SUMMARY
Our example company, let's call them 'We Be Parts', wishes to increase revenues
through repeat sales to existing customers -- their resellers. They plan to meet
this objective by improving customer service. Ancillary benefits that help to make
the business case include reducing costs while also supplementing existing marketing
efforts.
After 'Building the basic site', the company uses the feedback from their customers and
other site visitors to enhance the business case and to further develop the website.
A description of the subsequent activities includes anticipated benefits from the
add-on features as well as the associated incremental costs.
The following table contains a range of market prices for the design and implementation
of this small business website. Click on each 'Activity' title for a more detailed
description of the anticipated benefits and capabilities for each website enhancement.
| Activity |
Date* |
Low |
Median |
High |
| Building the
basic site |
Jun-98 |
5,645 |
44,500 |
653,000 |
| Adding databases |
Mar-98 |
3,000 |
11,250 |
42,970 |
| Adding eCommerce |
Feb-98 |
8,000 |
25,000 |
84,600 |
| Adding cookies |
Mar-97 |
1,000 |
2,250 |
6,000 |
| Adding
personalization |
Sep-97 |
N/A |
10,000 |
N/A |
| Adding chat |
May-98 |
150 |
3,500 |
36,000 |
| Subtotal |
|
19,045 |
100,800 |
835,070 |
| |
|
|
|
|
| Hosting
& maintenance |
Jul-98 |
|
|
|
| |
Monthly |
400 |
2,500 |
60,000 |
| |
Yearly |
4,800 |
30,000 |
720,000 |
* 'Date' refers to the publication date of the respective market
research.
BUILDING THE BASIC SITE
The Case
We Be Parts represents a business-to-business distributor of products to construction
contractors (i.e., widgets, sprockets, etc.). The enterprise wants to be "on
the Web," but management does not fully understand what this entails.
The primary business case depends on obtaining more repeat business by improving
reseller loyalty through improved customer service. The initial website
will provide easy access to information about the company's products and its
customers. A second objective will be to reduce publication costs, both material
costs and payroll (i.e., staff time). A third objective will be to provide company
information to a greater audience by using the Internet.
The site plans
The basic site will consist of about 20 web pages, featuring tables of parts
specifications and corporate information. The company has already developed logos of
its own that it would like to incorporate into the site. This will reduce the cost
of implementing site graphics, primarily in the area of graphical design.
In the back office, the enterprise needs some easy way for the staff to update
documents on the site without having to learn too much new technical stuff, such as
programming languages or file transfer protocols. This will require the purchase of
Web Publishing software, as well as Internet access services (i.e., dial-up access by
telephone and modem). Also, the company will require some electronic mail and FAX
software to operate on their existing equipment.
Comments
The company does not plan to purchase any additional computing equipment. To
date, however, the company has invested very little in networking technology to improve
customer service or staff productivity. Throughout the engagement, management and
staff will need a considerable amount of tutoring and initial support.
ADDING eCOMMERCE
The case
We Be Parts has been happy enough with their basic website to start adding
enhancements. Resellers say they like the site and the business case still seems
strong. So, the company now wishes to leverage their existing product catalog and
add electronic commerce to its website. This will allow vendors to order parts from
the company online, using the Internet.
The primary business goal has not changed: higher repeat orders and reseller loyalty
through improved customer service. We Be Parts plans to provide even better service
to its resellers by through the convenience of online ordering, 24 hours per day, 7 days
per week. The overall business case also depends on more significant cost savings by
shortening the required office hours for staffing telephones to receive product orders
(i.e., staffing costs).
The site plans
These site additions will consist of another 20 web pages, plus an additional page
where resellers can select products, indicate an order quantity and, finally, submit the
order form. To keep the ordering process relatively simple from a technical
perspective, the company wishes for the system to convert the order into a FAX and, then,
to send it to the company office for final processing. In addition, pictures of
items will now accompany the list of parts specifications.
Comments
We Be Parts has reduced implementation costs for this add-on by having already prepared
a copy of all product images on a photo CD.
ADDING DATABASES
The case
After implementation of online ordering, the company has been receiving order requests
from end-buyers in addition to their resellers. This came as a bit of a surprise.
Consequently, We Be Parts now wishes to add site features that will assist with market
research. Management suspects, and hopes, that a revised business plan can be
developed. The new plan would include the custom tailoring of goods
and services based on specific market niches.
The site plans
A simple database capability will be added to the website that provides a user registration feature. Users of the website will first need to complete an
online form that will be stored on the database.
Subsequently, the database will be searched or sorted by We Be Parts
management to find basic demographic information about the website visitors, specifically
the first-time buyers.
Comments
Later, the user registration feature can be expanded to limit site
access, to provide personalized service or to track visitors throughout the website.
ADDING COOKIES
The case
Management has become pretty excited about the prospect of selling to consumers in
addition to resellers. In an attempt to capture more of the first-time buyer market,
the company has added more promotional material to their website.
However, website usage, and sales, from the resellers has been declining after steady
increases in the past. After contacting a few of these merchants, We Be Parts
learned that some of its resellers dislike all of the "clutter" that has been
added to site. They find it increasingly difficult to use and are not happy with how
long it takes.
The screw up
With the excitement dampened, the We Be Parts President, Harry Squatter, was
commiserating over a few beers with one of his long time friends that was also one of his
resellers. Really getting disillusioned by all this 'Web stuff', Harry felt
that the website investment was a bust. Even though it had been profitable, the
success was short-lived and did not live up to the potential that was planned.
It turns out that those beers paid for themselves. Harry learned that, in
reality, the resellers felt threatened by the move of We Be Parts into the consumer
market. Why should they work so closely with one of their competitors?
Now recognizing that the company has potentially undermined the original business goal
-- to improve service to their resellers -- they have asked for further assistance to
address the situation.
The site plans
'Cookies' represent pieces of information deposited on a site visitors terminal that
can be subsequently re-examined by the website when the visitor returns. As
businesses learn more about their target markets, cookies allow the company to tailor
website content to individual visitors.
With this add-on feature, a person visiting the website for the first time will receive
a different starting Web page than a return visitor. In this way, resellers will be
directed to product ordering information and a new 'reseller news' feature. While,
first-time visitors will first be directed to promotional literature and the user
registration page.
ADDING
PERSONALIZATION
The case
Until the recent screw up, We Be Parts management had been very pleased with the
response to their online registration form. They learned that, indeed, they do have
two distinct audiences: (1) their target from the beginning -- resellers; and, (2) a
higher number of end-buyers than anticipated.
With renewed vigor, Harry Squatter instructed his senior staff to revise the business
case for the website. The results were promising.
We Be Parts now wishes to differentiate their marketing plans as well as their services
provided to these two distinct audiences. Their best customers, the resellers, will
receive perks, such as special discounts and access to privileged information on the
website. First-time buyers will receive special promotions on selected items.
The site plans
With this website addition, visitors will be directed to one of two different catalogs
(i.e., consumer or reseller), based on the preference stored in the registration
cookie. New images and text will be provided for the second catalog.
ADDING CHAT
The case
The resellers have been very happy with new look and feel of the site. Traffic
and repeat sales have increased once again. In fact, the resellers have started to
proactively make suggestions to improve the website, such as providing a forum to exchange
information with one another.
To further foster this sense of community and reseller loyalty, the company would like
to give the vendors a place to talk about product offerings and their customers
online.
The site plans
This add-on will incorporate an existing, free utility into the website in order to
provide the suggested capability.
THE END. FOR NOW...
HOSTING
AND MAINTENANCE
The case
website implementation costs are not limited to the cost of building the
site. These additional costs include hosting and on-going maintenance.
We Be Parts decided to outsource the "hosting" of their site to
reduce costs, as well as share computing resources with other companies. Other
options considered include: (1) obtaining a dedicated computing facility through
outsourcing; and, (2) creating a dedicated IT organization and bringing all systems
maintenance and operations activities in-house.
Although, performance will generally be slower, Harry felt that this
approach currently represents the most cost-effective solution for quite a while.
The site plans
On-going technical maintenance will be provided by a Web hosting and
development firm.
On-going functional maintenance will be conducted mostly be existing
employees. This includes keeping the parts catalog and other website information
current, as well as reviewing and responding to user correspondence.
CREDITS
Market Research Source and Story Outline:
NetMarketing Guide to Web Pricing,
Crain Communications, Inc. |
