinions to date.
Example: iPod shuffle is by no means a revolutionary product nor particularly better than its competitors. But thanks to the image and power of the Apple brand, it is perceived as special and is selling perfectly. That is owing to the history of the brand: the image is consistent with the story and the promise is fulfilled.
Area 2: Offer
This is of course the most important of all five areas. If a product is really good, it can sell perfectly event without most of the other areas (see: example).
Components of this area are:
- target group – identified potential buyers being “compatible” with the brand image – the market
- product or service – a specific core of the offer
- benefits – what needs of the target group it satisfies
- price – not only the amount itself but the whole pricing model (e.g. discounts, installation charges, subscriptions)
- added value – additional characteristics of a product which mark it out from the competition (e.g. quality, unique design).
In the case of online shops, there is one more component that comes into play: manufacturers’ brands.
Example: from 1997 to 2006, HTC, a Taiwanese smartphone producer with a 7 per cent share in the global smartphone market, provided operators (e.g. Orange) with cutting-edge devices which were then distributed by the operators under their own brands (e.g. Orange SPV, O2 XDA). HTC decided to start promoting their own brand only in 2006.
Area 3: Processes
What influences the final effect, i.e. the customer experience, apart from the product is also the effectiveness of processes, from the purchase, delivery and complaint handling processes to after-sales support service (warranty, servicing, updates etc.).
It is important that tools (e.g. an online shop) are adjusted to the optimised business processes and not the other way round.
Components of this area are:
- optimisation – striving for perfection consisting in the maximising of effectiveness and minimising of efforts (costs, time etc.)
- customisation – because the comfort of the client is more important than the comfort of the seller
- transparency – making the information on the processes available to their potential participants
- development – on-going updates in response to the ever-changing environment (including competition).
Example: One of the 3 largest PC producers, Dell Computer, is famous for its highest-quality customer service processes. Through the entire delivery process, you can track online the order status of the device (whose units you can choose on your own) you ordered on the producer’s website. But there is more: any moment you enter the serial number of the product, you get the history of the device (including any possible developments) and access to all possible drivers and updates.
Area 4: Website
It is not without a reason that the main tool of online sales is just item 4 on my list. The three areas above are simply more important and must be touched up first. In extreme cases, having your own website may even be unnecessary (when you produce, as mentioned before, for other brands or you sell entirely through an auction portal).
Components of this area are:
- layout – understood broadly – from creation to properly coded templates
- mechanics – foreseeable and reliable functionalities (navigation, forms, process handling etc.)
- content – texts, graphics and multimedia, with their meaning and form adjusted to receivers
- usability – such construction of a website that all its elements enable you to reach the goals you have defined in the simplest and quickest way
- conversion – the actual usability of the website, i.e. the percentage of its visitors who decide to take a given action (place an order, register etc.).
Example: The largest online shop in the world, Amazon.com, sells hundreds of thousands products a day. One of the factors that made it possible for them to reach such volumes is the extremely efficient hardware and software infrastructure. Thousands of online shops in the world continuously watch Amazon and follow their solutions. After all, why should you not use the experience of others gained from millions of users?
Area 5: Advertising
I took the liberty of referring to the area of any online activities with a view to attracting potential buyers to the website as advertising.
The main measure of how effective advertising activities are is the cost per click (CPC). However, because the “quality” of attracted users is different, the cost of winning the client is in fact a really reliable measure; we calculate this cost by comparing the CPC to the conversion rate mentioned above.
Components of the advertisement area are:
- message – content of the communication and creation
- means of conveying – form in which the message is communicated (e.g. banner, e-mail, text box, blog article, virus video, comment etc.)
- medium – a way of reaching users (website, e-mail addresses base, social networking service, discussion forum etc.)
- verification – tracking the results permanently and optimising other components (against CTR, CPC or CPM).
Example: “Paczkobranie” [package taking] – a campaign which introduced Paczkomaty 24/7 into the Polish market and combined advertising components effectively enough that it resulted in 320,000 Facebook users being involved and in Mixx Awards 2010 for the agency which handled the campaign. A creative contest in the social networking service and a PPC campaign for only 2500 clicks triggered a real avalanche.
Summary
A key to be successful when selling online is the selection of components in each of the areas I mentioned. I deliberately do not write “right selection” or “appropriate components” because there is no ideal configuration. And it cannot exist because the external factors which influence the results (e.g. technologies, fashion, competition etc.) are changeable. And they are much more changeable than in the case of traditional commerce.
That means there is necessity of constant experimenting. Trials and errors. Testing and checking. And after you have reached a satisfying level of effectiveness you need to maintain it and introduce further changes in response to the changing environment.
Does that mean that we have to grope in the dark while selling online? Absolutely not. The generally-available knowledge on each of the areas narrows the set of effective actions and gives us as much free hand as is necessary to … determine the success or failure.
