The Internet grows and you can attract more customers

Internet growth is at eSpeed

Suffice to say that Internet traffic is doubling every 100 days. Whereas it took only five years for 50m US users to be online, it took nearly three times as long to rack up 50m telephone users. Every fundamental Internet growth curve is a hockey stick. It doesn't matter if we are talking about customers online, buying or conversion; the trend is the same. The Internet revolution is happening fast. The drivers of this exponential growth are fuelled by four mutually reinforcing factors. If you understand these factors, you may find the way to get ahead of the game.

Compelling customer value

As obvious as it sounds, make sure your start-up is more compelling to customers than the competitors. Consider new business models that will make it more convenient, a richer shopping experience, sell at lower or tailored prices, tailor products to meet individuals' needs, integrate commerce with content, have a deeper or broader range and develop a motivated community. As sites become more compelling, customers will be driven online to realise these benefits. Don't carve out a small share of the market value – create new market value by doing something different. The opportunities are limited only by entrepreneurs' ability to deliver the unthinkable and undeliverable. What will really drive your customer value to new levels?

Convenience. For 'time poor' people the Web is a convenient means of shopping. This convenience can revolutionise the 10% of the world's population who are disabled. It is no wonder that they represent one of the most eEnabled groups. What do your customers find inconvenient? How will you help them find the Holy Grail?
Shopping experience. This can be so superior versus traditional direct retailing. Catalogues can not rotate or zoom in on the product, you can't see the product in situ or in 3D, you can't try it on (for example Landsend.com) or see if it fits and a catalogue can't suggest which product you should be buying. It is no wonder that the average German AOL customer uses the net approximately 50% more than they spend reading magazines. How is your shopping experience going to be competitive versus the on- and offline equivalents?
Price. 80% of eCustomers who have made purchases online were motivated by low prices. As the early European eCommerce retailers battle to acquire customers faster than each other, this is likely to continue for some time. The increasing availability of 'perfect' pricing information in market forums and the increase in shopping robot sophistication will drive prices lower. Aggregated purchasing models (for example letsbuyit. com) and auction sites may increase downward pressure. The Internet is also enabling dramatic decreases in price as a new second hand market emerges. The Internet can drive sales of distressed and low-turnover inventory at higher prices than would normally be possible. In addition, a more granular understanding of individual customers will enable tailored pricing. What is your pricing policy? Is it tailored to the individual? Are discounts across the board or on specific products? Is your service so superior you can charge more?
Tailored offerings. Visit Barbie.com to understand how products and services can be tailored to the individual. At this wonderful site you can design your own Barbie, give it a name and get it shipped to your daughter. Ask yourself who you will tailor offerings to give outstanding satisfaction and loyal site evangelists – the true goal?
Integrated offerings. Many successful sites will integrate both content and commerce. Magazines are bought for content, but have consistently failed to integrate any selling. So when you see the perfect room in your home magazine, you can't recreate it, because you don't know where you can buy all the products – until now. Visit Goodhome for a good example of how the two can be integrated. Which off-line magazines are there that are similar to your business idea? How important is content? Where will you get it? How can you merchandise your selling within the content?
Breadth and depth of product offering. Be more competitive than bricks and mortar retailers. They are constrained in their range by the need to have high sales densities in stores. As Internet retailers are unencumbered by stores, you can have a broader and deeper offering. Wal-Mart has six times as many products for sale on its Internet site than in its stores. Although you should bear in mind that you will only achieve buying scale on best selling items, and your business model shouldn't be so complex that you can't roll it out into other European countries. If your product range is so broad that it involves lots of suppliers, you may start sacrificing customer service in your early growth years.
Interactive communities. FirstTuesday.com, TheChemistry.com and estart. com are rich communities for eEntrepreneurs. iVillage.com and Women.com female communities are some of the most visited on the Web. These communities represent the stickiest sites on the Web where customers continually return to their 'friends' for advice and interaction. Elements of community range from bulletin boards to chat rooms, expert advisors online to offline events, and greenhouses to share business plans to email clubs. How important is a community in your site? What will you do to create one?

Customer value is driving people online

Customers are adopting the Internet at an unprecedented rate driving the Internet to mass market status and opening dramatic opportunities for entrepreneurs to meet granular customer segment needs. Some businesses have chosen to wait for their customers to move online in bigger numbers so they can realise profits faster. Don't wait or you will be beaten to the opportunities. Laggards will struggle to make any profits at all, and they will be top of the 70% of start-ups that are forecast to wither away in the inevitable industry shake out.

Mass market medium. The Internet is no longer the preserve of techy nerds as the user profile normalises. New Web users in the US are normal people, split male/female with average wages and educational backgrounds. In Europe the normalisation of the Web population may be quicker as digital TV and mobile phone usage enables Web access for all. It is reasonable to assume that like the telephone, radio and television nobody will want to be without it. Before I receive complaints – I aspire to techy nerd status and the wealth they have generated for all.
Opportunities to meet granular customer segment needs. It used to be tough to have a beekeeping shop that could afford to offer advice and hold an inventory of beekeeping products because the population of keepers is so small and dispersed. After all, there are only 450,000 beekeepers across the whole of Europe. The Internet has enabled entrepreneurs to access small segments of customers with the required scale to make some money. 'The beekeeping ring' is not one site, but a network of sites enabling people to meet their specific beekeeping needs. They can buy and sell products, chat, diagnose diseases and even buy a few more bees. How granular will your customer segments be? Will their needs be met within one site or a network of sites?

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