Business on the web - A Mandate

"Many a false step was made by standing still". This quote from Tim Ferriss book The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich  has a profound impact on me.

In the last few months I have been  interacting with quite a few Small and Medium size businesses ( SMBs) who want to have a foot print on the web albeit reluctantly.In most of these interactions, the business owners think that web is a mere online brochure ware and all it takes is a web developer to design & develop some static pages and have a domain address printed in all their offline collaterals.Cheap and Quick!!!!

Why do they want to go for this half hearted attempt? Simply because they are caught between new age consumers demand for an Interactive website against SMBs time tested ways for marketing and sales,typically offline and push based approach.The stated answers for resisting change includes:

• Don't want to spend a lot of money on a new channel 
• Not sure of the RoI
• My customers prefer offline marketing and sales
• Online is not personal. B2B business need personal touch

I tried exploring the reasons for the resistance/half hearted attempts to move the web and found that most of the reasons emanate from lack of knowledge of doing business on the web which further results in  trust deficit. Result: SMB owners contract a small time web designing agency ,usually chosen based on cost considerations,who inturn with scanty information and no direction will create a static brochureware website.No prizes for guessing the result of this initiative.The result of this initiative will prove the SMB owners  words ," I know that this will not work", prophetic.. .Project failure... Investment down the drain. All these are as a result of fear of unknown, lazy thinking and indiscriminate action

Dear SMB owner... doing business on the web isn't a choice anymore...Its a Mandate. Consumers across demographics research online before purchasing offline. This phenomenon is called as multichannel buying.

Doing business on the web is not all that complicated. . All that the SMB owner needs is clarity on the role of the online/web channel, conviction that it will work, commitment in terms of resources and few baby steps to set up the online channel.Few baby steps to set up the online channel:

• Register a domain name
• www.domaininseconds.com
• www.godaddy.com
• Decide on dependable hosting services
• www.godaddy.com
• www.net4.in
• Define the role of the web channel based on Persuasion Architecture
• Who are your target audience?
• What do you want them to do on the web?
• What are they doing on the web? If you don't have a website do research on competition website
• Identify design agencies who understand your domain,your customers and technology
• Build a website with a theme and a personality based on the product,brand and industry maturity
• Need for subject matter experts and user experience consultants
• Use a simple content management system which help manage the website in a seamless manner- Plenty of open source options like Joomla,Drupal can come in handy
• Need  an ecommerce site with payment processing capabilities. Can set up a store front using
• Yahoo store
• ebay store
• Need a payment gateway to accept customer payments
• Google checkout
• Pay Pal

Now your website is all set... Launch it...What next?

• Draw customer traffic to website - Based on budgets, the campaign can be pan echannels.To start small, invest on
• Google Adwords or Pay Per click campaigns- choose specific keywords that relates to your business and run continuous campaigns.Refer to www.adwords.google.com
• Know more about your customers,optimize website and Measure results
• Set up web analytics using the likes of www.google.com/analytics or www.clicktracks.com to measure various Key Performance Indicators ( KPIs)
• Tract competition using www.alexa.com and continuously improve your website

Very easy and simple isn't and interestingly most of these tools and services come at competitive rates...monthly plans are available.Now that you know your cost and website goals( it can be leads or online sale), its easy to calculate RoI. Tools like Google analytics provide such info on a dashboard. With these baby steps, 2 out of the 4 objections, high cost and RoI issue, stated by SMB owners have been addressed. 

Once the online business is in an auto pilot mode then it is imperative enter the world of web based customer interaction & intimacy - web 2.0. Will try and address the other 2 objections of SMBs in the next blog post

Way to Influence purchase at a store - Create Panic

Conventional wisdom always states that consumers wish to have a clear idea about any product or service before they buy.Clear explanations of product through simple product brochure, transparent sales process, organized sales stores are believed to be sales enablers.

I did believe these "cast on iron" tenants as truth till I heard an interesting anecdote from my friend on how a chaotic and panic stricken environment helped create better sales for a product. Wait!!! Isn't it contrary to the conventional wisdom that we have since time immemorial. To understand the reason for this consumer behavior lets explore few situations:


1. Deep Discount sale @ clothes factory outlet during Christmas or Diwali
2. Jewellery purchase in India especially during marriage season or Akshaya Tritiya
3.Purchase of electronic goods at stores like Best buy or Chroma especially during festive days like Thanks Giving Day or New Year Sale

What is common to these environments beyond just great deals? Crowded stores.. Have you ever noticed why most of these purchases happen in a crowded environment? I am sure you would have walked out of the store after the purchase with exasperation and the common complaint why cant the stores be more organized?Believe me, the next time you visit the store,the chaos would have just increased.

But why did the consumer begin acting that way when it's clearly not in his nature to do so? Simple. Because everyone else was doing it. So many others were doing it, in fact, and doing it so loudly, he/she will find it impossible to just sit there without acting.

Dr.Robert Cialdini,in his book Influence: The Psychology of Persuasion (Collins Business Essentials),calls it as the Rule of Social Proof ."Social Proof is what psychologists call a "decision heuristic" — a shortcut for making decisions. Life is too complicated to carefully evaluate every element of every situation, so we learn to take shortcuts to help us make what are usually reasonable and reliable decisions".

The reason for the consumer behavior to purchase despite panic/chaos can be deduced as follows :
- Crowd and chaos creates panic
- Panic sets in ambiguity
- When we feel ambiguous, we look for people who are similar to us and take decisions based on their actions
- Greater the number of people who find an idea correct,more the idea will be correct


When overwhelmed by the panic & chaos, consumer ends up thinking that the offer in hand is a dream deal and it cannot wait for the next day. The 'Suspension of Disbelief" results in a purchase without thinking, contrary to our conventional wisdom.

How can this technique of influence "Social Proof" be exploited by online marketers? While there are welter of ideas like limited period offer,testimonials, products sold for the dayetc, it's worth exploring an online shop where there marketer builds crowd and chaos by giving the consumer the option to user Nag,Tag (go social) and haggle at the online store to help make a purchase. Going social (integrating the online shop with Facebook, Blippy)at the time purchase will create enough noise for chaos to set in and then we know the consequence.The consumer ends up purchasing from the online store.My guess is that this kind of selling will be better suited for low cost, discount stores especially when the consumer is not sure of his purchase. Atleast worth exploring...

This influence technique appears to be a negative but in reality thats how consumers behave.Smart marketer will be on the lookout for this kind opportunity.

Beware... don't enter a crowded shop...