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On the web, targeted traffic is essential to an
online business' survival. Al Ries, in his book "Focus:
The Future of your Company Depends on it," wrote that our
rapidly changing, technology-driven marketplace will mandate a sharper
marketing aim -- particularly in the new millennium as increased
competition will give more choice to the electronic consumer.
Niche marketing is indeed the wave of the future. In a society
saturated with sameness and overcrowded with choice, the necessity of
narrowing one's focus and differentiating one's business have become
more evident. As the Internet grows, so too will the number of online
businesses. Targeting and catering to a higher quality traffic is
increasingly important.
It makes no sense to market to an audience that is uninterested in --
or unqualified to buy -- a site's offering (such as a web site
catering mainly to corporate executives when its traffic consists of
hobby farmers). It also makes no sense to spend more resources on
generating new sales when repeat sales may be more cost-efficient,
which in fact are often ignored.
As the business adage goes, it costs ten times more to generate a new
customer than it is to keep one. Online, that adage rings even more
since the Internet is littered with potential shoppers that are
becoming harder and harder to reach. That said, it is also true that
the web does make it difficult for a business to keep customers too,
since an underlying benefit of the Internet is the ability that
clients have to shop around at the single click of a mouse.
Therefore, since online it is harder to both
find and satisfy higher quality clients, the question remains: How
does one milk this sleeping cash cow? In other words, how does one
build repeat traffic and especially repeat sales?
While answers to those questions can be quite diverse, one solution is
to incorporate the extended benefit. It's an area that can become
profitable for many online firms. In reality, extended benefits are
sales promotion tools to help, among others, increase short-term
sales, build client relationships, reward loyal clients, stimulate
product trials or convert competitors' clients. Here are some examples
of extended benefits that businesses use:
Samples, Tools and Coupons
Samples are product or service
trials. In terms of hard goods, and while web sites can offer actual
samples of their products (mostly by mail), samples can also include
other things -- such as soft goods that aim at informing the prospect,
entertaining the visitor or rewarding the client. They include ezines,
ebooks, freeware, contests, quizzes, polls, online greeting cards,
forums, screen savers, web-based email accounts and so on.
For example, a site selling large exercise equipment, which is
difficult to sample, can offer free, downloadable diet recipe ebooks
that complement the exercise machine. Incidentally, these types of
samples can become effective viral marketing tools since they are
spread freely around the web. And the greatest benefit of all is that,
once recipients hit the site, they are far more qualified and apt to
buy than most casual, curiosity-seekers.
Sites offering other types of traffic generation tools include, among
others:
Coupons are certificates that
give buyers certain savings on their purchases. But coupons do not
have to be physical in nature let alone limited to one's site for
distribution. There are numerous web-based coupon sites and email
coupon services that can be used -- such as:
Extended Warranties
Extended warranties are like
insurance policies that in some way guarantee the continued
performance of a product, especially after an initial period of time.
While guarantees in essence promise specific benefits, warranties
promise that the enjoyment of those benefits will continue. An
extended warranty is like a guarantee's guarantee. And they too can
take different shapes and forms, and become potentially effective
profit centers.
The warranty promises that a product will perform the way it is
supposed to do so for a specific period of time. In addition to
guarantees, businesses should also consider selling extended
warranties with their products. But if the product is guaranteed
indefinitely or can not be guaranteed for whatever reason, then the
warranty may take the form of future upgrades, additional benefits,
patronage rewards, membership programs or support services.
For example, if an online business sells new and used computers it can
also offer a buy-back plan. In exchange for an additional fee,
customers receive a certificate giving them the ability to trade their
newly purchased systems for better models within a year following the
purchase. The plan promises them a complete refund that's applied
towards their upgrade. And if they do choose to exercise their option,
clients only pay the difference between the two systems.
Bundled Services
With services, the extended
warranty is a little different since services are not tangible, need
no repair or do not depreciate in value. Therefore, the warranty can
take the shape of memberships, preferred customer programs, prepaid
retainers, premium services, customer service packages, options and so
on. Such warranties are in fact service agreements.
For example, a consultant can offer prepaid
retainer packages or special web-only packaged programs that may
include several hours of email consulting at a discounted rate. If the
marketer offers repetitive services like a hairstylist or a
chiropractor (such as a business offering repetitive web-based
services), a number of prepaid visits can be offered at a discount.
They can also extend their line in order to cater to varying segments
of their market.
The latter comprises of offering alternatives -- several variations of
one's service -- in order to cater to those that are quality-sensitive
as well as those that are price-sensitive. An example is to bundle
services together or to apply the "Olympic" approach to one's
portfolio, which for example could include a gold program, a silver
program and a bronze program -- each of which varying in terms of
price, services (or number of services) and so on.
In addition, these programs are often more advantageous to the client
above the obvious price incentive, since the value of a particular
variation -- by catering to a specific segment and its unique needs,
goals and budget -- is regarded as being of higher quality. This is
why "preferred client clubs" are so popular. Clubs have a mystique
about them. The perception is such that members feel part of an elite
group to which higher priority or greater attention is given. Clubs
also cater to our human need for belonging.
Preferred Client Clubs
Highly consumable products
generally translate into repeat sales. Therefore, an extended benefit
in this case would be a loyal customer program. This could involve a
flat discount rate on all purchases made at a particular web site
during a specified period of time. And what this program also does is
to preemptively reduce the possible loss of a client to a competitor.
Bookstores sell avid reader membership
programs that offer a fixed discount rate on all subsequent books
purchased during the time that the program is in force. These programs
can range from one month to a full year. Such programs can certainly
be applied to the Internet, where a customer pays a membership fee and
is given a username and password. In turn, that person is given access
to better rates, specific products or member specials.
Again, on the Internet it is easy to shop around and to lose customers
at the click of mouse. But with a discount club or loyal customer
program, clients are in some way guaranteed to return to the original
web site for their subsequent purchases, which removes the possibility
of having them shop around when those opportune times appear. Keep in
mind that these type of extended benefits can be adapted to many
different situations and in different ways.
Nevertheless, one of the biggest disadvantages of the web is the fact
that people are given too many choices -- too many in fact that they
tend to do nothing or easily jump from one site to another. Extended
benefits in this case encourage targeted and repeat customers to
remain loyal, and also to spread the word around -- especially among
other, qualified prospects.
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