Web business beginner series - Part1: What to do before building a Web strategy for a small business? Saturday , July 18 , 2009 by Hasnain Zaheer

Web business beginner series - Part 1: What to do before building a Web strategy

It is important for you as a Web business strategist or planner to clarify your goals and situation before you start thinking about building a Web presence. Hasnain Zaheer explains these pre-requisites.

Introduction

The commercial Web made its presence felt in the mid-90s. By the eve of the new millennium, many business people had recognised its game-changing potential. Unfortunately it was prematurely hyped up in the media and markets in 1999-2000 while it was still developing and was far from reaching its potential.

As a result, a massive market crash in the ‘dot-com’ sector kept it under water for 4-5 years. However, it continued growing even during those icy years of 2001 to 2004. Developers and business people continued working on Web applications and business models that were not just new and innovative but also practical and low cost. By 2006, we realised that the Web is on the way to occupy the centre-stage of much of our personal and work life, this time led by Web 2.0 and social networks.

But, now that the Web business’ potential is being realised, many people underestimate it, fearing that its performance will once again lag promises.

Australia is a mature Internet market with about 75% of the population online covering more than 15 million people, according to Internet World Stats.

Well, not everyone with a computer is buying grocery online but as consumers, we are certainly communicating by e-mail and instant messaging, using banking services, researching our options to study and travel, comparing product features, connecting with colleagues and friends on social networks and shopping for books and electronics.

We have certainly become a connected society and a business owner should not ignore the Internet’s potential to improve, if not transform the way they conduct their business.

Wait…before you rush inviting a quotation for a new website, think about your web initiative carefully and monitor as it is planned and implemented. Here are a few pointers:

Do you actually need to go online? The answer to this question would certainly be Yes. Whether it’s a feeble ‘Yes’ or a roaring ‘Yes’ depends upon the nature of your business.

Let me explain how the nature, location and industry affect the level of attention, investment and focus required in building a Web business.

So, going back to the question: Do you actually need to go online?

Highly localised, high touch business?

If the answer to the above question is a feeble yes, you are probably a highly localised business owner servicing a small, local community. A local fast food franchise, a hair stylist or a café may be examples of this type of business. But that’s not all - a much larger business that depends upon personal contact and negotiation to seek customers and deliver their products may also be less excited about the Web.

Highly Web oriented business

On the other hand, you probably roared out a Yes to Web business if you operate a business that does not depend on geography or location and probably deal in computer files and other software that can be easily transported over computer networks.

For example, a music composer or a software developer who feels that they have a great product on their hands can easily publish the specifications of their product online, offer it for a trial by way of a free download, accept order with online credit card payment, and deliver the product by allowing the customer to download the fully working product. Such a business will completely revolve around its Web initiatives.

Can you map your business to the Web?

Most businesses lie between the above two extremes. In some cases, it is enough to ‘paste’ a ‘brochure’ Web site with a brief description of their products and services and their contact information. Other businesses have much greater potential and it would be a mistake to build a Web site that does not help you reach that potential or a Web site that only goes halfway in fulfilling its business potential. Before spending your dollars, evaluate the nature of your business.

1. Can your business derive value from the Web? To what extent?

2. Can the business justify the investment? Have you calculated a Return on Investment?

3. Can your products or services be easily described, displayed and ordered on the Web? What about transport or delivery? Domestic and international regulations on their sale and distribution?

4. Do the economics of the business, product or service support the shift to the Web of a few or all aspects of your business?

5. Are you ready for the initial and regular commitment of time and expense in building and maintaining a Web site and the associated marketing programmes for search engines, e-mail or newsletter, social media, viral and other programmes.

What are your online business objectives?

Have a clear understanding of what you want to achieve from your Web initiatives. This is the most important set of questions: 1. What are your competitors doing on the Web? 2. Are your Web initiatives designed to gain an edge over the competitors, to equal them or to narrow the distance? 3. What are your objectives for your Web site? To build a name or brand, to make sales, to service your customers post-sales or any other? 4. Have you worked out the numbers for sales, profits, awareness level, exposure or any other metrics over short and long term to achieve your objectives? 5. Do you have an idea of your expected return on this investment. What is your offering? A little more discussion is required on this issue. What is the nature of the product or service you are trying to offer online? Are customers willing to buy it over the Internet?

From past experience, initiatives to sell grocery and other physical products that a customer would like to ‘look and feel’ did not fare well in the market. However, information based products such as books are a success because their attributes and information are very easily captured and delivered in much greater detail (expert reviews, user reviews, books on the same topic and so on) on an online book store. As a result, you probably get a great experience browsing and buying books online.

Purely digital products such as reports, e-books, software products, and music are most suited for online stores because you can not only take orders but also deliver them online.

However, don’t estimate the power of the Web to help you connect with and engage your customers even if your product or service is not exactly sold or delivered over the Internet.

Are your customers ready for it?

Look at the online consumer behaviour of your target audience and evaluate if they are ready to accept your online offering. If your target customers are not comfortable sharing their credit card number online, then it is okay to just provide information of your product and have a page for contact information, whereas the rest of the order is fulfilled offline. It is better to provide offline services that satisfy your customers rather than confuse them with online services that they are not ready for.

Have you analysed your customer segments and positioning carefully?

It is found that niche services or narrow scope of offerings is more successful than broad based sellers on the Internet. So, for example, if you offer everything in musical instruments, customers may often not find what they are looking for and may not consider you a specialist for their niche interests. Instead, you may say that you have everything in drums. And ensure that you have the most comprehensive range and expertise in a narrower area so you are the first choice for people interested in that area. Of course, it depends upon your objectives and resources available to you, and competition landscape among others.

It is important that you decide the nature of your online offerings, the level of complexity of your online initiatives and the actual products and services after a basic research of your field and customer profile.

Strategy follows only after a careful review of the existing business situation, its potential, resources available and business owner’ objectives. Any shortcuts will lead to an unworkable Web business strategy.