1260 Productions

How to reduce risk when you start up online

‘Fail fast and fail cheap‘ is a piece of advice that’s embedded in Internet culture. It’s also a piece of advice that many Internet entrepreneurs and established businesses fail to fully understand.

Let’s strip away that idea of failing, for a moment. Let’s modify it to ‘launch fast and cheap‘. Many small businesses and start-ups soon get carried away with launching and lose sight of how they should be spending their budget.

Look before you leap
I see an amazing number of new businesses blowing all their start-up capital on a wonderful-looking & full featured e-commerce Web site, without any idea of whether they have a viable business idea or not. Having commissioned that huge project of a site, they are then are faced with the problem of how to get customers to visit with the little budget that remains.
They are the people who find themselves being sucked in by the often dubious practitioners who claim that marketing a Web site is cheap, instantaneous and totally effective in the long term.

Lack of online marketing budget may not be a big problem if you’re planning to market properly offline, but if the expectation is that your business will operate and be marketed 100% online, then ‘fail fast’ is exactly what you’ll do. All the money put into the site will be teetering perilously close to the precipice.

That’s what I call failing expensive.

How to save failing expensive

While it’s a huge temptation to go out and get that big online presence built – of course, it’s human nature to want to see something tangible – it can cost you a lot of money.

Proceed carefully. Don’t blow the budget (or your own time) on building a site and on branding until you know you could have a business. By all means, think up a business name, buy a domain, create a presence/information page but go no further until you’ve found out if your business idea has a chance online.

What do you need to know?
Just because there’s a market out there for what you’re hoping to sell, there’s no reason to believe you’re going to be successful online. Suppose you’re in financial services, a regional financial adviser with a few offices perhaps? You’re going to be running up against the marketing budgets of the banks and other huge financial institutions, and life is going to be very tough.

But, whatever your business, you’ll need answers to two fundamental questions:

1. Can you expect to get a first-page natural search position on Google within your budget or available time and resources?

or

2. Can a Pay Per Click (PPC) campaign be run profitably?

If you can make a clear case for Organic SEO success, you should be more confident of the future of your business. Organic SEO is much more under your control than PPC/SEM (Search Engine Marketing). Carried out properly, using ethical methodologies, it’ll give you the lowest risk route forward.

If you need to rely on PPC for your customers, the future could be far more uncertain. You’re relying on being able to buy traffic at a price that enables you to remain profitable when the price is changing constantly – yes, PPC is more auction than anything else.

If the price you need to pay for your traffic increases significantly, you’ll either be running at a loss or you’ll need to stop buying traffic entirely until the prices (CPCs) come down. What will cutting off the supply of customers do to your business plan?

Getting the answers you need
The good news is that getting the answers you need before launch is considerably cheaper than getting a good Web site designed and built, and then running marketing experiments on the live site.

If you want to do the research yourself, the best approach is through taking these three steps:

1. Identify all the key phrases that prospective customers.
2. Rank the key phrases according to number of searches.
3. Work out the number of key phrases you need to get on the top page of Google by:

i) Running a Google search on the key phrase,
ii) Taking note of the domain name of the sites at the top and bottom of the first page (positions 1 and 10)
iii) Recording the number of links,
iv) Repeating this for each key phrase in your list and
v) Recording the figures in a spreadsheet.

You’re looking for the best balance of high numbers of searches and low numbers of links – the key phrases with the lowest numbers of incoming links are those that are easiest to target with your Organic SEO campaign. So you’ll know which key phrases to optimize on, and how many links you will need to build.

Alternatively, you can 1260 Productions and ask how they can provide an online marketing strategy for your site.

Whichever way you go forward, it will be an investment well spent, allowing you to embark on a great site design and build from 1260, knowing that your online business has an excellent chance of succeeding in attracting the traffic it will need.

Times are always changing…

Marketing has changed even more dramatically during the past 10 years than any other similar period in the past. Why? Technology and its incredible impact on how we access and process information.

Today, there are more than 100 million Web sites, 35 million blogs, and cell phones are hand-held computers that can multitask phone calling, text messaging, photography, video downloading, digital music files and an endless variety of games. It was in 2004 O’Reilly Media coined the phrase Web 2.0–a group of second generation Web-based services.

New tech, new media, new Marketing

What does all this mean for marketers? A change in the landscape, a whole new set of consumer and customer segments and a wealth of new tools that still must be smartly deployed and effectively targeted.

Marketing in today’s crowded, infoglutted world is more exciting than ever, but it’s challenging in new ways. Here are three key dynamics affecting small and mid-market businesses, and some new media strategies to connect customer with your message.

1. Marketing is now in the hands of the people.

As coined by Peter Kim, from Forrester Research in Reinventing the Marketing Organization, participation is now the fifth “p” joining price, product, placement and promotion.

Whether it’s blogs, consumer produced Super Bowl commercials or e-mail sharing, customers have never been in such control. Embrace that change. Give your customers opportunities to generate testimonials, feedback and suggestions for product improvements. Allocate time to listen to what they say and respond promptly and honestly. Product and service improvements start with feedback from your own customers.

Instead of being talked at, customers now expect being talked to. Wikis, e-mails, live chat, bulletin boards, texting and video sharing are just some of the ways the word gets spread. Start with the right product (that’s never out of date), couple it with good customer service, and you won’t need to be afraid of interactive communication–as much communication as you can handle.

American Idol and similar television reality shows are the epitome of the new customer participation model. Instead of just sitting back and watching shows, viewers are now choosing who they want to see by voting. Be creative and think about how you could develop your own company’s “fan base.” With the technology tools now available, you can deepen your relationships with customers and create the dialogue that leads to loyalty.

2. Online media are mandatory in today’s marketing mix.

The Internet continues to absorb more and more of the advertising dollar, leaving other media with less. Newspaper readership is declining. Network TV ratings have declined steadily over the past 10 years. With Internet search engines, consumers can find what they want, rather than be pushed toward purchases with advertising messages. In fact, 66 percent of high school students report that they get their news and information from Web portals such as Yahoo! and Google. More than one-half of U.S. broadband customers said that a recent purchase was influenced by an online message (36 percent by shopping sites and 15 percent by search sites), exceeding the impact of TV commercials (11 percent) and magazine ads (6 percent), according to a 2007 study by market researcher Media-Screen.

“Even the most intensive users of newspapers and magazines spend less time reading these publications than they do online or watching TV,” a 2007 Jupiter Research study confirmed.

While a Web site is a marketing “must-have” for today’s businesses, additional online presence is also required. E-mail newsletters, blogs, interactive Web elements (videos, podcasts, direct response tools) keep your site fresh and relevant. Targeted e-newsletters are a great way to provide inexpensive yet highly valued information of interest to customers and prospects. New tools now make it easy to personalize the messages and track e-mail opens and click-through rates.

3. Integration is the key to success.

Do all these new media seem like a bit much for any one customer? Possibly. Most people average more than 3,000 commercial message exposures a day, and the volume continues to grow. (Reality check: After you’ve bought your next $12 movie ticket, count the commercials and previews you have to sit through before the film begins). Creating clear, concise messages that are smoothly integrated is absolutely crucial to successful customer communications.

That’s because, despite all the new technologies, this marketing principle hasn’t changed: You must start with a relevant position, supported by consistent communications, to achieve a desired position with your target audience.

It used to be that companies could get away with broadcasting clever commercials that generated awareness, and even sales. Now, thanks to infoglut, your company and product and service positioning must be clearly evident across all media. Every customer contact point–how you answer your phone, your e-mails, your customer service and your advertising–need to project the reason why your company provides a unique, relevant value for your intended audience.

The Author: Kathy Cox, Outsource Marketing’s Marketing Integrator and New Media Strategist