How a Dane County Business Set Up Shop on the Information Superhighway
FCI designs and produces food court equipment, countertop merchandisers, custom operations manuals and training, branded food development and other services. Duesler started FCI in a room above his garage seven years ago. Thirteen employees, $2 million annual sales.
IC provides Web site development, design, redesign and maintenance services for the Internet, intranets and extranets. Staff of six. Spencer travels extensively to speak at Internet conferences and seminars. He did his first Web site in 1994 at UW-Madison.
Web site objective: Increased industry awareness resulting in tangible sales and margin growth of at least 10% in the first year, which should cover the capital investment cost of the online initiative.
Over the past several months, In Business followed the progress of a Dane County company’s foray onto the Internet. Our reporter sat in on meetings with a local Web development consultant, and recorded the steps in the process.
These days, businesses use the World Wide Web as everything from storefront to customer service center, discussion forum, billboard, newsletter and employee policy manual. Equally diverse are the stories of how Dane County businesses discover the World Wide Web and get online. Here is one of those stories, chronicling how Food Concepts Inc., Middleton, established its Internet presence.
June 24: Chance meeting
At a Firstar Bank reception for Concerts on the Square, Rick Remeschatis of Financial Advantage introduces two of his clients, Brad Duesler and Stephan Spencer. Duesler mentions his interest in launching a Web site for Food Concepts, and he and Spencer agree to sit down and talk over the possibilities.
July 24: Assessing potential
Spencer visits Food Concepts Middleton headquarters to talk about what Duesler hopes to accomplish with a Web site. Duesler sees the Internet as a way to make information about his company readily available to potential clients across the country. “We’re well known in small circles, but even people who work with us often don’t know the full scope of our operation,” Duesler tells Spencer. He sees an online brochure as an accessible medium that can be updated more promptly than print materials.
Spencer discourages Duesler from putting a lot of money and energy into a brochure site that even interested prospects would likely visit only once. Effective Web sites engage people interactively to keep them coming back, he suggests. The most successful sites turn passive “users” into “participants.”
Duesler mentions a brand directory that FCI assembled of food brands, restaurants and other foodservice businesses. He and his staff toyed with the idea of developing a print or CD-ROM directory but were concerned about the time commitment and costs of keeping it updated.
Spencer recommends an online directory. A food service brand directory could form the foundation of a useful Web site that would bring potential clients back again and again, and help FCI develop a reputation as an expert in its field.
Spencer shares the example of another client’s success. The third largest ink manufacturer in North America, INX International Ink Co., sponsors both a corporate Web site and PrinterSpace, which has become a common online hangout for printers and printing clients across the country. PrinterSpace started as a directory of printers, Spencer explains. It now includes 100,000 printers around the world and has become an online community with discussion forums and a “content aggregator” that brings together data from other sites. The philosophy behind PrinterSpace is to establish INX’s reputation in its field and generate goodwill with customers and potential customers by helping them generate business, Spencer explains.
“PrinterSpace has been wildly successful,” he tells Duesler. “We get 10 times the traffic to PrinterSpace than to INX’s corporate site, not because the corporate site isn’t good, but because PrinterSpace is such a central, valuable, timely, vendor-neutral resource for the printing industry.”
Traffic to the PrinterSpace site is so high that IBM contacted INX to advertise there and became the site’s first paid advertiser, he adds. In Spencer’s example, Duesler sees an idea for a Web site that could establish Food Concepts’ nationwide reputation and eventually become self-supporting.
Equipment like this for food courts in malls is part of what Food Concepts of Middleton wanted to promote on the Web.
July into August: Ideas gel
At Spencer’s suggestion, Duesler checks out competitors Web sites. One is a “cobweb” with no opportunities for interaction, no recent updates, and thus no reason to return. Another competitor has had a “site under construction” sign up at its Web address for several months; Spencer contends that sends a more negative message than not being on the Web at all.
Meanwhile, Spencer checks possible domain names for the Food Concepts site. “Foodconcepts.com” is already registered, but “foodconcepts.net” is available, as is “brandcenter.com,” “brandcenter.net,” “foodcourts.com” and “foodcourts.net.” At $75 a crack, Duesler decides to register them all. Eventually, they will all link back to either Food Concepts’ corporate site or the brand directory it sponsors, making it as easy as possible for potential clients to find their way there. Plans for both sites begin to gel. Food Concepts corporate site will offer a virtual tour of the company’s diverse services. The brand directory will be designed as a matchmaking service to connect retail chains and large employers that want to open food courts with potential food vendors and brands. Food Concepts will invite food brands (like Tombstone) and service providers (like Pizza Hut) to list their company and products and post photographs on the directory. Thus, the site would grow itself.
“If you ask the average retailer how many brands are available in the food court industry, they might say 30, maybe even 50,” Duesler explains. “In reality, there are over 1,000 brands out there.”
Aug. 31: Zeroing in
Spencer meets at Food Concepts with Duesler and Julie Pedretti, Food Concepts Director of National Accounts. An immediate question is how to measure the Web site’s effectiveness. “In my mind, our primary objective for this site is increased revenue,” Pedretti says. “How can we measure that?” Duesler acknowledges it will be difficult to measure Food Concepts return on serving as a conduit to introduce food court operators to brands, franchise opportunities and other vendors. He is a little concerned that some users will get what they need from the brand directory without inquiring about Food Concepts services. A paper or CD directory might be costly to maintain, but at least the company would realize up-front revenue from selling that product.
“Our long-term objective certainly has to be return on invested capital.”
On the other hand, Duesler says he is more convinced than ever that unless businesses figure out now how to put the Internet to work for them, they will be left behind. He sees a great advantage in being among the first in his industry to harness the Web as a business tool.
“I don’t want to look back and say, ‘Why didn’t we get in on this on the front end?” he says. “I don’t want to miss that window.”
Duesler anticipates that the brand directory will produce revenue through the sale of banner ads promoting food brands and services. And he accepts Spencer’s premise that the directory must appear vendor-neutral to gain acceptance in the foodservice industry.
Spencer can supply no concrete measurements or formulas on Web site return. Referring to the INX example, he notes that ink sales have jumped since PrinterSpace went online, though there is no way to tie new sales to the Web site.
Duesler turns the topic to an equally important question: How much is this going to cost? “Is it a $2,000 project or a $200,000 project?” he asks Spencer. “If it’s $200,000, we wouldn’t be here. If it’s $2,000, I suspect you wouldn’t be here.”
Netconcepts hourly rate is $125, Spencer responds, and corporate Web sites tend to run at least $10,000. Elaborate design, database functions and the inclusion of shopping cart software for online sales increase costs. FCI will realize some economies of scale by using programs Netconcepts already has developed for other Web sites, Spencer adds.
Netconcepts offers cost estimates in two ways: (1) By laying out exact specifications for a site, down to specific database fields, and providing a full quote; (2) By supplying an estimate up-front and developing detailed specs as the project proceeds. Clients can track Web site progress – and costs – on Netconcepts extranet site.
Duesler and Pedretti agree that FCI must establish goals about how the Internet project will affect the company’s bottom line.
“We need to know what constitutes a go or no-go to the next level. At what point do we say we’re not going forward with this anymore?” Duesler notes. “Our long-term objective certainly has to be return on invested capital.”
A final topic for discussion is how to let potential users know about the brand directory once it’s up and running. Spencer suggests that Food Concepts begin by inviting vendors listed in the directory to review their entries, add or change information, and add artwork. Those early visits would help Netconcepts work out any final bugs in the database, he notes.
When Food Concepts is ready to cast a wider net, Spencer suggests announcing the brand directory at trade shows and offering demonstrations at the FCI booth. The company also should issue press releases to trade associations and post Food Concepts Web site and e-mail addresses on every piece of paper that leaves the office.
Sept. 9: Details, details
A six-hour-plus meeting with Spencer, Netconcepts project manager Jody Hartwig, Duesler and FCI’s public relations representative Connie Smidebush demonstrates how each decision in the design process has tactical, economic and maintenance implications.
“There’s a lot more to this technology than I expected. It’s much clearer to me why it’s a cumbersome project,” Duesler says. “This is not a casual venture.”
The first issue is which fields to include in the database, how it will sort entries, which fields must be filled in, and which fields will be searchable. Security issues are also crucial. For instance, retailers seeking brands for a food court in a new store may not want to broadcast its location. Thus, certain fields would remain private.
Pinning down these details is necessary for Netconcepts to offer a complete quote for the project, which will spell out costs for necessities and potential extras.
Duesler explains: “Stephan would say, ‘Do you want this on your site?’ and I’d say, ‘Yeah, but I don’t know the economic implications.’ It’s hard to know what I want until I know how much it costs.”
Despite the mind-boggling detail, Duesler remains convinced that Food Concepts is headed in the right direction by jumping on the Internet now. He likens the company’s move to seeking out the best business location along the information superhighway so clients and prospects can find the site and return frequently.
On a more practical level, Duesler thinks about the Web site as a global ongoing trade show, and that’s how he intends to finance part of the cost – with money originally set aside for a trade show.
Sept. 18: A work in progress
Staff from FCI and Netconcepts review notes from previous meetings and work through the final details on tactical and security issues. They decide the main domain name for the directory site will be “foodpros.com” or “foodpros.net.” Previoously registered names will all link to the FoodPros site. The registered site name, “foodconcepts.net,” will become the address for Food Concepts corporate site.
Duesler also decides to divvy up design work, both because everyone on his company’s design staff is familiar with the corporate look FCI wants to achieve, and to hold down costs.
Spencer supplies Duesler with a Chinese menu of cost items, prioritized according to how crucial each component is. The A (“needed”) and B (“nice to have”) priorities tally $36,500, with just a few blanks left to fill in. Duesler wants to be sure this front-end work will create a site that can continue to grow with his company and the Internet’s ever-expanding capabilities.
“This is a living medium,” he says. “You can grow it as you go, and as your budget allows.”
Sept. 22-25: Sharing strategies
Duesler attends the International Quality and Productivity Center (IQPC) conference in Chicago on “Strategic Planning for Marketing on the Internet” as Spencer’s guest.
Duesler appreciates the mix of marketing and Internet professionals. “I also came away with the sense that this is moving a lot quicker that we thought, and it’s going to be a lot bigger than we thought,” he says.
He hears at the conference that the Internet is evolving so rapidly that one Web year is the equivalent of three weeks actual time. He hears that getting company officers to buy into investing in the Internet as a business tool is a tough sell and is glad he doesn’t have to deal with that one. He also hears this imperative: Assign an in-house Webmaster even if you’ve hired an Internet consultant to design, host and maintain your site. Duesler decides office manager Tim Wiese will take on those duties with his assistance.
Oct. 7: A Web site is born
The FoodPros site premieres in rough form. Though graphics and design are still in the works, the directory is far enough along that users can page through it and vendors can add contact information about their companies.
Duesler calls a couple companies listed in the brand directory and “walks” through the brand center with them, checking on functionality and ease of use.
Oct. 9: Prettying things up
Netconcepts staff adds new functionality and features every day as design begins to take shape. A banner headline appears at the top of the site, with a note that a site finder, buyer’s guide, bookstore, and food chat forum are forthcoming. “Please note: this is a PRE-RELEASE of the FoodPros site,” the Web page intones.
Oct. 11: Starting to spread the word
Duesler attends the trade show of the National Association of Convenience Stores in Atlanta and invites vendors to view their brand center entry on the FoodPros site and try out the directory. He even sets up his new laptop at the vendors’ booths so they can try out the new fully functional database. About 20 to 30 company representatives sneak a peak at the FoodPros site.
“The questions they inevitably asked were, ‘Why are you doing this?’ and ‘How do you make money?'” Duesler notes.
Oct. 22: A work in progress
The Buyer’s Guide database of suppliers is functional, and the discussion forums are ready to go as soon as FCI decides which topic areas would best invite participation. The FoodPros site also includes a banner ad from Jimmy Dean as an example of the type of exposure advertisers would achieve.
Traffic to the site remains light, though a few vendors introduced to FoodPros at the Atlanta conference have visited the brand directory to update their listings.
Oct. 23: Style vs. speed
With the nuts and bolts in place – the site now lists 610 brands and 670 suppliers – staff from FCI and Netconcepts meet to talk about the FoodPros design and future areas of functionality. Smidebush suggests the need to enhance the graphic look of the FoodPros site, but Spencer recommends keeping design simple.
Many Web sites offer stunning visuals, but they tend to be slow to load and lacking in information, he notes. Many users browsing the Web seem to prefer sites that load quickly to serve up simple graphics and more data. If a site takes longer than eight seconds to load, you are going to lose people, Spencer warns. Thus, many companies doing business online strive to make the first screen users see as informative and functional as possible.
The next order of business is unveiling the FoodPros site. FCI decides to issue direct mail invitations in December to all vendors in the directory to visit the site and update their listings. A printed application will be included for all businesses that prefer to submit information that way.
In January, when both the FoodPros site and Food Concepts corporate site should be up and running smoothly, FCI plans to announce its Internet initiative more broadly to retailers across the country.
Early November: Looking ahead
Food vendors have been checking out the FoodPros site and e-mailing suggestions to Duesler, who is quickly coming to appreciate the immediacy of the medium.
“If I find a glitch, I call Stephan and ask about it,” Duesler relates. “He always seems to know immediately what the problem is. I can hear his keyboard working in the background, and then he says, ‘Hit your refresh key.’ Sure enough, it works.”
Chat rooms for foodservice professionals, including a bulletin board to post job openings, are up and running. A list of 200 books related to the foodservice industry is available at FoodPros, which get a 15% commission if interested users order a copy from Amazon.com. Eventually, Duesler plans to add book reviews to the FoodPros bookstore.
A little farther down the road, FCI will begin offering banner space to foodservice industry advertisers.
Beyond that, who knows? “I understand the power of the Internet, and I know in my gut that it’s a big opportunity,” Duesler says. “It’s certainly going to be bigger tomorrow than it is today.”
Tools of the Trade
Netconcepts developed a secure extranet environment to help Food Concepts and other clients manage Web Projects, budgets and priorities, all in real-time.
Continuously updated reports on web site usage, traffic patterns, and rankings in the search engines help Food Concepts keep a finger on the pulse of ROI, user demographics, success patterns, and new trends.
Links to mockups and pages pending approval are easily accessible.
Performance and reliability are critical. Netconcepts provides automated 24/7 server monitoring, with real-time extranet status reports and a pager gateway that pages the server administrator if a site goes down.
The extranet gives Food Concepts the ability to add work requests, set priorities, review the list of tasks that require their input, check the progress of current tasks, access staff work schedules, and see who’s currently clocked in at Netconcepts.
An archive of all email correspondence between the two companies helps keep all interested parties “in the loop”.
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