Chapter 3 Selling on the Web Learning Objectives

Chapter 3 Selling on the Web

Learning Objectives • Discuss approaches to revenue models • Discuss the transition between models • Discuss the revenue strategy issue • Compare and contrast alternatives to create an effective business presence • Explain website usability • Discuss effective communication 2

Creating an Effective Web Presence • Businesses always create a presence in the physical world by building stores and office buildings. • The only contact that customers and other stakeholders have with a firm on the Web is through its presence there. • Creating an effective Web presence can be critical even for the smallest and newest firm operating on the Web. 3

Why is it so important? • 97 Million People Online • $7 Trillion This Year • 50 Times More Than 1999 • 1 Billion Emails Each Day in US • Doubling Every 17 Months • Within 5 to 10 Years expected to double every 11 Hours 4

The situation today … 5

Online vrs Traditional marketing • Consumers Want Time Savers • Education & Research • People Communicate Differently 6

Revenue Models • • Web Catalogue Revenue Models Digital Content Revenue Models Advertising Supported Revenue Models Advertising-Subscription Mixed Revenue Models • Fee-for-Transaction Revenue Models • Fee-for-Service Revenue Models 7

Web Catalogue Revenue Models • 130 year old idea • Mail Order catalogue revenue model • Seller – establishes a brand name – using brand strength to sell through catalogs • order via a toll-free number or website – important for the web-weary • Computers, consumer electronics, books, music, videos, luxury goods, clothing , flowers and gifts • http: //www. amazon. com 8

Digital Content Revenue Models • Reduction of Printing costs – Reduction of fees charged • Examples – – Legal research tools Doctoral dissertations and masters thesis Journals and Books First pioneers where sellers of adult digital content! – http: //search. epnet. com/ 9

Advertising Supported Revenue Models • As used by network televisions • Sales grew by 1998 but reached a plateau in 2000 • Now improving gradually • Major problems – No standard for advertising charges – few web sites have enough visitors to interest advertisers • Examples: Web Portals, Newspaper publishers, Niche Market sites • http: //www. timesofmalta. com/ 10

Advertising-Subscription Mixed Revenue Models • Subscribers pay a fee and accept a limited amount of advertising • Used by distinguished newspapers – New York Times – Wall Street Journal • Others provide free access to recent news but charge a fee for archived news • Others require subscription to print version for access to entire site • http: //www. nytimes. com/ 11

Fee-for-Transaction Revenue Models • Fee charged based on number/size of transaction • Disintermediation – removal of middle-men in selling • Re. Intermediation – Use of fee-for-transcation sites in selling • Examples – – – – Travel Agents Automobile Sales Stockbrokers Insurance Brokers Event Tickets Real Estate and Mortgage Loan Brokers Online banking and Financial Services • http: //www. hsbc. com. mt/ • http: //www. bov. com/ 12

Fee-for-Service Revenue Models • Fee charged based on value of service provided • Examples – Online Games – Streaming of Concerts and Films – Professional Services • limited by state-licensed professions • http: //www. java. com/en/ 13

Revenue Models in Transition • Subscription to Advertising-Supported – Microsoft Slate Magazine • Advertising-Supported to Advertising-Subscription – Salon. com • Advertising-Supported to Fee-for. Services – XDrive • Advertising-Supported to Subscription – Northern Light • Multiple Transitions – Encyclopedia Brittanica – info-seller to advertising-supported to advertising subscription models 14

Revenue Strategy Issues • Channel Conflict and Cannibalization – competition between different selling channels • Strategic Alliances and Channel Distribution Management – companies join in an activity over a long period of time (Amazon) – web portals and web services • Mobile Commerce – Growing, but not as fast as expected 15

Making it sticky! • Stickiness is critical in creating a presence that attracts advertisers • People will spend more time on it and visit it often • What makes a website sticky? • Give some examples with websites you use regularly 16

Channel conflict and cannibilisation • Levi’s jeans – Sell through shops – Sell through website – Conflict occurs • In 2000 Levi’s stopped selling jeans from their website 17

Identifying Web Presence Goals • On the Web, businesses have the luxury of intentionally creating a space that creates a distinctive presence. • A Web site can perform many image-creation tasks very effectively, including: – – – Serving as a sale brochure Serving as a product showroom Showing a financial report Posting an employment ad Serving as a customer contact point 18

Achieving Web Presence Goals • An effective site is one that creates an attractive presence that meets the objectives of the business or other organization. • Possible objectives include: – – – – Attracting visitors to the Web site Making the site interesting enough Convincing visitors to follow the site’s links Creating an impression of corporate image Building a trusting relationship with visitors Reinforcing positive images of the organization Encouraging visitors to return to the site Creates a positive image and reinforces existing ones 19

The Toyota Site • The Toyota site is a good example of an effective Web presence. • The site provides: – A product showroom feature – Links to detailed information about each product line – Links to dealers – Links to information about company – http: //www. toyota. com/ 20

Quaker Oats • Quaker Oats has created Web sites that did not offer any corporate presence until 1999. • In 1999, Quaker Oats changed its Web page to improve its general appearance and user-friendliness. • The Toyota and Quaker Oats examples illustrate that the Web can integrate an opportunity for enhancing the image of a business with the provision of information. 21

Quaker Oats in 1998 22

Quaker Oats in 2000 23

Quaker Oats in 2002 24

Not-for-Profit Organizations • A key goal for many not-for-profit organizations is information dissemination. • The combination of information dissemination and a two-way contact channel is a key element in any Web site. • The American Civil Liberties Union and American Red Cross have created effective Web presences. • Political parties and museums also use Web site for their image presences. 25

How the Web is Different • The failure to understand how the Web is different from other presence-building media is one reason that businesses fail to achieve their Web objectives. • Firms must use the Web’s capability for twoway, meaningful communication with their customers. 26

Meeting the Needs of Web Site Visitors • Businesses that are successful on the Web realize that every visitor to their Web site is a potential customer. • Creating a Web site that meets the needs of visitors with a wide range of motivations can be challenging. • Technology variation can be another concern to Web presence. 27

Meeting the Needs of Web Site Visitors • A good Web site should give the visitor the option to select smaller versions of the images. • A good site design lets visitors choose among information attributes, such as level of detail, forms of aggregation, viewing format, and downloading format. • Flash Debate 28

Trust and Loyalty • When customers buy a product, they are also buying that service element. • 5% increase in loyalty can yield 25 to 80% profit increase • A seller can create value in a relationship with a customer by nurturing customers’ trust and developing it into loyalty. • Customer service is a problem for many corporate sites. • A primary weak spot for many sites is the lack of integration between the companies’ call centers and their Web sites. 29

Usability Testing • Firms are now starting to perform usability testing to their Web sites. • As the usability testing becomes more common, more Web sites will meet their goals. • Eastman Kodak, T. Rowe Price, and Maytag have found that a series of Web site test designs help them a lot. 30

Customer-Centric Web Site Design • Design site according to visitor’s navigation, not company organization • Avoid jargon and business terms • Cater for low-end clients • Consistent features and colours • Visible text and navigation controls • Test colour combinations for colour blind visitors 31

Identifying and Reaching Customers • Two general ways of identifying and reaching customers: personal contact and mass media. • An important element of corporate Web presence is connecting with site visitors who are customers or potential customers. • Mass media is a one-to-many communication model • The Web is a Many-to-one communication model, • Personal contact is a one-to-one communication model. 32

New Marketing Approaches for the Web • The Web is an intermediate step between mass media and personal contact. • Using the Web to communicate with potential customers offer many advantages of personal contact selling and many of the cost savings of mass media. • Gartner. Group reported that customer-centered marketing strategies would be an excellent fit for the Internet marketplace. 33

10 Marketing Tips • • • Grab ‘em Don’t mix messages Feature a call to action Retain your branding Make it easy to contact you Use expected colors and imagery Optimize for search engines Feature testimonials Focus on the visitor Adopt a privacy policy 34

Grab’em • A good headline… – Is focused on the visitor, with words such as “you” and “your” – Is the dominant element on the home page – Appears larger than even your logo, company name or tagline 35

Don’t mix messages • Be clear • Feature what you offer – Use pictures – Use relevant text • Link directly from those images on the home page to detailed pages with extensive information and more pictures 36

Always observe the 1 -2 -3 rule 1 – 2 – 3 … I’m ‘Outta Here! • Can visitors find whatever they want within “ 3’ clicks? • Based on experimental results. 37

Feature a clear call to action • Tell the site visitor, on the home page, exactly what you want them to do • Visitors will read your site content at length if it answers their questions • Be sure to ask for the business at the end of the page or article (get to the point) 38

Retain your branding • Building upon your existing brand identity is key to immediately establishing trust… • These elements need to be consistent with your brand’s off-line identity… – – Brand logo Brand name Key messaging Graphics 39

Make it easy to contact you • Your visitors don’t want to dig for the basics, so make sure it’s easy to find the following: – – Telephone numbers Contact forms (mini and full) E-mail links Physical address of your place of business in an easy to copy format 40

Make it even easier to contact you • E-mail Signature w/ Contact – Hyperlink to Your Site – Peak Interest w/ Free Offers – Focused E-mail Subject Line 41

No surprises • Use industry-appropriate color and imagery – Give your visitors what they expect exactly as they expect it – Don’t attempt to re-brand your industry – This is your opportunity to be consistent and professional at the beginning of the sales process 42

Optimise for search engines • Search engine optimization is the art and science of increasing your website’s visibility in the major search engines across a strategically defined set of keywords and phrases that apply to your products or services • An estimated 77 percent of Internet users employ search engines to find Web sites • 20, 000 Search Engines & Directories • If you are not listed on Google or Yahoo, you are invisible – It doesn’t matter how well known your brand is! – Visitors will not guess your site name but will go through Google or Yahoo just to be safe 43

But how to market to Search Engines? • • • Unique Content Links to Your Site (ask!) Design Fundamentals make a difference • Top Search Engines by Search Share, January 2005, U. S. , Home & Work Search Engine Google Search Yahoo! Search MSN Search Total • Searches* in thousands 1, 923, 153 868, 174 523, 188 4, 085, 880 Share of Total Searches 47% 21% 13% 81% Note: Searches are the total number of queries conducted at a search engine during the specified reporting period, excluding internal site searches. 44

Search Engines count in links … • Search Engines measure popularity through links • Don’t be a copycat – unique content matters 45

Speak the Search Engine language • Find out what you are saying to the search engines • Keyword Density • Bloggers Linking to you? • Test Your Web Site Here: http: //www. schipul. com/ en/sem/keywords/ 46

Buy your way to the top … 47

Get a hand from popular sites … • Often overlooked quality links • Make sure your link – is done right! • Organization sites typically rank well. 48

ETC Website Case Study 49

ETC Website Case Study (1) • www. etc. gov. mt • A year after its launch • How many links does it has? • www. etc. gov. mt = 83 links • How many links does the old (deactivated) website still have? • www. etc. org. mt = 222 links 50

ETC Website Case Study (2) • What about keywords? • Which are the most representative? • Some stats according to http: //www. schipul. com/en/sem/keywords/ … – – Word count: 131 Total links: 61 Percentage of links to words: 102. 29 (%) And more … 51

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ETC Website Case Study (3) • What’s in a keyword? • http: //inventory. overture. com/d/searchinventory/suggestion/ Vacancies Employment 53

Feature Testimonials • Assure visitors that you are a “real” company with a solid reputation – Gain client approval to use a quote – Even better, use client logos and link to their Web sites – Never assume that everyone knows you want their business 54

Focus on the visitor • Cater to what the visitor wants and needs from your site, then give it to them… – If you are a association, offer online registration and case studies – If you are a plastic surgeon, offer dynamic before-and-after photo galleries – If you are targeting the younger generation, offer games or social software tools (myspace. com) that feature your brand 55

Adopt a privacy policy • Respect the privacy of your site visitors with a privacy policy – Link to a written privacy policy at the bottom of every page – Be sure policy is written in normal language, not legalese 56

Privacy Policy contains … 1 • Gathering and using information – only collects personal information from our visitors on a voluntary basis. – We don’t require this information to obtain access to any of our sites. – Personal information may include name, address, e-mail address, age, etc. , and may be collected for contest entry forms, requests for information – We may also occasionally ask, on a voluntary basis and with parental permission, if appropriate, for personal information for our internal use, such as marketing and research. – Personal information received from any visitor will only be used for internal purposes and will not be sold or provided to third parties. – Since the information you submit to us may not be encrypted, we cannot guarantee the absolute privacy of that information. – Only those who ask to be added to our update lists or who ask for information from us will receive e-mail from us. – If you want to remove your or your child’s e-mail address from our files, please let us know. 57

Privacy Policy contains … 2 • Kids and Parents – Kids If you are 18 years of age or younger, please be sure to ask your parents for permission before providing any information to us. – Parents We hope that you and your kids enjoy our web site. In communicating directly with minors over the Internet, we recognize the unique issues raised regarding the protection of your kids’ privacy. The Children’s Advertising Review Unit (CARU), a section of The Better Business Bureau, has issued guidelines for web sites gathering information from minors. The company intends to comply with the CARU guidelines in order to protect your kids and their privacy. 58

Privacy Policy contains … 3 • Cookies – The company may use "cookie" technology to obtain non-personal information from its online visitors. The cookie tracks the total number of visitors to our sites in an aggregate form (you’re one of a group and your information is not singled out). These aggregated statistics are used internally to better provide services to our consumers. We don’t extract personal information in this process nor do we provide this information to third parties. We also do not contact you. 59

Privacy Policy contains … 4 • Links – The site may contain "links" to other sites, and we make every effort to only link to sites that share our high standards of decency, fairness, and integrity. We try our best to ensure that these links are safe for kids. However, since we cannot guarantee the content of every site to which we are linked, kids should always check with an adult before linking to any new sites. 60

Privacy Policy contains … 5 • Your Ideas – We encourage you to share your comments and questions with us. We promise to read all the mail you send to us, but we may not be able to respond to all of it. However, please note that we assume no responsibility for reviewing unsolicited ideas for our business (like product or advertising ideas) and will not incur any liability as a result of any similarities between your ideas and future products or programs. This means that we have no obligation to treat your idea submissions confidentially and that we can use them without paying you for them. Any and all idea submissions will be owned by the company exclusively and may be used for any purpose, now or in the future. 61

Privacy Policy contains … 6 • Use of Materials on this Web Site – Please remember that the trademarks, service marks, graphics, text, music and other properties appearing within this web site are protected intellectual properties used by the company and/or its related companies. These properties may not be copied, reproduced, republished, uploaded, posted, transmitted or distributed in any way, except that you may, for personal and non-commercial use only, download one copy onto your personal computer. In order to protect these valuable assets, we must prohibit other uses without its prior written consent. Except as expressly provided above, nothing contained herein shall be construed as conferring any license or right under any copyright or other intellectual property right. 62

Come back … • How to make people return to your site? – What’s New Section – Ask The Expert or FAQ – Testimonials – E-Zines (information rich & focused) – Giveaways, Surveys & Contests 63

E-Zines • • • E-Zinez. com & Ezine. Queen. com Speed to Market Low cost – No Cost – Low Risk! Wide Distribution Easy & Effective As easy as – A) Copy Format & Text – B) Cut & Paste Your Message – C) Test & Send BCC 64

E-Zine Subscribers • • Existing Customer Database Give something For FREE Opt-in Sign Up On Web site Buy E-mails From List Companies Articles Featuring Your Expertise Publicity Post On E-zine Directories 65

Website R. I. P 1. Dead Links 2. Site or Page Under Construction 3. Too Many Fancy Graphics/Gadgets 4. Backgrounds Take Too Long To Load 5. Mixed Messages and Scroll Bars 6. Burying Your Message 7. Overall Unprofessional Image 66

How to measure website effectiveness? • • A visit – user requests a page from a website A trial visit – the first time a user makes a visit A repeat visit – all visits except for the first one An advertising view – is a page visited which contains an advert • Click through – the number of times an advert is clicked 67

Time for time travelling … • • Thanks to the Way Back Machine http: //www. archive. org/web. php 68

Way. Back. Machine 69

Analysis … • Is the website effective? – Is/can it being promoted? – Are there signs of branding? Which? • Visitors – – – • • • Is it usable? Why? Is the company diversifying or focusing on core business? What business model is being used? – – – • What are their needs vis-à-vis the organisation? Does it meet them? How is trust and loyalty being boosted? How is it reaching customers? Is it saving them time? Does it cater for different customers (Personalisation)? Web Catalogue Revenue Models Digital Content Revenue Models Advertising Supported Revenue Models Advertising-Subscription Mixed Revenue Models Fee-for-Transaction Revenue Models Fee-for-Service Revenue Models M-Commerce? 70

Suggestions … • How can it be more effective? – To Flash or not to Flash? High vrs Low res graphics? • Visitors – – – What needs should be met? How can we boost trust and loyalty? How can we reach more customers? How can we save customers more time? Should it cater for different customers? How? • How can we make it more usable? • Should the company diversify or focus on core business? • What business model should be used? – – – Web Catalogue Revenue Models Digital Content Revenue Models Advertising Supported Revenue Models Advertising-Subscription Mixed Revenue Models Fee-for-Transaction Revenue Models Fee-for-Service Revenue Models 71

Question • You have been employed by Dictionary. com to explore revenue generating alternatives. • Consider the revenue models. Which would you chose and why? Which won’t you chose and why? 72