Learn how understanding the opportunities and challenges of selling directly to consumers online is important if you are thinking about taking your company online.
- As a kid growing up, when my dad had to make a big decision, I remember him taking out a big yellow legal pad, drawing one line across the top, and one right down the center. On one side he would list the pros, and on the other, all the cons. This is how people started businesses, bought new homes, even began marriages and families. So now we're going to take out our imaginary legal pads and go over the opportunities and challenges to online B-to-C. The first thing on our pro side of the page is the one we discussed previously, and that's that online is where 80% of consumers go when looking for a product or service.
The challenge here is that you can convince yourself that even though this is true, why not have distribution that puts you in all the physical locations, and also has you in all the online retailers? The real issue is that advertising and marketing to go direct costs money, and distribution channels also cost significant money. It generally requires that you generate demand also. All things equal, if your sales conversion doesn't change at all, but the number of potential buyers coming through your online door increases dramatically, and at little to no extra cost, naturally your profitability goes up.
If you employ my strategies that will help you communicate more effectively to the consumer's buying brain, you're not only going to have far more traffic, but far more people converting to paying customers. Next, with online B-to-C, your business is always open, any time, day or night, 24 hours a day, seven days a week, 365 days a year, you'll be open for business. With people able to enter your online storefront or business any time of the day, you can literally be making money while you sleep.
Then there's the scalability. Take that 80% of American consumers shopping online, and now multiply it by the global audience. Going online grants you a scalability not easily available to a brick and mortar business, and it also gives you the same scalability at little to no extra cost. Going online gives your business a nationwide or global presence, and it can do so with a little more than a click. Another reason to consider online B-to-C is the low cost of entry.
It was only a few years ago that setting up a website and online storefront required more of an investment. Today, you can be up and running with a strong online presence for next to nothing. And we haven't even begun to discuss the positive effects a strong web presence can have on your overall brand, which we will be reviewing later in this course. But first, let's take a moment to talk about the cons. I'll be honest, I can only think of a couple of cons, neither of which, in my opinion, outweighs the benefits.
First, with online sales, you can expect an increase in returns. There are ways to bring that number down, but it will still be more than you will want. Even with the increased returns, storage, and fulfillment cost, if you're attracting more of the right customers, you can still experience increased profitability as well. The biggest con is unavoidable cost comparison. As we've discussed before, consumers will compare price. 45% of consumers even admit to showrooming, or using their phones to go online and compare pricing while actually shopping in the physical store.
Like I said, cost comparison is unavoidable, but getting past price is avoidable. And that's why your online presence should be directed at the buying brain, the same way as if it were in a face-to-face sale. You may find something in your con list that's a deal breaker for you. But make sure it's a challenge that's worth losing access to nearly every potential customer in the world. I think when you put the pros next to the cons you can see why going online is definitely the way to go to grow your business.
- Categories of offline and online B2C companies
- Developing personas
- Measuring persona success
- Creating effective website copy
- Measuring the success of your content
- Engaging with social media marketing
- Measuring the success of pay-per-click campaigns