Starting Your Own E-Business, Part 4: Marketing on a Shoestring

By James Maguire | Posted November 03, 2005

Okay, you've built your new online store, and now all you need is a large crowd of customers. But you face a major problem: without customers, you can't afford advertising — but without advertising, you can't attract customers.

The solution is to use effective shoestring marketing methods to begin building a customer base. Once you have a steady revenue stream, you can bulk up your marketing. But, for now, you're looking to do it on the cheap.

Marketing on the Internet revolves around search engines, e-mail campaigns, and affiliate programs; all three of which require investment for maximum return — sometimes a hefty investment.

We'll look at each of these approaches. But before we do, let's face it: we're cash-strapped. Are there any marketing methods that are free, or almost free?

The Real Freebies (Well, Almost)
Mention your site in online forums Find an online forum that relates to your business — there are dozens of them, no matter what you sell — and post there. Don't overtly push your business. Instead, make an intelligent comment and list your URL in the signature line of your post. This invites people to your site without offending them by turning the forum discussion into an ad for yourself. To find a relevant group, visit Google Groups.

Offer a free service Make your site useful by posting a service, or information, that relates to your product, like a mortgage calculator, a bunch of great recipes, or a list of the 100 most popular boys and girls names. Not only will this draw in visitors (that is, shoppers), but if it's really useful, other sites will link to you. Also, don't forget to present your sales offers near your free service.

Write a blog, or related articles No matter what you sell — from sailboats to CDs — a running commentary on that area can spark consumer interest, drawing visitors to your site. (Hint: a little controversy does wonders.) To host a free blog, go to TypePad or Blogger.

Include your URL on everything Any time you print something, especially business cards or your stationary, include your URL. Don't forget to include it in the signature line of every e-mail you send.

Join a Web Ring A Web Ring is a series of related sites that link to one another, promoting traffic flow between them. It costs nothing to join, and having other sites link to you will increase your search engine ranking. Find a Web Ring resource at — you guessed it — Webring.com.

Hold a contest A chance at winning something excites people — and can also convince them to part with their e-mail address in exchange for a chance to win. Choose the item you give away carefully to ensure you're attracting the kind of people who will likely turn into repeat buyers. (Also, check to be sure your contest rules are legal.)

List your site on Froogle Froogle is Google's free comparison shopping search engine. Other comparison shopping engines charge, but since Froogle is free you've got nothing to lose by listing your site there.

Distribute a free press release PRWeb mass distributes press releases to a legion of publications and news-business outlets. The basic service is free, and PRWeb caters to small and medium-sized businesses. (Although free, the service accepts voluntary contributions.)

Viral marketing Viral marketing is a message you send out that recipients find so interesting or entertaining that they send it out to other people — it spreads by itself like a virus. There's no advertising expense required to keep it circulating in ever-wider circles. It's usually some kind of joke, or perhaps an odd video clip. A successful viral marketing campaign is a hard thing to develop, and you're a genius if you can do it successfully. (There are highly paid people working right now on creating viral campaigns for big budget companies.) A few imaginative people have managed to do it cheaply, or at no cost at all.

Search Engines: Unpaid Results
Getting your site listed near the top in a search engine is arguably the best possible type of Internet marketing. However, 100 zillion other Web sites just like yours want top listing, too. These days, getting highly ranked requires both time (several months, at least) and money.

The first step is registering your site with the top search engines, but that alone won't get you listed. Being registered merely means that as the search engines send a "spider" out to "crawl" the Web (automated software that indexes sites) they'll know to crawl your site.

Be leery of those services that charge you $50 to "submit your site to 500 top search engines." There aren't 500 top search engines. Those cookie cutter submission services submit the same information to each site, although the sites themselves have different submission criteria.

It's worth registering your site with the top search sites on a one-by-one basis. Among the many you want to register with is the Open Directory, Google, MSN, and both the Yahoo search engine and the Yahoo Directory. (Yahoo offers both a free "standard" submission and a paid "Express" submission; experts concur that that the fee is worth it for faster ranking).

Because high rankings attract so many shoppers, businesses spend large sums on search engine optimization (SEO). SEO is the process of tweaking your site so that search engine spiders will more readily recognize it, and hence boost your site's ranking.

Many e-businesses hire SEO experts, who are high-priced gurus that help them change their site to boost their ranking on search results.

Quickie SEO
If you can't afford a SEO guru there are some basic steps you can take to optimize your site for search engines.

Your site's ranking will be determined chiefly by two things: 1) the keywords in the text of your pages, which must be included in your page titles and meta tags; and 2) the number of other sites that link to yours (including how popular those other sites are and how their content relates to yours).

First make sure your page titles, meta tags and site text are all focused on attracting the shoppers you want. In short, they all have to echo the same keywords.

If you're working with a professional site designer to build your site — a good idea — it's important to check whether they've done the following:

Title To get the most click-throughs from search engines, make your site's title specific and interesting. Not "Joe's Shoes" but "Joe's Shoes: Athletic, Dress and Casual." Shoppers want to know before they click through if you offer what they want.

Description meta tag In this one- to two-sentence description of the site (no more than about 250 characters), incorporate all the keywords you know shoppers are searching for. These terms should echo those you used in your title. Not only do the search engine spiders index this, the description also shows up in search results, so it must clearly compel surfers to visit.

Keywords meta tag This list of terms (about 170 characters or so) should include all the most common terms that shoppers use to search for your product. These terms should be the same ones used in your description meta tag.

Headings Your site's text will have headlines, and these headlines must, again, incorporate your site's key search terms.

Text If your search terms aren't built into the text in your site, all your work with tags won't count for much. For example, if you sell music downloads, you have to weave "music download," "get song," and "download music" into your site's text.

Hyperlinks Your links must, once again, use the search terms that relate to your products or services. On a site that sells sailing gear, instead of a hyperlink that that says "more information" it should say "sailboat gear" or "learn about sailing."

Two key points: 1) sites built with frames encounter difficulty with search engine spiders; and 2) pages built dynamically — which means a software program creates them only when a shopper request that page — are indexed more slowly.

For more information about SEO, visit Search Engine Watch and Search Engine Forums.

Linking for Success
Even if all your tags are in order, to get highly ranked you'll need many other sites to link to yours. Search engines place great weight on this.

Google, for example, tracks the total amount of incoming links to your site, boosting your ranking more if those links come from what Google considers a leading site in your area. Google explains this, somewhat, on its technology page. (Google keeps its technology secret, lest anyone learn how to trick the system.)

Ideally, you want to convince as many related sites as possible to link to you — particularly big ones. To find influential, non-competitive sites, install the Alexa toolbar, which will provide a site's relative ranking.

You can contact related sites and suggest reciprocal links, but that is a tough process. It will only work if you can offer something of value, at the very least, a link from a truly relevant site (yours), which boosts their search ranking.

(Whatever you do, don't use those automated programs that request links — your e-mail will only get deleted.)

One way to build a network of links to your site is through affiliate marketing. With an affiliate marketing program, you sign-up other Web sites to link to yours, and pay them a commission if a click-through results in a sale.

The advantage to affiliate marketing is that you pay only when you make a sale. Consequently, many well-established e-commerce sites use affiliate marketing. They hire firms like LinkShare and Commission Junction to help them administer their programs.

However, affiliate marketing is of limited value to a brand new online store with a shoestring budget. It's hard to recruit affiliates to drive traffic to an unknown site, and many of the programs charge a set-up fee. But keep affiliate marketing in mind as you grow — with time it can be a valuable traffic driver.

Paid Search: A Necessary Evil
In today's competitive online marketplace, merely optimizing your site for high ranking is rarely enough. Many of your competitors are paying for high-profile search results, using tools like Google AdWords, which is why you'll probably need to as well.

To ensure your site comes up when someone searches for a given term, you bid for that term on a per-click basis. The more popular the term, the more expensive it is. Many terms are pennies per click (though many are far more expensive), and the search engines allow you to set a spending cap so you don't spend the family fortune.

Naturally, this gets expensive, and fast. "When people step up to the plate who don't know what they're doing, it's very easy to get hurt," notes Jeff Binder, CEO of Saffron Rouge and an expert on setting up e-businesses.

The key to surviving and thriving in the world of paid search is doing the math to see what you can afford. You need to calculate your cost of acquisition, which is the amount it costs you to attract each customer. (This is an important figure to know for your entire marketing budget, not just for your paid search expenses.)

In short, you must calculate: what is the maximum dollar amount you can spend to attract a customer and still make a profit from that customer? As long as your cost of acquisition stays underneath this figure, you have a chance of making a profit.

To calculate your cost of acquisition, you must know your conversion rate, which is the percentage of the visitors to your site who actually make a purchase. Conversion rates vary wildly across the e-commerce industry, but many sites report a one to three percent rate.

Let's calculate a theoretical cost of acquisition. Let's say you buy a keyword search term for 18 cents per click. At that rate, it will cost you $180 to get 1,000 people to your site. With a conversion rate of 2 percent, from those 1,000 visitors you'll get 20 sales. So here's your math: $180 (advertising cost) divided by 20 (number of customers attracted) equals $9. Your cost of acquisition, the amount you pay for each customer, is $9.

Do you have more than $9 profit in each of your sales? If you do, you can afford to spend 18 cents per click and still make a profit. When you start out, you won't know your conversion rate, so you'll need to experiment. Be prepared to lose some money in the experimentation phase.

Which words should you bid on? To research the words shoppers use to find your product, go the Overture Keyword Tool. Enter the search terms you know are related, and the results will show you how many times each term was used, along with related searches. The only drawback is Overture's results are calculated using data from the previous month.

It's important to remember that these popular terms are the ones you want to build into your meta tags and the text of your site, so you're boosting your free search ranking while you're paying for higher ranking.

Another key point is that as you run your paid search campaign, you need to monitor your results using your Web analytics software. Where are visitors coming from? What keywords are driving the most business? Only by knowing the answers to these questions can you maximize the return from your paid search..

Examples of Web analytics software includes WebTrends, ClickTracks, and Urchin, and there are many good packages available.

E-Mail Marketing
Wow, you've actually attracted a shopper to your Web site — now you have to convince them to come back. A great way to do that is to send them an e-mail with relevant and timely product offers.

But harvesting your shoppers' e-mail addresses is easier said than done. Typically you have to offer today's spam-wary shoppers something of real value to cajole them into parting with their e-mail. Some merchants offer a coupon or a discount on purchase. Whatever you offer, it's a good idea to provide a sign-up option on every page.

This process of gathering e-mail addresses is part of what's called opt-in marketing or permission marketing. Two key principles of successful opt-in marketing are: 1) letting your shoppers know you'll never, ever, give or sell their e-mail address to another party; and 2) providing a unsubscribe link so they can easily get off your list.

If don't have an e-mail list, you might consider renting one. There are vendors who sell lists of address of people who have indicated they're interested in a given topic. Be careful, though, because some of these vendors are simply spammers selling addresses they've collected with automated harvesting software — e-mailing to these lists will quickly make you a very unpopular merchant. You can search for e-mail list vendors at the Direct Marketing Association, among other places.

You'll need special software to administer your e-mail marketing campaigns - gathering addresses in Outlook Express just won't do. If you're on a tight budget, there's a free version of the popular Group Mail software, and a low cost version of the popular Constant Contact. Other leading programs include Gammadyne Mail and iBuilder, and there are many good group e-mail applications.

To be sure, e-mail marketing is one of the great special weapons of online store owners. But your e-mails must be written effectively — a complicated art form that takes considerable time to master. The basics, however, include two golden rules:

  • A compelling subject line Getting people to open your e-mail is the biggest hurdle because we're all drowning in spam. The subject line must romance your specific target demographic, not merely the general audience, and it must offer real value without hucksterism. It's a good idea to include an "action word" like free, bargain, sale, and close-out, or promise some truly interesting tidbit of information.
  • Make the body copy brief — and relevant Your readers won't give you much time, so you must state your message succinctly. The point is to present an offer. It can be a free sample, free shipping, a money-back offer, a special new customer discount, a quantity discount or any of dozens of other offers. But the offer must be clear and present compelling value.

How often should you send out e-mails? There's no set answer, but the point is to establish a regular connection without pestering your customers. At a minimum, e-mail your customers once a quarter. Many businesses send a couple mailings a month, and plenty send weekly mailings.

Marketing Your Site: The Bottom Line
The process of promoting your site never stops — and it never gets cheap. The only way to truly thrive online is to market constantly, and to regularly monitor the results of your marketing efforts. Start now and don't stop!

Adapted from ECommerce-Guide.com, part of Internet.com's Small Business Channel.

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