There are more than 5 billion web pages with millions of businesses trying to do business online. But only a few have succeeded while the rest are mere billboards on the internet superhighway.
These few have succeeded in overcoming the value hurdles by constant innovation.
Constant and never ending innovation is the key to creating value in business more so when your business is totally web based and online. Why is it more important in online business than traditional brick and mortar businesses?
Let us look at a few key components of value creation in traditional vs. online business
Human Presence in Enhancing Value
Traditional business has one major advantage. It is the ability to communicate one to one and personally with the customer. While communicating directly with the customer by a sales person, the owner or the resource person, the personality of the person is added to the overall value of the goods or services.
A smile, witty presentation, on the spot analysis of the need and matching the product benefits to the need of the customer, a feel for the product and services enhances the value of the product for the customer.
Online business has very little scope to add value by physical presence either of the product or the person promoting it. To make up for the personal charisma and interaction, online business content has to be highly conversational, witty with personalized writing styles or audio/video to get the same effect and results.
Technology as Value
Traditional business is able to get the attention of the customer by projecting a vision of the technology and its possibilities through personal contact. Even a moderate technical improvement is made more visible to visiting customers
Online business is heavily dependent on technology. But technology has the disadvantage of becoming a commodity as everyone catches up and the differentiation vanishes. Enhancing value through technology requires constant innovation to stay ahead of the pack. Technology as a commodity may be overcome only though a human face. You may have the ability through autoresponders to send thousands of emails in an instant but few online businesses can write an intelligent, witty, one to one personalized communication to effectively leverage the autoresponder..
Knowledge as value
While internet is a huge repository of knowledge and could act as the major tool for value enhancement, the volume of information or knowledge available can also become its major disadvantage. Everyone online knows that there is a huge amount of knowledge that one has to assimilate quickly. The person therefore scans the information online mechanically and quickly, not comprehending fully the information he is scanning on the monitor screen.
Another disadvantage is knowledge cannot be applied selectively to the online customer. All knowledge can be made available online but it is the discretion of the customer to recognize, choose and use it for value enhancement. Therefore it is a highly perishable commodity online achieving very fast obsolescence.
Offline business has the advantage of communicating knowledge and information in a form that is relevant. The availability and access to knowledge, though limited, is used selectively and tailored to customer requirement.
Change and innovation as value
Change and innovation are better perceived offline in real life situations than online. Any innovation or change takes time and effort on the part of the online businesses to reach to the customer in spite of technology as customers may choose not visit the web pages or emails may be filtered out.
A change from a staircase to an escalator, automatic doors, a facelift to a building or storefront, a better billing system are all far more appreciated than online innovations.
An online business has to constantly innovate in terms of sticky online content to keep the customers coming back. The web content has to be designed and written very intelligently to achieve the same impact as a simple handshake in offline business.
Is it the reason why more online businesses fail?