Transforming Your Website into a Profit Center

If you're like most companies that have a presence on the Web, it's probably time to upgrade your site so that it contributes more to profits. This article describes what's possible and how much it will cost.

OVERVIEW

This Web site is costing me money every month, but I'm not really sure that it's doing my business any good.

If you've found yourself muttering these words lately, you're not alone. Many businesses can be counted among the ranks of "Web brochure" owners, which means you hope consumers will surf by your site and learn more about what your company does. Somewhere along the line, someone convinced you that the Web is a necessary marketing tool for this purpose--that it's a better, less expensive tool than mailing out paper brochures to a list of qualified prospects.

That same person also probably convinced you that you can't be in business today without being on the Web. They inferred (and more and more companies are coming around to this view) that a lack of Web presence relegates you to some antiquated mom 'n' pop status, which is surely the kiss of death in today's competitive marketplace.

But what that person--Internet service provider (ISP), graphic designer, systems engineer, PR expert, or whoever--failed to tell you is how much more you can do with your Web site. In all fairness, that someone who convinced you to spend the dough for your Web site probably told you about selling goods and services from it, but that's as far as they went. Accepting credit card transactions over your site, thereby transforming it into a direct-channel point of sale, is just the beginning. There is much more you can do--things that will result in higher profits for your company.

True, you will have to invest some money, but you'll find that it's well worth it. What you get out of spending this extra money is a new distribution channel for your products and services. Consider this statistic from International Data Corp., a market research firm in Framingham, MA: Out of 7.4 million small businesses in the U. S., the ones with Web storefronts have higher revenues, averaging $3.79 million compared to $2.72 million overall.

PLENTY OF POTENTIAL IN YOUR WEB SITE

The key to understanding how to transform that dormant Web site into a dynamic profit center is to see the whole spectrum of what it can do. That means understanding the technological prowess of a Web site from a business standpoint.

There are many business applications for your site, both internal and external. To picture the potential, think of your Web site as a place, a virtual office building. That building can house a retail store, which is how most people think of a Web site, but it can also house as many other office compartments as you like. For example, you can have your human resources (HR) office in that space. In fact, you can have your whole corporate headquarters there, with each department--sales, advertising, accounting, HR, public relations--behind its own virtual door.

You can have graphic icons to symbolize the doors on your site. Opening some of these doors will require a password, so you can restrict access to these areas to, say, employees and business partners. All they have to do is enter a password and a name ID.

There are two main ways in which this virtual office building differs from the physical world. First, this place expands and contracts in a way that a physical space never could. You can have as much office space as you want, adding or subtracting departments instantaneously. Second, there are no geographical boundaries to this place. Anyone with an internet connection can enter anytime by connecting from anywhere in the world.

There are other significant differences, too. In the hands of a skillful programmer, your site can offer customers, business partners, and employees opportunities to interact with a wealth of materials prepared for them to use at their convenience. Interactivity of this sort is catching on in such applications as order processing and tracking, customer service, and training. The cost of making your site interactive will probably range from as little as $10,000 to $40,000 or more.

Enhancing a Web site is bound to bring you closer to your customers, and with that relationship may come consumer concerns about privacy, especially when you ask them to provide information about themselves. One thing that is critical to remember about the Web: It is a close-knit global community where word-of-mouth is powerful. If you do things to anger consumers, they'll badmouth you to the whole Web community.

The ability to realize the potential of the Web varies from company to company. The following sections describe eight applications that you can readily apply to your organization.

ELECTRONIC COMMERCE

You can set up a telecommunications connection with your bank so that you can accept credit card transactions over the Internet. That means consumers can go to your Web site, fill out a form that pops up when they want to buy something, then e-mail the order to you. If you think of the Internet as a glorified worldwide telephone network enhanced by text, graphics, and video, you can see that this sort of e-commerce is simply a new twist on telephone selling. The main advantage, of course, is that you don't need to hire telemarketers and clerks to operate a bunch of phones. E-mail orders can simply be collected on one worker's PC.

The average cost of setting up an electronic commerce component on your Web site is between $300 and $1,500 per month. The high end of that price range represents the cost of high-speed telecommunication lines you may need so that orders will get processed quickly.

An easy place to get started in electronic commerce is through major Web search engines and other Web services that offer basic e-commerce programs. Such services can be found at Yahoo.com, MSN.com, virtualsellers.com, and other sites on the Internet. If you want a more comprehensive, customized program, you will need the assistance of an experienced Web site developer.

CO-MARKETING DEALS AND BRANDING

What's in brand name? When it comes to profit, everything. The whole point of the World Wide Web is that it is a web of virtual places. Your place, by way of the network infrastructure that is the Internet, is connected to everyone else's place.

The implications of this for marketing and brand-building are enormous, especially for smaller businesses with limited resources. For the first time, small businesses can crash through the boundaries of physical location and have their brand seen in a worldwide marketplace.

The playing field for brand-building has never been this level for small businesses. So you're not The Gap, or Barnes & Noble, or Starbucks, which build their brands by being visible on every other street corner and mall in America. With banner advertisements placed strategically on popular community Web sites, your business can appear larger-than-life.

It helps, naturally, to become visible on the Web sites and online services that get the most traffic. Appearing on America Online as a Web storefront, for instance, gives you access to tens of millions of consumers. That can cost you anywhere from a few thousand dollars to millions, depending on the deal you cut. The big telephone florist service, 1-800-Flowers, paid millions of dollars for a four-year deal to be the only florist on the AOL shopping channel. But the company made its investment back in less than two years.

Some co-marketing deals aren't so expensive. Banner ads on Yahoo!, a popular portal site, cost much less. But depending on the terms, such an ad can run more than $10,000.

The hard part of co-marketing is to find other Web sites specific to your industry and get them to link to your site. As an incentive, it's customary to offer a reciprocal link from your Web site. For example, as a retailer you might ask a consumer protection association to link to your site, and in return offer to link to theirs. Not only do you get visibility, but you may also raise the public perception of your company. Think along these lines, and you'll start to see many Web sites that would make good bedfellows.

For the shoestring approach to co-marketing and branding, there are things you can try before you spend big bucks. For instance, you can register your Web site address with various search-engine sites, including Yahoo!, so that when consumers search for the subject that includes your business, your Web site address pops up. That costs less than $100. You simply sign up with a service, such as Submit It! (http://www.submitit.com), and the service submits your Web site address to all the search engines.

CUSTOMER SERVICE

Imagine that, when your customers had a problem or question, they e-mailed you instead of tying up your 800 number. This is not to suggest that customers with complicated requests should stop phoning you, but there are many customer service functions that the Web is good for. And good means for your customers as well as for you. For instance, for questions about inventory and what kinds of products you have, the Web is far easier to navigate than a catalog and far more effective than talking to someone. Some people even argue that the Web is one big searchable catalog.

Or, think about order tracking. Federal Express pioneered this customer service application on the Web. With a tracking number, a customer can go to the Fedex Web site and see the status of a particular package instead of calling.

You can set up return policies over the Web, too. Have customers send an e-mail when they return something, and coordinate receiving the package by putting a PC in your mail room and having someone there check incoming packages against the e-mails.

Give customers a chance to tell you about what kinds of products and services they want by offering a form on your site so they can fill out a personal profile. This kind of information can be useful for marketing campaigns, too, but be careful. People are touchy about their privacy being invaded on the Web, so state your intentions clearly and be respectful of consumers' privacy.

One key to setting up customer service applications is finding a software programmer who can create interactive databases for you. That way, a customer can ask questions and get answers automatically from one or more of your existing databases. Thus, to track an order, customers would tap into the database that holds all the information about orders. Expect to pay $10,000 to $20,000 to make your customer service operation interactive.

PRODUCT DEMONSTRATIONS

This application can turn your catalog into a dynamic tool on the Web. Say you sell telephone systems or electronic gadgets; using a step-by-step visual tutorial, you can show off the features of your product. Consumers can click on graphics on your Web site and see how products work. A toy company promoting a jack-in-the-box, for instance, might animate the graphic so that when someone clicks on a picture of the toy, it pops open.

This application can also be used for internal purposes. If your company designs industrial products, such as car parts, you can hire a software programmer to put demos on your Web site for business partners or your own employees to look at. You keep the access exclusive by protecting this part on your site with passwords.

RECRUITING

Now that you're thinking in terms of internal business applications (those developed primarily for your employees and business partners), the possibilities of putting your Web site to work really open up. One useful application is for employee recruitment. You can set up a place on your Web site devoted to telling people about job opportunities at your company.

A skillful programmer can design an interactive form that allows people to fill out job applications online. You can also ask for resumes to be e-mailed. By using passwords, you can set this application up so that HR personnel have exclusive access to this information. Or you can simply have all the resumes and other recruitment information that comes from your Web site go directly into their e-mail boxes.

To make online recruitment even more versatile, you can sign up with Web services devoted to recruitment. One of the most popular is called the Monster Board (http://www.monster.com). You set up a link from Monster Board to your Web site where job candidates can fill out whatever applications you have online.

Working with a Web service this way shows how you can leverage an external application (co-marketing) with an internal one (recruitment). It's a classic example of what the Internet is good for: Getting your business projects more exposure. Registering on Monster Board, for instance, may help you find new employees more readily than an ad in a local paper, if only because your message is exposed to far more people.

IN-HOUSE BULLETIN BOARDS

The HR department can use the Web site for more than just recruiting from the outside. Again using passwords to protect people's privacy, you can post job openings on a section of the site so that employees can see what opportunities are coming up. Going a step further, you can use the site to provide a slew of information about employee benefits, including interactive question-and-answer features so that HR staff don't have to field phone calls to explain such things as 401K plans, health benefits, vacation days, and sick leave.

An in-house bulletin board needn't be limited to HR functions, either. If you have company announcements or reports to share, you can post them on the Web site. You can even set up a shadow Web site, giving employees more options than outsiders. Consumers and employees might bring up the same home page, but employees can key in a password to reveal a whole different set of options.

Some companies go so far as to issue different passwords to pop up different home pages. For example, if you want business partners to see some of the internal options but not all of them, you can create categories of passwords that, once keyed in, yield different views. Business partners might be given passwords that begin with a B, while employees have ones beginning with E.

EXPENSE REPORTS FROM THE ROAD

By now, it should be apparent that the Web is a perfect vehicle for internal communications. If you need more convincing, here's one of the coolest internal applications that uses different classes of passwords to yield different views of the Web site.

Say one of your salespeople has just finished calling on a client. If you have the proper databases set up, he can go to the Web site, key in his password, and see the client's account information. After entering the order in the sales system, he can e-mail the accounting department with the billable hours spent at the client, send in a travel and entertainment (T&E) report, and perform a number of other functions. By doing this from the road, the client will get billed faster, the salesperson will be reimbursed sooner, and the overall machinery of your business will move faster.

That kind of application is simply a matter of tying the Web site into certain databases at the accounting department and the sales department. Take the case of a salesperson on the road selling advertising for a magazine. After clinching a deal, he or she can surf to the Web site, go into the sales database, and mark the client "Sold." People back at the office know immediately that the client has bought an ad. The production and art departments can now schedule the ad and contact the client to get graphics and other materials. The client may well get a call while the salesperson is on an airplane flying home. There's no doubt that your customers would be impressed with such efficiency.

This concept can be applied in numerous ways at any company. For example, salespeople aren't the only ones who can file T&E reports through the Web. It's even possible to set up a routing system so an employee's T&E report first gets e-mailed to the manager who needs to sign off on it. After it's signed digitally, it's routed automatically to accounting.

TRAINING

Training is perhaps the most dynamic area to use Web-site applications and one that will change the most over the next few years. Right now, the most realistic way to use the Web for training is to post reports, lectures, and even the full text of books and instruction manuals. Graphics and slides translate well on the Web, and they are easy to view with Web browsers.

The beauty of training over the Web is that, using interactive software, people can learn at their own pace. You don't have to schedule big meetings in conference rooms for things such as employee orientation. You just direct new people to the orientation function on the Web site.

What makes Web-based training exciting is its potential for incorporating video and audio. For instance, if you need to train people on an assembly line, you can create a video to show them how the mechanism works. At this point, video can pose problems because you need high-speed digital telecommunication lines so that it doesn't look like some slow-motion mess. But if you have the bandwidth, video is an option.

Audio is more feasible. It doesn't require an enormous amount of bandwidth, and once the recordings are made, it doesn't cost that much. Adding voice instructions to training materials is a relatively simple matter, but you will need an audio expert to set them up. Expect to spend a few thousand dollars for such expertise.

OPPORTUNITY UNLIMITED

The important thing to keep in mind when trying to make your Web site more productive and profitable is that it is a multimedia communications tool. Think of it as the phone with text, audio, and graphics. Perhaps the Web can't do everything you can dream up, but you can get creative within the eight categories of applications discussed here.

Although some of these applications may seem pricey, the return on investment can be quick. You'll know by your own personal calculations how much an application increases productivity or sales.

Also, remember that the Internet is an emerging telecommunications network, so its capabilities are expanding all the time. Once you have the concept down, it will be easier for you to understand what new applications are possible as the Internet, and thus your own Web site, evolves.

RELATED SMN ARTICLES

For more information related to making the most of your Web site, see #7515, Using the Internet to Improve Customer Service; #7024, Increasing Sales Productivity via Internet and Intranet; #3027, Incentives Online; and #9105, The New Marketing.