With the economic crisis forcing small business owners to slash costs, while trying to build up sales and revenue, ecommerce is increasingly seen as an attractive market environment. The best position for small business to be in is one of adaptability; to remain agile and nimble, with the ability to adjust market offerings, pricing and promotion at a moment's notice, in order to leverage and stay ahead of changing market conditions.
In an online environment, trade is relatively open in terms of market access. Small businesses can compete on a level playing field with their larger industry competitors, and minimize their business costs. What they lose in terms of purchasing power, small businesses can make up for in terms of hyper-targeting, flexibility and gearing their business quickly and cost effectively, as the market requires new and different value propositions. A major component of the competitive advantage that small business has over bigger entities is the ability to quickly and easily adapt the promotional messaging, media and value perception of your market offering, while still retaining the trust factor in the company, the brand and the product service offering.
The powerful, yet relatively low cost ecommerce platforms available today let small companies reduce the costs of developing a compelling retail face for their businesses. They also manage the administrative back office, while streamlining their brand and product marketing and promotion costs. With this in mind, here are perhaps the three most important ecommerce practices for small business owners this year:
1) Capture ecommerce market share with limited dollars. It's imperative for small businesses to be as lean as possible. Budgets are limited, and small business owners need to get maximum bang for their buck. Generating traffic and capturing market share on the web is critical, and the best ways to do this include the following:
Build a credible and professional web brand and presence. Make your site speak to users, and show them that you understand them. Make it easy to use and allay any fears consumers may have about entering into a remote financial transaction with you. This, more than anything or anywhere else, is where the final purchasing decision will be made.
On the web, with all of the potential challenges inherent in the 'distance purchasing' framework, and in a highly competitive environment with easy access to the next competitor on the list, perception truly is reality. Your website needs to convey your credibility, your brand and your benefit, and it has to leave the buyer with the sense that you will back your business and the purchase, should there be any need for recourse. This is where your online brand is built.
Market and promote your site and offering. Don't rely on the "build it and they will come," principle. Proactively market your online business using online marketing tools such as search engine optimization, pay-per-click advertising and offline marketing programs, all focused on trade publications, direct marketing, public relations and other tools. If you are attacking the web market, use the webspace as a focal environment for customer acquisition. You know that potential customers will probably be more comfortable with online purchases if they are already on the web, and you can really tweak and adjust your messaging quickly and easily, in a way that you cannot do with offline and traditional print media. This audience is accustomed to immediacy, and on the web you can show them just how relevant your messaging can be.
2) Despite the economy, don't pull back on marketing. Do not make the critical mistake of slashing your marketing and promotional activities. Some of the most successful companies increase their marketing spending in these economic downturns, because they recognize their messaging will have much less clutter and competition. A pull-back on marketing is often a small business' knee-jerk reaction, as this is seen as discretionary spending (not critical to day to day functioning). In some cases this is true, but although a business owner may choose not to spend in this area, without an immediate fall in the company, this often has a far greater impact on the company, as its very lifeblood becomes starved.
Alternatively, a focused push into an area that was previously dominated by a larger entity, where that entity is now unable to compete so hotly because of its pressures, may often yield business opportunities that were unavailable to the small business owner, and a way for them to entrench themselves in a new, lucrative market space.
3) Build market trust and value. Small business owners must establish and maintain market trust in the coming year and beyond. Even if a product or service is priced lower than a competitor's, when buyers have uncertainties about the quality of their purchases (or the companies behind them) they simply won't buy. Have price be the 'cherry on the top,' but if you sell on price, you do not build any inherent value, trust or loyalty into your brand and/or market offering. If you position your business, your brand and your products or services purely on price, this means that you would necessarily expect ALL of your customers to go somewhere else if a competitor came out with a lower price. This position is an incredibly weak one for a small business, as it slashes your profit margins and gives you no real ability at customer retention.
Take the steps you need now to build credibility, market trust and value, and you will be much better positioned to survive and thrive across all economic cycles.
Daniel Meyerov is CEO of OnlyBusiness.com, a business platform and community that provide small business with all of the tools and services they need to be successful on the web.
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