Online business failures: Reasons and remedies

Reports suggest that a majority of online businesses fail. This means that you will need to avoid the common reasons for the failure in order to make a success of your online business.

Instant results:

In the day of instant gratification and lightning speed, everyone wants everything yesterday. The level of expectations is further heightened by the number of stories doing the rounds about internet millionaires and guys who invented the next big thing online. A huge number of internet businesses fail simply due to the unrealistic expectations the owner had. Now let’s be realistic. You are probably not a rocket scientist or Einstein and while your idea may be good, it may simply not take off. A successful business person has to be persistent and be patient. You will see some failures before success comes and you need to weather through it and persist. This is the most important way to sustain your business - keep at it and don’t give up easily.

Lack of Updates:

If you expect that you can simply put up your site on the internet and people will swarm to it and you never have to do anything again, think again. That simply doesn’t happen. That’s what they don’t show you – what happens after the end of the movie. The hero gets rich but has to work hard to stay rich. It’s the same with your site. You will need to constantly change with the business, the technology and the internet’s thought process to remain in business. You need continuous updating, in terms of marketing, optimization of your technology and content, and even your offerings.

Value proposition:

A number of online businesses fail simply because they do not offer a value proposition to the customer. Do not underestimate your customer – you cannot fool everyone all of the time so people will compare the value you offer to hundreds of other competitors on the internet market before selecting. If you want to get picked, be sure that you have a unique selling proposition and the customer will find value in what you provide.

Riding a wave:

Many people do not have a unique idea of their own and simply want to cash in on the latest wave in the market. The internet has its share of fads and one line of thinking is to create a site based on what everyone else is doing. While this is not a bad idea in itself, you need to remember that if everyone else is doing it, you need to find a way to differentiate yourself from them. Further, you will need to have solid understanding on the subject that you select, through research and experience. Also, remember that when the next fad comes, this one will fade and your business site should have a sustainable advantage to keep afloat.

Disinterest:

Some entrepreneurs are simply not interested in providing a product or service. They only want to make money. This harks back to the earlier points of updating and offering value to the customer. If you do not update your site and offer good service to your customer, your lack of interest in the business will show through and customers will not buy from you.

Threats to online Trading Companies from fraud and hackers

There are many threats from hackers and con artists when a company does business online. Here are some of the main types of fraud:

Supplying fake products:

Fraud can occur at the very outset of your business when you try to contact a supplier for the product that you have chosen for your online business. The supplier turns out to be untrustworthy and disappears with your money leaving no trace and no hopes of a business. This type of fraud is similar to anything that can happen in the brick and mortar world of business as well. Remember that almost anything that can happen in the real world can happen in the virtual world too, so take the same precautions that you would as for an offline business.

Clones:

A common problem that more established businesses face is clone businesses that set up with similar sounding names and logos. These businesses will often target your trading company’s clients, and make no mistake; they are after your business specifically. This can create a number of problems for the online trading business, since there is a lack of physical interaction with the customers and it is easier to pull this off. Customer can become confused and either leaves you for the other company unknowingly or be put off by the incompetence of the other company and blame your business. It is a headache for many companies that operate solely online.

Credit card fraud:

This is the most wide spread type of fraud by hackers and is not limited to the web. But operating online does make it easier for a hacker to find a weakness in your system and exploit it. Most times, hackers will gain access to secured financial information and credit card data and use this to purchase products and transfer money to their own accounts. This can be done so cleverly by an experienced hacker that the trail is impossible to follow. The FBI has been involved in many cases that involve large amounts being stolen in this way and often are unable to locate culprits. It is essential to have plenty of security and use the services of established players in the market such as Pay Pal, etc.

Click fraud:

Business Week has reported the sharp rise in click fraud as one of the growing problems with doing business online. It implies the software that is now available to fake clicks on an advertisement online, which results in incorrect statistics about the popularity of the site and the number of visitors. Since online business sites pay per click, the advertiser ends up paying much more money than he should. Many unethical affiliates and advertising agents use this type of fraud to make a lot of money.

Phishing

A common hacker practice online, Phishing or password harvesting has acquired a special name. It is a technique used by hackers via email or Instant Message to subtly and creatively find out an unsuspecting person’s financial and personal information. Sensitive data such as passwords, account names and numbers, credit card details, social security numbers are smoothly extracted with the help of a little social engineering practices. Phishing hackers are known to pose as government bodies to defraud even online businesses of access to their databases.

How does branding help in retaining and getting repeat customers

A great branding campaign is an asset to your business and is sure to pull in repeat business. Here are the reasons why:

Inspires trust: –

A branded product or service tends to inspire confidence in people because there is the perception that the quality of service will be higher. This is usually because the branding makes the product or service easily identifiable and it becomes more important to the business to maintain a good reputation. People tend to view unbranded products with a little bit of suspicion due to the pervasiveness of branding in every sector of business. Retaining customers is a factor of trust, a brand is able to create in their minds.

Builds brand identity: –

Customers associate a certain image with a brand name product or service so in one sense, a business without branding is a business with no identity. Once a customer has purchased a product or service from a business and is satisfied with it, branding allows the customer to locate the business easily again and get repeat business. For instance, if you were to eat the best ice cream in the world at a little drive by ice cream place, you’re not likely to remember its name, or anything beyond the taste of the product. But with branding, it is likely that you will remember some other little detail that will help you find the place again or locate it in your own town.

Know what to expect: –

Along with identity, a major portion of repeat customer business comes from satisfying and living up to a set standard each time. Branding suggests to the customer’s mind that you have established certain standards and will deliver on these every time you sell a product or service. This means that the customer has an idea what to expect and comes back for the same experience again. One of the functions of retaining a customer is to provide the same level of service and branding carries the connotation that you will do that.

Growth with branding: –

Branding can be an essential part of the growth of a business. It is the backbone of expansion simply due to the fact that it provides you the opportunity to use the good image that you already have in place and replicate your success. For instance, going back to the earlier example, if you were to eat this great non-branded ice cream, you’d probably rave about it and then forget it after a while. If you were to eat one that was branded, you’d probably notice the next time you passed another ice cream place with the same branding and then become a repeat customer. You’d know that you could get this product at different places and would look for it closest to your own home.

Aspirational brands: –

In case of lifestyle brands, the repeat sale is about the experience and branding makes all the difference in retaining customers in this section of the market. If you are able to sell a great experience to the customer along with a great product or service, the customer is sure to come back and give you repeat business.

Converting Ideas into success stories

OK, so you have a great idea and you can’t wait to sell it. This baby sells itself, doesn’t it? You may be wrong there and if you are, it will cost you dearly. Converting concepts to successful money making businesses is not easy and requires the following steps.

Viability:–

To put an idea into execution, you need to check on its viability. It may sound really good in theory but not work when put into action. There have been great ideas that have not planned out, simply due to a lack of utility or the lack of a market for the product or service. Make sure that you ask your mentor, or other industry experts for advice. This can be a bit tricky if you don’t want to give your idea away. Alternatively, try to find some small way of testing it out. Another separate and equally important aspect is to decide whether your product or service has an online market. Ask yourself whether people go online looking for your offering and whether these people would buy this offering online. This will help to establish the online viability of your concept.

USP:–

Remember that people are looking for value in your product or service and if you can differentiate yourself by coming up with a unique selling proposition for your business, you will be more successful. Your idea must have merit, essentially and offer something unique that sets it apart in making it attractive to customers. Keep in mind that you are up against a lot of competition on the internet before deciding to go ahead with your plan. Remember also that if your idea is not unique, some other aspect of your approach should be.

Marketing:–

This may be one of the pillars of your online business if you can get it right. Your great concept will only get you so far – to get people to find and buy your product you need the help of a great marketing effort. If you can hire a good search engine optimization team, do that. If not, try to research and read up on the subject to the best of your abilities. Definitely get a good web developer who will follow World Wide Web Consortium standards and will also optimize the structure of your site to make the job of search engines that much easier. Further, get good content that is informative and intelligent to attract customers. Most importantly, look for affiliate programs, email marketing opportunities, start newsletters, blog marketing, banner ads, pay per click and so on. These are the various techniques that help a site get attention from its customers. It is important to get relevant visitors who are looking for your offering or something similar.

Planning/ strategy:–

Have a plan. Create a business model, do projections, make a marketing plan, be ready for difficulties, identify problems and work on problem solving. Educate yourself about your business, the internet and about the product or service you are selling. Once you master this, you will know more about how to plan and structure your start up phase and be ready for future growth. As in any business, an online business needs to have a strategy in place to make money and convert ideas to money making businesses.