5 Factors that can favorably or unfavorably influence the stability and profitability of your new online business in 2017 are your target audience, product value, social media platform’s excellent usability, competition, a good understanding of evolving internet marketing strategies and their correct execution.
If you ignore them, you’re doomed.
Let’ see why.
This content rationally explains why you shouldn’t dare ignore these five factors if you’re starting or running an online business in 2017.
You’ll find case studies, statistics from market research and consulting groups like KPMG and Accenture. The content will help you understand consumer behavior online, their preferences, and what’s happening in the internet business space globally.
I have cited all information sources.
How These 5 Factors Will Influence Your Online Business In 2017?
1. How Target Consumers’ Sentiment and Online Purchase Behavior Can Influence Online Business?
Consumers from Africa, Middle East, Eastern Europe, Russia, Latin America, Australia and New Zealand made the highest number of online purchases of imported goods.
Source: The Truth About Online Consumers
Why? What encourages these consumers to shop online and import from other countries?
Could price be the reason? Or unavailability of certain products in their region is the reason that prompt them to purchase online and import from other international markets?
Did you ever try to know what types of products global consumers are buying online and importing?
If your product is not selling good in your local market, could it be a reason that your product price is not very competitive in a crowded market?
Sometimes products don’t do well because marketers fail to position the product as per consumers’ social identity.
What do I mean by that? Ok, here is one excellent example from Harvard Business Review publication.
All of us are part of different social groups. And all these groups have a distinctive identity. For example, I would like to identify me with ambitious working women.
I can never be a housewife living life as per other’s expectations or depending on others’ finance.
So, my social identity (ambitious working woman) likely influences my behavior. It will influence my perspectives, choices, decisions, and actions.
Does this matter for selling a product? Oh yes.
Being an ambitious career oriented woman, I will have a propensity to save money, invest in my business, or invest in things that can grow my business, buy products that can save my time, etc.
Consumers’ social identity influences their purchase behavior.
Successful professionals, like athletes and executives, can be seen to read the same kind of magazines or buy similar cars often.
I will give you an example.
Nescafe was very quick to understand the effect of social identity on consumer purchase behavior.
When Nescafe launched its instant coffee in the 1950s and positioned it as a time saver product, the campaign flopped. What could be the reason?
Remember, here we are talking about the 1950s.
Nescafe’s target audience were women of 1950. They were living the social identity of a homemaker. That was the decade when women used to feel pressured to be a perfect homemaker for their hardworking men.
So the target audience did not get the time-saving message of the marketer. Nescafe got that and changed its approach.
The new message of Nescafe said that the coffee would help women serve better coffee to their husbands and save them more time to do more for their husbands.
It sounds hilarious to me. But it worked for Nescafe. Their sales increased 12 fold by mid-1970.
The point is that if marketers can identify consumer’s social identity, they will be able to understand their priorities and so can position a product in a market accordingly.
Therefore, it’s essential that you know your consumers, understand their sentiment and purchase behavior before you worry about sales.
2. How Product Value Can Influence Your Business?
I read a fantastic Inc. article.
It said people like to buy products that can help them get a job done. The content included a McDonald’s case study.
McDonald’s wanted to increase its milkshake sales. The company hired a Harvard University professor, Clayton Christensen, to figure out how to do that.
So Clayton and his team conducted a study. They observed that McDonald’s most milkshake buyers were male, and early morning buyers.
They interacted with the customers and asked them what made them buy a milkshake early in the morning.
The summary of their response is that they wanted a drink which could keep them full for a long time. And the milkshake of McDonald’s was doing that job well than any other alternatives like banana, bagel, Snickers or Donuts.
So what McDonald’s did?
McDonald’s changed the milkshake formula. They made it thicker so it could do its job even better. As a result, sales of the product improved dramatically.
Source: Why Do People Buy Things?
So when it comes to your online business, do you know that consumers need the product that you intend to sell?
If you’re not taking this aspect seriously, you’re not in the online entrepreneur’s league.
Your product sale won’t improve. And your business won’t grow due to lack of revenue.
3. Existing Local and Global Competition For Your Online Business
You must have used one type of product from two different brands, right? Why did you shift from one brand to another?
The closest reason would be that you found one better or more beneficial than the other.
Likewise, the product you’re selling or thinking of selling, someone else might be selling already. Someone else must be running a business like yours.
No product or service is unique nowadays. So, did you make some efforts to study your competition?
If you’re launching a product in a market where thousands of similar businesses exist already, you have to carefully position your product with a USP (Unique Selling Point).
If you randomly start an online business with no research or idea about what exclusive your product or service could offer to target audience, you’ll ensure struggle, sluggish business growth and return.
4. Social Media and Its Audience
Consumers often use social media to get recommendations or feedback for products.
The KPMG study found that both young and old age consumers prefer to share their feedback on seller’s website or Facebook.
Source: The Truth About Online Consumers
So, did you improve your understanding of social media and its optimum use for the growth of your online business?
5. Creative Online Marketing Strategies
Your business will die in isolation if you do not adapt to the evolving internet marketing strategies.
Well, no one marketing tool, tactic or strategy plays a dominant role anymore.
Now marketing is a constant experiment and a combination of tools, tactics, and strategies.
You will need to learn and implement social media marketing, neuromarketing, SEO techniques, video marketing, content marketing, influencer marketing, etc.
Yes, a lot to know and experiment. You will have to choose, combine, design, execute and test marketing strategies based on what works for your target consumers and your product.
You will have to make informed decisions.
And if you do not understand the importance of these five aspects, running a profitable online business will always remain a dream.
I have many things to learn about consumer psychology, consumer behavior, and online marketing. Are you struggling with any of these aspects?