chapter 16 launching a successful online business

Chapter 16Chapter 16

Launching a SuccessfulLaunching a Successful

Online BusinessOnline Business

© Prentice Hall 2004© Prentice Hall 2004 22

Learning ObjectivesLearning Objectives

1.1. Understand the fundamental Understand the fundamental requirements for initiating an requirements for initiating an online business.online business.

2.2. Describe the funding options Describe the funding options available to startup businesses.available to startup businesses.

3.3. Evaluate the options for hosting Evaluate the options for hosting Web sites.Web sites.


Learning Objectives Learning Objectives (cont.)(cont.)

4.4. Understand the processes and Understand the processes and business decisions associated business decisions associated with managing Web site with managing Web site development.development.

5.5. Understand the importance of Understand the importance of providing content that meets the providing content that meets the needs and expectations of the needs and expectations of the intended audience.intended audience.



6.6. Evaluate Web sites on design Evaluate Web sites on design criteria such as appearance, criteria such as appearance, navigation, consistency, and navigation, consistency, and performance.performance.

7.7. Know the techniques of search Know the techniques of search engine optimization to obtain engine optimization to obtain high placement in search high placement in search engines.engines.



8.8. Understand the benefits of Understand the benefits of customer relationship customer relationship management through customer management through customer self-service, listening to self-service, listening to customers, and increasing trust.customers, and increasing trust.


OBO Sets OBO Sets Its Goals for SuccessIts Goals for Success

The ProblemThe ProblemOBO sells protective gear for OBO sells protective gear for field hockey goalkeepersfield hockey goalkeepers

OBO’s unique three-dimensional OBO’s unique three-dimensional thermo-bonding manufacturing thermo-bonding manufacturing process produces equipment process produces equipment that is shaped to reflect the way that is shaped to reflect the way the body moves the body moves


OBO Sets OBO Sets Its Goals for Success Its Goals for Success (cont.)(cont.)

By manufacturing a quality By manufacturing a quality product and listening to the product and listening to the customer, OBO has become the customer, OBO has become the market leader market leader

OBO is based in a small OBO is based in a small provincial town in New Zealand provincial town in New Zealand that is a very long way from its that is a very long way from its principal markets principal markets



OBO sells a niche product that is OBO sells a niche product that is best sold thorough agents or best sold thorough agents or stores to ensure a proper fit stores to ensure a proper fit

How does OBO use its Web site How does OBO use its Web site to market an experiential to market an experiential product to a global market from product to a global market from New Zealand?New Zealand?



The SolutionThe SolutionThe goals of the The goals of the obo.co.nz obo.co.nz Web Web site are:site are:

community buildingcommunity building

product salesproduct sales

research and development research and development



Community building happens Community building happens through:through:

online discussion forumsonline discussion forumssponsored playerssponsored playersan image gallery an image gallery

The principal marketing and The principal marketing and sales goal of the Web site is to:sales goal of the Web site is to:

convince the visitor of the value of convince the visitor of the value of the productthe product direct the customer to a store or direct the customer to a store or agent to make the purchase agent to make the purchase


OBO Sets OBO Sets Its Goals for Success Its Goals for Success

(cont.)(cont.)The Web site is a support The Web site is a support mechanism for the brand and mechanism for the brand and the sale of equipment through the sale of equipment through the agents the agents Research and development goal Research and development goal is met through:is met through:

online surveysonline surveyssolicitation of players’ opinions of solicitation of players’ opinions of the productsthe productsfocus groups focus groups



(cont.)(cont.)The ResultsThe Results

The OBO Web site is most successful The OBO Web site is most successful at community building at community building

The site also builds community by The site also builds community by promoting a goalie-friendly approach promoting a goalie-friendly approach to OBO’s customers to OBO’s customers

Online product sales are modest Online product sales are modest because the Web site supports, not because the Web site supports, not competes, with OBO’s agent network competes, with OBO’s agent network



(cont.)(cont.)Online sales are expected to grow Online sales are expected to grow because OBO has introduced a new because OBO has introduced a new line of clothes designed to be sold line of clothes designed to be sold exclusively through the Web siteexclusively through the Web site

The focus groups deliver high-The focus groups deliver high-value feedback at almost no costvalue feedback at almost no cost

The discussion forums contribute The discussion forums contribute to both community building and to both community building and feedback about OBO’s product feedback about OBO’s product



(cont.)(cont.)What we can learn…What we can learn…

A small company with a great A small company with a great product is using its Web site to product is using its Web site to reach its target markets in reach its target markets in distant countries distant countries OBO is using the site to support OBO is using the site to support business goals, as well as to business goals, as well as to meet the needs and meet the needs and expectations of its target expectations of its target audience audience



(cont.)(cont.)The Web site is simple and well The Web site is simple and well designed, includes:designed, includes:

““attractors” that encourage attractors” that encourage customer interaction and keep customer interaction and keep customers coming backcustomers coming back

content that promotes cross sellingcontent that promotes cross selling

effectively promotes sustainable effectively promotes sustainable customer relationshipscustomer relationships


Doing Business Online:Doing Business Online:Getting StartedGetting Started

Business formation process:Business formation process:Identify a consumer or business need in the marketplaceInvestigate the opportunityDetermine the business owner’s ability to meet the need


Doing Business Online:Doing Business Online:Getting Started Getting Started (cont.)(cont.)

Requirements that reflect the online nature of a business:

Need to understand Internet culture

Customers are active in how they absorb and use information, and the Internet is a personal, helping, and sharing place for most users

Consider the nature of appropriate products and services



E-business planningE-business planningBusiness plan:Business plan: A written A written document that identifies a document that identifies a company’s goals and outlines company’s goals and outlines how the company intends to how the company intends to achieve the goalsachieve the goals



Biggest difference in e-business planning is for the ontrepreneur to recognize that the Internet is unlike any other sales channel; companies can:

interact with consumers with both reach and richnessintroduce new and innovative business modelsdistribute information at the speed of light at almost zero cost



An existing brick-and-mortar business looking to move online also needs a:

Business case:Business case: A document A document that is used to justify the that is used to justify the investment of internal, investment of internal, organizational resources in a organizational resources in a specific application or projectspecific application or project



Business case template includes:Business case template includes:GoalsCost savingsNew revenueExtra benefitsCost of the solutionNet benefitsRecommendation



Funding the online businessFunding the online businessVenture capital (VC):Venture capital (VC): Money Money invested in a business by an invested in a business by an individual or a group of individual or a group of individuals (venture capitalists) individuals (venture capitalists) in exchange for equity in the in exchange for equity in the businessbusiness



Angel investor:Angel investor: A wealthy A wealthy individual who individual who contributes contributes personal funds personal funds and expertise and expertise at the earliest at the earliest stage of stage of business business developmentdevelopment



Incubator:Incubator: A company, A company, university, or not-for-profit university, or not-for-profit organization that supports organization that supports businesses in their initial stages businesses in their initial stages of developmentof development


Doing Business Online:Doing Business Online:Building the Web SiteBuilding the Web Site

Classifications of Web sitesClassifications of Web sitesInformational Web site:Informational Web site: A Web site A Web site that does little more than provide that does little more than provide information about the business and information about the business and its products and servicesits products and servicesInteractive Web site:Interactive Web site: A Web site A Web site that provides opportunities for the that provides opportunities for the customers and the business to customers and the business to communicate and share communicate and share informationinformation


Doing Business Online:Doing Business Online:Building the Web Site Building the Web Site

(cont.)(cont.)Attractors:Attractors: Web site features Web site features that attract and interact with that attract and interact with visitors in the target visitors in the target stakeholder groupstakeholder group

Transactional Web site:Transactional Web site: A Web A Web site that sells products and site that sells products and services services


Doing Business Online:Doing Business Online:Building the Web Site Building the Web Site

(cont.)(cont.)Building the Web siteBuilding the Web site

1. Select a Web host2. Register a domain name3. Create and manage content4. Design the Web site5. Construct the Web site and test6. Market and promote the Web

site


Web Site HostingWeb Site Hosting

Web hosting options:Web hosting options:Storebuilder service:Storebuilder service: A hosting A hosting service that provides disk space service that provides disk space and services to help small and and services to help small and micro businesses build a Web site micro businesses build a Web site quickly and cheaplyquickly and cheaplyISP hosting service:ISP hosting service: A hosting A hosting service that provides an service that provides an independent, standalone Web independent, standalone Web site for small- and medium-sized site for small- and medium-sized businessesbusinesses


Web Site Hosting Web Site Hosting (cont.)(cont.)

Web hosting service:Web hosting service: A dedicated A dedicated Web site hosting company that Web site hosting company that offers a wide range of hosting offers a wide range of hosting services and functionality to services and functionality to businesses of all sizesbusinesses of all sizes

Mirror site:Mirror site: An exact duplicate of An exact duplicate of the original Web site, but it is the original Web site, but it is physically located on a Web physically located on a Web server on another continentserver on another continent



Co-location:Co-location: A Web server owned A Web server owned and maintained by the business and maintained by the business is placed in a Web hosting service is placed in a Web hosting service that manages the server’s that manages the server’s connection to the Internetconnection to the InternetSelf-hosting:Self-hosting: When a business When a business acquires the hardware, software, acquires the hardware, software, staff, and dedicated staff, and dedicated telecommunications services telecommunications services necessary to set up and manage necessary to set up and manage its own Web siteits own Web site



Contracting the Web hostContracting the Web hostThe search for an ISP host:

contacting local ISPs for informationasking others in the business community for recommendationsconsulting with local telecommunications and computer user groups



When a short list of potential ISPs has been compiled, a RFQ can be used to ensure that complete and consistent bids for provision of service are submitted



Consider: Consider: service quality measuresguaranteed uptimenumber of clientscurrent traffic rates

software support securitysite traffic analysistechnical support servicescosts



Registering a domain nameRegistering a domain nameDomain name:Domain name: A name-based A name-based address that identifies an address that identifies an Internet-connected serverInternet-connected server

Domain name registrar:Domain name registrar: A A business that assists business that assists prospective Web site owners prospective Web site owners with finding and registering a with finding and registering a domain name of their choicedomain name of their choice



Selecting a good domain name:Make it memorableMake it easy to spellAvoid numbers and special charactersKeep it short and sensible



Be flexibleThink about the futureGive products their own nameInvestigate the competitionAvoid trademarked names


Content Creation Content Creation and Managementand Management

Content:Content: The text, images, sound, The text, images, sound, and video that make up a Web and video that make up a Web pagepage

Commodity content:Commodity content: Information Information that is widely available and that is widely available and generally free to access on the generally free to access on the WebWeb


Content Creation Content Creation and Management and Management (cont.)(cont.)

Premium content:Premium content: Content not Content not available elsewhere on the Webavailable elsewhere on the WebCross selling:Cross selling: Offering similar or Offering similar or related products and services to related products and services to increase salesincrease salesUp selling:Up selling: Offering an upgraded Offering an upgraded version of the product in order to version of the product in order to boost sales and profitboost sales and profit



Up-selling activities usually include offering products with a different design, color, fabric, or size

Promotionsecondary content that can increase sales or improve customer service

Commentfurther explanation about the product can be offered after introducing the product



Creating contentCreating contentcollecting all the content that is currently availablevalue of additional content is assessed for inclusion in the Web siteconsider how each bit of content will serve the site’s goals and whether customers will want it or expect itcreated by customers through reviews etc.



Buying contentBuying contentContent can be purchased or licensedContent that is acquired from outside sources should be supplemental content, not primary contentIf primary content is purchased and no value is added, visitors will go to the originating site and not return



Personalizing contentPersonalizing contentPersonalized content:Personalized content: Web content Web content that is prepared to match the needs that is prepared to match the needs and expectations of the individual and expectations of the individual visitor visitor

Delivering content by e-newsletterDelivering content by e-newsletterE-newsletter:E-newsletter: A collection of short, A collection of short, informative articles sent at regular informative articles sent at regular intervals by e-mail to individuals who intervals by e-mail to individuals who have an interest in the newsletter’s have an interest in the newsletter’s topictopic



Writing effective contentWriting effective contentWrite scannable textBreak long sections into smaller ones with clearly noted headings

Grab the reader’s attention at the Grab the reader’s attention at the beginning of every page and beginning of every page and sectionsectionWrite in a tone and with language that reflects the purpose of the material



Consistency in site content can be achieved using a style guideMake the material available in a .pdf file when necessaryCreate compelling links that encourage a reader to clickExternal links can offer good content for visitorsAvoid material that is not highly valued by customers



Content managementContent managementContent management:Content management: The The process of adding, revising, and process of adding, revising, and removing content from a Web removing content from a Web site to keep content fresh, site to keep content fresh, accurate, compelling, and accurate, compelling, and crediblecredible



Content testing—Content testing—frequent checks of material for:

AccuracyClarityTypos

poor punctuationmisspelled wordsinconsistencies



Content removalContent removalExpired pages should be deleted or moved to an off-line location that can serve as an archive

Content management softwareContent management softwareAllows nontechnical staff to create, edit, and delete content on the company’s Web site



Purchasing a content Purchasing a content management softwaremanagement software

1. Do a thorough needs analysis2. Document requirements and discuss

with at least two companies that have purchased a CMS

3. Start small with CMS that has a trial version or low entry cost

4. Assess the system after 30 days5. Repeat the assessment process

regularly


Web Site DesignWeb Site Design

The goal of any Web site is to deliver quality content to its intended audience and to do so with an elegant design


Web Site Design Web Site Design (cont.)(cont.)

Information architectureInformation architectureInformation architecture:Information architecture: How How the site and its Web pages are the site and its Web pages are organized, labeled, and organized, labeled, and navigated to support browsing navigated to support browsing and searching throughout the and searching throughout the Web siteWeb site



Web site Web site design criteria:design criteria:

NavigationConsistencyPerformance

AppearanceQuality assuranceInteractivitySecurityScalability



Site structure is:hierarchicalcircular linear

Getting the homepage right is criticalAll pages within the site should link back to the homepage



Deep linking:Deep linking: Entry into a Web Entry into a Web site via the site’s interior pages, site via the site’s interior pages, not the homepage, typically not the homepage, typically through search engines or through search engines or external linksexternal links



Organizing and labeling the site support browsing and searching:

Obey the three-click rulePlace the most important content at the top of the pageKeep pages short



Keep page layouts simpleFollow commonsense publishing rulesMake the primary content easy to findShow the products in many ways



Site navigationSite navigationSite navigation:Site navigation: Aids that help Aids that help visitors find the information they visitors find the information they need quickly and easilyneed quickly and easilyThe simplest navigation aid is a navigation bar at the top and top and bottom of each pagebottom of each pageFrame:Frame: An HTML element that An HTML element that divides the browser window into divides the browser window into two or more separate windowstwo or more separate windows



Other suggestions for designing successful Web site navigation:

Use small lists and menusDo not rely entirely on graphical images for navigationMake the homepage easy to findIntegrate navigation into contentAvoid framesFollow accessibility guidelines



ConsistencyConsistencyLook and feel:Look and feel: The elements that The elements that visually distinguish a site from any visually distinguish a site from any other, including layout, typeface, other, including layout, typeface, colors, graphics, and navigation aidscolors, graphics, and navigation aids



Elements of page content also should be consistent:

company logocompany logo

contact informationcontact informationshort, descriptive title

Design a Web site for all of these browsers, but to use designated World Wide Web Consortium standards



PerformancePerformanceSpeed ranks at or near the top of every list of essential design considerationsThe most widely recognized cause of long download times is a large graphic or a large number of small graphics on a single page



12-second rule: Every page on the Web site should appear within 12 seconds4-second rule: something should appear in the visitor’s browser in 4 seconds or less



Colors and graphics rules:Colors and graphics rules:Match the expectations of the target audienceUse standard colorsFollow color standardsUse complementary colorsSpecify the background color



Use bandwidth-intensive features selectivelyDesign for visually or hearing-impaired visitorsUse the ALT tagAvoid distracting features



Quality assuranceQuality assurancemake sure the Web site design is properly tested before it is launchedensure that it continues to perform up to expectations after launch



design the site for easy maintenanceresponsible owners frequently test all features of the site personallyquality Web sites are tested regularlyWeb site performance is also an ongoing concern


Web Site ConstructionWeb Site Construction

Who builds the Web site?Who builds the Web site?Internal staff, an outside contractor, or a combination of these two

Internal Web site development:Internal Web site development: The process of building and/or The process of building and/or maintaining the Web site with maintaining the Web site with company staffcompany staff


Web Site Construction Web Site Construction (cont.)(cont.)

Companies build their own site Companies build their own site because:because:

Use of existing in-house expertiseDesire to build in-house expertiseProtection of proprietary technologiesTighter control and responsiveness



External Web site development:External Web site development: When the business hires another When the business hires another firm to build and/or maintain the firm to build and/or maintain the Web siteWeb site

Speed to marketNot a core competencyAccess to special expertise



Partnering Web site development:Partnering Web site development: When a mixture of internal and When a mixture of internal and external development is used to external development is used to build and/or maintain a Web sitebuild and/or maintain a Web site

The principal downside to partnering is the additional overhead of contract and relationship management



Web site construction:Web site construction: The initial The initial content creation, design, content creation, design, programming, and installation programming, and installation phases of a Web site’s developmentphases of a Web site’s development

Web site maintenance:Web site maintenance: The on- The on-going process of keeping the Web going process of keeping the Web site open for business, managing site open for business, managing content, fixing problems, and content, fixing problems, and making incremental additions to the making incremental additions to the sitesite



Managing Web site construction:Managing Web site construction:Start with a planSet goals early and stick to themUse a fixed-price contractJustify graphics and features



Accepting credit cardsAccepting credit cardsCard-not-present (CNP) Card-not-present (CNP) transaction:transaction: When there is no When there is no signature and no verification of signature and no verification of the credit card signature by the the credit card signature by the merchantmerchant



To accept credit cards online a To accept credit cards online a company must:company must:

Open a merchant accountPurchase credit card processing softwareIntegrate the credit card processing software into the transaction system


Web Site PromotionWeb Site Promotion

Internal Web site promotionInternal Web site promotionInclude content that establishes the site as a useful site for customers to remember so that they return and make a purchaseSignature file:Signature file: A simple text A simple text message an e-mail program message an e-mail program automatically adds to outgoing automatically adds to outgoing messagesmessages


Web Site Promotion Web Site Promotion (cont.)(cont.)

Search engine optimization (SEO):Search engine optimization (SEO): The application of strategies The application of strategies intended to position a Web site at intended to position a Web site at the top of Web search enginesthe top of Web search enginesThe key to SEO is understanding the algorithms the search engines use to determine the ranking of the results returned to the searcher



Strategies for keyword creation and placement:

Create keywords the target audience is most likely to useUse specific phrases, not general keywordsOptimize the title



Use meta tagsMeta tag:Meta tag: An HTML element that An HTML element that describes the contents of a Web describes the contents of a Web pagepage

Use keywords early and often in page contentInclude keywords in ALT tagsAvoid spider-hostile featuresDo not spam search engines



Strategies for maximizing link popularity:

Create content that promotes linkingSeek reciprocal linksDetermine what sites already link to the target site



Visit competitorsSeek highly placed linksSeek links from well-known sitesDo not use free-for-all (FFA) or link farms


Customer Relationship Customer Relationship ManagementManagement

Customer relationship Customer relationship management (CRM):management (CRM): A customer A customer service approach that focuses on service approach that focuses on building long-term and building long-term and sustainable customer sustainable customer relationships that add value for relationships that add value for the customer and the company the customer and the company


Customer Relationship Customer Relationship Management Management (cont.)(cont.)

Using content to create customer Using content to create customer relationshipsrelationships

Provide membershipPersonalize the user experienceSupport usersCommunicate via the communityReward visitorsMarket effectivelySet up smart affiliate relationships



Customer self-service with FAQ pages:Customer self-service with FAQ pages:FAQ page:FAQ page: A Web site page that lists A Web site page that lists questions that are frequently asked questions that are frequently asked by customers and the answers to by customers and the answers to those questionsthose questions



Characteristics of an effective Characteristics of an effective FAQ page:FAQ page:

The FAQ page is easy to findThe FAQ page loads fastThe questions are easy to find



The answers are written from a customer’s perspectiveThe answers do not repeat information offered elsewhereOffer an opportunity to ask a question not on the FAQThe FAQ page is never done



Listening to customersListening to customersMine e-mail for informationSurvey customers quickly and frequentlyCreate an e-mail list

E-mail discussion list:E-mail discussion list: A group of A group of people who share a common people who share a common interest and who communicate with interest and who communicate with each other via e-mail messages each other via e-mail messages managed by e-mail list softwaremanaged by e-mail list software



Create a discussion forumElectronic discussion forum:Electronic discussion forum: A A portion of the Web site where portion of the Web site where visitors can post questions, visitors can post questions, comments, and answerscomments, and answers

Create a chat groupChat group:Chat group: A portion of the Web A portion of the Web site where visitors can site where visitors can communicate synchronously communicate synchronously



Increasing trustIncreasing trustTrust:Trust: A psychological state-of- A psychological state-of-mind when two or more parties mind when two or more parties are willing to pursue further are willing to pursue further interactions to achieve a interactions to achieve a planned goalplanned goal



Ways to increase trust:Ways to increase trust:Tell the customer about the companyInclude testimonials from loyal, satisfied customersProvide numerous opportunities for feedbackAnswer customer e-mail promptlyProvide information to the customer about an order


Managerial IssuesManagerial Issues

1. What does it take to create a successful online business?

2. Is creating a Web site a technical task or a management task?

3. How do we attract visitors to the Web site?

4. How do we turn visitors into buyers?


SummarySummary

1. Fundamental requirements for initiating an online business.

2. Funding options for a start-up online business.

3. Web site hosting options for an online business.

4. Web site construction options for an online business.


Summary Summary (cont.)(cont.)

5. Provide content that attracts and keeps Web site visitors.

6. Design a visitor-friendly site.7. High placement in search

engines is key.8. Customer relationship

management can contribute to success.

chapter 16 launching a successful online business

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