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Thread: Experience counts (Internet Marketing)

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    Email problem RKS Computer Solutions's Avatar
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    Post Experience counts (Internet Marketing)

    Experience counts
    19/10/2007 11:48 - (SA)


    Arthur Goldstuck

    In the next 12 to 24 months, South African businesses that have been struggling for years to make the internet work for them will be celebrating.

    For some unknown reason, which many website owners will put down to their own brilliant strategies, insight and foresight, traffic to their web pages will explode. Customer response to web-based offerings will take off. Customers will be telling them what they would like to see on the web sites. Site owners will finally be able to use the phrases "Internet presence" and "Return on investment" in the same sentence.

    While it won't apply across the board, this success story is almost inevitable for websites that have been built with the customer in mind, that are easy to navigate, interesting to browse, and in tune with the expectations of users.

    The magic bullet that will make all this possible will be something completely intangible. It is called Experience.

    From the analysis of findings from research into apparently unrelated aspects of internet usage in South Africa, a clear conclusion has emerged: there is a powerful relationship between length of time an individual has been on the internet, and that individual's willingness to bank online, shop online, engage in social media and specialised social networks, and generally strive for online self-actualisation.

    That last one is not an arbitrary example: it is the same term used for the peak of Abraham Maslow's well-known Hierarchy of Needs. It begins with basic physiological needs, like food and shelter, works its way up through social needs like love and belonging, and peaks with self-actualisation.

    Slow growth

    The Internet Hierarchy of Needs is almost identical. It starts with physical needs, such as getting connected and quality of that connection, works it way up through social needs like communication and networking, and peaks with self-actualisation, such as user-generated content, interaction with web sites, and leisure shopping.

    This evolution up the Internet Hierarchy of Needs does not happen overnight. According to a related phenomenon, called the Experience Curve, it takes at least six years for the average individual's internet usage to develop from a physical Internet connection to online self-actualisation.

    Take, for example, the number of onternet users online in South Africa in 2001. It was no less than 2,8 million individuals. Many online retailers saw this as a huge potential target market, and invested tens of millions of rand in reaching that target market. The result was that they made losses running into the tens of millions of rand. The total spent in online retail that year was a mere R162m - in an overall retail market of more than R300bn.

    The numbers didn't make sense - until the market was segmented according to experience of users. It emerged that only 200 000 South Africans had been online for six years or more. Segmenting this market further into demographics like age, gender, education, location and income, it became clear that the real audience for a specific online retailer was probably no more than 50 000. No wonder they all took a bath!

    Fast-forward

    Now fast-forward six years. At the end of 2007, 3,85 million South Africans will be online. And those 2,8-million people who had been online at the end of 2001 will all be at the six years-plus level of internet experience.

    Even a conservative segmentation of this audience suggests that a major online retailer has a potential audience of close to a million shoppers who were ready and able to shop. Online retail in 2007 is expected to see the sharpest percentage growth since 2003, and the biggest rand growth in the history of the sector in South Africa.

    And in 2008? No less than 3-million South Africans will have been online for six years. The number grows to 3,2 -million in 2009. The online market is suddenly real, the online user is suddenly experienced, social media like blogging is taking off, social and business networking sites like Facebook and MyGenius are taking South Africa by storm, and it all appears to have happened overnight.

    But, as they say in the entertainment industry, it takes years of sweat and tears to become an overnight success.

    # Arthur Goldstuck is an award-winning author and journalist, and is managing director of World Wide Worx, which leads research into Internet and mobile communications in South Africa. Visit his urban legends blog at thoselegends.blogspot.com
    http://www.news24.com/News24/Columni...205322,00.html

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    Platinum Member Chatmaster's Avatar
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    Another very good article by Arthur Goldstuck. I just wish I knew where he gets his Internet usage stats from. According to my information we had 5,1 mil users in 2006 already. Also the indications according to the internet usage by several sites within the country shows that we have much more than 5 mil users. We had 3,6 mil users back in 2005 according World Wide Worx a company owned by Arthur. I think he should investigate his statistics as he is mistaken imo. According to my calculations SA will have close to 6 mil unique users by the end of this year. Although getting accurate stats on this is impossible because of multiple users per ISP account and multiple ISP accounts per user.

    With the storyline of his article I fully agree, but I also think that website owners are in deep trouble, as only a handful of websites in this country is truly ready for the Internet revolution and SA's step out of the black hole of the Internet. Not to mention how many sites are not ready for 2010. I think allot of people underestimate the importance of their web presence for 2010. Europe for example had over 330 mil Internet users at the end of Sept '07. These people are not going to look at any kind of land based advertising for SA they are going to look at the Internet for information with regards to accommodation, shopping, car rentals etc.

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    Email problem RKS Computer Solutions's Avatar
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    CM, what he says in general though makes sense to me... Once a users perception of the online world changes, he becomes more at ease with dealing online with businesses.

    As for the stats, I'd love to know how anyone can have correct stats, as I doubt that it can be done by anyone other than the ISP's themselves and then even figures might be bloated in order to have their market share shown bigger versus their competitors... Also, in SA where ISP's use other ISP's using other ISP's, how reliable would the counts be?

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    Full Member Ann Williams's Avatar
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    Cool Ever tried to do e-commerce in SA?

    There is no doubt for me that one of the main reasons what we have such a pathetic online expenditure is because it is quite difficult and costly to sell things online.

    Search any of the bank's websites for 'e-commerce' and see what hoops you have to jump through (first become a merchant; which implies first having a nice turnover - but what if you are just starting out and want to be exclusively an e-commerce retailer...?)

    And we can't use PayPal as they will not send money to a South African account!

    I think there is going to be a quiet revolution during the next year or two when simple e-commerce solutions such as MyGate become more well known. Easy, cheap systems that all even the smallest business to sell stuff over the web to other South Africans with very little hassle.

    It will be interesting to see the survey results for 2010.
    www.2BBusiness.co.za
    Business portal that provides free news and information to assist South African entrepreneurs in SMMEs.

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    Platinum Member Chatmaster's Avatar
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    Well there is good payment gateways in SA already, although, as you stated, they are expensive. Iveri, Mygate, Paym8 and then internationally I like Moneybookers.

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    Email problem RKS Computer Solutions's Avatar
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    I see MyGate as the only viable option open to e-commerce businesses out there... Paying R1.50 per transaction is dirt cheap, if only you could get away with the Merchant Accounts with the banks who flatley refuse to offer you something decent, which makes the banks the big bottlenecks in my opinion.

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