August 17 02 SBC Small Business Newsletter

August 17, 2002

Table of Contents

Featured Resource - WEBMASTER EXPERT

Staff Article - DEADLY SMALL BUSINESS MARKETING MISTAKES -PART 1
Staff Article - MORE SUBSCRIBER QUESTIONS ANSWERED
Parting Comments

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Featured Resource

WEBMASTER EXPERT

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Staff Article

DEADLY SMALL BUSINESS MARKETING MISTAKES - PART 1

by: Cary Christian

Small business resources are frequently far too scarce and valuable to waste. Yet, we see companies wasting money on a grand scale every single day when it comes to marketing. The waste is not necessarily in the marketing method chosen, although it frequently is, but in the execution.

Sometimes the marketing mistake is really a problem with the website. Effective marketing is useless if your website kills the sale.

What do we mean by this? Let's list some of the more prevalent errors and look at some examples.

1. SEARCH ENGINE OPTIMIZATION THAT STOPS SHORT

The company painstakingly determines the very best keywords for their site and carefully follows all the rules for creating effective meta tags for their home page. This company may even create several versions of their home page to take into account the supposed requirements of different search engines. Sounds good so far. Right?

Then they blow it by ignoring content! The content of the home page is so geared toward search engine optimization that it does little to make the reader who visits want to visit the rest of the website. Getting the visitor is merely the first step and becomes a worthless effort if they do not want to stick around for awhile and see what the company has to offer.

Notice also that we stated the optimization effort was geared toward the home page. What about the rest of the site? Companies often forget that the purpose of search engine optimization is to attract targeted visitors. More often than not the products companies want to attract visitors to are not located on the home page, but on other pages within the site. Far too frequently, nothing has been done to optimize and submit these interior pages.

2. FORCING VISITORS TO VIEW A FLASH PRESENTATION BEFORE ENTERING THE SITE.

Yes, Flash presentations can be very cool and impressive. But only about 21 percent of surfers have DSL or broadband connections and Flash can take a while to load over a dial up connection. People WILL NOT wait unless they are so sold on the content they are ultimately going to be able to access that they don't mind you wasting their time.

First of all, if you use Flash at all, hire a professional who knows how to optimize the presentation for the fastest possible load times.

Second, make the Flash presentation optional. If the visitor is interested, he or she will load it and wait. If not, they can go about their business on your site and will be pleased that you gave them the option.

3. INEFFECTIVE USE OF GUARANTEED HITS AND SURF FOR HITS PROGRAMS.

It could be argued that using these types of programs is a waste in and of itself, and often it is. But if you want to try them or use them as supplemental advertising, don't just send the hits to your home page or directly to a product sales page. Create a special page just for these programs and don't try to sell directly. Get people to sign up for an informational autoresponder or to a newsletter so you can use more effective marketing techniques on those who respond.

You'll also have better luck if you use a script-based subscription technique that automatically captures the visitor's information without them having to enter it. You'll get more signups and better email addresses this way.

4. PURCHASING GUARANTEED HITS FROM A COMPANY THAT SUPPLIES THE HITS USING POP-UPS, POP-UNDERS, LOTTO VALIDATIONS AND SIMILAR SOURCES.

No matter how well you prepare yourself for using guaranteed hits programs, your campaign will not be effective if the hits come from these sources. Most surfers use software that suppresses pop-ups and pop-unders so you might be paying for phantom hits. Hits from lotto and other gaming sites are not targeted and do not represent hits from visitors who have the slightest interest in what you're selling. Always know the source of the hits you're buying and let common sense be your guide.

5. FAILURE TO PREQUALIFY VISITORS WHEN USING PAY-PER-CLICK SEARCH ENGINES.

Pay-per-click search engines are terrific sources of targeted traffic to your site. However, your marketing tactics need to change a little when using them. Your goal is not to drive the maximum amount of traffic to your site. That's wasting money! Include in your description information that will weed out the tire kickers. If your product costs $299, say so. This will prevent your paying for visitors who aren't interested if the price is over $50.

Take a look at your marketing efforts and make sure you aren't making any of the above mistakes. If you are, commit to fixing the problem as soon as you can. Next week, I'll give you some others to work on.

Copyright (c) 2002

Staff Article

MORE SUBSCRIBER QUESTIONS ANSWERED
by: Cary Christian

We always welcome and enjoy receiving questions from you guys. Here are a couple of good ones we received this week.

1. Should non-GAAP (proforma) financials be abolished?

Proforma financial statements present particular problems that are not applicable to historical financial statements. They can't be audited because they represent future events. There are provisions where proforma financial statements can be issued with a review report from a CPA firm, but the review is nothing more than a statement that the underlying assumptions have been reviewed and found to be "reasonable."

The assumptions are the crux of the problem. Projected results of operations are only as good as the assumptions underlying them. For example, if a company enjoys a 50% market share as a result of a market-leading product and projects it will increase market share by 10% in the coming quarter, the assumption might well be reasonable. However, if their largest competitor comes out with a better product 15 days into the quarter, the company may actually lose a huge chunk of its market share rather than increase it. There is normally no way to foresee these types of events.

Proforma statements are useful to an investor or other user of the statements if they are a realistic and HONEST reflection of management's belief as to where the company is going. If they are not, they are little more than sales hype.

If a user is to make use of proforma financial statements, he or she needs to know and understand the underlying assumptions in some detail. Only then can he or she form their own opinion of the reasonableness of the statements. Even then, this assumes the reader has the financial and business knowledge to understand and interpret these assumptions. Most do not.

I believe proforma statements are necessary. Investors and other users need to know where management thinks the company is going. They also need to hold management responsible for meeting these numbers. The new anti-fraud bill and any amendments to it in the future needs to address this as well. If management produces proforma numbers it knows it cannot meet, that should be considered just as fraudulent as issuing erroneous audited financial statements.

A literal reading of the bill would appear to impose this requirement on management. The CEO and CFO must sign off on financial statements, including the notes to the statements which is normally where proforma data is included. As long as management is accountable, we can have some comfort that proforma numbers will be reasonable.

2. Arthur Andersen seems to be closely aligned with all the major Chapter 11 filings in recent history, such as Global Crossings, Worldcom and Enron. Were they the only Big 5 firm doing such a poor job?

Andersen was the auditors for each of these firms, but don't think the problem is or was isolated to Andersen. The real problem is that auditing firms earn far more in consulting fees from their clients than they ever do from auditing. Auditing has become more of a "loss leader" product that allows an accounting firm to get in the door and sell other, more profitable services to a company. As a result, auditors have lost a lot of their independence. They'll do almost anything a large audit client asks of them out of fear of losing the work.

Andersen has been hit hard, destroyed actually, by these huge debacles, but I would look for others to come under fire as well. The new fraud bill will take care of a lot of these problems by forbidding audit firms to perform other work for the firms they audit. There are other provisions as well that will keep auditors and their clients from becoming too cozy.

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Copyright (c) 2002

Parting Comments

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