Interland (NASDAQ:INLD)
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Business Leaders List Revenue Growth, Customer Retention and
Expense Reduction as Top 2005 Business Priorities, and Cite Inflation,
Trade Deficit and Energy Prices as Threats
Interland (Nasdaq:INLD), a leading provider of online sales and
marketing services for small and medium-sized businesses, today
announced the results of the Interland Spring 2005 Business Barometer,
a nationwide survey of 1,032 leaders of small and medium-sized
businesses. The detailed report, which reviews issues impacting small
and medium businesses -- such as Social Security and tort reform --
can be downloaded at http://www.interland.com/about/news/.
The findings revealed that two out of three business leaders
clearly believe that business Web sites influence overall sales, both
on- and off-line. In addition, 94 percent say their businesses have
Internet access, and seven out of 10 cite email as very or somewhat
critical to their business.
When asked to name their top three 2005 business priorities, all
tracked back to the bottom line, with 79 percent of business leaders
naming revenue growth, 70 percent customer retention and 46 percent
expense reduction. The group named rising inflation (44 percent), the
current trade deficit and the collapse of the dollar's value (40
percent), and energy and other supply shortages (40 percent) as the
top three immediate threats to the success of small and medium-sized
U.S. businesses. Meanwhile, the group identified the top three
greatest strengths of U.S. businesses as technological lead and strong
productivity (49 percent), democratic government (46 percent) and a
flexible economy and labor force (39 percent).
Specific to the impact of Web sites on business sales, 44 percent
of those with Web sites said they generated from 1 to 25 percent of
their 2004 revenues through online purchases or offline purchases that
were influenced by their Web site. Additionally, nearly a quarter (24
percent) say 26 to 100 percent of their revenue was attributable to
having a Web site.
The report showed that of the 24 percent of those businesses
surveyed which are actively using e-commerce features (such as online
payment transactions, online business forms or email requests) to sell
through their Web site, 87 percent are receiving monthly revenue from
their Web site. In fact, 42 percent say they derive more than a
quarter of their monthly revenue from their Internet presence.
"This study shows that small and medium-sized businesses that are
using the Internet to market their services and offerings are getting
a clear return in top-line revenues for their investment," says Joel
Kocher, CEO and Chairman of Interland. "Looking at the data carefully,
you can start to see how tightly online tools and services are
starting to fit with small-business priorities. For example, business
email can be used to help up-sell and cross-sell, to help reinforce
customer loyalty and to reduce business expenses. We are getting to
the point in most small-business categories where it will soon be safe
to say that if you're not online, you're not really serious about
being in business."
The group was polled on business e-mail usage habits, and a
dramatic 70 percent said e-mail is critical to their businesses. When
asked how they use their business e-mail, 72 percent said to
communicate with existing customers, 56 percent with partners and
business associates, 53 percent with potential buyers, 36 percent with
employees, 33 percent to get and request bids, and only 14 percent
said they don't use e-mail in their business.
"Clearly, e-mail is a tool small business owners can't do without,
and this reliance on online communications is helping to fuel the rise
in the number of small businesses with Web sites," says author and
small-business expert Kim T. Gordon, president of National Marketing
Federation Inc.
The group of small-business owners surveyed was asked to select
three marketing tools critical in driving business for their
companies. Topping the list were community relations (55 percent), Web
sites (47 percent), followed by public relations/media coverage (31
percent). "It makes sense that these three marketing tactics top the
list, since they represent affordable, yet highly effective ways to
grow your business," says Gordon. "They're also interrelated because
if your community relations and PR are working, they're going to drive
customers to your Web site to learn more about what your company has
to offer. What's also truly eye-opening here is that more than half of
the small businesses surveyed now have Web sites in place, and a full
96 percent of those say their online identity is critical to their
success."
Other tools small-business owners cited included direct mail (26
percent), which just beat out the Yellow Pages (23 percent), followed
by email marketing and newspaper advertising (both at 21 percent).
Search engine keywords (18 percent), telephone marketing (10 percent)
and outdoor advertising (10 percent) all broke the double-digit
threshold. At the bottom of the list were magazine advertising, print
coupons and radio advertising (all three at 6 percent each), and Web
banner adverting (5 percent).
Other interesting data points show that only 22 percent of those
surveyed think Congress will pass major Social Security reform in 2005
or 2006; however, 43 percent say the system is in crisis and needs to
be fixed now. On the topic of tort reform, 45 percent were uncertain
if it would benefit them, 33 percent said tort reform would benefit
small and medium-sized businesses, and 22 percent said it would not.
Surprisingly, two-thirds (66 percent) of small businesses admit they
rarely or never evaluate the risk of getting sued when making business
decisions.
About the Interland Spring 2005 Business Barometer
During April a total of 1,032 leaders of small and medium-sized
businesses participated in this invitation-only, nationwide online
survey of organizations with 500 or fewer employees. Company size
ranged from less than $250,000 in revenue to more than $5 million, and
68 percent had been in business for five years or more. Fifty-three
percent of respondents said they had a business Web site. Industry
breakouts were as follows: 38 percent business services, 29 percent
retail, 28 percent personal services and 5 percent non-profit. The
margin of error for the survey is plus or minus 3 percent.
About Interland
Interland, Inc. (Nasdaq:INLD) is a leading online services and
Web-hosting company dedicated to helping small and medium-sized
businesses achieve success by providing the knowledge, services and
tools to build, manage and promote businesses online. Interland offers
a wide selection of online sales and marketing services, including
standardized Web hosting, eCommerce, application hosting, and Web-site
development, e-marketing and optimization tools. For more information
about Interland, please visit www.interland.com, email
moreinfo@interland.com or call 1-800-336-9883.
EDITOR'S NOTE:
Camera-ready charts and graphs of the findings from the Interland
Spring 2005 Business Barometer are available by contacting Mike
Neumeier by phone at 404-451-7832 or by email at
mneumeier@interland.com.