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*How to create multiple, flexible revenue streams
The successful online portals and marketplaces today are well-known; the failures aren’t but there are multiples of the winners.
Here’s a snapshot look at what it takes to build winning web portals based on real-life lessons.
Ten years ago I was immersed in a meeting of Information Technology professionals and business leaders from the Pennsylvania Industrial Resource Center Network.
They were trying to come up with new ways to serve their base constituents, Pennsylvania manufacturers, and get them into the world of e-Business.
Lo and behold, one rather entrepreneurial centre director brought up the idea of an online business web portal site, targeted to this market.
Building A Winning Web Portal
Nowadays, it’s not just about building a website, it’s more about building a website that works; a website that presents and markets your brand to the world in a creative way.
A business or company could showcase itself to the world on the website, access new quoting opportunities and resources such as suppliers and information. So just what are the best methods of building a winning web portal?
Here comes the problem: this idea was not a new one. In 2011, even less so. There are loads of online web portals out in cyberspace that aren’t working and can barely pay the rent.
There are, however, targeted communities or successful web portal sites out there that are getting it done. We read about them in the trade press and marvel at their “instant” success.
So what makes a Yahoo or a Hoovers Online a winner where many other attempts turn out to be losers?
#1). Connect People With Each Other
We did some competitive analysis for the manufacturers’ portal, and found an interesting thing. Lots of online portals were repositories of links to other places – societies, associations, other portals – all good stuff, but missing something. That something is the personal touch.
The most successful business web portals have a search feature that allows you to touch companies or individuals that you request, based on your input. This is the entire premise behind a search engine site like Google or a directory like Yahoo. Your query tailors your response.
For the manufacturers portal we wanted to go that even better. All of the manufacturers on our site had a listing akin to a yellow pages slot, but with much more information.
Contacts at the companies, core competencies, special awards, certifications of performance – all this stuff and more had to be provided. The goal was to provide listings, and therefore query returns, that would instantly tell the online viewer who that company is, what they stand for, and what they can do – all before you have to pick up the phone or click-through to another slow-downloading website.
“Wait a minute, Karl. Isn’t that information hard to come by?” YES. If it was easy, everybody would do it. What we found in investigation of portals with little traffic was weak levels of often inaccurate information, sometimes searchable and sometimes pooled in interest groups.
The trouble was that it was difficult to find out a lot of juice on any entity without going through multiple pages of click-thrus, paying to get it, or picking up the phone. Ah-hah! This user found an inherent weakness that our web portal would not have.
#2). Have A Unique Niche For Your Online Portal
Everybody tells you to have a unique niche these days, so I won’t be labour this. This is something you’d need to do in any good marketing effort, even offline. Unless you have mass amounts of equity or capital, it is almost impossible to be the Yahoo or eBay model of all things to all people. There are already giants doing it.
Speciality portals like eSteel.com or even those that trend socially like eHarmony.com for lonely singles have decided to be the biggest fish in their vertical pond if they can.
Niching allows you to achieve scale faster and sooner dominate a market, whether it’s manufacturing, certain commodities like steel that are bought as a group, or even online dating.
It can also be a horizontal niche based upon some unique way to deliver a successful online marketplace or web-based reverse auction site for generating business quotes.
#3). Develop Rapid Scale
A key element of how to build web portals for success is rapid scale. It needs to get the masses on it and using it, and fast. Scale of users is what makes an online portal valuable to the advertisers that support it.
There has to be a large, target market of potential buyers out there that the big corporate sponsors want to get in front of. The more scale you have, the better rate of page view advertising or click-thru revenue you can generate. The portal we developed needed a strategy to get massive scale by, like, yesterday.
To that end, we needed a strategy to get every manufacturer in Pennsylvania onto our site as a registered subscriber and as a user. Deals were struck with database information houses, partnerships were established, and that group of statewide Resource Centers who already have contact with companies throughout the state was engaged to take the message to the people about this portal and why each company should spend some time there.
We also put into play a major marketing awareness campaign. Scale of nearly 20,000 companies was achieved within a one year timeframe. We had a large database, but alas, only a small percentage of those were active users.
#4). Add Long Term And Transactional Value
Successful web portals need something to make them sticky. This is akin to providing valuable content in your blog posts for better SEO. If you don’t have the time, there are assorted experts you can leverage to extend your reach. What did we do?
First, we partnered with an online RFQ service that allowed our contract manufacturers to bid on open work. Moderate success here. We added a Free Ask the Expert section to field questions on manufacturing process, lean, six sigma – even financing. The goal was a response from our expert network within 24 hours. For the most part we made that happen.
The most ambitious thing added was a reverse auction style, demand aggregation purchasing portal. The value we added was aggregating the demand of multiple small manufacturing companies in order to leverage their collective purchasing power to buy commodity items. I’d field requests on what a company wanted to buy and our staff would try to find others to form a super-buyer.
Eventually I had this built into a web application so that companies could aggregate their own friends by sending out a Blast-Opp (c) to the marketplace, a tailored email with my office running quality control (like a blog or forum community moderator). Blast-Opps(c) had to for virtual demand aggregated purchases or RFQ opportunities for our members, and the structure of the forced response form did a fabulous job of controlling spammers, along with our moderation.
Many successful web portals today have a series of services that provide Free value as a teaser in order to gain market share or scale, then try and up-sell to the Premium level where visitors should be able to make a larger splash in the marketplace.
#5). Create Multiple, Flexible Revenue Streams
Our little portal eventually went the way of the Dodo bird. Why? Because at the time we conceived it, banner ads were new and generating massive revenue, and this was our financial model.
Within 12 months, banner ads tanked in their current form when people realized page views did not lead to money, an amusing standard for traceable Internet advertising that isn’t applied evenly to print and other mass media campaigns. We tried to recover with revenue from the reverse auctions, but it was too late.
This portal was privately funded with a profitability goal of 1.5 years, which at the time in the gold rush of dot coms was not realistic. It was taking much longer than anticipated to build active scale for that model to work, at least to work as a stand-alone revenue stream.
So here comes the last lesson for creating winning web portals: have multiple, flexible revenue streams. Today, you can achieve success with online portals in the first 18 months of operation, depending upon how fast you attain visitor scale.
The variety of income streams a site can earn grows by the day – premium member services, click-thru ads, affiliate programs, and of course transactional commissions on the commerce that happens in the online marketplace. These multiple streams now form a financial model not beholden to a sole means of cash production.
Some, such as affiliate programs, don’t even need mass scale, just a handful of quality performing affiliate streams can pay the bills while value is added and unique visitors multiply.
Written By Karl Walinskas and also posted here