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Software Forum: Selling on the Net
At the New Jersey Technology Council’s Software Forum,
Tom Scott will tell the assembled software developers that the
World Wide Web does, indeed, level the playing field for smaller and
medium sized firms. At the Helmsman Group, he is seeing it happen.
Scott addresses the Software Industry Track on Friday, June 18, at
7:30 p.m., at the Sheraton at Woodbridge Place. This annual forum
attracts a hefty portion of New Jersey’s software gurus. The speakers
include Roger Sparks of Princeton Softech, Rick Maloy
of Maloy Insurance, and the keynoter, Jason Olim of CD Now (see
story below). Cost: $180. Call 609-452-1010.
Helmsman has budgeting, forecasting, and planning software that
targets
the middle market, firms that do $50 million to $1 billion in sales.
“Not the Fortune 500 or the multinational,” Scott says,
“they
are most likely using Hyperion or Compshare.”
Scott says that his firm’s revenues exceeded $1 million last year,
and the average sale is $50,000. The company recently expanded to
14 employees at Princeton Meadows Office Center
(https://www.helmsmangroup.com).
It was founded by Kenneth Kay, the son of a Korean diplomat who
majored
in finance at the University of Chicago, Class of 1978, and earned
his MBA there as well.
“In our marketplace,” says Scott, “the customers that
we win are technology conscious and value conscious. That feeds nicely
to the Internet as our marketing solution.” So last spring his
company moved to a webcentric marketing approach. “We do PR and
trade shows, but our primary lead generation source is our website,
and it has become an integral part of our selling effort.”
Scott, the son of a Duke history professor, majored in economics and
history at Northwestern, Class of 1979, and has a Harvard MBA. He
worked for IBM and was president of ImageScan in Lanham, Maryland,
before joining Kay. He offers these tips for marketing on the Web.
Monitor the search engines. Most important is what happenswhen a surfer types in the key words for your service. Do whateveris necessary to get in the top 10. “The most important thing wedo each week is that our marketing director checks seven engines foreach key word to see whether we show up in those top 10 results,”says Scott.”It is just like anything else,” says Scott. “If you don’thave a human responsible for it and being creative, it won’t getdone.”Joanne Pinter, the marketing director, not only monitors thesearches but also gives the first response to all the queries. Forthe top five engines she watches (Yahoo, Alta Vista, Lycos, Excite,and Infoseek) the firm was in the top 10 for four of them. Only inInfoSeek was it number 14.Take banner ads on search engines themselves. “Yahoois by far the best, Alta Vista a strong second, and Lycos is a distantthird,” says Scott. Scott bought the key words “budgetingsoftware” and “budgeting” on five engines. Theclickthroughrate is 2.6 percent on Yahoo but only .6 percent on InfoSeek, a ratethat Scott attributes to InfoSeek’s appeal to consumer rather thanbusiness surfers.Don’t be afraid to spend money on web advertising. “Wehave the key words locked up through the year 2000. That is animportantpoint for players like us,” says Scott. He spends a minimum of$1,000 to $2,500 per month at a rate of $60 per 1,000 impressions.Total spent since January is $15,000. “We are able to be thenumberone marketer in this environment, and we will reach 2 millionimpressions,cumulative, this year.”Keep an online presence in the magazines in yourmarketplace.For Helmsman, that would be https://www.CFOnet.comand https://www.BusinessFinancemag.com.Monitor the metatext, the hidden code words at the topof every file (use the page source option on the tool bar). Compareyour metatext to your competitor’s and see if the key wordssynchronize.Often the right metatext will drive a search engine to your page.Use your site for market research. Competitive Internetads emphasized the pain and aggravation of budget work, but by usingorganized trial and error Scott found they didn’t pull. “Thebeautyof online results is that they tell keyword by keyword, banner bybanner, which pulls what, and you drop the losers,” says Scott.He found that the best-pulling ads are animated, simple, and upbeat.”Our conclusion is that people don’t want negativity, darkness,and clutter. `Are you in budgeting hell?’ pulled terribly on theWeb.””To our surprise, our best pulling banner ad pulls 3.3 percentwith Yahoo and consists merely of this statement: `Helmsman simplifiesbudgeting. Click here to evaluate.'”Resubmit your site regularly to all the search engines.”Everybody does it. You have to update the content regularly,so you legitimately do have something new to provide, but if you don’tsubmit it regularly they think it’s old and drop you down.”Scott pays just short of $50 monthly for a consultanthttps://www.submitit.comto keep submitting his pages to 400 search engines. When the automaticsubmissions don’t work, as with Yahoo, which employs live people todo the evaluations, the marketing director submits them “byhand”and less frequently.Analyze results of server logs on your website’s statisticsprogram . Find out where surfers are coming from and how they areclicking through.”All the marketing is for naught if you get to the websiteand all you see is corporate speak,” says Scott. “Ourcompetitorstalk about how great they are, but our site offers a self-runningdemo. And if you are interested you will download our package fora free 30-day trial.”At this point the human hand must intervene. “We give them a keyto unlock it. We capture some information and send literature andthen we begin teleselling,” says Scott.”The finance guys who want to get the task done — they canevaluate it themselves if you give them the data. More than one ofour clients has said that they really liked that we trusted them withour whole product,” says Scott. The potential client enters somedata onto the demo and then the Helmsman salesperson, by telephone,shows how the software will crunch their numbers. “Most of ourcompetitors would take 12 days, not 12 hours, to build a similarprototype,”says Scott.Another plus: such extensive use of the web reduces travel expenses.”Before, it was normally a two-visit sales process. We let thewebsite be another sales person. We can sell twice as much as we couldin traditional mode,” says Scott.At least in the financial software marketplace, well-educated financeprofessionals are computer savvy. But concentration on web marketingdoes completely exclude another portion of the market, those thatnever surf.Has all of this web marketing brought results? Absolutely, says Scott.”Ninety percent of our sales originated through the Web.”But don’t play dirges for Willie Loman. “No client bought theproduct without a human sales effort. We believe the future is thisway.”– Barbara FoxTop Of PageJason Olim and CDNowB>Jason Olim and his twin brother Matthew Olimhave grown their business, CDNow, from the basement of their parents’house to the point where one of the world’s leading technologycompanies,Sun Microsystems, is taking out full-page ads in the New York Timesto brag about how it has been CDNow’s platform from the start. CDNowrecently merged with Music Boulevard, also on a Sun platform, andso CD shoppers can choose from more than 500,000 sound samples, readreviews, and buy digital downloads of full-length albums fromhttps://www.CDNow.com.Olim has become an inspiration for all the start-up entrepreneurswho hope that chutzpah and creativity will substitute for deep pocketsand corporate support. That’s why he was chosen as the keynote speakerfor the NJ Technology Council Software Forum on Friday, June 18, at7:30 p.m. at the Sheraton at Woodbridge Place. Cost: $180. Call609-452-1010.The young web-entrepreneur was hand-selected by Mel Biada, ofthe Council’s Software IT group and chairman of Bluestone Software(https://www.bluestone.com) in Mount Laurel. “I thinkCDNow personifies the internet start-up. I think Jason is familiarwith what it takes to start a business from a financial perspective– how to keep stock valuations at the appropriate level andcompeteagainst the Amazons of the world — and he has a good cross sectionof technical experience.” The conference will also include panelson web-enabled applications, security, and web-powered businesses.Panelists include Tom Scott of the Helmsman Group (see above).In the book “The CDNow Story Rags to Riches on the Internet,”written with his brother and Peter Kent (Top Floor Publishing,1998), Olim tells the quintessential tale of how starting big canbe a disadvantage. “Some of our competitors assumed that goinginto business on the Internet is just like opening a traditional realworld store. These large established companies believed they couldquickly dominate online music sales just as they dominate real-worldsales.” But based on an initial investment of $20,000, in threeyears CDNow had a 33 percent share of the entire online musicbusiness.That doesn’t mean the small start-up won’t have some harrowing times.”When things went wrong, having no one to turn to was a realproblem,”Olim writes. “For instance, there was the night we had a systemcrash. Just one of those things — we never did find out what hadhappened.””This was late in 1994 while we were still in the basement. Wewere grossing around a $1,000 a day, which gave us a gross profitof about $150 a day, so money was still quite tight,” writes Olim.”One evening the computer system just locked up. We had backupsbut we had never really tested them, and in any case, we didn’t haveeverything backed up. We had backed up irreplaceable datarelatedto the operations of the store, but we hadn’t backed up the operatingsystem.””It was on nights like this that we’d realize we were just acoupleof kids in a basement. We may have been running one of the worldlargestInternet stores, but we were just tired 25-year-olds working byourselvesbelow ground level.””It was a really scary night. We had no spare disk drives, andwe simply didn’t have cash for that sort of luxury. And we felt thatwe couldn’t be down for a minute. We were living on the float in thosedays. As it turned out, we lost perhaps $500. Back then, it was enoughto really hit us hard.”The business changes daily. Just last week Sony Music Entertainmentannounced it would solve the problem of insufficient on-site retailstock in retail stores by setting up digital vending machines inretailstores. Customers will be able to choose digital files from 4,000albums and — after 15 minutes processing — take them homeas CDs, DVDs, or minidisks.But the Olims have gained a huge head start: “The expertiserequiredto build an online music store — making it easy to use, figuringout the tricks of online merchandising, making the store personal,making the most of potential sales — involves newly developedskill that take time to acquire, but our staff has these skills: thevery best people in this business work for CDNow,” says Olim.Olim says that five C’s should determine whether a business will workon the web:Choice is one of the great gifts of this channel ofdistribution,because by freeing the store from space limitations, much wider choicecan be provided.Convenience. Over 50 percent of U.S. households have twoincomes, 25 to 49-year-olds who simply don’t have enough time.Control, mechanisms such as search boxes and fuzzy-searchtechnology — the system by which the consumer can access theavailablechoices.Community, something that comes from the content, a senseof place, the reviews.Customization, the customized E-mail newsletter, thecustomizedstore. How else, without the Internet, could you customize a store?”Every business will be changed by the Internet, but ifyou’re looking for a product category that really fits the netperfectly,one that will be changed enormously by the new technology, look fora product that can be digitally distributed,” says Olim, “thencheck to see if it fits this concept of the Five Cs.”Previous StoryNext StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
