archived news from MarketingViews

February weeks 3 - 4, 2002

• Creating a lasting impression-Example: January's iMac® introduction began with a Time Magazine cover. The cover of Time is strictly thinking outside the box.

• Trial use-Example: Sony's game website allows players to check out PlayStation® games.

• Building brand awareness-Example: Amazon.com has build brand awareness to the highest online levels, through customer service.

• Getting heard above the noise-Example: Gateway Computers understood the need to get above industry noise when it went outside the box to pioneer "build-to-order" PCs.

• most of the advertisers for the lower priced products run targeted banner ads, so their typical click rates are in the region of 3% to 4%. Let's say a typical customer acquistion cost of about $100.

• this is the important part! The economics of banner advertising (as with all direct marketing) are based on the lifetime value of the customer. Advertisers of these lower cost products have often commented that an individual sale of SCSI cables, adapters, GBICs or whatever to a new customer who may be a reseller or systems integrator can be over $20,000. And most end user organisations are in the market for mutiple products, either in one order, or over time.

1. Contact Local ISP's. Most Internet Service Providers offer a few MB of webspace or hosting accounts to their customers. However, most don't offer website design services. Contact local ISP's and offer a generous referral fee if they send business your way. This tactic has worked very well for some of our Resellers. Note: It's important to help the ISP's promote your service by providing them with some marketing materials they can send out by email and snail mail to their customers.
2. Local Networking. Time and time again, web developers have cited this as one of their primary sources of new business. You can't do business sitting on your behind in front of your computer all day! You need to devote some time to getting out and meeting local business people. This is most easily accomplished by joining local business organizations such as the Chamber of Commerce and the Rotary. If you keep active in these groups over time you will establish yourself as the person to go to for any web-related services. Always be sure to carry business cards, or better yet, full-color postcards to handout with a screen-shot of your website or web design portfolio. See http://www.web-cards.com for some great business card and postcards ideas.
3. Online freelance sites. There are number of sites now, such as http://elance.com, where you can find listings of web projects open for bid. It is true that you will be competing with many bidders for these projects but don't let that stop you these are businesses that are ready to buy now. A good strategy is too bid as low as you can initially in order to get your foot in the door with a given company. If you do a good job and delivery it quick the company will naturally go back to you for additional work.
4. Create a community business directory. This is a great strategy that is often used but rarely done well by local web design firms. By creating a community business directory you accomplish three things. First, you now have a database of all the businesses in your local area your primary target market! Secondly, you have now created a legitimate reason to get in touch with them. And finally, when you do contact them they will not perceive it as a sales call; rather, they will thank you for providing such a valuable service!
5. Ask for referrals. As soon as you land a client and sign the contract, you should immediately ask them for 3 other businesses they know of that may be in need of your services. Right when you've made the sale is the best time to ask for referrals, don't wait until the end of the project. Remember, you need to keep filling up your sales pipeline with pending projects to keep the cash coming in. When you call your client's referrals be sure to mention the person that referred them and offer something additional such as a small discount or free consultation for the referral.
6. Write articles and free reports. Writing short articles on Internet Business and Web Development is a great way to get your name out and generate new clients. You can submit articles to your local print media, Chamber of Commerce, and business publications. You can also syndicate this content online for online publications and websites. One short article can go a long way in generating new business.
7. Focus on a niche. By narrowing your focus it will be much easier for you to find new web design clients. It's tough to be everything to everybody. Look at your existing client base and think about the industries your best clients come from. Pinpoint the best two or three and then focus your effort to only those types of businesses. It's easy to get leads for specific industries from list brokers such as Info USA (http://infousa.com) and others. You can then contact similar businesses and let them know you specialize in creating websites just for their type of business. Tell them about the specific tools you can install to help their business increase profits, save money, and gain an advantage over their competitors.
8. Smile and dial. Telemarketing can be a great way to find new business clients when done properly. The best way to do it is to start with a free offer that will help you qualify the lead. For example, if you create a community directory, you can then simply call the businesses in the directory and let them know they are entitled to a free listing. This will give you an opportunity to chat with them and see what their needs are. You can then email or fax them a brief form asking for a description of their business to post on the community website. Let them know when it's up and then send them full details on your web development services. From there it will be easy to set an appointment.
9. Send postcards. Direct mail using postcards can be a very effective and cheap way to get the word out about your services. If you use full color postcards you can even showcase screen-shots of some of the sites you've designed. Always offer some type of free offer on the postcard, such as a "FREE Website Analysis," "FREE Search Engine Readiness Review," etc. in order the increase response.
10. Follow up. Follow up. Follow up. There is an old adage in marketing that says it takes at least seven contacts before a prospect will purchase. This is as true in selling web design services as it is with anything else. No matter what marketing tactics you use, remember that you must relentlessly follow up with people that have expressed the need for your services. If you keep in touch, a good percentage will eventually become clients.

View from the Hill:- It's M & A Time Again

Mergers and acquisitions activities in the storage market seem to have picked up pace again recently. Just in the last couple of weeks we've had announcements about tape backup companies LAND-5 merging with Tandberg Data, and in the web storage market Xdrive acquired Freedrive. Meanwhile in the storage software market Legato Systems said it wanted to acquire OTG Software. Later this month we have shareholders voting on one of the biggest of all, the proposed HP-Compaq merger... If such things interest you can see our very long list of who's been acquiring storage companies.

When you see more of these announcements it's a sign that somebody (in the acquiring company) is optimistic about future market prospects, which you may read as a plus vote for the market picking up. But most mergers aren't successful, and the storage market is no exception. If we look back at some of the more than 100 storage company acquisitions in the last year or so, we can see that the management running very large corporations are often no better at seeing a vision of the future and executing than you or I.

Here are just a few examples:-

• Quantum's HDD Unit merged with Maxtor. But in the 12 months ending December 29, 2001, the new "enlarged" company reported revenues more than $2 billion lower than the two companies achieved separately the year before. In addition to losing market share in 2001, the new company racked up losses of over $646 million.

• Sun Microsystems bought a bunch of companies including Cobalt Networks, HighGround Systems and LSC. But that didn't stop Sun losing storage market share probably just as fast as it would have done without these acquisitions, just as we predicted before all this buying started. No one believed Sun was a serious storage company then, and they don't now.
  
  But Sun has recently tried to leverage the HighGround business as a credible launching pad for Sun's new Linux business. If you haven't heard of it, don't worry. I don't think many people believe that Sun is a credible Linux/Pentium server company either, no more than you would believe Microsoft if it launched into the Linux /SPARC business. But Sun's in a bit of a mess at the moment, so it's got to try some new tricks, which don't cost too much.

• Exabyte is in the "still to be decided category". Exabyte thought it was a good idea to acquire Ecrix, when Compaq decided last year to drop Exabyte's tape drives and replace them with Ecrix's VXA. Similarly the Ecrix managers were looking at the prospect of running a bigger publicly owned company with a bigger VAR channel. But if the HP-Compaq merger does go ahead this month, then it's most likely that HP will drop Exabyte tape drives ASAP and the new Exabyte will most likely speed into bankruptcy by the summer.

I hope you'll stay tuned to this news page to see what happens next.