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ABDM4233 ENTREPRENEURSHIP E-Commerce and Entrepreneur by Stephen OngPrincipal Lecturer (Specialist) Visiting Professor, Shenzhen
The 360° CUBE Pitch Six Posters in a 6 minute Investor Pitch SOCIAL MARKETINGPROBLEM & SALESVISION & OPERATIONS TEAMMISSION & KEY PARTNERSBUSINESS FINANCIAL MODEL MILESTONES
360° Business CUBE1. The Problem : How BIG is the problem?2. The Solution : Our Social Enterprise’s Vision & Mission3. The Business Model : Getting the JOB done for the Customer Segments4. Marketing & Sales (and Fundraising)5. The Team & Key Partners6. The Financial Plan : Goals and objectives, with a timeline (Milestones)
The Internet: Changing the Face of Business Successful companies embrace the Internet as a mechanism for transforming their companies and for changing everything about the way they do business. Business basics still apply online. In the world of e-commerce, company size matters less than speed and flexibility.
The Internet: Changing the Face of Business Study: By 2011, the Internet will influence more that $1 billion in offline sales. Neilsen study: 86% of the world’s online population has used the Internet to make a purchase. Items purchased most often online include computer hardware and software, tickets, books, music, movies, gift cards, toys and video games, and baby products.
Benefits of Selling on the Web Opportunity to increase revenues and profits Ability to expand into global markets Ability to remain open 24 hours a day, seven days a week Capacity to use the Web’s interactive nature to enhance customer service Power to educate and inform
Benefits of Selling on the Web (continued) Ability to lower the cost of doing business Ability to spot new business opportunities and capitalize on them Ability to grow faster Power to track sales results Conversion rate – the percentage of customers to a Web site who actually make a purchase.
Online Business Models Affliate programs Pay-per-click programs Direct Ads E-commerce Subcription services Freemium models
E-Commerce The Small Business Research Board reports: 57.3% of small business owners in the U.S. have a Web site 56.1% of those sites engage in online sales. Barriers: Not knowing how or where to start Cost and time concerns
Factors to Consider Before Launching into E-Commerce How a company exploits the Web’s interconnectivity and the opportunities it creates to transform relationships with suppliers, customers, and others is crucial to its success. Web success requires a company to develop a plan for integrating the Web into its overall strategy.
Factors to Consider Before Launching into E-Commerce (continued) Developing deep, lasting relationships with customers takes on even greater importance. Creating a meaningful presence on the Web requires an ongoing investment of resources – time, money, energy, and talent. Measuring the success of a Web-based sales effort is essential to remaining relevant to customers whose tastes, needs, and preferences constantly change.
Assessing You Company’s Online Potential1. Does your product have broad appeal to customers everywhere?2. Do you want to sell your product to customers outside of your immediate geographic area?3. Can the product you sell be delivered conveniently and economically?4. Can your company realize significant cost advantages by going online?5. Can you draw customers to your company’s Web site with a reasonable investment?
Case : Sevenly – E-commerce by Weekly CampaignFaceBook Users (2012) T-shirts Sold Online Highest : $51,016 (7,288 Worldwide : T-shirts) (0.004% USA 835m FB) Lowest : $1,900 (271 T- USA : 173m shirts) (0.0001% USA FB) Asia : 195m Malaysia : 12m
10 Myths of E-CommerceMyth 1: Online customers are easy to please.Myth 2: If I launch a site, customers will flock to it.Myth 3: Making money on the Web is easy.Myth 4: Privacy is not an important issue.Myth 5: The most important part of an e-commerce effort is technology.Myth 6: I don’t need a strategy to sell online.Myth 7: Customer service is not important.Myth 8: Flashy Web sites are better than simple ones.Myth 9: It’s what’s up front that counts.Myth 10: Its too late to get on the Web.
10 Myths of E-CommerceMyth 1: Online customers are easy to please. Experienced online shoppers tend to be unforgiving and quick click to another site if their shopping experience is subpar or they cannot find the products and information they want.
10 Myths of E-Commerce (continued)Myth 1: Online customers are easy to please.Myth 2: If I launch a site, customers will flock to it.
Promotion Is the Key! Include your URL on everything related to your business Provide phone and e-mail contact information Create Web-based newsletters Write articles that link to your company’s Web site Sponsor online contests Establish a blog
10 Myths of E-Commerce (continued)Myth 1: Online customers are easy to please.Myth 2: If I launch a site, customers will flock to it.Myth 3: Making money on the Web is easy.
10 Myths of E-Commerce (continued)Myth 1: Online customers are easy to please.Myth 2: If I launch a site, customers will flock to it.Myth 3: Making money on the Web is easy.Myth 4: Privacy is not an important issue.
Myth 4: Privacy Online (continued)Pew Internet Report: If online companies were able to alleviate customers’ online privacy and security issues, the percentage of online buyers would increase from 66% to 73%.
10 Myths of E-Commerce (continued)Myth 5: The most important part of an e-commerce effort is technology. Understand the underlying business... …then use technology to develop an online business model that provides customer value in a profitable way.
10 Myths of E-Commerce (continued)Myth 6: I don’t need a strategy. An online strategy is critical to success Define the target audience Understand customers’ needs and wants Create a strategy to set your site apart from others
Myth 7: The Importance ofCustomer Service on the WebMyth 7: Customer service is not important. Study: 22% of online shoppers expect higher levels of customer service than they do offline. Concern: Nearly 90% of online shopper reported they have had problems completing an online transaction. 84% of these shoppers said they would share their negative online shopping experience with others!
Myth 7: The Importance ofCustomer Service on the Web Study: 58% of Web shoppers who fill their online shopping cars abandon them without checking out. Reasons: Shipping and handling charges too high Total purchase higher than expected Desire to compare final price before buying Inability to contact customer service representative Forgot use name or password for Web site
FIGURE 9.3 Reasons for Abandoning Online Shopping Carts
10 Myths of E-Commerce (continued)Myth 8: Flashy Web site are better than simple sites. Fast download times increase sales potentialMyth 9: It’s what’s up front that counts. Order systems and support are criticalMyth 10: Its too late to get on the Web. Web opportunities still exist
Strategies for E-Success Focus on a market niche. Develop a community. Attract visitors by giving away “freebies.” Make creative use of e-mail, but avoid becoming a “spammer.” Make sure your Web site says “credibility.”
Strategies for E-Success (continued) Make the most of the Web’s global reach. Use Web 2.0 tools to attract and retain customers. Promote your site online and offline. Develop an effective search engine optimization (SEO) strategy.
Search Engine Strategies Natural (organic) Listings – Arise as a result of “spiders,” powerful programs search engines use to crawl around the Web. Paid (sponsored) Listings – Short text ads with links to the sponsoring company’s Web site. Paid Inclusion – When a company pays a search engine for the right to submit either selected pages or its entire Web site content for listing.
Designing a Killer Web Site Understand your target customer. Give customers what they want. Select an intuitive domain name that is consistent with the image you want to create for your company and register it. Short Memorable Indicative of a company’s business Easy to spell Make your Web site easy to navigate.
Designing a Killer Web Site (continued) Add wish list capability. Use online videos. Create a gift idea center. Build loyalty by giving online customers a reason to return to your Web site. Establish hyperlinks with other businesses, preferably those selling complementary products.
Designing a Killer Web Site (continued) Include an e-mail option an a telephone number on your site. Give shoppers the ability to track their orders online. Offer Web shoppers a special all their own. Follow a simple design. Create a fast, simple checkout process.
Designing a Killer Web Site (continued) Assure customers that online transactions are secure. Establish reasonable shipping and handling charges and post them up front. Confirm transactions. Keep your site updated. Test your site often. Consider hiring a professional to design your site
Tracking Web Results Web Analytics – tools that measure a Web site’s ability to attract customers, generate sales, and keep customers coming back. Only about 40% of e-businesses use Web analytics strategically to refashion their Web sites. Commerce metrics Visitor segmentation measurements Content reports Process measurements
Measuring Online Performance Recency – The length of time between customers’ visits to a Web site. Click-through Rate (CTR) – The proportion of people who see a company’s ad online and actually click on it.
FIGURE 9.3 E-Mail Open and Click-Through Rates by the Day of the Week
Measuring Online Performance (continued) Cost per Acquisition (CPA) – The amount it costs to generate a purchase (or a customer registration). Conversion (browse-to-buy) ratio – The proportion of visitors to a site who actually make a purchase.
Conclusion Know what you need to know before launching into e-commerce Assess the basic strategies to follow Know what works on Web sites Track results and listen to customers
Further Reading Scarborough, Norman, M. 2011. Essentials of Entrepreneurship and Small Business Management. 6th edition. Pearson. Brooks, Arthur C. (2006) Social Entrepreneurship : A Modern Approach to Social Value Creation. Pearson Barringer, Bruce R. & Ireland, R. Duane, 2011 Entrepreneurship – Successfully launching new ventures 4th edition, Pearson. Schaper, M., Volery, T., Weber, P. & Lewis, K. 2011. Entrepreneurship and Small Business. 3rd Asia Pacific edition. John Wiley.