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Using the Web to compete with established businesses was a pipe dream. It could never work. Why not Established businesses spent millions to get where they are, and they will not fall down and play dead just because some Web site comes along. If it were easy, you would have lots of Web competitors, and you would soon nd it dif cult. Furthermore, if it were easy, the established businesses could always beat you by doing exactly what you are trying to do, because they know a lot more about it than you do.
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From the previous discussion, it is obvious that for most companies, Web sites cannot be successful sales channels to consumers for most of their products. They are primarily ordering vehicles and information providers. They may be excellent sales channels for spare parts and supplies and for obscure and slow-moving items that dealers will not stock. To think properly about the role of the Web site, we must begin to think of it as a cross between mass media ads, spare parts distributors, and customer service. The value of a manufacturer s consumer Web site today is estimated in Table 3-1. Table 3-1 Monthly Value of a Commercial Consumer Web Site
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Customers Visits per month Customers registered CSR time saved Data printed Rebate certi cates printed Certi cates redeemed Parts sold Total value 500,000 20,000 50,000 40,000 25,000 15,000 8,000 Rate $ 0.02 $ 1.00 $ 4.00 $ 2.00 $ 2.00 $64.00 $12.00 Value $ 10,000 $ 20,000 $ 200,000 $ 80,000 $ 50,000 $ 960,000 $ 96,000 $1,416,000
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Let s start one step up from the bottom: Parts sold. Every Web site should sell spare parts and replacement items that dealers will not or cannot stock. These parts are not a pro t center. They are a reason for consumers to visit the site. They can be the most important draw on any site and can turn existing customers into advocates. To determine the value of parts sold, we have to consider three factors: The pro t made on the parts themselves, which may be quite low, depending on how you want to price them The acquisition of a customer name and email address, which can be valuable for marketing The goodwill and brand name publicity value of the site Certi cates redeemed. To determine the value of these certi cates, we need to consider the pro t from the sale of the item less the rebate and ful llment costs. If the pro t, for example, is $80, we must subtract $15 for the certi cate and $2 for the ful llment cost, giving us $63 net pro t. To be totally accurate, you can make the assumption that some of your products might have been sold to these same people without the certi cate, so that the pro t from the sale that is attributable to the Web would be less than the full pro t. You can experiment and test to get the right answer. Certi cates printed (whether redeemed or not). There are two bene ts of having a certi cate printed. First, of course, is the fact that some of the certi cates will be redeemed, which has already been discussed. But whether a Web certi cate is redeemed or not, it has value to the issuer, because before the certi cate is printed, we require a valid name, address, and email name. To determine the value of a name, we can use the method described in 5, The Value of a Name. Here we are assuming that it is $2. Data printed. When people go to your Web site, you make it easy for them to nd information and print it out on their PC printers. Make sure your name and identi cation is on everything that they print. People who are looking for a refrigerator may print out information from your site and take it with them when they visit a store. They will print out the speci cations of your automobiles,
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