Interland’s Small-Business Leader Survey Shows Websites Key In Keeping Businesses Healthy, and Important Holiday Sales Tool

Interland’s Small-Business Leader Survey Shows Websites Key In Keeping Businesses Healthy, and Important Holiday Sales Tool

ATLANTA — Business Leaders Say They Are Bullish on Online Holiday Sales, Driving Leads Through Websites and Using the Web to Create Competitive Advantage

Interland (Nasdaq: INLD), a leading provider of Web-hosting and online services for small and medium-sized businesses, today announced the results of the Interland Fall 2004 Business Barometer of Online Activities, a nationwide survey of 530 small-business owners.

The findings reveal that a high percentage of small businesses report their websites have made their businesses healthier, helped them weather the economic downturn and are generating sales leads. In addition, a clear majority (87 percent) says online sales during the 2004 holiday season will be as good if not better than the 2003 online holiday shopping season. More information about the survey, including downloadable findings, can be found at http://www.interland.com/about/news/.

Of those surveyed, 77 percent said their business is healthier – has a better competitive advantage or stronger economic footing – because they have a business website. A majority (55 percent) say having a website has helped their company weather the economic downturn, and 81 percent report that their website generates leads for their business. When examining the ability of websites to generate leads by industry type, the findings clearly show that retail companies, business service providers, personal service companies and non-profits all report high levels of success.

As part of the survey, respondents were asked about their expectations for online sales during the 2004 holiday shopping season. Of the group, 45 percent said they expected online holiday sales for this year to be better than last year. Forty-two percent said they expected 2004 to be the same as 2003, and 13 percent project 2004 online holiday sales to be worse than 2003.

“Selling online is a must for any small business serious about succeeding,” according to Marsha Collier, author of Starting an eBay Business for Dummies and online selling guru. “With organizations like eMarketer forecasting online sales to be up as much as 29.3 percent and Nielsen//NetRatings reporting that eBay continues to be a white hot draw for consumers, being online is critical to any company. It is still not too late for businesses to capture a piece of the 2004 online holiday sales pie. Using pay-per-click programs like Interland MyEzClicks is ideal for any small business looking to jumpstart online holiday sales.”

When asked to identify the three ways they will “prepare for the 2004 holiday shopping season,” the majority of small businesses (58 percent) say they will update their website, 34 percent say they will offer special holiday-shopping promotions, 32 percent report they will engage in direct-marketing efforts and 32 percent say they will increase the number of items or services they sell. Increasing online advertising (29 percent) was on par with increasing offline advertising (28 percent). At the bottom of the list was updating in-store decorations (15 percent) and hiring temporary help (10 percent).

“We have continued to see the number of small-business websites grow over the past 18 months, with some experts estimating that as many as 75 percent of all small businesses already have an online presence,” said Joel Kocher, CEO and chairman of Interland. “The killer application that this group is now turning to is online marketing tools and services that help them generate leads and convert those leads into sales. This survey confirms that a website that provides leads and sales is what small-business owners want from their online investments. That is why we are providing turnkey services such as MyEzClicks, our paid-search advertising package that guarantees qualified website traffic without forcing small business owners to manage complex pay-per-click advertising campaigns across multiple search sites.”

The group was also polled on their anticipated annual revenues generated by their websites in 2004, and it’s clear that small businesses expect to profit from the Internet’s ability to deliver on its promise as a new sales and marketing channel. More than a quarter (28 percent) say they expect 26 to 100 percent of their annual 2004 revenues to be through online sales; 22 percent say 11 to 25 percent of their sales this year will be driven by their website; and 36 percent say anywhere from 1 to 10 percent of their sales will be generated online. Only 14 percent of those surveyed said they expect their websites to generate no revenue.

Small businesses themselves appear to not be shy about purchasing business products and services they need online. In fact, 85 percent say they do this. The most popular categories they buy on the Internet include office supplies (76 percent), software (60 percent), travel (50 percent), computer hardware (50 percent), web-hosting/web-site services (41 percent), broadband/Internet access (37 percent), print and online publications (36 percent), advertising/marketing placements (22 percent), telephony services (17 percent), data/databases (16 percent), technical support (15 percent), and professional services such as accounting, marketing and legal services (9 percent).

Those surveyed were also asked how they would most likely invest profits from their business. Topping the list were “take it to my bank account” (20 percent), “reduce business debt” (19 percent), and “use for market expansion” (13 percent). Ten percent said they would invest in “employee benefits,” 9 percent said “new product expansion” and 9 percent “office/plant/facility upgrades or enhancements.” Rounding out the list, 8 percent would invest in “profit sharing with employees,” 5 percent would spend it on “employee training and education,” 4 percent would use profits to make “Web/technology enhancement” and only 3 percent would put it in the stock market.

Other interesting data points show that 72 percent of respondents say they themselves (the owner or general manager) are responsible for their company’s marketing efforts. When asked to define the role of marketing in their company, 66 percent said to generate sales, 44 percent selected to generate leads, and 40 percent said to build credibility or brand awareness (respondents could select all that applied).

Conducted during October, this survey is part of Interland’s ongoing effort to understand issues important to small and medium-sized businesses in the U.S. This invitation-only online survey was administered to a nationally representative sample of business leaders (owners, presidents and general managers) of organizations with 500 or fewer employees.

Of the 530 participants, 57 percent had been in business for five years or more. Company size ranged from less than $250,000 in revenue to more than $5 million, with 86 percent reporting under $1 million in annual sales. Fifty-seven percent of respondents said they have a business website, and 81 percent of respondents reported having five or fewer full-time employees. Industry breakouts of the respondents were as follows: 41 percent business services, 30 percent retail, 24 percent personal services and 5 percent non-profit. For results based on the total sample, one can say with 95 percent confidence that the error attributable to sampling is plus or minus 5 percentage points.

About Interland

Interland, Inc. (Nasdaq: INLD) is a leading Web-hosting and online-services 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 services, including standardized Web hosting, e-commerce, application hosting, and Web-site development, marketing and optimization tools. For more information about Interland, please visit www.interland.com, email moreinfo@interland.com or call 1-800-336-9883.

All product and company names herein may be trademarks of their respective owners.

EDITOR’S NOTE:

Camera-ready charts and graphs of the findings from the Interland Fall 2004 Business Barometer of Online Activities are available by contacting Mike Neumeier by phone at 404-260-2649 or by email at mneumeier@interland.com.

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