If you are about to start an online business, the first thing you have to do is creating a proper strategy for your online business. A proper online business strategy can boost your chances, by helping you to focus on your goals and activities.
Average Reading Time: 15 min
What you will learn:
- Why you must need an online business strategy
- How to start planning your online business
- How to define your target audience and market
- How to identify the customer’s purchasing journeys
- How to define your Unique Selling Points to stand out from the competitors
- How to set KPIs for your online business
Hey, don’t get overwhelmed by the heavy words like KPIs. As long as you understand the process, you are good to go.
How your online business will benefit from a proper business strategy
By outlining a proper business strategy for your online business, you can get all you swirling business ideas into a readable format. Once you define your ideas, you can clearly set your goals, stride towards them.
On your way to achieving your business goals, time to time you can measure your measure your achievements.
This will help you either to tweak or to abandon your process if it is going to lose.
But, if you do not have a business plan and a strategy, you won’t have any idea about what is happening. Is it going well or is it burns you?
Also, if you don’t have a business strategy, you will not be able to define your process. Doing things here and there won’t help you anyway. Remember, you are going to start an online business, not a gambling game. 😐
For example, if you want to lose weight, you have to work out and follow a diet plan. Unless your superpower is your luck, you need planning to achieve things.
So where do you start?
How to start planning your online business
If you are planning to start an ecommerce store as an online business, you need to think what you are going to sell and to who you are going to sell.
If you are planning to start an online business on top of your existing business, perhaps you would be thinking of increasing your sales by 50%?
Likewise, you may have different goals for your online business.
Once you define your basic goal, take a piece of paper, and write down a mission statement.
We have a mission statement at ecommercebuff “to help people to start an online business”.
Likewise, write down your mission statement.
Then, you have to work out on a realistic budget. As you know, you need money to make money. Think about how much you can spend on a new online business.
If you are starting a business to earn a side income, define how much you can spend as disposable money.
Let’s face the truth, you may or may not win this. That is the nature of the business. There is always a risk. But, do not try to allocate a tight budget for your new online business.
Remember, that we are working on a strategy. So, you can measure your success on your way, and if anything goes wrong, you can quit early. So, allocate a sufficient budget, and keep it aside.
Next, you need to think of a way to stand out from your competitors. What is going to make you different from your competitors? This is called your unique selling points (UPS).
This is very important. There are so many online businesses doing the exact same things. So, if you need to stand out and sell your products, you need something unique for people to love you.
It can be anything, it can be your innovative product, active social media marketing campaign or it can be a popular person as your brand ambassador. So, think of a way to make you stand above the rest.
Great! Now let us try to define your target market and audience.
How to define your target audience and market
In most of the places, you will find the terms “target market”, and “target audience” are used interchangeably. But, there is a difference.
The target market is the specific set of people that your business is planning to sell your products or the services to (the end users of your products).
The target audience is the group of people who respond to your marketing message (the people who click the “Buy now” button).
For example, if you sell baby clothes, your target market is small babies. But, they can’t purchase their clothes. So, your target audience should be the parents.
Identifying and understanding your target market can help you to determine the trends and adjust your product portfolios to meet future needs.
For example, if your target market is the German kids in age 5-10, you can adjust your products to match the latest trends in Germany, and to match the weather conditions in Germany. There is no point in advertising summer clothes during the winter time. So, you can get that information by defining your target market.
Also, by defining your target audience, you can precisely set the tone of your brand message.
For example, if you sell a kid’s meal, you have to talk about the nutrition facts to grab the attention of the parents. So, you can adjust your brand message accordingly.
Here is an additional reading: How to select a target market and target audience for ecommerce
Now that you know your customers, your mission and everything, let us try to understand what a purchasing journey is.
How to identify the customer’s purchasing journeys
Let us assume that you want to buy a noise cancelling headphones. What will be your customer journey?
First, you need to have a problem. You may need to listen to the music on your daily commute to work. Before buying a noise cancelling headphone, you may want to learn how to select a good headphone.
So, you may search for “best noise cancelling headphone” on Google. Then, you found this article which explains a good headphone brand.
Now, you will check online reviews for this particular headphone brand. Hum, it seems people love this headphone brand.
Next, you will search for this brand, and found the product you want, and hit that “buy now” button.
The story won’t end there. You just found that brand is offering “50% off” loyalty rewards for their customers. So, you decided to buy an in-ear wireless headphone 50% off from them.
Likewise, your potential customers can have their purchasing journey with your online business.
So, why do you need to identify your potential customer’s purchasing journey?
Well, if you know your customer’s major touch points in their purchasing journey, you can help them at these points, and subtly direct them to our online business.
Let us get back to our previous example.
Touchpoint 1 – Awareness
You have started your purchasing journey by searching for the best noise cancelling headphones. Now, if you are selling headphones, how can you use this particular touchpoint to benefit your online business?
What if you have published an article about “the best noise cancelling headphones” or have created a video for that? Yes, your potential customer will find your article or the video and get to know about your brand/ business.
So, you have created awareness.
Touchpoint 2 – Consideration
Once you got to know about the brand, you searched for the online reviews.
This is where your potential customers consider which brand to select. So, you can use touchpoint and help them to make a decision by publishing product reviews or an unboxing video.
Touchpoint 3 – Conversion
You hit the “Buy now” button for your noise cancelling headphones. In the same way, you can help your customers to make their purchasing decision more comfortable by providing them with a secure and easy checkout process.
Usually, a hard and complex check-out processes result abandoned carts in online businesses. So, you can help your customers at this touchpoint, by creating an easy checkout process.
Touchpoint 4 – Loyalty
Modern purchase journeys in the online businesses would not end after the making the sale. There can be many cross-selling opportunities. So, if you neglect this touch point, you are literally leaving your money on the table.
So, here is a list of the question you should ask yourself to identify the purchasing journeys of your potential customers.
- What problems do my products solve, and where can I usually find solutions for these problems?
- What helps me to decide which product to buy?
- Where do I see a brand again after purchasing something?
Great, now you know why you should identify the purchasing journeys of your potential customers.
Here are some additional readings:
How to define your Unique Selling Points to stand out from the competitors
Is competition always bad? No, it is not! Having a healthy competition can actually help you to grow your online business.
How can you do this? Well, first you need to identify your unique selling points (or USP).
At the beginning of this guide, we have discussed the importance of having something unique in your online business. So, how can you figure out what is your business uniqueness or USPs?
Here are the steps/ questions to identify your USPs.
- What is my target audience?
- Who are my competitors?
- What are problems does my audience have?
- What are the problems that my competitors do not solve?
- How can I solve them?
So, before answering those questions, first, you need to assess your competitors.
How to assess your competitors
Before starting an online business (and, even while running an online business), it is always a good idea to see what your competitors are up to.
So, let us see how you can spy on your competitors!
1. Search on Google for the product or the service you offer. See who the dominant players in your industry are. Be familiar with their solutions and how they handle their marketing campaigns.
2. Use tools like buzzsumo to see what is popular across social media. This will help you to understand the trends in your online business segment.
3. Use an alert system like google alerts to stay updated about specific topics. So, when your competitors are up to something, you can get updated.
4. Regularly go through the product reviews and FAQs of your competitors! There you will find many people ask for some features and your competitor has answered as no they don’t offer them.
For example, here is a snapshot from Amazon. It is about a garden light. And, as you can see, people would like to have a longer wire for this light.
If your product can solve this problem, it can be a USP for your online business.
Also, you can use a SWOT analysis to evaluate your business against the competitors. The SWOT analysis is an excellent way of finding your USPs.
SWOT is short for Strengths, Weaknesses, Opportunities and Threats.
- Your strengths are the things that you are good at.
- Your weaknesses are the things that you can do better.
- Your opportunities are the things that you can improve.
- Your threats are the things that can affect you negatively.
Once you figure out your USPs, always shout out loud about your USPs. Show your USPs everywhere. It can be your website, Facebook page or an advertisement, and you name it.
How to set KPIs for your online business
KPIs or Key Performance Indicators are the measurable goals that help you to track and measure your progress. These are your intermediate business goals.
For example, if you operate an online ecommerce business, you can set a KPI as “Reply 100% of the social media messages within 15 minutes”.
This KPI is measurable, specific and related to your long term business goal of providing the best customer support in your segment.
Also, you may set another KPI to “post three times a day on the Facebook page”. This is again a measurable, specific and can relate to a long term goal of establishing your social media presence.
Once you set such KPIs, measure them regularly and see how much you or your team can achieve doing this. The measurements of these KPIs can help you to identify the area, which needs to be improved.
For example, if you cannot reply to social media messages within 15 minutes and post three times a day on Facebook, maybe you need to hire someone to manage your social media account.
Before setting KPIs, remember the KPIs should be,
- Relevant to a wider business goal
- And, realistic
After all, there is no point of setting KPIs like, posting 100 times a day!
Let us wrap up!
In this guide, we have discussed how to work out a strategy for your online business.
Starting an online business blindly is a total gamble, and unless the luck is your superpower, you will eventually fail by doing so. So you need to work on a business strategy before starting your online business.
Here, we have discussed how to start planning your online business and how to define the target market and audience for your business.
Then, we learnt the importance of identifying the purchasing journeys of your potential customers and how to help them at significant touch points.
Finally, we have discussed how to stand out from your competitors by defining the unique selling points (USPs) and how to set KPIs to measure your intermediate processes.
Great! With a great strategy, you can confidently move into the next step.
Up Next, we will learn how to build a business website.