Will a web site increase my exports? Is it worth my time and
financial resources to design and maintain a web site? What is the
essence of a well-designed, high-traffic web site? Are small
businesses selling products and services on the Internet or it is
the domain of large businesses? What is the average ratio of "hits"
to sales?
Thousands of small and medium-sized enterprises (SMEs) still ask
these questions, as the Internet evolves into a marketing medium
that someday may be as common as advertising in the newspaper, at a
trade show, or in a trade journal. The Internet is an
ever-changing, increasingly popular, untested marketing medium that
confuses, frustrates, and yet gives hope to millions of SMEs
attempting to penetrate foreign markets using the Internet as their
launching pad.
Scores of articles have been written regarding the exploding use
of the Internet, but actual research is sparse regarding how
consumers use the Internet to purchase products and services,
successful e-marketing techniques, analysis of "hits to sales"
levels, and overall constraints of e-commerce. SMEs in developing
countries should benefit from the research that exists when
developing their own successful e-commerce strategies to compete
with firms across the globe.
In 1996, 15 Michigan-based small businesses were selected to
study their experiences as they marketed their products and
services on the Internet. The study aimed to identify common
pitfalls and successes of Internet marketing, share results with
SMEs as they begin to market on the Internet, and help SMEs decide
if Internet is a wise investment.
As part of the project study, help was provided to design
company web sites; set up e-mail accounts; conduct training
sessions; and track the number of visits, sales leads, and sales
for the duration of the study.
Great expectations
SMEs in this study did not want to simply design a web site to
attract customers. Many expected to market products and services by
providing on-line quotes, advertise in more markets at less
expense, use e-mail as a marketing tool, and decrease the costs of
printing marketing materials. They also expected to sell products
and services over the Internet, enhance credibility by projecting a
professional image, answer questions about products or services in
several languages, and conduct foreign market research. Finally,
the companies wanted to improve customer service, by providing
same-day service, getting feedback from customers, offering
paperless documentation, improving response time to customer
queries, and using e-mail as a customer communication tool.
Frustrations
During the course of the study, the SMEs sold next to nothing on
the Internet, despite the best attempts by e-commerce experts,
in-depth training, constant analysis of constraints, and changing
of web site content and other marketing techniques.
The study revealed that the low sales figures resulted from a
combination of constraints related to competency, time, finance,
marketing and technology. Most firms had limited knowledge about
how various computer technologies could contribute to an overall
e-commerce strategy. Firms were frustrated that they were unable to
update the web sites-they were too reliant on expensive web
designers and Internet Service Providers who were not responsive to
their specific problems or questions. Due to staffing constraints,
many firms were frustrated that there was no time to respond to the
increase in inquiries, to use Internet as a research tool, or to
develop and keep the web site current.
They also found it difficult to design a site with truly useful
information for clients. Firms were frustrated that search engines
did not list their site prominently-due to too much competition on
the Internet-which meant it was difficult to get existing and
potential customers to visit the site. Also, firms found it
difficult to register key words with search engines that would be
obvious to customers searching for a product or service on the
Internet.
The firms were disappointed by the low level of visits to the
web site, relative to the company's investment in marketing and
sales via the Internet. They found that in addition to the US$ 30
per month web site maintenance fee and an initial US$ 1500 to
design a basic web site, there were significant research,
development, staffing, promotion, maintenance, and other costs.
This illustrates why it is important for an SME to set up a
business plan that tracks investment and return over time. (See
box, above, for an example of measuring a site's impact.)
A marketing presence
Firms in the study nevertheless remained optimistic about how
Internet will help enhance credibility, market research, marketing
and sales capacity.
The study found that firms with an active marketing strategy
generate more visits to the web site. To attract new visitors,
promoting the web site is essential. In addition, updating the site
with useful information tended to foster repeat usage.
Consider, for example, the promotion for the Michigan Small
Business Development Center site. Initially designed in May 1996,
the number of visits increased very slowly for about a year until
the Center launched a promotion campaign. The campaign consisted of
sending waves of 1,500 humorous postcards to over 8,000 firms and
organizations. It was an inexpensive yet successful way to generate
greater interest in the site. For every 1,500 postcards sent per
month, roughly 300 new viewers visited the web site. The
conclusion? A constant marketing awareness campaign results in a
greater number of visits.
Lessons learned for developing countries
The firms reached potential clients in new international markets
through reactive or passive marketing using search engines, and
through a proactive promotion by the firm to encourage existing and
potential customers to visit the site.
Many firms felt that Internet marketing provides substantially
more advertising value because it reaches a wider and more targeted
market than traditional marketing mediums (in other words, firms
can reach many more specific potential clients).
Because of the initial success reaching targeted customers in a
relatively inexpensive venue, many firms expressed willingness to
invest marketing dollars in updating and expanding their web site
rather than spending funds of traditional marketing venues such as
trade shows or newspaper advertisements.
Firms that did sell adopted a proactive, multi-faceted approach
to advertising their web site which was updated on a monthly basis.
They did not abandon the Internet as an e-commerce strategy due to
lack of sales. They viewed the Internet as a way to enhance
services to customers as an investment in the future. This approach
was integrated into an overall e-commerce strategy embraced by a
cross-section of the firm's employees.
The bottom line is that it is important to design an e-commence
strategy that is responsive to customer needs because the only
guarantee e-commerce provides is that the Internet will help you
find foreign clients, information, and, perhaps, sell products.
Sarah McCue is ITC's Adviser on Practical Guides. Boxes in
this article are adapted from the book, "Internet: Force or Farce?"
Michigan Small Business Development Center, United States
Tips:Questions to Ask a Person Who Will
Design Your Web Site
• How many web sites have you developed for a fee?
• What are the web site addresses of the best sites you've
designed?
• What are the least and most expensive sites you created?
• How long have you been creating web sites?
• Who does your graphic design?
• How will graphics be used in our site?
• Explain your techniques for reducing the size of images.
• Have you worked for our competitors?
• How will you help us publicize our web site?
• Do you charge for changes to be made to the web site?
From SMEs for a Good Web Site
• Keep it "fast" by using a minimal number of graphics and
photos.
• Put information on your site that responds to exactly what
your buyer wants to know.
• Include educational information.
• State trends in the industry.
• Post employment opportunities.
• Articulate the firm's strategic goals.
• List the key contacts within the firm.
• Include a complete list of products.
• State delivery schedule, warranties, and technical assistance
offered.
• Explain how the product is packaged and mode of transportation
used
for export.
• List the firm's terms of payment.
• Answer most commonly asked questions.
• Develop an online newsletter.
• Respond to e-mail within three days.
• Provide links to kindred organizations.
• Register with search engines.
• Articulate the firm's production capacity, manufacturing
processes, quality control systems, previous export experience,
firm history, number of employees, and financial standing.
• List your products on web sites that advertise foreign buyers
and contacts.
• Place phone, fax, e-mail, and mailing address on each page of
the web site.
SME Viewpoints "Having a web site adds
tremendous value to a business-it contributes infinitely more than
it costs. You have an international "office" with little overhead.
You can project an image that puts SMEs in the same league with
"the big guys"."
"Every morning I check our e-mail for requests from potential
customers who visit our home page. Usually we have two or three
e-mails. The good prospects are requests for our business services
that we probably would not have received if we were not marketing
on the Internet."
"Benefits of marketing on the Internet will be realized in three
to five years; the sooner a business gets on-line, the sooner the
business will notice a positive change in his or her business."
"I learned about the need to focus the content of my web site in
response to my customers' need for information."
"Marketing on the Internet has made our business look more
professional, placed us with top people in the industry, help
compete with large business, and help broaden the customer
base."
"We have developed a low-cost, high-impact web site which we
feel will generate sales for us, which would have been inaccessible
without the development of our web site."
"Internet is good for sending an impression about my business,
but it did not generate sales."