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The 10 Commandments for Digital Products Companies:
Insights from the first four semesters of the EDE
by Anitesh Barua
1. Create early visibility and market presence. Successful EDE companies got started quickly with simple but functional storefronts, while others wasted time creating highly sophisticated sites.
2. Invest in building trust. On the EDE, as on the Internet, trust is absolutely critical since pure Internet companies initially lack the credibility enjoyed by established companies in the physical world.
3. Don’t make it difficult for buyers to assess you and your products. Buyers want quick access to price and product information, without having to fill out registration screens designed to help the company, not them.
4. Provide signals about product quality. Since digital products are difficult to assess, companies must be able to help buyers make informed buying decisions, and must clearly describe their products.
5. Make it easy for buyers to express their needs. The top EDE companies deployed automated help desks which clearly identified buyers, their projects and needs, while helping the companies offer customized products.
6. Don’t forget product quality. Successful sellers created original products, and were therefore able to command a significant premium over those who used the Web as a primary source of raw material for low priced products.
7. Customize content and presentation. Most of the money in the market was made from “big ticket” items that were customized for specific buyers.
8. Be nimble, be quick with customer care. In an electronic medium, buyers expect immediate response from sellers.
9. Don’t treat customers with a one-size-fits-all strategy. The winning companies treated their special customers differently by offering deeper discounts for their loyalty and high purchase volume.
10. Offer bundled products in a world of synergy. Companies that carefully bundled related information and software items were able to generate top revenues with just a few transactions.
For more information contact: Anitesh Barua, Texas Business School, 512-471-7895; Andrew Whinston, 512-471-8879; or visit the Center for Research in Electronic Commerce.
For information on specific programs at the McCombs School, consult our contacts page. For media information, contact the Communications Director by phone at 512-471-3314 or by email at CommunicationsDirector@mccombs.utexas.edu.
