Surviving Online Consolidation

16 Nov

A version of this appeared on ClickZ.

The online world lives and dies by mergers and acquisitions. Every time someone finds a niche, others race to expand the market. That leads to fragmentation and, inevitably, attempts to consolidate.

Some people thrive on it. Others run from it. But for those of us crafting Internet strategies there’s no avoiding it.

If you work with a dot-com company, there will come that acid test moment when your work, your gray matter, will be laid out on the table and someone decides if it is better than the other company’s. The best case scenario is that your strategy is dead on the mark where the two companies want to go together. Worst case is, well, let’s just say it’s a good job market out there.

So, how do you increase the odds that you leave the board room smiling?

Take stock of your assets. For a web site, the number one asset is the base of registered users. Every name in your database is cash in the bank, provided you got the names cleanly and with full disclosure.

It’s a simple point, but too often lost on companies moving at Internet speed. If you sign up someone for a special promotion, make sure the opt-in language makes clear that you want to retain the opportunity to talk with them beyond the promotion at hand. You’d be surprised how many email addresses Fortune 100 companies have, but will never be able to use, because they failed to plan ahead.

Make sure you’ve got an active communications program for those users. If you aren’t talking to them, it’s hard to convince someone they’re worth paying for. Outbound communication programs provide an ongoing source of information on your users’ habits. Document the response rates, the offers that generate the best response, and determine which portion of your users account for a disproportionate amount of revenue.

And while we’re on the subject of databases, make sure your web site is built on an expandable foundation. That means the databases are programmed in commonly used languages and not conceived in such a way that it will be cheaper to replace them than modify.

Of course, that means finding a top-notch database programmer. They demand their weight in gold, but in the long run they’re worth every penny. These people, in essence, are your gardeners, tending and nurturing your key asset.

Next on the check list are two inextricably linked items: The web site’s positioning and the traffic through it. Without exception, if you are building a site just to sell your product, you’re living on borrowed time. If there’s a common theme to all the ClickZ material, it’s this: Speak to your customers. Don’t sell to them. That means building sites that look beyond the sale itself to create bonds with visitors.

Start with the interface. It’s easy to craft a look and feel that moves people quickly to the point of purchase. But it takes some thought to make sure the interface delivers the right message. And when two companies combine efforts, the clearest message will always prevail.

Evaluate the online offerings to include content that extends beyond your immediate sales needs. If you’re selling retirement planning services, the site should offer travel-related material, or maybe a grandparent’s issues column. The direction should come from the company’s business plan. Look at the exit strategy and build towards that goal.

An extended content mix will build traffic to the levels where those at the negotiating table will think long and hard before shifting direction. No one wants to walk away from an audience.

Every site out there should have the potential to become its own self-sustaining entity. So craft a long-term strategy that leads the site to dominate its niche. If you succeed, the site itself becomes a asset of substantial value. Even if you fall short, the results will be far superior to a simple “build it and they will come” strategy.

Lastly, there’s the age-old strategy of the best defense is a good offense. Don’t wait for another company to find you. Find your acquisition target, potential partner or suitor. Even if you aren’t in the position to drive the deal, you are in the position to know what’s happening online. Use that credibility to advance recommendations.

That way, when the moment of truth arrives you’re leading the discussion, no swallowing hard and thinking about polishing your resume.