Get more of such content, Weekly

* indicates required
Business & Marketing

5 critical success factors for an online business

success factors for an online business

Every online business takes a while to carve a place in the market. It takes a lot of fresh ideas, strategic planning, tough choices and mistakes to find success in this clustered environment.

Along with that, there are other factors that attribute to the success of an online business like marketing, maintaining supply and demand, demographic factor, competitive advantage, etc. 

But, one needs to identify the crucial factors contributing to the growth of the business and its brand. 

Here in this blog, we list out the top ten factors that are instrumental in the growth of an online business. 

Pricing

Pricing the products or a service plays an important role in the growth of an online business. An online business must continuously review the prices to reach the profit margin. 

Generally, online businesses use two types of pricing strategies that are:  

  1. Cost-plus pricing – The cost is fixed based upon the prices of goods, labour cost, and overhead cost, and delivery cost. Along with that, a markup cost is added to gain the profit of the service or selling the product. 
  2. Competitive pricing – The online business sets the pricing by studying the market and competitors pricing strategy. 

The pricing strategy also differs depending upon the industry and the product or service is offered at the company. 

In Manufacturing industry, the commonly used pricing strategy is cost-based pricing, markup pricing, and value-based pricing. 

The markup pricing is the pricing one sets to higher than the cost price of the goods and service. The price is set to achieve the profit margin of the company. 

The value-based pricing is about setting the price based upon the value it is perceived by the customer to the product or service. 

When it comes to industries like Entertainment, Travel, E-commerce, Retail, on-demand the mostly used pricing strategy is dynamic pricing. Dynamic pricing is a type of pricing strategy where the price is set depending upon the demand of the current market. 

Customer service 

Customer service plays an important role in keeping up the brand name of the business. The customer service is the act of providing service before, during and after the purchase of the product or using the service. 

The customer service helps the business in retaining the customers and making them loyal to the business brand. It also helps in bringing more potential customers by spreading positive reviews. 

According to Micah Solomon, the success of customer service is dependent upon the employees “who can adjust themselves to the personality of the guest”. Also, the employee has to follow-up with the customers to know further about their interest or new decisions taken. 

As we all know customer service is a hectic job in any company. It sometimes gets difficult to handle if the customer is not very cooperative to communicate. When hiring candidates for the customer service, the company has to look for the following skills such as patience, attentiveness, clear communication, persuasion skills, skilled to handle rude or a bad customer, flexible and willing to learn new things. 

As the business is run online, the customer can reach the company through email, phone, or skype. Also, today companies have a separate web page dedicated to customer service providing answers to frequently asked questions, and having demo videos to give a visual understanding to customers. Sometimes tech experts from companies take webinars and demo explaining the product.  

A good website to run an online business

As the entire business is run online, the website is a part of the business identity. A good website design not only increases the conversion rate, but determines the success of the business. 

A good website takes a simple design, taking into account the usability and website aesthetic. To design an exceptional website, one has to consider the: 

Color – The website colors stir up strong emotions in customers. It can make a person feel curious, amazed by the pleasing look, or make them feel excited to try out the website. Colours can make the users feel engaged and convenient in using the website. 

Typography – It also plays a key role to make the website look apart. The content of the website has to be formatted to be readable and stylish as well. The font size has to be fixed that immediately gets the attention of the customer. 

Image – Images is the visual representation of the business. They say an image speaks a thousand words. Displaying a right image on the website can speak volume about the business. The message of the brand is conveyed easily and quickly through a single image. 

Other than design, the business has to take care of the website loading speed, how the website appears in all window screens including mobile devices and SEO of the website. A lot of on demand businesses got huge levels of success by developing user-friendly websites.

Provide a quick and easy transaction process

Transaction is the essential and main part of the business. After viewing the products or the quality of the service, customers finally make their decision to purchase the product or book a particular service. 

Today, making a payment online is considered an easy option and quicker. Customers don’t have to worry about keeping extra change or a remainder about to pay in cash. 

The different payment methods we can see are bank transfer, wallet, payment gateway like PayPal, Stripe, Google Pay, Skrill, etc

According to the Valuates Reports, the Global Online Payment Gateway Market size is expected to grow from USD 43,491.95 Million in 2019 to USD 90,431.01 Million by 2025 at a Compound Annual Growth Rate (CAGR) of 12.97%. 

Here are the top three tips for designing a payment for an online website.  

  1. The payment process should be simple and be convenient for all age groups. 
  1. It is said that 28% of those carts are abandoned because of a lengthy checkout process. Customers don’t prefer to spend a lot of time entering the banking details and making a payment. Design a payment that takes one or two steps and finish the overall process. 
  1. Provide all types of payment methods on the website. Some users feel convenient in making a payment through the wallet, while others prefer to make a payment through Apple Pay or Stripe. Including all types of payment on the website can enable the business to cover all kinds of customers. 

Package delivery 

When customers order the products and finally receive in the hands, they check whether the product brought is not damaged, broken or used. And if it does get damaged, a business not only makes the customers disappointed but loses a loyal customer. 

Package delivery is one of the important factors for the success of a business. Today, customers expect the package to be delivered within a few business days instead of waiting for one-two weeks. The company has to be aware of how the packing is done, shipped and delivered to customers. 

As shipping costs more than the price of product in today’s market, companies can follow different strategies to regain the invested cost. 

  1. Charging a delivery amount if the number of ordered products is above a limit. 
  2. Some companies chart a flat rate shipping for all the products being brought on the website. 
  3. There are cases where the price of the product is increased covering the shipping cost. 

The shipping cost is usually calculated based on the: 

  • Package size 
  • Package weight 
  • Courier company 
  • Customer address
  • Custom/duties 
  • Packaging material 

Usually the packing material used are:  

  • Cardboard box – To pack all the items in one box, electronic items, machinery 
  • Packaging tube – A small-sized item which weighs less. 

The filler material used inside the package are: 

  • Cardboard pieces
  • Crumpled paper
  • Styrofoam 
  • Bubble wrap
  • Tissue paper

Final Thoughts 

You made it to the end? You must be curious to learn new things. 

Let’s rewind and give a quick recap of what is discussed in this blog. 

The top 5 critical factors for an online business are: 

  1. Pricing the product or service
  2. An exceptional customer service
  3. A good website to run an online business 
  4. Providing an easy and quick transaction process
  5. Package delivery 

So, if you feel your business is having a low conversion rate, apply these factors to your business and infer the errors you made in your business decision. 

About the Guest Author – WooberlyEats

WooberlyEats is a trustable food delivery app solution providers, we have made our solutions to achieve the user’s expectations and essentials in the on-demand food delivery industry, We built our solutions using the latest technology named flutter to increase user retention rate and to enhance the performance of the app.

MindxMaster

Leave a Reply