Start-up Entrepreneurs' Blog

What Happens When a 3rd Generation Business Goes Online

October 25, 2012

There are many business to business companies that wonder whether an online presence would really be helpful to them and want to know what to expect when trying to create this new online strategy. When companies are new, creating an online presence through websites, social media, video channels, and the like seems obvious and is often done. But when a company has been around for decades, there is the question as to whether this new technology is worth the effort.

This is exactly what Gilbert Welsford, Managing Director at ValveMan (www.Valveman.com) faced. I think you can learn so much more by just reading someone story about their efforts and triumphs than by reading an instructional or how-to book. I hope my readers find my interview with Gilbert informative and helpful.

Cynthia: Tell me about your company. I understand this is a well-established company that has been selling valves for decades, and you spearheaded the effort to add an online business into the traditional mix. Why did your company decide to establish an online presence? What were your initial objectives?

Gilbert: Well, I am the third generation of our family business and I had the idea that I believe could take our business to the next level. I actually came up with the idea while on a 13.5 hour plane ride over the Atlantic when I was 14 but it wasn’t until I was 18 that my father trusted in me enough to give me the startup capital to build the business. Our initial objectives were to grow our sales reach. Our core business focuses sales efforts for valves in only 4 states and I wanted the other 46 to be targeted.

Cynthia: Can you tell me what steps you took to get started online? What worked and what didn’t?

Gilbert: Well, this comes back to my initial reason for contacting you. The whole premise that ecommerce is not a build it and they will come business. I really believed initially that if we built an amazing website, people would use it and we would sell tons. So, as a result we spent wayyyyyy too much time and money on building the initial website, which we scrapped about 6 months after it launched. We started our business by selling some of the most custom and complex valves in the industry. But, in reality, we should have started with the smallest, simplest valves, and worked out way up.

Cynthia: What was your biggest initial challenge and how did you overcome it?

Gilbert: Our biggest initial challenge was marketing. Since, at the beginning, we really did not focus too much time on marketing. The way that we overcame this hurdle was by focusing less on the nitty gritty details of the functionality of the website and more on the marketing of our brand and site.

Cynthia: What lessons did you learn about starting an online business?

Gilbert: It is not easy. We really believed that ecommerce was going to be as simple as spend lots of money upfront and make lots for years to come. However, in reality, it takes just as many marketing dollars to get an order as it does through other means; it is just in a different avenue of marketing.

Cynthia: One of the biggest issues new online businesses have is to know when the website is working. It’s easy to hire someone to create a website. However, driving traffic to it is harder and capturing sales even more difficult. If you get no sales, you know you’ve done something seriously wrong. The most difficult case is the marginal one where you get just enough to give you hope, but not enough for the business to thrive. What were those milestone markers that made you believe you were on the right track or that you should change course?

Gilbert: The thing that really helps us benchmark is looking at our analytics. Knowing how people came to our site is crucial. We know we are doing a great job with organic marketing when the majority of our traffic is coming from non-paid search and our incoming links increases. The other way we benchmark is by the quality of the initial orders we receive. We are a business that focuses on B2B sales, not B2C and so when we had too many residential people calling and asking for ‘expensive knowledge’ with inexpensive things, we knew we need to refocus our efforts.

Cynthia: The Internet is fairly new medium and people often have this belief that it’s cheap. I know a lot of companies that spend huge amounts maintaining page one ranking and effective pay-per-click advertising. I seem to recall Google saying that 5% of the advertisers get more than 85% of the traffic. How did you get and grow traffic to your site?

Gilbert: We do tons of paid searching, but from our niche experience, it does not work as well as organic searching. Now, that does not mean we do not do paid search. But, if we write a blog post about something very specific and someone is searching for a very specific valve or application, they are more likely to be ready for a quote, or even ready to buy a valve. If we paid $10 per click for the keyword ‘valve’ we would lose huge amounts of money because the majority of the people searching for ‘valve’ are not ready to buy the high quality, industrial valves we sell.

Cynthia: The online world was simple when websites were the only technology out there. Websites are now just one component of having an online presence. Now companies engage in social media as well. They use Twitter, Google+, Facebook, LinkedIn, YouTube, Qoura, and so on, as well as blogging. Have you used any of these components? Are they effective for your type of business? Is one more effective than the others?

Gilbert: Social media use for a B2B ecommerce business is very interesting. We have a Twitter, G+, Facebook, LinkedIn, and YouTube. However, we do not really use these different components for much more than just distributing blog posts. Our experience has proven that blog posts will generate more quality leads than the social networks because these posts come up on searches for technical issues. If a plant manager has an issue with a leaky valve, he probably isn’t going to go onto Facebook or Twitter to find the answer. He is more likely to go onto Google and hopefully we’ll come up on his search.

Cynthia: If you had to do it over again or were creating an online business for another company, how would you proceed? What would be the first 3 steps or tasks you would do?

Gilbert: Definitely start with simple products and then expand. When we launched our website, we had over 10,000,000 skews available. It would have been much simpler to start a website with 100 skews and then work towards those 10,000,000. We spent lots of money on a website build out without really knowing if we were going to be successful or not. So, 1- ask the customer what they want (I know every business book says this but I was too stubborn to listen as an 18 year old), 2- find a great reliable supplier for an array of products that other companies are not focusing on, 3- create a simple website, do some paid search, and really start blogging as much as possible about the products’ applications and uses, as well as the products themselves. Google loves when websites are resources for its searchers and so be a resource.

I want to thank Gilbert for this wonderful interview. It is so helpful to others. Much of being able to be successful comes from our expectations and this interview shows that creating an effective online presence isn’t as easy as the gurus say it is. Like anything else, it is a process to be worked through.

Filed under: Entrepreneur Interviews,Marketing & Sales

Tags: Gilbert Welsford, online family business, taking a business online, Valve Man