Selling on the Web: Revenue Models and Building a Web Presence

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• Selling on the Web Revenue Models and Building
  a Web Presence

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Revenue Models in Transition

• Several companies have changed their revenue
  models over the years in response to their new
  and changing Web customers
• Subscription to Advertising-Supported Model
• Slate Magazine
• Advertising-Supported to Advertising-Subscription
  Mixed Model
• Salon.com
• Advertising-Supported to Fee-for-Service Model
• Xdrive Technologies
• Advertising-Supported to Subscription Model
• Northern Light

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Multiple Transitions

• Encyclopedia Britannica
• Print publisher to Advertising-Supported model to
  Advertising-Subscription Mixed Model

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Revenue Strategy Issues

• Problem
• Channel conflict or cannibalization can occur
  when sales activity on a companys website
  interferes with existing sales channels.
• Solution
• Web sites provide product information but
  directs customers to online and physical stores
  where goods can be purchased.

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Revenue Strategy Issues

• Problem
• Goods purchased on company website can be
  returned to physical store thereby stressing
  retailers time and causing further inventory
  management.
• Solution Channel cooperation
• Retail stores are credited with inventory and
  labor costs for each Web site return they handle,
  while catalog division managers are given credit
  for customers who purchase goods from the Web
  site.

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Strategic Alliances

• When two or more companies join forces to
  undertake an activity over a long period of time
• Example Amazon.com has partnered with Target,
  Tool Crib of the North, Borders, Toys R Us,
  drugstore.com

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Strategic Alliances
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Creating an Effective Web Presence

• Businesses always create a presence in the
  physical world by building stores and office
  buildings.
• The only contact that customers and other
  stakeholders have with a firm on the Web is
  through its presence there.
• Creating an effective Web presence can be
  critical for even the smallest and newest firm
  operating on the Web.

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Identifying Web Presence Goals

• On the Web, businesses have the luxury of
  intentionally creating a space that creates a
  distinctive presence.
• A Web site can perform many image-creation tasks
  very effectively, including
• Serving as a sales brochure
• Serving as a product showroom
• Showing a financial report
• Posting an employment ad
• Serving as a customer contact point

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Making Web Presence Consistent with Brand Image

• Different firms, even those in the same industry,
  might establish different Web presence goals.
• Coca Cola and Pepsi are two companies that have
  developed strong brand images and are in the same
  business, but have developed different Web
  presences.
• The Web presence conveys the image the company
  wants to project.

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Achieving Web Presence Goals

• An effective site is one that creates an
  attractive presence that meets the objectives of
  the business or other organization.
• Possible objectives include
• attracting visitors to the Web site
• making the site interesting enough that visitors
  stay and explore
• convincing visitors to follow the sites links
• creating an impression of corporate image
• building a trusting relationship with visitors
• reinforcing positive images of the organization
• encouraging visitors to return to the site

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Not-for-Profit Organizations

• A key goal for many not-for-profit organizations
  is information dissemination.
• The combination of information dissemination and
  a two-way contact channel is a key element in any
  Web site.
• The American Civil Liberties Union and American
  Red Cross have created effective Web presences.
• Political parties and museums also use Web sites
  for their image presences.

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How the Web is Different

• When firms started creating Web sites in the mid
  1990s, they often built simple sites that
  conveyed basic information about their business.
• The failure to understand how the Web is
  different from other presence-building media is
  one reason that businesses fail to achieve their
  Web objectives.
• Firms must use the Webs capability for two-way,
  meaningful communication with their customers.

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Meeting the Needs of Web Site Visitors

• Businesses that are successful on the Web realize
  that every visitor to their Web site is a
  potential customer.
• An important concern for businesses is the
  variation in important visitor characteristics.
• People who visit a Web site seldom arrive by
  accident they are there for a reason.
• Technology variations among visitors (e.g.,
  connection speed) should be a concern for Web
  sites.

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Many Motivations of Web Site Visitors

• Creating a Web site that meets the needs of
  visitors with a wide range of motivations can be
  challenging.
• to learn about products or services that the
  company offers
• to buy the products or services that the company
  offers
• to obtain information about warranty service, or
  repair policies for products they have purchased

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Meeting the Needs of Web Site Visitors

• to obtain general information about the company
  or organization
• to obtain financial information for making an
  investment or credit granting decision
• to identify the people who manage the company or
  organization
• to obtain contact information for a person or
  department in the organization

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Making Web Sites Accessible

• One of the best ways to accommodate a broad range
  of visitors needs is to build flexibility into
  the Web sites interface.
• Many sites offers separate versions with and
  without frames and give visitors the option to
  choose either one.
• A good site design lets visitors choose among
  information attributes, such as level of detail,
  forms of aggregation, viewing format, and
  downloading format.

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Trust and Loyalty

• When customers buy a product, they are also
  buying a service element.
• A seller can create value in a relationship with
  a customer by nurturing customers trust and
  developing it into loyalty.
• Customer service is a problem for many corporate
  sites.
• A primary weak spot for many sites is the lack of
  integration between the company's call centers
  and their Web sites.

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Customer-Centric Web Site Design

• Putting the customer at the center of all site
  designs is called a customer-centric approach to
  Web site design.
• Electronic commerce sites are encouraged to focus
  on the customers buying process rather than the
  companys perspective and organization.

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Connecting with Customers

• An important element of corporate Web presence is
  connecting with site visitors who are customers
  or potential customers.
• Mass media is a one-to-many communication model,
  the Web is a many-to-one communication model, and
  personal contact is a one-to-one communication
  model.

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Connecting with Customers

• Most businesses are familiar with two ways of
  identifying and reaching customers personal
  contact and mass media.
• These two ways are referred to as communication
  modes.
• Some experts also distinguish between broadcast
  and addressable media.

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Connecting with Customers

• The Web is an intermediate step between mass
  media and personal contact.
• Using the Web to communicate with potential
  customers offers many of the advantages of
  personal contact selling and many of the cost
  savings of mass media.