With the advent of the era of online marketing, more and more enterprises have joined the ranks of online marketing. But in fact, a basic reality of current online marketing is that over 95% of visitors do not actively contact the enterprise after browsing their website. This means that companies with websites lose a large number of potential business opportunities every day. In addition, even customers who shop online have a high rate of attrition. How can we retain more customers? How can we stabilize online sales revenue? A group of online marketing experts with sharp marketing minds and skills has explained several "key factors" for the success or failure of online marketing.
Achieving cost accounting to its utmost
One significant advantage of online marketing communication is that costs are controllable and relatively low. The effects produced often do not fall short of typical practices in the advertising age, such as print ads, TV commercials, outdoor billboards, and building digital TV advertisements.
Tang Jun, who operates a new brand of Daypai monitors on Taobao, has taken the network cost advantage to its ultimate extent. Over two years, he devoted much effort to establishing a liquid crystal display brand, achieving monthly sales of 300,000 yuan, earning him the nickname of "Taobao retail tycoon."
For example, when customers use Alipay for payment, there is a fund retention period; only after the customer receives the goods and acknowledges them can the funds be collected. Tang Jun carefully studied the delivery speeds of different logistics methods, determining the shortest delivery cycle for various regions. For distant areas, he included the increased costs due to fund retention into the selling price. For Guangzhou and nearby areas, this part of the cost was removed to offer customers lower prices.
In terms of shipping, Tang Jun also has some experience. For instance, recently, a customer from Shandong ordered 12 monitors. Tang Jun divided these monitors into multiple packages for shipment, aiming to quickly settle payments. Once the customer received one package, they could confirm and complete the payment immediately. This way, if one package had an issue, it would only affect the settlement of part of the funds, allowing most of the money to be quickly recovered. By maximizing cash flow speed, Tang Jun achieved higher sales at a lower cost.
Regarding this, Tang Jun believes his success lies in accurately grasping the low-cost advantage of online marketing. Besides offering good quality products at reasonable prices, detailed services, professionalism, and reliable after-sales service, he feels the most successful aspect is choosing products that fit market positioning and have a cost advantage. For example, adding some unique small features to mainstream size products doesn't necessarily increase costs significantly but allows for functional improvements at a lower price compared to similar products, making them very suitable for online marketing.
The low-cost advantage of the internet also allows thoughtful merchants to implement "small but agile" marketing strategies. Minghui Tea's online marketing strategy of selling tea by the cup caught people's attention. Most merchants sell Tieguanyin tea by the box, bag, or jar, but Minghui Tea innovatively sells it by the cup, starting from one cup, and even more impressively, each cup is sold for just 2 yuan. Buyers receive exactly what they order. Each 2-yuan Tieguanyin cup weighs 5 grams. However, due to the savings from other operational expenses online, Minghui can still ensure a gross profit margin, typically around 10%.
Even more uniquely, Minghui China's gift box (containing eight of China's top teas from various regions) can be freely combined. Buyers can choose any combination from top green tea, black tea, yellow tea, dark tea, and white tea. As a result, many buyers purchase dozens of packs at once, leading to Minghui's success.
"Unconditional returns" isn't foolish
Online marketing faces challenges due to the inability to exchange information face-to-face and the relatively chaotic integrity of online marketing. Therefore, online marketing adds an extra hurdle of "internet integrity" compared to traditional marketing.
Li Jinsong runs a store called "China Back Street" on Taobao. In the 2007 Alibaba Net Business Festival, he won the title of "Top Ten Online Merchants Nationwide," with an annual transaction volume through Alipay reaching 5 million yuan. He believes opening a store on Taobao requires no monetary cost, only a unique business mindset. Li Jinsong summarizes his business philosophy as "Heaven rewards diligence, commerce rewards trust."
Once, a buyer purchased a large order worth over 100,000 yuan. After receiving the goods, the buyer subjectively judged them to be counterfeit and substandard, demanding a return. Without hesitation, Li Jinsong immediately agreed to the return. After completing the return process, Li Jinsong used his extensive tea knowledge to provide professional reviews and analyses, convincing the buyer. These purchasers later became his loyal repeat customers, and such cases were not uncommon. Li Jinsong firmly believes: providing too many explanations before a return is futile. On the premise of believing in the quality of his products, he considers it most important to win the trust of customers.
Using rabbits as a metaphor for customers, Li Jinsong claims that since there are more rabbits than trees in the forest, he prefers to create a good environment and wait for the rabbits to come. His reliance is on the attractiveness of credibility. In his advertisements, Li Jinsong promises to send a free sample of tea along with the sale of good tea. If the customer finds the sample does not meet expectations, without any excuses, they can return the product, and he will refund the full amount immediately. However, one point remains: customers cannot open the original packaging of the product. Li Jinsong states, "This is the only place where customers must respect us." "Everything depends entirely on the customer's feelings to decide whether to buy or leave."
Giving up something to gain something, thorough after-sales service, and customer-oriented marketing approaches successfully helped Li Jinsong break through the suspicion and barriers in online marketing, effectively promoting low-cost online marketing into real transactions.
Another example is Zappos, the shoe-selling website founded by Chinese-American Tony Hsieh, which became the largest online marketing company in the U.S. thanks to its free return policy. Hsieh often says, "I don't want to spend money on advertising; I prefer spending it on improving customer service." Zappos follows the principle of "wear if the shoes fit, otherwise exchange." Although it wasn't the first online store to offer free returns, Hsieh made this service a key tool for Zappos to stand out: overnight delivery of goods, and free returns if unsatisfied. Last year alone, Zappos spent $1 billion on shipping fees. However, it was also last year that Zappos, established in 1999, began turning losses into profits, entering a virtuous cycle. Now, this website has a status akin to "Amazon" in the shoe industry.
Hsieh stated, "This is a strategy to retain long-term customers." Statistics show that 60% of Zappos' customers are repeat customers, and another 25% are referred by friends or family.
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The views of online experts:
★ Han Hongying, the owner of "Xiuzimei" lingerie, one of Alibaba's top ten net merchants, believes that the secret to successful online marketing largely lies in "service." There are a few points to consider when opening an online store: honesty, products, prices, service, and activities. If all merchants perform well in products, prices, activities, and even honesty, then the only thing that can differentiate them is service. Here, service is not just after-sales service but also cultural dissemination service.
★ Han Feng, who runs a virtual shopping store for tin toys online, believes that the channel (Place) in the integrated marketing "4P theory" is crucial in practice. The 4P theory in marketing refers to Product, Price, Place, and Promotion. Han Feng believes that merely doing online marketing or solely relying on physical store marketing will lead to a dead end. Only by developing multiple marketing channels can sustainable business growth be achieved.