The COVID-19 pandemic has caused rapid changes in consumer behaviour across virtually every industry - and the predominant effect is that the focus of the consumer has shifted to digital experiences and transactions. This has put many business owners into a situation where their livelihood is at stake - facing an "adapt or die" scenario. For many unfortunate businesses the "adapt" part is not feasible as their services rely on face-to-face experiences and there is little room for change. But for others, they may have the luxury of the opportunity to transform their operations and to save their businesses before government support runs out.
There is a multitude of issues that can make the leap to (purely) digital operations a very tricky ordeal.
The psychological and behavioural factors that guide your customers are the most critical. A common scenario is that perfectly sensible business activities that work well and operate at a profit in the real world simply can not be monetised online no matter how much time and money you throw at the problem. The reverse is also often true: some business propositions work much better digitally as they incur less overheads for operators and allow for greater flexibility.
The first step is to identify where your business stands and if there is indeed potential to thrive online.
For certain types of businesses such as travel agents (and, unfortunately, most of the tourism industry and many others) the entire discussion about the benefit of a successful online presence is moot - as they technically no longer have a product or service to sell in the current environment.
A quick and simple way to find out where the potential of your business in the digital space lies is to have a look at your largest, most successful and active competitors - is it just your business that is a bit behind with digital developments, or is your entire industry not quite thriving in the digital world? You need to identify some sort of an end game as a goal, otherwise you may end up investing a lot of funds into a project that will never have a positive return on investment. It is very easy to throw money into the digital space for no tangible benefit.
When it comes to technical issues, these are generally easily resolved given there are sufficient resources to invest. It is simply a matter of choosing the right company with experience to develop your digital project.
"There is a huge difference between a digital presence that functions to serve as an extension to a business and a digital presence that is the actual business in itself."
Where do you currently stand?
Most companies already have some sort of an online presence - now is the time to do a comprehensive analysis as to where your business actually stands.
A key factor is that there is a huge difference between a digital presence that functions to serve as an extension to a business and a digital presence that is the actual business in itself.
A quick way to gauge the situation is to identify where the majority of your sales take place, as well as from where the majority of sales come from. Is your business in a situation where most of your enquiries come from online sources, and only after this do customers come to your shop and purchase your products? Or does your business rely on walk-in traffic, and your online facilities exist solely to keep in touch with your existing customers?
It is very much possible to be in a situation where the majority of your business comes from the digital space, but due to the fact that most of your interactions eventually occur in the real world, you do not have a clear picture as to where your customers actually come from.
A business can also be in what seems like an unusual (but common) situation, where your leads are generated online but sales are closed because of a personal factor - for example, due to the business owner presenting well and thus building trust and confidence when dealing with potential clients.
In order to be truly successful online, you will need to build a system by which the sales process is completely detached and impersonal. That means that your website will need to become the salesman and that is no easy task.
Selling Goods: Race to the Bottom
When it comes to selling goods online, the primary issue that businesses face is that it's a race to the bottom. The technical component to selling goods online is quite simple: you just need an online store and some digital marketing to get going.
If your business sells common consumer goods that are widely available (e.g. power tools, gym equipment, clothing, etc) and relies on local customers and good old fashioned service, there is a big problem with going fully digital. If you intend to sell common products, you will be competing against companies (often fully operated from overseas (!)) with largely automated systems and operations that earn tiny profit margins - or even, in some cases, operate at a loss to force competitors out of buisness and thus gain market share.
This is what is known as the "race to the bottom" and it always results in a profit margin of zero. It is virtually impossible for a "mom and pop" business owner to win in these price wars and its best to formulate a strategy to avoid this particular aspect altogether.
The one way to sell online successfully is by offering niche products that are not widely available. This enables some sort of a profit margin, but take note: your success will eventually be noticed and someone else will try to sell what you are selling.
You will definitely have a distinct advantage if you have a proprietary technology, a trademarked brand or some kind of a licensing system for your products that limits competition. The primary focus needs to be on the quality of your goods, your reputation and on your brand - not on price.
Selling Services: Everything Online is FREE
When it comes to selling services online, this a reference to to businesses that offer some sort of a digital platform at a subscription cost (e.g. cloud services, media subscriptions, software as a service etc). If your business is one that provides an actual face-to-face service, all you can do is develop a good online marketing strategy by investing in a decent website, search engine optimisation (SEO) or paid search engine marketing (SEM), and social media if applicable - you just need to focus on working out a decent digital marketing strategy using the tools available.
However, if your business is actually looking to find customers to pay for some kind of a digital service, you are looking at facing a big problem: a universal perception that online services should be free of charge. For example, the reason why newspaper publishers have not been able to shift and thrive online is not because the owners are dinosaurs that haven't yet figured out that they can hire a developers to develop a website that publishes news content and offers a popup where you can enter your credit card details to pay for subscription - it's quite more complex than that.
The real issue is that the years of conditioning that online content and services should be "free" has built an environment where it's simply not possible to charge for certain services due to perceptions. If you are looking to transform your business into one that offers paid online services, you will be facing a battle with such a steep hill that you will likely never get off the ground (as harsh as that sounds). This is why "start-ups" have such a high failure rate and even if they are successful, they often end up perpetually operating on cash injections from investors rather than actual revenue generated from clients. They generally follow a completely different operational model (funding rounds, exit plans, IPO, etc.) that has virtually nothing to do with how traditional businesses operate.
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