"Search engines are where you make the money period," Harrison says. "Because the lower I can get the cost per customer acquisition, the better." He says the majority of his traffic comes from unpaid search engine results.
Harrison's focus on search engine optimization (SEO) seems to be working: In business since 1985 and online since 1994, his company saw 2002 revenues of about $7 million, he says. Based in upscale Long Island, New York, PoolandSpa.com sells approximately 130,000 skus, and in the warm weather may get 150 to 300 orders a day.
Yet it's next to impossible to anticipate the logic these spiders use, in Harrison's experience, because it changes so frequently. "For 'pool paint,' we came up great in Yahoo! in February, and they changed the math equation and - bam - all of sudden we don't come up in 'pool paint' anymore," he says. "So we're constantly testing the search engines, seeing what works and what doesn't. I know that to sustain our level of sales, it all boils down to the search engine stuff."
Hot Tubs and O.J.
To boost his placement in search engines, Harrison's site offers a huge library of articles about pool and spa subjects. These thousands of informative pieces are picked up by engines like Google or Yahoo!, and play a critical role in driving traffic.
"Most of the traffic comes for the content, the articles, the pictures, the how-tos, and we're skimming off the top of that the people who need to buy something," Harrison says. "The percent you're going to sell something to is microscopic, but the bigger I get the traffic number up, the bigger that microscopic percentage translates into dollars."
Harrison writes many of the articles himself; others he finds online and gets permission to reprint. "The long and boring water chemistry articles come from the chemical companies whose chemicals we sell," he says. "It's sort of propagandistic in a way. Obviously if it's something we sell, we're going to write it with a certain slant."
He claims his site is "One of few places on the Internet you can get an exploded view of your filter, see the part number and price right there online and order it in real time."
A few years back, the site posted an article featuring a connection between O.J. Simpson and hot tubs. "Because people were searching the Net for O.J. stuff, it drew tens of thousands of people to our site who would never have been there. For a good six to eight months that was our top entry page."
To complement his unpaid search results, Harrison works "both sides of the angle," spending heavily on pay-per-click. He spends enough at Google and Overture to have his own sales reps at these search portals. "You can call up them up and say 'I want you to change these things' - it's just like having an employee."
As part of his pay-per-click search engine strategy, Harrison has XML feeds that go directly into the Inktomi database. Inktomi is a leading provider of paid inclusion services.
"If you type in a very specific string, say 'blue wave chlorine tablets,' and that search engine is powered by Inktomi, it's going to go 'wait, Dan paid us all this money, we're going to look at his SQL server database.' " Then, Harrison says, the Inktomi feed puts his link at the top of the search results. "There's the product, there's the product price, there's the link, and you're not even going to know that we're paying for that [placement]."
But all of Harrison's search engine work would be for naught if he couldn't track results. For this he uses WebTrends, which gives him exhaustive statistical feedback about site traffic, including total visitor count, where visitors came from, and what search terms they used.
Harrison has gotten used to WebTrend's torrent of data. "But two years ago when I started it was so overwhelming because you're given every possible statistic," he recalls.
It's essential to wade through the data and understand which numbers are metrics you can use to increase your conversion rate, he says. "We have programs that are continuously checking the competition, going into our Google and Overture accounts, and changing bids based on our click-tracking and orders that are coming in."
"For two days, 'pool slide' was our biggest natural search term. I was shocked at that. We sell a $9,000 pool slide," Harrison says. "But I checked the [sales] conversion rate, and they were not wanting a $9,000 pool slide. These people want an $800 pool slide. That tells me I should go find somebody who can drop ship an $800 pool slide, and then we're going to give that another go."
The use of an analytics tool made that possible. "You could never do this without something like WebTrends where you get to look at where these people are coming from and what they're typing in to find you," Harrison says. This feedback allows site owners to perform a task he sees as essential: continually comparing the cost of driving traffic to the profit derived from that traffic.
Closing the Sale
As much effort as Harrison puts into attracting customers, he puts just as much into closing the sale: he has a 15-person in-house call center, staffed with personnel trained to answer technical questions. He tried outsourcing his call center, but the outsourced order takers couldn't explain the products. Their closing rate was dismal. Harrison calls the experience "the big Dan failure of '02."
Although many buyers have questions that require a phone call, Harrison has seen an increase in the percentage of customers who self-service via the Web site over the years. "It used to be 80 percent phone and 20 percent Web. It's probably approaching 50-50 at this point," he says. "The demographic niche who has to gotten used to using the Internet for anything they can - they're going to order it online."
Harrison keeps inventory costs to a minimum by storing no more than about 60 percent of his items in his Long Island warehouse. For the remainder, he routes orders to manufacturers who have agreed to drop ship to customers.
He has programmed logic into his fulfillment software that decides from where orders are shipped. "You might buy a heater for your hot tub and eight rubber ducks. Normally we'd ship the rubber ducks from here, but because you're getting the heater, we're going to have Arizona ship the whole thing."
Using the Net
Harrison cautions Web entrepreneurs to approach e-commerce with the same discipline used in traditional retailing. "A lot of people in our industry are down on the Internet because they put some money in it and didn't follow through, and they're like 'I sell one pump every two months, the Internet doesn't work,'" he says. "Not true you're a pool builder, not an e-commerce person, you shouldn't be using the Internet that way. Put pictures of your pools on the Internet. Show jobs you've done."
"The people who have gotten killed are people who have overly invested in Web technology. They're sitting there with the Jaguar of technology and they're selling Hyundais."
"If you already have an existing business, the Web might not be for you," Harrison says. "A lot of mid-sized companies say 'I want to do e-commerce,' and maybe they're looking at the wrong medium. I always tell people: put your foot in the hot tub before you jump in, because it might be too hot for you."
Adapted from ecommerce-guide.com.