The Yellow Brick Road to Emerald City (10 Steps to E-Commerce Nirvana) was published in July 1998 when I was an Internet Consultant. To this day, e-commerce remains a new and unfamiliar way to do business for many companies both within and outside of franchising. At the time this article was published, e-commerce was often implemented by employing a company with the requisite technical skills but without considering the strategic, operational, marketing or practical concerns of the business. Today, 13 years later, not much has changed. The passage of time shows that while technology may continue to advance, it is proven business approaches that should guide in the use of technology.

This article presents a methodology for implementing e-commerce that today’s skilled business professionals will recognize. It presents e-commerce as just another customer focused business consideration. While this article was written for non franchised businesses, I think it has specific relevance to a franchised environment. In the franchise industry, it is not uncommon for the franchisor to struggle with how to move individual franchisees to embrace a technology that requires a commitment of time and money so that all can benefit from future business growth. It seems to me that the progression outlined in this article presents just such an approach.

I have chosen to republish this article through the FranchiseFacts web site as an aid to franchisors in understanding how the Internet can be better utilized within their businesses.

Perry Shoom
FranchiseFacts

The Yellow Brick Road to Emerald City

(10 Steps to E-Commerce Nirvana)

By: Perry Shoom

Initial Publication: July 1998 Republished without revision: August 2011

Your company needs to be on the Internet, perhaps even establish an e-commerce website. After all, your competition is there. And with everything written on the Internet’s importance in business, maybe you are losing out by not establishing a presence. But how do you get on the Internet? What services should be offered? How much will it cost? And how will an Internet presence (or lack of one) impact on your business? Perhaps you feel a little like Dorothy in The Wizard of Oz? This isn’t Kansas anymore!

Take a step back, relax, and consider the facts. What is it you want to do? What challenges does your business face? Are you looking to increase revenue, reduce costs, improve productivity, enhance customer service, or some combination? The Internet is an important strategic asset but only if applied to further your specific goals.

As with anything new, there is a natural progression of steps that should be followed. This progression can be described as follows:

Inform and Educate –	The education stage. Learn about the people you wish to interact with. Determine what products or services interest them, and what processes are important. Focus on specific details that impact on success or failure. Then deliver on behalf of your customers. One of the more common uses of the web is as a customer service center to answer those Frequently Asked Questions (FAQs).
Interact –	How does the company interact with its stakeholders (customers, suppliers, etc.). Is there an opportunity to improve these relationships by offering self-service, search and/or query capabilities via the Internet. The goal should be to improve business relationships by delivering a more personal service through interaction – usually by allowing stakeholders to query internal databases for specific information such as order status details or local store contact information.
Transact & Capture –	Interaction alone is not enough – allowing customers to conduct business is a logical next step. Whereas e-commerce is normally associated with selling products via the Internet, there are more creative ways to use this technology. Allowing customers to order replacement parts, request service scheduling, activate warranties or register for catalog mailings can all be managed more efficiently through the Internet and internal databases. During this stage it is important to learn about each customer and their preferences, and to use this information to provide better service.
Customize –	Make each customer or supplier feel special. When they come to your website ensure it is sufficiently dynamic to provide each visitor with some degree of personalization that they value. This personalization can come from customer databases maintained internally or from recording previous visits to the website. Businesses have always dreamed of the 1-to-1 personalized service model. The web can deliver on this model more effectively than any other medium.
Adjust –	Finally, be prepared to adjust your initial strategy. Very few ideas are perfect right out of the box. Review your sales, strategy and offerings in light of the response they receive. Acknowledge things you did well and learn from them. Also look at what could have gone better and find ways to make improvements.

The ten steps to Internet commerce presented below provide for a relatively smooth journey through the process outlined above (that is, as smooth as can be expected for a technology initiative).

Not all organizations have the same goals. Consequently, your ultimate destination along the Yellow Brick Road may differ from your competitors or partners. The nirvana of Internet commerce – selling of products or services, collection of payment and order processing over the Internet -- is not always a desirable destination.

Each successive step down the Yellow Brick Road involves greater technological sophistication, tends to be more costly and often provides greater rewards. Where does your company fit?

Step 1:	Get an E-mail Address (Inform and Educate) An e-mail address is your entry to electronic communications
Communicating via printed word remains an essential component of business communications, and e-mail is becoming the preferred way to do so by an increasing number of people. E-mail improves productivity by eliminating telephone and voice mail tag. It is more immediate than postal service, not subject to time or distance limitations, and more convenient than fax. Reduced need for fax machines and postal services, along with lower telecommunication costs, are just some of the financial benefits. Getting an e-mail address can also provide you with Internet access. In addition to sending and receiving e-mail, you’ll be able to access the largest knowledge repository in the world. Faster, more efficient communications and the ability to quickly gather information are the first steps to better productivity.
Step 2:	Electronic Brochure Website (Educate)
Very often a company’s first electronic face to the world, most business websites are best described as an electronic brochure. The content and/or design of these sites tend to emulate existing print materials -- most often showcasing company and/or product information. Basic electronic brochure websites do little to engage site visitors or convert them into viable sales prospects. Most troubling, there is usually no mechanism for visitors to identify themselves or express any interest they may have in the company’s offerings. Creating an electronic brochure website does establish a footprint on the web real-estate market and signifies an intention to make use of the technology. It looks impressive but, unfortunately, delivers little in the way of quantifiable results.
Step 3:	Not Making Money? Selling Advertising Sounds Easy – but isn’t! The wrong solution to justify an under performing website
Selling advertising banners on a website as a way of making money may seem easy. The reality, however, is that few organizations are capable of making this work. While anyone can publish on the Internet, attracting eyeballs is infinitely more difficult. And getting people to buy is even more challenging. Organizations seeking easy justification for maintaining their website seem unable to grasp the illogic in transforming their site into an advertising vehicle capable of producing results on behalf of paying advertisers. This step, which is not recommended, often becomes a necessary learning experience as organizations attempt to better understand how the Internet impacts their business. According to Jerry Yang, founder of Yahoo; the most successful advertising site on the Internet, only media or publishing companies should attempt this strategy. Most organizations underestimate the cost and effort that goes into attracting visitors to a website and selling advertising space – including the required infrastructure. The ability to create quality content and sell advertising space is expensive, most often cost prohibitive. Yahoo, for example, employs over 500 people and their per employee revenues remain unimpressive. Organizations successful with an advertising revenue strategy tend to view themselves as publishers first and Internet businesses second. It is no coincidence that the majority of advertising dollars are going to successful media and publishing organizations. These groups not only possess resources and expertise but also the inventory of quality content needed to continuously attract visitors to their websites. And yet many of these organizations continue to sustain significant losses in their Internet ventures. For an analysis on the state of advertising and selling on the Internet, the following resources are available; Hope, Hype or Happening      http://www.hiphype.com/hhh.htm
Step 4:	Integrating Internet Technology with Reality, at last! (Interact)
Early disappointment often leads to eventual failure, and the Internet might be dismissed as hype and the website ignored or removed. Yet the potential results and impact of a successful Internet initiative are so compelling that reflection and re-evaluation are necessary. For the few who continue this journey, opportunities await. The enlightened few organizations that have been highly successful in their Internet initiatives share one common insight. The Internet is most effective at allowing for personal interaction. This interaction may take many forms from improved customer service to self-service or personalized order processes. Steps 5-10 describe the various forms this interaction may take. At this stage, the use of a professional Internet services company warrants serious consideration. A good company can assist in determining which parts of your business are best suited to improvement through use of Internet technology and provide an assessment of your technological capabilities. They can also manage the transition and implementation on your behalf.
Step 5:	Lead Generation (educate) Relationships are as or even more important than technology
Getting people to visit and re-visit a website is difficult enough. More challenging is converting website visitors into sales prospects and ultimately to customers. Senior level marketing and sales professionals should become involved in developing and ongoing management of the website lead generation process. How do you know if your website is generating high quality leads? Ask your sales people! Do they have access to these leads? What follow up is undertaken? Is there any follow up? Can the quality of leads be improved? An effective lead generating website typically contains the following elements: 1. Information on company products and services. 2. A contacts section, possibly including description and photo of sales staff along with individual contact information, can help to quickly build rapport. 3. An easy way for the prospect to leave their contact information, details on their interests or needs, and choice of follow up contact options -- e-mail, fax or telephone call. 4. A degree of personalization that provides tangible value to website visitors and which will entice them to provide personal information. The site may even offer some transactional capabilities. 5. Website sales leads transferred immediately to sales for follow up within 24 hours.
Step 6:	Customer Relations (Inform / Interact) Excellent companies stay close to their customers
This statement remains as true today as it was when written over 15 years ago in Thomas Peters book “In Search of Excellence”. The Internet provides many ways to achieve this goal. Depending on your company’s market, product/service and level of computer literacy, technology can help you to be more closely in contact with more customers. Technology can even help to provide a more personal level of service and interaction. Do customers frequently call for office hours, direct telephone numbers, technical support or product information? Do they sometimes receive incorrect information, remain on hold for unreasonable periods of time, get transferred more than once or leave messages that are not returned? All this can be alleviated by posting relevant information on the website. The information remains available 24 hours a day and permits customers to assist themselves while allowing the organization to reduce costs, improve productivity and deliver better customer service. Fortune Magazine's Stewart Alsop (May 11, 1998), discusses how companies fail to manage one very simple but important task -- an address change. The importance of this information, and sharing it throughout the organization, cannot be overstated. After all, keeping track of customers and prospects is essential to future business. The Internet offers an easy solution to this difficult and labor intensive process that is almost universally ignored. This failing has more to do with lack of understanding about the Internet than with the technology itself. Stewart Alsop's article, recommended reading for any organization wishing to make better use of the Internet, can be found at http://www.pathfinder.com/fortune/digitalwatch/0511als.html. There are many other ways for the Internet to enhance customer service and sales efforts while reducing costs. But for now its time to move on. Making use of computer databases containing customers’ personal information (demographics, most recent purchases, etc.) allows any organization to provide a more personal service to each and every customer – to the extent that each customer can see something different when they visit your website. This type of interaction makes the customer feel more important, provides them with more relevant information and increases the likelihood of their making a purchase.
Step 7:	Business Productivity (Transact)
Each Internet based customer communication is an opportunity to improve business productivity and reduce costs. Reduced print, postage and phone costs are just some of the obvious benefits. More valuable is the freed up manpower now available for other uses. At its most basic level, business productivity is an inevitable result of following steps 1-6. More technologically demanding productivity enhancements are discussed in steps 8 to 10.
Step 8:	Revenue Building (Transact & Capture)
For the right product or service, the Internet can be an important sales tool. Whereas effective customer relations (Step 6) can result in increased revenues, companies such as Dell Computer Corporation (computers) and Amazon.com (books) have successfully gone to the next level. Dell Computer Corporation has shown it is possible to be successful selling products via the Internet. Amazon.com, on the other hand, has used the power of information to compete with larger and better funded organizations. This company maintains a powerful database containing customer preference details. When revisiting their website, potential customers are provided with suggested books based on previous purchases or stated preferences. Internet based revenue building strategies can involve a variety of technologies including electronic or product catalogs, sales force automation, order automation and management, customer management systems and commerce solutions for accepting on-line payment. A high level Internet services company is no longer optional for companies that reach this stage of Internet technology.
Step 9:	Back-office Integration (Customize and Transact)
Many businesses have developed what is described as back-office technologies. These are the computer systems used to manage essential business processes such as order processing, accounting functions and sales management. Integrating Internet technology with these processes provides many benefits. Allowing customers to check the status of an order, providing sales people and/or customers with an order placement system, delivery and billing status offerings and related functions all serve to enhance internal productivity while delivering an extremely high level of personalized customer service. Cost saving benefits include elimination of paper work and manual data entry, and error reduction.
Step 10:	Complete E-Commerce
E-commerce websites are usually designed to process orders, check credit and accept payment, confirm orders, arrange or schedule deliveries and generate necessary documentation. Companies most successful at e-commerce consider it a logical extension of their existing systems rather than a new and revolutionary technology. True e-commerce is not for all businesses. Retailers, for example, may be more successful at developing a website that will increase retail traffic rather than attempting to change consumer habits. “Putting the Internet to Work”, an Internet White Paper I published in Spring, 1997 presents a strategy and rationale relevant to many businesses. While e-commerce may not be the final destination for your company, there are many roads to Emerald City along the Internet highway. And just like Dorothy, if you go looking for your heart’s desire on the Internet you really only need to look in your own backyard to determine what will work for your business.

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About the Author
Perry Shoom is the founder of FranchiseFacts, a company that provides research services for the Franchise Industry. The company also publishes a Report incorporating the results from its National Franchisee Survey. The 2010 Annual Report, and the Franchisee Survey that is currently in progress, can both be found at www.FranchiseFactsUSA.com. The survey is open to all franchise owners and store managers. FranchiseFacts does not disclose identifying information that may be provided by survey respondents.

At the time this paper was written, Perry Shoom was Senior Internet Consultant for Nubium Technologies in Newton, MA. Perry provides marketing, management, strategic and technology expertise to mostly small and mid size businesses.