On Internet Business

How not to launch an e-business

Posted by Michael under Business Growth, customer service, Entrepreneur Resources, Leadership, Online Retail, Social Media

A recent article at Inc. suggests that the easiest way to launch an e-business is not to have a great business plan but buy a website through a broker on which to launch it. I’d like to suggest that ‘easy’ is not a good route to business growth and that buying somebody else’s mistake is an unlikely way to achieve success.

Inc. suggested Ebiz brokers and eBay as the best places to find sites. There are more established locations to find sites for sale such as Flippa and Dalton’s Weekly

Looking at the ecommerce section of business brokers sites can also show up potential opportunities. UK brokers include:

Knightsbridge
Avondale.

Even if you can find a good site (and if they were going concerns with a good customer base why would they be on the open market, rather than brokering a goodwill deal with a competitor who can see their value?), there are inherent risks in this approach:

1.    The observable traffic on a site you purchase may have no value or even a negative value, if it’s not convertible
2.    Search engine rankings are fragile and Google, in particular is tough – if there are hidden dangers in the site you buy (cloaking, embedded automatic content generators, black hat blogging), stripping them out is costly and even when they’re gone, you’ll find yourself penalised by the Google algorithm
3.    The seller wont always give you the full story – it’s all very well asking questions but it’s quite another thing to get honest answers: when e-commerce fails, very few site owners are willing to own up to their mistakes in front of a buyer, even if they recognise them.

There aren’t any shortcuts to starting a successful online business. The business fundamentals have to be right

•    Products
•    Pricing
•    Promotion
•    Reaching the right customer base
•    Customer service.

If any of these are less than excellent, online customers find out quicker than any others, and spread their disillusion faster and wider than any others, using social media to inform a wide audience about your failure. They may be low barriers to entry in setting up an ecommerce business but without a clear strategy and unique selling proposition why will customers buy from a new online business?

If the fundamentals of the business are right, services like Volusion can help build a scalable online business. Volusion is an all in one software solution which already powers 30,000 online stores. It takes a lot of the headaches out of starting an online and, unlike many other solutions, it is targeted at UK merchants.

However if your aim is build the best possible online experience for your customers, starting from scratch with a bespoke website may not be the cheapest or easiest option but in the long run it still might be the best one.

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Real-Time Marketing and PR: How to Instantly Engage Your Market, Connect with Customers, and Create Products that Grow Your Business Now

Posted by Michael under Business Growth, customer service, Entrepreneur Resources, Leadership, Social Media

This book is an exploration of value and speed. It’s like an equation in business physics – the businesses that learn to deliver value faster than others are the ones that gain market share and loyalty. Speed added to value provides competitive advantage in the internet age.

So how does it work?

Some people struggle with the insight and anecdote based approach that David Meerman Scott uses to take the reader through how people, and organisations, have coped (or failed) in using real-time opportunities to engage with the real world, in real time, by offering value rather than relying on a pre-determined PR formula.

From the Amazon reviews about it, there are people who complain about the anecdotal style Meerman Scott uses: that he doesn’t provide enough empirical detail; that the metrics just aren’t in the book.  And that’s precisely the problem that this book sets out to solve. You can’t operate in real time using a manual. You can’t know what’s going to come at you, and you can’t guess in advance how the world is going to change around you, and in relation to you.

A perfect example, and the most famous, is the ‘United Breaks Guitars’ saga. A musician whose guitar was broken by United Airlines became so disgusted by the way the different airports passed responsibility for his claim to each other, that he wrote a song about it and made a video. That video went viral on YouTube. Two associated businesses: Taylor Guitars and Carlton Cases, seized the real time opportunity to publicise the value of their products in relation to the video and gained market share as a result. United Airlines apparently lost $180 million by failing to respond to the story.

In a blog interview David Meerman Scott made a key point about the brutality of real-time marketing, “Losing control is the toughest principle. You have to let people talk about your organization in the way that they want to talk about it. You can’t complain that they didn’t use your key words”.

In other words, to succeed, a business has to take part in a real-time conversation, not control it, and that requires leadership.

So how does a business use social media, crowdsourcing, videos, mobile devices, media alerts and so on to deliver value in real time?

Meerman Scott offers a range of tactics to help organisations speed up their information gathering and shorten their response time, but over and over he makes the point that what successful real-time marketing requires is a new mind-set that accepts that action is outward facing and fast, not inward looking and risk-assessment based.There are many examples of how other businesses learned to listen to more voices, act more swiftly, make rapid course adjustments and demonstrate their core values in both success, and failure.  He also talks about how to drive real-time customer value through an organisation with zeal and enthusiasm.

The examples recognise the need for speed and agility, while helping readers to understand when process applies and when it needs to take a back seat to swift communication. Moving quickly at the right time is prioritised in customer-facing business areas, while ensuring core values remain integral to decision-making is seen as part of the strategic function of a management team committed to integrity of response when under pressure.

There are many obvious tips that businesses still ignore – Meerman Scott says a business should respond in the same medium that the challenge arrived in. So United Airlines should have made a video apologising to the musician and loaded it on YouTube. Insisting on using ‘formal channels’ means not being heard by the same audience who get to hear the bad stuff about your brand, company or product, so all efforts are wasted because you’re talking to people who hadn’t heard about the problem (but have now you’ve pointed it out) and ignoring those who had heard about it. In other words, you’re damaging your own brand.

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Business Awards – in pursuit of excellence

Posted by Michael under awards, Business Growth, Entrepreneur Resources, Leadership, Social Media

From the Growing Business Awards through to the Queens Awards for Enterprise, taking in everything from awards for green business through to fast growth, social media use, family businesses or digital innovation, there are awards programmes that expose businesses to a rigorous analysis and reward those who ‘win’.

But what of those who don’t? Is it worth entering if you don’t scoop the top prize?

Yes, it is. For three reasons:

1.    The evaluation used by the judges helps a business to measure itself against the current and anticipated challenges in each category area. For a new enterprise in particular, but for businesses generally, this is an exposure to the likely threats to business growth as identified by international experts in that area of business – working through that assessment ‘future-proofs’ a business better than it could do alone.
2.    The scrutiny of your business will highlight weaknesses or areas of underdevelopment that could be holding the organisation back, so it gets a heavyweight consultancy on the impediments to business growth.
3.    Being exposed to a peer group of acknowledged leaders allows for sharing of information, networking and bench-marking – whether a business wins or loses the category, there are always new ideas, better systems or solutions to problems to absorb and utilise.

What’s also starting to emerge is that businesses that don’t get this kind of external competition may actually spin into hyper-competitive behaviour and poor decision-making. Donald C Langevoort’s study: Organizational Psychology of Hyper-Competition: Corporate Irresponsibility and the Lessons of Enron – suggests that when a culture of healthy competition isn’t properly established inside and outside an organisation, spiralling risk-taking can become ‘natural’ and, like subprime lending, it becomes normal for certain kinds of business to look at competition alone, not at the bottom line that being competitive delivers.

So the value of nominating your business for an award is not just about being the winner, it’s also an opportunity to learn from the best, to look at the future, and to see potential problems clearly and evidence from organisational psychology shows that a strong business thrives on organised, recognised and validated competitive structures.

Awards courtesy of Schipulites

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Smart businesses have savvy social media…

Posted by Michael under customer service, Social Media

… but sometimes even the people who are supposed to know their stuff get it badly wrong. In the small but highly charged world of computer games, a bad review can be a substantial belly blow, but when a PR agency hit back, the story went viral.  The game was Duke Nukem Forever and the agency was the Redner Group, which responded to negative comments on the game previews by posting a tweet saying “too many went too far with their reviews. We r reviewing who gets games next time and who doesn’t based on today’s venom.”

While the tweet was swiftly removed, so was the game designer’s confidence in their PR choices. Redner Group no longer have a contract with the game company and as that was their biggest client, their future is looking less than promising.

The phrase coined to label this kind of behaviour is ‘social over-sharing’ – it means that a business or individual has lost sight of the boundaries that separate personal emoting and business communication and in the case of James Redner of Redner Group who posted the infamous tweet, he’s on the record as saying that he ‘felt like a father’ about the game and his overreaction was as a result of that emotional identification.

Dealing well with negative social media commentary

Social media is a two-way track. It’s more like a conversation than an ‘exercise’ so (a) you can’t control what comes back at you and (b) everything you say may be overheard by other people who respond immediately – be prepared for that! In the case of Duke Nukem Forever, journalists jumped all over the tweet as it looked to them like blacklisting. That may not have been Redner’s intention but when ‘conversation’ is ‘overheard’ there may be a wide range of interpretations that the business needs to recognise and deal with.

Define the problem. If you’ve got any constructive criticism at all, in amongst the negative stuff, say thank you. The revealing of genuine problems should always be something a business is grateful for. If you think the person has gone over the top, but there is some truth in their negative comment, try reframing the facts in more pleasant words and then respond to your reframed version. Example – ‘this product stinks: it took me four tries to put the thing together and the instructions are useless, too small and badly translated.’ Reframe – the product was more difficult to assemble than expected and the instructions are not as helpful as they could be. Response – thank you for pointing out that the instructions could be clearer: we will work on that. We’d like to know if you think better instructions would have made the assembly easier?

Trolling and Trashing. Trolling is the behaviour of online personalities who simply like to cause conflict. Trashing is where a person comments on your product negatively in order to promote a rival service or product. The only way to deal with trollers and trashers is to ignore their comments and remove whatever you can of their presence. The good news is that even determined trashers have a short attention span if you are on their case and don’t respond to them. Be sure they are a trasher though – one way to find out is to copy and paste their comments into a search engine: if you get identical hits appearing you know you have a trasher on your hands. Trolls are clever, manipulative and determined, but in social media terms, poorly tolerated so often you’ll find social media will patrol its own trolls and you just need to be on your guard against giving them the oxygen of publicity.

Troll image by meshmar2

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Creating the right climate: social media and employees

Posted by Michael under Business Growth, Social Media

We’ve all seen the stories: forwarded work-based emails that travel the globe carrying salacious details of peoples’ personal lives, or the employees who diss their employers on their last day in the job, dishing the dirt on the company they’ve worked for or their immediate boss’s bad habits.

Then there are the ‘anonymous public announcements’ via blog – the most recent of which purported to show how young Ronan Parke was ‘groomed’ by Simon Cowell’s production company and that the show was ‘fixed’ – this claim has been passed to the police by Cowell as a malicious communication. Then there are the several recent cases in the USA where employees have had their employment contracts terminated for social media statements that breached their employer’s social media or other policies. In one an employee said on facebook that his company was full of thieves and idiots and a couple of days later named his company and his boss. In another case, an employee said he was being supervised by a ‘17’ which is USA Human Resources code for a psychiatric patient.

The outcomes of these cases haven’t been simple. While none of the employees who were dismissed have won an unfair dismissal case, several employers have been castigated over their overly broad policies and required to revise their social media and other policies to ensure that they could not be used to limit an employee from speaking about matters internal to the company but still part of the employee’s right to free speech.

Social media such as facebook and blogs, but increasingly also twitter, are proving a minefield for employers. It’s important to have a coherent policy that allows employees to understand what is acceptable communication about, and originating from, the workplace. But it’s almost impossible to patrol social media and difficult to judge when lines are crossed – in some companies saying you work for the biggest lunatic in the world is entirely appropriate (and may even be appreciated in some of the zanier industries like gaming, music and the arts) but in others is totally unacceptable.

Creating a solid social media policy

•    Network with similar organisations – having an industry or sector based policy or at least widely agreed lines is useful because with staff churn it’s a time and trouble-saving way of ensuring that people moving from one company to another have a rough idea what is okay and what isn’t.
•    Review regularly – this area moves fast and a policy on social media probably needs reviewing every six months.
•    Involve unions representatives if possible – several of the contested US cases have involved the failure to allow employees to discuss matters like pay and working conditions which are their right to reveal under terms like collective bargaining. Working with unions or other trade groups when creating policy can prevent unfair dismissal cases later on.
•    Be flexible – while there are always areas where immediate dismissal is almost always necessary: racial and sexual harassment etc, having a range of sanctions to apply can help a company feel its way through early examples of social media misuse before it ends up at an employment tribunal.

Tweeting courtesy of topgold

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Making customer service work

Posted by Michael under Business Growth, customer service, Entrepreneur Resources, Leadership, Social Media

A recent article in Inc suggests an unusual approach for any business that has an intensive service profile: hotel and retail and personal services, travel and holiday industries and every form of catering to name but a few. The problem it seeks to address is the issue that if you’re giving great customer experiences to those in front of you, customers further back in the queue may be losing patience and eventually, you lose their business.

So what’s the answer? According to a study entitled ‘The Quality-Speed Conundrum: Trade-offs in Customer-Intensive Services’, published in Management Science, it’s simply to find the right balance between service and speed, and while that includes a complex algorithm or two, the bottom line is that you end up deciding how many people you can serve superlatively and limiting your service to that number.

This means that you set the price for the customer number that’s optimum and stick to that price/number ratio without reducing service by adding more customers. But how many of us can honestly do that?

Alternative approaches include outsourcing or crowd-sourcing non-customer facing processes so that you can concentrate on driving a customer service ethic from the top.

This means establishing an expectation understanding with your customers – where possible before they actually become customers – and setting up systems that check you meet those expectations more or less all the time.

•    Begin by deciding what you can do, what you can’t do, and what you do that nobody else can do. Should existing customers be addressed by name whenever they call? Do you want a random audit of customer satisfaction every month? What about mystery shopping? How will you handle complaints and suggestions for improvements? What will you do to reward loyalty?
•    Make sure your staff, but more importantly, your customers, know how and when they can access this customer service. There’s no point offering superlative service if it doesn’t work for the times when your customers can access it.
•    Ensure consistency in response – don’t agree you will call customers back by phone within 24 hours but allow a week to pass before responding to emails.
•    Be honest about failure – things will go wrong, and telling your customers (where possible, in advance) that you know there’s a problem, and what you’re doing to rectify it, goes a long way to turning a negative customer experience into a good one. If there’s a postal strike planned, make sure your website, facebook page, twitter feed and phone staff all know the details of your alternative delivery system. If bad weather or some other uncontrollable force knocks out your service team, be ready with a fall-back system like an outsourcing centre, and be clear to your regular customers that this is a fall-back and they may not get the consistent familiar service they expect from your organisation.
•    Offer alternatives – if you can’t do what people want, suggest somebody else who can. It sounds risky but it’s better to hand over a relatively happy customer than lose a disgruntled one: often they come back if you’ve done the decent thing.

Poor customer service image courtesy of Matthew Wilkes

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Making your business newsworthy

Posted by Michael under Business Growth, Entrepreneur Resources, Social Media

Getting good coverage for your business’s successes can be tough unless you have some X Factor feature to catch the media’s eye, but businesses that don’t exploit their PR potential are likely to be missing out on opportunities and brand recognition tools.

Know your media

There are thousands of ways to reach the media, but establishing connections that lead to coverage takes time. Somebody in your organisation has to sit down and work out what the target audience reads, listens to or retweets and then read, listen to or retweet those media outlets until they understand what the themes (or memes) are that work best.  Some radio shows, for example, regularly feature the same local businesses if those businesses have some weird, whacky or other ‘line’ that works for the show. Others constantly seek opinions from ‘green’ businesses on major news stories such as interest rate or legislation changes. Certain newspapers and TV journalists like to have established family businesses to call on for quotes, while others are keen to get the views of entrepreneurs and multi-cultural organisations.

Spin your story

If a company has a new product or service, it might look, at first sight, to have a very limited publicity pull, but that’s when you need to find the right hook. Most journalists will respond to stories that hook into:

•    Public concerns (cuts in government services, economic bad news, long term bad weather forecasts etc) to which your product or service could provide a positive spin.

•    International news (look for new UN or EU legislation and pin your stories to that – it may take a while to get a credible reputation but there are many more businesses competing on the UK stage than linking their development to international stories, so over time your organisation is more likely to become a quotable source on the ‘international business stage’ even if you’re tiny)

Set up a system

Pick national days that are relevant to your organisation and others which are easy to spin off such as National Take Your Daughter To Work day and make sure you have a good PR angle set up well in advance. You can use the same days year after year so that you have a regular PR schedule running. Of course it needs to be a serious story, not a cynical approach to obtaining PR because journalists can see through these and make an organisation regret it ever tried to ‘play’ the media.

Be the squeaky wheel

This is a higher risk strategy but worth it for businesses that feel they have an edgy profile (think Branson rather than Dyson). Just take a big story and offer an alternative viewpoint. If you can make it controversial, and you are sure you can ride that tiger, go for it!

Don’t stop

PR is a process, not a story. Successful businesses expect to get one hit in eight, which means putting out eight press releases to get one into the hands of a journalist who will run with it. It can take years to build a public reputation (but only minutes to lose one) and creating systems like Google alerts allows you to keep up a momentum that will bring PR credibility and coverage in the long term.

Interview image courtesy of Phil_Parker

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How negativity can lead to business success

Posted by Michael under Business Growth, customer service, Entrepreneur Resources, Leadership, Social Media

There used to be a deeply offensive joke that did the rounds in working men’s clubs accompanying a cartoon of a man in a smart suit with a speech balloon saying,  ‘The doctor says I’m impotent, so I’m going to dress impo’tent’. The addition of the missing letter gives the joke some sense: impotent or important?

One of the biggest stumbling blocks to new businesses is the way that issues come up and hit the executive team in the face. If there’s no team, just a solo entrepreneur, it’s his or her face that gets slapped with each new ‘important’ demand. A customer complaint needs handling with tact. A new contact has to be massaged into becoming a client or supplier. A competitor moves into the company’s space, challenging market share (or withdraws from a joint arena, offering the opportunity for business expansion) and a decision has to be made. Something trending on Twitter or Facebook seems likely to bring attention to the company, but somebody has to oversee the engagement process …

Some of these are important, some make you impotent. Focusing on the wrong ones is like stepping into a hamster wheel: the faster you move the faster you have to move, but you’re getting nowhere.

Negate the problem

Negativity means refusing to put time and energy into non-productive areas. Each business is different, and every set of priorities will vary, depending on the maturity of the business and the management style and ethos of the decision-makers, but decisions still need to be made. A maturing business be ready to say ‘No, our Founder or CEO isn’t going to deal with customer complaints, but we are going to invest in a customer service workshop to ensure all managers are ready to resolve complaints effectively’ while a new business might decide the boss’s time is best spent on face-to-face customer relations, so his or her energy will need to be removed entirely from social media. The key thing is that the decisions are made because one of the characteristics of a business that outgrows its success is ‘Founder Failure’ – where the entrepreneur’s inability to be equally focused on every aspect of the organisation leads to decline in the areas where he or she is trying, and failing, to maintain personal input.

It’s difficult for determined, committed, smart people to accept that some things are just distractions from their primary role. It’s tough to give up the personal touch, but business evolution requires certain kinds of negativity. Hiring a speech-writer allows a CEO to focus on business-building: a few personal touches added to a professionally written script are usually all that’s needed. Professional ‘ghosts’ manage social media for small companies, engaging with the public and transferring genuine complaints or concerns to the management team – it saves hours of trawling through tweets and Facebook comments and still gives the organisation a personal face.

Let go of the past

How often do you really need to be up to date with finance? Daily, weekly, monthly? Scheduling a one-to-one meeting with your finance manager (or just time to focus on your accounts for the really small business) is better than trying to stay on top of the money every minute of the business day. If you can’t relinquish that level of control you are building a bottleneck into business growth.

Did you start out as a techie with people skills and are you still trying to meddle with the techie side of business? If you’re the boss, it’s your job to delegate while remaining in touch with developments: trying to ‘do’ rather than delegate is one of the main reasons that new businesses don’t grow. Use your background to hire the best, not to be the best, and keep your energy for what the best techs can’t always do: building relationships, spotting opportunities and planning strategies.

Business to do wall courtesy of juhansonin

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Google’s latest algorithms go after content farmers and bad online retailers

Posted by Michael under Business Growth, customer service, Entrepreneur Resources, Leadership, Online Retail, Paid Search, Search, Social Media

Back in December, the Google algorithm was tweaked to deal with a surreal business scenario that was played out through the search engine rankings of an American eyewear retailer, the pages of the New York Times and the number-crunching desks at Google HQ.

Bad Retailers Punished

Essentially, one online retailer had realised that its many extremely poor online reviews and customer comments were actually pushing it up the search engine pages. So (it is claimed) it made an explicit company policy of ill-treating customers and abusing them when the complained, so that they would make negative ‘flaming’ online reviews which served to put the company at the top of the Google searches again, and again, and again.

When the NY Times wrote about this bizarre scenario, the comments redoubled and the company made the top spot on Google … at which point the Google mavens decided to do something. They designed a substantial revision to the search algorithm that stopped negative reviews driving a company up the popularity ladder.  How they did it has not been made clear, and there are still some questions about whether businesses can use this tweak to drive down their competitors by posting false negative reviews to drop rivals back down the rankings. Even so, the tweak made many online retailers happy.

Content Farmers Cut Out

In February a new algorithm, nicknamed Farmer, came into play, and now we’re seeing the results. The familiar name is the clue – this algorithm goes after content farmers who regularly top searches with content that is either derived from other sources (aggregated) or just packed with keywords (spammy).  This is meant to give more content-heavy, original-material sites a chance to reach the top 2 or 3 position, ahead of some of the sites that exist purely to link content to paid-for ads in the hope the viewer will click on them.

Together, these new algorithms herald a substantially different future for online retailers and information providers – they attempt to stop bad retailers using their poor reputation as a search engine tool and they aim to stop content farmers clogging up search pages with keyword-rich but content-poor information.

For many online retailers this heralds a new opportunity – the chance to revamp their own content format to deliver quality information and good customer engagement, not just for its own sake, but because it’s worth competing for a first page ranking again. Or at least it is for now, until the farmers and cowboys work out how to beat this new system …

algorithm billboard courtesy of toastyken

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Kickstarter – netwise, networked, business funding

Posted by Michael under Business Growth, Entrepreneur Resources, Leadership, Social Media

Kickstarter is an online platform that gives just about anybody, making, selling or designing just about anything, the opportunity to raise funds for their project.

It’s a very simple model: the ‘creator’ who has the project idea sets up a page on which he or she details fundraising goal, deadlines, and an optional set of rewards for backers. If the goal is reached by the deadline, the backers are charged by Amazon and they get the goodies offered by the creator. If the goal isn’t reached, nobody gets a thing.

Who Gets What?

Creators retain total ownership of the project but have to incentivise their backers, usually by offering some project related outcome. Kickstarter is the venue through which creators chart their progress to their goal and keep their backers informed.

Over a thousand projects have been funded on Kickstarter and they range from music albums to textile design studios to juice blending outlets. They all have one thing in common – seeing support for one-off ideas rather than long-term funding for business ventures. Each project is finite and has tension built in – will the creator make their deadline or not.

How It Works

Kickstarter isn’t intended to launch an empire – the idea is to test the potential of an idea and to give the initial traction that could lead to the development of a small enterprise.

Every project has to be approved by Kickstarter before it goes ahead, and then has to produce an outline of the idea, pluse photos, videos, and a request for pledges. The goal has to be met within an agreed time frame. If it isn’t there are no donations made and it doesn’t proceed, if the goal is met or exceeded, the funding goes ahead.

Who Can Use Kickstarter?

In theory, almost anyone, in practice, those with a well-developed online network are likely to find it easiest to meet their pledge amounts. Previous successful creators highlight the need for good video and project outlines but most say that half their funding came from people already known to them, or known to people they knew, so isolation is no likely to benefit even the best idea.

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