In this exclusive Urban Times series, Business Lessons from an Entrepreneur, serial business owner and Entrepreneur in Residence at the British Library, Stephen Fear, examines a different theme each week of 2013 to give the reader useful and usable lessons for enhancing and growing their own business.
January 2013 sees a major change in the way people shop: who says so? Well just about every major retailer in both the UK and the US.
John Lewis, Britain’s biggest department store chain, has seen an increase in overall sales of 13% leading up to Christmas 2012, but most startling of all is that Andy Street, the retail giant’s managing director, said that 25% of its sales are now made online. Experian, the credit reference agency, are quoted saying that Boxing Day 2012 was the busiest day in history for online sales in the UK; with 113 million visits to retailers’ websites the day after Christmas.
So what does all this mean to entrepreneurs, and how can someone enter this ever growing and lucrative market?
It is important to remember exactly what the internet is, and what it can do for your business. Essentially, a website is a shop window; whether you are selling a product or a service, it is your shop front to the world. It is essential that your shop window is well dressed and inviting, but even more important, perhaps, is that just like a high street shop it needs to be seen. Many budding internet entrepreneurs don’t realise the importance of directing traffic passed their front door.
There is no point having a wonderful website if your customer doesn’t know where it is or how to find it. In the case of a high street shop, a retailer will pay rent according to footfall; the number of people or traffic passing its door. Clearly this means that a store in Oxford Street will attract a higher rent than a secondary location in Chiswick. More people passing will mean a higher rent paid to a landlord. It is essential to realise that the web operates in a similar way except rather than paying a landlord rent, one can pay marketing costs to drive traffic to the website.
There are many benefits to being an online retailer and it is no surprise to see the exponential growth in this area. I have long been a promoter of “keep your overheads low” and the advance of the web allows a budding entrepreneur to do just that.
One can avoid many of those ‘old economy’ dangers, such as long leases on shops/offices, employing staff and restricted opening hours. If a business is online, one is open for business 24/7 without the need to pay staff for those hours, alongside avoiding electricity costs such as heating or light. This enables a newly formed enterprise to operate from the owner’s laptop, eliminating the fixed overhead trap faced by what I call “BBTW”, or businesses before the web.
So how does one drive traffic to a beautiful new website?
- AdWords is an advertising system that allows advertisers to place their adverts next to the results returned by search engines. It works, but can be expensive. Essentially one bids against others to use popular words such as ‘food’ or ‘pub’.
- AdSense is another service which gives advertisers the opportunity to place their adverts on partner websites showing relevant content.
Social media is becoming more and more important, although it does take time to administer and stay current. Nonetheless, twitter, mums net and other media can produce phenomenal results if used professionally.
Affiliate networks are also useful and a vast number exist in the UK and US. All have different member websites and focuses, so matching your business to the network that can deliver you the best result is critical. In the early days of the web, affiliate marketing received a stain on its character due to the high numbers of spammers who used it. Thankfully, this has settled down a bit but one still needs to check this method out fully before using it. SEO, or search engine optimisation, is essential for driving traffic to your site but doing it ethically will create a long term gain which will benefit both you and your customers.
The great thing about marketing online is that it is possible to track one’s results through easily available software. You cannot tell how many people have viewed your TV or newspaper advert, but you can see exactly how many people have clicked on an advert online.
I will be reviewing six books concerning online marketing in my February 2013 book review, filmed at The British Library, which can be seen by going to www.feargroup.com and clicking on ‘monthly book review’.