There’s no pre-defined success story, recipe or formula to follow in any business, and definitely not in ecommerce. The playing field is as wide as your imagination and you can be either successful, survive or die out. But that’s really up to how you have planned out your business… yes, you need to plan – going with the flow isn’t for startups.
So as promised in my last post, here are some of the tips I had shared in my presentation at The Nest I/O here in Karachi, Pakistan.
Businesses thrive on the little things that make it great. Today, they seem little and probably unimportant, but later they turn out to be the most precious investments made. And here’s the funny part, they seem little, but when you start working on them they are truly the most draining exercises people do. I’m talking about the key ingredients to success of any business. Let’s look at them one at a time.
Where do you see yourself in, say 10 years from now? Or better yet, what do you want to do with your savings you have right now?
To answer these questions, you need to set an objective. The questions I asked are the ones you need to answer for yourself, first and foremost. I’ll rephrase them as:
What do you want to do?
Where do you want to be?
Think through these two defining questions. As broad as the questions are, it is expected that your answers will be broad too. It’s like the apex of a pyramid, the answers to these will get you there. But don’t EVER change the answers. Your vision must be that much absolute and firm.
How will you achieve the objective?
When you look at the root of the word, it means “leading an army” in Greek. So you are indeed putting together a plan to eventually lead an army towards a goal you want to achieve, which is success.
It is the “book of knowledge” for your business, a scope document if you will, that tells you exactly what you need to do at each stage of your business, and charts your way to reach your objective. So if I can say this in short form, a strategy:
- is your step-by-step plan that will take you to the top of your pyramid.
- serves as a guidance to those who are working with you
- is flexible and adaptable, and as situations change you can make alterations, as long as you don’t miss out on your vision.
For the people you lead, it will have answers to certain questions, for example:
- Where is the business heading in the long term? This points to the vision of the business
- What are the activities that we should take on and which ones should we avoid? It is very necessary to understand this specific question… you can’t just go and work on everything under the sun. Focus is the key!
- How do we penetrate and deal with competition? Unless you have an absolute niche, or are penetrating a market that doesn’t have any competition, you need to be ready to face some opposition and barrier to entry.
- What resources should and can we take on to do our business, compete and establish presence and be successful? This includes any human and capital resource acquisition, internal and external.
- What external factors or regulations affect the business, and how to deal with them? Most of this changes with time, so there must be provision to adapt and be flexible here.
- How much money is required to fund the business? More than 70% startups fail just because they haven’t kept a check on their budgets, and how the funds will flow in and out as and when required.
- What contribution or role will the stakeholders and influencers perform within and around the business? Each business has stakeholders, both internal and external, who contribute and oppose the business and/or its activities. It is an art to create a balance and make way for your business to succeed.
These are just some of the high-level questions you need to answer in your “book of knowledge”. The answers to these and similar questions come from analysis and using various tools and techniques to determine the way forward.
Some more questions… you may be thinking is business all about asking questions? Actually, it’s about answering them. So let’s figure out how to answer some more questions that people or your stakeholders etc may have.
What is your product? What purpose does it serve?
Why do we need it? How does it add value to my life?
How are you going to make it? How will it benefit me?
When will it be available? When will it deliver results?
You see what I just did there… I added a question that corresponds to the original question, that also helps you expand on your initial answer and be ready to respond to an immediate follow up. These are all legitimate and absolutely essential questions you need to answer. Think of yourself as a potential investor or customer and ask these to yourself. You can stop when you don’t have any more questions on your mind, and are satisfied that the answers have helped me understand the product better. By the way, this works for a service too.
Here comes one of the trickiest questions. You can answer this by understanding how much it costs to make your product or deliver the service, but the value that you deliver often remains unaccounted and unrealized. Similarly, how would you know the true value of the products you purchase, and what to keep as a profit? The question then is… What is the right price?
It is not the total of all your costs or the mere profit that you add etc. The answer lies with the customer.
It is the price the customer is willing to pay.
To figure this out, you need to get into the market and understand the true value of your product and the purpose it serves, and how it benefits the customer. The customer will give you the answer indirectly, and you will understand how you need to price it.
So you can say that… it is the value of the goods that helped you make the product, along with the value that you deliver to you satisfy your customer.
How will you procure and deliver your product to the customer? The answer lies in your business model, which is part of your business strategy.
Since we are talking about an ecommerce business, let’s answer this through some examples of what typical ecommerce business types to do manage:
- E-tailers have to bulk purchase and storage – this helps them economize on procuring costs, but the storage costs generally offset this benefit, unless these are high value or fast moving goods
- E-marketplaces don’t store anything, source when needed – so the goods are ordered from the source on need basis, and immediately delivered to the customer without storage, though the procurement cost is higher
- Digital goods / services can be downloaded or accessed – everything is procured and delivered online, the cost of transaction is the only thing that matters here.
Mode of Payment
Ecommerce businesses generally opt for minimal interaction, the same goes for payments. But the options you make available to your customers can’t be just what you feel best. In the more developed markets you will find electronic transactions to be a norm and generally acceptable. The developing or under-developed markets still have a long way to go, where the majority of the population is still unbanked and prefer cash on delivery.
In the last 10 years Pakistan has seen an increase in branchless banking and a gradual progression towards mobile wallets. Its a slow progress but it has also been facilitated with the recent launch of 3G and 4G LTE services by telcos, leading to higher consumption through a relative increase in smartphone purchases. In just one year, from 2013 to 2014, there has been a jump in data consumption, leading to an increase in revenue contribution from 13% in 2013 to 25% in 2014.
Knowing the market and occasionally shifting regulations, service providers have held on to their strategies and are gradually reaping the benefits of their survival over the last decade, while constantly upgrading their offering and adding more value added products.
This is my favorite part, how to deliver a unique experience that brings the customer back to you, again and again. In my opinion, an experience is built on five fundamental pillars:
- Promise – what you have given to yourself and customer, on what you will deliver
- Value – your unique offering and reason to believe in your business
- Quality – above all else, no compromise on the quality aspects of the product
- Service – attention and dedication to each customer
- Reward – this happens both ways, as loyalty bonuses to customers, and return customers for business
Since we are talking about online businesses, the most important things you need to look at are:
Your website / app needs to be very easy to use, reader friendly, and calls to action must be clear, visible and clickable. The designs must be eye catching and not an eye sore. Consult a design specialist if you have to and come up with colors, layouts and features that work best for your target audience. Remember, it is not you who you’re trying to sell to, its the customer. So think beyond yourself and what you like.
Nobody likes to keep looking at a desktop or mobile screen to see it load for a long time. The results and output should be snappy, and if it does indeed take long to generate results, why not show something interesting to the audience while they wait. Again, talk with a user experience specialist and they will tell you how to keep the audience engaged even while they have to wait. But yes, concentrate on code and speed optimization to reduce query time and produce results in a jiffy.
Display products in the most elegant way possible. Elegant for the user, easy to interact with, clean and nicely shot images, eye catching and pleasing content, and related links that get the customer to engage and understand your products in depth. Skip this, and you’ll probably have a high drop out rate to contend with.
Correct pricing and offers
Prices should be correctly stated at all times, updated regularly and giving the customers reason to believe that you offer the best value, even if your prices or offers may be slightly above the rest. There are some services which add certain hidden costs, or the prices get adjusted at checkout. Often the customer is called to let them know that the price has changed and the order value will differ now. Things like this leave a bad impression, and you can’t expect anyone to come back to you after such a mishap.
Your content, communication style, emails, chats etc should be simple for any customer. You don’t know the person on the other side much, so better to keep everything as easy as possible. It would also help to keep terms and conditions and other legal information as simple as possible. No one said that legal information can’t be easy to read and understand, I have done this before and it has led a lot of people to come back and say that they actually read the terms and conditions for the first time, only because it was so easy to understand.
Help during purchase
Add any options you can to help customers in their purchase activity. Add a non-intrusive chat widget, or even allow a customer to leave their number and have someone call back. This reduces friction and gives the customer more confidence in what you have to offer. Just remember one thing though, the person helping the customer out, should be fully trained in the products offered, your business, and most importantly the art of sympathizing and understanding the customers needs. Pushing and going on to a hard selling pitch will leave a hidden scar, so just avoid it at all times. Upselling only works when the customer is on your side, till then hold on to your horses.
Post sales assistance feedback
Once you have won the customer, that is the purchase is done, make sure you have a follow up and feedback process in place. See how you can make it painless for the customer to give feedback, give them an incentive if needed, but gather authentic and valuable feedback, scan them for feasibility and any additional value that these can help create, and include them in your strategy. Remember, a strategy can be updated as per situation, and if anything helps you achieve your objective faster and with customer confidence, you must consider it. And thank them for the value. Another idea is to actually pass on some benefit to every customer who has helped in adding a new service or value to the business and then watch how it pushes your business further.
So this brings us to the end of Part 2 of my series on ecommerce and startups.
In the concluding part we will talk about Accessibility – where and how to make your presence most effective.