A Dozen Things to Think About When Launching an Online Business
Robin Neifield | June 17, 2010
Starting an online business is not an easy process. Remember these 12 tips when considering starting your own startup.
It seems everyone (and their brother) has a great idea for a new online business. As an agency with deep e-commerce experience, we get more than our share of inquiries from startups. And while some have real potential, like all new businesses, they face significant hurdles. Sometimes the advice we give isn't heeded by the starry-eyed entrepreneur who's in a hurry to get to market. But the smart and successful ones listen. If you're considering launching an online business, please take some time to consider the following.
- Get the business fundamentals down first. Ensure you have appropriate funding, a solid management team, and a business plan with explicit goals. If you don't have a differentiated brand and a sustainable value proposition for a clearly defined, large-enough-to-matter target audience, you don't have a business - online or off.
- Don't spend more than you're comfortable investing and consider an investment that you can do in phases. No reputable agency will be able to help you reach your business goals without budget guidance, but budgets have to be tied to something concrete. Just as you need to be able to articulate your brand, your offering, the market potential, and identify your competitors - you also need to be able to express in dollars and cents important targets like what a new customer is worth to you or your average order value goals.
- Think of "competition" online differently. Anyone using the same keywords and phrases is competition. Anyone offering anything (products, services, information, community, or entertainment) to the same target markets is competition. You can't limit your thinking to just those who offer competitive products or services.
- Consider options like a Yahoo store or Amazon store to help you afford the back-end functionality of your online business, at least to start. You'll need the fulfillment processes, customer service support, tax calculations, plus a hundred other e-commerce tools they've already built into their platform. You may even be able to ship product to them to store and ship at reasonable prices.
- Please, please don't build your site without a marketing budget. You'll be wasting your money. There are millions upon millions of sites. You need sufficient resources to create and execute a digital marketing strategy that will bring you to the attention of those you're engaging.
- Don't launch until you have enough product to fulfill demand and your back-end capabilities are fully tested. New customers are gold, especially during the early stages of an e-commerce business. If they have a good experience, they tell 10 people and you may have gained a customer for life, plus great referrals. If you're out of stock or the customer has to wait or otherwise has a bad experience, they tell dozens or hundreds of people, never come back, and your business is damaged.
- Don't launch and market at the same time. Do a "soft launch" for a few weeks or months (no more if you have strong competitive pressures) to ensure that all the site kinks are worked through before you proactively drive traffic.
- Don't ignore local markets and local online marketing channels. Even if your aspirations are national or global, you can effectively reach lots of local markets.
- Don't forget to use all your tools. An online business is more than just a website. Consider and use mobile, video, social, and other channels for awareness, relationship building, and sales.
- Focus on all stages in a customer lifecycle. While ultimately it's about the sale, it's just as important to reach potential customers in their early research phases to stimulate sharing and to capture e-mail addresses for remarketing and loyalty programs. You need a layered approach to succeed and your prospect and customer databases are absolutely critical to your success.
- Don't underestimate the content burden. A stale website is a bad experience. You'll need a content strategy and a way to produce fresh content. Use social media to share the content burden by drawing in and engaging your audience on your site. This gives them a reason to return to the site regularly and provides a mechanism for them to contribute relevant and valuable content.
- Keep learning. Ongoing optimization of your site, your site marketing, your merchandise mix, pricing, and a host of other variables is what will win the day. Prepare for that success with a comprehensive analytics setup matched to your goals so you can track and act on the right variables.
All this advice is just as applicable to large companies or divisions of companies launching an e-commerce component as it is to a startup. If all this seems pretty generic, that's because it is, but it's also just the first step. If you've gotten this far, you're ahead of most, but still have a world of work ahead of you as you dive into the specifics of your industry, audience, and value proposition.