Turn this ship around

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Turn this ship around

Don't just stand there! if your Web strategy isn't working, do something! Peter Guthrie has some tips

ComputerWeekly.com - 07/12/2000

You've launched your Web presence, the features are all there and working, but unfortunately the customers aren't. So what can you do to turn the turkey into a blockbuster? For many companies the promise of future profitability from the Web is simply not good enough and profits are needed imminently to prevent Web projects folding. E-business projects and their launches are expensive and time consuming things, so how can you catch it early, before it all goes pear shaped, and do something about it?

The first question to ask is what exactly is going wrong? By identifying the problem, the solution is usually a lot easier to find. So is the problem simply a lack of Web traffic? Is the share of wallet too small? Are customers not using the e-commerce functionality? If not, why not? It's pretty simple stuff, but these are questions that a surprising number of businesses don't ask before throwing a load more budget at a dying site.

As with the lead up to launching a Web presence, research is vital at all times, and companies should scrutinise any aspect of the e-business that causes concern. The value of research is often undervalued, with many organisations simply ditching projects due to a lack of profitability without actually researching the reasons why (often because the research wasn't carried out in the first place). All too often a business rushes into the Internet without exploring the needs of its customers, so this is fundamental to analysing current and future success.

Many e-businesses have operational problems, which often stem from a lack of integration between the Internet side of the business and traditional systems. Those organisations that have transformed all aspects of the business to facilitate more cost-effective operation will find that integration is relatively easy to achieve and operational problems will be lessened.

Distribution is often regarded as a failure in e-business, so many have started to transform offerings from brick-and-mortar to clicks-and-mortar, with giants such as Oracle, IBM and even Sony able to offer products as downloads, rather than relying on large distribution arms. This dramatically reduces costs, though it does rely on the product sold being 'soft'. Other ways of reducing costs are partnering with suppliers and using their distribution systems to get products to customers. Many Internet appliance retailers use this system to avoid logistical costs and simply act as a middle man between customer and manufacturer. As many of the manufacturers do not have significant sales representation in the UK and rely on their channels, this is an ideal solution. Interfacing with customers

You may find that traffic is fine, but users simply find the site boring or difficult to use. While navigation is often major fault, a lack of interactivity can also mean disappointing results.

Interactivity is key to gaining and retaining the attention of customers and is strongly linked to the 'stickiness' of sites. This can be achieved through more extensive database work, adding games and other functionality or improved reporting. You can also look to technologies such as Macromedia's Flash to gain a more interactive feel to your site.

Another key aspect in retaining customers is personalisation, though as Tim Clark, director of e-business at Macromedia explains, "a lot of users feel that they are being managed. Personalisation must be non-threatening".

Software such as Macromedia's LikeMinds can be powerful as it analyses the previous decisions of other customers and makes recommendations to the customer accordingly, with all content being dynamically created. Clark continues, "LikeMinds examines what other people feed back so, as a buyer, I'm benefiting from the decisions of other people like myself."Research may point towards the technology being largely at fault, whether from a lack of results data, trying to reach customers through the wrong medium or simply approaching the market from the wrong standpoint.

The solutions

A lot of solutions can take you in new directions, software such as Oracle's ClickStream Intelligence, for example. And if it's speed that's the problem, Oracle's audacious claim that it will run your website three-times faster or give you $1m cannot be ignored! Unfortunately, this offer is only available in the US at present.

ClickStream is part of the Oracle 9i Portal system that can give live reporting functionality on a variety of customisable fields on any aspect of your website's performance. Working in a similar way to Macromedia's LikeMinds, the software analyses users' decision making on the site and other Web statistics to predict future trends and analyse current success.

Your research may indicate that the Web isn't the best medium to reach your customers, but the Internet is still important. For example, you may find that your key customers cannot afford a computer, or wouldn't be willing to buy and use a computer to reach you. In this case it may make more sense to invest in sites and functionality for Digital TV where customers can reach walled-in sites from the comfort of their homes. The downside of digital TV is that you tend to have to choose between Sky Digital or Cable Digital until the walls surrounding services are felled.

Mobile technology will become increasingly important to our Internet future and many see it as a more important stream than the PC. The majority of the UK population has a mobile phone and many now have wireless application protocol capabilities. And with the advent of GPRS and then UMTS, the functionality available through a phone becomes increasingly powerful. It is worthwhile developing sites and gaining brand recognition through WAP now as GPRS is almost upon us and mobile devices are developing fast.

If your problem is simply a lack of 'stickiness', you can implement community functionality, such as that deployed at www.acehardware.com. Communities can dramatically boost your customer satisfaction rates and turn visitors into long term customers.

E-business strategies

New directions are fine for sites that have been around for a while, but what if your website is new and you simply don't know who your customers are or what their needs are? Dave Brotherton, Operations Director of consultancy ProfitShare believes that "when most people have their first website they don't know who's going to use it. It's like starting with a blank piece of paper and it's difficult to 'guestimate' what they want until you've gleaned a reasonable amount of data.

"The vital aspect is to be able predict what a customer is going to do, and you need to know what people have done in the past in order to predict what they and others will do in the future." The message here is to analyse your data and act on the results. An underperforming website may just need tweaking.

Marketing is very important in the Web mix and for those that don't have the backing of a well-known brand, search engine positioning, banner adverts and even traditional media advertising can be important in making people aware of your site. Don't forget that on the Web there's no such thing as passing a store and deciding to pop in - people don't type in addresses at random, so they have to know where you are and what you do.

Who can you turn to for advice?

There are lots of people to turn to for advice, from your friendly e-business magazine to consultants and analysts that specialise in e-business. Web strategy is very important and too many companies believe that 'to have an Internet presence' is a strategy, rather than as a tool that exists to serve customers.

Web strategy has to be geared around revenue streams as well as customer satisfaction, and in many cases it's perhaps more suitable to have an Internet as opposed to Web strategy as not all businesses are suited to generic websites. Extranet or other such functionality may be more suitable.

We all know about the Andersen Consulting's of this world, but there are many other sources of help and consultancy. Most of the leading IT services houses and Web agencies will have consultancy facilities that can help you get the most out of the Web.

Drive through: how vauxhall motors drove away with a successful e-business strategy

Vauxhall Motors claims it was the first car maker to have a website way back in 1996, but it was a pretty basic attempt that was little more than an online brochure. Paul Comfrey is the head of Internet projects at Vauxhall and says that "we soon realised that an online brochure wasn't going to do much for us and during 1997 and 1998 we started adding some more value-add functionality.

"The philosophy of the site was still to provide information on the car range, however, and it didn't contribute to either revenue streams or long-term strategy. Loyalty was central to the strategy and Vauxhall wanted to create long-term relationships with customers so that when they renewed their vehicle in 3 years' time (average ownership of a new car), they would be loyal customers.

With this in mind, and an eye on the evolutionary e-commerce world, Vauxhall changed its Internet strategy to one that was informative, but also enabled the visitor to buy a car. Comfrey adds, "during 1999 we wanted to create an 'electronic salesman' that would be a core part of the site, so that a visitor could log in, look at a car, find out how much they would get on a part exchange and price up finance. We launched the .com range of cars, which was a limited range of models, specifications and colours that could be purchased over the Internet at a discount."

In the longer term, the likes of Tesco and Sainsbury's bulk-buying and selling cars at a discount means that the relationship of the customer need not be with Vauxhall and a customer may never experience the service level of a Vauxhall dealership.

The selective distribution channel is important to Vauxhall and Comfrey explains that "we wanted to keep our retailers in the loop to strengthen the bond between Vauxhall and the customer."

Buy Power is Vauxhall's brand name for its Internet presence. Vauxhall achieved just over 1,000 online sales last year and although this was only 2% of overall sales, these sales were worth nearly £2m in PR value alone, which was significantly less than the cost of building the site.

The next step has just launched and means the entire Vauxhall range can be sold on the Internet, at a discounted Vauxhall Internet Price (VIP). This is yet another significant strategical change, where the business model is fundamentally altered to show online and retailer prices at different levels. It's essentially a response to the tins.co.uk or jamjar.com ventures, but is a decision that shows how important it is to Vauxhall to retain the relationship with the consumer. "In the future, we want to add even more functionality to help the user run their Vauxhall car. Most manufacturers offer very little reward to those visiting their sites, but we want to create an ownership centre where we can help people to run their cars, from finding the cheapest petrol for them, to purchasing warranties and booking services, it's about taking the hassles away." Paul Comfrey concluded


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This was first published in December 2000

 

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