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Q &A Column - From
our June 2001 Newsletter
curious about getting on the Internet, but I know some people who've
spent a lot of money on web sites and it's not doing them a bit
of good. Don't all the dot-com failures show that the Internet is
just a bunch of hype anyway? And if not, how can I tell if a web
site would help my business?
questions. First, let's clear up the dot-com part. When the media
refers to "dot-com failures", they are referring to less
than 300 companies that were able to generate large sums of venture
capital money during the recent boom. Uninformed investors poured
millions into bad projects just to get in on the Great Internet
Gold Rush. When these projects failed to generate the expected windfalls
within impossibly short time periods, those same investors got spooked
and yanked their money out of Internet companies and stocks - both
good and bad. The same force that created the boom also caused the
bust; the get-rich-quick investing mentality.
business continues to do what small business does; build steady
growth on a solid foundation. The Internet is a marketing and communications
tool, just as direct mail, catalogs, and radio advertising are tools.
The big difference is in the tremendous number of people you can
reach for very little money by comparison. But marketing principles
still hold true - you must reach the right people, at the right
time, with the right message in order to be successful. The magic
is not in the tool; it's in the use of the tool.
can benefit from using the Internet, but you have to have two things
firmly in hand: 1) a professional-looking site that is built from
the beginning with marketing, not design, as its main focus, and
2) the correct Internet marketing strategy for your business. Contrary
to popular belief, there are not one, but three basic types of business
sites on the Web today. They are the e-commerce, the ad-driven,
and the credibility (also called demonstration) site.
Each type measures success differently. Many sites considered failures
were actually successes, just in a different way than the owner
site, in which sales are generated completely online, is the most
well known type. It is also the most costly to build, the most difficult
to maintain technically, and the most vulnerable to security risks.
(There is, however, one huge exception; selling valuable information
to a worldwide audience. You should speak to your Internet
Business Consultant if you're interested in this special niche
business.) Only one thing matters on an e-commerce site: sell-through
rate. Many Internet ventures of this type have failed simply because
the cost to obtain customers was higher than the sales revenue generated.
site lives and dies based on traffic. These sites tend to be huge,
ever changing resource centers based on the "content is king"
theory. As the number of site visitors clicking from page to page
for information, gameplaying, or entertainment increases, advertisers
become interested in reaching your particular demographic. However,
these sites have also proven very expensive to maintain. In addition,
web-based advertising has yet to prove itself as a revenue generator
for the advertisers. As a result, ad space, particularly banner
ad space, is selling for far less than it did at its peak in 1999.
If you have
a real-world business, and are looking to use the Internet to reach
your local market, I recommend the Credibility site. Much
more than simple brochureware, this site is an interactive source
of information about your business that allows people to answer
some of their own questions - and come to you much more qualified
and ready to buy. It also gives you the ability to stay in touch
with your client base, giving them reasons to come in and giving
you top-of-mind status when they are ready to do so. It turns out
most sales over $39.95 require some type of personal contact anyway,
either by phone or in person, to complete. Take advantage of this
reality by using your site to drive people into your place of business,
rather than trying to complete the entire sale online.
A well thought-out
marketing strategy is critical for the success of your venture.
Using your web site as a centerpiece, and integrating it with your
current marketing strategy, can produce immediate and amazing results.
Most businesses are already utilizing various offline marketing
tools, i.e. postcards, yellow pages, newspaper ads, cable TV, etc.
Correctly combining just one of these mediums with the power of
email and a strong web presence will generate a spiral branding
effect that builds momentum each time you take your prospects through
didn't really change the rules; it just makes it much easier to
get the rules working in your favor. Commerce using the Web is at
record high levels, and accelerating. As usual, big business may
dominate the news - but small business dominates the landscape.
Upgrade your web presence as soon as you can, and make it central
to your marketing mix. Don't let media sensationalism or the "other
guy's" mistakes cause you to miss out on your share of the
additional business that's yours for the asking.
Grace Cheeseman is the Director of Operations at SkyVault Web Site
Services, a web marketing and consulting firm based in Alameda.
SkyVault provides a full range of services including training, design/development,
hosting, and marketing assistance. Find them at ww.skyvaultgroup.com.