Lead a Horse to Water: Part II

My article in November spoke of a large Retailer resisting the common sense approach to investing more on their website instead of classical advertising mediums (i.e. Print, Radio).

Every time I have another example of a large prominent New Zealand Brand and/or Retailer exhibiting resistance and/or ignorance to growing focus in their online channel, I will document their story under the title of ”Lead a horse to water”.

I can’t think of a better title.  These are groups who have asked Exceed Online what needs to be done to become more successful online, however, once they hear the answer, they ignore the advice or more importantly, fail to understand the opportunity cost.

In its simplest form, opportunity cost represents the benefits a Company could have received by taking an alternative action.

The latest example of “leading a horse to water” was with a very large Travel Company who had been told to create landing pages for their key products.  Selling two of their products would pay for the cost to create one landing page, however, the client still argued the price to create landing pages was too high.  Their average traffic is 20,000 unique visitors each month with a conversion rate well under the 1% mark.

For this Organisation, their inability to see the potential benefits of reallocating spend (or costs) will minimise their ability to capitalise on the opportunity.

In the physical world, the concept of Opportunity Cost is a key in economics and is an extremely common and effective decision making tool when allocating budgets and justifying capital expenditure.  Unfortunately, the New Zealand business environment still has more learning to do in order to apply this methodology to the web.