companies can identify the opportunity for influencing and delivering sales online.
They can also understand the drivers to usage and barriers to increased usage and so
encourage adoption of online channels by emphasising the benefits in their communi-
cations and explaining why some of the barriers may not be valid. For example,
marketing communications can be used to explain the value proposition (see Chapter 4)
and reduce fears of complexity and security.
Surveys reported in the social factors section of the next chapter show that the fol-
lowing are important factors in governing adoption of the Internet:1 Cost of access.
2 Value proposition.
3 Perception of ease of use.
4 Perception of security.Assessing demand for e-commerce services
To set realistic strategic objectives such as leads or sales levels for online revenue contri-
butions for digital channels (as described in Chapter 4), e-marketing managers need to
assess the level of customer Internet access and activity for different markets and the
online market share that a particular organisation has achieved. For each customer seg-
ment and for each digital channel such as Internet, interactive digital TV or mobile we
need to work to assess the volume and share of customers who:1 Have access to the digital channel;
2 Are influenced by using the digital channel but purchase using another channel as
part of the multi-channel buyer behaviour;
3 Purchase using the digital channel.
This can be simplified to the ratios: ‘Access : Choose : Buy’. This information can be
gathered as secondary research by the researcher by accessing published research for dif-
ferent sectors. Primary research can be used to better understand these characteristics in
the target market.Conversion models
As part of situation analysis and objective setting, experienced online marketers build con-
version or waterfall models of the efficiency of their web marketing. Using this approach,
the total online demand for a service in a particular market can be estimated and then
the success of the company in achieving a share of this market determined. Conversion
marketingtactics can then be create as many potentialsite visitors into actualvisitors and
then convert these into leads, customers and repeat visitors. A widely quoted conceptual
measurement framework based on the industrial marketing concepts of purchasing deci-
sion processes and hierarchy of effects models, which can be applied for conversion
marketing, was proposed by Berthon et al. (1998). The model assesses efficiency of offline
and online communications in drawing the prospect through different stages of the
buying decision. The main measures defined in the model are the following ratios:
Awareness efficiency: target web-users/all web-users.
Locatability or attractability efficiency: number of individual visits/number of seekers.
Contact efficiency: number of active visitors/number of visits.
Conversion efficiency: number of purchases/number of active visits.
Retention efficiency: number of repurchases/number of purchases.CHAPTER 2· THE INTERNET MICRO-ENVIRONMENT
Demand analysis
Quantitative
determination of the
potential usage and
business value
achieved from online
customers of an
organisation.
Qualitative analysis of
perceptions of online
channels is also
assessed.
Conversion
marketing
Using marketing
communications to
maximise conversion of
potential customers to
actual customers.