1. Chapter 16 Launching a Successful Online Business

2. © Prentice Hall 20042 Learning Objectives 1.Understand the fundamental requirements for initiating an online business. 2.Describe the funding options available to startup businesses. 3.Evaluate the options for hosting Web sites.

3. © Prentice Hall 20043 Learning Objectives (cont.) 4.Understand the processes and business decisions associated with managing Web site development. 5.Understand the importance of providing content that meets the needs and expectations of the intended audience.

4. © Prentice Hall 20044 Learning Objectives (cont.) 6.Evaluate Web sites on design criteria such as appearance, navigation, consistency, and performance. 7.Know the techniques of search engine optimization to obtain high placement in search engines.

5. © Prentice Hall 20045 Learning Objectives (cont.) 8.Understand the benefits of customer relationship management through customer self-service, listening to customers, and increasing trust.

6. © Prentice Hall 20046 OBO Sets Its Goals for Success The Problem OBO sells protective gear for field hockey goalkeepers OBO’s unique three-dimensional thermo-bonding manufacturing process produces equipment that is shaped to reflect the way the body moves

7. © Prentice Hall 20047 OBO Sets Its Goals for Success (cont.) By manufacturing a quality product and listening to the customer, OBO has become the market leader OBO is based in a small provincial town in New Zealand that is a very long way from its principal markets

8. © Prentice Hall 20048 OBO Sets Its Goals for Success (cont.) OBO sells a niche product that is best sold thorough agents or stores to ensure a proper fit How does OBO use its Web site to market an experiential product to a global market from New Zealand?

9. © Prentice Hall 20049 OBO Sets Its Goals for Success (cont.) The Solution The goals of the obo.co.nz Web site are: community building product sales research and development

10. © Prentice Hall 200410 OBO Sets Its Goals for Success (cont.) Community building happens through: online discussion forums sponsored players an image gallery The principal marketing and sales goal of the Web site is to: convince the visitor of the value of the product direct the customer to a store or agent to make the purchase direct the customer to a store or agent to make the purchase

11. © Prentice Hall 200411 OBO Sets Its Goals for Success (cont.) The Web site is a support mechanism for the brand and the sale of equipment through the agents Research and development goal is met through: online surveys solicitation of players’ opinions of the products focus groups

12. © Prentice Hall 200412 OBO Sets Its Goals for Success (cont.) The Results The OBO Web site is most successful at community building The site also builds community by promoting a goalie-friendly approach to OBO’s customers Online product sales are modest because the Web site supports, not competes, with OBO’s agent network

13. © Prentice Hall 200413 OBO Sets Its Goals for Success (cont.) Online sales are expected to grow because OBO has introduced a new line of clothes designed to be sold exclusively through the Web site The focus groups deliver high-value feedback at almost no cost The discussion forums contribute to both community building and feedback about OBO’s product

14. © Prentice Hall 200414 OBO Sets Its Goals for Success (cont.) What we can learn… A small company with a great product is using its Web site to reach its target markets in distant countries OBO is using the site to support business goals, as well as to meet the needs and expectations of its target audience

15. © Prentice Hall 200415 OBO Sets Its Goals for Success (cont.) The Web site is simple and well designed, includes: “attractors” that encourage customer interaction and keep customers coming back content that promotes cross selling effectively promotes sustainable customer relationships

16. © Prentice Hall 200416 Doing Business Online: Getting Started Business formation process: Identify a consumer or business need in the marketplace Investigate the opportunity Determine the business owner’s ability to meet the need

17. © Prentice Hall 200417 Doing Business Online: Getting Started (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

18. © Prentice Hall 200418 Doing Business Online: Getting Started (cont.) E-business planning Business plan: A written document that identifies a company’s goals and outlines how the company intends to achieve the goals

19. © Prentice Hall 200419 Doing Business Online: Getting Started (cont.) 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 richness introduce new and innovative business models distribute information at the speed of light at almost zero cost

20. © Prentice Hall 200420 Doing Business Online: Getting Started (cont.) An existing brick-and-mortar business looking to move online also needs a: Business case: A document that is used to justify the investment of internal, organizational resources in a specific application or project

21. © Prentice Hall 200421 Doing Business Online: Getting Started (cont.) Business case template includes: Goals Cost savings New revenue Extra benefits Cost of the solution Net benefits Recommendation

22. © Prentice Hall 200422 Doing Business Online: Getting Started (cont.) Funding the online business Venture capital (VC): Money invested in a business by an individual or a group of individuals (venture capitalists) in exchange for equity in the business

23. © Prentice Hall 200423 Doing Business Online: Getting Started (cont.) Angel investor: A wealthy individual who contributes personal funds and expertise at the earliest stage of business development

24. © Prentice Hall 200424 Doing Business Online: Getting Started (cont.) Incubator: A company, university, or not-for-profit organization that supports businesses in their initial stages of development

25. © Prentice Hall 200425 Doing Business Online: Building the Web Site Classifications of Web sites Informational Web site: A Web site that does little more than provide information about the business and its products and services Interactive Web site: A Web site that provides opportunities for the customers and the business to communicate and share information

26. © Prentice Hall 200426 Doing Business Online: Building the Web Site (cont.) Attractors: Web site features that attract and interact with visitors in the target stakeholder group Transactional Web site: A Web site that sells products and services

27. © Prentice Hall 200427 Doing Business Online: Building the Web Site (cont.) Building the Web site 1. 1.Select a Web host 2. 2.Register a domain name 3. 3.Create and manage content 4. 4.Design the Web site 5. 5.Construct the Web site and test 6. 6.Market and promote the Web site

28. © Prentice Hall 200428 Web Site Hosting Web hosting options: Storebuilder service: A hosting service that provides disk space and services to help small and micro businesses build a Web site quickly and cheaply ISP hosting service: A hosting service that provides an independent, standalone Web site for small- and medium-sized businesses

29. © Prentice Hall 200429 Web Site Hosting (cont.) Web hosting service: A dedicated Web site hosting company that offers a wide range of hosting services and functionality to businesses of all sizes Mirror site: An exact duplicate of the original Web site, but it is physically located on a Web server on another continent

30. © Prentice Hall 200430 Web Site Hosting (cont.) Co-location: A Web server owned and maintained by the business is placed in a Web hosting service that manages the server’s connection to the Internet Self-hosting: When a business acquires the hardware, software, staff, and dedicated telecommunications services necessary to set up and manage its own Web site

31. © Prentice Hall 200431 Web Site Hosting (cont.) Contracting the Web host The search for an ISP host: contacting local ISPs for information asking others in the business community for recommendations consulting with local telecommunications and computer user groups

32. © Prentice Hall 200432 Web Site Hosting (cont.) 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

33. © Prentice Hall 200433 Web Site Hosting (cont.) Consider: service quality measures guaranteed uptime number of clients current traffic rates software support security site traffic analysis technical support services costs

34. © Prentice Hall 200434 Web Site Hosting (cont.) Registering a domain name Domain name: A name-based address that identifies an Internet- connected server Domain name registrar: A business that assists prospective Web site owners with finding and registering a domain name of their choice

35. © Prentice Hall 200435 Web Site Hosting (cont.) Selecting a good domain name: Make it memorable Make it easy to spell Avoid numbers and special characters Keep it short and sensible

36. © Prentice Hall 200436 Web Site Hosting (cont.) Be flexible Think about the future Give products their own name Investigate the competition Avoid trademarked names

37. © Prentice Hall 200437 Content Creation and Management Content: The text, images, sound, and video that make up a Web page Commodity content: Information that is widely available and generally free to access on the Web

38. © Prentice Hall 200438 Content Creation and Management (cont.) Premium content: Content not available elsewhere on the Web Cross selling: Offering similar or related products and services to increase sales Up selling: Offering an upgraded version of the product in order to boost sales and profit

39. © Prentice Hall 200439 Content Creation and Management (cont.) Up-selling activities usually include offering products with a different design, color, fabric, or size Promotion secondary content that can increase sales or improve customer service Comment further explanation about the product can be offered after introducing the product

40. © Prentice Hall 200440 Content Creation and Management (cont.) Creating content collecting all the content that is currently available value of additional content is assessed for inclusion in the Web site consider how each bit of content will serve the site’s goals and whether customers will want it or expect it created by customers through reviews etc.

41. © Prentice Hall 200441 Content Creation and Management (cont.) Buying content Content can be purchased or licensed Content that is acquired from outside sources should be supplemental content, not primary content If primary content is purchased and no value is added, visitors will go to the originating site and not return

42. © Prentice Hall 200442 Content Creation and Management (cont.) Personalizing content Personalized content: Web content that is prepared to match the needs and expectations of the individual visitor Delivering content by e-newsletter E-newsletter: A collection of short, informative articles sent at regular intervals by e-mail to individuals who have an interest in the newsletter’s topic

43. © Prentice Hall 200443 Content Creation and Management (cont.) Writing effective content Write scannable text Break long sections into smaller ones with clearly noted headings Grab the reader’s attention at the beginning of every page and section Write in a tone and with language that reflects the purpose of the material

44. © Prentice Hall 200444 Content Creation and Management (cont.) Consistency in site content can be achieved using a style guide Make the material available in a.pdf file when necessary Create compelling links that encourage a reader to click External links can offer good content for visitors Avoid material that is not highly valued by customers

45. © Prentice Hall 200445 Content Creation and Management (cont.) Content management Content management: The process of adding, revising, and removing content from a Web site to keep content fresh, accurate, compelling, and credible

46. © Prentice Hall 200446 Content Creation and Management (cont.) Content testing— Content testing—frequent checks of material for: Accuracy Clarity Typos poor punctuation misspelled words inconsistencies

47. © Prentice Hall 200447 Content Creation and Management (cont.) Content removal Expired pages should be deleted or moved to an off-line location that can serve as an archive Content management software Allows nontechnical staff to create, edit, and delete content on the company’s Web site

48. © Prentice Hall 200448 Content Creation and Management (cont.) Purchasing a content management software 1. 1.Do a thorough needs analysis 2. 2.Document requirements and discuss with at least two companies that have purchased a CMS 3. 3.Start small with CMS that has a trial version or low entry cost 4. 4.Assess the system after 30 days 5. 5.Repeat the assessment process regularly

49. © Prentice Hall 200449 Web 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

50. © Prentice Hall 200450 Web Site Design (cont.) Information architecture Information architecture: How the site and its Web pages are organized, labeled, and navigated to support browsing and searching throughout the Web site

51. © Prentice Hall 200451 Web Site Design (cont.) Web site design criteria: Navigation Consistency Performance Appearance Quality assurance Interactivity Security Scalability

52. © Prentice Hall 200452 Web Site Design (cont.) Site structure is: hierarchical circular linear Getting the homepage right is critical All pages within the site should link back to the homepage

53. © Prentice Hall 200453 Web Site Design (cont.) Deep linking: Entry into a Web site via the site’s interior pages, not the homepage, typically through search engines or external links

54. © Prentice Hall 200454 Web Site Design (cont.)

55. © Prentice Hall 200455 Web Site Design (cont.)

56. © Prentice Hall 200456 Web Site Design (cont.) Organizing and labeling the site support browsing and searching: Obey the three-click rule Place the most important content at the top of the page Keep pages short

57. © Prentice Hall 200457 Web Site Design (cont.) Keep page layouts simple Follow commonsense publishing rules Make the primary content easy to find Show the products in many ways

58. © Prentice Hall 200458 Web Site Design (cont.) Site navigation Site navigation: Aids that help visitors find the information they need quickly and easily top and bottom of each page The simplest navigation aid is a navigation bar at the top and bottom of each page Frame: An HTML element that divides the browser window into two or more separate windows

59. © Prentice Hall 200459 Web Site Design (cont.)

60. © Prentice Hall 200460 Web Site Design (cont.) Other suggestions for designing successful Web site navigation: Use small lists and menus Do not rely entirely on graphical images for navigation Make the homepage easy to find Integrate navigation into content Avoid frames Follow accessibility guidelines

61. © Prentice Hall 200461 Web Site Design (cont.)

62. © Prentice Hall 200462 Web Site Design (cont.) Consistency Look and feel: The elements that visually distinguish a site from any other, including layout, typeface, colors, graphics, and navigation aids

63. © Prentice Hall 200463 Web Site Design (cont.) Elements of page content also should be consistent: company logo contact information short, descriptive title Design a Web site for all of these browsers, but to use designated World Wide Web Consortium standards

64. © Prentice Hall 200464 Web Site Design (cont.) Performance Speed ranks at or near the top of every list of essential design considerations The most widely recognized cause of long download times is a large graphic or a large number of small graphics on a single page

65. © Prentice Hall 200465 Web Site Design (cont.) 12-second rule: Every page on the Web site should appear within 12 seconds 4-second rule: something should appear in the visitor’s browser in 4 seconds or less

66. © Prentice Hall 200466 Web Site Design (cont.) Colors and graphics rules: Match the expectations of the target audience Use standard colors Follow color standards Use complementary colors Specify the background color

67. © Prentice Hall 200467 Web Site Design (cont.) Use bandwidth-intensive features selectively Design for visually or hearing- impaired visitors Use the ALT tag Avoid distracting features

68. © Prentice Hall 200468 Web Site Design (cont.) Quality assurance make sure the Web site design is properly tested before it is launched ensure that it continues to perform up to expectations after launch

69. © Prentice Hall 200469 Web Site Design (cont.) design the site for easy maintenance responsible owners frequently test all features of the site personally quality Web sites are tested regularly Web site performance is also an ongoing concern

70. © Prentice Hall 200470 Web Site Construction Who builds the Web site? Internal staff, an outside contractor, or a combination of these two Internal Web site development: The process of building and/or maintaining the Web site with company staff

71. © Prentice Hall 200471 Web Site Construction (cont.) Companies build their own site because: Use of existing in-house expertise Desire to build in-house expertise Protection of proprietary technologies Tighter control and responsiveness

72. © Prentice Hall 200472 Web Site Construction (cont.) External Web site development: When the business hires another firm to build and/or maintain the Web site Speed to market Not a core competency Access to special expertise

73. © Prentice Hall 200473 Web Site Construction (cont.) Partnering Web site development: When a mixture of internal and external development is used to build and/or maintain a Web site The principal downside to partnering is the additional overhead of contract and relationship management

74. © Prentice Hall 200474 Web Site Construction (cont.) Web site construction: The initial content creation, design, programming, and installation phases of a Web site’s development Web site maintenance: The on-going process of keeping the Web site open for business, managing content, fixing problems, and making incremental additions to the site

75. © Prentice Hall 200475 Web Site Construction (cont.) Managing Web site construction: Start with a plan Set goals early and stick to them Use a fixed-price contract Justify graphics and features

76. © Prentice Hall 200476 Web Site Construction (cont.) Accepting credit cards Card-not-present (CNP) transaction: When there is no signature and no verification of the credit card signature by the merchant

77. © Prentice Hall 200477 Web Site Construction (cont.) To accept credit cards online a company must: Open a merchant account Purchase credit card processing software Integrate the credit card processing software into the transaction system

78. © Prentice Hall 200478 Web Site Promotion Internal Web site promotion Include content that establishes the site as a useful site for customers to remember so that they return and make a purchase Signature file: A simple text message an e-mail program automatically adds to outgoing messages

79. © Prentice Hall 200479 Web Site Promotion (cont.) Search engine optimization (SEO): The application of strategies intended to position a Web site at the top of Web search engines The key to SEO is understanding the algorithms the search engines use to determine the ranking of the results returned to the searcher

80. © Prentice Hall 200480 Web Site Promotion (cont.) Strategies for keyword creation and placement: Create keywords the target audience is most likely to use Use specific phrases, not general keywords Optimize the title

81. © Prentice Hall 200481 Web Site Promotion (cont.) Use meta tags Meta tag: An HTML element that describes the contents of a Web page Use keywords early and often in page content Include keywords in ALT tags Avoid spider-hostile features Do not spam search engines

82. © Prentice Hall 200482 Web Site Promotion (cont.) Strategies for maximizing link popularity: Create content that promotes linking Seek reciprocal links Determine what sites already link to the target site

83. © Prentice Hall 200483 Web Site Promotion (cont.) Visit competitors Seek highly placed links Seek links from well-known sites Do not use free-for-all (FFA) or link farms

84. © Prentice Hall 200484 Customer Relationship Management Customer relationship management (CRM): A customer service approach that focuses on building long-term and sustainable customer relationships that add value for the customer and the company

85. © Prentice Hall 200485 Customer Relationship Management (cont.) Using content to create customer relationships Provide membership Personalize the user experience Support users Communicate via the community Reward visitors Market effectively Set up smart affiliate relationships

86. © Prentice Hall 200486 Customer Relationship Management (cont.) Customer self-service with FAQ pages: FAQ page: A Web site page that lists questions that are frequently asked by customers and the answers to those questions

87. © Prentice Hall 200487 Customer Relationship Management (cont.) Characteristics of an effective FAQ page: The FAQ page is easy to find The FAQ page loads fast The questions are easy to find

88. © Prentice Hall 200488 Customer Relationship Management (cont.) The answers are written from a customer’s perspective The answers do not repeat information offered elsewhere Offer an opportunity to ask a question not on the FAQ The FAQ page is never done

89. © Prentice Hall 200489 Customer Relationship Management (cont.) Listening to customers Mine e-mail for information Survey customers quickly and frequently Create an e-mail list E-mail discussion list: A group of people who share a common interest and who communicate with each other via e-mail messages managed by e-mail list software

90. © Prentice Hall 200490 Customer Relationship Management (cont.) Create a discussion forum Electronic discussion forum: A portion of the Web site where visitors can post questions, comments, and answers Create a chat group Chat group: A portion of the Web site where visitors can communicate synchronously

91. © Prentice Hall 200491 Customer Relationship Management (cont.) Increasing trust Trust: A psychological state-of-mind when two or more parties are willing to pursue further interactions to achieve a planned goal

92. © Prentice Hall 200492 Customer Relationship Management (cont.) Ways to increase trust: Tell the customer about the company Include testimonials from loyal, satisfied customers Provide numerous opportunities for feedback Answer customer e-mail promptly Provide information to the customer about an order

93. © Prentice Hall 200493 Managerial Issues 1. 1.What does it take to create a successful online business? 2. 2.Is creating a Web site a technical task or a management task? 3. 3.How do we attract visitors to the Web site? 4. 4.How do we turn visitors into buyers?

94. © Prentice Hall 200494 Summary 1. 1.Fundamental requirements for initiating an online business. 2. 2.Funding options for a start-up online business. 3. 3.Web site hosting options for an online business. 4. 4.Web site construction options for an online business.

95. © Prentice Hall 200495 Summary (cont.) 5. 5.Provide content that attracts and keeps Web site visitors. 6. 6.Design a visitor-friendly site. 7. 7.High placement in search engines is key. 8. 8.Customer relationship management can contribute to success.