Great looking store – but can you make it pay?

With the many professional ecommerce solutions that are available today, it’s not too hard or too expensive to set up a good-looking and fully functional online store. Generating sales and making a good income can seem like a much bigger challenge. But you don’t have to be a big high-street name, or have a huge marketing budget, to start building up a profitable base of loyal customers.

 

Unleash your niche

The adage, ‘get big, get niche or get out’ is nowhere more true than in ecommerce. The web can reduce costs to a minimum and enable you to keep prices low, but economies of scale still count. Small online businesses will find it impossible to compete with larger ones on price alone – so don’t even try. A much better approach is to offer something that sets you apart from the competition. It may be a unique range of hard-to-find products, free expert advice, first-rate personal service – almost anything that adds value to your customers. If you have such a proposition, the web will enable you to exploit it much more extensively than traditional channels.

Anything Left-Handed (www.anythingleft-handed.co.u) is a good example of a business that has flourished by choosing a specific niche – selling products for left-handed people. But don’t be afraid to experiment - a niche can sometimes be discovered by accident. The Cake Store (www.thecakestore.com) offers online ordering for home delivery in the south London area. They don’t ship overseas, but the business unexpectedly developed an international dimension – they get a significant number of orders from abroad for deliveries of cakes to relatives in London.

 

Pick the low-hanging fruit

You don’t have to spend a mint on marketing to build up a good customer base. Look first for low-cost opportunities with good prospects. The Cake Store were able to attract good PR coverage from national media with attractive and topical products like their ‘Nemo’ cake design. This, coupled with word-of-mouth recommendations and good search engine rankings, lifted their visitor numbers to over 80,000 each month for very little investment.

By using creative ways of reaching the most accessible customers at low cost, it is possible to build up business quickly without risking the shirt off your back. Chocaid (www.chocaid.com), who sell fairly-traded chocolate products, hit a seam of gold when they linked up with The Irish Times for World Food Day. The newspaper gave them the equivalent of 30,000 euros (£20,000) advertising space to offer 20 readers free chocolate worlds. Over two years this delivered more than 1000 potential new customers.

One great tip for cost-effective marketing is to buy a copy of The Guerrilla Marketing Handbook by Jay Conrad Levinson and Seth Godin. It’s full of ideas for low-cost ways to promote your business.

 

Don’t speculate - affiliate

One way to ensure that your marketing spend is not wasted is to pay by performance. Joining an affiliate network can drive good traffic to your site. You will pay either a fixed fee for each visitor, or a percentage of each resulting sale. This method worked well for The Garden Pharmacy (www.garden.co.uk), the largest online pharmacy in the UK. Their site attracts up to 90,000 visitors per month, of whom 12-14% come via affiliate network AffiliateWindow. Proprieter Harry Ganz opted to pay a generous 10% commission on each sale – double the industry average – to maximise traffic from that source.

Another important performance-related marketing tool is pay-per-click advertising. Offered by the major search engines such as Google (Google Adwords) and Yahoo! (Yahoo! Search Marketing, formerly Overture), this allows you to target visitors who are searching for key phrases that relate directly to the products you sell. You bid a fixed amount per search phrase for each visitor that clicks through to your site. The Garden Pharmacy receives another 20% of all its visitors from this source.

 

Reasons to be cheerful

A happy customer will come back to you again and again. So, do everything you can to make your customers happy. Harry Ganz takes the view that, "There are two ways of handling ecommerce: price cutting or top-level service. We have always concentrated on the latter". Examples of good service include acknowledging and remedying any problems immediately, and sending free samples of other items with every order. By focussing on customer satisfaction, The Garden Pharmacy has achieved a repeat order rate of over 20%.

Chris Brown of www.Gamble.co.uk, which sells gambling-related products, also attributes his success in a large part to good customer service. They offer 24-hour courier as standard, and reply personally to every email enquiry within hours. According to Chris, "This shows that real people are behind the computer should anything go wrong, which helps boost a potential customer's confidence enormously".

 

Go beyond the web site

Setting up a web site is not the only way to use technology to your advantage. The Cake Store, recognising that many customers would be unfamiliar with online ordering, installed two terminals in their newly refurbished main shop in Sydenham, South East London. "They are brilliant at showing customers how easy it is to order online, and a great way to display our huge range”, says Tim Slatter.

At Chocaid, Alan Clayton found another way of using technology to increase performance. In the first competition they ran in the Irish Times, they received 200 postal entries to their prize draw. The next year they allowed people to text, and ended up with 850 mobile phone numbers. They used some of these to recruit guests for a World Food Day reception they had organised.

 

Ideas for assessing and improving your own performance

It’s always hard to see ourselves as others see us, so have mechanisms in place to assess your performance. If you do not proactively seek feedback, you will only hear from people who have an unusually good experience – or an exceptionally bad one.

However hard you try, things will go wrong. If a customer does phone or email with a complaint, don’t be defensive. Listen carefully to their grievance, and do your utmost to put things right.