The Internet changes everything. It seems like new online-only businesses emerge on a daily basis. These companies — armed with a slick Web site and targeted marketing campaigns — are a significant competitive threat to established businesses. To succeed, the brick-and-mortar companies need to fight fire with fire and establish a dynamic Web presence of their own.
The key to success for any business is balancing speed and efficiency with effectiveness across all business processes from the marketing and selling of products to taking an order to fulfillment and support. Traditionally, the key to business success was effective operations — good products, marketing, services and logistics. But that is not enough any more. Companies that focus entirely on taking as many orders as possible are likely to suffer from a wave of misshipments, cost overruns and disappointed customers. Buy.com, a well-known e-business, is experiencing some of these issues.
Because of the need to balance efficiency and effectiveness, brick-and-mortar companies have a tremendous advantage over new e-businesses. It takes years to establish effective business operations and strong brand recognition. As a result, these strengths should be leveraged on corporate Web sites.
The harder part is introducing speed and efficiency. In many cases, the very thing that makes a company effective is its well-designed business processes. With the Internet, these processes must be further streamlined, enabling immediate response to changing business needs.
With that in mind, here is a four-part recipe for Internet success. Following this approach will enable you to both stave off competitive threats and significantly increase your own profitability
Leverage your assets. Established businesses have four major assets that a new business doesn't: brand, employees, customers and partners. Leveraging these assets is the key ingredient to Internet success.
* Brand. The knowledge and perceptions that the market has already formed about your company and products is of tremendous value. Make it easy for your audiences to transfer that knowledge to their interaction with you on the Web. The biggest investment for online-only businesses is in brand development, and by leveraging and enhancing your brand, you can put them in a weaker position.
* Employees. Your employees have a detailed understanding of how your business works, what customers want and who your customers are. Empower these employees to participate in your e-business. It will enhance their productivity and your company results.
* Customers. New businesses start with no customers. It's universally accepted that the cost of new customer acquisition is significantly higher than selling more to existing customers. By focusing on your existing customer base, you can gain rapid Web acceptance from loyal customers at much lower costs than if you focused solely on new customer acquisition — the lifeblood of online-only businesses.
* Partners. In the beginning, businesses have to establish their brand and recruit customers. Established businesses often have a network of partners from suppliers to distributors to dealers. Get these groups to support your e-business initiatives, directing customers to your site and, if possible, becoming involved in the promotion of your partnership through the Web.
Eliminate bottlenecks. In order to succeed, you must be able to react as quickly as a small organization does. This is not as hard as it may seem. Simply empower the people who manage information and relationships to manage them on your e-business Web site, rather than funneling change requests through a myriad of paper forms and people. If reviews and approvals are required, do that online as well. By taking this approach, you enable your people (a critical asset) to take an active role in your e-business. Products, like Eprise Participant Server, exist to make this easy.
Integrate with established business operations. Many organizations initially view their e-business operations as being independent from the rest of their business. This approach essentially puts you in the same boat as your online-only business competitors. As a result, your primary competitive advantage (your existing corporate assets) is weakened. To successful integrate, you need to:
* Assess how existing business operations can be enhanced using the Internet. Consider taking orders online, but give the customer the option of saving on shipping costs by picking the items up at a local store. When they come to the store, you have an opportunity to sell them more.
* Measure success based on the overall business impact, not just the results that can be tied directly to online orders.
* Continually monitor industry trends to determine how you should adapt your traditional and e-business operations in response to changing market conditions.
* Create affinity groups that encourage your key customers and partners to do business with you through any channel and reward them for doing so.
Make it easy. E-business does not have to be hard. Focus on making life easier for your audiences (employees, customers and partners). Target information and applications to their business needs. Don't overwhelm them with technology and useless information. Take the same approach with your technical staff and provide them with tools and technologies that help them keep pace with change.
By following this simple four-part recipe, your established business can easily stave off competitive threats from online-only businesses. At the same time, this approach also will result in increased profitability for your entire business, which is, after all, what it's all about.
Hank Barnes is the vice president of marketing at Eprise Corp., Framingham, MA. His e-mail address is [email protected]