The revenue-generation engines of many HB 500 companies are relocating from brick & morter to Web & wire.
Across all industry sectors, companies on the Hispanic Business 500® are adopting the latest technology and using Web sites to score orders or lure customers. In 2005, 400 companies on the 500 depended on a Web site to generate some portion of their revenues, up from 66 in 1996.
Many of these companies are using multimedia advertising, including television, radio, and print as well as regular and e-mail to drive their Web-based revenue growth. Strategies range from targeted promotions and incentives to new business partnerships.
TradeStation Securities Inc., founded by brothers and co-CEOs William and Ralph Cruz, leads the way. The Plantation, Florida-based company – which sells sophisticated online securities trading platforms to traders and "serious investors" – earned nearly all its 2004 revenue of $71.8 million via the Internet (see chart, "2006 Top e-Business Companies," which ranks the top 20 Hispanic Business 500 companies by percent of revenues earned online in 2004).
But a Web-based sales presence doesn't stand on its own. TradeStation helped drive customers to its state-of-the-art site by spending $3.8 million on advertising in 2005, up from $2.7 million in 2004, according to the company's 2005 financial reports, which add that revenues climbed about 35 percent in 2005, to $97 million.
The company also uses telephone call centers, direct mail, and e-mail to attract customers to its Web site. "The e-mail blasts are pretty significant. It's an important part of our marketing strategy," says President and COO Salomon Sredni.
Investing in this multimedia push seems to be working. TradeStation reported 23,973 trading accounts at the end of 2005, up 31 percent from the previous year. The average TradeStation account trades about 530 times per year, while the average trade frequency for Ameritrade and E*Trade accounts is about 10 times per year, according to annual financial reports.
Other top-ranking Hispanic e-commerce businesses include:
• 7Search.com, a Chicago-based pay-per-click advertising and affiliate network that generated 100 percent of its 2004 revenues of $6.9 million online.
•Fulfillment Corporation of America, based in Portland, Oregon, which provides order processing and inventory management services, and earned 98 percent of its $9.2 million 2004 revenue via the Internet.
•Miami-based Alienware Corp., which sells gaming desktops, media centers, notebooks, and accessories.
In 2004, Alienware reported earning 75 percent of its total revenue of $112.4 million online, or $84.3 million. This qualifies the company as the top online revenue generator among the top 20.
Measures of Marketing Punch
Alienware's marketing strategy employs technology to target mostly males, generally between the ages of 20 and 30. E-mail blasts and the Alienware Insider, an online newsletter, reach more than a million people, says Mark Vena, senior vice-president for marketing. Customers who click on certain products
but don't buy them receive e-mails about those items.
A call center in Costa Rica also solicits customers and steers them to the Web site. Alienware advertises with banners on CNET, Yahoo!, and Google, and also has online partnerships with brick-and-mortar retailers. For example, consumers who click on the Alienware logo on Circuit City's Web site can see its products and prices.
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