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These articles were published in U.S. 1 Newspaper on June 16, 1999.
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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
the middle market, firms that do $50 million to $1 billion in sales.
"Not the Fortune 500 or the multinational," Scott says,
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
It was founded by Kenneth Kay, the son of a Korean diplomat who
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.
when a surfer types in the key words for your service. Do whatever
is necessary to get in the top 10. "The most important thing we
do each week is that our marketing director checks seven engines for
each key word to see whether we show up in those top 10 results,"
"It is just like anything else," says Scott. "If you don’t
have a human responsible for it and being creative, it won’t get
Joanne Pinter, the marketing director, not only monitors the
searches but also gives the first response to all the queries. For
the top five engines she watches (Yahoo, Alta Vista, Lycos, Excite,
and Infoseek) the firm was in the top 10 for four of them. Only in
InfoSeek was it number 14.
is by far the best, Alta Vista a strong second, and Lycos is a distant
third," says Scott. Scott bought the key words "budgeting
software" and "budgeting" on five engines. The
rate is 2.6 percent on Yahoo but only .6 percent on InfoSeek, a rate
that Scott attributes to InfoSeek’s appeal to consumer rather than
have the key words locked up through the year 2000. That is an
point 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 the
one marketer in this environment, and we will reach 2 million
cumulative, this year."
For Helmsman, that would be http://www.CFOnet.com
of every file (use the page source option on the tool bar). Compare
your metatext to your competitor’s and see if the key words
Often the right metatext will drive a search engine to your page.
ads emphasized the pain and aggravation of budget work, but by using
organized trial and error Scott found they didn’t pull. "The
of online results is that they tell keyword by keyword, banner by
banner, 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 the
"To our surprise, our best pulling banner ad pulls 3.3 percent
with Yahoo and consists merely of this statement: `Helmsman simplifies
budgeting. Click here to evaluate.’"
"Everybody does it. You have to update the content regularly,
so you legitimately do have something new to provide, but if you don’t
submit it regularly they think it’s old and drop you down."
Scott pays just short of $50 monthly for a consultant
to keep submitting his pages to 400 search engines. When the automatic
submissions don’t work, as with Yahoo, which employs live people to
do the evaluations, the marketing director submits them "by
and less frequently.
program . Find out where surfers are coming from and how they are
and all you see is corporate speak," says Scott. "Our
talk about how great they are, but our site offers a self-running
demo. And if you are interested you will download our package for
a free 30-day trial."
At this point the human hand must intervene. "We give them a key
to unlock it. We capture some information and send literature and
then we begin teleselling," says Scott.
"The finance guys who want to get the task done — they can
evaluate it themselves if you give them the data. More than one of
our clients has said that they really liked that we trusted them with
our whole product," says Scott. The potential client enters some
data onto the demo and then the Helmsman salesperson, by telephone,
shows how the software will crunch their numbers. "Most of our
competitors would take 12 days, not 12 hours, to build a similar
Another plus: such extensive use of the web reduces travel expenses.
"Before, it was normally a two-visit sales process. We let the
website be another sales person. We can sell twice as much as we could
in traditional mode," says Scott.
At least in the financial software marketplace, well-educated finance
professionals are computer savvy. But concentration on web marketing
does completely exclude another portion of the market, those that
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 the
product without a human sales effort. We believe the future is this
— Barbara Fox
<B>Jason Olim and his twin brother Matthew Olim
have grown their business, CDNow, from the basement of their parents’
house to the point where one of the world’s leading technology
Sun Microsystems, is taking out full-page ads in the New York Times
to brag about how it has been CDNow’s platform from the start. CDNow
recently merged with Music Boulevard, also on a Sun platform, and
so CD shoppers can choose from more than 500,000 sound samples, read
reviews, and buy digital downloads of full-length albums from
Olim has become an inspiration for all the start-up entrepreneurs
who hope that chutzpah and creativity will substitute for deep pockets
and corporate support. That’s why he was chosen as the keynote speaker
for the NJ Technology Council Software Forum on Friday, June 18, at
7:30 p.m. at the Sheraton at Woodbridge Place. Cost: $180. Call
The young web-entrepreneur was hand-selected by Mel Biada, of
the Council’s Software IT group and chairman of Bluestone Software
(http://www.bluestone.com) in Mount Laurel. "I think
CDNow personifies the internet start-up. I think Jason is familiar
with what it takes to start a business from a financial perspective
— how to keep stock valuations at the appropriate level and
against the Amazons of the world — and he has a good cross section
of technical experience." The conference will also include panels
on 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 can
be a disadvantage. "Some of our competitors assumed that going
into business on the Internet is just like opening a traditional real
world store. These large established companies believed they could
quickly dominate online music sales just as they dominate real-world
sales." But based on an initial investment of $20,000, in three
years CDNow had a 33 percent share of the entire online music
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 real
Olim writes. "For instance, there was the night we had a system
crash. Just one of those things — we never did find out what had
"This was late in 1994 while we were still in the basement. We
were grossing around a $1,000 a day, which gave us a gross profit
of about $150 a day, so money was still quite tight," writes Olim.
"One evening the computer system just locked up. We had backups
but we had never really tested them, and in any case, we didn’t have
everything backed up. We had backed up irreplaceable data
to the operations of the store, but we hadn’t backed up the operating
"It was on nights like this that we’d realize we were just a
of kids in a basement. We may have been running one of the world
Internet stores, but we were just tired 25-year-olds working by
below ground level."
"It was a really scary night. We had no spare disk drives, and
we simply didn’t have cash for that sort of luxury. And we felt that
we couldn’t be down for a minute. We were living on the float in those
days. As it turned out, we lost perhaps $500. Back then, it was enough
to really hit us hard."
The business changes daily. Just last week Sony Music Entertainment
announced it would solve the problem of insufficient on-site retail
stock in retail stores by setting up digital vending machines in
stores. Customers will be able to choose digital files from 4,000
albums and — after 15 minutes processing — take them home
as CDs, DVDs, or minidisks.
But the Olims have gained a huge head start: "The expertise
to build an online music store — making it easy to use, figuring
out the tricks of online merchandising, making the store personal,
making the most of potential sales — involves newly developed
skill that take time to acquire, but our staff has these skills: the
very best people in this business work for CDNow," says Olim.
Olim says that five C’s should determine whether a business will work
on the web:
because by freeing the store from space limitations, much wider choice
can be provided.
incomes, 25 to 49-year-olds who simply don’t have enough time.
technology — the system by which the consumer can access the
of place, the reviews.
store. How else, without the Internet, could you customize a store?
you’re looking for a product category that really fits the net
one that will be changed enormously by the new technology, look for
a product that can be digitally distributed," says Olim, "then
check to see if it fits this concept of the Five Cs."
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