I would like to start the series of articles about business processes online by looking at them from a perspective of entrepreneurs. The topics of articles will be closely linked by both creating a volume of knowledge for beginners, and providing suggestions to specialists.
Taking into consideration our experience, in this article we will look at the main factors that disturb to develop online for the majority of Latvian companies:
Problem Nr.1. No data, knowledge, or understanding about business processes online.
Problem Nr.2. No strategy for online business development.
Problem Nr.3. Not sufficient funding for online marketing.
We will proceed to the solutions of these problems in detail.
1. Knowledge and understanding about online processes.
Gathering data.
In order to take a right decision about investments in the internet, an entrepreneur needs data. The lack of data often leads to making wrong decisions and negative first experience.
Where to get these data and what data you should look for? Of course, you have to look yourself online. You might be interested in the data about the development of internet as a medium, the development of your sector and the use of mobile devices online both worldwide and in Latvia. The world data will show tendencies that with a great delay will appear also in Latvia. For your insight – the classical marketing model with comparison.
According to our assessment, currently Latvia is in the first phase, but developed countries are in the 2nd and 3rd phase, USA and UK are leaders.
Pay attention that now more than 50% of world’s inhabitants are below age of 30, but iPads are introduced in the kindergarten training. These are only some of the facts to model the future perspective. The question remains, if you can see the connection and become those entrepreneurs who will gain guaranteed success by effectively using internet as a platform for your further business development.
Knowledge acquisition. Understanding creation.
When you have obtained data, then it is time to gain extra knowledge that is necessary at least for intuitive understanding about online processes. For more in-depth comprehension one must acquire the basic terminology of sector which is not complicated. Have a look at these 5 terms:
website as a sales’ tool – it is not important whether you selling a product or a service. This platform can become a powerful source of profit. Website is in the centre of your sales system;
flow of target audience – correctly created sales system will bring the flow of target audience – that part of consumers who are your potential clients;
conversion – is some action you desire to achieve from visitor of target audience on your platform – request of information in form, leaving e-mail, showing interest about goods and services by using e-mail, purchase, repeated purchase;
metadata – is data about data that are found on the website. It is like an information reading standard. Google search engine particularly highly estimates this prepared information. If metadata are not technically correct, it will be difficult to reach the first positions on the first page of Google;
keyword – isthe smallest unit of information in the search field. It can be one word or a group of words. Each business must identify the list of its own keywords that could bring the target audience flow. In the reality, this list considerably differs from what entrepreneurs themselves have identified.
Where to learn further? Self-education online, by visiting online (digital) marketing conferences, watching the free webinar series by Latvian Association of Internet marketing, and exploring the blogs from internet marketing agencies.
Entrepreneurship nuances on the internet.
The classical entrepreneurship with shops differ from online entrepreneurship; there is no difference if you are selling goods or services, as well whether you sell them to companies or to individual consumer. Online company has to be able to create distance credibility. In the last 10 years, the internet has completely changed the habits of buying goods and services.
In their research, Google discovers that a consumer will check 10 information sources on average before making a decision. It can be a) information search engines (Google); b) social networks; c) other media: TV, radio, and newspapers; d) private communication.
The last year’s social media research analysis showed that only 14% consumers believe in commercials, while 90% trust their peer recommendations. 53% Twitter followers in their tweets suggest various products which mean that information about goods reach you without you having to search for it.
Still there isn’t more powerful commercial than “word of mouth”. The possibility to share easily with information has made this medium the most important platform that influences decisions on buying goods and services, in particular, in the segment of youth. The time that consumers spend in this medium via various devices increases with every day.
There are at least 10 crucial factors that considerably influence online sale. At the beginning, we will have a look at 3 of them: esthetical assessment of website, price and product return policy.
Visual assessment of website
The very basic for sale is a platform – website that serves a sale tool. Its visual design is particularly important. On average, up to 75% of website visitors pay attention to visual design of online sites, unconsciously assuming that the purchased goods will correspond to the same esthetical criteria.
People regularly choose a product guided by the most beautiful packing. The esthetical enjoyment creates additional credibility that to seller means bigger opportunity of conversion or sale.
This opinion will be as a base for any further action that website visitor probably will do on the website.
Price
People often go to shop to examine the desired product and use online shop to buy it. The costumer expects a better price online and it has its reason.
Internet allows companies to offer clients a better price in comparison to offline shops. Mainly it is related to the automation of various business processes – the abilityto obtain goods and serve customers for lower price.
Still the majority of Latvian companies have not introduced different price policyfor goods and services online.
Product return policy
Price is only one of three main criteria for buying a product online. According to this research, for 33% consumers it is not the main factor either. Another criterion is product return policy. Examples: a) purchased shoes do not fit, because do not match to the shown size; b) the colour of T-shirt does not correspond to the image. These conditions have a great impact on the motivation to purchase goods, but in the long-term they increase the loyalty to seller.
In the area of services, an analogy would be a guaranteed return of100%paid money to customer for improperly provided service without any objections. It is a common standard in developed countries; however, in Latvia this process has been introduced only recently.
2. Strategy for business development online
The lack of strategy means that the company has not put forward any goals and there is no plan of steps how to achieve them. Therefore the strategy is short-term and long-term. It is crucial to understand what can be achieved and if it can be achieved. In this case, the gained knowledge can serve a great deal to the entrepreneur.
There is a stereotype that a magic wand or trick exists that will make an average business online into a blooming one in short period of time. This shortcut does not exist.
Firstly, you must put in order your content – the content of service, brand and etc. In Latvia, dozens equally strong companies offer the same services. In order to achieve a leader position in such a saturated market, one must clearly see those small differences from competitors that could be distinguished as the strong sides. In this context, we advise to make a careful SWOT analysis.
3. Necessary funding for online marketing.
There can be no conversation about substantial results without suitable funding directed for the achievement of goals. So how much money is needed for development? To determine that, it is crucial to define goals, how to achieve them and how fast you want to achieve them (look p.2.)
Financial investment in online marketing in the current economic situation is a difficult question for the majority of small and medium enterprises. The companies mainly are ready to invest only risk capital. Different companies have various size of risk capital, starting from hundred euros up to several thousand per month.
One of our suggestions is to overlook the effectiveness of existing marketing channels. Can your company calculate the returns from investments in these channels? Our individual experience show that mainly they cannot. Currently the investments in marketing happen according to the crowd principle – my competitors are doing this, therefore I’ll do it and I’ll pay even more, because it will surely bring proportionally even better results. As a result, you expect a miracle that will never happen!
Therefore we can safely assert that funding for marketing is provided, but is improperly used. In this context, we would like to invite companies to examine their marketing budgets more carefully for various printed media and materials, online business catalogues and exhibitions.
What to do with the released resources? Fix a monthly budget with whom you can gradually start to implement your strategy. Place your website in the centre of your sale system. Identify your keywords and flow channels. The most crucial – analyse results in a specific time period! The process analysis is what distinguished beginners from leaders. Understand with what budget you can achieve what results.
Observe this order of tasks:
We invite you for discussion about this topic in the comment section. It will be very interesting to know the range of your main problems!
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