By Andy Marken
It's been said that the only people who make money on the Internet and World Wide Web (WWW or Web) are the early investors in Netscape Communications and other Internet-based companies, Web home page developers and the telephone companies. But the truth is, this global "supernetwork" is being profitably used by thousands of firms--locally, across the country, and around the globe.
While electronic commerce is slowly becoming a reality, the Internet is helping firms reach new prospects, enhance existing relationships and sell more products to present customers every day. And no wonder ... there are more than 40 million Internet users already plugged-in and the universe is growing at the rate of over 200,000 users every month.
Open for Business
Once the domain of academics, researchers and government employees, the
Internet is now "open for business," and it's estimated that more than 2,000 companies, large and small, are added to the Internet each month. Surprisingly, small firms are doing more business on the Net than corporate giants.
Bob O'Keefe, author of "Interesting Business Sites on the Web," feels that selling through the Web, where companies can become known through advertising and services, will be a major benefit for small to medium-sized firms. He notes that larger companies already have a presence in traditional marketplaces and that these firms will primarily use the Web for customer service/customer support and internal information distribution. Small firms, on the other hand, can use the Web to improve their competitive advantage against the big names.
To explain the difference, consider computer industry giant Sun Microsystems and the considerably smaller Pasadena-based Hot Hot Hot.
Business Savings, Profits
To quantify its Internet and Web usage as a business tool, Sun examined their marketing savings using the Internet to allow interested parties to obtain product literature, software updates and answer frequently asked questions. In a single month, the firm saved nearly $950,000 by not having to mail out over 5,000 literature packages and nearly 7,500 software modules. By allowing customers to access the customer support help desk themselves and download solutions, they saved an additional $250,000.
Hot Hot Hot, a specialty shop that deals in exotic hot sauce, sold more than $100,000 worth of sauce over the Web last year--nearly a quarter of their total business. As O'Keefe explains it, the Internet and Web provide a relatively fixed-cost method of providing the services of a larger firm.
Dell Computer and Gateway Computer are reported to be racking up more than $2 million and $1 million a day respectively from custom computer sales over the Internet. Their success has attracted the attention of Apple, Cisco, IBM, 3COM and almost every other computer and communications industry player who is trying to determine how they can increase global market penetration without significantly increasing their marketing costs.
Most marketing and business experts though agree that marketing on the Web is still in its infancy. Even the pioneer in electronic selling, 1-800-Flowers, doesn't see the Web being a big revenue producer for another two years. However, most firms that have established a Web home page find the benefits are not direct sales but people who visit the site, take information and request a sales representative to contact them or visit a store.
Cybercash
Doing business in cyberspace is a great idea, because it offers low overhead, no real estate, no traffic; but for retail firms, the challenge is to find a safe, secure electronic payment system. Business-to-business firms aren't concerned with this area because they only use the Internet and Web to send and receive product and application information, purchase orders and delivery data and to provide on-line customer service/customer support.
While many claim that providing credit card and electronic checking information over the Internet is as secure as placing a catalog order over the phone, firms are developing encryption techniques that will not only protect your money from snoops and thieves, but will even obscure the identity of the owner. Banks, major corporations and even government agencies already carry out electronic fund transfers on a daily basis, and industry experts feel that in the near future, even small purchases will be practical electronically.
For retail firms concerned about payments for goods, industry security experts agree that multiple payment methods in cyberspace will become a reality just as they have in the real world. But whether the company is selling goods and services to other businesses or to the buying public, the key is to reach the prospects and customers efficiently, effectively and consistently.
This requires a Web home page.
Global Receptionist
A home page is an electronic version of a reception lobby where people can come in and browse through the company, look over its products/services and determine if it something they want or need. Whether your Web site visitors are from Anaheim, Anchorage or Amsterdam, they'll be visiting at their convenience and will be looking to find out more about the firm and why they should want your products or services.
Because the world market is now open to every business, home page addresses are quickly appearing on business cards and letterhead, along with FAX numbers and e-mail addresses. The URLs (Uniform Resource Locators) are cryptic (http://www.markencom.com/) but effective. Once an Internet/Web user enters this code, he or she will immediately travel to your home page.
Economical Web Services
Opening shop on the Internet used to require a major investment in computer hardware, software and maintenance. While you can buy your own Web server, software and high-speed data link, the cost is usually $30,000 to $60,000 or more ... and that doesn't include the security devices you'll want to add to keep computer hackers out and to protect your corporate data. You would also have to add the cost of the services of an in-house UNIX guru to nursemaid the software used to access the Net.
The cash outlay, combined with the security issues, are the prime reasons even large corporations with their own data processing staffs often prefer Web services that most quality Internet Service Providers offer. For a cost that can be as low as $150 a month (or less with many second tier ISPs), any organization can have Web home page advertising that is available to millions of people around-the-clock, around-the-calendar.
Today, there are a number of packages that are so easy to use that almost anyone can develop their own home page. For firms that want to test the Internet waters, this can be a logical and economical first step. However, most companies will want to ensure that they present the best possible image on the Web and will want to hire professionals to develop their home page's "look and feel."
Once your organization is on the Web, even in a modest way, you've only just begun. You'll want to study your weekly and monthly hits (how many Internet users visit your home page) and then start analyzing why they are being drawn to your home page and what they are looking at. This will help you improve your Web presence and produce better marketing results.
Another means of research is to surf the Web yourself, visiting competitive and non-competitive home pages to see what they are presenting, how they are presenting it and what you like/dislike about their home page so you can improve your own Web presence.
Evaluate Your Site
To help you gauge your success in using the Web, here are 15 questions you can ask yourself about your site:
1. Does it attract your target customers?
2. Do you know what your customers look at and why?
3. Do your customers spend enough time at your site?
4. Does your site contain elements that cause your customers to return?
5. Does your site extend your customer base?
6. Is there an overlap of your on-line and non-on-line customer sets?
7. Is your message delivered effectively?
8. Does your message move your customers to action?
9. Do you facilitate that action?
10. Is your site personalized for your customers?
11. Does your site provide added value to your customers?
12. Is your site truly interactive?
13. Does it protect your brand?
14. Does it leverage your brand?
15. Does it extend your brand?
Reasons for Web Presence
Depending upon your product or service and the purpose of your Web site, an effective home page doesn't necessarily have to be sales-oriented. It can be used to develop new strategic alliances or cooperative product development/marketing efforts. It can be used to reduce the number of direct customer service/support calls you receive, i.e., people can obtain the information they need, when they need it, from your home page.
Regardless of your marketing objective, the Internet and Web can bring more than 40 million people to your front door. Anyone, whether they're across the state or around the globe, is within surfing distance. The World Wide Web is a quick, simple and relatively inexpensive way to facilitate business-to-business transactions, get your company in front of millions of potential customers and keep existing customers informed of your products, services and capabilities.
Of course, there's always the fear that if you don't do it, the other guy will. If a company doesn't have a presence on the Web, it doesn't get a chance to play.
Andy Marken is president of Marken Communications, an agency focused on promoting businesses in the computer, Internet and communications markets. He may be reached at 3375 Scott Blvd, Suite 108, Santa Clara, CA 95054. The phone number is (408) 986-0100. You may also email Marken by writing marken@cerf.net. Agency information is available online at www.markencom.com
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