From the June 1999 issue of Startups

As you read this, somewhere some consumer is being introduced to the wonderful world of e-commerce. But as Internet users are morphing into savvy e-shoppers, some entrepreneurs are getting left behind.

Shopping online needs to be convenient. It needs to be easy. And reliable. To make it an effortless experience for the customer, successful e-commerce entrepreneurs have to put in a whole lot of effort.

The worst thing you could do is leap into this newfangled marketplace teeming with increasingly demanding shoppers ... and not know what the heck you're doing. Before you hang out your e-commerce shingle, these are the elements you need to have in place.

Service With A Smile

Often, much of an online retailer's efforts go into building his or her site, without much thought given to how to service customers when it's done. But it goes without saying that customer service must be every e-tailer's top priority. In fact, as an online merchant, I'd encourage you to provide even better customer service than traditional brick-and-mortar retailers do because of one simple fact: You're not dealing with customers face-to-face. To get consumers to buy (and keep buying) online, there must be procedures in place to instill trust, ensure prompt and reliable service, and simplify the buying process.

But not every e-tailer has caught on. According to a January 1999 survey by Jupiter Communications, only 74 percent of online shoppers were satisfied with their experience, down 14 percent from six months prior. Common complaints include the cost of shipping and slow (or no) responses to customer inquiries.

I once ordered some gourmet goodies online only to discover the e-tailer's shipping costs were exorbitantly high. Since I really wanted the items for a gift, I paid the high price--but vowed never to return again.

Don't make this mistake with your customers. One way to keep your shipping costs down? Ship smart by visiting http://www.smartship.com. Type in the size and weight of the product and where you're shipping it to and from, and this free service provides information on the lowest-priced carrier and methods for shipping. It also has features to easily track packages you've sent (or let your customers track them themselves). Remember, when building shipping costs into your order-processing system, be sure to offer customers the lowest rates possible, or you risk losing the sale.

If you aim to please, customer-support procedures are another consideration. According to Jordan Fladell, president of LeaseAnApp (http://www.leaseanapp.com), a consulting company that provides cost-effective e-commerce solutions, commonly overlooked customer support issues include:

  • How to process orders
  • How to support orders outside of normal business hours
  • How to handle customer-support inquires

Developing a customer-support plan to address these issues is key, Fladell says. It should include an analysis of the entire ordering process, from the number of orders you can support to back-end fulfillment systems and delivery processes.

Consumer-friendly e-commerce sites also offer customer-support systems to better serve their shoppers. Your Web site should include information that specifies how long customers will typically wait for delivery. After each order is placed, send an e-mail telling the customer you've received his or her order and specifying when he or she will receive the shipment. To head off customer frustration, send an e-mail immediately if there's any delay. If possible, include methods for Web shoppers to track their orders' progress (or at least provide somewhere to e-mail or call to find out that information). After customers have received your goods or services, send follow-up e-mails a few weeks later, offering tips on maximizing the value of their purchase and thanking them for it.

For after-hours support, consider building a FAQ page to address common concerns. Ancillary support, says Fladell, may also include an online support module containing clear instructions on how to use your product or service and troubleshooting tips in case customers run into trouble after hours.

Other good customer service practices include quick responses to customer e-mails (consider using e-mail software with auto-responders to address common questions), holding regular online customer support chats, and offer easy ways for customers to reach you, such as a toll-free number or e-mail address. Says Fladell, "It's about keeping all lines of communication open between you and your customers."

Spread The Word

If the key to success for traditional retail outlets is location, location, location, the golden rule for online retailers is marketing, marketing, marketing.

Don't forget to plan for marketing costs you'll incur during your site launch and throughout your Web site's lifetime. No matter how well-designed your site is, you won't make a dime unless you build effective marketing strategies for getting the word out (and continually add to your efforts to bring in new customers).

Your marketing efforts should focus on reaching the widest audience you can in the swiftest and easiest manner possible, says Ben Isaacson, acting executive director of the Association for Interactive Media, a trade organization for Internet businesses. "[Marketing] needs to be done in a manner that's as viral as possible," explains Isaacson, "where people spread the word about the store's products and services [on their own] and [the buzz] just sort of feeds off itself."

Two low-cost marketing efforts homebased e-tailers should consider: opt-in direct marketing lists and affiliate programs.

A number of opt-in direct marketing programs exist where potential customers agree to view your newsletter and marketing announcements in return for earning free cash or product discounts. Popular opt-in list services include Web Promote (http://www.webpromote.com), BonusMail (http://www.bonusmail.com) and MyPoints (http://www.mypoints.com).

Visitors indicate their areas of particular interest and agree to receive e-mail regarding these topics. Businesses may purchase targeted lists with names and e-mail addresses for sending information regarding their products or services. Some opt-in list services, like Web Promote, also help you create online marketing campaigns, register your site with popular search engines and more.

Isaacson says opt-in list services are a viable way to reach potential customers who are much more willing to consider your pitch. Plus, because they're Web savvy, they may be more comfortable with online shopping.

Affiliate programs like LinkExchange (http://www.linkexchange.com) can also supplement your marketing efforts as well as draw in more revenue. "Affiliate marketing is the best way to market your products and services at a low cost," Isaacson says.

How do they work? At LinkExchange, sign up with its BannerNetwork and you can advertise with banner ads on other Web sites for free (by agreeing to place a banner ad on your site). LinkExchange also offers discounts for placing banner ads on popular search engines like Yahoo! and Excite.

To generate additional revenue, LinkExchange helps establish links on your Web site to selected online merchants who pay you regular commissions for driving traffic and sales to them. Simply browse through LinkExchange's directory of online retailers for products similar to yours, and you can become a reseller of (or affiliate for) some of the Web's best-known brands. For an additional fee, LinkExchange establishes links for affiliates to send Web site traffic your way as well.

Relationship marketing tools like these offer the best strategies for achieving proven results. They're simple and cheap to use, too. Don't ignore them when planning or expanding your electronic storefront's marketing strategy.

Keep 'Em Coming Back

Congratulations! You have a well-designed online storefront, offer quality products, follow good customer service practices and are fluent in the intricacies of online marketing. Site traffic is way up. Orders are pouring in.

But answer this: How are you going to keep customers coming back? If you're drawing a blank, your success might be short-lived. Without successful strategies for bringing in repeat business, Web shoppers will soon start to find your site B-O-R-I-N-G and buy elsewhere.

The solution? Quality content, easy-to-use features and frequent updates. Customers and prospects expect to find engaging content, value-added features and interactive opportunities. A stagnant site makes your business appear stale. In fact, the more your site changes, the more repeat customers you'll get.

According to a recent survey by PricewaterhouseCoopers LLP, ongoing site maintenance is key to bringing in customers. Currently, 25 percent of the fast-growing companies surveyed update their site information daily or weekly; 33 percent do so at least once a month.

As more customers become familiar with surfing and shopping the Web, expectations for up-to-date content and new-and-improved features continue to grow. The best Web sites engage visitors, provide access to crucial information and link to related sites of interest.

One easy way to boost site content is to check out community-based Web sites like GeoCities (http://www.geocities.com) and Tripod (http://www.tripod.com). These virtual communities host discussions and new content on a variety of topics, from art to drag racing and wine. Here, you can join a defined group, often referred to as a "neighborhood," that's related to your business. For instance, a wine retailer might want to join the Napa Valley neighborhood on GeoCities--and then establish a link to its own online storefront. That way, visitors can link directly to GeoCities from an e-tailer's site to find related information, participate in discussion groups and more.

To provide ongoing value, consider instituting games, contests or sweepstakes. Contests and sweepstakes are popular promotional tools on the Internet. Before you go this route, however, have an attorney read over the fine print regarding contest rules and be prepared to heavily promote your contest on the Web to get the most benefit.

Developing and distributing an online newsletter is another method for generating ongoing interest. Collect visitors' names and e-mail addresses with an on-site guestbook, and send them a copy. In your newsletter, promote new products, reveal your thoughts on industry developments, offer tips--do whatever you can do to pique customers' interests and spur them to return to your Web site to learn (and buy) more.

In the end, doing your best to build some sort of virtual community where customers can learn, share and grow will go a long way toward maintaining a successful site.

But Wait, There's More...

While customer service, marketing and site maintenance are where you'll want to concentrate the bulk of your efforts, your preparation doesn't end there. Another important consideration: fraud prevention.

E-tailers have taken many steps to ensure their customers feel secure when making online purchases. But little focus has been given to protecting e-tailers from unscrupulous shoppers. Credit card fraud remains a growing concern for e-tailers, says Steven Peisner, president of Shared Information Systems (http://www.nochargebacks.com), an Internet fraud prevention company.

How can it occur? "Electronic shoplifters," as Peisner likes to call them, place an order on your Web site using a credit card. Then they call their credit card company, claiming they never received the goods or didn't request them. The result? The retailer typically ends up eating the loss, plus gets charges a $15 to $25 chargeback fee by the credit card company. Just two or three chargebacks per month can quickly add up, putting a substantial dent in your profits.

To protect online retailers, Peisner's company offers a Web-based service, http://www.nochargebacks.com, which provides access to a database of credit card holders with prior chargeback requests, to help you decide whether to accept a transaction. There's a $50 to $95 application fee and a monthly subscription charge of $15, plus 25 to 35 cents per transaction. E-tailers offering high-ticket items will especially want to consider this service.

In addition, if you plan on doing business in different countries, you'll need to be aware of possible taxation issues, language barriers, and order processing and shipping logistics. Government regulation remains an increasing concern for e-tailers as well. Congress is currently considering a number of bills regarding privacy, Internet taxation and company e-mail marketing policies. Expect these issues to strongly impact your electronic storefront in the coming months.

Is your head swimming yet? Certainly, all this gives you plenty to think about. But being informed could save you from potential problems down the road, increase your sales and improve your chances for success.