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10 Steps to E-Business on a Shoestring, by Dr. Ralph F.

Wilson page 1

10 Steps to E-Business on a Shoestring


by Dr. Ralph F. Wilson
Editor, Web Marketing Today, Doctor Ebiz,
Web Commerce Today, and NetAssisted Biz
Director, Wilson Internet Services

September 15, 2002

P.O. Box 308, Rocklin, California 95677, USA


http://www.wilsonweb.com

US $17.95
Additional copies may be obtained at
http://www.wilsonweb.com/ebooks/shoestring.htm

Please do NOT distribute this e-book to others. It is for your use only.
Unauthorized distribution constitutes theft of my intellectual property.

Copyright © 2002, Ralph F. Wilson. All rights reserved.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 2

Acknowledgements
This e-book may seem familiar to you, since it distills the basic wisdom
previously published in issues of Web Marketing Today, freshened up for
mid-2002. The first three steps also appeared in slightly altered form in my
book Planning Your Internet Marketing Strategy: A Doctor Ebiz Guide
(Wiley, 2002).

Nevertheless, I believe you'll find it helpful to have it all gathered in one


place as you design your new e-business start-up.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 3

Table of Contents
Introduction............................................................................................... 6
Step 1. Define a Unique E-Business Niche.................................................8
Thriving in a Tiny Niche .............................................................................................8
Differentiating Niches from Blocks...........................................................................11
The Elusive Holy Grail of the "Ideal" Product ......................................................... 12
Unfilled Niches ......................................................................................................... 12
Poorly Filled Niches.................................................................................................. 12
Camcordia.com ......................................................................................................... 13
Partly Filled Niches................................................................................................... 14
Creating New Niches ................................................................................................ 15
Brick-and-Mortar vs. Internet Niches...................................................................... 15
Finding and Filling Your Niche ................................................................................ 16
Step 2: Devise an Adequate Revenue Plan ...............................................17
Traditional vs. E-Businesses .....................................................................................17
Advertising Revenue................................................................................................. 18
Referral Revenue ......................................................................................................20
Sales Revenue ........................................................................................................... 22
Multiple sources of revenue ..................................................................................... 23
Step 3. Naming Your Online Business..................................................... 24
1. Develop a clear, simple statement describing your online business.................... 24
2. List all the words that relate to your business idea.............................................. 25
3. Brainstorm business name word combinations................................................... 25
Good Names, Bad Names .........................................................................................26
4. Check domain name availability ..........................................................................28
5. Check trademark availability................................................................................28
6. Purchase relevant domain name(s)......................................................................29
7. Apply for a trademark...........................................................................................30
Naming Resources for Your Online Business .......................................................... 31
Step 4. Assess Your Needs and Resources............................................... 32
Establish Phased Objectives ..................................................................................... 32
Consider Your People Resources.............................................................................. 33
Examine Your Bartering Resources ......................................................................... 34
Inventory Your Equipment Resources ..................................................................... 34
Assess Your Financial Resources ............................................................................. 35
Plan to Reinvest in Your Business............................................................................ 35

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 4

Step 5. Obtain Professional Website Design............................................ 36


Building Trust ........................................................................................................... 36
Navigation Systems .................................................................................................. 37
Planning for Ease of Maintenance ........................................................................... 37
Move Maintenance In-House ...................................................................................38
What Kind of Designer Should You Look For? ........................................................ 39
Clear Agreements and Specified Payments.............................................................. 39
Hosting and Domains...............................................................................................40
Step 6. Build the Trust Necessary for Success ......................................... 41
Show Photos of Yourself or Your Staff ..................................................................... 41
Show Photos of Happy People on the Front Page.................................................... 42
Tell the Story of Your Business................................................................................. 42
Write in a Chatty Manner ......................................................................................... 43
Display Testimonials from Satisfied Customers ...................................................... 43
Make Credible Presentations.................................................................................... 43
Provide Full Contact Information ............................................................................ 43
Reverse the Risk for Your Customer ........................................................................ 44
Trust-Building Associations ..................................................................................... 45
Step 7. Plan Low-Cost Marketing Techniques ......................................... 46
Marketing Strategy 1: Search Engine and Directory Registration........................... 47
META Tags ........................................................................................................... 47
Search Engines .....................................................................................................48
Directories ............................................................................................................48
Paying for Directory Inclusion .............................................................................48
Marketing Strategy 2: Search Engine Optimization (SEO) .....................................49
Algorithms and Alchemy......................................................................................49
Gateway or Doorway Pages ..................................................................................49
Do-It-Yourself.......................................................................................................50
Paying a Service....................................................................................................50
Marketing Strategy 3: E-Mail Marketing to Your House List.................................. 51
E-Mail List Servers ............................................................................................... 51
Privacy and Permissions ...................................................................................... 51
Collecting Information ......................................................................................... 52
Marketing to Your House List .............................................................................. 52
Marketing Strategy 4: Paid Advertising ................................................................... 53
1. Sponsorships and CPM Advertising ................................................................. 53
2. Pay Per Click (PPC) Advertising....................................................................... 54
3. Cost per Action (CPA) Advertising -- Affiliate Program .................................. 54
Step 8: Determine How to Receive Payments ......................................... 56
Introduction to Internet Money Transfer ................................................................ 56
Comparisons of Low-Cost Funds Transfer Systems ................................................ 57
Shopping Cart or Ordering System .......................................................................... 59
Step 9. Deliver Products and Services Efficiently.................................... 61
Select a Low-Cost Way to Store Your Product ......................................................... 61

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 5

1. Warehouse Products Yourself .......................................................................... 61


2. Buy from a Local Distributor ...........................................................................62
3. Drop-Ship from a Distributor or Manufacturer ..............................................62
4. Have a Fulfillment House Warehouse and Ship for You................................. 63
Assessing What's Right for You............................................................................ 63
Select a Low-Cost Way to Ship Your Product .......................................................... 63
Digital Delivery System Options ..............................................................................64
How to Select a Fulfillment House........................................................................... 65
Fees and Policies to Ask About ............................................................................ 65
Profiles of Two Small Business Fulfillment Houses ............................................ 67
Step 10. Provide Excellent Service to Your Customers............................68
The Importance of Happy Customers ......................................................................68
The Importance of the Second and Third Sale.........................................................69
An Example of Excellent Customer Service .............................................................69
Finding Ways to Automate Customer Service ......................................................... 70
Investing in Customer Service...................................................................................71
When Not to Automate Customer Service ............................................................... 72
Some Customer Service Resources .......................................................................... 72
Customer Service Is a Management Decision.......................................................... 73
The Golden Customer Service Policy ....................................................................... 74
Conclusion -- Wise Person or Buffoon..................................................... 76
Appendix: Other Resources by Dr. Wilson .............................................. 78
Best-Selling E-Books ................................................................................................ 78
Vital Resource for "NetAssisting" Your "Local" Business........................................ 79
Dr. Wilson's "Real Book" on Strategy Development................................................80

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 6

Introduction
shoe·string n. 1. shoelace. 2. a small sum of money; capital inadequate or barely adequate to the
needs of a transaction.
boot·strap n. a looped strap sewed at the side or rear top of a boot to help in pulling it on. vt. to
promote or develop by initiative and effort with little or no assistance.

Merriam Webster's Collegiate Dictionary. Tenth Edition (1993)

Why do the two chief metaphors for starting a business from


scratch both relate to footwear? Shoestrings. Bootstraps. Perhaps
because you feel pretty small and struggling when you hunch
over to tie your shoes or pull on your boots. It's a ground-level
achievement. There's nothing fancy, no glory, little recognition.

But despite tales of high-flying dot-com bankruptcies, there is


great opportunity to make a good living developing a small,
healthy online business -- if you go about it right. We heard that
dot-coms just weren't making any profits. These heavily-funded
start-ups needed to make a big splash or go bust in the process. But there
are hundreds of thousands of small, very profitable e-businesses -- begun
on a shoestring -- that thrive all over the world. You'll need some money --
every businesses does unless you possess all the necessary skills in-house --
but you may be surprised at how little money may be necessary to succeed.

In this e-book we'll be examining how to begin a successful e-business or


revive a struggling one. In some cases, you'll realize that your stillborn e-
business needs a funeral -- nothing will bring it back to life. But in other
cases you'll be able to discover the missing pieces, and this time find
success.

This e-book isn't for the get-rich-quick dreamers who are always looking for
the next magic bullet. They'll always be disappointed and disappoint others.
This is for serious individuals and small companies who are willing to learn

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 7

rapidly, teach themselves new skills, master new disciplines, and do all it
takes to become successful.

The first and crucial step to success requires finding your niche in
cyberspace. We'll start there.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 8

Step 1. Define a Unique E-Business Niche


Standing at the base the Wailing Wall in Jerusalem and looking up, the
immense stone blocks laid one upon another seem to
reach to the sky. This most holy site to Jews is all that
is left of Herod's Second Temple. It is a place of prayer
for the nation. Herod built the Western Wall as part of
a retaining wall around the temple mount, formed of
massive limestone blocks, some weighing over 100
tons each.

But when you look more closely at the Wall, you see the
crevices between these giant blocks. In the first two tiers of stone they are
filled with papers inscribed with the prayers of the faithful. But above them
the crevices are alive. Plants, rooted deeply in the cracks between the
stones, abound far above the heads of the worshippers and add character
and life to the Wall.

When you move from the sacred to the secular, the Wall has a lesson for us.
If your company doesn't have the mammoth clout of a Fortune 500
corporation, then you must find a niche between the immense players and
adapt yourself to thrive there. The English word "niche" rhymes with
"ditch" (though is pronounced NEESH by some). It comes from a French
word that means, "to nest." And that's what small companies can learn to
do very successfully, filling small voids left by the big players.

Thriving in a Tiny Niche

How can small businesses thrive if the niches seem pretty narrow indeed?
You can purchase kitchen knives at Safeway and KMart, at Macy's and a
restaurant supply outlet, as well as a gourmet cooking store. But a shop that
specializes in kitchen cutlery? It would take a major metropolitan area of
one or two million people to support such a store, and still it might struggle.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 9

But so long as you can deliver your goods or services across distances, on
the Internet your marketplace is the nation, and, if you have the vision for
it, the world. As of March 2002 estimates were about 1/2 billion Internet
users world wide. Look at the sheer millions of users that constitute your
market. English-speaking countries are in boldface:

Sorted by Number of Internet Users


Internet
Nation Population Users % users
(millions)

United States 278 149.0 54%


China 1300 33.7 3%
United Kingdom 59.6 33.0 55%
Germany 83 26.0 31%
Japan 126.8 22.0 17%
South Korea 47.9 16.7 35%
Canada 31.6 14.2 45%
France 60 11.0 18%
Italy 57.7 11.0 19%
Russia 145 7.5 5%
Spain 40 7.0 18%
Netherlands 16 6.8 43%
Taiwan 22.3 6.4 29%
Brazil 174.5 6.1 3%
India 1000 5.0 1%
Australia 19.4 5.0 26%
New Zealand 3.8 1.3 34%
Source: CyberAtlas.com, March 21, 2002

If you market to English-speakers, your potential market size is 202


million, 80% of those in North America.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 10

Many countries have a predominance of Internet users -- over 25% in the


countries listed below:

Sorted by Percent Internet Users


Nation % users
Qatar 61%
Iceland 60%
United Kingdom 55%
Hong Kong 54%
United States 54%
Sweden 51%
Norway 49%
Switzerland 47%
Canada 45%
The Netherlands 43%
Finland 41%
UAE 38%
South Korea 35%
New Zealand 34%
Estonia 33%
Austria 33%
Germany 31%
Portugal 30%
Singapore 30%
Denmark 30%
Taiwan 29%
Belgium 26%
Australia 26%
Ireland 25%
Source: CyberAtlas.com, March 21, 2002

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 11

Countries with a high percentage of Internet users are becoming used to


making purchases via the Internet.

A kitchen cutlery shop might die in a town of 10,000 or a city of 100,000.


But on the Internet, the market is so huge that even a small slice provides a
large number of shoppers. Let's take a country like South Korea where 35%
of the population are Internet users. Where travel time once prevented
shoppers from getting to specialty shops in downtown Seoul, on the
Internet, the nation is like one very accessible city. With Korea's 16.7
million Internet users, even a very narrowly-defined specialty business can
thrive because of the huge number of potential shoppers. Think of the
market as 17 cities of a million people each. That many potential shoppers
can support nearly any specialty business.

After nearly eight years of intimate involvement with the Internet, I am still
awed by its vast potential. To succeed you must be able to see the Internet's
hugeness as a market, and at the same time comprehend that even the
narrowest kind of business can find enough customers to thrive. The "wall"
is so big that the niches between the huge corporate blocks are quite
adequate to support a lively small business marketplace.

Differentiating Niches from Blocks

The phone rang and the caller wanted to set up an online store. "I want to
sell something on the Internet," he told me.

"What do you plan to sell?" I asked.

"Books," he said, "and consumer electronics."

I can see him competing head-to-head with Amazon, Barnes and Noble,
Borders, Good Guys, and Best Buy. With his puny resources, he doesn't
stand a chance against the big players. None. Nada. Zip.

I've been asked a dozen times, "What would it cost to build a book store just
like Amazon.com?" I grind my teeth. With all the opportunities begging to
be explored, why would you want to challenge the top dog? I answer that
question by saying, "It would cost you the millions and millions of dollars
Amazon spent to build its store." Look instead to the niches.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 12

The Elusive Holy Grail of the "Ideal" Product

I'm sometimes asked, "What is the best product to sell on the Web?" The
answer is pretty straightforward; here are the characteristics:

• Enables a high profit margin,


• Offers exclusive sales rights,
• Delivers by digital download,
• Offers customers more value via Internet sale than through
traditional channels,
• Fills a universal need, and
• Must be purchased regularly.

If you can score with majority of those parameters you probably have a
winning product or service. But, frankly, few fit. Don't let your mind
wander aimlessly looking for the perfect product.

A better way is to look to yourself or to your company. What are you good
at? What do you enjoy? On what subject are you considered the "local
world's authority"? What are you strong in? What do you have to offer that
is fairly unique? How can you leverage your present strengths? Instead of
fantasizing about the "perfect," take what you know and let it empower your
vision to clearly see the niches out there.

Unfilled Niches

These days it's hard to find a niche that nobody is filling, but occasionally I
run across one. The classic path to success is "Find a need and fill it." So
look to the customers you know best. What are they asking for? What would
they like? What keeps them from fully realizing their own success? Since
you're an "expert," you may have some key insights. You may be able to
develop a new or improved product, service, or business process that,
coupled with the Internet, can make a big difference. It's your interest and
training that give you the vision to see these opportunities. Look closely at
the niches.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 13

A while ago I was in the market for a camcorder. I knew practically nothing
about them -- and I found that the average salesperson at my local stores
didn't know much either. I had lots of unanswered questions. I needed
information, opinions from people who really knew something about the
trade-offs between one recording format and another. But I couldn't find
what I was looking for.

There have to be other people like me. What kind of site would make this
selection an easier task? One site was very good, but called on me to make
decisions about which I didn't have enough knowledge. Nor did it provide
expert opinion or consumer feedback on questions of format pros and cons,
answers to my stupid questions, etc. Another site had a camcorder buying
guide, but no individual comments except at the product level. And nothing
offered a chart that showed the differences between the models available
from a single manufacturer. I was also ready to buy an extra battery pack
and a carrying bag, as well as a supply of recording tape, but none of these
sites made it easy. Some camcorder sites were only departments in a larger
consumer electronics enterprise with little focus on this niche.

Camcordia.com

I concluded there was no single "greatest place" online to buy camcorders.


Maybe I ought to build it myself. In addition to a excellent shopping cart
system and check-out procedure, these are the elements I would include:

• Buying Guides
• FAQs
• Honest reviews of each manufacturer's product line contrasted with
other manufacturers' offerings
• Easy comparisons within a manufacturer's product line
• Live chat that allows shoppers to ask questions from a knowledgeable
person 8 to 10 hours per day
• Competitive prices, if not the very lowest
• Carrying all major manufacturers' products
• Inventory of best sellers, drop-ship arrangements for less common
requests
• Shipping at a variety of speeds and costs
• A no-quibble guarantee
• Links to the "help" pages on manufacturers' websites
• Addresses, phone numbers, and URLs of repair stations
• A full line of accessories

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 14

• A full line of recording media


• Information and cables to connect camcorders to TVs, VCRs, and
computers
• Online forums where camcorder aficionados discuss detailed
questions
• An affiliate relationship with camcorder dealers in regions of the
world where I don't want to risk shipping a $250 to $1,500 item.
• A monthly newsletter I could call The Camcorder Comrade. :-)

And I'm sure once I got immersed in the process of building, I'd find more
to do. We could call it camcordia.com or camcording.net or cambug.com.
(These names were available when I first wrote this, but have since been
taken.)

Isn't this a lot of work? You bet.

Of course, you could build a "good" camcorder store fairly easily. But not an

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 15

done quite profitably. This is a partly filled niche longing to be filled more
completely.

Creating New Niches

We haven't nearly exhausted the subject of niches yet. How about creating a
new niche where one didn't exist before? I love what JustBalls.com did
when they began several years ago. They didn't pump themselves up to
think they could tackle the whole sporting goods sector. They weren't a Big
5 or a FogDog. So they sliced sporting goods in a brand new way that it had
never been sliced before -- balls only. They didn't sell bats or first-
baseman's mitts. They sold balls. Baseballs, basketballs, footballs, golf balls.
If there was a sports ball of any kind, they would carry it. Now they offer
laser-engraved sports balls for gifts and presentations. They succeeded
because they created a brand new niche, found a catchy, memorable name,
developed a customer-centered approach, and opened their doors.
(www.justballs.com)

Brick-and-Mortar vs. Internet Niches

I need to say a word to you who have an existing brick-and-mortar business


already. Should you put your business on the Web? By all means, do so!
(Unless you're a barber, or something inescapably local, of course.) The
stability of your traditional business will give you the time to find your way
online. But don't put your entire business offerings online, only those that
are unique and especially adaptable to the Internet.

Several years ago, Jeff Greene called me for help setting up an online store.
Jeff is the longtime owner of The Office Market, an office and art supply
store in Conway, New Hampshire, an area of about 20,000 people in the
White Mountains. This was before OfficeDepot.com, OfficeMax.com, and
Staples.com had developed a strong presence online. He asked me if he
should sell both office supplies and art supplies. I pointed him toward the
niche market and away from the mass market, and he has since done well
with Discount Art Supplies (www.discountart.com) offering a full line of top
brand, high quality brushes, paints, and other supplies. If Jeff had tried to
put his whole office supply inventory online, the e-business would have lost
focus and he wouldn't have been able to carry a full enough line to compete
with the big companies (though in his local region The Office Market is the
leader). By putting all his energy into the art supply part of his business, he

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 16

has succeeded admirably on the Web and can compete with others in this
field.

Determine what aspect of your current business is best for the Internet and
put that online; don't load your website with generic products and services
that diffuse your focus.

Finding and Filling Your Niche

The promise of the huge Internet market is there for you, too. While it is
intensely competitive, the size and lack of geographical barriers is especially
suited to small business people who are blessed with niche vision and a
dose of creativity and determination. Look closely, now -- not at the
massive blocks but at the niches between them -- and find a niche with your
name on it.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 17
10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 19

Page Views per Monthly Revenue Monthly Revenue


Month at $10 CPM at $1 CPM
1,000 $10 $1
10,000 $100 $10
100,000 $1,000 $100
1 million $10,000 $1,000
10 million $100,000 $10,000
100 million $1 million $100,000

The revenue projection above assumes (1) that you sell out your advertising
completely each month, and (2) that your costs to sell the advertising allow
you to earn a profit. With millions of websites there is often unsold
inventory available, especially on untargeted sites. To sell advertising you'll
need to develop (1) your own in-house sales force, (2) outsource sales to a
representative who'll expect 20% to 50% of the gross ad sales, or (3) sell
your inventory to an ad network.

While advertising used to be a premier revenue source, several trends make


it more iffy:

1. Advertising dollars are being spent more carefully since the dot-com
meltdown in April 2000.
2. Sites that carry advertising are getting much more aggressive about
selling ads.
3. The increase in sites means that inventory (total advertising space
available) exceeds paid advertising, and actual sales prices are in
decline.
4. Media buyers find it easier to deal with a few large ad networks than
dozens of smaller sites.

While advertising might be a substantial revenue source for some sites, at


this point don't look at it as your primary revenue source or you'll go broke.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 20

Referral Revenue

Referral revenue describes income you receive from referring visitors at


your site to another site where they make a purchase, sign up, or take some
other kind of action. Sometimes this is called CPA (Cost per Action) or PPC
(Pay Per Click) advertising. There is a fuzzy line between referral income
and advertising. In both cases you are helping to promote another business;
you're just getting compensated in different ways.

Affiliate Programs are one of the most popular types of referral programs.
Typically, the siteowner (affiliate) signs an agreement with a merchant, or a
third party affiliate service bureau, such as Commission Junction. If
someone makes a purchase as a result of clicking on a link at the affiliate
site, the affiliate will receive a sales commission of 3% to 15%, and
sometimes more.

It sounds like a pretty easy way to make money. No work, just add a link or
a banner and wait for the dollars to roll in. I've belonged to dozens of
affiliate programs over the last several years and have learned this:

1. Affiliate programs must directly relate to the content of your site,


preferably integrating the affiliate link into the text of articles and
information. Without this close relationship between content and
product, your profits are negligible.
2. Driving large numbers of very targeted audiences to your site is
required to realize much income.

Alongside affiliate programs I categorize business-systems such as vStore


(www.vStore.com) and Quixtar (www.Quixtar.com), the online version of
Amway. They automate the ordering process, but margins are often not
enough to allow advertising that will bring significant traffic to the entry
page and profit at the end of the month.

For several years I devoted the right side of each page of my website to Web
marketing and e-commerce books, many of which I had reviewed. Each was
linked to the appropriate product page at Amazon.com. If someone made a
purchase of a book I was directly linked to, I earned 15% of the purchase
price. If they browsed around and found another book, I would make 5% of
the purchase price. Here was the report for a quarter in 2000:

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 21

Total shipped to customer this quarter: $14,804.50


Total New Customers: 102
Referral fee this quarter: $ 1,178.50
Credit referral fee previous quarter: $ 0.00
New Customer Bonus: $ 350.00
Total Earnings: $ 1,528.50

Purchased books from my direct links:


Total shipped: $4,385.87
Referral fee (at 15%): $657.33
Browsed and found books:
Total shipped: $9,877.22
Referral fee (at 5%): $494.10
Other Qualifying Products:
Total shipped: $541.41
Referral fee (at 5%): $ 27.07

But quarterly checks in the last year are only about a third of that.

I share this to point out how much a site with 650,000 page views a month
can make on an affiliate program directly related to the content of the site.
I've had good success with Ken Evoy's Make Your Site Sell
(sales.sitesell.com/myss) and WebPosition Gold software
(www.wilsonweb.com/go/to.cgi?l=wpg), and, to a lesser degree, Cory
Rudl's Insider Secrets course. http://www.marketingtips.com/t.cgi/15267/

Of course I value the income I receive from affiliate programs, but by


themselves, they don't make what I consider "a good living." Now if I had
millions of page views, I'm sure I'd do better, but probably the products
wouldn't relate as closely to the site content. For many sites, affiliate
programs are a good additional source of income, but not a main source of
revenue.

But there is an exception. In the last two or three years, many


entrepreneurs have built mini-sites narrowly focused around a single topic
or product designed for a single purpose -- to attract targeted shoppers and
send them to the merchant's site where they'll purchase the product, and
earn affiliate commissions. Some of these have done very well. Ken Evoy's
Site Build It! tool (sales.sitesell.com/buildit/) is designed for just this
purpose, and has many built-in features to help you succeed. For more
information on this approach, subscribe to and read Allan Gardyne's
Associate Programs Newsletter (www.associateprograms.com).

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 22

Sales Revenue

This leaves us with sales revenue for goods or services that you sell or re-
sell directly.

Services. I believe that a great deal of revenue will be generated through


services sold via the Internet. The services may be performed offline or
online, but the ordering and paying for those services will be online. This
includes everything from newsletter subscriptions, access to password-
protected information, opt-in e-mailing services, tax preparation, database
warehousing, and thousands of other services.

The more automated the service, the more "productized" it becomes, and
you move from selling time to selling a product. The more person-time
invested in performing the service, the closer it is to a regular "job." Now
don't get me wrong, even though you are selling a time-intensive service
over the Internet, you can certainly gather more business through
marketing it nationally and internationally.

Products. Hard and soft goods can be bought and sold via the Internet in
online stores as well as on eBay, in B2B marketplaces, and through e-
procurement systems in an increasing number of industries. For more than
two decades the US has had a thriving mail-order industry. In a sense, an
online store is just an automated catalog. But while the Internet automates
the front-end ordering process, the make-or-break decisions of the business
often rely on the efficiency and costs of back-end product fulfillment and
customer service. Drop-shipping is a way of outsourcing inventory,
warehousing, and product fulfillment, but it cuts margins and makes it
more difficult to offer excellent customer service.

Selling products and services means that you must deal with real
customers, some of whom will phone or e-mail you angrily and demand
that their concerns be heard. None of this is easy. But I believe that for
many siteowners, selling or re-selling goods and services is the primary way
to make the Internet positively affect your bottom line. The ins and outs of
selling products and services will be the main thrust of the remainder of
this e-book.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 23

Multiple sources of revenue

Even better than just one of these approaches is to find ways to incorporate
two or even all three sources of revenue in creative and innovative ways.
The site that can include advertising revenue, referral revenue, and sales
revenue is best positioned to leverage its Internet investments in a way that
will produce profits. When you're starting an e-business on a shoestring,
make sure that you've designed a realistic plan to bring in the
revenue you'll need to continue.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 24

Step 3. Naming Your Online Business


After you've found a suitable online niche for your business, and worked
out a revenue plan that will make setting up a business worth the long
hours it will take, it comes time to name your fledgling business.

Don't get this backwards. I've met a few business fools who own some nifty
domain names and want to start a business to fit the names. Wrong.
Without a niche and a sound business idea, you don't have a chance of
success -- even with a good domain name. You're much better off to sell
unneeded domain names to someone who can use them (or someone
foolish enough hold them for ransom).

1. Develop a clear, simple statement describing your online


business

The name should evolve naturally from your niche. As I was reading Dan
Janal's e-book Branding on the Internet, I came across a wonderfully
simple positioning exercise which Janal calls his Fool Proof Positioning
Statement. It is an extremely useful fill-in-the-blank approach. First, you
need to decide what to put in the blanks:

Elements of your positioning Example


sentences
Name of the company or product Acme CeilingGrip
(insert your tentative company name
here)
Category sheetrock screw
Core audience contractors
Key benefit attach sheetrock ceilings more
securely
Key differentiating feature doesn't rust when wet

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 25

Now let's fill in the blanks of the first sentence:

_(Name)_ is a _(Category)_ that helps _(Core audience)_ achieve _(Key


benefit)_.
"Acme CeilingGrip is a sheetrock screw that helps contractors attach
sheetrock ceilings more securely."

While the first sentence helps you state the benefit clearly, the second
sentence helps you differentiate yourself from competitors.

Unlike other _(Category)_, _(Company name or product)_ has _(Key


differentiating feature)_.
"Unlike other sheetrock screws, Acme CeilingGrip doesn't rust when wet."

This may seem simplistic, but take a couple of minutes right now to see the
power of it for your own online company. You might want to stress different
key benefits to different core audiences, but this will give you a start. Keep
working on your two or three sentences until they are clear and compelling.

Another term for this type of short statement is a Unique Selling


Proposition (USP) that describes how your company uniquely meets the
needs of your customers. Whatever you call it, the positioning statement or
USP will help you name your company. Remember: you don't start with the
name, you start with the concept -- and the name flows from that.

2. List all the words that relate to your business idea

Next, list all the words that relate to your business idea, its category,
products, services, core audiences, and key differentiating factors. The
longer this list, the better you are at loosening up your brain so you can
come up with a business name that is striking and memorable.

3. Brainstorm business name word combinations

The chances are that domain names of each of these keywords has already
been taken -- by themselves. But now you take the list of words from Step 2
and begin to form two-word combinations. Ideally, you'll come up with a
business name that propels you to stand out from the crowd. While you're
not quite at the stage of selecting a domain name yet, the characteristics of
a good domain name that I outlined in my article "How to Select a Domain

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 26

Name for Your Company" are apropos:


(www.wilsonweb.com/wmt5/domain-select.htm)

1. Short
2. Memorable
3. Not easily confused with others
4. Hard to misspell
5. Relates to your core business
6. Sounds solid to your target audience

Hopefully, you'll find some word combinations that fit many or most of
these criteria. Run them past some other people to see how they react.

Good Names, Bad Names

I'm a bit mystified at companies that name their products or business with
words that don't have any meaning in their target language. At the risk of
offending, let's look at the name Hewlett Packard selected for a major spin-
off company -- Agilent Technologies (www.agilent.com).

I'm guessing that Agilent is a combination of the word "agile" and a


common English suffix. It expresses HP's corporate desire to move quickly
and agilely to innovate in the Internet space. But "agile" isn't immediately
obvious unless you think about it. Nor does it express a clear category,
product, or service. To be fair, HP needed a name that bridged more than
one category. But in order to firmly imprint and position "Agilent" in their
potential customer's mind, they're going to have to rely entirely on hard
advertising to make the name familiar since they're starting nearly from
scratch. Small businesses have the advantage that their names can help
position them and be memorable.

In a number of ways, coming up with a company name is like creating a


brand. It shouldn't sound stogy. Reading music isn't enough. A good name
should be able to sing, as well. Let me illustrate.

Wilson Internet Services. When I began my company in 1995, I called it


Wilson Internet Services. Stodgy -- and easily confused with the type of
name used by Internet Service Providers. When I look back on it, I think
that kind of naming was a mistake. I named the company without a clue
that I was naming a brand. I did better with the domain name,

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 27

wilsonweb.com. It is memorable and sings much better than the company


name.

Web Marketing Today and Web Commerce Today. My next attempt


was Web Marketing Today® (www.wilsonweb.com/wmt) my flagship e-
mail marketing newsletter. It's better. Each word in the name adds to the
meaning. And it's somewhat memorable. The domain name
webmarketingtoday.com is pretty clumsy, however. When I named my
premier e-commerce newsletter Web Commerce Today®
(www.wilsonweb.com/wct) in 1997, I made a mistake. I wanted to build on
my success and reputation with Web Marketing Today, but I succeeded in
confusing people. The name didn't provide a clear way to distinguish
between my two publications.

By 2000, however, I was beginning to understand the importance of


branding. I launched two publications that year, the weekly

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 28

4. Check domain name availability

Only when you have developed a number of possible company (or product)
names should you begin the domain name search. The reason is this: so
many good domain names are taken already that you might be influenced
to only use what is left over. A good place to check your domain name
possibilities is the Whois database at 000domains.com.
(www.wilsonweb.com/go/to.cgi?l=000domains) or VeriSign
(www.netsol.com/cgi-bin/whois/whois). Beyond the .com, .net, and .org
domain names, also consider the newer .biz, .info, and .us designations. For
countries other than the United States, consult a domain name registrar in
your country (www.norid.no/domenenavnbaser/domreg.html).

Check all of your top name choices and minor variations of them. Note
which domain names are available as a .com (or with your country
designation, such as .fr or .de). Also note which have already been
purchased. These days there are many more domain names than there are
active websites. In many cases, over-eager domain speculators have bought
up blocks of names and are having a difficult time unloading them at the
level of prices for which they were hoping.

5. Check trademark availability

Just because there isn't a corresponding domain name doesn't mean that
your business name isn't being used by others who have a prior claim on it.
A trademark is a graphic logo or a unique name that is used in trade to
identify a business, product, or service. In general, the first company to use
a name in trade owns it. Make sure you check the trademark database for
your country -- it's probably online. Make sure you search your own
country first for similar names, then other countries where you want to
avoid confusion. Some online databases are:

US Patent and Trademark Office


(tess.uspto.gov/bin/gate.exe?f=login&p_lang=english&p_d=trmk) To be
thorough, consider checking you state trademark database, too.

Canada
(strategis.ic.gc.ca/cgi-bin/sc_consu/trade-marks/search_e.pl)

UK (www.patent.gov.uk/tm/dbase)

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 29

Australia (www.ipaustralia.gov.au/trademarks/T_srch.htm)

More international links can be found in Gregory H. Guillot's All about


Trademarks (www.ggmark.com).

If you don't find competing companies that have already registered a


trademark for your desired name, then move ahead. But if you find
trademark problems, it's much easier to find another business name.

6. Purchase relevant domain name(s)

I used to be concerned about the price of my favorite already-owned


domain name getting jacked up if I were to show an interest. No more. This
is how I suggest you handle it. Discover the owner from the Whois directory
and then write an e-mail similar to this:

Dear domain owner,

I've been thinking about starting an online business selling


sheetrock screws to contractors. I've come up with about a
dozen really good possible domain names, one of which is
yours. If you're interested in selling, I'd like to see if we can
come to an agreement about price. Fortunately, since I've
identified a dozen good domain names, I'm not under pressure
to purchase the one you own, but if your price is right, it might
help me select yours, and put some fast Christmas cash into
your pocket.

Sincerely,
John Doe
Sheetrock screws par excellence!

This way you don't sound too eager, but willing to deal; additionally, the
domain name owner knows you have other options so he can't push the
price up too high. Venture capital funding initially drove up domain name
prices and fed greed among speculators. But VC money has pretty well
dried up for start-ups, and there are many, many domain names waiting for
the right business. My guess is that if you were to get your hoped-for
domain name appraised for a modest fee, you could use that as leverage to
purchase a pretty good name for your business. You also should consider
having others appraise your domain name picks at Afternic.com

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 30

(www.afternic.com). Purchasing the domain name may cost you $100 or


$250 or $500 or $1000 depending upon the owner's and your respective
negotiating abilities, but a memorable domain name is an important
marketing investment -- don't skimp here!

7. Apply for a trademark

If you plan to use a trademark, you should place the letters "TM" in
superscript next to the trade name to indicate your intention to use it as a
trademark. The letters "SM" indicate "service mark," though the usage
often blurs with that of the word "trademark." To protect your right to use a
particular business name, you ought to register the trademark with the
official government agency in your country, and other countries where you
expect to do much business. In the US this can cost $500 to $1,000
(including search and attorney fees) and take a year or two to be completed.
If you are successful and your trademark is registered, you are entitled to
use the ® symbol to indicate registration of your trademark.

Many online businesses have learned the hard way that it's
cheaper to register the trademark up front than to wait until
another company files for registration ahead of you. If you
can't afford the filing and legal costs, I understand, but make
this one of your early priorities as soon as some revenue is
generated if it looks like your business has commercial
potential. Just because you own a domain name doesn't
automatically mean you own the corresponding trademark. Since your
business is likely to be national or international on the Internet, you can't
afford to ignore the legal threats you may face to your unique business
name. More information is available on my website
(www.wilsonweb.com/cat/cat.cfm?page=1&subcat=mm_Law). If you're
interested in US trademark law, you might read the book Trademark:
Legal Care for your Business and Product Name (Nolo Press,
2001), by Kate McGrath and Stephen Elias or look at these authors'
Trademark Registration Kit (Quick & Legal Series; Nolo Press, 1999).

I hope this will help you see the process involved in naming your online
business. As one who has made some serious marketing mistakes here, I
hope that my advice will save you some headaches. Remember, the main
costs of naming your business are:

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 31

• Fictitious Business Name Statement. Local government. $10 to


$50.
• Domain name. $10 to $500, or more, depending upon your country
and the price you have to pay for an already owned domain name.
• Trademark registration. $400 to $750 or more, depending upon
your country and whether you file forms yourself or get legal
assistance.

Even if you're trying to name your business on a shoestring, make sure you
don't scrimp where it counts.

Naming Resources for Your Online Business

Other resources you may find helpful include:

Naming Consultants. Yahoo! Directory section on Marketing and


Advertising | Naming

BrandFidelity.com Automated, online naming and branding services


(www.brandfidelity.com/services.htm)

NameBoy. A creative tool that helps you combine words to come up with
interesting, and often humorous, domain name combinations
(www.nameboy.com).

Brainstorm from VeriSign helps generate domain name ideas


(www.netsol.com/en_US/name-it/keywords.jhtml).

Domain Fast Find. From Register.com, another name generator


(www.register.com/DisplayFastFind.cgi).

E-gineer Dominator. Finds other combinations, with links to


dictionaries and synonyms, rhymes and trademark searches (www.e-
gineer.com/domainator).

Web Marketing Info Center Domain Name section and Legal


section (www.wilsonweb.com/cat)

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 32

Step 4. Assess Your Needs and


Resources
Starting your business on a shoestring takes discipline -- the discipline to
tether your dreams to realities. Let them soar, yes. But make sure they are
firmly grounded to the earth. Many Dot-Com companies have lacked the
patience and fortitude to start small and grow. They wanted it all now, and
many of them are now paying the price.

Planning your business is some of the hardest work you'll


do, and in this step I'll only skim over the surface. You can
find much more detail in my book Planning Your
Internet Marketing Strategy (Wiley, 2002). But let's
consider certain aspects of this process.

Establish Phased Objectives

If you're starting from scratch, you probably have a dream


of where you'd like to be someday. But unless you have
unlimited resources, you'll have to phase your objectives. Here's an
example for an online shop specializing in tall ship models:

Phase 1. Store set-up. Set up online


store, obtain merchant account, locate
drop-shippers, and go online with name
TallShipShop.com (available as of this
writing).

Phase 2. Marketing. Develop a very


targeted campaign to get listed in search
engines, and obtain reciprocal links with complementary sites.
Become an active part of three e-mail discussion groups on

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 33

model-making and tall ships. Establish e-mail newsletter for


visitors and customers.

Phase 3. Advertising. Experiment with paid advertising,


both online and in targeted magazines. Determine conversion
rate in your online store and calculate the cost of customer
acquisition for each form of paid advertising.

Phase 4. Customer Service. Stock in-house inventory of


best-selling model kits so you can ship quickly. Develop
customer service with real-time help and order tracking. Once
you've made a small profit, invest that in more inventory.

Phase 5. Gear Up for the Holiday Season. Develop


affiliate program with hand-picked sites with links on
complementary pages of their sites.

Your phased plan may look entirely different. The point is to make sure you
don't try to do everything at once, but that you have a plan to develop the
essentials of your site and marketing plan.

You'll want to prepare a rough budget for each phase, but make a detailed
list of the items you'll need in Phase 1, and the amount it will cost you to
reach your Phase 1 objectives before you can expect any revenue. With this
sort of plan you can hope for some revenue in Phase 2 to fund Phase 3. And
enough in Phase 3 to fund Phase 4, etc.

Consider Your People Resources

Of all your business resources, people are most important because they will
form the team you need to succeed. For some of you, the main people
resource may be you -- especially if you are multi-talented. If not, you'll
need to find others who can help you. Perhaps it's you and your spouse, a
true "Mom and Pop" store. Don't laugh. There have been many, many
successful mom and pop stores and businesses. The partnership begun with
marriage now extends to a venture to help earn a living. Since it is,
hopefully, a stable relationship, it will provide stability for your business as
well.

Some will join forces with a friend or two or three. Since there may be little
or no money involved, you might be tempted to make the relationship very

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 34

informal. I recommend that you write out clearly, agree upon, and sign a
memo of understanding that details: (1) the responsibilities of each person
involved, (2) what investment each brings to the task, (3) how profits will
be shared after expenses are paid, and (4) what happens when a person
leaves the business. How much, if anything, does a partner take with him?
When you get a little money, you'll want to formalize this with the help of
an attorney. Many small businesses fail because the partners don't have a
clear agreement. Clear written agreements form the basis of good business
relationships. You can find a lot of help at the Inc.com website
(www.inc.com) and Nolo Press books on small business (www.nolo.com).

An alternative to partnering with others is outsourcing to independent


contractors. Besides saving a lot of hassle with employment taxes and
forms, outsourcing allows you a lot more flexibility when your business
needs to change, expand, or contract. One source of virtual contractors can
be found at the eWork Exchange (www.ework.com/exchange.cfm).

Examine Your Bartering Resources

Since you're starting on a shoestring, don't forget that bartering and


swapping goods and services is an important way you can leverage your
own skills. You help others with your skills and resources; they help you
with theirs. I've found this an important avenue for bootstrapping a
business. Just make sure that the person really has the skills you need and
that you have a clear written agreement with clear expectations.

Inventory Your Equipment Resources

Make a list of the equipment and services you need for your online
business. By definition, you'll need a computer, a web server ... and the list
continues. I suggest a list of Phase 1 "must have" items, with less vital items
planned for later. Then determine the costs of your Phase 1 list. Consider
purchasing used equipment, borrowing a scanner from your brother-in-law
until you can purchase your own, swapping for services, and bartering. The
nice thing about an online business is that you don't need to impress
anyone's ego but your own, so your office can be pretty basic for now.
Consider starting in space you already have, such as a garage, basement, or
extra bedroom. Hewlett-Packard was famously begun in a garage in Palo
Alto. Follow a legend. As the business grows you'll be able to -- and may be
forced to -- move the business to its own space.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 35

Assess Your Financial Resources

Consider your financial resources now in comparison with your needs. You
have tremendous advantages not seeking venture capital or large bank
loans. Realize that credit card purchases that aren't paid off every month
are very expensive bank loans. Instead look to savings and to part-time jobs
that can provide for a basic investment. Consider pooling financial
resources with friends, partners, or co-founders of your company, but make
sure you are crystal clear in writing about the arrangements. Consider
relatives -- your great aunt Samantha who has always liked you. Perhaps
she'll loan you some of the money you need and feel very good about
helping you. But I encourage you strongly: don't mortgage your home in
order to finance your bootstrap business. New businesses are risky, even
when they're well planned. Only invest what you can afford to lose if the
business's success doesn't meet your expectations.

Plan to Reinvest in Your Business

Finally, plan to take at least some of your early profits and reinvest them in
the business, especially in marketing, since marketing provides the
lifeblood of your business via new customers.

As you consider your absolute start-up needs and assess your resources --
especially your hidden ones -- you may well find that you're not that far
away from beginning your business.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 36

Step 5. Obtain Professional Website


Design
I can hear you asking, "Why should I pay a professional to
design my website? I can do an okay job with Microsoft
FrontPage or Macromedia DreamWeaver. Besides, it'll cost
me a lot to hire a website designer, and I just can't afford it."

On the contrary, you can't afford not to. Unless you're


thinking mighty small indeed, there are several important
reasons why you should pay to have your site professionally
designed. Let me explain:

Building Trust

The most important reason to have your site professionally designed is to


build trust with your clients. That takes a high level of competency.

When my daughter was young she would bring home a drawing or painting

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 37

will feel intuitively that this is a well-run business. The website will convey
many hidden messages that evoke trust. And trust is absolutely necessary
for the success of your online business.

Navigation Systems

Second, a professional website designer has learned a lot about


constructing navigation systems that work well and minimize confusion.
When you are buying a website, a big part of what you are buying is a
navigation system that is good enough to allow you to expand considerably
before it becomes outmoded. The typical storeowner just doesn't have the
experience to produce an excellent navigation system and user interface.

Planning for Ease of Maintenance

I have built literally hundreds of websites. What I've learned along the way
is that you can create maintenance nightmares for yourself unless you
design the site in a modular fashion. When I began, I would construct
template pages and then insert my content into them. But the only way to
change the design of the whole website would be to do a "global search-and-
replace" on all the pages. Inevitably, I would have made tiny changes in
certain pages and they wouldn't update properly. The result was a humble-
jumble headache. To fix it I would have to take my new template and
manually insert every webpage into it again, one-by-one through the entire
website.

In 1997 I learned about Server Side Includes (SSIs). Each SSI is an


individual "boilerplate" file that makes up part of the whole template. At a
minimum you have an SSI for the top of the webpage, one for the left menu,
and another for the bottom. Computer nerds tell you that SSIs slow down
the server, and that's true. But in my opinion, computers are made to do
grunt work. They certainly save a lot of time. Here is a simple template for
my DoctorEbiz.com pages:
<HTML>
<HEAD>
<TITLE> -- Doctor Ebiz</TITLE>
<META NAME="KEYWORDS" CONTENT="">
<META NAME="DESCRIPTION" CONTENT="">
<!--#include virtual="/ssi/deb-side.ssi" -->
<!--#include virtual="/ssi/deb-top.ssi" -->
<CENTER><H2>
<!---- HEADLINE BELOW THIS LINE ---->

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 38

<!---- HEADLINE ABOVE THIS LINE ---->


</H2></CENTER>
<CENTER>by Dr. Ralph F. Wilson, E-Business Consultant</CENTER>
<!--#include virtual="/ssi/deb-mid.ssi" -->
<!-- TEXT BELOW THIS LINE -->

<!-- TEXT ABOVE THIS LINE -->


<!--#include virtual="/ssi/deb-bot.ssi" -->
</BODY>
</HTML>

Each line such as <!--#include virtual="/ssi/deb-side.ssi" --> calls one of


these boilerplate files and places it into the file before the visitor's web
browser ever sees it. The beauty of this is you can modify only a single file
that effects a change on every page of your website. It is extremely
powerful.

When I think of how much work I used to do to maintain my sites, I've


decided never again to build a website without SSIs.

The problem is that the average storeowner just doesn't have the experience
to build this kind of system. It looks deceivingly simple, but there are little
SSI gremlins that like to taunt you. Insist that your website designer builds
your site with SSIs (or "include" statements, as FrontPage 2000 calls
them). The time you save in maintenance will be very substantial. You can
learn more about SSIs in Craig McFetridge's SSI Tutorial
(www.carleton.ca/~dmcfet/html/ssi.html).

For the three reasons listed above:

• A professional look that builds trust,


• A well-designed navigation system, and
• Server Side Includes to simplify maintenance

I recommend hiring a professional to build your website.

Move Maintenance In-House

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 39

book such as Elizabeth Castro's HTML 4 for the World Wide Web Visual
Quickstart Guide (4th edition, Peachpit Press, 2000) or Nolan Hester's
FrontPage 2002 For Windows: Visual Quickstart Guide (Peachpit Press,
2001). Using a WYSIWYG (what you see is what you get) tool such as
FrontPage 2000 makes maintaining your webpages rather easy.

In far too many cases a designer will produce a great website, but it
becomes obsolete and non-functional because the siteowner or his 17-year-
old son didn't bother to learn to maintain the site. In-house maintenance is
a must.

What Kind of Designer Should You Look For?

For a well-funded e-business you'll probably want to hire a well-established


website design shop that employs a number of individuals, each with a
particular specialty. However, for a shoestring website, you can probably
find an individual who works out of her home and produces very nice
websites for smaller businesses in the $1,000 to $2,000 range. Find these
people by telephoning the local dial-up ISPs and ask if they know of any
good freelance website designers in the area. Also ask at your local
Chamber of Commerce and print shop. Look in the Yellow Pages under
"Web Site Services," "Web Page Design," or "Internet-Marketing Services."
Look in the search engines for "web design" in your local community or a
nearby city. When you find the person or business, explain what you want,
and then ask to see other similar small business websites she has built. If
she hasn't built any, pass her by and find someone who has. You're paying
for experience. Get the phone numbers of a couple of these former clients
and ask them about the process and how well the website designer worked
out.

Clear Agreements and Specified Payments

I recommend putting an agreement into writing, with milestone dates and


payments attached to them. A clear agreement will save you lots of
headaches and keep the arrangement on a business footing. I still have
online some forms and contracts I used when I was in the website design
business (www.wilsonweb.com/worksheet).

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 40

Hosting and Domains

Many website designers would like to do your website hosting for you, as
this creates an additional income for them. However, if you need to move to
another server, it can sometimes be very sticky. I would encourage you to
specify a nationally known web hosting service, such as Lexiconn Internet
Services (www.lexiconn.com) or Interland.com (www.interland.com). Make
sure you get some basic instructions on how to upload and download files
using FTP, and get the password to your website before making the final
payment. Also insist that your name is listed as both the administrative and
billing contact for your domain name, and that your company -- not your
website designer's company -- is listed as the owner of the domain.

A number of legitimate website designers both host client websites and


keep their names as administrators of the domain names in order to take
good care of their clients. But I've heard too many horror stories to be
comfortable with this arrangement. Hold those accounts in your own name

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 41

Step 6. Build the Trust Necessary for


Success
Your small businesses can build a website and get on the Internet for a few
hundred to a few thousand dollars in the first year. But to succeed, you
need to establish trust. Your online business must be seen as both
believable and attractive. Trust is the essential lubricant that allows
business transactions to take place -- in the physical world and in the cyber
world.

Large companies spend tens of millions of dollars to build a brand. This


expenditure buys name recognition and the confidence that goes with it, a
favorable position or association in the mind of the consumer, and a belief
that a company with so much invested in its reputation would not
disappoint its customers. Investments in brand development pay rich
dividends.

But smaller companies just can't afford the money it takes to establish a
national brand. Instead of relying upon an established reputation, they are
required to build trust and confidence from the moment customers land on
their site. Big companies have their brands, but small companies have the
advantage of a personal face and a personal character -- and connecting
personally can be a very powerful sales motivator indeed!

Show Photos of Yourself or Your Staff

For years I've displayed a photo of myself on my website. I went


to a professional photographer to get as good a photo as I could.
But, frankly, I'm not handsome enough to win customers. I don't
display the photo out of vanity. I show it for one reason: so
people will perceive me as a person and therefore begin to
establish a relationship with me through my writing.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 42

In a sense, you are what makes your small business different from all the
rest. You are your own brand.

If you hesitate to display a photo of yourself, perhaps you can show a group
photo of your staff or sales team. Professional photos taken for this purpose
can project the personal service you show your customers. They put faces
behind the names. And people connect with people. Give people the choice
of doing business with a cheerful, competent person rather than a faceless
corporation, and they'll choose the person every time.

Wells Fargo talks about "your personal banker," Wal-Mart features its own
employees in national TV ads, and MicroWarehouse.com's "brand" includes
a picture of one of its phone order-takers.

If you have an existing brick-and-mortar business, show a photo of the


building, too. Even if it doesn't look spectacular, it demonstrates that your
business isn't just a cyber-mirage pretending to be an online establishment.

Show Photos of Happy People on the Front Page

But don't stop with photos of yourself and your staff. Instead of animated
letters and blue buttons, provide centers of human interest on your front
page. Find photos of happy people who are part of the demographic target
group you've determined are your best customers. To see how this is done,
take a look at Wal-Mart (www.walmart.com). You can secure royalty-free
people shots for your website from Getty Images for about $40 each -- a
small price to pay for attractive models and excellent photography
(creative.gettyimages.com/photodisc).

Shoppers will relate to the people they see at your site. If they look
confident and at ease, it will help to lessen a shopper's natural distrust of
unknown Internet shops.

Tell the Story of Your Business

To build trust you'll also want to tell the story of your business. You may
think that shoppers won't care about the details. But it's precisely these
details that show your store is for real, that values of honesty and hard work

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 43

underlie your whole business. I've read some business stories that really
made me want to make a purchase because I liked the people I was reading
about.

Write in a Chatty Manner

Let the big companies write in their pompous, elevated, third person,
slightly distant tone. But you need to write in the same way you would talk
to a shopper if she were directly across from you. It'll help you build a bond
of friendship and trust that will produce sales.

Display Testimonials from Satisfied Customers

As you develop satisfied customers who tell you how much they like your
business, ask whether you can use the kind words they've written for your
promotional materials. Nearly always they'll agree. Then excerpt two or
three sentences for the testimonial. Make sure you use a variety of topics --
one about your great customer service, another about your selection and
prices, a third about how you took special time to explain something, a
fourth about how they recommend your site to their friends, and a fifth
about the promptness of your e-mails and shipping. Feel free to remove
extraneous phrases or clauses from the final testimony, but make sure you
don't change the wording or intent of the key items you leave in. Use full
names with their permission, where they live, and ideally, a phone number
to contact them. (Listing an e-mail address will subject your top customers
to a barrage of spam.)

The personal touch is a powerful way to build trust.

Make Credible Presentations

Most customers distrust products promoted with hype and unbelievable


claims. Though exaggeration can be effective with some shoppers, most of
the time wild claims will backfire. The storeowner needs to present
products in such a way that all of a shopper's anticipated questions are
answered in a believable manner.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 44

ask questions and make contact. This breeds frustration and distrust.
Consumers are wary of online stores that hide phone numbers or mailing
addresses. The shopper wonders, If I can't get in touch with this storeowner
when I have a question, what happens when I have a problem after the
sale? Why doesn't he accept phone calls? I, too, am wary of companies I
can't contact through traditional communication channels.

Reverse the Risk for Your Customer

One of the reasons people hesitate to place orders in your store is the risk to
which they feel they are exposing themselves. If you can reverse this so that
you the merchant take all the risk and your customer takes none, you'll
substantially increase the number of orders completed and expand your
profit at the end of each month. You build trust by taking the risk on
yourself.

For many years, Sears has clearly displayed its simple policy: "Satisfaction
Guaranteed or Your Money Back." Do you think this policy has lost Sears
money over the years? Hardly! It is one of the reasons people shop at Sears
in the first place.

Small business storeowners are often afraid to make strong, iron clad, no-
questions-asked guarantees for fear that unscrupulous people will take
advantage of them. And a few moral rejects will take advantage of them,
but not many. Overwhelmingly, those who offer a money-back guarantee
have found that it creates much more business than problems.

Make sure you have easy-to-find links to your ordering policy page. You'll
need to include:

• Return Policy
• Guarantee on Products
• Shipping policies

The clearer you are, the more confidence you inspire. The more generous
you are, the more trust you build. And remember, trust is the one essential
business element.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 45

Trust-Building Associations

A final way to establish your business credibility is to associate your site


with names known for their integrity. Each of these organizations requires
some kind of investigation or accountability from you. In exchange for
accountability and some money, you can use the organization's logo on
your website.

Here are some to consider:

• BBBOnline. The online version of the Better Business Bureau


monitors how member businesses handle complaints and provides a
reference to consumers on what kinds of complaints have been
registered. In addition to their "Reliability Seal" program, BBBOnline
also offers a "Privacy Seal" for both kids sites and general sites
(www.bbbonline.com).
• TRUSTe. Helps monitor privacy statements and policies
(www.truste.com).
• BizRate.com. After an online sale, buyers can rate the merchant on
BizRate, and the aggregate of this rating is open to shoppers on the
site (www.bizrate.com).

If you implement the suggestions I've made, you'll be investing dozens of


hours improving your website. But the pay-off will be substantial. You'll get
customers who otherwise wouldn't consider you at all, and you will have
laid one of the essential paving stones on your road to Internet business
success -- trust.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 47

require exclusivity. I also link to many products or services that don't offer affiliate programs -- I
want to send you to the best resources I know and I do my best to be objective. But to keep my
business afloat I use affiliate links where possible. For a complete absence of affiliate links you'll
probably need to read publications fully funded by advertising -- that are still in business. :-)

The four brief strategies below are basic, but even experienced marketers
may find some clues that have eluded them.

Marketing Strategy 1: Search Engine and Directory


Registration

Registering means to let search engines and directories know that your site
is up and ready to be included among their listings. Just be aware that
registering and actually being listed are two different things. You have to be
patient and persistent. Here's how to go about it.

META Tags

It's important to design your website so that each webpage includes a clear
page title, because when your site shows up on a search engine the webpage
title will be displayed. This isn't the headline that you place between HTML
<H1> tags, but the title placed between HTML <TITLE> tags. The title of
each page ought to be both descriptive and provocative. For example,
"Widget Specifications" might be better titled "Acme Widgets Have Won
Five International Awards for Quality." Think of the webpage title as a vital
marketing tool.

Two other META tags are important to search engine listings of your site.
The description META tag is used by some search engines as the sentence
or two they display below your webpage title. Limit this to about 200
characters or so. The keywords META tag will include half dozen to several
dozen words that someone might search on in order to find your website.
Lately I've been inserting keywords separated by spaces rather than
commas, because experts I trust tell me that this allows search engines to
better create their own combinations of keywords. Both science and old
wives tales contribute to META tag lore. You can learn more in the Search
Engine section of our Web Marketing Info Center
(www.wilsonweb.com/cat/cat.cfm?page=1&subcat=mp_Search) and at
Danny Sullivan's SearchEngineWatch.com
(www.searchenginewatch.com/webmasters).

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 48

Search Engines

There's an important distinction between search engines and directories. A


search engine is an automated indexing system that periodically sends a
robotic "spider" to your website to "crawl" (that is, scan and index) some or
all of your webpages. A directory, on the other hand, is a listing describing
your website edited by humans. In order to get on the search engines' radar
you need to register your webpages. Here are some of the most important
North American search engines with which to register: AOL Search,
AltaVista, Excite, FAST Search, Google, HotBot, Inktomi, Lycos, MSN
Search, NBCi, and Netscape Search.. Each of these has a URL where you
can suggest your own webpage, but nearly all the search engines can be
submitted to at one time using a free submission system such as at
JimTools SubmitBot (www.jimtools.com -- but skip his FFA submissions).
After you submit your webpages, be patient. The time lapse from you
registering your site until the time the listing actually appears on the Web
can be weeks.

Directories

Search engines are vital, but directories arguably drive as much or more
traffic to your site. And increasingly, search engines are combined with
directories, so they'll include information from both human-edited
directories and automatically-indexed webpages. The most important
directory by far in most countries of the world is Yahoo! (www.yahoo.com).
But they are very picky about what they'll include in a listing and reject
many listings because of shoddy websites. You'll also want a listing in the
DMOZ Open Directory Project (www.dmoz.org) since its materials are also
used by Netscape Search, AOL Search, Google, Lycos, HotBot, DirectHit,
and hundreds of others. A third important directory is LookSmart
(www.looksmart.com) -- not because it gets a lot of hits itself, but because
its listings feed into search results from MSN, About.com, Netscape,
InfoSpace, CCN.com, and CNET.com. Another directory you should submit
to is Ask Jeeves! (www.ask.com).

Paying for Directory Inclusion

Commercial sites need to pay $299 for a listing to be considered for Yahoo!
Directory listing. This is one of your best marketing investments. You'll
sometimes see ads such as, "We submit your site to 500 search engines for
only $50." Don't bother! Only a dozen or so search engines are important to

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 49

you anyway -- the rest are essentially wannabes or disguised spam


mongers. Beware.

Marketing Strategy 2: Search Engine Optimization (SEO)

While important, just registering your webpages with the search engines
isn't likely to lift you above the clutter of billions of webpages currently on
the Net. If your site doesn't appear in the top 10 or 20 search results for
your important keywords and keyphrases, your site will seldom be visited.
To achieve high ranking you need to enter the complex world of search
engine optimization (SEO) or search engine positioning.

Algorithms and Alchemy

Every search engine has a complex method of determining which webpages


come up as the top 10 choices when you put in a search word. Long gone
are the days when you could repeat the words "widget widget" 100 times
hidden in white text at the bottom of your webpage and trick the engines
into placing you in the number one spot. Now the placement algorithms or
formulas are very complex and are constantly changing to outsmart the
army of determined positioners vying for top positions on competitive
keywords. The exact algorithm that a particular search engine uses is a
closely guarded secret, but positioners are constantly doing tests to see
what works best. The algorithms seem to include "keyword density" in
various sections of the webpage -- the title, keyword META tag, the first 100
words of body text, headlines, etc. Search engines aren't looking for high
keyword density, but what they consider "normal."

Gateway or Doorway Pages

While it's wise to design your webpages to score high on search engines,

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 50

Let's say you wanted to show up in the top 10 of a search for the keyphrase
"economy widgets." Since each major search engine has different and
sometimes conflicting algorithms, you need to build a separate webpage --
fine-tuned for "economy widgets" -- for each search engine, perhaps 6 to 10
different gateway pages per keyword or keyphrase. If you desire to score
high for several search words or phrases, you'll need to create a set of
gateway pages for each. You can see how this can get complicated (and,
unfortunately, increase clutter on the Web even further). Then throw in the
complication that algorithms often change. Furthermore, you need to be
careful, since some search engines have been known to ban domain names
or IP addresses associated with search engine spamming. Consequently,
these gateway pages may be hosted on a domain other than your primary
website.

Do-It-Yourself

It is possible to do search engine optimization yourself. There's only one


product that I know of that enables do-it-yourselfers (and professional
positioners) to do search engine optimization adequately -- WebPosition
Gold (www.wilsonweb.com/go/to.cgi?l=wpg) which costs $149 for up to
five domains. This software is constantly updated to provide you with the
latest intelligence about changing search engine algorithms. Its Page Critic
feature will analyze your webpages, compare them to top-scoring pages,
and point out elements you need to change to help you score higher on a
particular search engine. In addition, you can use WebPosition Gold's
automatic submission and reporting features to monitor your progress. I
use the program myself for regular submissions and monitoring, and was
able to achieve a #1 ranking for the very competitive search word "e-
commerce" on Infoseek and #2 on Excite -- for a short time. The problem is
that the amount of time required to maintain your position on competitive
search words is considerable. And it must be sustained over a period of
months as you submit, wait weeks for new rankings to appear, monitor
your progress, make appropriate adjustments, and then resubmit again for
a new cycle.

Paying a Service

Because of the tedium and time investment involved in search engine


positioning, I recommend that small businesses consider outsourcing this
task to experts. Expect to pay $1,000 to $1,500 for an initial positioning,
and then $100 to $300 per month to maintain your position. You can find

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 51

vendors in the Search Engine Optimization Services section of the Yahoo!


Directory. Be sure to ask for references and then contact them before you
sign a contract. If possible, ask to have the gateway pages hosted on your
own website under a domain name that you own, or you may find your
hard-won positions disappear the moment you stop paying a monthly
maintenance fee. You want to own your position, not rent it, in case you
decide to maintain it yourself or switch to another search engine
positioning firm.

Marketing Strategy 3: E-Mail Marketing to Your House List

Once you get visitors to your website, your next important task is to secure
their e-mail addresses and their permission to e-mail them your newsletter,
occasional updates, or new product information. Failure to collect e-mail
addresses of site visitors is a common and often fatal error. Getting visitors
to your website is hard work. But getting them back again is much easier
once you can contact them inexpensively via e-mail.

E-Mail List Servers

You're naive if you think that you can just collect e-mail addresses for use in
your Outlook or Netscape e-mail program. To conduct e-mail marketing
you need a program that's specifically designed to handle lots of e-mail
address -- and provide for constant e-mail address changes, deletions, and
obsolescence. Two excellent free programs are Yahoo! Groups
(www.yahoogroups.com) and Topica Exchange (www.topica.com), which
pay for their services by attaching ads to outgoing e-mail messages you
send. If you have some money to spend, consider three hosted solutions
that start at $20 to $30 per month: Topica Email Publisher (www.email-
publisher.com) EmailFactory (www.emailfactory.com), and
ProAutoResponder (scc.proautoresponder.com).

Privacy and Permissions

It's important to understand two related trends that affect a house e-mail
list. First is your visitors' understandable desire to maintain privacy of their
personal information, so that it is not sold or distributed without their
knowledge. Second is the importance of obtaining permission to send e-
mails to your site visitors and customers. Single personal e-mails don't need

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 52
10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 53

Remember, you'll probably get only a single chance to capture a website


visitor's e-mail address. Don't blow it. But if you can obtain an e-mail
address and permission, you'll be able to inexpensively market to that
visitor again and again for the life of the e-mail address and make sales that
eluded you on a customer's first visit. E-mail marketing to your house list is
an essential strategy.

Marketing Strategy 4: Paid Advertising

I know that paid advertising sounds scary to shoestring e-merchants, but I


am convinced that some form of paid advertising is important if you wish to
grow your business, since paid advertising motivates others to carry your
marketing message to their own networks of site visitors and e-mail
newsletter recipients. I'll discuss three types of paid advertising that small
businesses can afford.

1. Sponsorships and CPM Advertising

Traditional advertising pays a publisher to carry an ad in the publication


priced in proportion to how many people are likely to see the ad -- readers,
subscribers, etc. The same model has moved over to the Internet.
Advertising is often sold on a CPM (cost per thousand "impressions") basis.
For example, $10 CPM means that it costs $10 for 1,000 people to see the
ad, or 1 cent per impression. While targeted B2B websites like
WilsonWeb.com charge higher-than average CPMs, you can sometimes
purchase semi-targeted banner advertising at $3 to $10 CPM, and expect a
click-through rate (CTR) of 0.2%, more or less. When you do the math, $3
to $10 CPM at a 0.2% CTR calculates to $1.50 to $5.00 per visitor to your
site.

Another approach to paid advertising is to purchase an ad for a fixed cost


per week or per issue, no matter how many visitors or subscribers happen
to see it. For example, I sell 2-Line Ads (www.wilsonweb.com/ads/2-line-
ad.htm) in Web Marketing Today (120,000 subscribers monthly) and
Doctor Ebiz (63,000 subscribers weekly), for US $250 and $150 per issue,
respectively (the equivalent of $2 CPM and $2.40 CPM, respectively), with
a substantially higher click-through rate than banner ads. I've priced these
advertising opportunities to appeal to small businesses -- and you'll find
other publishers offering similar bargains. Look for newsletters related to
your site and investigate ad prices for small ads. You may be surprised at
what you'll find.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 54

2. Pay Per Click (PPC) Advertising

One very popular small business approach is to pay


for advertising on a Post Per Click basis (PPC). The
best-known of PPC sites is Overture.com
(www.overture.com) where you can bid on search
terms. For example, when I searched on "list
hosting," the "advertiser's maximum bids" for the top three positions were
$4.01, $3.30, and 55¢. But this charge is assessed only if someone clicks on
the listing. "Maximum bid" is only assessed an advertiser if it is needed to
keep him ranked above lower-bidding competitors -- top ranked advertisers
don't always pay their maximum bids.

In addition, the first three positions show up on a number of major search


engines as Yahoo! Lower positions also may show up on CNet, AskJeeves,
InfoSpace, and others. You can get started with Overture at a relatively low
deposit and minimum bid of 5¢ per click-through. There are many similar
PPC search engines that require no minimum bid -- but they have little
ability to bring much traffic. Another key PPC approach is Google's
AdWords Select (https://adwords.google.com/select). These ads appear not
only on Google, but also AOL Search, Earthlink, and Sympatico. To really
understand the strategies necessary to make money using PPC strategies,
read constantly updated e-books such as Andrew Goodman's Unleash
Amazing Profits with Google AdWords Select
(www.wilsonweb.com/go/to.cgi?l=pagezero).

3. Cost per Action (CPA) Advertising -- Affiliate Program

A third approach that is becoming quite popular is cost per


action/acquisition (CPA) advertising, often known as affiliate program
advertising. While the set-up fees to begin your own program may vary
from $200 to $800 or more, such a program allows you to recruit affiliates
whom you pay only when a link on their site results in a sale or sign-up on
your website. For example, I've set up an affiliate program
(www.wilsonweb.com/affiliate) to help me sell subscriptions to my premier
Web Commerce Today e-commerce newsletter (www.wilsonweb.com/wct/)
and my e-books (www.wilsonweb.com/ebooks/). I pay a generous 20%
commission to my affiliates, but only after the sale is actually
consummated, which gives me money to pay the commission. (That's more
than the average program, which usually pays a commission of 4% to 15%.)
Setting up and running an affiliate program is no trivial venture, but it is a

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 55

very cost-efficient way to advertise your products and services. You can find
helpful information comparing various affiliate management software
programs from a merchant's perspective in my e-book Report on Affiliate
Management Software: User Feedback and Editor's
Choices (www.wilsonweb.com/ebooks/affilisoft.htm).

I encourage you to experiment with paid advertising --


don't be afraid of it. Even shoestring e-merchants need
to spend some money to make money. Your goal is to
find an effective form of advertising for your goods and
services that is affordable from a cost-per-sale
perspective and therefore sustainable on a month-to-
month basis.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 56

Step 8: Determine How to Receive


Payments
Introduction to Internet Money Transfer

The ability to transfer money via the Internet is part of my core definition of
e-commerce. Back when I designed my first online store in 1995, e-
commerce elements were difficult to assemble. Today there are a number of
solutions, some of them quite inexpensive.

In this e-book I focus on low cost methods. They work reasonably well, but
have their downsides. The better -- and more expensive to set up --
methods involve two major expenses: (1) a merchant credit card account
and (2) a payment gateway. A merchant account enables you to accept
credit cards for payment, and a payment gateway connects the transaction
on your website in real time with your bank's credit card processor. All this
takes place via secure Internet pipelines so that your customer's credit card
information is not compromised.

The advantage of the best systems is automation. It's possible to program


your online store so that the whole process takes place automatically. The
less expensive systems all require more intervention from the site owner.
With larger volumes of sales, the set-up and monthly fees become much
less significant than with a very small site.

In Web Commerce Today, Issue 38, September 15, 2000 I explained how to
get good prices on merchant credit card accounts
(http://www.wilsonweb.com/wct4/issue38.htm) and how to avoid the
sharks of that industry that lock naive merchants into 3 to 4 year leases and
often sell them e-commerce software they don't need. I also vent a little
anger in that issue. :-) I hope you'll subscribe to Web Commerce Today so
you can get up-to-speed quickly (www.wilsonweb.com/wct/).

In my Merchant's Guide to Payment Gateways


(www.wilsonweb.com/ebooks/gateway.htm), I describe some of these

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 57

processes in greater detail. But in this e-book I'll point you to several
relatively low-cost ways to get started in e-commerce -- without either a
separate payment gateway or a merchant account.

Comparisons of Low-Cost Funds Transfer Systems

The tremendous popularity of eBay and other consumer auctions in the last
few years created the need for low-cost means of transferring money that
protects both seller and buyer. This has spawned a number of new solutions
-- PayPal, BillPoint, Yahoo! PayDirect, C2it, and BidPay. Of these, only
PayPal has really matured to the point where it is of much use to serious
online merchants outside the auction arena. (Note: eBay recently acquired
PayPal and will probably discontinue their own BillPoint solution.)

I've also listed three e-commerce systems -- CCNow, ClickBank, and


DigiBuy -- that handle the entire credit card transaction. They require little
or no set-up fees, but they charge transaction rates from 7.5% to 13.9%.
Because of the these stiff charges, these are useful only for products with a
high mark-up.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 58

Restrictions Percent of Transaction Monthly International


Transaction Fee Fees and US funds are
Set-Up transacted
Fees by all these
systems

BillPoint Standard For 35¢ None Sellers must


www.billpoint.com account transactions be US or
eBay and Wells Fargo limited to over $15, Canadian
$500 2.5% + residents.
transactions, 0.5% Payments can
$2000 for (1.75% + be received
merchant 0.5% for from 50
account. high volume countries.
Currently sellers),
limited to 1.5% +
eBay sellers. 0.5% for
electronic
checks
(0.75% +
0.5% for
high volume
sellers).

c2it Limited dollar No charges $10 to None US residents


CitiBank amounts. within the transmit only.
www.c2it.com US. money
outside the
US.

BidPay For auction 2.25% on $30 and None Yes, though in


Western Union payments funds over under, some
www.bidpay.com only, limited $100. $2.95. $5 on countries
to $700 per amounts cashing
item. over $30. money orders
Includes first is more
class difficult.
postage.

Yahoo! PayDirect No fees None None No, US


paydirect.yahoo.com currently. residents only
may be sellers
or buyers.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 59

Restrictions Percent of Transaction Monthly International


Transaction Fee Fees and US funds are
Set-Up transacted
Fees by all these
systems

CCNow Tangible US residents None None Yes, all


www.ccnow.com goods only. $9.95/mo countries.
plus 9% on Payments may
monthly be mailed by
amounts regular check
greater than or cashier's
$100. check, or
International wired. Direct
$11.95/mo deposit for US
plus 11%. sellers.

ClickBank Digital goods, 7.5% $1.00 $49.95 Yes, payments


www.clickbank.com ebooks, or set-up fee. mailed by
services. check.

DigiBuy Digital goods 13.9% or None $29.99 Yes, payments


www.digibuy.com or ebooks, $3, set-up fee. mailed by
with download whichever is check.
service. greater.

Merchant Account No 2.5% 10¢ to 30¢ $5 to $25 A merchant


restrictions. discount per month must have a
rate. plus often merchant
a payment account in his
gateway or her own
fee of $30 country, or
to $60 per corporate
month. presence in
Application the US.
fees vary Exception is
from $100 Planet
to $200+. Payment and
World Pay.

Shopping Cart or Ordering System

For the most part, the payment transfer systems function as a kind of
ordering system -- often inadequate. For most e-commerce sales you need
the following functions.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 60

• Shopping Cart (to allow purchase of more than one product at a time)
or ordering system. (CCNow and PayPal have shopping cart
applications.)
• Shipping Calculation. (There is a primitive calculation system on
PayPal and CCNow.)
• Tax Calculation (currently only on PayPal.)
• Payment System and real-time credit card authorization (all the low-
cost systems provide this)

For all of these low cost systems except DigiBuy you'll


need a website where your products and services are
described and pictured. Next to the product information
you'll copy and paste the HTML code for an order button
than links to your ordering system.

It is possible to run a more sophisticated system.


StoreFront BizPlaces (www.bizplaces.com) provides a
multitude of high-end features beginning at $14.95 per
month. You can use PayPal as your low-cost payment system, if you like. To
learn about the wide options available in shopping cart ou Pa ou P.8(on(ym)7(i7( s pm)8

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 61

Step 9. Deliver Products and Services


Efficiently
Select a Low-Cost Way to Store Your Product

If you are selling a tangible product, you'll have to decide upon a storage
method. Storage sounds a bit stodgy in this fast-moving age of electronic
commerce, but it is essential to having your product available and ready to
ship as soon as you get an order. There is no single one-answer-fits-all --
each has advantages and disadvantages -- but here are the various models.

1. Warehouse Products Yourself

This brings visions of boxes of CDs lining the hallways of your home or
running over in your garage. Some small companies lease light industrial
space to store inventory. For the smallest e-businesses that want to make
maximum dollar profit on sales, probably warehousing your own inventory
will make the most profit. This is appropriate, too, for brick-and-mortar
retail stores, which are small enough to ship products for online sales out of
existing inventory. From a customer service standpoint, handling inventory
and shipping yourself means that you have the records at hand to provide
quick, efficient customer service for telephone calls and returns. You
control the inventory, ordering ahead what you think you'll need. You'll be
able to easily determine the amount of product in stock and know whether
orders can be shipped or must be backordered. You are in control.

But there is a price. First, you must pay for the inventory that the
manufacturer or distributor ships to you. Only individual artisans will be
willing to negotiate payment for sales on consignment. Second, you must
pay for inventory space. If you have extra space already, there's no extra
cost. But if you need to lease space to warehouse inventory, you'll be paying
for the square footage it takes to store the products. When you carry your
own inventory and run your own shipping department, you are betting that

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 62

your own shipping system will be more cost-efficient than that of a drop-
shipper or fulfillment house.

A modification of this model is to carry inventory for your best selling


products only and handle the occasional orders for other products using
another model.

2. Buy from a Local Distributor

If you don't want to warehouse inventory yourself, one option is to find a


local distributor who carries a considerable inventory of your most popular
products. You get your orders from the night before, drive over to the
distributor's warehouse, pick up the products, and ship them out. This was
Amazon.com's first fulfillment method using an Ingram book distributor in
Seattle. It worked well for the first phase of their company -- until a big
bookseller competitor threatened to acquire Ingram.

The advantage here is that you don't have capital tied up in inventory or
monthly leases for warehouse space -- the distributor takes care of that. You
might get caught, however, if the distributor runs out of one of your
important products. There's no easy way to determine what is in stock and
can be shipped immediately.

3. Drop-Ship from a Distributor or Manufacturer

One of the most popular models for Internet start-ups is to set up


relationships with distributors or manufacturers who will receive the order
from you (faxed or e-mailed) and ship it to your customer with your
supplied label and your packing slip. The customer probably won't be aware
that it didn't come directly from you. You'll need to find which companies
will drop-ship the brands you desire to carry in your online store.
Fortunately, there are directories of such companies, brands, and products.
The best I've found is Chris Malta's online Drop Ship Source Directory
(www.wilsonweb.com/go/to.cgi?l=dropship), which is constantly updated.

Drop-shipping is wildly popular among start-ups because it requires no


capital investment for inventory. You only have to pay when you have an
order (and money) in hand to fund it.

The downside is that many drop-shippers don't give you much information
about what's in-stock or out-of-stock, so your customer may be left

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 63

hanging. In case of customer service inquiries, you may not have much
information at your fingertips about the status of any particular order.
Since building a happy clientele that makes repeat purchases is dependent
upon excellent customer service, drop-shipping can affect your long-term
viability. In addition, your discount from the manufacturer or distributor
isn't as great when you drop-ship; you're paying them to carry inventory
and fulfill your orders, so your profit margin may be lower. However, drop-
shipping may be your best way to begin on a shoestring.

4. Have a Fulfillment House Warehouse and Ship for You

The final model is to contract with a fulfillment house to warehouse your


products on their shelves and then pick, pull, pack, and ship to your
customers when you get an order. You can send them orders from your own
shopping cart, or use their shopping cart system to take your orders. In
addition to shipping charges and the cost of the inventory items, you'll pay
a per order fee and perhaps a monthly fee or minimum. Many will also
assemble your product, handle customer service inquiries, and reorder for
you -- all for a fee. A fulfillment house is best for products that have a
sufficient mark-up to cover the costs of outsourcing.

Assessing What's Right for You

Which of these four models is best? A lot depends upon your goals and how
mature your online business is. Here's one scenario that many Internet
companies follow:

1. Drop-ship or buy from a local distributor initially to get started with


minimal up-front fees.
2. Purchase inventory of their best-selling products.
3. As the business grows, either develop your own in-house warehouse
and shipping system or outsource to a fulfillment house.

Select a Low-Cost Way to Ship Your Product

Internet companies are right to assume that their customers want


immediate delivery of the products they order online. But high shipping
costs are one of the chief reasons that customers desert their shopping carts
without checking out.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 64

Offer as an option one of the major couriers -- UPS, FedEx, Airborne


Express, or whatever courier services are available in your country. But also
offer the US Postal Service (www.usps.com) or your own country's postal
service.

USPS Priority Mail claims an average 2- to 3-day delivery time, though I


think that delivery times have degraded some in recent years. The current
price of $3.85 for the first pound, or $3.85 for the flat-rate envelope, is a
fraction of rates charged by courier services, and often you can use the free
boxes and envelopes provided by the Post Office. The biggest drawback to
using the Postal Service has been verifying delivery, but with Delivery
Confirmation costing only 45 cents, that should no longer be a barrier.
Overnight Express Mail is even faster. Global Priority Mail and Global
Express Mail may well be a better alternative to using a courier service to
ship outside the US.

Offering your customers a high cost but fast option for shipping should be
balanced by also offering a low cost but slower alternative. Do this, and
you're likely to increase sales over offering just a single shipping choice.

Digital Delivery System Options

Product fulfillment on the Web is a dream if you have a digital product --


software, information, e-books, member-only subscriptions, and
entertainment. Delivery takes place by download -- and it's completely
hands-free for the merchant. Yes, there may be some web hosting fees for
storage and additional traffic charges, but the cost is low.

The chief difficulty with digitally delivered products is that they are subject
to fraud. A private download URL can be given to a friend (who may post it
on an online bulletin board). And fraudulent credit card transactions using
stolen credit information leave the merchant to susceptible to damaging
chargeback fees.

Here are some systems you can use to sell and deliver digital products. (I
am excluding ClickBank from this list because it only handles the sale, not
the digital delivery.)

Kagi (www.kagi.com). This Berkeley, California company handles


transaction, download, and product registration. No sign-up or monthly
fee. Fee is a percent of the sales price. The sliding scale assesses 12.5% of a

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 65

$20 product, 10% of a $100 product, and 5.8% of a $600 product.


Compatible with several affiliate programs.

DigiBuy (www.digibuy.com). Set-up fee of $29.95, plus $9.95 for each


additional product. Handles transaction, download, and registration.
Charges 13.9% of the sale or $3, whichever is greater. Compatible with
several affiliate programs.

More expensive options are Yahoo! Store (store.yahoo.com) and ShopSite


Pro (www.shopsite.com). I link to others in the Digital Download Software
section of my E-Commerce Research Room
(www.wilsonweb.com/cat/cat.cfm?page=1&subcat=cs_Soft-Digital). Or
you can use Download Protector to deliver digital products from short-term
URLs on your own site (http://wilsonweb.com/go/to.cgi?l=download).

How to Select a Fulfillment House

As an alternative to warehousing and shipping your own products, you can


outsource the warehousing and product fulfillment function to a fulfillment
house. You'll find many listed in the Yahoo! Directory "Fulfillment
Services" category. Most, however, won't look twice at the small merchant
just starting out. The vast majority are targeting merchants with 2,000
orders or more each month. Fortunately, however, there are some
companies that serve the needs of beginning Internet merchants.

Fees and Policies to Ask About

When you begin to research fulfillment services, you rapidly find that they
price in enough different ways that they can be hard to compare to each
other -- and it can be difficult to figure out what kind of bill you'll be paying
at the end of the month. Here are some fees and policies to watch for as you
research:

Set-Up Fees. Fulfillment houses charge set-up fees to help cover their
costs of acquiring your business and preparing their system to take your
products. Make sure these are reasonable and within your budget.

Order Processing Fees. This may include a flat amount for each order,
plus a charge for each additional item in the package. Rates vary with the
number of orders processed each month. Ask if boxes and packing
materials are included in the order processing fees or if they are in addition.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 66

Order Processing Minimums. If you're a small merchant, you may


have trouble making the minimums. Minimums are good for the fulfillment
house but not for you when you're getting started. Make sure your average
number of orders is likely to easily exceed their order processing
minimums, or else you'll be paying fulfillment fees even if you aren't getting
orders.

Return Processing Fees. Find out what you are charged when a
customer returns the merchandise and how this process will be handled.

Storage Fee. This is a monthly fee that reflects the amount of storage
space your products take in their warehouse. You may be charged per
pallet, or per cubic foot, or in some other manner. Your goal is to keep on
hand no more than a two- or three-month's supply of your product or you'll
be paying excessive storage charges.

Credit Card Transaction Fees. A few fulfillment houses will handle


credit card transactions for merchants who don't have merchant accounts.
They typically charge a percentage of the total transaction amount. How
does this compare to what you'd pay on your own?

Fees to receive merchandise. Look for charges to check in shipments,


verify the box count, and look for visible damage.

Shopping Cart Services. You can run your own shopping cart and
transmit orders to the fulfillment house via their preferred methods: FTP,
secure download, e-mail, EDI, XML, etc. But it may be cost-effective to use
the fulfillment house's own shopping cart program order buttons in
conjunction with your own website. That way they get your orders directly
and painlessly. Some fulfillment houses also offer accounting and banking
for foreign clients. Ask what services they offer. You may be surprised at
what they can do for you.

Order Transmission Method. Make sure that the method by which you
are required to transmit orders is technically within your company's grasp.
Is it simple or sophisticated enough to meet your needs?

Product Assembly. A fulfillment house can often assemble your product


or kit for you, charging you on an hourly basis or a time-costed per-piece
basis. They can also order products or components for you so that you're
never out of stock. Ask the hourly rate on which these services are based.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 67

Growth Capacity. Can the fulfillment house that serves your 100 to 500
orders per month ramp up to 100,000 orders per month if you get a
tremendous response? Inquire about their growth capacity.

Minimum Contract Period. Be careful of companies that lock you into a


six-month or one-year contract. What will you do if they don't meet your
needs, or you don't meet their minimums? You need an escape hatch if your
product line doesn't take off.

Profiles of Two Small Business Fulfillment Houses

We're seeing a small but growing number of fulfillment houses designed to


serve merchants with 0 to 2,000 orders per month. I spoke with two of
them.

iFulfill.com (www.ifulfill.com) of Maumee, Ohio, has been around for


several years. Owner Paul Purdue sees his company's role as enabling the
beginning merchant. "We reduce the entry barriers for the typical small
merchant," he says. "If they can sell it, so be it. If not, they're not losing a
lot." iFulfill's pricing is a bit higher in order processing fees, but it charges
no set-up fees. Purdue's company outgrew his barn and is now housed in a
warehouse. iFulfill offers a wide range of services to merchants in the US
and abroad.

eFulfillment Service, Inc. (www.efulfillmentservice.com) of Grawn,


Michigan, not too far from the Canadian border, is newer. I was impressed
by President Amy Caughell's enthusiasm to help her clients by being
flexible enough to meet their special needs. Prices and minimums tend to
be quite competitive.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 68

Step 10. Provide Excellent Service to


Your Customers
The myth of the automatic online sales machine is alive and well on the
Internet. But it is a lie. Unless an online business provides excellent
customer service, it will bomb. Guaranteed.

I've heard a lot of bragging about site automation. But the fact is, there's

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 69

also pass along the horror story of inexcusable customer service from the
original vendor. I, too, will be more hesitant to recommend this vendor
again.

I've heard that a happy customer tells one person about his good experience
while a disgruntled one will spout off to eight people. With the ease of e-
mail, it doesn't take long for your reputation to be destroyed if you don't
take care of your customers.

Every company has some problems, and all of us have had to fix something
that went wrong for a customer. Of course, customers would like products
or services to be problem-free. But they're realists. They understand
occasional problems. But customers really find out about your company
when something goes wrong. When you respond quickly to a customer
complaint and fix it generously and fully, you've made a friend for life. But
if you leave a customer to twist in the wind or just reply with an irrelevant
boilerplate e-mail, they'll go out of their way not to do business with you a
second or third time. That's what kills you.

The Importance of the Second and Third Sale

It's a fact that with many online retail sales, you make little money on the
first sale to a customer. The marketing costs to get that customer to your
site in the first place may be considerable. But if new customers are happy
with your service, they'll come back again and again. And as your

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 70

received a book entitled How to Make Love All Night (and Drive a Woman
Wild) -- not exactly what I had ordered. I thought it was hilarious, and so
did my wife. I telephoned Amazon's customer service number to see what
they would do. The customer service rep was apologetic, polite, and didn't
even laugh when I told him the books that got mixed up. He offered to send
me the dictionary by an upgraded delivery method and to send a post-paid
label with which to return the wrong book. Very professional, very well
done. I was impressed. And this time all I received was a boring German-
English dictionary! Will I shop at Amazon.com again? You bet. Not because
they never make a mistake, but because I know that if they do, they will fix
it promptly. On the other hand, I could name some companies with which I
have resolved never to do business again because of their horrendous
customer service.

Finding Ways to Automate Customer Service

I'm not against automating customer service. I strongly encourage you as


part of your customer service strategy to automate customer service as
much as is feasible. Here are some methods that will inspire confidence in
your customers and save you a great deal of time answering e-mail and the
telephone. Some cost only your time or employ lower cost services or
software. Others are suited to better established small- and medium-sized
businesses.

• State your guarantee and shipping policies clearly.


• E-mail customers when their orders ship. If there is any hold-up in
shipping, e-mail immediately and ask whether your customer wishes
to cancel the order or wait for a backorder. You may lose an order, but
you'll gain a loyal customer who knows you are looking out for his or
her interests.
• Prepare a detailed FAQ (Frequently Asked Questions) webpage. See
my article "The FAQ Answer to 80% of E-Mail Overload"
(www.wilsonweb.com/articles/faq.htm). If your online FAQ answers
80% of the questions your customers commonly ask, you'll save lots
of time and customers will be happy to find answers quickly.
• Prepare an online trouble-shooting guide that provides step-by-step
instructions to diagnose and fix the most common problems with
your product or service.
• Prepare a series of boilerplate e-mail messages that answer clearly
and concisely most of the questions that your customers ask. Outlook
98/2000/2002 refers to these as "signatures." Eudora calls them

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 71

"stationery." Whatever they're called, prepare them carefully and


you'll save lots of time. See my article, "Sample Boilerplate Responses
to Common E-Mail Requests"
(www.wilsonweb.com/wmt6/email_sigs.htm)
• Set up a facility that allows instant chat with your customers, or
allows you to telephone them back immediately. Web-based services
include LivePerson.com (www.LivePerson.com), InstantService.com
(www.InstantService.com) and LiveAssistance
(www.liveassistance.com). Or for a lower cost you can put the chat
software on your own web server with a program such as
RealTimeAide (www.realtimeaide.com). See more in Yahoo!
Directory's "Customer Service Software" category and the CGI
Resource Index under "Customer Support" (cgi.resourceindex.com).
• Provide full contact information so customers can contact you by
phone, fax, e-mail, postal service, etc.
• Subscribe to an online customer service system such as
SalesForce.com (www.salesforce.com) that enables your virtual
customer service reps to access information about previous calls or
contacts with a customer. You can outsource part or all of your
customer service to a call center. See the Yahoo! Directory "Call
Centers" category.
• Set up a "contact us" forms-to-email function that uses a drop-down
menu of subjects to route inquiries to the correct person in your
company. See tips in my article "How I Keep Up with the Deluge of E-
Mail" (www.wilsonweb.com/wmt6/email_deluge.htm)
• Set a maximum acceptable time in which to answer customer service
e-mail inquiries and then require those doing your customer service
to adhere to it.

Investing in Customer Service

Sometimes you need to spend more money to provide better customer


service and, at the same time, provide customer service more cost-
effectively.

The original system I built to manage subscribers, passwords, and access to


subscriber-only sections of my website cost me very little out-of-pocket at a
time when I couldn't afford much. It worked reasonably well for four years.
But it had several shortcomings that required lots of e-mailing, as well as
manual address changes. Recently, I invested several thousand dollars in
ColdFusion programming and found that this investment saved me perhaps

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 72

ten to twenty hours each month. Subscribers are happier, too, since they
are now empowered to make immediate changes themselves.

But I stay close to a computer or have my editorial assistant check when I'm
away so that customer service questions can be answered within a few
hours at most. Customers are my company's lifeblood and keeping them
happy is very important to me. Do I please them all? No. That's impossible.
But I try hard to find a way to keep them happy.

When Not to Automate Customer Service

How do you like the telephone menu systems? Rather than a real person
who answers, "How may I direct your call," too often you get a recording
that says, "Please listen to the following menu of eight complex functions.
And make sure you listen carefully since we change the menu every few
weeks just to confuse you."

More and more smart desktop e-mail mailing programs such as


Gammadyne Mailer (http://wilsonweb.com/go/to.cgi?l=gam) and
PostMaster Express (www.post-master.net/rs/wis) are now available.
These have the capability of scanning an e-mail for keywords, and then
taking an action based on the keywords they find, such as sending an e-mail
reply or unsubscribing a bounced e-mail address.

I recommend that you only use these for routine and highly predictable e-
mail interactions. I can remember a series of customer service e-mails I had
with a large domain name vendor who shall remain nameless. Every time I
wrote an e-mail describing my problem, I received a reply that showed no
one had read my message at all. I was talking to a machine.

While these smart e-mail systems are much better than they used to be,
test, test, and test again before using one for customer service. You cannot
afford to lose customers just to save some time.

Some Customer Service Resources

Customer Service on the Internet: Building


Relationships, Increasing Loyalty, and Staying
Competitive, by Jim Sterne (Second Edition; John Wiley &
Sons, 2000). Great overview of customer service techniques

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 73

on the Web by the acknowledged leading voice on customer service on the


Internet.

"Full Sterne Ahead," a monthly e-zine on customer service by Jim


Sterne. Humorous examples of how not to provide customer service
(www.targeting.com).

e-Service: 24 Ways to Keep Your Customers -- When


the Competition Is Just a Click Away, by Ron Zemke and
Tom Connellan (Amacom, 2001). Explains how to differentiate
one's website with fantastic service. How to develop a retention
strategy, etc. Published by the American Management
Association.

Articles and Resources on Customer Service in our searchable


online database of the Web Marketing Info Center and E-Commerce
Research Room:

• Customer Service Online. A more general category giving tips on


providing excellent online customer service.
http://www.wilsonweb.com/cat/cat.cfm?page=1&subcat=ms_Cust-Servicee
• Customer Service in Online Sales. Focuses on both before and after
support for online sales. Article titles are given, but full access to
URLs is provided only for subscribers to Web Commerce Today.
http://www.wilsonweb.com/cat/cat.cfm?page=1&subcat=cd_Cust-Service

Customer Service Is a Management Decision

One summer, one of my tires blew-out on the freeway 100 miles from
home. I took it to a department store Auto Service Center, arriving about
12:30 pm, planning to wait until the job was done. My need was simple: (1)
replace the tire, (2) stow the spare in its correct location, and (3) realign the
front wheels. How long will this take? I asked. About an hour and a half, I
was told. The person I talked to went home shortly thereafter. I waited
patiently (mostly) for an hour and a half, but my car was still sitting where I
had left it. I asked the new clerk when it would be taken care of. Soon, I was
told. I sat down again. I got up and asked again. Oh, we'll get to it soon, I
was told. By now I wasn't so patient. I insisted in no uncertain terms that
they get it done. We have to wait until that person gets back from his break,
I was told. It went on and on, with me having to push at each step of the
process, until at 5:30 pm they finally handed me the keys. However, the

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 74

spare tire wasn't stowed where it was supposed to go. At my insistence, a


disgruntled mechanic angrily threw it into its slot, but didn't secure it or
replace the cover.

By this time I was fuming. Where's the manager? I demand. He's out of
town, I am told. I want to talk to the assistant manager, I say. Oh, he had to
leave early and won't be back until tomorrow.

The more I thought about it, I realized that complaining to the manager
would not solve the problem -- because the problem was with the manager,
not the employees. If the manager had insisted on a "customer comes first"
policy, enforced it, and rewarded excellent service, the Auto Service Center
would have an entirely different attitude. Customer service reflects
management priorities.

The Golden Customer Service Policy

My dear Internet businessperson: What is your policy towards customers?


Customer service will determine the success or failure of your online
business. I recommend a simple, practical policy: "Treat your customer the
same way you would like to be treated in a similar situation." Sound
familiar? Of course! It's an adaptation of Jesus' Golden Rule (Luke 6:31).

Last week a customer requested a refund on one of my e-books. Why? "I


didn't learn anything from your e-book that I couldn't find on the Internet
for free. Please refund my $12." His request came two months after his
order.

What should I do? I had made no promises or guarantees that the book
would include information he couldn't find anywhere else. The Table of

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 76

Conclusion -- Wise Person or Buffoon


These are the 10 essential steps to E-Business on a Shoestring. I've tried to
explain the concepts in enough detail so you can get the lay of the land. Of
course, many of these steps you'll need to explore in greater detail, but this
will get you started. In the Appendix that follows, you'll see a number of
resources I've written that will help you flesh out some of the crucial e-
commerce areas.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 77

they have learned. Buffoons imagine that they have learned a lot, but never
put any of it into action. Which are you? A wise person or a buffoon?"

I hope that you'll jot down some action steps right now -- before you put
this e-book away -- that are necessary to jumpstart your E-business on a
Shoestring. Put a date next to each action step write them into your
calendar for the next few months. Finally -- tomorrow or next week -- begin
to turn those action steps into reality, one by one, step by step. You'll get
there. Begin now!

I wish you every success.

God bless you,


Dr. Ralph F. Wilson

P.S. When you get a chance, drop me a line and let me know how you're
doing.

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 78

Appendix: Other Resources by Dr. Wilson


Best-Selling E-Books

The Shopping Cart Report (213 pages) is a comprehensive


purchasing guide to e-commerce software. It provides a basic
overview, as well as special information on B2B, digital, and
members-only e-commerce software. The top eight small-to-
medium business shopping cart programs are compared and
contrasted, and many of them reviewed in detail. In addition,
you'll find links to online reviews of over 500 e-commerce
programs. $34.95. (www.wilsonweb.com/ebooks/carts.htm)

A Merchant's Guide to E-Commerce Payment


Gateways (119 pages) is a must if you are trying to figure out
what payment gateway to get and how this piece fits with the
other pieces of your online venture. In this report I
recommend several gateways, and tell you about a total of 90.
You also get candid user feedback from 70 readers. $29.95.
(www.wilsonweb.com/ebooks/gateway.htm)

Report on Affiliate Management Software: User


Feedback and Editor's Choices (108 pages) gives candid
feedback from 90+ people whose companies manage affiliate
programs. Some of what they say is damning, some offers
deserved praise. If you're planning to set up an affiliate
program, this e-book will guide you -- and perhaps keep you
from losing your job by making a wrong decision. $22.95.
(www.wilsonweb.com/ebooks/affilisoft.htm)

How to Develop a Landing Page that Closes the Sale


(24 pages) explains how to maximize the effect of your
advertising by pointing to a specific "landing page" that leads
the shopper to decide to complete the transaction. This short
24-page book will help you increase your conversion rate

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 79

substantially. $17.50. (www.wilsonweb.com/ebooks/landing.htm)

Special Limited Time Offer: If you subscribe (or renew your


subscription) to Web Commerce Today (www.wilsonweb.com/wct), I'll give
you a copy of all four e-books absolutely free. Together they're worth
$105.35 -- and if you add in the subscription price of $49.95, the total
value is $155.30. But you'll receive the e-books absolutely free when you
pay only the subscription price of $49.95 . Don't miss out.
Subscribe now!

Other great e-books include:

12 Ways to Give Your Webstore a Sales Boost:


Proven Techniques to Increase the Conversion Rate
in Your Online Store. (71 pages). Contains all the tricks
I've learned in building 18 online stores for my clients to
increase their sales rate to the maximum. I explain twelve
different approaches to increasing the conversion rate.
$34.95. (www.wilsonweb.com/ebooks/sales-boost.htm)

Guide to E-Mail Newsletters (41 pages). Provides a comprehensive


guide to planning and publishing e-mail newsletters for your business.
$12.00. (www.wilsonweb.com/ebooks/email-newsletters.htm)

Vital Resource for "NetAssisting" Your "Local" Business

NetAssistedTM Biz and NetAssistedTM Church are designed to help


strictly local businesses and organizations that can't use the Internet to sell
products and services nationally. Instead, NetAssistedTM teaches you how to
combine traditional local advertising techniques with Internet marketing
s t r

Copyright © 2002, Ralph F. Wilson. All rights reserved.


10 Steps to E-Business on a Shoestring, by Dr. Ralph F. Wilson page 80

Dr. Wilson's "Real Book" on Strategy Development

Planning Your Internet Marketing Strategy (John Wiley & Sons,


2002), 256 pages, softcover, ISBN 0471441090.
Shows you, step by step, how to construct an e-business marketing plan
that will focus your efforts, energize your staff, and generate sales.

Explains how to identify e-business opportunities, brand your Web site,


and define your e-business niche. You'll also discover how to develop a
unique sales proposition, analyze your industry and your competition, and
attract the best customers to your site. This powerful resource provides the
know-how you need to:

• Set goals for your e-business


• Differentiate your company's products and
services
• Position your company in the consumer's
mind
• Master product strategy, placement,
promotion, and pricing
• Budget and implement your plan

Complete with hands-on exercises that let you perfect each step before
applying it, Planning Your Internet Marketing Strategy is the road
map you need to follow your route to e-business success. List US $19.95.
Amazon USA typically sells this for $13.96.

Parts of several chapters in the e-book you are reading -- 10 Steps to E-


Business on a Shoestring -- are extracted from this book. Order your
copy today.

Copyright © 2002, Ralph F. Wilson. All rights reserved.