Do You Fail To Sell Online Because You Ignore This Important Fact?

By Steve Jackson
Posted Monday, July 5, 2004

Do you struggle to sell enough to warrant the time and resources required to sell your goods through your website? Are you spending more money on your website than you earn from it? Is your website simply a contact point with a shopping cart that no-one buys anything from?

Join the queue because you are far from alone.

In the quest to resolve why this happens, we went out of our way to find out what makes people buy directly from certain websites and not from others. There is a huge gulf between relatively successful websites and those that are failures. According to our research, the successful websites convert 1% to 4% of their total visitors per month into direct paying customers, who buy products online with a credit card. The unsuccessful websites have similar designs and functionality in that they look good and accept online payments, yet they convert no or just about no visitors into direct customers.

What is the difference?

This is what we have been striving to find out for the last year, and when it hit us what the major difference was, we were kicking ourselves! The phrase “not seeing the wood for the trees” was one particularly relevant for us as online marketing experts. We were so blinded by what we were doing and so focused on measuring things that effect conversion, that the most obvious and simple fact eluded us for some time. But we got there in the end!

Trust is the difference

It’s that simple. If you look at companies that currently sell products or services online, and compare them to each other the way we did, you will find that the successful ones are those people trust. The ones that sell products and services successfully tend to be brands of huge companies that have gone online and sold their products, such as Dell, or companies that have become an online brand, such as Amazon. Now before you despair, you do not have to be a huge branded company to be trusted online, but you do need to earn the trust of your prospect base.

Understanding

Once we understood this, we became more scientific about the way we did our research. We found that the successful companies applied one of three kinds of strategy, depending on the company’s profile: branded companies, companies selling to an existing customer base, and most interestingly, non-branded companies.

1) Branded companies

Branded companies are the ones we all know about – the ones you see on the adverts on your TV, see plastered on banners all over the Internet, or hear advertised on the radio. They might have offices in a city near you! Basically, the companies sell something offline and use the web to complement sales. In rare cases, such as Amazon, they have grown from huge investment, or partnerships with real bricks and mortar companies, and over the years have developed into their own brand.

Can you still remember the day when people thought Amazon would never catch on? They stuck with it and formed trust through large-scale web advertising campaigns and by offering their prospects an obviously good deal. Initially, this was by offering books for sale at considerably cheaper prices than the high ones at the bricks and mortar stores. Then, because their service was of a very high standard (fast delivery, good returns policy, good refund policy, high quality merchandise) people realized that there was no reason not to trust them. Now ask most people about online books and they think Amazon before anything else.

In most cases, the sales sequence of the branded company goes something like this:

- The prospects know who they’re dealing with.

- The prospects trust the branded product or service, having heard about, seen or dealt with the company before.

- The company doing the selling backs up its sales with good customer service.

If your company is branded, or you’re responsible for a website sales strategy of a branded company, then there is no reason to doubt that online sales will complement offline sales, provided the three criteria mentioned above are met. We found that the branded companies that failed to do well online were the ones that had a bad website that was not customer focused, and that didn’t optimize their sites continuously through good measurement and experimentation.

2) Companies acquiring new business from old customers

Companies doing this kind of online selling are selling products successfully to an existing customer base. The reasons vary. Sometimes the seller offers the products for less because of reduced costs in selling online. Sometimes it is easier to find a specific product online due to an efficient website. Whatever the reason the sales usually come from existing customers. For instance, companies with foreign customers found it more efficient to serve customers from abroad with e-commerce. Wholesalers found a good channel to sell in bulk over the web and could automate processes so it became very easy for their customers to do more business with them. The selling companies capitalize on the medium by offering incentives to their loyal customers via email, clearing old stock for instance, or by discounting to test the reaction to new products. This kind of selling method is usually heavily supported by more traditional offline methods and the sales process online complements the offline methods.

The sales sequence is similar to that of the branded companies:

- The prospects know whom they’re dealing with.

- The prospects trust the selling company, having dealt with them before at least once via traditional offline methods.

- The prospects are being offered some incentive to buy online.

- The company doing the selling backs up its sales with good customer service.

If you’re responsible for the online sales of this kind of company, and if you match your strategy to the requirements above, then an effective online sales strategy should be highly feasible. The companies that failed were the ones who didn’t give their prospects any good reason to shop online or simply had poor websites. Most companies of this type used the web as another channel to help with customer retention and loyalty. The ones that did it best were the ones that were most successful.

3) Non-Branded companies

Companies who do not have known brands and are not trusted at all can achieve sales conversions at the same levels as branded companies. We found that by building levels of trust in the prospect base via education and then selling the product or service to the educated, and therefore trusting, prospect base, the same level of conversion overall can be achieved. The successful companies give away samples of their product or valuable information, in turn getting web visitors to give the company their email addresses and permission to continue the dialog. This allows companies to continue to educate their prospects.

The selling sequence is completely different from the first two:

- Cold prospect (arriving as a web visitor) will not immediately buy because he doesn’t know with whom he is dealing.

- Prospect is educated by the company through online content, email, articles, resources and free products.

- Prospect begins to know the company and his appreciation of the company grows.

- Prospect becomes a customer as he realizes the value of the proposition and trusts the company.

- The company backs up its sales with good customer service, thus encouraging viral marketing and good word of mouth.

This is the where most errors of judgment have been made when building effective sales channels through online means. Businesses have been copying what the big companies have done, thinking that merely by having a website which does the same as a brand name website, a similar level of sales conversion will be attained. Worse still, they have simply gone out and made poster sites with shopping carts with no thought as to why a web visitor would buy from them. Where companies tend to fail even using the correct sales sequence is in not providing valuable enough information as education, thus damaging their reputations before they have even built them up. So, if your responsibility is to develop the online sales strategy of a non-branded, unknown company, then our research shows that the above strategy, while work intensive, does work.

Summary

One simple fact remains true no matter what kind of sales and marketing strategy is used. If the buyer doesn’t trust the seller, then the sale will not happen. It’s been said that a prospective buyer doesn’t become a customer until he’s seen the brand seven or eight times. While I don’t have a statistic to prove it, I am 100% sure this is why McDonald’s and Coca Cola have less work to do on their websites to get good sales conversion rates. By mentioning those brand names in this article, I have helped them with their marketing. You have a burger and a can of coke pictured in your head right now. If you’re a non-branded company, you have a great deal more work to do to earn yourself that consumer trust. But then who said sales and marketing was easy? Non-branded companies have more work to get customers offline, so why should it be any different online?

About the Author
Steve Jackson is Editor of The Conversion Chronicles, a respected writer and author of the e-book Learn Before You Spend - 6 Ways to measure web traffic costing $30. You can get a free copy by subscribing to (http://www.conversionchronicles.com)