The dot-com shakeup has made us realize that selling on the Internet is not as easy as it was portrayed to be. In fact, making money online maybe harder than earning from business offline.
If you are going to survive and be a long-term success in e-business, then you need to be aware of the most common mistakes and pitfalls that can ruin your best-laid plans. Whether you’re new to e-commerce or have a well-established site, learn how to avoid the ten common pitfalls of online entrepreneurs
1. Weak Site Design
Your ability to gain the trust of your visitors is the key to success on the Web. As Ron Zemke and Tom Connellan in their book “E-Service: 24 Ways to Keep Your Customers – When the Competition is Just a Click Away” advise, “Convincing the buyer that you are trustworthy is the first and largest hurdle every e-commerce site faces to secure the first and most crucial sale.”
How can you win a customer’s trust on the Web? The first barometer customers use to judge your online business is your web site’s design. All the elements of your web site’s design – navigational structure, product presentation, copy and testimonials, proof of security – converge to give your visitors an overall impression of your business. The look and feel of your site allows your visitors to form their own judgment of trustworthiness.
To be able to convince visitors to take out their credit cards and spend on your site, you must design your site from a shopper’s point of view. It is essential to a have well-designed interface, with a professional looking, marketing-oriented and easy-to-use page layout. You must make sure that every graphics; text and technology used works to your advantage, rather than losing sales opportunities.
You must make it easy for your visitors to find your products with a clear navigational structure. A cluttered web page makes it difficult for visitors to see what you have to offer or figure out how to place an order. All links must work and lead to the right page. The content of your online store must also be updated regularly, to give the impression that someone is actively minding the store.
Think and constantly rethink your web site’s design: any misstep can make your customers suspicious or fearful, and you can kiss them goodbye.
2. Inadequate Site Usability
“Web usability,” a concept that has gained a lot of ground in the past year, is all about making the right first impression. More than having a good web site design, your site must be both useful and usable for your audience. Your site must perform the function for which it was designed, with the minimal amount of user frustration, time and effort.
Jakob Nielsen, author of “Homepage Usability: 50 Web Sites Deconstructed” emphasizes four points to increase the usability of your web site:
a. Make the site’s purpose clear. This entails clearly explaining what your site is all about. If you are selling home furnishing items from the Middle East or pashmina shawls from Nepal, include a one-line tagline that would summarize what your company or web site does. This will immediately tell first-time visitors what they can expect and buy from your site. Also be sure to provide additional corporate information should your visitors want to know more about your business and who you are.
b. Help users find what they need. This involves making everything obvious, ensuring that every vital link and tool is accessible on every page. Your visitors should be able to go to their shopping cart, shopping categories, search field, and customer service easily from any page of your site. You also need to anticipate how your customers will use your site, and be prepared to offer them the search technology that they need. They may want to search your site by price to allow them to select only those products that they can afford, or you may want to present them with suggested gifts for different occasions.
c. Reveal site content. Your customers should be able to see your best offerings immediately. In your homepage, present pictures of some of your best-selling or most recent products. If you are running a special promotion, such as free shipping for orders $100 and above, display it prominently on your homepage and create a link where the customer can read more about it.
d. Use visual design to enhance, not define, interaction design. You may think that online bells and whistles such as Flash homepage, interactive text that blinks or spins may sound exciting, but everyday users are staying away in frustration. If you wanted to buy something from a site, I’m sure you wouldn’t want to go through countless animations and slow to load pages to make a purchase. Use meaningful graphics that will not compromise your site’s loading time.
The key is to get feedback and outside perspective from other people – whether family, friends, or customers – to help you evaluate your site’s development and performance.
3. Obstacles to Shopping
Your customer can leave your site in a blink of an eye. Confuse them with your navigational structure, and they leave. Ask too much personal information for them as soon as they arrive at your site, and they click their mouse to a different site. Make it difficult for them to order, and they may not bother coming back.
Customers buy online because it is supposedly faster, at times cheaper, and more convenient than driving to the store. They come to your site primarily to look for products that fit their needs quickly and easily. Put an obstacle early on, and you may not get them to order anything in your site.
What are some obstacles to shopping? The main factors that negatively affect the growth of online shopping include credit card fears; failure to trust online vendors; fear of misdirected merchandise or receiving the wrong items; or having to return merchandise. Note that these are common consumer fears that affect all e-commerce sites.
Consumers also quickly abandon sites whose pictures take forever to download. Zona Research estimates that more than $4 billion annually, or $362 million per month, are lost due to unacceptable download speeds.
Buyers are also irked when the information they need is not immediately presented to them. You must put upfront a price with every product, and not make them drill down to the product description to know the price. Also, don’t wait until the checkout process to tell them the shipping and handling costs. Many customers abandon their shopping carts because they are required to put in their credit cards before they even know the shipping costs of the products.
4. Lack of a Comprehensive Marketing Plan
There is no truth to the “if you build it, they will come” notion on the Web. There are millions of web sites on the Web, and you need to create a reason and way for customers to come and visit your site. More than just customer “eyeballs,” you need to be able to convert their visit to actual sales.
Similar to starting a traditional business, you need to have a comprehensive plan to help you market your business on the Web. Your plan should contain a detailed analysis of who your customers are, where can you find them, what are their preferences, and how best to entice them to buy from your site.
You then need to develop a package of strategies that will bring your potential customers to your site. Some of these strategies may include search engine optimization, pay-per-click search engines, affiliate and pay-per-performance programs, banner advertising, offline advertising, press releases and other promotional strategies. All the strategies that you use should be carefully measured, to tell you which strategy gives the best sales per capita so you can focus on them.
5. Poor Customer Service
Not serving your customers well can have severe repercussions to your online business. Treat your customers badly and you can be sure that they will never visit your site again. Worse, these unhappy customers can share their “bad experiences” with your business to a lot more potential customers through emails, chat rooms, instant messages and discussion forums. Studies have shown that dissatisfied online customers tell twice as many people about their experience than do satisfied customers.
What constitutes poor customer service? Poor service may cover site malfunctions, complaints and service disappointments. It could include not answering emails promptly, totally ignoring customer complaints and suggestions, unsecured and confusing order forms, convoluted return policy, delayed shipment of goods, vague and misleading “Frequently Asked Questions,” among others. The perception that your business does not provide the top quality service could hurt even your business, and would render your most costly advertising and marketing programs ineffective.
Some of the ways you could improve on your customer service include:
– Answer emails promptly, whether the customer is praising or your business, or not.
– Promptly confirm orders when it is received and send out emails when it is shipped. It is also very helpful if you could encourage your customers to give you feedback on the products that they received.
– Encourage customers to contact you by placing your phone number and email address prominently on your site. There are a lot of customers who are still not comfortable in giving out their credit card numbers online and would rather call the business to place their orders.
– Some e-commerce sites go even to the extent of installing some form of live support on their sites to encourage interaction with customers.
– Read and re-read your FAQ section to make sure that everything is clear and understandable.
6. Wrong Product Fit
As e-commerce expands, there is one basic tenet that you should understand: not all products can be sold online. Many dot-coms had the mistaken notion that they can sell anything and everything on the Internet, only to realize that it just not true. Some products lend well to this medium, but there are many products that are hard, if not impossible, to sell on the Internet.
Reasons vary: shipping costs may be too high for the product (e.g. sofa and other furniture items); need for customer’s personal evaluation of the product (e.g. shoes that need to be tried on); high product liability issues (e.g. breakage for wine and spoilage for cheese); and need for personal salesmanship.
Both studies and experience have shown that there is a strong demand on the Internet for products that have high value and not easily found in the Main Street. Products that lend well to shipping without incurring too high a cost have also found a strong market on the Web. Information-based products and services, such as books, and software, are natural choices for the Web.
Before opening your online store, make sure that your product are suitable for the Internet. First, investigate where in the traditional world are your products being sold (e.g. neighborhood supermarkets or upscale boutiques) and compare their prices with yours if you add shipping and handling costs. If your price still comes out lower, then you have a strong advantage. However, if the price of your product comes out higher than the price of the same product in the supermarket, you need to ask yourself: “Why would a customer order from me with all the risks of a shipped product (e.g. breakage, wrong size, etc) than drive for five minutes to the local mall?” Will the convenience that online ordering provides suffice to attract buyers?
An objective assessment of your chances of success online can save you a lot of time and expense in the long run.
7. Failure to Prepare for Success
Once you have your e-commerce site up and running, with good traffic levels and high sales conversion rates, your next concern will be preparing for your growth. Success on the Internet can come quickly – if you are lucky and do things right – that you may find yourself ill prepared to handle the growth.
Successful online businesses grow at phenomenal rates. When success arrives, you’ll face far greater expansion costs if you neglect to do some planning now. Consider in advance how you’ll add additional capacity to your site to avoid traffic and bandwidth problems.
High traffic levels mean traffic jams. You may need to upgrade your web hosting plans to secure additional bandwidth and ensure that your web pages load quickly no matter how many users are accessing your site. You can also consider buying your own server and getting a high-speed Internet connection.
Right from the start, you must plan for growth. Some smart e-tailers install high-capacity hardware and e-commerce software as early as the start-up phase. This approach may be expensive for a shoestring entrepreneur, but it can save money by delaying or eliminating expansion costs later on. You also need to think about the peaks of your business (e.g. Christmas season), and plan for them accordingly.
8. Slow and Faulty Fulfillment
You may have heard of horror stories about dot-coms’ failure to deliver products on time — Christmas presents arrived after New Year; birthday presents reaching the customer after the party ended, among others. Your site may not be as big a story as Toys R’ Us 1999 holiday debacle to warrant media coverage, but the inability to fulfill delivery is the fastest way to destroy your online business. Products delivered late can destroy customer loyalty and thwart any remaining willingness to repurchase from your site.
To avoid disappointing customers (who are already wary whether their orders will arrive or not), clearly state on your site when and how they can expect their orders – and stick to that. If preparing for the order and delivery takes up to two weeks, state clearly in your web site early on in the ordering process that the product will arrive in two weeks time. You need to explain in detail at your site when an item can actually be expected to arrive.
If you expect the product to arrive late, be sure to inform the customer either through email or phone and the reasons why. You may also give them options to either cancel or change the order, should they be unwilling to cope with the delay.
If you expect demand to increase significantly either for the holiday season or as a result of business growth, consider outsourcing your fulfillment.
9. Failure to Specialize
Your level of capitalization will dictate the focus of your online business. If you are able to get investors to finance your business, you can target a broader product category for your business. You can aim to be like Wal-Mart of the retail world, or the Amazon.com of the Internet.
Alas, if you are operating on a shoestring budget, it is harder for you to compete with the Amazons of this world. It is best to focus on more specific product categories and try to become the best e-tailer for that sharply defined niche.
Niche marketing involves carefully targeting pinpointed market segments to deliver your product or service. It is a strategy that works well for small businesses, but is also used even by the country’s largest manufacturers.
The key is to be able to select a niche that offers potential for growth. The market must be focused, yet large enough to generate your planned sales volume. If the market is very small, it may be costly and difficult for you to find where the potential customers are and how to entice them to visit your site.
Be sure to check out your competitors, and study their products. Evaluate how your customer could possibly be enticed to switch to your competitors – is the competitor using a more robust shopping cart, or is their web design much more appealing? Beware of extremely specialized markets that offers no competition – others may have already found that the niche is too small to be profitable or hasn’t found a way to entice the market to respond to product or service offerings.
10. Failure to Consider Security a Top Priority
As indicated above, credit card security is still a main impediment to online shopping. You need to seriously consider the growing threat of electronic theft and sabotage when you design and start your online business. Security should be a top priority even before your site goes live.
Look for a back-end system that will making sure that the credit card information of your customers is as secure as possible. This allows your customers to make purchases in confidence.
Nach Maravilla is the President/CEO of PowerHomeBiz.com. For information on starting a small or home-based business, visit PowerHomeBiz.com at http://www.powerhomebiz.com
