Where to Turn for Help in Creating an E-Business (1,393 words)
by Katie Haegele
You're a successful direct marketer and you know it's time to take your business online. Or, you're already there, and you need some expert advice to make your site even better.
Look no further. Before digging into our extensive listing of service providers, take the time to figure out exactly what you'll need to succeed.
The good news: A lot of this New Economy advice will be old-hat to direct marketers, as our industry is well versed in the need for target marketing.
Newcomers, on the other hand, must first answer such basic questions as,"Where does your target audience hang out on the Internet, versus off-line?" says Douglas Armstrong, director of marketing and digital communications for Arthur Andersen Knowledge Enterprises and co-author of "The Clickable Corporation: Successful Strategies for Capturing the Internet Advantage." "Once you understand this, you can decide where to put your marketing investment."
"One thing smaller companies can do is segment target audiences based on absolute priority," Armstrong advises.
Needle in a Haystack: The Search Engine Question
Let's cut to the chase. How can newcomers determine the best use of their marketing dollars?
"There are projected billions of URLs out there. Small companies don't have the budget to compete with larger companies who can build a strong brand online and a recognizable URL," warns Armstrong.
One tactic is to register with search engines so your site will come up in response to a query.
Robin Lebo, president of Lebo Direct, which helps e-commerce sites bring direct marketing concepts to the mix, says that although all search engines perform an automated sweep for anything relevant, registering your site increases the chances that it will be listed.
An outside vendor can register your site and check on its status, as well as set up the site to be more easily found by an engine. Search engines are so inundated with literally millions of new sites being added daily that it can take up to six months for an engine like Yahoo! to list a new one, says Lebo.
According to Armstrong, the rules vary from search engine to search engine on how you can get represented. Consistently getting a good listing is tricky and time-consuming, and can change daily. The general public takes the convenience of search engines for granted; as a successful marketer, you must recognize them as businesses.
"It's probably worth considering what a smaller search engine ranking service can do for you," he suggests. Even if you defer to an expert, stay on top of the situation.
"You shouldn't pay a vendor and consider the issue taken care of— you need to constantly monitor results to establish which engines are referring visitors to your site. There's a whole art and craft to search engine registrations, and some companies are better than others," says Armstrong.
Armstrong also strongly suggests newcomers begin developing an online database of customers as early as possible. The database allows marketers to tailor their Web site to individual visitors and send targeted permission-based e-mail promotions and newsletters. "This can be integrated with direct mail," he suggests, stressing the importance of a parallel off-line campaign.
One good example of a successful niche venture that exploits its target audience is hothothot.com, a specialty hot sauce boutique, says Armstrong. "They probably have an active list of buyers that they continually market to based on preferences," he says. The company's strong suit is creating personalized content that keeps its customers coming back.
A meaningful distinction to consider before outsourcing database services is the size of your company. Armstrong says that vendors offer very sophisticated customer relationship management and database packages designed for larger and mid-sized companies that could be overkill for a small company.
As everyone who reads the papers knows, consumer privacy online is of great concern to the general public. Deirdre Girard, principle and co-founder of PreVision Marketing, says one of the simplest solutions is the most effective.
"Companies are afraid to bring up the data issue at all, thinking that if they don't mention it they won't scare people, but the exact opposite is true," Girard says.
Design to Stop Traffic
Once you've directed some traffic your way, you need a few elements to turn eyeballs into buyers, and one-time buyers into loyal customers.
You may need help establishing a clear design. An Andersen Consulting study shows that difficulty navigating sites was one of online shoppers' top 10 complaints of the 1999 holiday season.
There's Safety in Numbers
The community aspect of the 'Net marketplace is one of the major advantages to being online. Consider affiliate marketing to link arms with a company that serves a similar demographic with a different product by implementing an effort.
"You're obviously not going to want to spend 100 percent of your marketing budget on your own Web site. Consider building a 'microsite' on someone else's site. It could get you a lot more traffic," says Armstrong.
A microsite is an alliance with another (usually larger) company to market in a specific content area on its site. Says Armstrong: "At a basic level, a banner ad is a brand awareness tool. A microsite is similar but has more substantial content."
A recent Gartner Group study indicates that, although only about 10 percent of online sales come from affiliate relationships today, by 2003 it could be as many as 40 percent. John Deneen, president of SiteForm.com, an e-commerce development firm, highly recommends seeking out such partnerships.
"You have to kiss a lot of frogs to find your Prince Charming," he warns. "A lot of your partnerships won't be an ideal fit, but the ones that work will work great."
Deneen, a former director of e-commerce for retailer Real Goods, says that affiliate marketing breaks down into three basic types.
1. At its simplest, another company links to your company's site, and it receives a commission each time that link provides a paying customer.
2. Paying a third party to "do the footwork" (track the sales and where they came from) is the next level—and the one Deneen has had great success with. Linkshare has successfully handled partnerships for Real Goods by recruiting companies with similar markets to link to the site, and Real Goods decides who it willpartner with. The rule: 99 percent of sales must come from 1 percent of the affiliates.
3. Once testing has brought in results, Deneen says you can begin building a more one-on-one relationship with the partnerships that really work. The third level of affiliate marketing can entail promoting one another's e-mail campaigns, package inserts and more prominent links, says Deneen.
"You have to nurture the partnerships that make the most sense," Deneen advises.
Security is one other issue to bear in mind. According to another recent Gartner Group survey, credit card fraud occurs at 12 times the rate of catalog purchases. Chris Curran, a partner with Diamond Technology Partners, a company that helps brick-and-mortar companies with e-commerce strategy and technology implementation, believes new and existing technologies (such as digital signatures and receipts) can solve a lot of these problems.
"When implementing these things, you need to decide—based on your business—how secure it needs to be. This determines how robust the solution should be," says Curran. He says that one-time information products, such as software, music or e-book downloads, are the most at risk for theft. A good technology consultancy can help you figure out how to protect your assets.
Finally, should you abandon your off-line marketing scheme in favor of the new medium? Absolutely not!
Says Curran: "The most important issue is to be sure that there is integration between online and off-line tactics—including branding and design, value proposition and overall positioning of the company. To reach a specific target audience, the space and the timing of how you execute needs to be coordinated."