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January 1999
Online Sales Strategies
By
Marc Phillips Over 65,000 commercial domain names now exist here
in Australia and many more will follow in the next 12 months. For many of us
who are web proprietors, we are enjoying increasing traffic levels to our
online businesses. Instead of becoming complacent in this rapidly changing
industry, the wise web marketers are ensuring that they are improving the
service levels for their existing online customers as well as attracting new
visitors. Customer Loyalty is increasingly becoming more
important for web based businesses, illustrating the Internet as a sales
channel is maturing. In the United States, there is a definite shift towards
the loyalty programs and the personalisation of e-commerce websites to
maximise sales. So how does this work? Let’s look firstly at how
e-commerce merchants are combining statistics from log files, registered
information about their users and purchase information to understand more
about their online audience. A typical example would be a homeware retail
store which has excess inventory of a particular kitchen product. Having kept
records of those online shoppers who have bought a homeware product and who
have registered other details about what they would like to purchase, the web
merchant can proactively suggest products and services. By correctly merging and cross referencing these
data sets, e-commerce merchants are building a more sophisticated profile of
not merely their user’s demographics and visitation patterns but their
purchase intentions. This allows the web merchants to produce better online
promotions that can be targeted to various user groups. Purchase intentions
and interests are usually compiled from post purchase surveys and
registration forms. There are various organisations that provide these
suggestive selling capabilities which is commonly referred to as personalisation. These include Net
Perceptions (www.netperceptions.com),
BroadVision (www.broadvision.com),
FireFly (www.firefly.net), LikeMinds (www.likeminds.com) and PersonalLogic (www.personalogic.com). The average
price for these software licences range from $25,000 to $300,000.
NetPerceptions would be the market leader having Amazon.com, CDNow, iVillage
and N2K as their clients. Check out these websites and get a feel for what
these companies do. In the fiercely competitive marketplace, these
technologies can make all the difference. Here in Australia, we are seeing the first signs of
companies that are now starting to invest in understanding their customer
base and providing them with incentives for being a frequent visitor. The
Cross Country website (www.crosscountrytv.com.au) is a great example of providing
customer loyalty. Developed by New Toys multimedia, this website compliments
the weekly TV program and is aimed at farmers across the country. As this
market is very targeted, it was decided that loyalty was an important part of
the website. The loyalty program chosen was to have a club which people
joined and registered details such as address and areas of interest. "By finding out more about their customers, Cross Country can
target advertising and information that they are interested in." said
Brendan Yell, Strategic Manager at New Toys. Each week before the program goes to air, users are
sent an email if any of the show’s topics match one of their registered
interests. Club members receive a 10% discount in the online shop and if
non-members try to make a purchase they are reminded of the discounts they
could get if they join. The website also have past story transcripts online
and these are only searchable if a club member. While members give full details to join they have the choice whether
they want to receive emails from Cross Country or any other rural focused
company. The user has complete control over this. Many web developers fall
short in the area of post launch marketing and customer service strategies. In a recent survey conducted by Jupiter Communications, forty-two
percent of the top-ranked websites in the USA either took longer than five
days to reply to customer e-mail inquiries, never replied, or were not
accessible by e-mail. This is a common mistake made by website proprietors. Websites often
ignore the opportunity to communicate with existing and potential customers,
discouraging brand loyalty, and opting out of a user-initiated, one-to-one
relationship by not offering, delaying, or eliminating responses to e-mail. Jupiter found that of the 125 sites examined, most retail shopping
websites performed the best, with 54 percent responding in less than one day.
However, in some segments there is ample room for improvement. For example,
19 percent of the travel websites tested took at least three days or never
responded to Jupiter's inquiries. "This effort illustrates that many websites have been unable or
unprepared to respond to the flood of user questions that come in via e-mail
from their sites," says Ken Allard, group director of Jupiter's Site
Operation Strategies practice. "Answering thousands of questions per
month is an enormous challenge for sites offering complex products and
services, especially if they never had a traditional call center. Yet,
companies that delay responses to user questions instantly lose a significant
degree of credibility and user loyalty, and not responding perpetuates the
consumer notion that using the Web site is not a reliable method of doing
business with that company." Jupiter recommends that sites develop or utilise some form of
"auto-acknowledge" feature that responds to all incoming requests
stating that the question was received and estimates a time frame for how
long it will take to respond to the question. Another interesting way that a web businesses is offering their
customers greater flexibility is E*TRADE Australia. Last month, E*TRADE began offering
BPAY. BPAY provides a fast and
convenient way to transfer funds into your E*TRADE Macquarie Bank Account.
Funds transferred before 5.00pm on any business day will be available
for trading on the next business day. Banks participating in BPAY are ANZ,
Commonwealth Bank, National Australia Bank, St.George and Westpac.
Using another
approach, I believe there is a great opportunity for e-commerce merchants to
use the Internet for product sampling. Unlike product samples that are given
out on street corners and train stations, online product sampling can be
followed up with an in expensive email asking them what they thought of the
product. However, not
all advanced marketing is done in isolation.
Retailers are joining forces to cross promote each others non
competing products – in effect, establishing informal networks to facilitate
traffic between their websites. These
e-commerce merchants know that there is greater profit to be had from cross
selling to existing customers as opposed to acquiring new ones through
advertising and promotion. The trends are leading towards online retailers using cross promotions. Reel.com, eToys, Cdnow, and
Cyberian Outpost are four companies that have recently launched a
cross-promotional marketing campaign. Initially, they plan to cross-promote
in two ways. Firstly, by advertising, free of charge, on each other's
websites and secondly, by including promotional flyers on their partners'
products with goods delivered to their online consumers. In conclusion, there are a great number of opportunities that need to be grasped by e-commerce website proprietors to ensure that the customers are not only treated to customer service but presented with suggestive selling options and a greater range of services to increase the convenience of doing business with your online store. For further information contact APT Strategies at info@aptstrategies.com.au |