Startup businesses are caught in the ultimate catch-22: By definition, they're strapped for cash, but in order to grow, they need to market their product or service. Entrepreneurs savvy enough to figure out how to market both cheaply and effectively have the best chance of surviving—and thriving—past the startup phase.
Kim T. Gordon is president of the National Marketing Federation, a coaching business that advises small-business owners on growth and marketing issues. Her book Maximum Marketing, Minimum Dollars offers suggestions on how to grow a small business with the aid of effective marketing. Gordon puts special emphasis on the Internet, showing exactly how it offers some of the cheapest and most effective marketing tactics out there.
She chatted recently with BusinessWeek.com writer Jeffrey Gangemi about how to use the Internet for both marketing a business and closing the all-important sale.
Do all small businesses need a Web site?
Essentially, everyone needs a Web presence. Most businesses should have a Web site (see BusinessWeek.com, 4/17/06, "Building Good Web Buzz"), since it is becoming the best source of information about any given company. If you're marketing nationally it's essential because it creates a level playing field for your company.
If you're a small-business owner, the Internet is a huge money saver for you. E-mail marketing has one of the best returns on investment (ROI) of any kind of marketing (see BusinessWeek.com, 3/13/06, "Thinking Outside the In-Box"). You can't engage in e-mail marketing unless you have a great site, because people need a place to go and click through in order to complete their mission of making a purchase.
But if you're a local dry cleaner, then you might not need a Web site. Instead, a good listing on Yahoo! Local might be better, so that when people search online for a local dry cleaner, they get a map of where your business is and the phone number.
If you decide you need a Web site, what is the most important message it should convey?
Your first, most important step in growing a business is to understand the difference between what you're selling and what your customers are buying. You may think you're selling tax-preparation services, but in the end your customers want to buy peace of mind and the ability to save money on their taxes. Define your message such that it differentiates your company or what you're selling. You have to try to look into the mind of your best, most ideal customer and answer their most pressing question, which is always: "What's in it for me?"
When creating your site, you should be very careful about copy. You can have a bare-bones design as long as it's clear and workable and readable and navigable. But if your copy is bad, you've lost it. So you may want to bring in a copywriter, someone who can convey your message through the language on your site.
Should you always outsource the creation of your Web site?
There are a few good programs that you can use yourself, like Microsoft (MSFT) FrontPage (see BusinessWeek.com, 4/17/06, "Web Services: Microsoft's Path"). It only costs a couple hundred dollars, and if you apply yourself, you can do it yourself. It is challenging, but you don't have to know HTML.
If you're not planning a huge site, you can also go with the major Web providers or Web hosts like Yahoo! (YHOO), Earthlink (ELNK), or Web.com (WWWW). They all have their own proprietary software that allows you to follow their wizards and create your own site. Before you sign up with a company, do your homework. If you decide to switch providers, the software stays with them—and so does your site.
In terms of other ways to optimize a business' Web presence, what search-engine placement and advertising do you recommend?
The major search engines—Google (GOOG) and Yahoo—have very effective local search capabilities. I would go with the big ones, because you want to go where your customers are, and if the vast majority are doing their searches on Google, Yahoo, and AOL (TWX), then that's where you have to be.
[Again,] you don't want to be on 30 search engines; you want to be on a couple, where your customers are going. You might be in the online yellow pages, Google, maybe a little Yahoo!.… A small business can't act like a big business. You should think big and plan big and never limit your ideas, but on the other hand, if you have $5,000 to spend instead of $5 million, you have to be circumspect.
Can you offer a few tips on making e-commerce as effective as possible?
You want to remove as many barriers to sales as you can. To make it as easy as possible you might consider adding online search capabilities. The biggest complaint people have is that they can't find what they're looking for. Also, sites that display products in logical groupings often do better on sales.
Do people come to a site looking for one thing in particular? In other words, once you close a sale, how many other similar products should you offer before checkout?
It depends on how well it's done. Amazon.com (AMZN), is one of the best online sellers. For just about every product, you'll notice that they'll present other items that were purchased by the same customers, but they won't interrupt the original sale. Instead, once you make a purchase, Amazon will send you additional e-mails with offers of similar products that you might like. If you can invest in similar technology, it's very smart, particularly if you're an online-only seller.
Customers are very receptive when you come back to them with additional offers [for items that are] similar to things…they've [already] purchased. A returning customer is the most important visitor you'll have on your site. They're more likely to make additional purchases than any other visitor, so you want to make sure to streamline the purchase process for them. Returning customers should never have to fill in any forms.
What kinds of businesses get the most out of an e-newsletter and other electronic communications? How often is too often to send mass e-mails?
Customer loyalty programs are very popular. Studies show that people, particularly working mothers, appreciate them. If you're sending out solicitations, make sure you make the benefit or promotion obvious. It should have to do with price or saving money, or an advantage to being in your loyalty program. If it's not obvious, they'll quickly tune out.
If you've ever bought anything online from Target (TGT), you can expect to get an e-mail from them no less than every week. I'm not suggesting that people do that; that's bothersome. Studies show that every other week is probably your maximum frequency.
How do you deliver the best customer service on the Web, and if your business is great (or not so great) at it, how do you advertise that?
If you're an online retailer, it might make sense to have live online customer service, where you answer questions in real time. That way, there's a better chance of closing the sale. Consumers expect the Web to be more instantaneous than any other kind of shopping. A customer might be happy to wait in your store as you help another customer, but on the Web, if the transaction doesn't happen within seconds, they're gone.