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by James Perrin on 18th November 2011
For any business, no matter how small or large, it’s important to ensure your house is in order before you take part in any digital marketing campaigns, whether that’s SEO, PPC and Social Media amongst many more.
If your business isn’t prepared operationally, strategically or financially for more users or custom, then the results could be crippling. This could either mean that your site just isn’t prepared for extra traffic or that your business as a whole simply can’t cope with an increase in conversions and sales. Increasingly more and more horror stories are being told.
The case study of Need-a-Cake
Traditional search engine marketing can either give you a steady stream of traffic overtime, but it can also provide you with a surge in the number of users. In addition to this type of digital marketing, there’s also the increasingly popular choice of vouchers and offers which can often help most businesses with the shot in the arm they’re desperate to seek. Cue Groupon.
This is a site that offers its users vouchers and discounts on local and national goods and services. This is a fantastic way for businesses to attract a whole new audience. The idea is that this service will give the user a discount for their purchase, with the aim of the customer returning for repeat business. In tough economic times, what company couldn’t do with a little extra custom? Cue Berkshire based Need-a-Cake.
As the BBC reports, the decision to use Groupon vouchers ended up costing this business thousands of pounds. By offering discounts of 75% on cupcakes through the Groupon website, this particular business simply couldn’t meet the exponential increase in demand. What would normally cost £26 for 12 cupcakes, actually only cost £6.50 with the Groupon voucher. The company usually receives 100 orders a month, and with this promotion they ended up receiving an extra 8,500 as a result.
Operationally the business couldn’t cope, they had to employ extra agency staff, the cost of which (including distribution costs) could be a whopping £12,500. A figure that the owner said will completely wipe out their profits for the year.
The issue was the fact there wasn’t a cap on the number of vouchers that can be offered. Groupon do provide these businesses with tailored and individual advice based on the company’s needs and prior deals, but Chris Moriarty of the Chartered Institute of Marketing believes they should offer a cap to prevent this from happening.
Get your business and your site in order
More so, this is a question of businesses properly planning and fully understanding what they’re getting themselves into. Whether that means getting your website in order, or your actual business processes, it’s important to take a critical look at the way you do business, especially if you want to avoid the Need-a-Cake situation.
Whilst this story doesn’t involve the perils of a poor functioning website, in addition to preparing operationally, it is also necessary to prepare your site if you’re looking into digital marketing campaigns such as PPC or SEO. It’s imperative that it functions properly and makes it as easy as possible for users to navigate and purchase goods or services. Make sure you have systems in place to deal with orders, connect the products on your site with what you have in stock, so you and the users can see what stock you have left. Make sure your pricing is clear and purchasing is straightforward, and that every step of the check out stage is connected without any broken pages, otherwise this will disrupt the process.
Whilst the story of Need-a-cake may seem a little extreme it does highlight that if you blindly go into digital marketing without getting your house in order, or properly understanding what it is that you’re doing, it could end up costing you more than you bargained for.
There are many other digital marketing platforms to use. Whilst vouchers offer businesses additional custom, they can be loss leading. Other services such as SEO and PPC will offer a steady stream of traffic over time, but in any case, it’s still wise to get your business in order first, especially your website if your involved in e-commerce.