The guests on Aug. 23 were Evan Jones of TSI Soccer and Gary McWilliams of Business Week, to discuss how small business can profit from using the Internet.
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OnlineHost: Good evening and welcome to Business Week Online. Tonight's conference takes us out on the Internet again -- how can small business take advantage of the Net? Posting messages in the newsgroups? Creating pages on the World Wide Web? What's the best way to build business via cyberspace? And how does the Net fit into other marketing strategies?
Those issues were addressed in a Business Week story in the Aug. 21 issue, "Netting New Business on the Net," by BW Houston Bureau Manager Gary C. McWilliams (Gary2A). He's here tonight, along with one of the entrepreneurs the story talks about, Evan L. Jones, president and CEO of TSI Soccer Corp. in Durham, N.C. Customers can learn all about TSI's soccer gear and clothing on the company's own Web page -- and then place an order. Evan Jones's screen name is Tsisoc.
As the BW story says, "Jones sees the Internet as a tool to position TSI Soccer as a cutting-edge retailer -- and a slick way to test new ideas and products on well-heeled U.S. and international customers." TSI, with annual sales of $17 million, started marketing on the Net last year. Evan Jones graduated from Duke with a BA in economics and went on to receive an MBA from the Kenan-Flagler Business School at the University of North Carolina.
Gary McWilliams has a BA in journalism from the University of Massachusetts. After stints on Electronic News and Computer System News, he joined Business Week in the Boston bureau in 1989. He has built coverage of small-business technology into one of his specialties. Gary has been Houston bureau manager since January. The moderator tonight is Jack Dierdorff (JackBW), consulting editor of BW Online. And now on to your questions!
JackBW: Good evening, everyone on AOL. Welcome to BW Online, Evan Jones. And hi, Gary McWilliams.
Gary2A: Welcome from Houston, all.
Tsisoc: Thank you.
JackBW: Gary, you can ask Evan Jones the first question.
Gary2A: Evan, if I can start, what does TSI's electronic catalog add to the paper version?
Tsisoc: We are able to reach customers internationally and can change the catalog on a daily basis.
Gary2A: Is the audience markedly different?
Tsisoc: The Internet audience is very dedicated and loyal, because they feel that we are supporting cyberspace.
Gary2A: What do you mean by loyal? Are these big spenders?
Tsisoc: Response rates from Internet requests are approximately 8% -- the average rate from print mail is lower.
Gary2A: That's impressive. How do you promote your page?
Tsisoc: We promote the page through the paper catalog and by linking to other soccer Web pages.
JackBW: Evan, here's another for you.
Question: How does the Internet home page fit into your company's overall marketing strategy? How big a role does it play relative to other approaches?
Tsisoc: The Internet page allows us to present ourselves as a cutting-edge retailer and approach younger audiences.
Gary2A: That sounds a lot like Internet is hip.
Tsisoc: The internet is hip and extremely popular now, as witnessed by all the media attention.
JackBW: Fine, Evan, but you must be doing other marketing things, too, such as the paper catalog. How much of a company's marketing budget should go to something like the Net?
Tsisoc: The paper catalog goes to over 5 million households per year, but the costs are appreciably higher than the Internet. We got up on the Net for about $1,500 per month to start.
Gary2A: How about ordering electronically. You've done a lot there, haven't you? Are customers willing to use their credit-card numbers online?
Tsisoc: Currently, we are doing electronic orders and are implementing a secure system for credit-card use.
JackBW: Evan, how about this question? And tell us your page's address,
Question: Evan, for those of us who haven't looked yet, what's on your Web page, exactly?
Tsisoc: Web address: http://www.tsisoccer.com/tsi. The page has a sampling of the range of products offered.
Gary2A: What products do you find interest the Net user more than print readers?
Tsisoc: Orders have been small -- test orders for items to test the new medium. We use the catalog to get a jump on the print catalog. Interest has been high for whatever can't be found in the print catalog. This year it is Nike items.
Gary2A: It sounds like you use the online catalog to test new items. That so? Any unusual findings?
Tsisoc: No unusual findings, but it is a cost-effective method.
JackBW: Here's one from AnnieWT in Connecticut.
Question: Do you have an internal server, or do you contract that out?
Pros/cons?
Tsisoc: We currently contract out the server, but have looked at both.
JackBW: MarkWP1 throws us this.
Question: How do you accept payment for Net orders?
JackBW: Everyone wants to know that at the start! A secure credit-card system?
Tsisoc: We accept payment via credit cards and will be accepting them over the Net next week. They are encrypted so they cannot be stolen. Currently, people must call us over the phone to give their credit-card information.
JackBW: GLollar983 has a question you might have an answer for, Gary. Or Evan?
Question: Can you suggest a book or some resource to help me understand all this?
Gary2A: There are several we can recommend. Two of my favorites: "Internet Navigator" (new edition coming out this fall) and "The Internet Business Book" by Jill Ellsworth. Other books are listed with my story, Netting New Business on the Net, which you can find under Search BW here on AOL in BW Online (look under Personal Business in the Aug. 21 issue).
JackBW: Our conference guest last Thursday, Dave Taylor, has written "Creating Cool Web Pages." He's also co-author of "The Internet Business Guide."
JackBW: Here's a follow-up to the server question.
Question: How about the second part of AnnieWT's question: pros and cons of having your own server?
Tsisoc: A server costs close to $15,000. It also requires a qualified administrator, which is unnecessary for writing the pages. A reputable company can do the work of upkeep for the server without the headaches. We hired a service for six months but quickly realized that writing pages is not much harder than navigating a software package like Word for Windows. A degree in computer science is hardly necessary.
JackBW: That leads right to this question, from BobA in New Jersey.
Question: How time-consuming is it to maintain your Web page? Who's your "webmeister"?
Tsisoc: Not very. Ideas get bounced around and are put up every day or so. It takes only as long as typing the information.
Gary2A: Evan, you mentioned earlier that timeliness is important to Net visitors.
Tsisoc: True.
Gary2A: How often do you update the product offerings?
Tsisoc: The products are rotated weekly. We offer only a sampling so we keep the page fresh. The Net allows to get a jump on our catalog competitors.
Gary2A: Do graphics help sell products -- e.g., color for jackets?
Tsisoc: Definitely. The quality on the Net is not the same as in the catalog, but colors are clear.
Gary2A: What have been the best sellers so far?
Tsisoc: People won't order size-specific items like shoes yet, but apparel is more popular. The challenge is finding the right audience. It takes a little time to locate your customers.
JackBW: But on the Net, don't you depend on the audience finding you?
Tsisoc: You depend on putting yourself where the audience will find you. Soccer-related Web pages are helpful.
JackBW: Evan, have you tried other new media, such as CD-ROMs or fax?
Tsisoc: We are planning to put the catalog on CD-ROM, but are waiting to see how successful the Internet is, because the Internet would be more cost-efficient. All people need is a modem, and we change things daily.
JackBW: MarybethR asks this.
Question: Other than your catalog, how else are you using the Web to enhance your marketing/advertising strategies?
Tsisoc: We scan the Web constantly for soccer information and contacts, newsgroups, etc. We keep our customers up on soccer news by using the Web.
JackBW: Gary, this one's for you, from Hornblass.
Question: Is there are way for (very) small businesses to get in on the action?
Gary2A: Yes. Our reporting shows that E-mail and bulletin boards are surefire ways to get started. In fact, many people troll the bulletin boards for help, advice, and tips.
JackBW: Gary, isn't the Web also relatively cheap and easy, even for tiny businesses?
Gary2A: It's becoming more so. Web server software can be purchased for under $200. Of course, you've got to learn HTML.
JackBW: Evan, tackle this one next.
Question: Once all your competitors are also on the Web, then what? How will you maintain an edge on them then?
Tsisoc: We will try to constantly bring new photos and new products to the Web and be creative with our marketing.
JackBW: By the way, Gary's BW story on Netting New Business on the Net is available in an HTML version in BW Online, under Search BW, Download Area, Software.
JackBW: Gary has another comment.
Gary2A: You know, it's worth making the point that not all businesses will benefit. The medium is unique. We've heard Evan mention the graphics and photos, and timeliness such as score info. That's a nice fit for a catalog business. Not others.
Tsisoc: Our customers are usually computer-literate, which is a very important factor. Check your demographics for Internet compatibility.
JackBW: How about this question, Gary, from GamerB2
Question: Are there any other modes of using the Internet under development that you know of?
JackBW: And Evan, are you investigating any?
Gary2A: Yes. Some folks put up messages that include their E-mail address. It lets them fax out information. FTP addresses also allow people to pull down a fixed packet of information, such as standard products.
Tsisoc: We collect E-mail addresses and will send SALE messages to those interested.
JackBW: Evan, this one now.
Question: Do you foresee the electronic/I-net catalog ever displacing your printed one entirely? No paper or postage costs?
Tsisoc: It is possible, and that is why we are getting on the Net in the beginning. If everyone was into the Net, it would work.
Gary2A: Evan, do you count the log-ons weekly, and what are the results so far?
Tsisoc: We check them monthly. Numbers have increased from less than 1,000 in the first month to approximately 12,000 last month, as information has been added. Visit time has increased as well.
Gary2A: Evan, do the service providers charge more with rising "hits"?
Tsisoc: Some do -- ours does not. Rates are based on the amount of space, not number of visits.
JackBW: Here's a cutting-edge question about impact.
Question: Do you find that having a Web site has raised awareness of your business in your hometown? Has it given you any edge over your local competitors?
JackBW: Do you have local competition?
Tsisoc: We do not have a lot of local competition, but it has given us an edge in the international market.
Gary2A: Evan, who are your best international customers, and why?
Tsisoc: Our best customers are from Japan right now, due to the exchange levels.
JackBW: Here's a final question -- the end is near!
Question: What's the most important piece of advice you would give to small businesses contemplating going on the Net?
Tsisoc: Investigate servers and make sure that your target audience is computer-literate.
JackBW: We have time for one more after all.
Question: Evan, from your perspective, how big a deal is interactivity on the Web? Do you get a lot of E-mail that doesn't pertain directly to products?
Tsisoc: We would love to have interactivity on the Net.
JackBW: Thanks for being with us, Evan, and thanks, Gary.
Tsisoc: Thank you.
Gary2A: Thanks, I enjoyed it.
OnlineHost: Thanks to Evan Jones of TSI Soccer, Gary McWilliams of Business Week, and all the BW Online team for this conference on small business and the Internet. And thanks to all of you on AOL -- with apologies to those whose questions we didn't have time for. If you'd like to continue the discussion, we invite you to move to the BW Online Chat Room or post comments and questions on the BW Online Message Boards.
Transcripts of all BW Online conferences are available soon after the event (look under Talk, Special Events, or Search BW, or for this one also in BW Online's new Small Business Center or Computer Room, under What's New on the BW Online opening screen). And remember to join us in the Globe every Sunday at 9 pm ET for BW Online's weekly conference with editors and newsmakers, usually featuring a discussion of the Cover Story in the current issue of Business Week. Thanks again and goodnight!
Copyright 1995 by The McGraw-Hill Companies, Inc. All rights reserved.
