New Online Businesses Should Steer Clear of These 5 Mistakes

By Jonathan Long

The Internet can be a gold mine for your business. U.S. consumers spent $42.75 billion online during the 2013 holiday season, with $1.2 billion spent online on Black Friday alone.

Taking your products or service online can open up a very profitable additional revenue stream. Take care to avoid these five mistakes as you take your business online and go after your piece of the pie.
1. Not building a customer list. 
It is no secret that email marketing is one of the most effective marketing channels, so wouldn’t it be a great idea to build a list of potential and current customers? This allows you to keep them up to date on new products and special offers, which turns them into repeat customers.

Offer something of value in exchange for their email address -- new product alerts, free shipping, etc. My company offers our email subscribers a free online marketing ebook when they join our list.

2. The lack of multiple visible customer-support options.
When a consumer lands on your website, they should be able to immediately identify multiple ways to get in touch with your company. This can include a phone number, physical business address, contact form, live chat or support ticket system. Take a look at these reasons you need to provide top-notch customer service:

•     40 percent of people purchase from a competitive brand because of its reputation for great customer service
•     55 percent are willing to recommend a company due to outstanding service, more so than product or price
•     85 percent would pay up to 25 percent more to ensure a superior customer service experience
•     82 percent of people have stopped doing business with a company due to bad customer service
•     95 percent of customers have taken action as a result of a bad experience, with 79 percent of those telling others about their experience.

3. Failing to test multiple advertising sources.
Finding a winning advertising source is not an overnight process. It is important to test several, and do so with small test budgets. Many online businesses assume Google AdWords is the only game in town. They load up their entire budget, create some ads and click “Go!” It is possible to blow through a huge budget in a matter of hours if the campaign is not properly set up.

Take baby steps and test several ad networks. Twitter, Facebook, the Yahoo/Bing network and AOL all have great traffic, but they aren’t all going to work the same for every website. Start small, testing multiple advertising networks and multiple ad copy variations until you find what works best. Once you identify the best advertising source begin to increase your spend.

4. Carrying too much inventory too soon. 
Many businesses assume that the customers will come knocking as soon as their site is live, so they stock up on inventory. If the sales don’t come in as quickly as first thought they are stuck carrying inventory, which is just an added expense.

Having to constantly order more inventory in the beginning is a great problem to have. Yes, having to make multiple orders might cut into your margins slightly, but wouldn’t you rather that instead of having a warehouse full of product that isn’t selling and a pile of debt?

5. Offering predictable discounts. 
Announcing sales too far in advance and having predictable discounts, such as “save 15 percent every Tuesday” ruins regular business. If you are predictable with offers your customers will hold out on ordering until your next special offer. They become accustomed to the discount and will stop buying at your regular price.

This kills your bottom line and now you have to work harder to make up for the loss caused by predictable discounting. Discounts can also make you look desperate and can destroy your brand.

Culled from: http://www.entrepreneur.com