Operational Risks – What Are They And How To Deal With Them
“The risk of loss resulting from inadequate or failed internal processes, people and systems or from external events” – that’s how the Basel committee defines operational risks.
In this post, we’re going to take a look at a couple of external events that may affect your ecommerce store.
Search Engine Algorithm Changes
It’s been over a year since Google released Panda onto the masses and many sites are still feeling the effects from that update. So how do you protect yourself from such changes. Well, you can’t but you can hedge your risks.
Instead of placing everything you have into SEO, try building your brand through social, image and video sharing sites. It’s a slow process but it’s definitely worthwhile. And besides, Google is looking more and more at ‘signals’ from these type of sites. Once you have accounts on these sites, it is important to keep them updated.
Many merchants also make the mistake of creating Facebook pages and not opening them to public for fear of receiving bad comments. When these pages are closed for public viewing and only open to members of ‘friends’, Google will not be able to pick up on the Likes and Shares that these pages might have generated.
Do not be overly worried about negative comments. And remember to never brush off bad comments. Reply them professionally. Take criticisms as an impetus to improve your store. Most good natured people will appreciate the effort you put into trying to solve a problem which customers encounter.
Competition is good, mostly for shoppers, because they know they can look forward to lower prices as the competition heats up. But for store owners, lower prices means lower margins. So what do you do when your competition starts slashing prices?
It is true that in times when the economy is not so good, a product’s price is the biggest factor in the decision making process of a shopper. But when people start having more disposable income, other elements come into play.
Though it is important to remain competitive pricing wise, it is also important to remain profitable. So instead of just focusing on product pricing, try to highlight other aspects of your store like pre-sales service, after-sales service or special promotions.
Here’s an example of a pre-sale service. I remember once coming across a sports shoes store which enabled shoppers to download and print sizing charts for different shoe models from different brands. The owners of this store took a common issue with buying shoes online and turned it into an opportunity. This little gimmick increased sales
So you see, there is a solution for everything. Focus on coming up with a solution and you will. Just be careful not to overlook the obvious. That is usually the case in hindsight.
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