Foreign Perspectives

Archive for the ‘Development’ Category

Whilst we’re all looking for rapid growth in our businesses, if that rapid growth happens to arrive unexpectedly it can cause equally unexpected problems.

Moving from being a small scale business to a medium sized one in any market is usually a very big move. On the small scale, it’s quite possible to operate very much as a cottage industry in many fields with the owner doing a lot of the work themselves. As the scale moves up though a point arrives where automation in some form is a necessity and that’s where many businesses fall down through not having prepared for it.

I say automation but, of course, another option is to take on staff. In the “real world” it’s additional staff that is usually the way to go but online automation is often the preferred route although not necessarily the easiest one. In fact, often automation is essential online simply because growth can be very, very rapid and so much so that taking on additional staff may not be a viable option. Sure you can hire staff if you find that you now have two or three times the number of customers that you had last year, but if it’s 10 times the number of customers you had a couple of months ago then it’s a different matter.

Fortunately, the Internet provides the tools to let you scale up your offering without major hassles. Ten times the number of customers online isn’t the problem that it would be in the real world. If you’ve used standard software then chances are you may well get away with simply upgrading the hosting package for your website as the number of customers grows.

What’s dangerous is to take it for granted that you can simply upgrade in that way forever though. There are upper limits that shared hosting packages offer before you need to move onto VPS hosting or even a dedicated server and in some cases those upgrades may mean you looking to hire an IT expert to support it all for you.

Although you can usually assume that you’ll get around a 1% return on any marketing that you send out, now and again you can get a much better response if you happen to hit on exactly the right message and target it at exactly the right group of people at exactly the right time.

The message that you use is the one variable that you have a great deal of control over and it’s worthwhile running a test of each marketing e-mail that you plan to use in your campaigns before you send the mail to everyone on your mailing list. By testing on a small group you have the chance to modify the text and get a better feel on the level of response that you might expect which in turn let’s you stage the mailing appropriately.

Unusually for us, we decided to short-circuit that process and just send out a brand new e-mail to our latest mailing list without any prior testing which has resulted in a certain amount of chaos in the last 24 hours.

For a start, the e-mail was unexpectedly attractive to the target audience which resulted in the webserver slowing to a crawl almost immediately after the e-mail went out. The volume of people looking at the site was so great that within a few hours we used up as much bandwidth as we normally do in two days. This in turn reduced the take-up as it was so slow at times that the signup form was timing out for some people. Finally, the responses coming through were so many that it looks like it will take us an entire day to process them all.

And all this for an e-mail that was sent out in what would ordinarily be a time of week that would produce quite a low immediate response rate for us!

I think in future we’ll make more of a point in testing any new messages that we issue.

Over the last couple of years we’ve watched our very own French gite listings site slowly but surely climb the ranks in the search engines.

Now that it’s a middling size site, roughly comparable to the likes of VisitFrance in size it’s great to see that it’s sitting right there in the middle of all the fully commercial sites and, moreover, often towards the top of that list.

What’s confusing though is quite simply: why? After all, several of those commercial sites are spending quite serious amounts of money in promoting their site whilst we spend very little comparatively speaking. We know for a fact that at least one of the middle ranking sites (which we rank much better than) was spending around £3000 per year on marketing up to a year or so ago.

Confusing too is how come we’re not innundated with applications to list on our site in that we charge a maximum of £29 whilst comparable sites are charging around the £100 mark and, for that matter, we even offer a “free forever” listing too whereas others limit their free period to six months.

One of the more interesting things that came up when I was in discussions about buying a commercial holiday accommodation listings site a year or so ago was the level of turnover in the properties listed on it.

Would you believe that the renewal rate of property listings is around 50-70%? Think about it: that means that there is pretty much a complete change in content of the listings sites every two or three years.

The turnover is presumably at the higher end of the range of the scale for smaller sites (say around 500 entries) but even then that means that they need to attract around 250 new entries per year merely to replace those that don’t renew which in turn means around 25, 000 e-mails to do that for the small sites (assuming a 1% return on marketing). For a large country-specific site (say around 2000 entries), the dropout % is lower but the absolute number of dropouts is higher at around 700 thus requiring something like 70,000 e-mails (assuming a 1% return on marketing).

Those stats are particularly interesting to me in that my own dropout rate is made up of those getting out of the business and is therefore somewhat lower at around 1%. This in turn means that, slowly but surely, I will become one of the larger listings sites. I’ve already caught up with the scale of that listings site that I was going to buy and hope to finish the year with around twice the number that they had when I was looking at them.

With that extra scale comes extra hits on the site and I’ve needed to upgrade the hosting package I use three times since Christmas as a consequence of that jump in size since Christmas a year ago. This, of course, means extra bookings for all those listed on the sites too.

By far the most popular post on our Whole Earth Guide is the one detailing how to go about opening a bank account in America.

The reason is simple really: if you run an online business then sooner or later you generally find yourself in need of an American bank account. Unfortunately, the increased security measures in place post 9/11 mean that it’s not quite so easy to open one these days unless, of course, you’re living in America and therefore a considerable number of websites have grown up with the specific aim of selling you the required information.

Our site doesn’t charge for that information and therefore is increasingly popular as it provides exactly the same information that other sites charge anything from $5 to $250 to provide.

However, we’re sorely tempted to start charging for it too given some of the emails we’ve received demanding additional information and wanting to know why it isn’t on the site yet. What we’ll likely do is to charge for the hand-holding level of information or at least offer it for sale as the information on the above page is quite sufficient to allow anyone to open an account in America.