What is Web Strategy and Why is it Important? 10 Questions to Help Explain

Do you think of your customers as one big group or do you categorize them?

Summary: I have watched friends build a website to generate income with very little planning; they have an idea, and the next day they're building the website. But I've watched those same friends start a business and immediately start with a business plan before doing anything else. Why the difference? It seems that planning is an expected part of successful business strategy. Why isn't planning considered equally important for a website? In this article we'll discuss what web strategy is, questions that should be answered as part of a successful website strategy, and we'll talk about why such a strategy is important.

So what is web strategy?

I'll start with a rather pithy definition: Web strategy is about looking at and anticipating root causes of online success or failure and coming up with solutions to address those root causes instead of superficial solutions.

Perhaps that still doesn't make sense; let's try to explain it another way?

Put simply, web strategy is like a business plan, but it is the plan for your website. In it you outline a road map for your website. You outline obstacles and challenges you expect to face, your plan to overcome those obstacles, and goals that will determine whether you've been successful.

Do you really need a web strategy?

You may ask, 'Why is planning important?' An ancient proverb states, "The plans of the diligent one surely make for advantage, but everyone that is hasty surely heads for want." Good planning ultimately leads to business advantages. Similarly, good website planning ultimately leads to advantages for your website versus competing websites.

But what types of questions are answered as a part of a web strategy?

Let me provide some examples of web strategy questions and see if this helps you to understand what web strategy is about:

1. What are the categories of customers who use your website? Thinking of all your customers in one big group is an example of having no website strategy because customers are not all the same. For example, a website selling books might group their customers into categories like as in the chart at the top of this article.
   
2. Does your website address the needs of each category of customer in a satisfactory way? Many website owners think primarily about their own needs, for instance getting a sale, and thus the website reflects this. Just as we hate salesman that are only out for their commission people hate websites that only sell and otherwise aren't helpful at sincerely answering questions or concerns the potential buyer might have.
   
3. What are the top 10 questions customers ask when they reach your website? How do you answer each of those top 10 questions? Websites that fail to answer the most important customer questions won't get sales because it is guaranteed you have a competitor on the internet that does answer his questions. Since this is the case, why would he buy from your website?
   
4. On each page of your website, what is the desired action you want the user to take on that page? If you don't know this, how can you tell your customer what to do? If you can't tell your customer what to do, how will he know what to do next? If he doesn't know what to do next, he will just leave your website.
   
5. What is considered a successful visit on your website? What are you doing to ensure that each visit to your website is successful? Are you trying to get a phone call, a newsletter subscription, a purchase? The answer to this question should greatly affect your entire website's layout and design.
   
6. What is the average conversion rate for your industry and what is the target conversion rate for your website? If you don't know your industry conversion rate, then how can you set a target for your own conversion rate? You can't just pull these numbers out of the air. If this data is not available, you need some other logical way of determining a reasonable conversion rate.
   
7. Besides relying on search engines, directories, and advertising, what is your six month plan for increasing the number of visitors to your website? Millions of websites are competing to get on Google Search, Yahoo Directory, etc. If you do the same thing everyone else is doing, you're going to get the same results. The average website fails. So what will you do differently than those failing websites did?
   
8. What are the goals for your website in the next 1 month, 3 months, 6 months, and 1 year? Your goals should guide your activity every day. Without goals you are like a runner running without a destination. How will he know which direction to take his next step?
   
9. What lessons have you learned from your competitors in the last 6 months and how do you plan to apply those lessons in the next 6 months? Your competitors are trying thousands of different things to find success. The smart entrepreneur learns from his competitors. Sam Walton, the founder of Walmart and Sam's Club, started Sam's Club after he visited Sol Price's Price Club (now named Costco). He way always learning. You should be doing the same by using your competitor's websites regularly.
   
10. What reason does a visitor have to tell others about your website? The best marketing is word-of-mouth. Is there anything about your website that a customer would have reason to tell his friends and colleagues about? To get an honest answer, you may need to ask someone else for their opinion. This is probably the most important question you can ask.
    

I could continue to list questions, but hopefully you get the point. Web strategy is about formulating answers to questions like the above. To put it another way, a successful web strategy can be a formal document, just like a business plan, that outlines your plan for the growth and development of your website and sets clear goals that will allow you to determine whether you were successful or not.

Your Plan is Your Map

If you don't have a web strategy, then you're like a traveler on a road trip without a map and without a route. You might stumble upon your destination, but your journey is going to be long and difficult full of wrong turns and dead ends. However, by developing a web strategy you're going to be like the traveler that has both a map, and a well planned route. You will reach your destination, and you will reach it quickly and you will enjoy the scenery along the way.

Discouraged? A Successful Website Requires Realistic Goals

What are the repercussions of having unrealistic business goals?

Summary: In this article we will discuss how to establish realistic goals for a website and why we do so. Realistic goals are important for a website owner if he is going to have success. Realistic goals accomplish two objectives. First, realistic goals lead to constant, measurable progress. Second, realistic goals provide motivation when achieved. Whereas, unrealistic goals can lead to wasted effort and discouragement.

What is wrong with having unrealistic goals for your website? Unrealistic goals can lead to discouragement. Discouragement can lead to a loss of joy and, worse, giving up altogether.

Sometimes in our efforts to reach out for as much as possible for our business, we reach out for so much that we overstretch ourselves.

Therefore, to keep your joy, and to continue to grow your company, you should always set goals that force you to stretch but that also allow you to see steady progress.

What makes a goal realistic? And how can your goals help your company make steady, measurable progress?

Here are some guidelines:

1. Realistic goals should be in-line with what companies in your industry have been able to accomplish historically.
2. Your goals should allow time for your efforts to bear fruit.
3. Realistic goals should reflect deep planning and not shallow thinking.

Let's briefly expand on each of these three points.

Realistic goals should be in-line with what companies in your industry have been able to accomplish historically.

If your goals fail to take into account industry averages they are more than likely going to be missed.

For example, if the average conversion rate in your industry is 5% and your website's current conversion rate is 6%, would a goal of having a 25% conversion rate be reasonable?

Google Analytics has a new benchmarking tool that helps companies to benchmark their websites against industry averages. Consider investing in tools like this or manually gathering data published about your industry. Then, armed with industry knowledge, set realistic goals.

Your goals should allow time for your efforts to bear fruit.

The farmer can not plant his seed Monday night and expect to reap Tuesday morning. Similarly, reaping the results of your effort to increase traffic, revenues, or profit requires time. Often noticeable improvement requires consistent effort for years not months.

Don't try to fool yourself into thinking that you're going to increase your monthly revenues an order of magnitude through a brief three month burst of activity. Though some websites manage to buck the trend, on average websites seem to take 2-3 years of consistent effort to gain traction. To read a real life example, click here.

How long are you currently planning on waiting for your efforts to yield significant results?

Realistic goals should reflect deep planning and not shallow thinking.

Many website owners obsess over only two numbers, traffic and revenues. This obsession is shallow because it fails to look at the root sources of traffic and revenue.

There are myriads of factors that go into a successful website (e.g. quality product selection, good site design, educational content, quality customer service, well written product descriptions, etcetera). Don't just set traffic and revenue goals as a knee jerk reaction. Try setting goals for improving very specific parts of your website.

For example, a study by Jakob Nielsen on website usability found that users are 22% more satisfied when website content is written in a concise, objective and scannable manner (Nielsen, 1997). Can you set a goal to re-write all of the text on your website to make it more objective (e.g. remove any biased or overly optimistic statements)?

One of Jack Welch's most famous actions when he became CEO of GE was to get GE out of any business where they weren't #1 or #2 (Wikipedia, 2008). This allowed GE to focus its energy on its strengths. Can you do something similar with your website? For example, can you set a goal of trimming back your product selection to only products with margins at or above your industry's average?

Paying attention to the three points discussed in this article as you set goals for your website will help you to set realistic goals that continuously move your website forward. By setting realistic goals you will avoid discouragement. More importantly, your steady, measurable progress will serve as personal motivation to continue working on building a successful business online.

References:

Nielsen, Jakob. 1997. "How to Write for the Web"
Wikipedia. 2008. "Jack Welch"

How can I analyze the reasons for a low conversion rate?

Sometimes in-depth research is required to generate an accurate comparison between your website and your competitors'.

Summary: The past two articles have emphasized the importance of product mix in determining website success. How can you figure out if a low conversion rate is due to a poor product mix versus a bad website? This question will be discussed in this article.

How can you identify the reason for a low conversion rate? As I mentioned in a previous article stressing the importance of analytics, you can't measure yourself against yourself. The best way to measure your success and identify methods of improvement is to benchmark your website against your competitors.

What type of benchmarking do you need to do?

Since this article is discussing website conversion rate, the answer is to compare your conversion rate to the conversion rate of your competitors. For example, do you sell Caterpillar tractors? What is your conversion rate on those tractors? What is your average competitor's conversion rate? Even better, what is your best competitor's conversion rate?

If your conversion rate on a product is 8%, is that good or bad? Well, it always depends on the average for your industry. If the average conversion rate for that product, in your industry, is 3%, then you're doing great. If the average conversion rate for that product, in your industry, is 15%, then you have some serious catching up to do.

What conclusion should the data help you reach? Here are two conclusions:

1. If your conversion rate is below the competitor average, then you probably need to improve your website.
2. If your conversion rate is low, but at or above the competitor average, then improving your website is unlikely to help generate a higher conversion rate. Perhaps you need to sell a different product. You're already at or above the industry average. Unfortunately, this product doesn't look like it sells well in general.

Unfortunately, figuring out the conversion rate for your competitors can be difficult. It may require some in-depth research. Each company will likely have to find industry specific resources in order to do their own analysis.

(Now that we are on the subject, I am interested, myself, in finding this data. I will do my best to dig around and see if there is a conversion rate research database out there. However, I doubt there is one. Nevertheless, if you are aware of one, I would appreciate your notifying me about it.)

UPDATE: I've found a wonderful database of conversion data at http://index.fireclick.com/. Read more about Fireclick's web site conversion rate database.

In conclusion, make sure that you are benchmarking your conversion rate against your competitors and not against yourself. Benchmarking how you rank in your industry is the only objective way to identify whether a conversion rate is low because the product you're selling just doesn't sell well or if you have a problem with your website and marketing approach. By doing this benchmarking you allow your business to make much more intelligent decisions in product selection and web strategy.

Great Product Selection Trumps Elegant Website Design. Re-emphasized lessons from The Popcorn Factory

There is nothing outstanding about The Popcorn Factory's website. The key is their product selection.

Summary: The other day I wrote an article that analyzed the key reasons for The Popcorn Factory's astounding 29.5% conversion rate in December of 2007. To translate, this conversion rate means that nearly one out of every three visitors to The Popcorn Factory's website actually bought something! Today, I want to re-emphasize those lessons in a more concise manner so that you can improve your own site conversion rate.

After looking at the success of The Popcorn Factory, and the relatively simple website they use to generate this success, the natural question is, "does website design really matter?" The answer is No...to an extent. How can we show this?

First, from the standpoint of aesthetic beauty, The Popcorn Factory website is not one of the more attractive websites out there. It's design is very plain, and really not very attractive compared to the really good sites. There are no pictures of beautiful people eating popcorn; there are no animated videos; the color scheme is a rather bland pastel purple, dull pink, and red.

Secondly, there are few calls to action and no empty marketing slogans like, 'Putting quality first.' or, 'Perfectly popped popcorn every time.' They do have an Easter sale currently on the website, but it doesn't scream at you with flashing lights or multiple exclamation points!!!!

Put simply, the website does exactly what its supposed to. It sells popcorn. No more. No less. And sell popcorn it does, very well in fact.

As mentioned, the key lesson from The Popcorn Factory is the importance of choosing products that are already primed for success. Don't choose a product that will require you fight an uphill battle just to get customers interested in it.

Warren Buffet has been known to say, 'Give me a great [profitable] industry and poor management any day, over great management and a poor [unprofitable] industry.' What did he mean? He meant that a profitable industry allows even the worst managers to have a measure of success. Whereas, an unprofitable industry will make even the best managers look like perennial failures.

The same applies to websites. As an owner, it is better to have a poor website selling a great product everybody wants, than to have a great website selling a product nobody wants. The website selling the in-demand product will win every time.

Does this mean that anything we can say about website design then is invalid? Absolutely not. If the Popcorn Factory improved their website, no doubt they would also improve sales. Warren Buffet would not turn down great managers in a great industry. That's a one, two punch. Similarly, no company would be wise to turn down having a great website, just because they're already selling a great product.

What's the conclusion? Absolutely, review your product selection, and make sure you're selling products that the customer already needs or strongly desires. Once you've reviewed your product selection once, review it again. Keep doing it until you know your product selection is excellent. Then, once you've done this, start investing in improving your website to further improve your conversion rate. Don't do this process in reverse.

Review your products, then improve your website. If you do these two things, in this order, you put yourself in position to maximize sales growth and profits.

What gave The Popcorn Factory the highest conversion rate on the internet?

The Popcorn Factory's basic homepage doesn't explain their high conversion rate.

Summary: In December of 2007 the Popcorn Factory had the highest conversion rate, 29.50%, of any major website (MarketingCharts.com, 2007). For most retail websites, a conversion rate of 10% is considered excellent. Anything below that is considered average (Eisenberg, February 3rd, 2008). What can we learn from The Popcorn Factory to help us improve our own conversion rates? In this article we will answer that question by looking at one very important reason behind their success.

No doubt there are many reasons that The Popcorn Factory has one of the highest conversion rates online. However, as I researched this article, one reason kept coming up, product selection. Not all products sell well online (Warren, 2000). The Popcorn Factory has done a good job of identifying what sells well online and investing their resources in those products. They have done this in the following ways:

1. The Popcorn Factory sells a product the customer already wants to buy.
2. Their online product mix is specific to online tastes and is different than their offline product mix.
3. Their products are well suited to being delivered by mail.

Let’s discuss each of these points one by one.

The Popcorn Factory sells a product the customer already wants to buy. If you manufacture a product, improving on this point may be difficult for you. However, if you are an online retailer retailing other vendor’s wares, then this is entirely within your control. The simplest way to increase your conversion rate online is to start with great products. This quote bears that out:

“People's motivations trump any great or poor [website] design. If people have made up their mind (persuaded themselves), that they want to buy flowers or popcorn from the particular retailer then they'll work through almost any poor shopping process…” (Eisenberg, January 29th, 2008)

How can you improve your product mix? Put extra effort into the product selection process. Read product reviews, see what people are talking about. Are there any trends you can take advantage of? Product strategy is not my area of expertise. Nevertheless, the key point I want you to take from this article is that bad product selection will trump good website design. So don’t invest more money in improving your website or increasing your online marketing if you don’t already have products that the customer desires. After all, we can put lipstick on a pig, but it’s still a pig. A better website might just end up being a better color of lipstick for a litter of ugly piglet products.

That brings us to the next point.

The Popcorn Factory’s online product mix is specific to online tastes. The Popcorn Factory has a print catalog as well as their website. Cheryl Zatz (the Vice President of Marketing for The Popcorn Factory as of at least October 2006) made clear in a ComputerWorld.com case study that, “the Web site doesn't simply replicate the paper catalogue: the number of products is limited, to avoid creating navigation problems for users, but the site does include a number of exclusive lines.” (Warren, 2000)

If you already sell products offline, moving online may not be as simple as putting pictures of your products on your website. Here the Popcorn Factory specifically faced a navigation issue. They didn’t want to overwhelm users. Nevertheless, not all products are tailored to the online world. For example, a clothing store that sells suits and dress shoes will probably find dress shoes are far easier to sell online than suits. Clothing that needs to be tried on first may be harder to sell than shoes that have fairly universal sizes. Such differences may affect policies such as return policies. Return policies online may have to be different than the return policy you’ve used successfully in the past.

These are just some of the things to think about. There are probably dozens of factors I could list. However, hopefully you see the point. When you decide to go online make sure you think through how the customer’s preferences are different online than when he is buying from you in your store or even over the phone. Your online policies, prices, product descriptions, may need to be different.

This brings us to our last point.

The Popcorn Factory's products are well suited to being delivered by mail. The Popcorn Factory started as a mail-order business, so their products are already nicely suited to being delivered through mail. What does this mean for those of us who don’t have mail-order businesses to learn from? We can take a look at the products we’re trying to sell online and make sure they really fit the online purchasing model. For example, the majority of cars will probably always be purchased locally. The internet is a powerful marketing tool for cars, but most customers want to test drive the car they ultimately buy. On the other hand, tin cans of popcorn are very easy to sell online. The cost is low; if you don’t like the popcorn, you’re not out a lot of money. Popcorn is a pretty standard product that is hard to mess up, so there isn’t much fear of completely botched service.

Thus, it is wise to ask yourself the following questions: Do customers understand your product well enough that they would feel comfortable buying it online? Is your product’s value proposition only convincing when seen in person? All of these factors will affect your conversion rate. Again, these factors are far more important than the overall look and feel of your website.

In conclusion, product selection on your website is going to have a larger impact on your conversion rate, than even the best website design can have. The Popcorn Factory achieves a high conversion rate, not because of outstanding website design, but because of outstanding products. Focus intensely at improving the product selection on your website and you will naturally see an improved conversion rate.

References:
MarketingCharts.com. 2007. “Top 10 Online Retailers by Conversion Rate - December 2007”
Eisenberg, Bryan. January 29th, 2008. “Top 10 Online Retailers by Conversion Rate: 12/2007”
Esenberg, Bryan. February 3rd, 2008. “Top 10 Online Retailers by Conversion Rate: An Analysis”
Warren, Liz. May 18, 2000. “Positive approach to e-business will pay dividends for SMEs”

Website goals are required to assure a successful website - Lessons from my January 9th Class

Obtaining a successful website requires more than hiring a graphics designer or purchasing a nice template.

Summary: Many of the website packages that get sold don't work. Some website design companies do not hesitate to sell you a failing website and leave you with a dud. How can you protect yourself? Before you spend money on a website, you must set goals outlining exactly what your website must accomplish. You can not expect your website design company to build you a site that works without your guidance.

I typically start all of my classes with some conversation about why students are attending. I was very happy to meet Mary at my class on January 9th. We conversed for several minutes, and one topic was particularly interesting. She has been looking at the website solutions being sold to businesses, and she asked me, "Does that stuff really work?"

I smiled, because it is an excellent observation. No. Most websites don't work. If they did, I would not need have been interested in helping business owners improve their websites.

However, I want to point out that all the blame can not go to the website design vendors. Too often, companies asking for a website have no real idea what their website should accomplish beyond saying, "My website should help generate sales."

This is true, a good website should help generate sales. But how this is accomplished for each company is going to be vastly different. Most web site designers have limited industry specific knowledge. Therefore, the company requesting the website must provide many of the deepest insights as to what makes a successful website design for their specific company.

How can your company do this? You must clearly identify the goals of your website, and hold your website designer to these goals.

What are good goals and what are bad goals? Let us examine...

Good goals: A good goal ties directly to customer's needs and differentiates your company from your competitor.

1. My website should answer the top questions my customers will ask.
2. The homepage should unambiguously state what my company does.
3. My website should be clearly organized and each page should be uncluttered.
4. My website should contain industry and product specific information demonstrating my expertise and explaining my products and my services.
5. The text on my website should contain all of my critical keywords at least once so that Google can index them.
6. My website should contain all of the properly formated Title, Keyword, Description, and Heading tags that Google uses.

Bad goals: A bad goal is one that is prone to different points of view, highly subjective, and does nothing to differentiate you from your competitors. For example, goals such as...

1. My website should look attractive. One man's beauty is another's ugliness.
2. My website should be easy to use. That all depends on what you consider easy to use.
3. My website should turn up high in Google. This is easier said than done. Your focus should be to have all the appropriate HTML tags used for your website and make sure your site text contains your critical keywords.

Before you spend money on your website, please identify the key goals for your website. Once you have identified these key goals you will be able to provide more productive feedback to your web designer. If you are designing the website in-house, specific goals will help you guide your own designs more accurately.

By planning well in advance, and outlining specific goals for your website, you will make sure that the money you spend on your website is money well spent. You will also help your designer to give you a website that is going to work.