No, this is not intended as a clever commentary on the current state of affairs in cyberspace. Nor is it an attempt to coin a new concept or definition. It is a wake up call for companies doing business on the Internet, especially for businesses that are not getting solid results. Up until now, ecommerce has focused on the wrong objective: namely making sales. It's getting to the point where everything on a site is designed to generate revenues. From the advertisers' banners, buttons, sponsored links, to the banners placed by affiliate members and, of course, to the display of the actual products or services offered for sale. No one can deny that the majority of sites have evolved to become lean, mean selling machines. So what is not working?
The fact is that most sites could be very successful business ventures if one major flaw in the fundamentals of doing business of the World Wide Web were corrected. Sorry, I am not going to reveal a quick fix that will magically turn sites in cash cows because, sadly, it does not exist. Nor am I going to divulge a revolutionary new concept for doing business on the Web; there is no need to do so. As you will see, for those willing to do the work, success on the Web is much closer than people think.
1. Poor e-business practices
Poor e-business practices are generally poor business practices. Case in point: Internet marketing services. Statistics show Internet marketing programs have not helped small businesses in 1999. Does this mean that Internet marketing is not appropriate for small businesses? Probably not. The problem is that the majority of Internet marketing programs they implemented had no chance of producing results from the start. Yet, these programs were sold anyway.
Sure, there have been questionable business services before, but the sad thing is that even some of the Web's biggest players have adopted a strategy where the focus is on selling and not necessarily making sure that the program would produce results for the company buying it. As a result, the number of small businesses who advertised on the Web in 1999 was down 10% from the previous year (source: Dun & BradStreet). This figure is quite disappointing but not surprising. Foolish would be the manager who continued to implement marketing plans that did not work. But more importantly it also demonstrates an important facet of doing business on the Web: if something does not work, you know right away. Vendors are consequently being punished faster than they are in the real world. This leaves them no chance to generate enough repeat sales per customer to cover their investments.
This WE-TAKE-YOUR-MONEY-AND-DON'T-REALLY-CARE-IF-YOU-MAKE-IT. THERE-ARE-MILLIONS-MORE-LIKE-YOU. SO-WE-WILL-GENERATE-REVENUES- BY-SELLING-TO-THEM-INSTEAD attitude is not exclusive to companies offering questionable Internet marketing services. Take e-commerce solutions vendors. Some want to equip your site with all the bells and whistles supposedly needed to do commerce on the Web. This might be fine for some companies, but it rarely is for the majority especially for small companies. Again, the focus is on the sale, not necessarily matching solution to the need.
2. So, what is ecommerce?
If ecommerce is not about selling, then what is it all about? Well, the key to doing business on the Internet is the same as doing business in the real world: achieving complete customer satisfaction. Forget about Web technologies for a moment; forget about next-generation web sites or rich media advertising. Get back to the basics: you are in business to meet specific needs and wants of a particular group of prospects. Your ultimate objective is to accomplish complete customer satisfaction. Sure, sales are part of the equation but they are not an end in themselves. Sales are needed because there must be an exchange between your company and your customer so that you can help him/her resolve a problem or satisfy a want.
It is not a revolutionary concept, but it forces managers to rethink their approach to doing business online. More importantly, it represents a starting point for solidifying the foundation of Internet activities, setting the direction for current and future Internet initiatives, as well as defining a web site's structure, strategy, and content. The result: clarity. Suddenly, determining which technologies will take you a step closer to achieving customer satisfaction is a lot easier; deciding what creates value to your audience a lot clearer. Maybe offering low-rate products for FREE is not really what your target market wants. Your customers might be willing to spend more on a product if it includes features that will help them reach their goals. The impact on your bottom line cannot be ignored. As you develop a system for achieving customer satisfaction, a viable online business model will emerge.
Eventually, managers will realize that a site designed to sell products is different from one designed to achieve complete customer satisfaction. How so? First of all, not everything is for sale. Information is offered to educate the consumer or customer as well as ensure that he or she is making the right decision. But more importantly, the site is designed around customer's needs. On certain occasions, a prospect will come to your site because she needs to buy your product to solve her problem. On other occasions, a prospect might come to your site to learn how to solve his problem. Your site will deliver exactly what each type of prospect needs. Sometimes it is a solution; sometimes it is advice, sometimes it might be a recommendation to look for another solution that better meets their needs. The content is different, the web site structure is different, the way a company organizes its Internet resources is different.
Take for instance, Eyewire.com. Eyewire sells royalty-free photo CDs, fonts, clip arts and other resources targeted at the desktop and Web designers' markets. The company uses a customer-driven ecommerce strategy. Consequently, the site's content and structure is largely determined by the audience's needs. Consider how the company describes its site: "More than a hard sell. At Eyewire, we understand the creative process. It's more than simply finding and purchasing the right image. It's also about inspiration and learning new ways to achieve the look you want. The Eyewire web site is filled with extras to help you get from concept to completed project. Application tips and tricks, columns on design issues, free downloads, and more. You might even find a few distractions along the way." (Source: Eyewire Single image guide). Contrast this approach with a site whose pages feature descriptions and thumbnails of photo CDs next to an "ADD TO SHOPPING CART" button.
And because achieving customer satisfaction varies from industry to industry and from business to business, so will the structure and design of web sites. Remember there are no web site templates; web page templates maybe, but no site templates.
3. A giant step towards profitability
Of course, in the end, the ecommerce system you develop to satisfy the needs of your customers must be profitable. The good news is that focusing on achieving customer satisfaction and achieving profitability go hand in hand (the former eventually leading to the latter).
Inevitably, satisfied customers come back for more. If you have done your job very well, they might even convince friends and family members to shop on your site. This is exactly what made EarthLink/Mindspring one of the largest ISPs in the World. The company makes an extraordinary effort to achieve complete customer satisfaction. Remarkably, a large portion of the business it gains comes from word of mouth. A smart way to reduce acquisition costs.
But for this approach to produce any significant results, there must be a sincere commitment from everyone involved in your ecommerce effort to achieving customer satisfaction. The dedication to achieving complete customer satisfaction transpires throughout Mindspring's organization. From the company's core values to ad campaigns, everything at Mindspring revolves around making the customer happy or, as someone else might put it, meeting the customer's needs before and after the sale. In 1999, Mindspring achieved the highest mark in all 7 categories used to measure customer satisfaction in the ISP category. You can do the same.