Don't join the loss making website club!
There is an abundance of online businesses offering products and services. Across social media platforms such as Facebook, Instagram, and Pinterest, users can find just about anything they need. Whether you’re looking for the perfect pair of jeans or a new hairstyle, you’ll probably find it online. But how many of these businesses make money? The answer is not many. In fact, studies show that a high percentage of online businesses fail within the first year because they lose money instead of making it. So why does this happen so often? Let’s take a look at the top reasons why most online businesses lose money:
Poor Web Design and User Experience
Your website is your online storefront. When customers first arrive at your website, they’ll make a decision on whether or not to stay within seconds or even less. If your website is poorly designed with no clear navigation, customers will click away and never look back. This is because your website needs to be as user-friendly as possible.
Poor web design and a lack of a user-friendly experience will cause your website to lose potential customers. Customers are more likely to make a purchase from an online store when it has an aesthetically pleasing and user-friendly website. When your website isn’t user-friendly, you risk having your customers click away without clicking “buy.”
If your website doesn’t load quickly and cleanly, customers will be turned away and more likely to shop at a competitor’s website. A poorly designed website can also make your customers feel as though you don’t care about their experience. This will hurt your reputation.
A good web design can also help you rank higher on search engines, which means more customers will find your business.
So, if your website doesn’t have a great design and user experience, it will cost you money instead of making you money.
Spending too Much On Search Engine Ads
Some products or services are suitable for PPC (pay per click) but most are not. The majority of businesses that buy clicks from search engines lose money on them. How?
- A high proportion of clicks are from bots not humans
- A high proportion of click from humans are from bored kids or those working on school projects
- Competitors can click on your links to exhaust your budget
- Someone double clicks on your link? You are likely to get charged twice
- A lot of clicks are by malicious people
- A lot of clicks are accidental
- A lot of clicks are from people who have no wish to buy
- Big companies can get top spots to exclude competitors, forcing you to bid unrealistic sums
There are of course ways of minimising most of these problems but they would take a whole book to go through them all. If you do go the way of pay per click to find customes remember that it is estimated that only 2% of them actually result in a sale. So; be careful, read up as much as you can about the subject and don't risk a lot of money unless you are really confident that you will make money.
No Clear Value Proposition for Your Product or Service
If you’re selling a product or service, you need to know exactly why it’s valuable and beneficial to your customers. You also need to convey this message on your website to potential customers. If you don’t do this, customers will not buy from you. This is because they don’t know why they should buy your product or service. They don’t know why it’s beneficial to them. So, instead of making a purchase, they’ll click away and shop with a competitor that offers a clearer value proposition.
There are many factors that go into creating a successful business. One of them is knowing exactly who your target audience is and what their needs are. If you don’t know the needs of your target audience, you can’t create a clear value proposition. You also can’t come up with a product or service that meets their needs. If you can’t come up with a product or service that’s beneficial to your customers, you’ll spend money without making any. This is why it’s essential for every business owner to know who their target audience is and what their needs are.
You’re Selling the Wrong Things
Another reason why many online businesses lose money is that they sell the wrong things. This could be because you don’t know your customers well enough or because you don’t understand what they want.
You don’t have to become an expert on your customers to sell them the right things. All you have to do is ask questions and pay attention to what they say. Ask your customers what their biggest problems are and how you can help them solve them. Ask them what products or services they would like to buy and why. You can also pay attention to what your customers say in the reviews they leave.
When you identify what your customers want, you can sell that to them. You might even be able to sell things to people who don’t know that they need them. This is known as “targeted-marketing” and it’s a great way for new businesses to make money.
Bad Tasks and Task Management
Another reason why most online businesses lose money is because they don’t manage their tasks and projects properly.
If you’re the owner of an online business, you’re probably juggling a lot of tasks and projects. You may be responsible for marketing, customer service, product development, and more. Managing your time and tasks is important if you want to maintain a healthy work/life balance and keep your online business afloat.
However, if you don’t manage your tasks and projects properly, you may find yourself working too much and making too little progress. If your online business is losing money, it could be because you’re not managing your tasks and projects properly. There are lots of tools and outsourcing methods you can use to manage your tasks and projects more effectively. The key is to choose the ones that work best for your business and your specific situation.
Lack of a Marketing Plan
Marketing is essential to growing a successful business. However, not all businesses have a marketing plan in place. This can be due to a lack of planning or a lack of understanding about how to create a plan for your business.
You should have a marketing plan that details how you will make money from your customers. Your marketing plan should include your target audience, the products or services that you sell, your sales process, the tools that you use to make sales, your sales goals, and your budget. You should also revisit your marketing plan regularly; at least once every quarter and after any significant changes in your business.
This will allow you to make adjustments to your plan as needed. It will also keep you from becoming complacent with your marketing efforts.
Lack of Quality Content
If you’re trying to grow your business online, you need to create and publish quality content that answers questions your customers have and that helps people solve their problems.
It is a waste of time re-hashing the same content as on other websites; there may be thousands of other businesses online doing the same thing. Nothing succeeds better than offering unique products and services, or different ways of solving the problems your visitors face.
It can take a lot of time and effort, plus imagination, to create quality content. However, it’s essential for growing a successful business online. If you’re not publishing quality content, it will cost you money instead of making you money.
Lack Of Trust
The Internet is full of scammers. You have to make sure that visitors can be sure that you are not one of them. Here are some ways on how to do it:
- Make sure that you are easy to contact. Consider having an online chat system - they can be inexpensive or even free - but at least have ways in which people can contact you by post, telephone or email. Answer all queries promptly.
- Have an 'About Us' page that displays photos of yourself and your staff (if any). Make it a light hearted, friendly page rather than stuffing it with sales copy.
- Get a Facebook page where people can contact you - but only if you have time to manage it. You may also consider Twitter but personally I think that it is often a pretty toxic environment.
- Join any professional associations that are connected to your line of business, and publish your membership details at the footer of your website.
Poor Product Quality or Design
If you’re selling products or services, they have to be high-quality. They have to be the best products you can possibly create. They have to solve a problem that your customers are facing.
Review sites abound and a lot of people trust them - perhaps more than they should, since some of them are too easy to exploit. However, a few bad reviews from dissatisfied visitors can prove very expensive for you.
Many bad review are unfair. If you do get them post a reply if it is possible to do so, keeping a calm, courteous and reasonable attitude. Calling a complainant an idiot, even if he/she obviously is, won't win you any friends but a sensible explanation about the perceived problem will show that you are someone who cares about your business' reputation.
Lack of Expertise or Knowledge
This is a biggie. If you don’t have the expertise or knowledge to run your business, you’ll definitely lose money. For example, if you decide to sell a product that you don’t know much about, many of your visitors will soon realise that. It’s critical that you know everything you can about your industry and every product you sell. You also need to know the best marketing techniques and how to reach your customers. If you don’t, you’ll lose money.
The Bottom Line
By now you’ve realized that there are many ways that businesses can lose money. The good news is that there are many ways to avoid losing money too. By following the tips above, you’ll be on the right path to success.
If you want to make sure that your online business doesn’t lose money, you have to put in the work. It’s impossible to succeed without hard work, dedication, and perseverance.