e-Business, e-Commerce, Online Marketing & Web Strategy

Calculating RFV

Thu, 10 Sep 2009 19:34:19 GMT

Calculating RFV

RFV = Recency, Frequency & Value. Way back in 2008 the big phrase was lead nurturing. In other words, preparing for the future by understanding where your potential customers were on the buying spectrum. Did they even know they needed you or your product? Or did they have to be educated first? Were they in the research phase wherein they wanted info but not a strong sales pitch? Etc., etc. See my previous post, Understanding the Buying Spectrum, for more on this topic. Fast forward to 2009. All I've heard over and over and over again is "what can we do to drive sales NOW?" Does this mean we're not nurturing anymore? Probably not. We're just expediting the process by becoming more forward in our approach. Yes, some prospects may be left behind, but tough times... So here's what I am prescribing for my clients who insist they can't take a long view approach, but instead need sales NOW. It's called the RFV, or Recency, Frequency & Value.

What are your prospects' RTV scores? It's hard to know that without the basic info. In order to gather the basic info you will need, a survey is probably necessary. 4 questions is all it should take.

When was the last time your company purchased any of the following products or services? - list them out and provide time frames
Please select all of the products your company buys in a given year - list out all products and services to choose from
How many times per year does your company buy these products or services? - Give choices of a couple of months, 6 months, a year, more than a year.
How much does your company spend on these products and services in a given year? - Give choices of less than 10k, 25-50k, 50-100k, 100-250k, 250k+, or whatever scale fits your business.

Wow, pretty blunt right? Ok, maybe. But these 4 questions will give you the answers you need to evaluate RTV. We know what products or services they buy, when they bought it last, how often they buy it and how much they spend on it. Selecting the cream of the crop from these answers is not hard as you can imagine.

Now we can get back into nurturing mode, but this time we can blitz hard and fast on those prospects that are most likely to generate sales NOW. Do I like the heavy-handed RTV approach? Tough times...

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Creating the e-Business - Part 11: The Summary

Thu, 26 Mar 2009 19:15:08 GMT

Creating an e-business summary

As we have discovered, an e-business truly does touch every department within a company. And a truly integrated e-business has optimized both its human and technology resources.

From forming a strategic business plan that incorporates traditional business practices with e-business solutions, to conducting a risk analysis and disaster recovery plan, ABC has many steps to take before it can be tagged a successful e-business. It must first develop a marketing strategy and ask itself fundamental questions regarding its operational success factors.

ABC must also create a financial plan that looks at past performance as well as future trends. E-business involves reducing operational costs as well as increasing sales. Finally, ABC must work to make its e-business solution work for the customer. The customer must ultimately benefit from the efficiencies that ABC and its business partners will gain from a well-strategized and implemented e-business campaign.

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Creating the e-Business - Part 10: Risk Analysis and Disaster Recovery

Thu, 19 Mar 2009 16:20:29 GMT

Risk analysis and Disaster recovery

Along with the financial plan, ABC should incorporate a thorough legal study and a thorough risk analysis. These aspects cannot be overlooked, as they are the biggest defense an e-business company can have to protect its assets. ABC should first analyze its privacy and service commitment statements. There are important laws and regulations that explain how data is to be collected, stored and shared. ABC should be aware of the many resources available to an organization that explain and keep up-to-date on new laws and regulations.

ABC should also conduct a thorough analysis of its infrastructure. During this analysis there should be considerable time devoted to uncovering any weaknesses in either information storage procedures or the processes used to keep the website up and running in the event of a natural disaster. This is also known as a disaster recovery plan. And like any plan there needs to be documentation drawn out that highlights the weaknesses. Then a disaster recovery team can be assembled. There can be several teams for each area of recovery, but each team should have a leader. The team leaders are responsible for determining the problem, the root cause of the problem, finding a resolution to the problem and finally responding to the problem and fixing it. This scenario should be conducted prior to any ‘real’ disaster so that there is documentation available when the time comes.

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Creating the e-Business - Part 9.4: Reducing Costs

Mon, 09 Mar 2009 21:29:49 GMT

Reducing costs

Financial considerations should be given towards reducing the costs of operating the business. Even though most companies use the Internet to increase their marketing presence, there are many ways to lower operating costs by using the Internet and the technology advancements that the Internet offers. One way of doing this is to lower transactional costs. When customers self-service their accounts, they free up the customer service department’s time and the Sales departments time. This allows them to spend more time procuring additional sales. Further, EDI and XML transactions can be instituted to allow computers to ‘talk’ to one another and therefore alleviate human interaction and human costs.

Another way to lower costs is to offer information online. This will decrease paper, ink, storage and management costs in the physical realm. Along these same lines, a company could reduce costs by offering online invoices. Companies routinely lose or misplace their invoices. Having an electronic version to send them will decrease time and delivery costs. Using e-mail to communicate with the customer and other business partners will reduce phone-call cost, but it will also serve as an electronic backup in case of further disputes. Also, when a company uses online suppliers to procure their goods, much of the ‘fat’ has been taken out of the equation and costs are typically lower by doing so. One way to buy online is through bidding sites. These sites can offer a company the raw materials it needs to operate, but it can also offer the machinery it needs as well.

Recruiting employees online can save costs as well. Doing research online can reduce the time it takes to come up with an answer. Another great advantage the Internet has in reducing costs is training employees or customers via the Web. Quarterly sales meetings can be conducted via the Web without the added time and expense of traveling. Plus, Webinars can be conducted to train users on using an e-commerce site or educating suppliers on the services offered by ABC in an effort to encourage them to push their products through ABC. These are many ways that the Internet can reduce overall company costs. These elements should be included in a thorough financial and accounting plan.

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Creating the e-Business - Part 9.3: Budgeting the Costs of an e-Business

Tue, 10 Feb 2009 18:52:55 GMT

Budgeting

Budgeting is important because it gives marketing and e-business management a greater vision of your expectations in relation to the rest of the company. A thoroughly planned budget can lead to reduced administrative costs and tasks, increased service levels to employees, and freeing up the finance department to focus on strategy, not spreadsheets.

Another consideration for budgeting goes beyond an employee’s salary. There should also be consideration towards an employee’s bonus structure. An employee incentive plan is a very important aspect of creating additional revenues for a company. A budget should include an incentive plan for the e-commerce manager that would pay out if they increase overall company sales through online business transactions; if they decrease transactional time with regard to checking and approving e-commerce orders; and additional revenues gained from selling Web advertising and/or preferred placement within the program’s product search results.

Budgeting is also important because it allows management the tools to increase and decrease budgets depending on economic and other environmental circumstances. During our next discussion we will speak directly about reducing costs.

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Creating the e-Business - Part 9.2: Operating Costs of an e-Business

Mon, 19 Jan 2009 15:47:25 GMT

Operating expenditures

As with the startup expenditures, the operating expenditures involve employee time. The e-commerce manager, MIS, programmers, graphics people, and customer service representatives must all be involved on the operational side of an e-business. Further telecommunication expenses are incurred monthly or quarterly, as well as basic utility expenses.

Advertising also comes into play on the operational side of an e-business. Literature and other ‘hard’ advertising pieces must be created. Pay-per-click advertising and e-marketplaces should be advertised in so that horizontal partners push users to your site. ABC may also wish to conduct live web demonstrations of its capabilities. This per-month resource must be budgeted.

While some business costs can be reduced in the e-business environment, it is more accurate to say that money can be spent more wisely after e-business implementation as a result of better reporting, trends data, and better accountability for marketing dollars spent versus true customer acquisition, ROI and lifecycle earnings from a customer.

The budgeting process is just as important in the e-business environment, so we will discuss budgeting in the next post.

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Creating the e-Business - Part 9.1: The Costs of e-Business Startup

Mon, 05 Jan 2009 18:02:05 GMT

A Complete View of Costs Associated with Starting an e-Business Enabled Company

Startup expenditures

Even though ABC is a successful brick and mortar business in its own right, there are many expenses associated with starting an e-commerce division of a company. For instance, there are development costs involved. ABC wants to offer its users a unique and industry-leading searching mechanism for finding cogs based on several criteria. This will require development time and money. Further, the graphical layout for the new site will have to be determined. This will primarily be done in house, but a portion of the finished style sheets will be imagined and created by an outside graphic artist. This will require an expenditure.

A minimal, but necessary, charge will be incurred to obtain a domain registration for the new company division. This project will require time from the marketing manager, e-commerce manager, graphics artist, programming, IT and accounting departments. The time involvement from these individuals is an incurred soft cost. Also, equipment must be purchased in order to service users in an efficient and secure manner. A middle-ware server must be bought and put in place so that credit card numbers are not floating around on the Net. This middle-ware server will also act as a liaison between the e-commerce site and the back-end inventory and financial systems. ABC will also require an additional router, a new hosting provider, and more programmed jobs to run security backups of information.

These are the starting expenditures that must be considered in a financial plan. Next time we will discuss the operating expenditures.

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Creating the e-Business - Part 8: Predictive Accounting

Wed, 10 Dec 2008 19:20:13 GMT

Predictive Accounting

It is estimated that only 25 percent of companies incorporate predictive metrics in their plans. This means that 75 percent of decision-making is based on lagging indicators. This is a sobering statistic when it comes to financial planning. A financial plan needs to incorporate past figures and expected future results. Without both, considerations regarding future expenditures, profits and goals cannot be met. With this being said, the first thing that a company should do when creating a financial plan is to think ahead in a strategic way. That is to say, one must look at costs in an encompassing way. That is to say, one should consider startup expenses, operating expenses, cost-reduction techniques and budgeting. Let us begin with startup expenses. This should also be considered the beginning of a draft outline in regard to a financial plan for ABC Co. Next time we will talk about the costs associated with starting an e-business enabled company.

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Creating the e-Business - Part 7.2: Improving Profitability

Mon, 24 Nov 2008 21:36:46 GMT

Improving profitability

Now that ABC has a plan to collect and join its data into a company-wide knowledge management (KM) system, it must begin answering the all-important question regarding improving profitability. Improved profitability can be achieved by utilizing the tools of the KM system. ABC can use the personal data of its customers to form a general description of its customer base. It can look at the products and services bought by the customer to answer questions regarding marketing and promotions. It can look at the internal notes on issues, complaints and resolutions to determine the best course of action when problems arise.

ABC can also improve its profitability by acting on the answers to its external environmental questions. It can improve its technologies to stay ahead of the competition. It can also utilize the technology and industry information to increase barriers to entry and effectively hold off competition for an extended period on time. The longer ABC can keep competition away from its customers, the longer it has to develop stronger relationships through increased customer service and to build up the customer’s loyalty to the company. Increased customer service and increased loyalty by the customer is a powerful barrier to entry in and of itself.

ABC can also act off the knowledge gained regarding its distributors and supplier’s power in the distribution chain. ABC can work to integrate systems and build stronger, mutually agreeable relationships with strategic alliances in order to minimize their power and increase ABC’s power in the chain. Because of the trends that can be seen from a KM system, ABC should be in a position to make educated guesses regarding its supplies and product substitutions. ABC should make it clear to its suppliers that if they cannot meet the demands of ABC’s customer to get the products delivered in a timely manner, ABC will seek out a comparable substitute from another supplier. The answers gained from the KM system will allow ABC to plan, create and implement an effective operations plan. An effective operations plan is only effective if there is also an effective financial plan. The financial plan of an organization takes into account many aspects of the business including viability, predictive accounting, operational costs and future goals, to name just a few.

In order to take a brick and mortar business and transfer its products and services online, the most important aspect to consider is the financial viability of the project. Just because a company is successful off-line does not necessarily mean that it will be a successful company on-line. Companies must live by the same business rules that traditional brick and mortar business live by. That is to say, once a traditional company expects more capital, then it should spend more money. This ‘traditional’ way of thinking, was not the direction that many early Internet retailers took. When one company, eToys, saw trouble ahead, and should have been looking to cut expenses, it still spent tremendous amounts of money on advertising. This example is used quite often in the e-business arena to underscore the fact that a company cannot continue to show losses quarter after quarter and expect to stay in business. A solid financial plan is the first step a company must take before it takes the plunge into e-business.

Staying on this topic, we will next discuss how predictive accounting plays a major role in e-business success.

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Creating the e-Business - Part 7.1: Customer Data Integration

Mon, 24 Nov 2008 21:32:18 GMT

Customer Data Integration

ABC wishes to create an enterprise resource planning (ERP) management system that will support and coincide with its business objectives. In order to accomplish this, it must ask crucial questions that demand factual and documented answers. These types of answers will provide managers with tools they need to assess their distant and direct partners. The two most important sets of data for an ERP system are customer and external environment data.

The goals of customer data collection are to create a single, accurate and complete view of the customer, and to utilize that intelligence through each customer interaction at every touch point enterprise-wide. The types of data that need to be collected on the customer should be found in either the customer relationship management (CRM) system or in the backend details of ABC’s financial and accounting system. When the information in these two systems is combined, the ERP infrastructure is in place to begin answering the critical questions of the operational agenda. The data that needs to be collected on the customer are listed below:

Personal data
Products and services bought
Billing data
Company-wide services being ordered on a growing basis
Inside notes on issues, complaints and resolutions

Once this customer data integration (CDI) is entered into a single database that is then used to answer the pertinent business objective questions on a company-wide basis, ABC’s ERP system is the ending result. However, ABC still lacks the information that a complete knowledge management (KM) system can provide. In order to accomplish its KM goals, ABC must answer certain questions with regard to its external environment.

A company’s external environment can be broken down into three segments: 1. The surrounding environment consisting of economic, social, political, technological and ecological issues; 2. the market environment consisting of entry barriers, supplier power, buyer power, substitute availability and competitive rivalry; and 3. the operating environment consisting of competitors, creditors, customers, labor and supplies. Each one of these segments must be thoroughly investigated and questions must be answered for all of these areas in regard to ABC’s operational goals. Once the company is educated on the external environment, this information can be combined with the CDI and ERP data to create the KM system. This KM system will provide ABC with a 360° view of its customer and external environment. Now ABC can begin focusing on profitability.

Creating the e-Business - Part 6: Measuring Effectiveness

Mon, 10 Nov 2008 20:28:22 GMT

Measuring Effectiveness

One way to measure effectiveness is for ABC to ask more questions of its customers. It must know whether or not its customers are aware of all of its capabilities, investments in technology, its large database of products and description information, its online ordering and self-servicing capabilities, its ISO 9001:2000 certified status, etc. Do ABC’s customers know how its close relationships with all the major cog manufacturers can save them money?

These are fundamental questions that ABC must be able to answer in order to gage the effectiveness of its campaigns. It must know its customers’ ‘hot buttons’ in order to offer problem-solving solutions and advertise these solutions-based services to future customers. ABC could also look towards web analytical software to refine its marketing efforts and to help it determine future trends. The key to success is to not just gather and segment data but to use it to better understand customers. Once potential customers can be contacted and converted into true customers the next challenge is to ask the critical questions that will ultimately lead to a successful implementation of a company-wide e-business program.

Let us now examine the critical strategic questions that ABC Company must ask and answer to successfully implement its e-business operations. The focus will be on three main objectives: Data collection, joining information and improving profitability. Each one of these objectives will require a number of answers to a number of questions. However, all of the answers shall be used for one purpose: to provide the management of ABC with the tools they need to assess their distant partners, or customers, and their direct partners, or distributors and suppliers. These tools consist of INFORMATION.

In the next post we will discuss these information tools in the form of customer and data integration -- Oh yes, it's getting exciting!

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Creating the e-Business - Part 5: Getting Out of the Gate

Wed, 05 Nov 2008 22:38:24 GMT

Branding and Positioning

Pay-per-click advertisements on major search engines, direct mail and e-mail campaigns, trade journal advertisements, or e-newsletters to customers and targeted potential customers would be a way for ABC to create a powerful brand awareness campaign, while positioning itself in key areas where potential customers are most likely to find it and become a qualified lead. Next, ABC must look at its internal realties. That is to say, it must ask itself key fundamental questions regarding the way it does business internally and what connections it must make on the outside to secure competitive advantages in the future.

Internal Realities

ABC must answer many questions about its internal realities. It must answer how it plans to integrate Internet leads into its CRM program. It must also answer how it plans on tracking these leads into profits once they are entered into the back-office accounting system. Some companies combine the two systems into what is known as an ERP or enterprise resource planning system. Some companies take it a step further and add trends analysis information and other information into one central database called a knowledge management system.

Sizing Up the Competition

ABC must answer what it means to be a customer-focused company. It must answer questions regarding product pricing, placement, inventory, distribution, competition analysis and ethical concerns such as security and privacy issues. One point to keep in mind when studying the competition is to pay close attention to how the competitor structures its products and services while analyzing the following areas of the competition:

Technical
Sales
Distribution
Manufacturing
Marketing
Financial
Legal

This information should be used to plan for the future with ones' competition in mind. Relationship analysis effectively drives more intelligence into strategic decision making, which will give one’s company a competitive edge. Understanding how one’s competitors relate to and work with other organizations provides a more accurate picture of one’s competitive landscape. Finally, ABC needs to measure the effectiveness of its efforts and answer whether or not it accomplished its strategic goals.

In the next post we will talk about measuring effectiveness.

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Creating the e-Business - Part 4: Marketing Strategy

Fri, 31 Oct 2008 15:36:34 GMT

Marketing Strategy

ABC believes it can accomplish these strategic goals by advertising in horizontally integrated e-marketplaces and by optimizing its website for content and backward linkage to increase its web page ranking and popularity with the major search engines. ABC must answer which marketplaces will drive its target market to its website. Business-to-Business marketplaces like ThomasNet, Global Spec, Vert-Markets and similar horizontally integrated e-marketplaces could offer relevant lead generation for ABC. ABC must also answer the question of which advertising methods would offer the best brand awareness opportunities for the company.

ABC could look towards various brokerage models when determining the appropriate marketing mix. Brokerage models are used to bring buyers and sellers together in an effort to establish business connections between them in order to form a mutually agreeable transaction. One example of a brokerage model is a search agent. Search agents attempt to take the user’s query, or criteria, for a specific good or service and find the best provider or best price for the user. Examples of brokerage models are, as mentioned above, e-marketplaces. E-marketplaces have many companies that advertise on their sites. When the user enters their criteria, the system selects the best company to fulfill the needs of the user.

Another example of a brokerage model is the auction broker. Auction brokers do not get involved in the transaction, they simply take a percentage of the sales commission or require a small listing fee to list products or services on it site. An example of an auction broker would be E-bay. E-bay has a section of its website dedicated to the small business. ABC could look here in an attempt to procure auction brokerage business while getting rid of excess inventory.

A further example of a brokerage model business is the distributor. Distributor sites serve as an online catalog and lead generating tool for their advertisers. An example of a B2B online distributor would be ThomasNet’s online catalog of industrial manufacturers and distributors. ABC must also question how it wants to create brand awareness throughout the industry.

In the next post, we will discuss branding and positioning for our fictional company.

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Creating the e-Business - Part 3: Critical Steps for Success

Tue, 28 Oct 2008 14:47:11 GMT

Critical Steps for Success

There is a theory when it comes to implementing a successful project and that theory maintains that there are four (4) critical areas of any project:

Time Frame
Quality
Scope and
Budget

The project manager gets to choose three (3) of these critical areas, leaving one critical area for the implantation team to decipher. The same holds true for any e-business implementation. The team charged with the task of completing the assignment must be given the freedom to hold one of these critical areas to their discretion; otherwise, the project has a good chance of failure. An e-Business manager, Web manager or any other manager put in charge of the e-business implementation must negotiate the fourth critical area beforehand so that the final product is achievable.

To illustrate, let us say that the new e-commerce package has to be up and running 100% by January 1^st and it has to be able to do XYZ. The team was just given the Quality objective at 100% complete; it was given the Time objective of January 1^st; and it was given the Scope objective of “able to do XYZ”. Therefore, the implementation team must create the Budget for this project. If the budget they come up with is not satisfactory, then the company heads can create the budget, but they must release either Time Frame, Quality or Scope back to the implementation team. The point here is that, assuming you have a competent and qualified team, they will be able to give the company accurate information of that fourth criteria. And if the team is not allowed that discretion, they will fail a good proportion of the time. Now, let us talk about the steps that ABC Company needs to take in order to move towards a successful e-business transformation.

The first step that ABC should take is to move towards standardizing its procedures in order to increase efficiencies and decrease costs and the likelihood for errors. Another major step in the process is for ABC to establish a detailed disaster recovery plan. If a majority of its customers are self-servicing themselves, and if new customers are ordering or looking for the first time, the site must be up and functional all of the time. A disaster action plan and team should be put into place in order to assure that ABC’s site remains online and functional 99% of the time.

Further, ABC should market itself on horizontally and vertically integrated marketplaces. Lastly, the sales and customer service force should be trained on the implications of the website. They should understand how to use the site and be aware that any time-savings that the site affords them should be used to gain new leads and sales and to grow sales among the current customer list. In these ways, ABC’s strategic plan can have a direct impact on business and customer relationships. After this has been accomplished, the focus should turn to developing a marketing strategy that incorporates ABC’s goals.

For ABC to create a successful e-business marketing strategy, it must answer some fundamental questions regarding its business practices, external obstacles and long-term strategic vision. Among the most intrinsic questions for ABC to answer are its marketing strategy, internal realties, effective measurement of benchmarks and its overall branding and positioning strategy. Each one of these questions can be broken down into more detailed and insightful questions for ABC to answer.

In our next discussion, we will turn to the topic of marketing strategy.

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Creating the e-Business - Part 2: Setting Your Goals

Wed, 15 Oct 2008 15:34:03 GMT

ABC’s Goals

ABC’s main goals with its e-commerce website are to:

Increase value to the customer
Increase customer loyalty as a result of this value
Increase sales as a result of increased customer value and loyalty
Enter new markets and industries by utilizing end user informational data gathered from increased website usage
Increase the barriers to entry to competition

ABC will likely accomplish these goals based on its vision and core competency integration into its e-commerce program. The value to the customer is increased because they can now source their products based on their own set of criteria. ABC’s proprietary searching software takes care of that. Customers can also buy products online. Products that they have bought in the past can be found in their personalized shopping list, or they can simply type in their personalized product number and the system will recognize it and place it in their cart. Further, customers can check on open orders, past purchases and even open and print out invoices. Shipment tracking is also available. This option alone saves ABC’s customer service department many phone calls, because half of their calls from customers are centered on asking where their shipments are.

ABC’s hope is that by offering this increased level of customer service, it will create a loyalty from its customers that will translate into an increased number of sales. Further, ABC will utilize the end user information gathered from the website usage and tracking reports to better understand current and new markets. This information will help in entering new markets and will also serve as a barrier to entry from would-be competitors. One other key factor that ABC must take into consideration is the need for increased inventory. If an increase in business is achieved, the user will demand quick delivery. This can only be achieved through tighter inventory control.

But many companies are tentative when it comes to increasing their inventory levels. This opens the door to higher costs and inventory waste. But the real problem is not the threat of increased inventory levels; the real problem is a lack of knowledge when it comes to the true costs to buy raw materials, process the goods and inventory the goods until shipment. Now hold on. This is not where an attempt to place blame on any one individual is going to happen. This is where we revisit the idea that true e-business involves system integration and information dissemination. Here is a live example: Company ABC gets a call from client XYZ. Client XYZ wants a 10% reduction in their overall cost on widget123. Now, can Company ABC tell Client XYZ ok, or will this send them into deficit on this item? Only a true e-business enabled company can give accurate results because it knows its true markup price for that item. And believe me, in a manufacturing environment, the true markup price does fluctuate quite a bit.

For instance, if you calculate the cost of the job, that is the labor cost plus the machine time and the machine’s floor space value, and add this cost to the cost of material and add that to the proposed markup percentage, then you have the true markup price…for the moment. You see, variables within this equation change. For instance, the time it takes an employee to run a job may be less and less because of the learning curve associated with the job. If this is true, then the profit percentage actually increases as the employee becomes more proficient at running the job. E-business allows us to track work time through the scanning in and out of jobs. A work order kicks out, and it’s scanned in. The job gets ran, and it’s scanned out. The total time of that job run is saved and stored in the centralized database and awaits a manager to come along and discover that, indeed, what used to take two hours to run now takes only an hour and a half. So, yes, Client XYZ, we can meet your request and keep your business.

So you are hopefully starting to see that e-business managers have to understand the many departments of a company in order to be successful. The information that is gathered via e-business is used by good managers to run a more efficient and profitable business. E-business professionals don't have to be operations managers, or IT managers, but they do have to understand how communication and data collection can help these other managers survey the business landscape. E-business managers have to be very aware that the technology they help to institute within the organization actually touches every department. Working with those departments to gather and disseminate that information is a big part of being a successful e-business manager.

Next, we will discuss the fictional company, ABC, and its critical steps for success.

Creating the e-Business - Part 1: Success Determinants

Fri, 10 Oct 2008 17:45:17 GMT

Creating the e-Business - Part 1: Success Determinants

ABC Company

E-business is more that just selling products and services online. E-business runs the gamete from e-commerce sales to inventory management. E-business also encompasses operations, marketing and finance. The reality is e-business touches, in some way, every department within an organization. This is what makes e-business so complex. This is also what makes e-business so powerful. Over the course of this ‘blog, we will paint a picture of the many facets of e-business and thoroughly examine each of these facets in order to help the reader comprehend the vast nature of this beast. The first step to creating a successful e-business is to form a strategic plan based on the long-term goals of the organization.

ABC Company has a vision to grow its business into new industries, new product markets and increase overall sales via the Internet. It has begun these efforts by creating a functional e-commerce site. This site has a goal of becoming the preferred source for engineers and purchasing agents for sourcing, procuring and applying cogs. ABC’s hope is that along with increased sales, the site will allow its customers to self-service themselves around 50% of the time, if they so choose. This will allow its sales and customer service personnel to spend more time researching and contacting new potential customers.

Success Determinants

In order for ABC to succeed in its efforts to increase sales, break into new markets and industries, and create an environment wherein customers can self-service their selves, ABC needs to accomplish some major objectives. First, it must work to integrate its core business functionality into the site. The site must answer the types of questions that a typical customer or potential customer would ask, and it must give the user the power to research products, procure products and check on their orders after the purchase. These are the main functions that customers demand in ABC’s sales and customer service personnel.

Another success factor would be to integrate the information received online into ABC’s customer resource management (CRM) software program. The information obtained from online users could then be transferred to the larger enterprise resource planning (ERP) system. The results from online leads and sales could thereby be measured, studied and refined. The information from these studies could be used to market the site differently, allocate more or less resources to the site, change the functionality or usability of the site, etc. This phase of information integration is a key determinant to the future success of the program. A further review of internal and external environments is necessary in order to move forward with creating a successful e-business.

The analysis in question would come in the form of a SWOTT analysis. SWOTT stands for strengths, weaknesses, opportunities, threats and trends. The SWOTT analysis forces the company to look at its internal vision and the external realities that await it. If ABC wants to enter new markets and new industries, it must first understand the competitive nature of these environments and the buying nature of the customers.

In Part 2 of this "lecture" we will discuss this fictional company's goals and determine what role e-business plays in those goals.

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SEO Quickie

Mon, 06 Oct 2008 21:18:18 GMT

SEO Quickie

Search engine optimization really just takes the best parts of corporate tribal knowledge and Web tracking reports and uses that information in all areas of the site in order to flood the site with the “right’ information in order to be found by the search engines and placed toward the top of the results.

It is somewhat just a matter of focus and consistency. One must focus on the keywords and phrases that attract the best potential customers and then be consistent in how those keywords are spread across the site or the page. For instance, if ‘soft feel golf balls’ is a strong keyword that the Web manager needs to optimize, then at least one page URL on the site needs to be created with the term ‘soft feel golf balls’ in it, as well as a having that terminology in the source code for that page’s title, keywords and metatags.

Further, a strong heading on that page should read ‘soft feel golf balls’ and that term should be used several more times on that page; this is called keyword density. Plus, any pictures on the page that are related to that term should have an ALTAG of ‘soft feel golf balls’. Now that that page is optimized for that key term, it is time to use the rest of the site to further enhance that term.

Anywhere on the site where the term ‘soft feel golf ball’ is used, it should be linked to that optimized page. DO NOT link to the page with a ‘click here’. Link to the page with a ‘soft feel golf ball’ link. This is called “interlinking” and is a great tool for Website optimization. Further, any other Websites that agree to link to that optimized page should be instructed to use that terminology. So, instead of having a link to ABC Company, have them link to ‘soft feel golf balls’. This keyword relevance gets picked up by the search engines and helps move the page up the results ladder. So what’s the theory behind all this stuff?

This stuff is not just theory; it is proven practice. If a company ABC is a completely brick and mortar business and wishes to branch out online as well as create e-business efficiencies within its organization, how would it go about accomplishing those goals? It would look to its e-Business Manager, Web Manager, Technology Manager and other Managers, and ask them to lead the way. But there is far more detail involved when it comes to putting this knowledge into practice?

In our next posts, we will examine the multiple facets involved in creating the e-business.

The New Marketing Mix

Tue, 30 Sep 2008 18:39:11 GMT

The New Marketing Mix - Understanding Your Potential and Current Customers

The Marketing Mix has changed. Again, the Marketing Mix has changed. The power structure has swung into the hands of the buyers. They do not care how big or small an organization is. They do not care that an organization has the newest technology or machinery. They care about one thing: Solving their problem. This may not be a new concept, but the power of the end users to carry out this task as freely as they do today, is new. Web Managers must know their customers in order for their customers to find them on the Web and make a business contact.

Web managers must manage the research into the markets of their potential customers. Surveys need to be sent out, Web analytics need to be examined and Internet research must be completed in order to find out both the hot buttons of the customers and the tactics of the competition. Search Engine Optimization (SEO) is a very important tool to the Web manager. Once the manager knows who the main referring domains are, he/she will know where to focus their attention as far as optimizing their site for that particular source. For example, if Google is the largest referring domain, then the Website should be primarily optimized for Google. If it is ABC Craft Company, then efforts should be made to find out how to get more hits from ABC Craft Company – as long as the hits they are sending turn into legitimate, qualified leads. So, in other words, Web managers should take the path of least resistance and tweak their site towards the referrer that is sending the most potential business their way.

Other important Website diagnostics facts are keyword popularity reports, entry page reports and e-mail form origination reports. Obviously, if one knows what keywords are being typed into the search engines, then one will have a good starting point when optimizing their site for those keywords. Also, if one knows what pages of the site are entered first, then one can work to create “sticky” features on those pages to get the user to either contact the company, or keep them moving deeper into the site towards more relevant information. The point here is to make sure that the pages visited first and most often by the users get the most attention when it comes to detail. Web managers live and die by keeping those visitors on the site past the first page and ultimately long enough to gather some identifying information.

Now, one of the best reports is the email form origination reports. These reports show, through Web tracking analytics, where all the people who contacted the company via email originated from. It also shows what they typed in to get to that contact point. This is as good as it gets in terms of Web analytical information. One has a list of people who actually contacted the company and from that list one can see: where they came from, what they typed in to get to the site and where they went on the site before they filled out the e-mail form. This information helps Web managers figure out what is working best in order to advertise online as well as change their site in order to mimic the results from these reports. After all, the contact is the reward for all of the Web manager’s hard work.

Obviously, the marketing mix is much more and involves the culmination of all media into one centralized message, or many unique messages to many people. However, we must master the basics of e-business before we can reach the optimal goal of gaining a 360 degree view of the customer through a centralized knowledge base routed in decentralized decision making. Too deep? Ok, in our next post we will discuss some SEO basics and then move on to the really hard stuff.

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The Role of the Web Manager Continued - Understanding the Buying Spectrum

Thu, 25 Sep 2008 15:40:26 GMT

Bridging the Confidence Gap

A Web Manager must work to understand future trends in their customer’s industry by researching, surveying, attending sales calls, and understanding that some customers are further along the educational spectrum than others, and therefore must be marketed to in varying approaches and styles. When speaking of the Customer Education Spectrum, it must be understood that customers go through many stages before ultimately buying from a particular company.

First, they must realize that they have a problem or a need that needs to be solved or fulfilled. Once this is done, the customer will conduct their initial research, usually online or by asking colleagues and friends. After this, they will attempt to narrow down their choices and make contact with the organizations that most closely match their perceived need. The companies that are selected are still under much scrutiny by the potential customer. They must still work to bridge the confidence gap that the customer feels. The customer still wonders if this company is really the right one to solve their need. The problem is that often times, the customer is towards the end of the buying spectrum before they even contact the company. So it is even more important that companies have a solid presence and external perception, as well as a unified marketing and sales strategy so that it is not sending out conflicting evidence on why this customer should chose it in which to conduct their business. Therefore, understanding and creating that value to the customer is one of the most important rolls of the Web Manager.

Another important role of the Web Manager is to understand the value proposition the Web brings to its company. A good Web presence can bring increased business to the company through greater leads, new sales and sales growth with existing customers. Increased customer loyalty is also an important aspect of a company’s Web presence. The Web can help a company grow in existing markets as well, by integrating intelligent software applications that allow marketers to use cross-promotion and up-selling to target new segments within existing markets or bringing relevant buying information into the fray for new titles within an existing profitable account.

Some critical steps that a Web Manager must take to begin successfully implementing a Web campaign are making sure that the site functionality is good and user-friendly, understanding and preparing the marketing techniques and campaigns that are to be used, organizing the sales chain and methodology of the organization, and having an unbiased view of the corporation’s internal realities such as time, money, personnel, the ability to meet goals, keeping track of leads, sales, customer feedback and business networks. Without these things in place, the Web Manager cannot successfully drive a technology-enabled company. In our next post, we will discuss how the marketing mix has changed and what you need to know about it.

The Role of the Web Manager Continued - SWOTT Analysis

Thu, 18 Sep 2008 20:20:10 GMT

Swott Analysis

The very first task to be accomplished as a Web manager is the creation of a plan. This plan must take into account the long-term goals and vision of the company. Then a strategic business plan can be based on these goals. As in Marketing, a Web Manager must perform a SWOTT analysis for their company. This analysis consists of finding out the company’s Strengths, Weaknesses, Opportunities, Threats and Trends. During this phase of the Web Management plan the competitive landscape should be examined thoroughly as well as the creation of trends analysis reports derived from the company’s Business Intelligence software and its Website analytics reports.

A brief company description should be laid out for examination before describing the company’s areas of interest and major goals. The strengths might consist of competitive advantages that the enterprise holds such as dominant software, increased market share, increased industry knowledge, advanced machinery, better leveraged buying power, deeper consumer or industry data, or heightened growth potential due to the industry’s business climate. Weaknesses to consider are not growing fast enough or growing too fast. It is hard to imagine growing too fast, but this phenomenon happens more often than one might think, and can lead to damaging results. When a company is growing too fast for its business model, it can overextend its finances to keep up. This could cause a company to be slow to react when challenged with environmental issues. Smaller companies could make faster changes and leave the company in question unable to make adjustments.

Hopefully one would find that a company has many opportunities on its horizon. Being a customer-centric organization is an opportunity. Being first movers in industry, machinery, business philosophies or technologies can bring significant competitive advantages. If a company has systems in place to capture end user trends and information, then it has a chance to grow its market share. In fact, a company that rushes to manage its knowledge assets will partake in increased business intelligence; and business intelligence is the tool that talented business professionals and decision-makers need.

A threat to be weary of is competition that is more focused than the company in question. Niche players in production practices, product deliverables, industries or technologies can illustrate their advantages readily. These companies, although not focused on business intelligence or bridging existing business units, are focusing their energies on technology enhancements that are threatening to leapfrog the company at hand. This scenario risks these companies eating away at said business’ critical client base.

The SWOTT analysis must also consist of a problem/resolution statement. A primary problem, either with the company or within the industry, must be highlighted and a statement presenting the opportunity for the company in question must be presented. This is followed by a conclusion in which the Web Manager wraps up for the decision-makers and tells them what they are doing right, what they are doing wrong, what areas they stand to gain the most, and what is coming down the pike in terms of industry trends.

The next goal is to create value to the customer. We will discuss this next time.

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The Role of the Web Manager

Wed, 17 Sep 2008 19:27:32 GMT

The Role of the Web Manager

Now that the e-commerce example has been given, let us discuss the roll of the Web Manager. The roll of a Web manager is to create a plan for the company’s Web Presence and to manage each aspect of that plan to its fullest and most profitable end. But before this plan can be created, the Web manager must be versed in all the facets of e-commerce, including: e-law, e-marketing, e-operations, e-strategy, e-communities and ‘blogs, and best practices in Website management and usability.

E-law knowledge is important because a Web manager must know the law in order to enforce it. For instance, a Web manager should work to protect his/her company’s intellectual property. Entire Websites can be registered as a copyright in the U.S. Copyright Office. The only requirement is that the site must be original and creative. This copyright will provide exclusive statutory rights for the company and would include protection for pictures, logos, software, music, literary works and databases. Further, databases can be copyrighted and protected even further in terms of their methodology for choosing, extracting and showing information.

Linking agreements can also be made between linking partners of a site in order to avoid misunderstandings regarding copyright infringements. Knowing the law is also particularly important when it comes to e-mail marketing. Understanding who can be emailed, under what circumstances they can be e-mailed, and how to create and maintain a legitimate, opt-in in-house e-mail list is critical. It is also important to understand privacy laws when it comes to sharing and protecting vital customer information.

All of the “e-knowledge” listed above is required from a Website manager. With 90% plus of the business community researching, sourcing and buying their goods and services online, a company’s very existence will hinge on the knowledge and successful business implementations of its Website manager. Given this, we will next discuss creating a Web Management plan and delve into the world of the Web manager.

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E-Commerce Example - The Travel Industry

Tue, 02 Sep 2008 19:01:06 GMT

E-Commerce Example - The Travel Industry

Before we talk about the role of the Web Manager, let's go over a relevant example of how e-commerce is changing the landscape of business. In this case, I'll use the travel industry as an example of which we can all relate.

The travel industry has been dramatically altered due to e-commerce. In an examination of the effects that e-business has had on this dynamic and extremely personalized industry, we see that not long ago, travel agents ruled the travel industry. These agents performed their service from their brick and mortar offices. After the popularity of the Internet hit mainstream, travel became a new animal. Individuals decided that they enjoyed researching their vacations online before they called their travel agents. These individuals became a prime target for online, e-commerce travel companies. Two of these companies are Hotel Reservations Network and Priceline. These two companies have done the best job thus far in reaching the do-it-yourself audience of travelers.

Hotel Reservations Network, or Hotels.com, made strategic alliances with major hotel chains around the world. They were granted rooms to these hotels at a discount, even when the hotels are “sold out”. Travelers have really begun to utilize Hotels.com in a major way. Another big hitter in the industry has been Priceline.com. Priceline offers the customer the opportunity to enter what they are willing to pay for a service, and the companies on Priceline’s list all bid on accepting your request. One other thing that sets Priceline apart from its competitors is its horizontal partnerships. They have brought in companies from airfare and hotels to companies that offer car rentals, vacations and cruises. Priceline has become the one stop source for all your travel needs. This one stop source mentality has become the war cry of many do-it-yourself e-commerce users. The belief is that both bricks and clicks will win in this thriving industry. However, one would give the edge to the clicks.

Travel is so personalized that most people, other than the busiest individuals, would prefer to make their own travel plans over the Internet. More horizontal partnerships in the industry will also lead to increased online research and procurement. Travel agents will be forced to move from their bricks into clicks in order to compete with the other online travel houses. Of course, the travel industry is just one example of traditional business being transformed by the e-business revolution. As companies move from bricks to clicks, or clicks within bricks (such as ordering from an electronic user interface at a fast-food restaurant), they will need competent Web managers to lead the transition. Professionals that understand sales, usability, functionality, tracking, storing customer information, advertising, community building, customer research, surveys, content building, and many other areas of e-business will be in high demand. These attributes can all fall under the umbrella of a "Web Manager". In our next post we will discuss the growing role of the Web Manager within an existing brick and mortar.

Web Presence - E-commerce

Fri, 29 Aug 2008 19:28:49 GMT

Web Presence - E-commerce

Over the next few posts we will discuss what it means to have a Web presence. We are starting today with e-commerce.

One of the main advantages of having a Web presence is to gain the spoils of e-commerce. This technology offers the customer a broader selection of goods and services. E-commerce also gives the seller a greater ability to track customer trends and gather marketing information. This can be accomplished through better customer service, via CRM software integration, or by better communications with the customer. Other methods for marketing to e-commerce customers are to offer quicker deliverables and added customer loyalty programs. E-commerce also gives the customer 24/7/365 operability to purchase products and services. This means that the customer never gets turned away.

More revenue streams are also made possible by e-commerce. These revenue streams can come from advertising, sponsorships and miscellaneous partnerships. The bridging together of horizontal businesses related to one specific industry can form these partnerships. For instance, a hotel company may want to partner with other companies that are involved in the travel industry, such as car rentals and airfare providers. E-commerce basically means delivering goods or services bought by customers electronically; or it can mean providing transactional information or offering payments electronically. E-commerce can also help to automate the transaction and fulfillment process, as well as offer tracking, billing and other customer service features to the customer. E-commerce is all about making traditional trade faster, cheaper, more efficient and cleaner throughout the value chain.

Many large manufacturing companies offer good discounts when distributors purchase their products through the Web. Some offer a 3% savings when making EDI transactions. Others offer a 2% savings when distributors buy online. Manufacturers offer these discounts because by doing business in this way, they are saving costs throughout the ordering and fulfillment channel. These discounts can also help offset price hikes due to higher energy prices, higher raw material prices or the increased costs associated with capital investments.

Efficiencies can be gained from a variety of places when conducting business electronically. First, there is less paperwork wherein the buyer and the seller can make mistakes. Also, e-commerce can be accomplished quickly and efficiently through XML, EDI or advanced optics transactions. These are electronic transactions that are very quick and inexpensive to operate, due to their ability to communicate computer to computer or system to system. Also, e-commerce will surely mean a decrease in distribution channels. By decreasing distribution, e-commerce will ultimately lower the final cost to the end user. This will spark an intense buying trend. These advantages of e-commerce are the main drawing cards for its success.

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Business Intelligence

Thu, 28 Aug 2008 16:24:05 GMT

Business Intelligence

I'd like you to remember back to the previous post when I stated that the true purpose of e-business is to disseminate the enterprise’s business intelligence electronically to managers and non-managers in order to create efficiencies and more accurate business decisions through better communications.

Well... This is accomplished through developing Business Intelligence.

Marketing, Customer Support, Sales/Promotion, and Product Delivery are all recipients of COMMUNICATION. That is because they all share from a centralized knowledge base known as Business Intelligence, or BI. BI is basically the integration of two other databases, Customer Data Integration (CDI) and Knowledge Management (KM). In simple terms, CDI is the 360 degree view of your customers. It takes into account:

Who they are – Customer, Company, Market, Sub-Market
Where they are – Location
What they do – Job title, Business function
What they buy – Products, Services, Quantities
When they buy – Frequency, Date of last purchase
Why they buy – Application, Need, Hot button interests
How they buy – Fax, Phone, E-mail, E-commerce
How much they buy – Broken down into months, years and life of customer
How they heard about you – New business as well as new sales with existing customers
- This gives you profitability per enterprise as well as per opportunity – allowing you to track ROI for marketing and sales campaigns more efficiently
What issues has the customer had and what was the resolution

All of this information needs to be gathered, stored, brought together and disseminated in an organized way. All of the customer touch points such as the Web, Marketing, Sales, Customer Service, and Shipping, must all converge their data in a reservoir of information known as Customer Resource Management (CRM) software. Then, all of the individual customer monetary information must be stored in a back-office accounting software known as Enterprise Resource Planning, or ERP. Only when these two systems are converged can a company have its CDI.

Knowledge Management, or KM, is the storing of all the organization’s soft data such as training manuals and best practices, expert knowledge, committee findings and disaster recovery plans. This data, while holding little physical value, holds tremendous value to the organization because this knowledge asset is slow to acquire and quick to be lost if it is not stored in a knowledge management database. This database can be stored on the company’s internal servers or computer system, or it can be manipulated into smart design functions that allow it to be placed on the company’s extranet site for use by trusted business partners with their own password to the secure site.

To make it clear:

Customer Relationship Management + Enterprise Resource Planning = Customer Data Integration
and
Customer Data Integration + Knowledge Management = Business Intelligence

So there it is: the e-business purpose. Is it what you thought it would look like? For most reading this, the answer is no. This is because most people are under the impression that e-business and e-commerce are one in the same; wherein reality, e-commerce, or an organization’s Web presence, is only a small part of the larger e-business structure.

Creating an e-Business? Get Your Employees on the Same Page!

Wed, 27 Aug 2008 19:25:06 GMT

Getting on the Same Page or Better Communication

An important point, maybe THE most important point of creating a successful e-business is that everyone within the organization must be on the same page when it comes to the company’s vision, goals and plan of action. The problem is that most corporate heads who think their employees are all on the same page are grossly mistaken. Sure, they know the company’s mission statement, and they may even know the general direction that the company wants to go; but they don’t know squat about what it takes to get there in a technology-driven environment. What does this mean?

Technology is no longer solely used as a support mechanism for business functions; it has become the business model for true e-business enabled companies. Therefore, Chief Technology Officers, Managers of Information Systems and even leading computer programmers and architects must be proactive in educating themselves on business management and operations. These are the people that must communicate the possibilities of e-business enablement to the entire organization.

In fact, anyone in the organization that is involved with the creation of an e-business solution must first understand the potential implications for the business as a whole, including all of the separate business units. After all, the true purpose of e-business is to disseminate the enterprise’s business intelligence electronically to managers and non-managers in order to create efficiencies and more accurate business decisions through better communications. Marketing, Customer Support, Sales, Promotions, and Product Delivery will all share from the same intelligence structure in a well-balanced e-business system.

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