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Net profits questioned

A MERE two per cent of Australian businesses with an Internet presence reported a profit from transactions generated from and through their websites during 1999, according to a study by Marketing Focus research team leader Barry Urqhuart.

The study revealed 62 per cent of business owners and managers surveyed were disappointed with public response to their Internet presence.

However, all companies taking part in the study said they intended to retain their email and website addresses and would continue to develop their online image.

The least successful sectors for generating business through the Internet included tradespeople, professionals such as accountants and architects, small businesses and motor vehicle dealers.

Not surprisingly, businesses with successful Internet-generated responses included book and record stores, wine retailers, IT consultants and telecommunications.

Only 18 per cent of companies surveyed were able to transact business from their

website without the prospective customer being required to utilise another communication channel.

StarMall managing director Cliff Edwards said the problem with many websites was they were not truly functional for e-business.

Internet Business Centre production manager Lucien Sims said many small businesses were missing the point if they expected new business to “come in droves” as a result of their web presence.

“Those who want minimal expenditure on their site and still rake in the cash overnight will be disappointed,” Mr Sims said.

“To make an analogy, you wouldn’t just set up a shopfront with product in the window and not hire staff to sell it.

“There are a variety of outcomes a business may achieve through a web presence and one of the best uses is as a client retention tool.

“Many websites are essentially a communication tool that adds value for the client and strengthens an already visible brand.

“The real value on the web is not in business to client transactions but in business to business activities such as automating supply chains.

“The back end is where the web will provide most benefit to many businesses.”

Mr Urqhuart said Australia needed to take a lesson from US companies that spent six and seven-figure sums on marketing their websites.

“The Internet is – and will remain – a cost to businesses until development strategies and marketing budgets are documented and implemented,” he said.

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