A mentor of mine once told me that to succeed in business, I should always ask the why behind the why behind the why so here goes.
Because approximately 41% of Kenya’s population is now connected to the internet.
Because they are using the internet to open up their world to a whole new set of possibilities and opportunities. Why? Because whenever it feels cheaper, safer and more convenient, Kenyans have proven to go E-commerce throngs. Did you know Amazon is one of the most popular websites in Kenya?
Is E-Commerce Cheaper, Safer & More Convenient?
The mom who is able to design and order a birthday cake for her son online without having to leave the office would say it’s more convenient. The bachelor who is able to pay is rent through mobile money would say it's safer than carrying cash to his landlord’s office. The young lady who gets to download a discount coupon for a new dress she has been coveting would say its cheaper.
On the flip side, it’s cheaper for the cake shop owner to receive and service her orders online. It’s safer for the landlord who receives rent directly into his bank or mobile money account. It’s cheaper for a fashion retailer to do an online promotion as opposed to going with traditional channels like radio or newspapers.
How To Make E-Commerce Sense In Your Business
It must make sense for your business to go electronic, otherwise don’t waste your time and money on it. I always advise my clients to start with a hypothesis. In our case, the hypothesis is,
“If we adopted e-Commerce, we would increase our total sales by 5% in the next 3 Months?”
The next step is to create an experiment that tests this hypothesis in an affordable manner and quickly. In this case our Experiment will be,
“Create an online order form for product/service X, and incentivize customers to enjoy loyalty discounts by ordering online.”
We would then set out parameters for measuring success as follows:
For Success, out of every 10 Online orders,
1. 70% must be first time online buys from active customers
2. 20% must be first time online buys from idle customers
3. 10% must be first time online buys from new customers
If you do the math, this would translate into 30% new sales that would otherwise not have come through had you not gone online.
If you normally sell 100 units every quarter, the goal would be to achieve 5 new unit sales from online every quarter.
From the additional 5 units sold, I would commit 15% of the additional profit made to improving the online experience so as to encourage more repeat buys and referrals.
Remember, your new business will mostly come from referrals so investing in a better experience for your online customers is critical for long term gain.
The Devil Is In The Customer Service
It’s amazing how many Kenyan websites have an online inquiry or feedback form that does not work. Either the form isn't functional or no one will ever reply to you if you submit a query.
At the core of a successful e-Commerce venture is the customer service.
Because by its very nature e-Commerce is an impersonal point of sale thus businesses need to put in extra effort to make e-customers feel welcome.
Because we now live the world of ‘Word of Mouse’.
Because it’s easier for an online customer to share your website with friends via email or social media than it is for them to drag them to your premises in person.
I have seen a business that spent half a million Kenyan shillings on an e-commerce website and two years later it hasn't made a single sale from the website.
Their direct competitor combined apaybill number, a Facebook page, an e-mail database and a special offer to generate 70 million Kenyan shillings in sales from the same amount of investment during the 2013 Holiday season.
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E-commerce = 50% Customer Experience + 50% Value Addition (Cheaper, Safer, More Convenient)