As companies calculate the financial viability of their domestic online efforts, it's important to re-examine plans for Germany, Japan, Brazil, and other rapidly growing Net economies. Some companies will see the failures of heavily-funded international e-commerce efforts, such as boxman.com and dressmart.com, and will put the brakes on their global projects.

Return on global investment

Caution: Heed the lessons from others, but that doesn't mean you should take an all-or-nothing approach to global e-business initiatives. Apply the same business metrics to international expansion that you would to domestic markets. Calculate global ROI to determine whether an investment beyond domestic markets will:

• Increase revenue and share. U.S. companies see the enormous growth in Web usage outside the United States as an opportunity to drive up revenue. Conversely, firms like BMW in Germany and Embraer in Brazil target the United States to sell their high-value manufactured goods. Companies also look to sell into their own large ethnic populations as ways to increase domestic marketshare.
• Lower the cost of doing business. The Web has already demonstrated value in taking costs out of business practices and transactions. GE saves US$500 million annually with Web-based procurement systems. As companies extend their Web infrastructure to support international manufacturing and supply chains, they'll discover that inefficiencies multiply with each market they add.
• Improve customer service. The Web lets customers serve themselves for sales and basic post-sales needs 24x7x365. Besides benefiting customers, companies save money from self-service. Forrester Research notes that customer service costs plummet when buyers can access information in their own language. Jupiter quantified the savings for the U.S. market, estimating that the average cost to an American bank for executing a phone transaction is more than US$.50, but less than US$.05 if conducted online. Apply that to hundreds of thousands or millions of transactions, and this tenfold savings is substantial.
• Enhance a brand. Much of the stock market value of companies like Coca-Cola and Nestlé derives from their brands, rather than from the factories they own. With such enormous equity tied up in brands, companies use the Web to increase awareness of brands and the products associated with them into new worldwide markets. Global branding is much trickier to measure than the other three categories, but it's an essential driver for many corporations as they look beyond their domestic markets.

1. Identify the opportunity.
2. Figure out what it costs to enter and support each market.
3. Develop the metrics to show a yield from entering a market.

1. Study the data. You'll find details such as which sites visitors come from and where they leave your site, which transactions they abandoned and where, and other "breadcrumbs" that a random visitor or failed purchaser leaves behind.
2. Find deeper patterns. Systematically analyze the traffic logs to zero in on opportunities in geographic regions and individual countries. Where possible, uncover demographic profiles, such as middle-aged golfers or teenage music lovers, within a national consumer market. On the business side, a manufacturer might find demand at public utilities that require power generators or flow control devices for infrastructure development.
3. Cross-tab data from other channels. Complement Web measurements with information from any brick-and-mortar data you have. For example, Bertelsmann uses its in-country book clubs to quantify new market potential for its online bookseller BOL. Similarly, United Airlines first targeted countries on its most heavily trafficked routes for localized sites.

• Anticipated sales in demographically correct markets. As it expanded beyond its U.S. base, Travelocity reviewed demographic profiles of multiple countries, settling on Canada, the United Kingdom, and Germany as places with a large pool of avid travelers.
• Expected competitive pressures. A competitive intelligence unit can provide insight into opportunities uncovered by your rivals. For example, Amazon responded to the Bertelsmann and Barnes & Noble partnership with its own German site. Eastman Chemical, a leading U.S.-based chemical company, decided it must serve its international customers with targeted national sites to compete with European competitors like BASF and Celanese.

1. Duplicating investment in technology, process, and best practice for each site you build
2. Creating a good international site only to let it stagnate over time (figure 1)

1. Is local language support necessary? Is it sufficient just to use FedEx to ship orders to a particular country, or will local language support increase your chances of selling more products or services?
   
   While customers in northern Europe may be fluent in English, analyst firms such as IDC and Forrester claim that people are three to four times more likely to buy if addressed in their own language.
   
   Do the math. Our hypothetical site had 15 percent non-U.S. visitation, and succeeded in selling to 5 percent of those visitors. That means that for every 100 visitors, one was a foreigner who bought something. However, local language support could improve customer service and quadruple non-U.S. transactions, but it could also mean translating the content into several different languages, which would be very expensive. For high-volume transaction sites like Bertelsmann and Travelocity, or for very high-value equipment sites such as GE Power, that might make sense.
   
   Smart Move: In all cases, focus energy and resources on the countries with the best demographics for your product offerings.
   
2. Is business localization required? If you choose to support the local language, you set an expectation that you've adapted the site to a country's cultural, wireless, and business ecosystem. For some countries, you won't have a choice if you want to do business there. Whether it's consumer demand or regulation driving the issue, deeper support of an e-business costs considerably more as you adapt the internal systems that support a successful online marketing and selling effort, including sales, inventory, operations, and fulfillment.

• Measure the reduced cost of doing business. GE and Oracle are examples of companies that openly discuss how they've sliced cost and time inefficiencies out of their supply chains through the use of Internet technologies. These savings flow through to their bottom lines, and allow the companies to compete with low-cost producers.Companies also measure the lower cost of delivering an international experience by showing lower head count. To calculate the cost of producing and managing content suited to their needs, planners can turn to software vendor ROI models that demonstrate the bottom-line value of their solutions. For example, Comdisco's IT Cap suite analyzes ROI around hardware acquisition and IT cost-tracking. Ariba built a tool to showcase savings in Web procurement costs using its software. Idiom developed a similar ROI calculator to quantify its savings in site translation and adaptation costs over more traditional workflow approaches.
• Quantify revenue and share growth. Tools to measure top-line contributions already exist in your arsenal. Use the balance sheet to show quarter-over-quarter or year-over-year growth in revenue. Rely on industry watchdogs like A.C. Nielsen and Jupiter Media Metrix to keep track of marketshare. To analyze the success of increased conversions and bigger-value transactions, use analytical tools from WebTrends or business intelligence tools from vendors such as Cognos or Business Objects. Create measurable metrics such as increase revenue by 30 percent annually or by 22 percent quarter over quarter.
• Demonstrate improved customer service. Eastman Chemical plans to offer product information in the language of its key markets, letting customers drill down into product offerings for technical data and safe handling details, thus freeing up customer service representatives for higher value-add interactions.
  
  Using Web measurement tools, you can track metrics such as higher customer return rates, look-to-buy ratios, and time spent at a site. Those factors equate to increased customer satisfaction. You can also contract with measurement firms, such as Gomez or BizRate, to collect visitor feedback and calculate improvements over time. Keynote Systems can report on site performance characteristics to measure how long it takes international customers to access individual pages or download information.