 |
 |
 |
 |
 |
 |
 |
|
Why So Many Dotcoms Fail The World Wide Web is booming. More and more people are logging on and they are spending more and more money. Yet, according to the trade pundits, 95% of all e-businesses fail. According to Gartner, by the end of 2001 more than 70 per cent of multinationals will have failed to plan a coherent approach to e-business, and may be significantly less competitive as a result. What is causing so many failures? I'm sure the reasons are many and varied, but most of these failures can be linked to four major causes. A Good Business Model From the word go, your site or dotcom company should have a strong business model. In fact multiple revenue streams work better than a single revenue stream. Just getting traffic and attracting eyeballs is not good enough anymore. If your business is going to take 2-3 years to start making profits on the web, then the business model should be revised. The costs and expenses of running the dotcom business during those 2-3 years will be very heavy and it will not be easy for the dotcom company to survive.
Many
newcomers to E-Commerce try to market their e-business as though it
is a local brick and mortar business. Marketing an online business
is not as simple as hanging out a sign, placing an ad in the Sunday
paper, taking a listing in the Yellow Pages, Internet marketing must be directed toward a global consumer base and the advertising must be designed to catch and hold the consumer's attention in a second, as they are surf from site to site. Instead of getting listed in the Yellow Pages, you must get listed in all of the major search engines. Instead of placing ads in the local newspapers, you need to place advertisements in ezine and on classified sites. Instead of neon signs and billboards, you need banner ads on as many sites as possible. E-Commerce is faster paced than offline businesses and it requires a marketing plan that matches this pace. You have to learn and adjust your marketing mindset to these new rules. Dysfunctional Web Sites According to me, a dysfunctional site is any site with a design flaw or chronic technical problem that renders it either difficult or impossible for the consumer to use. For example: Last week I visited a site that sells marketing software. I liked what I saw and decided to purchase one of their products, but I could not find their order page. I clicked on link after link without success. After several frustrating minutes, I left the site without buying. How or why anyone would make it so difficult for his or her customer to make a purchase is beyond me. Maybe they don't realize it is so hard to find their order form. Could they have forgotten to include one? Whatever the reason, this is a major design flaw. New Economy firms will lose out to former bricks-and-mortar companies on the internet if they ignore basic business principles such as making sure customer orders are fulfilled. Many design flaws are not as flagrant as the previous example, but are still put offs to potential customers. Like a site that is difficult to navigate or has a color scheme that gives the visitor headaches. Examine your site carefully and see if you can spot any of these flaws. Technical
dysfunctions such as excruciatingly slow loading pages and sites that
experience a lot of downtime are a turn off to your potential customers
as well. Down time is the fault of our web server and beyond your
control, but if the A Lack Of Commitment Many online entrepreneurs don't give their business ventures enough time to succeed. They set up shop, toss out a couple of advertisements and if the money doesn't start to come in right away, they discard it and move on to try the another venture, which, will also fail if they make the same mistakes. A business, online or offline takes time to grow. Make the most of the time, you have to make adjustments in your original business plan. Don't be so quick to give up. Perseverance is the "secret" to many success stories. And if your business does fail, search out the reasons and learn from them. But, never give up without a fight. STATISTICS Reasons why so many dotcoms are failing? Poor
Management 15% |
