There are many ways to have your website take off and make money. Traditional business mottos tell you to buy low and sell high, or to remember that the customer is always right. But in the brave new e-world, I think that there should be a new business maxim: Imitate Amazon.
If you do what Amazon.com does, you can’t go wrong. Of all online merchants, Amazon.com is the site and the business that does it right.
So, today we present the cyber-rules of the Amazon jungle:
1.Value the customer above all else. Amazon.com founder and CEO Jeff Bezos has repeatedly stated that he endeavors to make Amazon the most customer-centric business in the world, and a visit to the site confirms this. Amazon offers great customer service. It knows that responsiveness is the key to making online shoppers feel comfortable.It is important to realize that ordering online is different than purchasing something in a store, where you see the actual goods and get to take them with you after your purchase. Online, you can’t touch the actual products and you don’t talk to a real salesperson. You just cough up your credit card number, make your purchase, and send your order off into cyberspace, hoping for the best. For many people, it still seems like a proposition based on faith. So the first secret to getting customers to order from you, as Amazon has proven, is to convince them that you won’t let them down.Amazon first does so by immediately sending you an email confirming your order and telling you when they expect to ship it. Then, when your order does ship, they send you another e-mail with your tracking number. You should do the same; it creates confidence in your store. (Some e-commerce software builds this function right into the software, such as Yahoo! Store for example.) Like Amazon too, you should try and ship quickly and offer returns and refunds.If a customer has a problem, Amazon also responds quickly. For example, I ordered a book from Amazon a week ago and it took them a day longer than anticipated to ship my order. It confirmed my belief in the site when they e-mailed me, saying that they upgraded my order to a “priority” mail shipment because of the “delay.” I got the package the next day. It is things like that which build loyalty.
2.Make shopping easy and pleasant. Amazon has a “three-click” policy that dictates that if a customer can’t accomplish what they want to within three clicks, then the system isn’t working right. Imitate Amazon and make shopping at your store simple too.By the same token, Amazon’s pages are clean and professional. Their use of images, for example, is prudent: never too many, nor too big, so the pages don’t take long to load. They know that their job is to give you the chance to find what you want quickly and easily and to be able to purchase it without a hassle.
3.Offer plenty. What is Amazon? Now, besides being “Earth’s Biggest Bookstore,” it seems to be earth’s biggest store. When you too have a big inventory it tells your customers that you are here to stay and that they will be able to find what they want if they go to you first.
4.Offer great prices. A big reason that people shop online is because they think they will find prices that can’t be beat. That is certainly true at Amazon, and it should be true for your store as well.While few of us have the resources to totally imitate Amazon, the spirit of the site is one to emulate. You might not become a billionaire, if you remember to Imitate Amazon, you will at least be on you way.
Today’s Tip: When selecting a bank for your business, remember that all financial institutions are not created equal.
Talk to friends, business associates, accountants, and attorneys about their banking recommendations. It’s also smart to try and find a bank that is aggressively seeking new customers; you may get a special deal or extra value for your business. You should also consider smaller banks with just a few offices as they may have more relaxed rules and offer more personalized services. Finally, although price alone probably won’t decide your choice of bank, you should at least compare interest rates on deposit accounts and basic consumer loans.
Your Website in the Mind of Your Customer
Your site positioning is the website equivalent to product positioning in market strategy and product strategy. You need to relate your website to the benefits offered to target users, and locate it in relation to its strategic focus on defined benefits for defined target users. Position your website to play towards strengths and away from weaknesses.
The classic marketing concept of product positioning is closely related to market segment focus. Positioning targets a product for specific market segments, with specific product needs, at specific prices. The same product can be positioned in many different ways. The illustration below shows an example taken from Philip Kotler’s book Marketing Management. The example shows how Kotler looks at the positioning of an instant breakfast drink, relative to the key variables price and speed. We think you can see how you can apply this concept to your website, positioning your website as if it were a product:
Another common framework for classic product positioning is taken from a series of questions. As you apply this idea to the Web, think about the Web version of the classic product positioning statement. You can position a product using a positioning statement that answers the important questions:
• For whom is the product designed?
• What kind of product is it?
• What is the single most important benefit it offers?
• What is its most important competitor?
• How is it different from that competitor?
• What is the customer benefit of that difference?
For example, the following are positioning statements used by Palo Alto Software to focus marketing for two new products:
- For the businessperson who is starting a new company, launching new products, or seeking funding or partners, Business Plan Pro is software that produces professional business plans quickly and easily. Unlike (deleted), Business Plan Pro is a stand-alone product, and requires no other programs to buy or learn.
- For business owners and managers who oversee their company’s marketing programs, Marketing Plan Pro is software that creates and helps manage professional Web plans. Unlike (deleted), Marketing Plan Pro provides a system for scheduling and tracking the entire marketing process from plan to action.
As a specific example of website positioning, consider this positioning statement used by Palo Alto Software to position this site, Bplans.com:
- For the person developing a business plan, Bplans.com offers directly relevant free information including dozens of sample plans, wizards, tools, and content. Unlike more general small business information sites, Bplans.com is focused on business planning and is full of valuable, real information.
Some positioning strategies will work better than others. Here again, strategy is focus. The best positioning plays to your company’s strengths and the product’s strengths, and away from weaknesses. Position your product to reach the buyers whose profiles most closely match needs you serve, in the channels you can reach, and at the prices you set.
Website Business Models
The term “business model” became popular in the late 1990s, during the Internet boom, in part because many website businesses seemed to plan for generating traffic without a clear view of how or when traffic would generate revenue and profits.
The term itself is a bit too trendy, in our opinion. Talk of the business model ought to be recast in more standard business terms, such as sales, costs, expenses, and profits. As you develop your strategy, focus on how your website will benefit your business. What is its payoff for your business?
The easiest payoff to understand is sales and profits, but there could be many others. Some websites exist just to support sales by making a buyer’s decision easier, some reduce costs, some improve customer satisfaction, some substitute for telephone communication or sales collateral.
While the classics below are fairly obvious, in reality there are infinite numbers of possible business models for websites. You might have a commerce site, content site, community site, portfolio site, or something else entirely. The main point is that there should be a payoff for your business. You don’t develop a website just because somebody says you should. You develop it because it has a business or organizational purpose.
The portfolio site: like a business card on the Web
These sites offer information. Their target users go to them to find out more about a business. The sites don’t specifically sell anything, but they do support sales by generating leads or making the viewer’s buying decision easier.
These sites offer information. Their target users go to them to find out more about a business. The sites don’t specifically sell anything, but they do support sales by generating leads or making the viewer’s buying decision easier.
What we call portfolio sites are the millions of websites that don’t really sell anything but present the equivalent of sales literature on the Web. The restaurant sites that post their menus, the legal and accounting practices that post professional biographies and related information are just a couple of examples. The Web started with these kind of sites because they are relatively inexpensive to produce and provide significant benefits.
The basic commerce model: sales and profits
The simplest website business model is based on making sales and profits. A classic commerce website like Amazon.com or Buy.com sells products, takes orders, charges credit cards, and ships goods. Software and some information sites have the advantage of being able to deliver what they sell online, at the time of the transaction.
The simplest website business model is based on making sales and profits. A classic commerce website like Amazon.com or Buy.com sells products, takes orders, charges credit cards, and ships goods. Software and some information sites have the advantage of being able to deliver what they sell online, at the time of the transaction.
These sites normally offer their target customers the benefit of ease of use and selection. Amazon.com, for example, set the standard for commerce sites by offering a huge selection and a wealth of additional information on the products it sells.
The content model: based on advertising
The content sites work economically like mainstream network television in the United States, free content to users paid for by advertisements that users put up with. This is also a lot like the classic newspaper and magazine business, content paid for mainly by advertisers, with the exception that most magazines and newspapers sell for a small price while getting most of their revenue from advertisers. The “business model” isn’t really new, just the fact that it is offered over the Internet.
The content sites work economically like mainstream network television in the United States, free content to users paid for by advertisements that users put up with. This is also a lot like the classic newspaper and magazine business, content paid for mainly by advertisers, with the exception that most magazines and newspapers sell for a small price while getting most of their revenue from advertisers. The “business model” isn’t really new, just the fact that it is offered over the Internet.
Consider Yahoo! And competing Internet portals, newspaper and magazine sites, entertainment sites, and other types of sites that are free to browsers and make money by charging advertisers or sponsors for banner advertising and sponsorships. These are content sites that depend on Internet advertising for their revenue.
Community sites
Consider the business value of the bulletin board in a local supermarket. The market doesn’t charge for posting notices on the board, nobody pays to read them, but the business takes the trouble to manage the board. The underlying business benefit, we guess, is that the sense of community builds traffic and loyalty.
Consider the business value of the bulletin board in a local supermarket. The market doesn’t charge for posting notices on the board, nobody pays to read them, but the business takes the trouble to manage the board. The underlying business benefit, we guess, is that the sense of community builds traffic and loyalty.
This value is similar in the Internet community site. A typical community site offers email, bulletin boards and forums, a common focus for some group that has a common interest. Community sites are often started by groups, clubs, and government organizations. Some of the best of them, however, are sponsored by businesses that want to take advantage of the common interest. For example, a rock climbing community site might be sponsored by a local store.
Business model summary
How will you turn users of your website into money? Is there a plan for it? How will you measure it? For a hybrid site you need to make sure you explain how the hybrid will make revenue. Will you have a commerce portion? Will you be depending on sponsorships and advertising? Will you be selling services to your users? Make sure that you think about how you will ultimately make your website venture bring in real money.
How will you turn users of your website into money? Is there a plan for it? How will you measure it? For a hybrid site you need to make sure you explain how the hybrid will make revenue. Will you have a commerce portion? Will you be depending on sponsorships and advertising? Will you be selling services to your users? Make sure that you think about how you will ultimately make your website venture bring in real money.
Try to think of your website benefits in monetary terms. This is a good time to your sales forecast. The sales projected might actually be business benefits instead of sales: increased closing percentage, increased customer satisfaction, or increased retail traffic. Think about how those benefits might fit into a sales forecast, because then you’ll be able to compare monetary benefits to expenses.
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