The Cost of Doing Internet Advertising and Business

A direct marketer’s rule of thumb tells us that it costs just as much to sell by mail or phone as it costs to do it in bricks-and-mortar outlets or with an in-person sales staff. The secret of sales success has been (and still is) to use any or all of these in whatever combination works best for selling your customers. Online marketing is sometimes is the only good way to advertise and sell. More often, it as one of several media to be tested and used as long as they are costeffective. But in most cases, Internet marketing will not be a cost saver. As more people are learning every day, whatever online marketing saves on handling paper work, the costs for media charges and people usually equal the savings. Learning how to use Internet advertising as all or part of your marketing mix reinforces four more of direct marketing’s oldest rules of thumb:

1. You “know” nothing until you test.

2. Keep meticulous records.

3. Believe the numbers, but know what the numbers mean.

4. Act on what you learn No “Friction-Free” Commerce Many would-be entrepreneurs entered Internet marketing because they believed that the Net provided “friction-free commerce,” that it was a medium where the customer would do most of the work to find the seller, rather than the opposite. In a few cases that has proven to be true, as witness the loss of business for travel agents. But as the number of Web sites increase literally by the thousands per day, making yourself known as a small to medium-size enterprise demands more than the Web. It needs all the tools listed at the beginning of Article 5 and a few more we will cover shortly.

No “People-less” Revolution People are social beings. Many enjoy shopping where there are other people and the Internet is not going to take them away to sit at home or in an office in front of a computer screen. For most businesses and manufacturers, it is a valuable additional way of doing business and getting that extra sale. Certainly the biggest share of retail is still—and will continue to be—the bricks-and-mortar establishment, even as much of it adds a “brick and click” component. The Internet is not the death knell of retailing, telemarketing, or direct mail. That is not going to change!

Will Internet-Only Commerce Survive? As we write in 2002, some analysts predict that few Internet-only firms are going to survive. We doubt that is true. By and large, they are operated by a very smart group of men and women who will learn how to make the transition from use of the Internet as their only marketing tool to its use as one of several. If not, perhaps they can gain new wisdom from our article and start again.

Alternatives to Getting Your Own Web Site If you do not want to go through all the design and business needs of establishing your own Web site, there are numerous alternative. Many established, reputable concerns have templates for you to use and most basic small business needs figured out so you can have an Internet presence. You won’t have your own URL, but with an address such as Amazon.com or Yahoo/store/your name, as opposed to www.your name.com, you may gain credibility rather than losing identity. An even simpler option is Yahoostore.com. For a small charge, you can put a certain number of products in this “Web store” to be on a Web site without putting it up yourself.

Finding the Right Web Site for You to Advertise As in other forms of advertising, ask those in related businesses or professions about their experience. Your direct competitors may not wish to tell you or give you helpful information, but you can check their Web sites and ask their ISPs how long they have been advertising and what format they have been using. Most media sales representatives sell by pointing to related businesses/professions/ services using their medium, so you are not asking for forbidden knowledge. “We really like the Blank Blanket Bundles site and we’re thinking of doing something like that. Can you tell me how long they’ve been on and what formats they’re using?” If you are not a direct competitor—and sometimes even if you are—you’ll probably get the information.

Industrywide Information For industrywide information, the Interactive Advertising Source, one of the many SRDS guides listed on page 51, gives detailed information on thousands of Web sites that accept advertising.

The Need to Find the Right Bank for Credit Sales If you are a small business offering credit sales, you may want a third party to manage the financial aspects of online sales for you. Many banks have a working relationship with ISPs to handle this, have knowledgeable legal help, and include programs to detect attempted frauds and other scams. A bank offering e-commerce credit service is more likely to spot fraud attempts on Internet and telephone sales. Find out if your current bank can handle those transactions and give advice. If not, ask your ISP to recommend one. Some banks even have Web design services. Of course, there are costs involved, but as we have said before, most often the Internet is not a cheaper way of doing business, it’s just a different way. As of October 2002, some major credit card companies guarantee payment of Internet sales. Check with them to see if restrictions apply.

SUMMARY Four Small Business Advantages

1. You can—and must—be the most customer-focused: from your advertising, through your sales, to your customer service.

2. You do not necessarily have to offer the best price as long as it is within reason. 3. You can—and must—be the one that is most reliable in having the product or service the customer wants, that keep your promises about delivery, and has a computer system that makes it easy to purchase!

4. You can make immediate decisions. Whatever your computer tells you about your online customer activity, you can do something about it without having to go through channels. Do it!

Setting Your Strategy People do not go online to see what is on. They have a specific purpose in mind, whether it be chatting, shopping, or information gathering. Your entire goal— while setting your e-mail and Web strategy—is to find and work with persons who understand your needs. You and they must always keep in mind that you want people to think about your company before they turn to their computer. You want to be the reason they turn it on. Here, too, there are no new “how-to” discoveries. You do it with the same old way, by giving people a benefit valuable enough to take them to your Web site. Instead of thinking of e-mail as “here is how I can do things more cheaply,” think of it as “here is how I can show my best customers how much I appreciate their business by offering them benefits no one else gets.” In addition, and this is a difficult leap for entrepreneurs to make, you need to think of not selling occasionally. For instance, if you are a manufacturer of safety signs required by OSHA, use e-mail to keep those customers up to the moment on local, state, and federal regulations. Make sure you have the right e-mail address for those who need the data. Offer the information on your Web site to noncustomers, too. In business-tobusiness applications you can help people who are swamped with data by pointing out what really matters and let them know where to find the details. Use it for industry convention updates. Warn them of pending price changes if they are going to increase. Surprise them with the good news if prices go down.

Make Your Goals Reachable Set goals reachable for your business and your budget. Certainly you want an Internet presence. It will answer frequently asked questions so you can reduce— not eliminate—phone time. It should add some incremental sales. Properly installed and used, it can cut order processing costs from dollars to pennies. Using e-mail lets you serve customers with computers even better by giving them special treatment, such as a note from you—one more personal than direct mail. As the company president, you can communicate individually with your best customers and make them feel the way they should feel—special! They are the people who pay your bills, pay your mortgage, maybe pay for a pool in your back yard, and should be treated as such. Be Easy to Find Make sure you are easy to find. You want a Web address that differentiates you from others. But be very careful of what careless customer spelling can do, as Publicsports learned from irate (and a few grateful) customers. Some X-rated and soft-core sites chose names that are frequent misspellings of the most popular Web addresses.