Mining for Gold on the Internet

August 7, 2001
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The gold-rush prospectors of the mid-1800s may not have had the luxury of central air and heat, but they did have the same excitement for get-rich-quick fortunes as the many prospectors who bet on dot-com stocks in the late 1990s.

Most prospectors in both groups lost their shirts (or worse), but these cloudy times had hidden silver linings. Gold mining brought many people who possessed an entrepreneurial mindset to the hills and valleys of California. They were willing to face risk and change for a better life and later became business owners, managers, and employees in the California economy.

The dot-com explosion introduced over 300 million people to the Internet and pioneered both the technological foundation and the business models on which 21st-century companies will grow. It also brutally reminded us of the severe consequences of not properly serving and providing value to the customer.



What Have We Learned?

In hindsight, the shakeout of dot-com companies simply taught us what does not work and, at the same time, proved what a powerful tool the Internet can be if it is used correctly.

Forrester Research (www.forrester.com) declares that e-commerce (loosely defined as buying and selling products and services through websites, e-mail, and Internet communities) is expanding rapidly and will explode over the next several years. Forrester determined about $1 trillion in business was done worldwide through e-commerce by the end of 2000.

However, it predicts this figure will increase to an incredible $6.9 trillion globally by the end of 2004.

Although the economy has slowed down during the last couple of years, people and companies continue to do more business online because it is easier and less expensive. From contractors to manufacturers, most hvacr managers say plans for adding technology and e-commerce have not changed and are equally as important today as they were before the dot-com meltdown.

For example, David Schulte, vice president of Member Relations for Excellence Alliance Institute (EAI), stated Alliance members are very optimistic today about e-commerce and e-business opportunities. He went on to say that some members are already using e-business technologies in the field, including wireless invoicing using the FieldCentrix system (www.fieldcentrix.com) and onsite credit card processing.

Brenda Schmidt agrees. As manager of E-Business Marketing at Trane, she said her company is interested in using the Internet to reduce costs and increase channel efficiency. Dealer feedback has been great and she indicated online purchases for extended service warranties are already up 30% in the residential division after being introduced on the Web only a year ago.



Generating Revenue

Making money online, however, is a little trickier. Although many online contractors are still experimenting with cost-effective ways to use the Internet to generate revenue, Philadelphia-area contractor Oliver Heating and Cooling is very pleased with the number of website leads that have turned into customers.

By making sure their Web address is in all of their marketing materials, especially their Yellow Pages ad, company president Bernie Sweenie says Web-generated leads are increasing monthly and result in above-average closing rates because the customer is already familiar with Oliver from the website. Sweenie goes on to say that the Internet has not replaced any advertising media for Oliver; it just allows the contractor to provide more information for the customer to make an informed buying decision.

Still, a good old-fashioned phone call is what usually sets the appointment.

Oliver’s story indicates a website is not a magic bullet for sales and should be used in conjunction with proven advertising strategies. But for companies willing to invest the time and money, the Internet offers many ways to reach customers online.

One of the first hvacr companies to embrace the Internet back in 1996 was Cropp-Metcalfe. According to sales manager Tim Cropp, “The Internet is all about making it easier for customers to do business with us. Our website conveys the image that we are up on technology and ready to do business in the future.”

He goes on to say the proper handling of many elements is what makes their website a successful part of the business. The first is making sure people know Cropp-Metcalfe is online.

“We get a decent amount of traffic because we put our Web address everywhere. It’s on our vehicles, in all our advertising and in the search engines. We even put inserts in our invoices inviting customers to pay their bill online.”

Cropp-Metcalfe’s e-commerce activities also include using Authorize.net (www.authorizenet.com), a wireless credit card processing system used in the field to process credit cards and print receipts. Within the next 12 to 18 months, the contractor hopes to add parts and service contract sales to its website.

The Internet promises great potential to the hvacr industry; however, significant time, money and planning will be necessary to make the transition to an e-commerce business model. Perhaps one thing we should learn from the dot-com prospectors who went before us is patience.

Keep in mind, there is much more gold in “them thar hills,” and our job is to learn how to mine it without going broke in the process.

Urbanski is an international speaker and writer on Internet trends and topics including Internet marketing, building better websites, training employees through e-learning, and e-commerce made easy. He can be reached at Brian@netmagic.com (e-mail).

Sidebar: Why Not Have a Website?

LITTLE ROCK, AR — When contractors ask Bill Lusk why should they create a website, the owner of Media Graphics and Communications (Leslie, AR) is quick with a reply.

“I turn around and ask them, ‘Why not have a website?’” Lusk said. “I ask them if they want to market their business, and if so, this is the way to do it.”

Lusk was one of the speakers at the Arkansas Hvacr Contractors 2001 State Conference. During his presentation, “Why the Internet is Important to Your Business,” Lusk informed attendees how a friend was overwhelmed with success from having a website.

“He put up firewood to sell — firewood!” Lusk said. “He eventually had to take down the site because he was getting orders for firewood from all over the country. He ran out!”

Lusk said that his friend was able to pay for his initial website costs in short order. In his estimation, all it takes is one good order to pay for a website. And most of the costs are up front, too.

“Once a website is built, it’s done,” said Lusk, who has produced many websites for customers, including www.shoptheozarks.com, a popular Arkansas site. “Maintenance is very simple after that.”

Lusk cited the simplicity of making changes to the website once it is up and running. He said updated information, such as pricing and new products, can be added with the click of a mouse and cause little disruption on the website.

“You can change information immediately,” he said.

Lusk told Arkansas contractors that it is important to maintain and promote the website. The key, he pointed out, is to have one — period.

“A website is an investment. It is all part of the bigger scheme, like making an investment in your inventory,” he said. “People aren’t going to take you seriously unless you have a website, because everybody else has one.”

For more information on website development, visit www.mediagraphicsand communications.com.

Publication date: 08/13/2001

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