February Feature-

Using the Internet in Business  

By:  Keith T. Chiles, MBA

How to better integrate the Internet into business

Introduction

The Internet has brought a revolution to business during the last ten years. Communication that used to take days now takes only seconds. Information is nearly instant and projects or services can be researched quickly. Although large companies took early advantage of the capabilities of the Internet, the smaller business can also utilize the Internet to improve relationships with their customers.
 

A well designed web site and the effective use of e-mail can provide even a small company with the ability to look large and effective. This paper will help to understand how the Internet can be used to help brick and mortar businesses expand to include click and mortar capability.
 

The basics of the Internet

The Internet is a series of data communications circuits, servers, and customer connections. The telecommunications companies provide the data communications circuits and a variety of Internet Service Providers (ISPs) maintain the servers and the customer connections.
 

It is not necessary for users of the Internet to understand about the high-speed data circuits except to know they are made up of fast backbones that are interconnected through border routers that move data from one fast backbone to another. These border routers were quickly overloaded during peak traffic periods during the rapid expansion of the Internet only a few years ago. This led to serious performance issues.
 

The users of the Internet should be most concerned about the servers and connections maintained by most of the Internet service providers. Although most ISPs maintain a large number of servers for their customers, the most important servers are the Domain Name Servers (DNS), the mail servers, and the web servers.
 

Despite the fact that few people have ever heard of the DNS servers, they are the most important servers maintained by the ISP. These servers maintain the directories of the domains on the Internet and are needed to translate those www thingies over to the four octet Internet Protocol (IP) addresses that are used by the routers and servers. The Internet simply does not work if your ISPs DNS servers quit responding.
 

The next most important servers maintained by your ISP are the mail servers. These servers exchange mail between the different ISPs by relaying mail for the customers. These servers also store incoming mail until the customer’s personal computer mail software retrieves that mail.
 

Relaying is what happens when the customer’s e-mail software attempts to send mail to someone else. The mail server reads the destination address, determines the appropriate server by checking with the DNS server, and then attempts to contact the destination server. If the other server cannot be reached for a variety of reasons, the mail server may either reject the message and provide the customer with a warning, or it will store the mail for four days and keep attempting to contact the destination server.
 

POPing is what takes place when the customer’s personal computer checks with the ISPs mail server to determine if any mail is waiting. This term comes from the Post Office Protocol popular with most ISP mail servers. When a POP request is received by the ISPs mail server, it checks to see if mail is waiting in the customer’s post office box and it hands off any mail to the customer’s client mail software for the customer to read.
 

A new trend on the Internet is to provide a web site that allows people to check their mail, which prevents the customer from having to be at their own personal computer to check their mail. Using a web site to check mail can also prevent customers from downloading a virus, but it should be remembered that mail stored on the web-based mail reading server is not under your control and may not be backed up. Most ISPs limit how much mail can be retained on their servers so using the personal computer to download mail is my preferred option. Web-based e-mail readers are good for checking mail when we are away from the home or office.
 

Web servers store web sites that are queried when a person browses the Internet using one of the popular browsers. They store a series of instructions in an language known as HyperText Markup Language or HTML. These pages can be created by either writing the programming instructions or by using special software that generates the HTML code.
 

It is necessary to connect to the Internet before any services can be used. Internet service providers have a variety of methods for connecting their customers to the Internet. The most common connection method is to use a modem and telephone line to provide the connection. Speeds are limited by the quality of the telephone lines and people with several phone lines into their homes may find the phone company has installed a multiplexer on their line, which will limit it to very slow speeds. Another problem with using the telephone line is that you cannot make voice calls while it is being used for the Internet.
 

Broadband has been around for a few years and there are several technologies that can be used for the faster Internet connections. T-1 is a high-speed dedicated circuit that is expensive, but very reliable. T-1 is usually only used by businesses. Integrated Services Digital Network (ISDN) has been around for a while and is an older technology that is going away. It became available before DSL and quickly lost favor when DSL became available. T-1 and ISDN may be the only available technologies for people who live in areas that are not serviced by other technologies.
 

Digital Subscriber Line (DSL) usually uses a couple of extra wires on the phone line to provide faster connection. Other versions use special filters to allow voice and data to use the same wires. DSL has limits regarding the distance between the telephone company central office (switch) and the location of the customer. Newer technologies have allowed people to have slower versions of DSL at distances further from the telephone company switch.
 

It is not uncommon to see DSL prices rise for slow circuits for people or companies that are some distance from the phone switch. Companies are often better off purchasing a T-1 connection with fast service than to purchase one of the slow and expensive DSL circuits. One needs to evaluate their usage needs before making this decision.
 

Most DSL providers separate their residential services from their commercial services.
 

Cable companies often provide broadband access and they are expanding their capabilities to larger areas. Cable and DSL have been competing with each other for several years to determine which technology will become dominant. Cable currently tends to be a residential connection method that has not been popular with business customers.
 

Wireless broadband has been evolving as a medium for several years, but has not proven to be as reliable as other technologies. It provides an alternative to the T-1 service for those who cannot qualify for other services.
 

Integrate the Internet into your Marketing Strategy.

It’s a common mistake businesspeople make to look at the Internet as something to just start doing. This is a mistake because money can be spent very quickly on Internet marketing strategies that are popular, but do not make sense unless they are integrated into the company marketing strategy in a way that the Internet provides support.
 

After reading this document and becoming familiar with the Internet technologies, the businessperson should develop a new marketing plan that includes the use of the Internet. Just adding some Internet capabilities to an existing company can be a waste of time.
 

Revisit your company’s marketing plan and see where adjustments can be made to incorporate the use of the Internet. It is not a bad idea to spend time with a consultant who can look at your company operations and suggest the appropriate technologies for your business and target market. Only use Internet technologies that are appropriate for your business products or services.
 

E-mail can be your best friend if you run a small and local business. E-mail allows the small-businessperson to interact with customers without being interrupted by the telephone. Many Tracy businesses could have a larger customer base if they were more available to their customers. Many businesses open after most of their customers have left for work in the bay area and they are closed before their customers return from their daily commute. Many of these same businesses are closed on weekends or only have very limited hours, such as only being open on Saturday mornings.
 

The limited hours of many small businesses can cause customers to shop at larger chain stores outside the community or to shop in the bay area where they work. Doing business on the phone may cause the seller to be interrupted during a sales presentation or cause them to engage in telephone tag. Promoting the use of e-mail allows the small business owner to interact with their customers and handle queries by letting a e-mail come into their personal computer and replying during slower periods of the day. This could allow a transaction to be completed during a weekday and have the product ready for the customer to quickly pick up during the weekend. I have seen stores conduct business through e-mail interactions and then have family members pick up and pay for the merchandise. Be sure to use good writing skills so you don’t offend your readers.
 

Domains verses standard mail address is a common question. Most ISPs provide e-mail as a part of their standard services. Another option is to lease your own domain name and set up your mail and web site at your own company domain. When I started in the consulting business, I used an e-mail address at my local ISP, but it appeared to be a bit amateurish. I then registered time-slice.com and set up my e-mail as kchiles@time-slice.com, which is much more professional appearing. Time-slice.com has moved through three different ISPs without my customers knowing I had made changes or any interruption in service. It is not much more costly to register a domain so you can have both your e-mail and web site at your domain. I strongly recommend the registration of your own domain name as it provides you with your own Internet presence.
 

Avoid the use of free accounts for a business e-mail account. It simply looks unprofessional to do business through a free Yahoo or Hotmail account. I have found that very few people will do business with someone who is using a free mail account.
 

The need for a web presence is greater than most people realize. We have become spoiled by the ability to go to a company web site and obtain desired information. Even the smallest company can communicate their message with a professionally prepared web site. The company’s web site should reflect the nature of the business and should either solve a business problem or create a business opportunity.
 

Developing a web site often reveals that the business does not have an effective strategic plan in place. Developing a site that reflects the values and strategies of the company is difficult if the values and strategies have not been defined. Begin by developing the company values and evolving the strategic plan and then seek a web developer. Pick a web developer who understands the values of your business. Many developers have a specific style of web design and they try to fit all clients into that style.
 

One of the most expensive mistakes I have seen with my clients who have had difficulties with web design companies is when they fail to do the analysis work before designing the web site. Some people enter the web design phase and are excited to see the site coming together, but they then start looking at other sites and asking for changes. Look at other sites for ideas before starting the design process and not during the site build.
 

Electronic Commerce allows a local company to participate in nationwide or worldwide sales. Brick and mortar is a term used to describe the typical retail operation that relies on walk-in sales. Click and mortar is a term that describes a company that combines conventional retail sales with an electronic commerce offering. E-commerce can be a very competitive marketplace so sellers may not be successful unless they can keep their operating costs very low.
 

Boutique companies can sell their specialized products through an e-commerce storefront if these products are unique enough to create even a small nationwide demand. Some companies have used their e-commerce volume to provide them with more buying power with suppliers for lower supply costs that translates to more profits or lower prices.
 

   I recommend that a specialist in that field handle an e-commerce offering. I also recommend a complete analysis by specialists before entering this highly competitive field. Many companies expend significant resources to reinvent the wheel or to learn how to make their next evolution of e-commerce site successful. Working with a specialist can streamline the process.

I recently joined two organizations. One had a web site that allowed on-line signup while the other had no web site. I went to the web site of the first organization and was able to sign up and become a member within about ten minutes. The other organization required over forty-five days to find the address, write for information, mail back my membership application and check for payment, and finally receive my confirmation of membership. This illustrates the advantage of e-commerce over more traditional forms of business.
 

Many people bringing a new web site on-line are concerned about being listed by the national search engines like Google and Yahoo. Several companies specialize in getting sites listed on these search engines for a fee. For a locally owned and operated company that is not doing e-commerce or other forms of business outside the local area, this is probably not an effective investment.

   Most small companies use brochure sites to demonstrate their offerings and establish their legitimacy. Most local companies do not need national listings on the major search engines and can use their own local advertising to list their web site. I recommend that everything leaving the company have the Universal Resource Locater (URL) of the company web site prominently displayed.

   Banner ads are popular for national advertising, but they do not tend to be effective for geographically local businesses unless they are placed on a web site that is often read by members of the community and who are in your target market. These ads can be simple boxes that are bought for a specific period of time, or they can be boxes that require payment only when the viewer clicks through the banner ad to your own web site. Click through banners are more expensive than monthly banners, because you are paying only for a positive and interested response.
 

So where does a small company make its presence known in its market? Finding new customers on the Internet can be a challenge. One way to build business is to become a common contributor to various news groups and on discussion boards. News groups are open discussions about a variety of specialized topics. There are over 30,000 current newsgroup topics. When participating in a news group, you set up news reading software to download your topic of interest. You can read people’s postings about the topic and reply to the news post. Your reply becomes a post that everyone can read.
 

Discussion boards are similar to news groups, but are web-based and the boards tend to be associated with a specific topic. If there is a bulletin board dedicated to your products, you can usually sign up on the board and contribute to the posts. On a topical discussion board, the users of the board may post a question or comment about something related to the topic of the board. Other people can help the person by answering the question. Everyone can read all questions, answers, and follow-on discussions.
 

It is important to note that most discussion boards are not for advertising or selling. Violating the rules of the board will quickly get you sent packing. The effective use of a discussion board is to establish yourself as an expert in your field in the hope that people will privately contact you to do business. Be polite and don’t violate any rules on the board and you can build a national reputation like San Pedro Saddlery.
 

Case Study--San Pedro Saddlery sells leather goods to cowboy action shooters and western history enthusiasts. The owner of the company became quite popular on some of the discussion boards with topics related to his leather goods business. He did this by always being helpful and telling people how they can get the most out of their leather products. Many people who enter the field of shooting have spent some time on these discussion boards and formed an image of San Pedro as a large company doing business out of a manufacturing facility in Tombstone Arizona. San Pedro has a nationwide reputation as a result of the owner’s efforts on the Internet I was quite surprised to visit the facility and find there are only about three employees. Image was everything to San Pedro and they did it well.
 

Keep them Coming Back

The objective is to keep some information on your web site is to get your customers returning to the site often enough to keep you in their minds so they will come to you when they need your products or services. Information is the key to getting people back to visiting your site and keeping a portion of will give the customers a reason to return.
 

I publish two electronic magazines (e-zines) that are free to the public and help to keep people returning to my site where they routinely see my message. Each person must fine their own way of keeping customers, or non-customers, interested in examining their site. Even if they never purchase from you, keeping you in their minds might help to get a business referral.
 

Avoiding Problems

Spam can quickly get you hated on the Internet. Spam is the sending of unsolicited e-mail to people who you do not have any business relationship. Do not send bulk e-mail or purchase any mailing lists. Be very careful of who you associate with for sending out information about your company. Even if someone else sends spam and includes your web site or products, you may find yourself kicked out by your ISP for being involved in a spam complaint. In distributing e-mail to your customers, make sure they have signed up to receive the mail you send and comply with the new FTC rules as they come out. I require people to send me an e-mail asking to be placed on my mailing list for my e-zines and keep a copy of the request in case someone complains.
 

Information superhighway road rage can also be a problem on discussion boards and news groups. People tend to be anonymous on the Internet and this breeds the courage to say and do things they might not do in person. My advice is to keep all interactions as polite as possible and ignore those who may try to goad you into a heated discussion. There are people on the Internet who are known as Trolls and their primary recreation in life is to get people angry. Avoid this. At the very least, you might end up finding a web site the word sucks appended to it. These sites can damage a company by spreading the word about your company problems. At the worst, your behavior can get your ISP targeted for a denial of service attack, which may get you removed from the Internet.
 

There is a new pitfall for those who do business with people on the Internet and it is most common when using news groups or discussion boards as part of your Internet marketing strategy. Unlike a typical brick and mortar business, the Internet news groups and discussion boards provide a place where a lot of your customers might gather and conspire against your business. This is why you must be very careful not to upset customers when doing business on the Internet. Just consider the following case study of a brick and mortar company that hit a few speed bumps as they moved over to the Internet.
 

Case Study--A Florida company engaged in selling a set of products to a specialized group of hobbyists. A large number of their customers would gather on a specific hobby discussion board. The company was introducing a new product with a large demand so they took deposits from those who wanted limited editions of their product. The delivery date came and went with the company giving a variety of reasons for the delays. They dealt with each customer individually and various people in the company offered slightly differing viewpoints about the delays. It turned into a disaster when thirty or forty customers began posting these differing excuses about the delays and turned an innocent situation into the appearance of a great deception. The company went on to deliver their products as promised, but the situation cast a shadow over everything they do. They had a very hard time getting any positive press after the incident, because the specialty writers had also been watching the discussion board.
 

It is a good idea to work with a consultant who understands the Internet and let them advise you on the best usage for your company. The consultant can work more effectively with the various specialists you might hire and often reduces the costs by more than their fees. I had to clean up poorly done web site that cost over $5,000. The cleanup of the site cost another $3,000 for a total of about $8,000. Had I been involved in the project from the beginning, the project would not have cost only about $3,000 including my fee. A consultant who can also function as a technical project manager can save a lot of money on a technology venture.

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