SEO, social media, internet security ... transactional and/or services outcomes. ... from those of traditional business and asserted that companies struggle to ...
An ‘elevator pitch’ value proposition for eCommerce websites of SMEs Completed Research Paper Abstract Whilst the literature provides a useful foundation for creating a marketing mix, it does not adequately address online value propositions. With this gap in mind, this study presents a framework that assists organisations in creating a value proposition for their eCommerce websites and to explain it in an elevator pitch. The framework suggests that a successful website value proposition is as easy as answering these four basic questions: (1) What is the goal of website? (2) What functionalities are included in your website?; (3) What marketing activities are you undertaking for your website?; and (4) What security measures have you taken to protect your website?. Keywords: eCommerce, SMEs, online value proposition, elevator pitch, goal setting, SEM, SEO, social media, internet security
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An ‘elevator pitch’ value proposition for eCommerce websites of SMEs
Introduction The popularity of online trading and the low entry cost has motivated small and medium enterprises (SMEs) to invest in setting up their websites to sell goods and services. Indeed, eCommerce websites have proliferated as owners are told that trading online is an essential part of today’s business practice and is used by businesses across all sectors. Despite the increasing attempts to trade online and the subsequent investments, owners still struggle to meet customers’ expectations and engage online customers. This may be a self-reinforcing cycle in that many owners have little knowledge of how to create a web-unique proposition appealing to their target market(s). Although creating an online value proposition is not a new practice, many SMEs are still struggling to create a succinct one. A succinct online value proposition identifies the reason why customers will click on, return, register or buy from the website and feel motivated to share their experience. Whilst the literature provides a useful foundation for creating a marketing mix, it does not adequately address online value propositions. With this gap in mind, this study presents a framework that assists organisations in creating a value proposition for their eCommerce websites and to explain it in an elevator pitch. In the traditional offline environment, value is created through the manipulation of the 4Ps marketing mix framework: Products (that meet the needs of customers), Price (value in the exchange), Place (available at the right place, at the right time, in the right quantity), and Promotion (informing target market about the product). Researchers have suggested replacing the 4Ps with one in the online environment. Online users use the web for informational, transactional and/or services outcomes. An eCommerce website, however, is a sales channel (sometimes a business’ sole interface) between the business, its customers and potential customers. In the competitive business environment, a website with a unique value proposition can provide the advantage a business needs to achieve its eCommerce objectives successfully. Without a unique value, customers are not willing to share their experience (Ghandour, Benwell, & Deans, 2012). Creating a web unique selling proposition for the online space Despite their successful physical presence, businesses are investing in setting up websites to sell their good/services with the possibility of abandoning the physical realm, as trading online is becoming more popular. Creating a website for such a purpose requires businesses not only to reflect their strategic initiatives but also to create value for their customers (Bremser & Chung, 2006; Ghandour, Benwell, & Deans, 2007; Zhu & Kraemer, 2003; Zott, Amit, & Donlevy, 2000). Such value should result in a competitive advantage that is difficult to imitate and ultimately dependent on customer appeal. Amit & Zott (2002) suggested that the value creation requirements for eCommerce are different from those of traditional business and asserted that companies struggle to survive if they fail to communicate a value. Krishnamurthy (2003) proposed an internet toolkit with 6Cs to deliver
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value. These are: Commerce (placing order and making payment online), Communication, Connectivity (reaching any user that is connected to the Internet), Community (through social media networks), Content (detailed information), and Computing (e.g. order tracking). Amit & Zott (2002) also identified four key value drivers: efficiency (e.g. reduce information asymmetries between buyers and owners), complementarities (value creation can be leveraged when bundled with complementary products from other suppliers), lock-in (the ability to prompt users to engage in repeat transactions), and novelty (the introduction of novel processes). In the online environment, however, users are using commercial websites for informational, transactional and/or services purposes (Deans & Adam, 2000; Molla & Licker, 2001). Hence businesses can create value when delivering these functions in terms of technology delivery, product delivery, and customer delivery process (Sharma, Krishnan, & Grewal, 2001). Porter (2001) described how the internet creates value for businesses by providing a standardised infrastructure, an intuitive browser interface for information access and delivery, bidirectional communication, and ease of connectivity. Constantinides (2002) argued that the 4Ps paradigm is a poor choice in the case of online marketing and suggested a web-marketing mix framework as an alternative. Krishnamurthy (2003) suggested a five-step process to deliver value to the user: 1. identify how different consumers perceive value; 2 choose which value element will be delivered; 3 provide the value and state how value is being delivered; 4 help users learn about the nature of the value and 5 assess how users perceive the value being delivered. According to Zhu & Kraemer (2003), businesses invest in their websites to reflect their strategic initiative to use the web to engage with customers. When a business decides to go online, its presence must be appropriate to the needs of the business and should focus on supporting its business goals. A website for eCommerce is a transactional one as it sells its products/services online. In general, selling involves creating value that confers a competitive advantage which is difficult to imitate and produces customer appeal. In addition, such a website serves as a communication channel for bidirectional information transfer and communication, a platform for transacting, an interface for providing customer service, and a facilitator for marketing initiatives. However, creating a website according to Thelwall (2001) is a business issue rather than a technical task. Value can therefore be created by assigning a mix of these requirements and suggestions. The outcome is a website that is differentiated from competitors’ sites, able to create awareness, generate traffic, and drive sales. To do so, the process does not have to be complicated. In fact, the major benefits can be obtained by going through a relatively simple process. This process requires careful consideration of four elements and establishing a method for ensuring a unique proposition; Table 1 provides an illustration. 1. Goal setting It is good practice to outline strategic goals as part of the business strategy. Goal setting serves the purpose of establishing a measure for evaluating the current performance of a business. This will not only set priorities but will keep the business focused and away from distracting activities that drain business resources and accomplish little (Turban, 2006). Although setting a goal may seem simple and straight forward, it requires the business to engage in strategic planning. While the first step is to transform the goals to objectives, the
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process of strategic planning involves a detailed analysis of internal resources, external forces and core competencies of the business. The outcome of this process is a specific plan selected and implemented. Finally, evaluation should be undertaken (Wenbo, 2002).
Table 1 Value Proposition Checklist Element
Example
• Increase sales. What is the purpose • Reach new markets. • Provide customers with of your website? more information on products. Website • Informative • Interactive What • Good navigation functionalities are • Personlised included in your • Security website? • Entertaining • Accessible Marketing • SEO • SEM What marketing • Social Media activities are you • Website banners on other undertaking for websites your website? • Promotional activities on the website • Links from other sites • eNewsletter • Affiliate marketing • Mobile Marketing Security • Digital certificates • Firewall and antivirus What security installed and regularly precaution have updated you taken to protect • Backups your website? Goal setting
Meaning A good business strategy should clearly outline your strategic goals. These goals can be used to evaluate your current performance and determine where future growth will come from. It is important to integrate a visitordesirable attributes to the website. Visitors enjoy and share their online experience if they find.
Attracting quality traffic to website increases the value of the website. There are different methods to acquire traffics businesses should consider.
Websites should provide security and privacy statements, secure payment gateways and have full disclosure statements for warranty, returns policy and liabilities.
In an online environment these goals involve choices that position the business in the global information technology market (Ghandour et al., 2007). Goals are a high level purpose of a website such as ’return a profit‘, which can be translated into lower level objectives. Objectives can be: increase sales, generating leads, build brand awareness, reach new markets, and provide consumers with information on products. These objectives will form the basis for the online activities the business is likely to be involved in. However, the
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objectives, the related goal and subsequently the online activities will be refined according to the detailed analysis of the internal resources, external forces and technology. Internal analysis deals with identifying internal strengths and weaknesses related to conducting business online, analysing business processes and the users’ requirements, and developing information architecture. External analysis is concerned with analysing business opportunities and threats. Technology analysis deals with analysis of technology trends and their impact on the business (Ghandour et al., 2007). The analysis provides some insight into the business’s online offering and dictates the purpose of the online activities including the website. Purpose then becomes the foundation of each website section which defines the content, the look and feel of the section. Having a clear purpose helps visitors understand what the site is offering. The effectiveness of the website can be measured by the extent a set of goals pursued by the organisation are achieved. 2. Website Unlike a physical store, a website is conveniently open 24/7 and reaches local, national and international customers. As selling can create unique value that determines a competitive advantage it can be difficult to imitate. Zott & Amit (2000) identified two strategies for value creation in eCommerce – the efficiency that eCommerce business models exhibit, and the degree to which they create “stickiness”. The efficiency is reflected through “what” a website offers while attracting customers to a website is created through “how” it makes the offer to effectively meet the expectations of both users and the owner of the site (Hong, 2007). Website offer (what and how) is intended to communicate an organisational image and product branding, to inform visitors to the site, to support access to information and knowledge, to support sales and to enhance customer service (Fitzpatrick, 2000; Ghandour et al., 2012). Much research has been conducted into which attributes should be included in a website. These attributes are: to convey information on the website, that is current and of value to potential customers. Visitors need useful and necessary information to make a purchase decision as easy as possible (Chakraborty, Lala, & Warren, 2002; Huizingh, Krawczyk, Bijmolt, & Hoekstra, 2007; Quelch & Klein, 1996). Personalised for visitors, a website recognises visitors and presents information to them based on their previous visit (Chakraborty et al., 2002; Lii, Hyung, & Tseng, 2004; Zhu, 2004; Zhu & Kraemer, 2003). Efficient navigation, which is the flow of the site due to its professional design; users need to be comfortable to move around the site easily; every page must have consistent navigation links, and safety in terms of security and privacy (Barua, Konana, Whinston, & Fang, 2001b; Belanger, Hiller, & Smith, 2002; Chakraborty et al., 2002; Elliot, Moّrup-Petersen, & BjoّrnAndersen, 2000; Lii et al., 2004; Turner, Zavod, & Yurcik, 2001; Zhu, 2004; Zhu & Kraemer, 2003). It must be customisable to each visitor (Chakraborty et al., 2002; Lii et al., 2004; Zhu, 2004; Zhu & Kraemer, 2003), efficient navigation (Elliot et al., 2000; Fitzpatrick, 2000; Gonza'lez & Palacios, 2004; Kim, Shaw, & Schneider, 2003; Lii et al., 2004; McCarthy & Aronson, 2000; Nielsen, 1999). It must also be simple, easy to use and well organised (Elliot et al. 2000; Fitzpatrick 2000; Gonza'lez and Palacios 2004; Kim et al. 2003; Lii et al. 2004; McCarthy and Aronson 2000; Nielsen 1999), have clearly defined security and privacy policies which provide secure payments and terms and conditions (Barua,
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Konana, Whinston, & Fang, 2001a; Belanger et al., 2002; Chakraborty et al., 2002; Lii et al., 2004). Additionally, online technologies improve a business’s immediacy and responsiveness which strengthen customer relationships while broadening its coverage in the marketplace (Kauffman & Walden, 2001; Ngai & Wat, 2002). Treacy & Wiersema (1997) have suggested that eCommerce transforms businesses into a customer intimacy discipline delivering not what the market wants, but what a specific customer wants. The customer-intimate company makes a business of knowing the individuals it sells to and the product and services they need. Thus through their unique value propositions they create the best solution for each customer, to cultivate relationships in order to build the business through customer satisfaction and ultimately, loyalty. The online user, however, cannot interact with the product. Thus a substitute is needed to enhance product knowledge. The provision of services on the website replaces the sales person from a traditional business. Users, therefore, need to know who they are dealing with and need help with product selection i.e. all the information they would have if they were shopping physically (Lohse & Spiller, 1998). Customer service is one of the key factors in determining the success or failure of eCommerce. A high standard of the customer service is the means by which the potential benefits of eCommerce are realised (Yang, 2001). Equally important is to include functionalities not only to engage customers but to keep their experience as positive as possible. Thus, eCommerce websites should include functionalities to share information, facilitate transaction, and improve customer service (Zhu & Kraemer 2003). Once the website is up and running, owners are interested in determining if their site meets their goals and performing to their expectations (Belanger et al., 2006; Schaupp, Fan, & Belanger, 2006). Owners however, perceive their success to be the value their website creates for their customers. It is also vitally important to review competitors’ websites to assess if they are outperforming and to check SEO rankings. If a competitor is ranking higher on search engines, SEO optimisation should be undertaken. To get an accurate indication of who is using their website, firms measure the website's traffic. By using tools such as Google Analytics it is possible to see where most customers are coming from, what they are doing on the website and how long they are doing it. The information obtained will give a good indication of which customers are visiting the website and what they are doing when they are there. The business needs to understand if their offering appeals to visitors. If it is not optimal, an adjustment may be needed, such as adding or deleting some of their online offering. However, poor sales may result from other problems related to the online offering’s effectiveness. Complete understanding requires looking at other areas which positively impact on users’ experiences that could influence purchase intention. According to Hong (2007), this is the “how” aspect of the offering which refers to the business’s efforts to make their website visible, usable and maintained (Fitzpatrick 2000).
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3. Marketing Owners need to understand that simply having attributes on their website does not mean that customers will visit. Customers seek websites that are relevant to their needs and tend to stay if the website meets these requirements (Ghandour et al., 2012). Online businesses like traditional ones require marketing. No matter how great a website is, if no-one knows about it is a waste of valuable resources. Businesses should be involved with activities such as informing visitors to the site in order to increase users’ experiences. Marketing activities by the business are required to make their website visible, usable and maintained (Fitzpatrick 2000; Thelwall 2001). This is how businesses leverage their investment in their website to create unique online resources (Zhu and Kraemer 2003). The issue of visibility is one that is easy for the inexperienced to ignore. An otherwise excellent website may be completely ignored because few potential customers ever find it (Thelwall 2001). Visitors can be directed to a website through offline advertising (Aldridge, Forcht, & Pierson, 1997; Dholakia & Rego, 1998; Drèze & Zufryden, 2004; Fitzpatrick, 2000; Turner et al., 2001) Aldridge et al. 1997; Drèze and Zufryden 2004; Hodges 1997) or by following a link from another site (Dholakia and Rego 1998; Drèze and Zufryden 2004; Fitzpatrick 2000; Turner et al. 2001). More importantly, SEO and search engine marketing (SEM) are the primary ways to boost visibility of the website (Ghose & Yang, 2010), or by modern social interaction media such as Facebook, Twitter, YouTube etc (Swamynathan, Wilson, Boe, Almeroth, & Zhao, 2008; Xiang & Gretzel, 2010). These activities allow you to target your lead search very precisely and therefore often result in better quality leads. Another essential practice is to keep the site maintained and up-to-date. Visitors will quickly leave a website that has not been maintained (Dholakia and Rego 1998; Fisher et al. 2007; Lii et al. 2004; Nielsen 1995; Thelwall 2001). Website visits and sales are can be generated by offline promotion (Lohse & Spiller 1998). A website that features price-based promotions (discounts, special offers and rebates) and nonprice promotions (what’s new) attracts visitors’ attention and increases their intention to transact (Song & Zahedi, 2001). Moreover, a website is intended to enhance the users’ knowledge. According to (Song & Zahedi 2001), the website should enable users to seek more information, customise the mix according to their needs, and provide payment and receiving options. 4. Internet Security Internet users have great concerns over how websites handle security issues. Serious consequences include abandoning the website and spreading negative words about the website (Chakraborty et al., 2002). Internet security concerns are associated with purchasing behaviour, satisfaction with the website, and the feeling of trust in the website. It is a common threat to businesses and it is important to recognise the threats and respond appropriately. Businesses need to consider all the steps needed to ensure that their online activities are conducted in a secure way. This also should be clearly conveyed to visitors of the website.
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Summary This paper argued that SMEs are still struggling to meet their customers’ expectations because they have limited knowledge of how to create a web-unique proposition appealing to the target market(s). We suggest that a successful website value proposition is as easy as answering these four basic questions: (1) What is the goal of website? (2) What functionalities are included in your website?; (3) What marketing activities are you undertaking for your website?; and (4) What security measures have you taken to protect your website?. References Aldridge, A., Forcht, K., & Pierson, J. 1997. Get linked or get lost: marketing strategy for the Internet. Internet research: Electronic Networking Applications and Policy, 7(3): 161-169. Amit, R., & Zott, C. 2002. Value drivers of e-commerce business models. In M. A. Hitt, R. Amit, C. Lucier, & R. Nexon (Eds.), Creating value: Winners in the new business environment: 15-47. Oxford: Blackwell. Barua, Konana, P., Whinston, A., & Fang, Y. 2001a. Driving E-Business Excellence. MIT Sloan Management Review, 43(1): 36-44. Barua, A., Konana, P., Whinston, A., & Fang, Y. 2001b. Driving E-Business Excellence. MIT Sloan Management Review, 43(1): 36-44. Belanger, F., Fan, W., Schaupp, L. C., Krishen, A., Everhart, J., Poteet, D., & Nakamoto, K. 2006. Web site success metrics: addressing the duality of goals. Communication of the ACM, 49(12): 114-116. Belanger, F., Hiller, J. S., & Smith, W. J. 2002. Trustworthiness in electronic commerce: the role of privacy, security, and site attributes. Journal of Strategic Information Systems, 11(3-4): 245270. Bremser, W. G., & Chung, Q. 2006. A framework for performance measurement in the ebusiness environment. Electronic Commerce Research and Applications, 4(4): 395-412. Chakraborty, G., Lala, V., & Warren, D. 2002. An Empirical Investigation of Antecedents of B2B Websites' Effectiveness. Journal of Internet Marketing 16(4): 51-72. Constantinides, E. 2002. The 4S Web-Marketing Mix model. Electronic Commerce Research and Applications, 1(1): 57-76. Deans, K. R., & Adam, S. 2000. Internet Survey Data Collection: The Case of WebQUAL. Paper presented at the ANZMAC Conference Proceedings, University of New South Wales, Sydney. Dholakia, U., & Rego, L. 1998. What Makes Commercial Web Pages Popular? European Journal of Marketing, 32(7/8): 724-736. Drèze, X., & Zufryden, F. 2004. Measurement of Online Visibility and its Impact on Internet Traffic. Journal of Interactive Marketing, 18(1): 20-37. Elliot, S. R., Moّrup-Petersen, A. S., & Bjoّrn-Andersen, N. 2000. Towards a Framework for Evaluation of Commercial Websites. Paper presented at the 13th International Bled Electronic Commerce Conference, Bled, Slovania.
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