What do you expect having your own web site to do for your company? There is a lot of hype about the Internet and the World Wide Web. You can find news items almost every day on this topic, especially about the impact it is having on the way the world does business today, and how it may revolutionize the way that we all shop tomorrow.
Some news items proclaim that the world of sales will never be the same as more and more people have the option to just shop from their PC. Other news items expose how poorly some of the most publicized Internet companies are failing to produce any profits for their stockholders. What is the real truth?
Actually, the content of both types of news items have a lot of truth. First, it is true that the amount of sales being done over the Internet is already a multi-billion dollar sector of our economy. Second, it is also true that very few of the companies involved in this sector have yet to see any direct net profits result from their participation in the Internet. Worse yet, several start-ups that have based their entire existence on Internet sales have quickly gone out of business!
Our view of this? We recommend that you do not start a company whose very existence will depend on the sales that it makes over the internet. Unless you have enough funding to keep your company alive for the long haul without adequate sales to support your costs, that would not be a wise move.
If you already have an existing business, does that mean that you should ignore the Internet for now? Our view is that would be a very unwise move. You will miss an inexpensive leap that you may be able to take at this time beyond your competitors. If you do not make plans to get on the internet now, you may find the effort to enter this world and to catch up to your competitors too costly in the future. Right now the costs are minimal to get your business onto the internet and to at least have your foot in the door and be ready for the next step in this new world of on-line commerce.
When people think about what the Internet World Wide Web can do for their business, they usually think of Advertising and Sales. These are usually the two major items that businesses have in mind when they evaluate the benefit their business can derive from other media sources such as magazines, newspapers, television, radio, direct-mail, etc. However, the Internet brings an entirely new benefit to your business that can not be done effectively through any other media outlet. As the number of people relying on the Internet continues to grow, you might find this tool to have more benefit to your business than any other media outlet. The Internet is ideally suited to providing this while other media is very limited in how much of this they can provide: Information !
Magazines, newspapers, television, and radio are ideally suited for advertising. Each reaches a large audience. You can let the public know that your product or service exists and let them know where to find your store or how to contact your business to purchase what you offer or for more information.
Unfortunately, space or time in such media outlets is very costly and limited. Most businesses cannot afford to present their entire line of offerings in one ad or commercial. Actually, most businesses can't provide much information about even one of their products in the time or space that they have purchased! As a result, most ads are filled with total hype. They have to get you excited about the product, maybe even excited enough to buy the product, without really knowing much about what you are buying!
Next time you see an ad (or purchase an ad?), examine just how much information is provided about the product and how much is left out. Ads usually contain a lot of excitement about the product, but very little more. Would you be able to take the information that you gleamed from the ad, and by using similar ads from competitors, do comparison shopping? Does the ad even tell you the price of the product? Is this the only item that the merchant sells, or does the merchant have a lot more products or services to offer which aren't in the ad because promoting of the other items just doesn't fit in the ad or would be too costly?
At present, magazines, newspapers, television and radio win over the internet hands down when it comes to how many people you will reach. We would be the very last people to advise you to replace your current advertising with ads on the Internet. Our advice is to continue or expand your current advertising program in traditional media outlets, but also start putting your web address in those ads! We'll explain why below.
Companies that expect the same results from advertising on the Internet as they get from traditional media outlets are setting themselves up for a big disappointment. The number of people that will see your ad on the internet is far smaller than the number of people that will see or hear your ad through traditional media outlets. But on the other hand, look at the difference in cost! Advertising for a year on the internet will usually cost far less than a single print or broadcast ad. If you compare how many people are made aware of your business and offerings relative to each dollar spent in advertising, you would end up with a much better result. Unfortunately as will be explained below, the results of your internet advertising are not going to be easy to measure. But, for so little cost relative to the rest of your advertising budget, the Internet should not be ignored.
While we are on the topic of advertising, we do wish to insert a bit of a plug for ourselves, TrainWeb. We do advise that you allocate some of your advertising budget to the internet. If your company has anything to do with trains (travel, the rail industry, model trains, railfanning, rail tourism, historical rail, etc.) then we are going to make a case that those internet advertising dollars are best spent with TrainWeb.
If you sell furniture, cars, ice cream and other items which don't have an appeal that is unique to the rail community, then I won't make the claim that TrainWeb is the best place for you to focus your internet advertising dollars. Since TrainWeb is the most visited rail related web site on the Internet, we can't think of a more logical place to advertise your rail related business to reach the tens of thousands of such people that do visit our web site each month.
As described above, a business will use the media to get the word out that the business exists, that they have something to offer, and will often but not always, explain where the business is located or where or how to obtain what is offered.
Businesses will often create an ad that is designed to result in an immediate and direct sale. These are the ads that provide you with a toll-free number to call, indicate what credit cards they accept, tell you that operators are standing by right now, plus give you the option of where to mail your payment if you would rather do that than call. And ... a number of them are also starting to provide their web address and indicate that you can purchase the item directly on-line!
I have to assume these ads must be effective as I seem to see more of them all the time. There are similar versions to this in the print media. You will see one or more items listed in the ad with an order form at the bottom for you to cut out and mail. Often those ads also have a toll-free number for you to call with your credit card. And ... once again ... more and more of those are starting to list their web address and let you know that you can order directly on-line!
Here is where a number of new Internet start up companies fall into the breach, never to return. Many brand new companies that have never sold anything to the public before, have opened up on-line stores. They have made the entire existence of their company depend on their sales on the internet. From the shear traffic of the internet, they expect enough people traveling along the Information Superhighway to stop by their store to purchase enough to keep their business going. Unfortunately, like with any highway, there has to be an exit ramp and a sign to let people know that you are even accessible from the highway!
If these people think of doing any advertising at all, the only advertising they usually do is just on the internet itself. As part of an overall advertising effort, that should be included, but is very inadequate if that is all the advertising the business plans to do. First, unless the business places its Internet ads intelligently, they can be very ineffective. Just putting an ad anywhere on the internet would be like placing an ad for sun tan lotion along an Alaskan highway! The internet ad has to be placed where people interested in your products are likely to see them.
More important, however, is that advertising of your web site has to be placed into traditional media outlets. When a business that only sells through the internet does not adequately market their web site using traditional media, they just end up on the trash heap of failed internet businesses.
If you are already in business, we strongly suggest that you also use the Internet World Wide Web as a method of advertising and a source of sales along with the traditional methods used by your business. If you are not currently in business, but are thinking about starting a business, we'd recommend that you think twice about starting a business where the only mode of sale will be through the internet. You might ask: "But isn't that what Amazon.Com and others like it are doing?" Yes, but Amazon.Com started with a significant amount of capital and has invested all of their profits back into traditional media advertising outlets. Even with all that start up capital and reinvestment of profits, they have yet to make a profit for their shareholders. Despite the skepticism of some investment advisors, this is not at all unusual for a new business. We believe that Amazon.Com will be very profitable over the long haul and will be considered a successful pioneer of companies with sales based exclusively on the internet. But, unless you have a lot of start-up capital and plan to invest all of your profits into traditional media advertising for your web site, we would not recommend that you create an exclusively internet based company.
While it is not a great idea to exclusively rely on the internet for sales, it is very important that you do prepare your company to be able to sell over the internet. Every day you see more and more companies placing their web address in their advertising. People appreciate and enjoy the convenience of shopping on-line. While this was once an unusual concept offered and used by few people, shopping on-line is rapidly becoming commonplace. Placing your company on-line and getting started with offering your products and services over the Internet is not very expensive. You will probably find that your initial set-up will cost less than many one-time runs of print or broadcast ads.
Offering information to the consumer is the unique and strongest ability of the Internet. No traditional media outlet can come close to this ability of the Internet World Wide Web. We believe the ability to provide exhaustive information is the #1 reason for the growth and success of the Internet.
How much information can you provide to the consumer via your web site? That is 100% up to you! Cost is not a factor at all. If you wanted to provide several full-color photos and many pages of text about every product or service that you offer to the public, you can afford to do that. In print and broadcast ads, you are charged for the size or length of the ad and how many times it is to run. The cost of the production or design of the ad will vary depending on how much time it takes to produce.
On the internet, the design of your web site will also vary depending on how long it takes to produce it. However, you are not charged anything extra for having it available to the public 24 hours per days, 7 days per week, all year long! You are also not charged for how often your web site is viewed nor for how long it is viewed. Our basic annual package gives you the ability to post so many pages and photos to the web that very few businesses need more than that basic package. But, even if you do need more than that, the annual cost increase to be able to post additional pages and photos is insignificant (for example, an additional $60 per year to post hundreds of additional pages and photos).
With traditional media advertising, you will usually have a new ad produced to introduce a new product or maybe to just give a fresh advertising approach to a product you have previously advertised. The old ad material is thrown away or filed away never to be used again. The web is different. As your business adds new products and services, you will have new web pages designed for those additions to your line. Those new web pages will be integrated along with your existing web pages. You might even have some of the old web pages updated with new information or just modified to try a different layout or presentation of the same material. But, rarely do you throw away work that has been previously done for you on the web unless you have discontinued something that you used to offer. Thus, your web site continues to grow over time!
This is a major departure from traditional media advertising. In traditional media, you are limited by either space, time or cost, in the amount of information that you can provide. Thus, you must select what you want to feature in your ad and almost ignore promoting everything else that you have to offer. But this is not the case with the Internet. You can "feature" a new product, or an existing product, just as you do in traditional media advertising. However, on the web, everything you have to offer is still available for the public to view! All the money that you have spent in previous design work has not gone down the drain. The results of all that design work is still on display at your web site! Through "links", each visitor to your web site can see everything that you have ever posted that you wish them to see!
Thus, the strongest feature of the Internet World Wide Web to businesses is the ability for you to provide "information" about ALL of your products and services to the public using the most cost effect method possible. Although you can and should advertise and enable the ability for direct sales on your web site, those are not the main reasons why you should consider placing your company on the Internet World Wide Web. The main reason you should do so is because the Internet World Wide Web allows you to provide information: unlimited text and full-color photos, to the public about your company and all of your products and services. Everything you want the public to know becomes as close as their fingers-tips on the closest keyboard!
Will you be able to figure out how much of your increase in sales is due to the Internet? This is a very difficult question to answer.
If you wish, we can provide you with a way to instantly determine at any time how many times a page has been viewed at your web site. This count can be made visible to everyone that comes to that web page, or it can remain invisible to visitors, but able to be seen by you.
Unfortunately, this counts visits to your web pages and not sales. The number of visits certainly indicates how interesting people find what you offer at your web site and that is helpful.
There are a number of problems in determining the effect of your web site on sales. You could just add up how many sales are placed through your direct on-line order mechanism. However, there is quite a bit of research that indicates that most people who visit your web site, are sold by what you have presented on your web site, will still pick up the phone or fax or mail the order form to you to place the order. Or, if you operate a store local to them, might just drive to your store. Although comfort with ordering over the internet is growing, a lot of people are still leery with placing on-line orders because of all the coverage that the press gives to internet security issues. Although ordering over the internet has one of the lowest rates for credit card fraud of all shopping methods, the myth of there being more of a problem with internet use of credit cards vs. other use of credit cards is probably not going to go away soon. Thus, many of your internet inspired sales are likely to arrive through traditional channels and not via your secure on-line order form.
How about just asking people when they order where they found out about your offering? Maybe. But that isn't as easy as it sounds. You have to come up with a couple of questions to really make sure you do not miss counting sales that were a result of your internet web site. Let's say someone sees your ad and they see your web address in that ad. They go to your web site, are convinced to purchase from the material presented in your web site, and then purchase from you. You ask them: "Where did you hear about us?" They will answer with the magazine where they saw your ad and no credit is given to your Internet Web Site! Yet, that sale would not have been made without your web site which closed the sale with the additional information provided!
To really determine what effect your Internet Web Site is having on sales, you might have to ask each customer a series of questions: "Where did you learn about our company?", "Did you visit our web site?", "Did the information provided on the web site have any influence on your determination to actually purchase our product?". I don't know if you want to put each customer through the third degree, but this would probably be an effective method of measuring the number of sales that are resulting from your web site.
I'm sure the result of such a survey would prove to be interesting and useful to your business, but is it worth doing? Before inconveniencing your customers with these questions as well as taking time from you and your employees, you need to decide why you are doing this survey and what you will do with the results. I would have to assume the main reason for the survey would be to determine whether or not it is worth having a web site at all.
Before you head down this line, do ask yourself if you would do the same for your fax machine, your toll-free order number, or for having a phone at all! Some businesses do carry out such surveys even for these order methods, but a lot of businesses would keep their fax, their toll-free order number and especially their telephone even if the total sales did not justify the cost. Why? Because the cost is now so low to purchase a fax and have an extra line for that fax, and the cost of calls on toll-free lines is so inexpensive, that the cost of these items is seldom figured into sales. There are certainly not many businesses that would consider removing their telephone regardless of its impact on sales. Having a phone, a fax, and a toll-free order number are almost standard for any business. Having a web site is quickly moving into this category. It is almost expected by the public that if you are in business, you do have a site on the web! In less than 5 years, I'm sure that just about everyone will expect that if you are in business, you will not only have a phone and a fax, but will also have a web site!
So, regardless of the performance of your website today in terms of sales, would you really want to eliminate it? There are two main reasons why you should answer a resounding: "No!" First, because the cost of your web site is relatively very low compared to your other advertising expenses. Second, because the public will expect you as a business to have a web presence. If not today, then in the very near future.
The point of this discussion was not to prepare you for a web site that does not perform in sales. It is to bring up the point that it is very difficult to determine just how much of an impact your web site is having on sales, even when it is having a very significant impact on sales. Rather than worry over whether it is worth diverting a minor portion of your advertising budget to having a web site based on its impact on sales, I'd rather see you commit to having a web site for your company as a necessary aspect of being in business. I'd like you to view having a web site the same as you view having a phone, a fax, or a toll-free order number. All of these items will aid in your sales, all of them have costs too low to consider eliminating for the relatively minor savings, and the public expects to be able to reach you as a legitimate business through any of those communication methods.
(P.S. If you don't think offering a toll-free order line would be inexpensive for your business, then click here to find out how to have a nationwide toll-free number for just 7.5 cents per minute and often even lower for in-state calls!)
Click here for more information on obtaining a web site at TrainWeb. You can also send e-mail to Ray Burns at ray@trainweb.com by clicking here. You can also call us between 9 A.M. and 5 P.M. Pacific Time at 714-773-9393.
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