The
Compass Winter 2000
The Compass || Spring
2000 |
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INTERNET OPPORTUNITIES: One cannot pick up a publication today, whether a daily newspaper or an industry trade publication, without being bombarded with news about the Internet and e-commerce. If the results of the NAGASA sponsored survey conducted in 1999 are any indica-tion, writing about the value of the Internet may be like preaching to the choir. Eighty-eight percent of respondents to the survey indicated that they have a website. It was not surprising to learn that 100% of companies over $10 million in revenue have a website, while 35% of companies under $5 million do not have a website. Given the rapid development of this technology, it was surprising to learn that one half of those responding said they have had a website for two or more years. The top five reasons for creating a website were:
Absent from this list of reasons is any mention of business-to-business (B2B) commerce. Consider what The Washington Post investment columnist Fred Barbash had to say about the future on January 2, 2000: “Every student of new technology I’ve heard or read believes the market for ‘business-to- business’ applications of the Internet will easily dwarf the market for retailing, which will be perceived as the valuable laboratory for the much greater enterprise … If you accept current scenarios, which I do, we are headed for a future in which businesses buy and sell to one another in vastly expanded marketplaces — formed by electronic exchanges and networks — where they get a better deal with less exertion and greater efficiency than anything imaginable even five years ago. They also will sell things they don’t use, or things they’ve already used, so that little or nothing is wasted.” If the Internet is to be an additional channel for distribution in the printing and imaging industry, one could reason-ably suggest that all companies should have marketing or sales personnel involved in maintaining their website. However, at the time of the survey only 60% indicated that this was the case. In many instances, the webmaster does what is asked — nothing more, and sometimes less. What often is lacking is creativity or ‘curbside’ appeal that makes the web surfer want to take a closer look. This should not be surprising given that creativity is often not the forte of webmasters. So what are some things you should do with your website?
Don’t give a visitor an excuse to go elsewhere, just like you wouldn’t give a visitor to your offices a reason to leave. Rather, you want to give him or her a reason to place your website on their list of frequent or favorite sites to visit. Refine it, improve it, and perfect it just like you would a sales representative. What does it cost to develop and maintain a website? The median or mid-point cost reported for creating a website was $3,500, with the median annual cost for maintaining the site at $2,000. While this is admittedly additional expense for most companies, and not inconsequential for small companies, think of it in terms of the costs of developing, printing and mailing a promotional brochure. It helps put this cost in perspective relative to other marketing expenses for the typical firm. In the extreme, website costs can be substantial, with the highest reported cost in this survey almost $30,000 per year. This makes the case for careful analysis and decisions when selecting a vendor. A change in vendor can result in having to repeat both the time and effort of your initial development costs. The most frequent and least frequent uses cited for company websites also reflects the fact that e-commerce is not yet on the radar screens of many companies and perhaps their customers as well. Most Frequent Uses for Company Websites:
Least Frequent Uses for Company Websites:
B2B commerce is in its infancy, so these results are not particularly surprising. Check again in 3 years — I will bet the least frequent uses today will compete for status as the most frequent uses by 2003. So is the glass half empty or half full? That depends on whether one wishes to take the pessimistic or optimistic outlook. I believe there is ample time for compa-nies to respond and meet the challenges posed by the Internet. As you move for-ward, I urge you to do so with a certain degree of caution. There is going to be a shake out period. A recent article in The Economist says, “Even enthusiasts con-cede that as many as 80% of today’s Internet companies may not survive – just as almost all the early railroads, car mak-ers and airlines did not.” We are already beginning to see the first signs of business failures in the retail segment of e-com-merce companies, and there are surely more to come. Winners and losers are the inevitable result of our free enterprise sys-tem. Proceed with due caution and posi-tion your company to be a winner in the new marketplace of the 21st century. The report is available at www.nagasa.org as a PDF file in the members only section. Members may request a complimentary printed copy. The cost to non-members is $30. Voice 202-328-8441; Fax 202-328-8441; E-mail: information@nagasa.org
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