Conference offers small businesses 'Net advice

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The World Wide Web is becoming an increasingly competitive place for small business people to penetrate, but a pair of speakers at the E-Commerce Conference 2001 here Jan. 10 offered advice on how to prosper.

Kristin Peterson, a professor of marketing at the University of Colorado, recommended that small businesses keep their Web presence focused on "customer relationship management" and especially on keeping the loyal customers they already have.

"Everyone wants more and better customers," Peterson said. "But if you can increase customer retention by 5 percent, your profit will increase by 25 to 95 percent." That's because you won't have to devote precious resources to acquiring new customers. Many people are surprised to learn that acquiring new customers through the Internet can be more expensive than using traditional means, Peterson said.

"One of the great things about loyal customers is they refer new customers," Peterson said. "Loyal customers are your future."

The online auction house eBay, can claim the enviable statistic of generating 50 percent of its business from referrals. However, eBay recently did something Peterson strongly advises against it sold its customer list to a group of telemarketers.

"As a small business, that's going to end up hurting you," Peterson cautioned.

Peterson urged business people in her audience at the Sheraton Steamboat Resort and Conference Center to learn everything possible about their existing customers, then fine tune their Web sites to reflect that knowledge.

"Who are they? What do they need? How do they buy? When do they buy?" Peterson challenged her listeners to find out.

Ty Ricker, of Advanced Media Communication Inc., a Steamboat-based Web consulting firm, works for a variety of clients outside of Routt County. His successful project included helping to develop touch-screen Web kiosks for Disney Galleries.

Ricker urged small-business people not to aim at too broad of a target.

"Find a niche," Ricker urged, " because everybody else is marketing to the masses. You don't want to compete with Kmart at bluelight.com."

Search engines hold the key to directing customers to your Web site, Ricker said. Winning at that game is becoming increasingly challenging for small companies, as search engines begin demanding cash compensation in return for ensuring that Web sites pop up at the top of search lists.

Becoming recognized as the No. 1 source of information in your area of expertise can represent a good alternative for small businesses. And that has everything to do with refining a niche that you can defend.

"When you find a small niche," Ricker said, "it's easier to data mine to find your customer base. It's also easier to position yourself at the top."

Key areas that small businesses must strive to succeed at to make their Web strategy effective include quality, value, reliability and functionality, Ricker said.

The perceived "quality" of a Web site depends on a professional appearance, Ricker said. In order to know if they are providing value, business people must research the expectations of their customer base.

Reliability translates into "uptime," the percentage of the time their site is up and running. Reliability also demands security, or risk management, for customers. While it's more expensive, the straightest line to ensuring uptime is to create mirroring IP addresses in two different data centers, Ricker said. If one server goes down, the other kicks in, and you're not out of business.

Ricker said it scares him to think there are e-commerce sites out there where business people are taking credit card numbers by e-mail, and without truly secure sites. It's just too easy for people to steal credit card data from e-mails, he said.

Functionality demands that you make sure your Web site is compatible with various browsers.

Peterson said a recent study by the respected Wharton School of Business predicted that U.S. Internet sales will increase to $133 billion by 2003. Even if that prediction were off by 50 percent, it would still be a big number, Peterson said.

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