Service A: Identify, Evaluate, & Decide on Improvements to Virtualized Business-Functions

• Work with company personnel to research potential improvements to departmental functions in your business (marketing, sales, shipping, or support).
• Define and quantify potential direct and indirect benefits from these improvements.
• Research offline ways to realize these benefits: how, how well, costs, ROI, & risks.
• Research online ways to realize these benefits: how, how well, costs, ROI, & risks. Include new or improved virtualized business-functions for your website. Also include designing and building parts yourself, customizing parts from off-the-shelf packages, & subscribing to online services for other parts.
• Facilitate a sound decision-analysis process to choose the best ways to realize these benefits, based on ROI (benefits divided by costs) and likelihood of success. Select the benefits worth going after right now. Estimate the financial impact on your business.
• Define these benefits clearly and specifically, along with the business improvements they are to accomplish and the selected way to accomplish each benefit.
• The final list of benefits and ways to accomplish them will serve as the overall business-objective for the project.

Benefits: Discover the best ways to enhance your company’s marketing, sales, or support functions

1. Find out whether to pursue offline or online means of improving some business functions.
2. Evaluate offline & online means: how, how well, costs, ROI, & risks.
3. Be clear what the business benefits are that your website is there to provide.
4. A well-informed decision about the best way to realize these business benefits
5. A clear, adequate, accurate set of business-objectives that your project should aim at.

Comparisons to Alternatives

Comparison of Features of Our Service to the Alternatives
Feature	Our  Service	Doing It  Yourself	Market Research Firms	Ad Agencies	Website  Design Firms	Software Develop. Firms
Identify, define, & quantify potential business-benefits
Research offline ways to realize these benefits
Consider all online possibilities to realize these benefits
Expert ways of virtualizing presently offline business functions
Evaluation of costs, ROI, & risks of each alternative
Sound, group decision-analysis to select benefits & means
Calculate financial impact on your business
Clearly define means, benefits, and business improvements
Define measurable business-objectives for the project
Know business benefits before proceeding with a project
Project goals that are fully supported by all stakeholders
Conducted by top business-professionals

This comparison reflects the capabilities of most companies that outsource these kinds of work, but your company's capabilities may differ.

Case Study

The Situation

A major phone company had been frustrated for some time by the poor performance of the sales functions of its website. The sales-to-marketing ratio was below 1%, and shopping-card abandonment averaged 90%. There were many customer complaints about the site’s being confusing. When customers couldn’t do their purchasing online, they reluctantly called the company or visited its retail stores, increasing the company’s costs.

Over the years, fierce competition among telecoms had driven up the number of phone stores, but the company’s competitors had experienced growth in online sales and were now beginning to scale back the number of their stores, as well as to refocus existing stores on service and support. The company wanted to follow these trends as well, but its history of problems with online sales was making it hesitate.

An additional concern was that this was a time when telecoms were being closely scrutinized by investors to see how they would cope with the mobile-web boom. Any signs of online weakness or competing poorly could have serious ramifications for a company’s share price. On the other hand, anything that demonstrated competence and success in the online arena would have the opposite effect. Therefore, the stakes for rectifying this problem were particularly high.

Given this quandary, the company wanted to know the following:

• How much increase in sales could be expected from online or offline changes?
• How much reduction in sales costs was possible?
• Why were their current online sales functions performing so poorly?
• Could online-sales functionality on their site be substantially improved?
• What was the best way to improve this functionality?
• What would it cost to make these improvements?

We were engaged to help answer these questions and, if redesigning their website was the best solution to these problems, follow up with a project plan and redesign of their online sales functionality.

What We Did

In these circumstances, the company was really not interested in solving their problem through offline means. Therefore, we focused on the problems with their online-sales efforts.

We began by investigating the causes of their poor online-sales performance. We determined that their marketing was fine, but their products and services were too complex for their customers—especially business customers—to figure out how to purchase without help. Their online-sales functionality did not supply nearly enough of this help, since it was little more than a simple product-catalog and a shopping cart. By comparison, offline sales worked well, because customers had the help and advice of a trained salesperson to steer them through the wide range of choices available and help them choose the one that best fit their aims.

We researched various ways of enhancing their website’s online-sales functionality, to determine the most promising alternatives. We defined the three best alternatives as follows:

1. A traditional, non-interactive, catalog-browsing approach, but with greatly improved clarity of information through the use of decision-trees and comparison tables, to help the shopper understand the options available and decide what to buy.
2. Same as option 1, but adding online chat, staffed by a new or expanded call-center.
3. Same as option 2, but adding decision-support wizards to their website’s online-sales functionality, to help hesitant users through the buying process. Users would only be directed to the call center if this decision-support didn’t suffice.
   

For each option, we calculated the range of sales increases, their probabilities, and the confidence level in those figures. We used web-analytics data available from the existing site, analyzed in terms of what customers were trying to do and what was frustrating their efforts. To do accurate calculations of the effect of these options on increasing sales, we used a known breakdown of their types of customers: 20% expert shoppers, 30% non-experts trying to compare options, and 50% just very unclear about what they wanted. The increases in sales were calculated to be as follows:

1. 40%-60% at the 90% confidence level
2. 250%-300% at the 90% confidence level
3. 250%-300% at the 90% confidence level, or 400%-500% at the 75% confidence level

Next, we estimated the costs, time, technical difficulties, and risks of designing, developing, and maintaining each option.

1. Lowest cost, time, technical difficulty, and risk
2. Slightly higher cost, time, technical difficulty, and risk to design and develop, but much higher ongoing costs, due to need for call center personnel to handle online chat
3. Slightly higher cost, time, technical difficulty, & risk to design & develop than Option 2, due to additional wizard functionality, but much lower ongoing costs than Option 2, because of lower use of online chat

Using the calculations of increased sales and costs, we then calculated the bottom-line ROI to the company for each option.

1. Very low ROI
2. Medium ROI
3. Highest ROI by a wide margin

Results

When management was presented with these choices and all the information and calculations associated with each, they chose Option 3. We then provided options, costs, and benefits for either enhancing the existing online-sales functionality or redesigning it from scratch. The redesign option was selected.

The final decision involved build versus buy choices. We presented options to management, which elected to design and develop their own, new decision-support functionality, customize a third-party shopping cart, and use an off-the-shelf call-center chat application.

When the full solution was in front of them, management considered whether to proceed, delay, or forget it. They easily decided to proceed immediately. The details used in their decision process became the specific objectives for the project.

We were subsequently engaged to perform concept-innovation, design, and project management services, and we shepherded the new website to launch. After several months of minor adjustments, it achieved an approximately 300% increase in sales.