Question

Selling Web Site Services

Judy Reiser and Elyse Larsen are college friends who followed the dot.com boom together into a Web site services company that hired them right after they graduated in 1995. In 1998, the company imploded — it ran out of cash, failed to meet the needs of their customers, and lost key employees faster than they could be replaced. By 1999, the company closed and Judy and Elyse were thinking about graduate school, in part because job opportunities in technology industries were so few.

Three months after they lost their jobs, Judy and Elyse were having dinner at an inexpensive local restaurant. They shared news about former colleagues, other dot. com businesses that had closed, and talked about graduate school options. Elyse mentioned that she had run into one of her former clients, the owner of a custom- made furniture business, who complained that he was having trouble finding someone to host and update his Web site. He had asked Elyse if she was doing any work independently. Judy had a similar experience when her aunt, the manager of a medical practice, asked if Judy knew any people who could create a Web site. Judy knew of two people who could, but she didn’t admire their work enough to recommend them to her aunt.

At this point, Elyse had an epiphany: Their old company had failed because it spent too much money and was badly managed, not because the demand for Web site services was small. In fact, demand was growing faster than ever, as virtually every business realized it needed a Web site. Judy agreed and within 15 minutes, the two friends had consented to start their own company. They even had a name for it: Finesse Systems. The two friends knew the technology, where to rent inexpensive offices with high-speed connections, and who to hire as demand for their services grew. The only thing they didn’t know how to do was sign up clients.

The next week, Judy and Elyse met with several people who worked in sales and sales management to learn more about the selling process. After these meetings, they didn’t have the answers but they did have some specific questions.

Case Questions:

• Which one of them should focus her efforts on sales?
• How could they create a list of potential customers?
• How should they communicate with these potential customers?
• What kind of client tracking system did they need?
• When they could finally afford to hire salespeople, what qualifications should they have?
• What kind of sales compensation system would work best for them and their business?
• When should they start reaching out to potential customers?

Margo Switches Coasts

For 17 years Margo Williams owned a jewelry store called Margo’s Diamond Mine near the naval base in San Diego. The large majority of her customers were sailors and their families and her most successful items were wedding rings, inexpensive necklaces, and low-priced brand-name watches. Because her customers were often stretching their finances to make what they felt was a major purchase, Margo’s store provided lay-away plans that allowed her clients to pay for items over time.

Margo’s mother, who lived in Ft. Lauderdale, recently became ill, so Margo decided it was time to close the store in San Diego and relocate both her home and business to Florida. She found a vacant store at a reasonable price in a small upscale strip mall in which the other businesses included an expensive dress shop, a gourmet food store, and a craft outlet. The surrounding area consisted mostly of high-end condominium developments which catered to retirees and people who spent about half the year in Florida.

Margo knows the jewelry business, including how to value items she takes on trade-ins, which suppliers are best to work with, and how to design and manage a store. Although she doesn’t know her new Florida market very well, some issues are clear:

• The new market is older, wealthier, and includes many retired people.
• People appear to wear much more expensive items.
• The existing competition consists of two well-known chain jewelry stores that aim their products at middle-income markets.

• Advertising and promotion tend to be concentrated in newspapers and pennysavers.

Margo was not sure she wanted to use the Margo’s Diamond Mine name in this new market and she really did not know how to go about designing a marketing and promotion plan for the Florida market. To get started, Margo focused on two issues. First, she wanted a preliminary plan that would address—as best she could—the new marketing challenge she faces. Second, she wanted to research background information so she could refine her preliminary marketing plan.

Case exercise:

You are Margo. What are the new marketing challenges you face? Based on the material covered in this chapter, use the 4 Ps of marketing to create a preliminary marketing plan.

Answer 1

Selling website services

Elyse should focus her effort on sales. She was the one who had the epiphany that the demand was good and they only need to make their operation more efficient. Considering that her business and market understanding is good, she should focus on sales.

They could create a list of potential client through various lead generation methods. Cold calling, website forms, attending events, exploring the current network, etc. can be done to create a list of potential clients.

A website service is not standardized. This means the potential clients will have different requirements and the company should be ready to support that. As a result, they should investigate on the client before approaching them and highlight their USP based on the client’s needs.

Since it is a new business, they could use a simple register at this point. However, if they are looking for something more systematic, they could use CRM systems.

The sales people should have B2B sales experience. This is the key requirement. In addition to this, they should be able to generate leads, follow through and handle the entire sales cycle by themselves. They should consider these qualifications when hiring sales people.

When it comes to compensation, they should follow a profit sharing model at this point. Since the organization is small, the sales people should not only be paid salaries but also a certain percentage of the sales that they bring in. This can be their incentives and will drive the sales people to be more aggressive.

They should start reaching out to potential customers as soon as they are ready with their delivery team and the sales team.