When you think about what marketing entails, are you clear on exactly what is included? A good definition of marketing is that it is the full range of activities that you undertake – both on and off the web – in order to make certain that you are meeting your customers’ needs and that you are receiving enough value in return for doing so. Note that we said ‘enough’ value; you need to be receiving enough in return that it is worth the time and investment that you are taking to provide the service or product that you offer.
Marketing is related to advertising, promotion, PR, and sales, but is actually a distinct activity that helps prepare you and your organization to perform the related activities thoroughly and well . You could actually think of advertising, promotion, PR, and sales as being influenced by your Internet marketing strategy, such as
Internet marketing, like marketing off-site (off of your website), requires that you know enough about your customers and markets that you know how best to price, sell , and distribute your product or service. Doing so requires a level of marketing research and the development of a marketing plan. But before we discuss marketing research and planning, let’s look further at how Internet marketing is related to other activities by defining each one and how they are performed in the online environment.
Advertising is the process of bringing your product or service to the attention of your prospects and customers. For Internet marketing, this means finding new ways to drive traffic, or visitors, to your website. Online advertising can take many forms: banner ads, pay-per-click (PPC) ads, links placed on other websites and more. Usually advertising is focused on one product at a time or one segment of your target market at a time. So, your Internet marketing plan might require several different advertising campaigns in order to help generate the number of customers and sales that you need. Advertising can and should also occur off-line, through direct mail, commercials, personal representation, or other collateral, always including your website address so that customers can learn more about you online. Advertising may also involve ways of letting your customers know about special offers or pricing that is limited in time or scope.
Promotion can be thought of as the way to keep your company, product, or service in front of your customer. It can help to generate more demand for the product as well . Whereas it might include advertising as part of your promotional strategy, it also includes publicity, public relations, and sales. Some of this promotion can be done online through sales efforts, press releases, offering a free information product, or writing targeted email campaigns, but some will also be done off-line. Any effort that you make to improve or enhance the image of your organization, sell more products, or get the name of your organization into the thoughts of your customers and potential customers is part of promotion.
Public relations, or PR, involves developing your company’s image and brand so that it is perceived by the public in the way you want it to be perceived. For example, you might want your company to be seen as the leader of the pack in your field, or you might focus on showcasing the community service that your company provides in the areas where they operate. When you are speaking about an online form of public relations, you need to consider first and foremost what your website looks like and how it operates. Is it young and trendy because that’s who your target audience is? Or is it more traditional and less focused on social media because your products appeal to an older demographic? Your website can be thought of as the “front line” of your public relations strategy.
PR also involves representing your organization to the media. You should have someone designated to speak to the press who is able to represent your organization’s interests and strengthen the image you want to portray – as well as answering any questions about your products or services. Your PR department or representative would send press releases announcing new products or services, answer complaints that the press might have picked up on, and general y be ‘the face’ of your company to the public. This might require adopting some form of technology on your website so that the press and customers can both communicate with you.
This activity is the easiest to understand. It’s the act of locating, informing, and agreeing on terms of the purchase with your customers. Before the Internet, this would have happened by attempting to drive customers into your store or onto your phone lines. Today, many people will first look for you online. So in online sales, you need to help your customers find you. However, the Internet is full of other websites clamoring for the attention of the same customers. You will need to actively market your company, your services, and your products to reach these customers. There are a number of strategies that we will discuss that will help you do just that. You need to be familiar with the “new rules” of marketing if you are going to develop an effective Internet marketing plan.
Before addressing specific steps towards Internet marketing, let’s look at how marketing has changed in regards to the “digital age.” Due to the fact that so much of a company’s presence is now dependent on multiple streams of media, the way that marketing activities are implemented has changed. You need to be familiar with the “new rules” of marketing if you are going to develop an effective marketing plan.
The Old Rules
The old paradigm of marketing was focused on delivering a one-way message from the organization to the potential customer. The idea was that the more creative the message and marketing campaign, the more likely the customer would be to respond by purchasing the product or service. Other characteristics of the old marketing rules include:
• Advertising was key
• Advertisements were meant to appeal to the general public
• Advertising campaigns ran for a specific period of time
• Awards were pursued for advertising campaigns
• Audience may have felt interrupted by advertising messages
• PR was a separate function from advertising
PR had its own set of rules that companies would follow. The main goal of the public relations department was to generate a press release that would grab the attention of members of the press and then use that attention to show that the audience was getting the message. Some other aspects of the old public relations format:
• All effort was focused on getting the message out to the public
• The press release was the most important tool
• The PR department was at the mercy of the press for success
• Successful PR required creative ‘spin’
The New Rules
Since the advent of the Internet, information is everywhere and available to everyone. Instead of getting the attention of the press in order to be successful, marketing and public relations now require that a company get the attention of the individuals surfing the Internet. The most successful marketing and PR campaigns are the ones that get the organization ‘found’ on the Internet. Some of the new rules include:
• People are well informed and expect the truth rather than ‘spin’
• Interruptions won’t be well tolerated in the age of DVRs and email filters for SPAM
• People demand value for their time and money and will use the Internet to get it
• Marketing and PR are designed to appeal to niche audiences
• Marketing and PR employ multiple techniques to reach those audiences
• Content stays online permanently so there is no end to a campaign
Marketing and PR can now also take advantage of the new tools available. Media is no longer limited to just articles, direct mail, TV, radio, newspapers, telephone, and press releases – it is multifaceted and requires multiple methods of approaching the customer in order to be effective. The new marketing paradigm requires that the company deliver quality content via a number of the tools available today such as:
• Web sites and pages
• Social media sites
• Articles in directories
• Videos and video blogs
With all of these tools available, companies have to be able to adapt their marketing and PR tactics in order to reach their customers in the ways that they are now available to be reached. You have to be where the customers are if you want them to hear the message or messages that you are trying to deliver. How you will do so is what you will determine with your Internet marketing plan.
In the Internet marketplace, pricing is vital. In one survey of 1,000 adults, 43% responded that price was the most important factor when choosing to make a purchase online, with an additional 18% saying that free shipping was most important. The next highest rated category was special promotions or coupons at 8%, followed by 7% claiming recommendations and product reviews as most important.
When you have to compete in such an environment, how you set your pricing could be the difference between success and failure. Plus, you may need to be much more responsive to pricing changes in the market than you would have to be in a “brick and mortar” environment. For example, if your competitor drops his price, you may need to drop yours as well . Whereas in a live environment, there are barriers to comparison shopping like driving to and from multiple stores, those barriers don’t exist in an online environment. Clicking through several sites or searching for the lowest price is a matter of a few seconds.
If you cannot compete on price due to your costs, you will need to work harder at positioning yourself in the marketplace as an expert, or by offering other benefits to the customer that your competition will not. That might be excellent customer service, an extended warranty, customized features, faster delivery, or any number of other offerings that could make you stand out as the clear choice despite price.
Demand for the Product or Service
Do you have an understanding of how your price will affect demand for your product or service? If you do any market research that involves identifying your potential customers, what are they likely to be willing to pay for your product or service over the competition’s? If you raise your price 10%, what percentage of customers will you lose? If the answer is none, then raise the price. If the answer is 50%, you will want to rethink that pricing strategy. You can determine a lot by studying your competitors’ pricing, but you also might want to hire a market research firm for more detailed information.
The phenomenon of Internet shopping can also drive prices much higher when demand is high. With websites like eBay.com, auctions can drive the price of a highly desired item much higher than the normal pricing for that same object. This is not what you see in regular “brick and mortar” stores – for example, at Christmas time, local stores don’t hike up the price of a popular toy by a hundred percent simply because it is in high demand. But you will find that kind of pricing on certain websites. Of course, customers have a long memory, so hiking up pricing when demand is high simply for the sake of making additional profit may damage your business in the long-run. But this is an example of a pricing decision you might face in Internet marketing that you wouldn’t have to consider otherwise.
In some cases, your pricing will be influenced by factors in your environment that are entirely out of your control. For example, there may be government or other legal restrictions on what you are allowed to charge. In e-commerce (electronic commerce or Internet selling), you may need to charge sales tax to customers who you are shipping the product to who live in the state where you are licensed to do business. Check with your Secretary of State’s Office to find out what your responsibilities are for charging and reporting sales tax.
Also consider whether or not you have an online and offline sales environment. For example, if you have a “brick and mortar” shop where you sell the same items as you do online, will your pricing be the same in both locations? There are arguments for and against making your pricing the same. First, it communicates a consistent face to the customer, whether they come into the shop or go home and shop online.
Remember that some customers might come into the store or onto the website first but then make the purchase through the opposite channel, so having different price points for the different channels might communicate a poor image to a customer. However, at the same time, if it costs you less to provide your product or service online and you are doing your best to compete, you may feel that reducing the online price will broaden your appeal to customers who will never enter your live store due to their location. You will need to make your decision based on what you believe your customers need and want from you.
There are several other pricing strategies for you to consider. A few popular ones include:
• Maximize the quantity sold. If you can get a good reduction on the costs of production by maximizing the number produced (known as economy of scale), then you might want to just sell as many products as you can even if it means a smaller return on each individual item. This can be a powerful strategy for penetrating new markets as well and may also drive traffic to your website that otherwise wouldn’t visit it.
• Target return pricing. In this scenario you determine your price by first deciding what you want your Return on Investment (ROI) to be. This can be important if you have investors to whom you have promised a specific return on their investment, or if you have invested your own money in your company and you need to recover that investment in a specific amount of time. If this requires that you price yourself above the competition, you need to make sure that you offer enough value in other ways so that Internet-savvy shoppers will still be willing to pay your price.
• Value-based pricing. Using this strategy, you determine what the value is that the customer places on the product or service and charge accordingly. For example, if you produce something that will cut a customer’s costs or increase their revenues, you may be able to charge a higher rate, even if it only cost you 10% of that price to produce it. In many cases, this can be the most profitable way to price products and services because it is dependent on what people are willing to pay rather than what you had to spend to produce or deliver your offering. Remember too that your perceived value will increase if you can establish the niche expertise that we discussed earlier.
• Popular price points – These are prices which people are conditioned to paying or are conditioned to perceiving as value for their money. Examples include 99 cent menus at fast-food restaurants, or prices like $19.99 or $49.99. Even if a popular price point is lower than where you would have otherwise set your price, you might make up for it by increasing the volume of sales that you receive. Since Internet shopping is a highly visual experience, setting a visual y appealing popular price point is a very good idea.
• Fair pricing – In this strategy, you are charging a price that is within the range of what a customer considers to be a fair price for that product or service. Even if you are the only provider in your area, customers will resist you if they perceive your prices as ‘price gouging.’ If you choose this strategy, you should set your prices by doing market research to make sure that your potential customers will consider your pricing to be fair for what you are offering. With the ease of Internet shopping, you should always be aware of what your competitors are offering and what customers are saying about a company’s pricing.
It may take some time for you to identify the best pricing strategy for your business, but eventual y you will learn what the market and your customers will accept as a price for your product or service and you will be able to make your decisions accordingly.
Gone are the days when you could consider only your local geographic area as a possible place for selling your product or service. With the advent of the Internet, customers no longer stay just in their local neighborhood when they are looking for something. They could buy it from someone across the country – or even across the globe. So you need to think about several aspects about where you will sell your product or service and how it will affect your online – and offline – operations.
• Channel Motivation – each channel you sell through, you need to be able to motivate your customers to take action through that channel. For example, if you sell a specific product, you could sell it through your own website as well as through a major retailer like Amazon.com. Each sales channel may require different marketing, advertising, and promotional activities so that you can recoup the investment you’ve made in that marketing channel. You also need to monitor the effectiveness of each channel so that you are sure you are getting the kind of customer response that you need.
• Market Coverage – what range of the market are you going to attempt to cover with your marketing efforts? Which other websites will you advertise on, and how will you choose them? Of course, this requires some understanding of what you already have gained in terms of marketing coverage as well as knowing where your customers are already surfing. Will you start by attempting to maintain customers you already have from your “brick and mortar” business, or will you be aggressive and attempt to gain a certain new percentage of customers the first year you roll a new product out? You can drive many of your other Internet marketing decisions by this decision.
• Logistics – For each decision you make on where, to whom, and how you plan to sell your product or service, both online and offline, you have to be able to carry through on the operational, logistical side of the sales equation. For example, do you have the means to fulfill the orders from all the channels you use?
If you use multiple websites to sell your product, can you comply with their fulfillment requirements? Will you have to maintain certain levels of stock ahead of time, or can you develop it as it is sold? Do you have delivery channels in place? What about support channels? All of the logistics need to be in place if you are going to be successful on the fulfillment end of the marketing process.
• Service levels – In this aspect of the Place decisions, you want to consider if you will offer the same level of service both online and offline. As we’ve mentioned, providing excellent customer service for online customers could be the key to keeping a customer from clicking over to the next website.
When it comes to online promotion, you have a myriad number of choices. Most companies will focus on one or two of them, but might not capitalize on all of them. For you to compete successfully, your Internet marketing strategy should take advantage of as many opportunities as possible to attract and keep visitors on your website.
• Advertising – What kind of advertising will you put in place for your product or service? How will you integrate any online advertising with offline advertising? One strategy is to use your offline advertising to drive your visitors to your website, where you can then advertise anything and everything you want. But knowing how to blend online and offline advertising requires that you know who your customers are, where they will be on the Internet or off it, and how they can best be reached.
• Personal selling – Will you still have personal selling, as in, will you be doing personal face-to-face marketing? Remember that if your website is the sales channel, there may still be salespeople behind it who need to close the sale – or fulfill the sale. Also, building relationships with your client base online is key if you want to become known as an expert and someone that your customers will buy from again in the future.
You have a number of ways to still sell with a personal touch online, even if you are never face-to-face with the customer. We’ll talk about these possible strategies more in later chapters.
• Public relations – A company’s reputation is critical in sales. The PR efforts you undertake both online and offline can make the difference between a customer choosing your product vs. the competition’s. For example, are you a community-oriented organization? Do you talk about that on your website or link to press coverage about it from your homepage? Is your product or service more earth-friendly than others?
Again, do you tell customers that on your website? The image you communicate to the public – your potential customer base – is something to consider when you choose Internet marketing strategy.
• Message – Can you condense your marketing message down to a few words? Your elevator speech, so to speak? If you boiled down all of your promotional efforts to one phrase, this is the message – it is the basic information you want every customer to know about your product, service and organization. It could be the basis for all of your online and offline advertising and what you want the customer to walk away remembering about your offering.
• Media – what additional types of media will you use, and how will you integrate them with your online advertising and marketing? The answer to this depends on whether or not your customers would receive your messages in those other channels. Does your target customer listen to the radio? Which stations? Does your target customer read magazines or newspapers? Which ones?
Yes, you can market solely online, but consider what you will do if you have customers who want to “see something in writing.” Will you just ignore those potential customers? Many people will choose to focus on online advertising and marketing because of the low cost of entry; you don’t have to pay for thousands of brochures or more for media time.
But eventually, a well thought-out Internet and offsite marketing plan will involve all media channels where customers might be located.
• Budget – Final y, your promotional efforts are limited by the amount of money that you have to spend on them. Again, many internet-based marketing methods can be relatively inexpensive or even free – but then some can be very expensive. For example, you could pay tens of dol ars per click on Pay-per Click advertising that lands you on the first page of Google’s ads for certain keywords or phrases (we’ll discuss this more in a later chapter). If each click results in a thousand dol ars of sales, that rate of cost will be worth it.
But most businesses will need to find a balance of Internet marketing methods that will drive traffic to their site and then experiment to see what methods prove to deliver the most sales.
Until this point, the Internet marketing strategies we have discussed have been low or no cost and are ones that you can implement on your own, without the need of any special programs or software. In this chapter, we will look at some additional Internet marketing strategies that will require either some financial investment or a more advanced level of knowledge (and software applications) to implement.
Since each of these strategies is slightly more advanced, they will be reviewed briefly as part of this overview to Internet marketing. Once you have mastered and implemented the techniques already listed in this ebook, you can and should consider implementing any or all of these strategies as well, depending on the results you have already seen and the budget you have available for investing in your Internet marketing strategies.
To send email marketing messages, you first need to have access to a list of email addresses. You then need to figure out a way to avoid the SPAM bin. There are two main ways for you to generate an email list of customers that you can market to in the future: one is to create your own, opt-in list of customer email addresses, and the other is to purchase lists of customers from market research companies. Since purchasing an email list is expensive and likely outside of the budget of many people who are starting out with Internet marketing, you can instead focus on building your own list of customers that you can then contact with your marketing efforts.
There are two main ways for you to generate an email list of customers that you can market to in the future: one is to create your own opt-in list of customer email addresses and the other is to purchase lists of customer email addresses from market research companies.
These “opt-in” lists are so called because they require that a customer first choose to give you their email address, and even to choose which types of email that they would like to receive from you in the future. This greatly limits the chance that you mail will automatically be categorized as SPAM. Of course, this means that you have to give the customer a reason to opt-in to your list. You can do this on your website, provided that you have the application (via software or plug-ins) on your site that will capture and store customer email addresses. The easiest way to get a customer to give you his email address is to offer him something in return. Some suggestions include:
• A “free report” on something important to customers in your target market
• Coupons or other discounts
• A newsletter that is full of information related to your site or topic
• Access to “first to know” information about your company such as special sales or promotions
• Tips or trends on the industry
• A free quote for your services
• Access to special areas on your website
• Any other “freebie” you can offer to your customers in exchange for their email address
Once you have the customer’s email address, you can use email management software that is specifically designed for running email campaigns. The software will let you do things like:
• Track which emails seem to “work” by the response you get
• Add and delete email addresses as needed
• Set up automated emails for things like sending a thank-you when a customer makes a purchase or registers for your newsletter, confirming an order, or responding when someone sends you an email.
• Send mass emails without getting flagged by your email server
• Allow customers to “opt-out” of email (a legal requirement)
This software is often available as part of a web hosting package, or as part of a customer management application. You can find some software that you purchase one-time and other services that you will pay for as you use them.
It may take time to build your own customer email database, but it will be a very valuable part of your marketing plan once you have it. Since the customer will have already had one form of interaction with you when they gave you their email address, they are much more likely to make a purchase from you in the future.
There are several different forms of Internet advertising. Since the goal of Internet marketing is to draw visitors to your site, this section will look at advertising of your site, not advertising on your site. However, you may want to look at adding advertising to your own site in the future, when you have enough traffic that others would be willing to pay for space on your site. This is one form of what is known as “monetizing” your site, and is outside the topic of this ebook.
Advertising on Other Websites
When you decide to purchase Internet advertising, there are two main forms of advertising you can invest in. The first is paying for advertising on other websites where you know your customers will already be. You have seen this kind of advertising on many websites that you have visited. The ad will be a “banner” at the top of a webpage or to the side of the webpage and will be designed to entice the viewer to leave the site they are on and visit your site.
Ads on another website can vary widely in price. Some of the factors that will affect what you pay include:
• The size of the ad you choose – the larger the ad, the more expensive it will be
• The location on the page where you want your ad displayed – ads at the top of the page will cost more than ads at the bottom
• The amount of traffic that the website receives – the more popular the website, so the more people that will see your ad, the more you will need to pay for that ad
• The competition for ad space on that site – the more people that want to have an ad on that site, the more you will need to pay for that ad
• The percentage of the time that you want your ad to appear – your ad won’t necessarily appear every time that the site is loaded by a visitor. Instead, you can pay less if your ad “rotates” in display with other ads.
If you want to advertise on another website, start by looking for an “advertise with us” or “about us” page and contact information for the person you need to speak with. Be sure to ask questions about:
• The site’s traffic – what demographic information do they have on their visitors (you want it to match the demographics of your average customer)
• Where does the majority of their tra_c come from when they arrive on that page?
• How many times your ad will be viewed?
• How long do visitors tend to stay on that page before leaving?
• How do they usually leave that page?
• Whether you will have to pay any additional fee each time the ad is clicked
Remember that in addition to the cost of the advertising itself, you will also need to invest in the creation of the banner ad. Unless you are familiar with graphic design software, you will need to hire a designer to help you develop the ad.
When you want to only pay for Internet advertising that gets a response – a “click” – you want Pay Per Click (PPC) advertising. In this case, you are usually talking about text ads that appear to the right of search engine results or on websites that have monetized their sites by allowing advertisers to place ads on the site that the advertiser believes that site’s customers will be interested in. This is different from purchasing ad space directly from the website because instead you are allowing the advertiser to choose which site(s) your ad should be shown on.
The most commonly discussed form of PPC advertising is Google AdWords, though similar programs exist on all the major search engines. In these types of advertising, you are competing with other advertisers for keyword-based ads based on what you are willing to pay to have your ad shown first.
To explain this more clearly, let’s go back to the weight loss supplements example we used earlier in the ebook. Imagine that you want to write an ad on Google that will display to the right of the search results when someone searches for “weight loss supplements.”
In order for your ad to appear, you need to be willing to pay more per click for your ad than other advertisers who want their ads to be shown when that same keyword phrase is used. This sounds simple enough, but it can actually be a complicated science to determine how much to pay per click so that you get enough traffic to your site but so that you don’t end up paying thousands of dollars for clicks that you can’t afford.
In Pay Per Click (PPC) advertising, you are competing with other advertisers who want their own ads displayed when someone searches for the same keyword phrase you are using.
To help you determine what your ad might cost, you can use the same keyword tool that Google offers to help you find your keywords for your site. Instead of choosing “keyword tool,” you will use the “traffic estimator tool.” You simply enter the keyword phrase that you want to buy PPC ads for, then the maximum amount you are willing to pay per click (the “cost per click” or “CPC.”) To get an idea of what you would actually have to pay, put in a high value for your CPC, like $10 or more.
At the time of writing, the results in the keyword estimator tool for “weight loss supplements” showed that there are an estimated 74.000 global searches for that keyword phrase each month. If my ad was to show up in the top position, it would cost me approximately $3.75 each time that someone clicked on the ad. However, I need to know how many times someone is likely to click on my ad out of those 74,000 searches. Google estimates that 345 people would click on my ad per day. At a rate of $3.75 per click, that results in a daily charge of approximately $1,293.75 per day.
Now your job is to determine whether or not that level of cost is worth it in terms of return on investment. If I know that my site makes a sale for 2% of the visitors that come to my site and that each sale averages $150, then 2% of 345 customers would mean approximately 7 people would by from me at $150 each. That is nowhere near enough return on my investment to even cover the cost of the ad. However, I might be willing to pay that cost if I know that my website tends to sell to 10% of the people who land on it, and that each one of those people tends to buy $500 or more of product.
PPC advertising is only going to provide a good return on investment if, once the customer arrives at your website, they are actually motivated to make a purchase.
In other words, the true value of PPC advertising depends on the value and quality of your website. If you get all the tra_c in the world to your site but it doesn’t convert visitors to buying customers, then PPC advertising is never going to be a good investment for you. However, if your website converts people to customers at a high rate, then you want all the traffic you can get and PPC advertising may be worth the investment.
If you decide to try a PPC ad campaign, start slow. Be sure to set a daily limit on the amount that you are willing to spend, and monitor the traffic that the ads bring in. If you find out that you’re not getting any good sales from the ads, it’s time to rewrite the ads and/or reevaluate your website and see what needs to be tweaked in order for you to get a higher rate of conversion.
The final major category of Internet marketing is affiliate marketing. In affiliate marketing, you get other people to drive traffic to your site in return for a percentage of any sale that is made as a result of that visit to your site. In other words, you allow others to do part of your marketing for you. However, affiliate marketing is not suited for every product. In order for it to work, you need to have:
• A high enough profit margin that you can afford a commission for your affiliates
• An attractive product or service that other people will be motivated to promote because (a) you pay a good commission and (b) the product is relatively easy to sell
• You are able to support the demand in your product that affiliates could bring in
• You are able to support the additional customers that affiliates could bring in
• You are able to support the affiliates themselves with training, advertising, and other promotional materials
• You are willing to pay for a service (or software) to help you track your affiliates sales
• You have the time to monitor your affiliate marketing efforts so that you know they are representing your company as you would want them to in their promotions
You can register with large affiliates “marketplaces” that help manage your affiliate programs for a fee. Some of the most popular include:
• Commission Junction (CJ.com)
• Affiliate Marketplace
You will need to register with these sites and then people who want to be your affiliates will be able to find you. Of course, you can manage your own affiliate program, but when you are first experimenting with affiliate marketing it will probably be easier for you to use one or more of these services.