Coldfusion only displays variable names, not variables.

Hi! I'm just getting started with ColdFusion and I'm having difficulties already. I have the following:

<cfset firstname="bob">

<p style="font-color:#ccccc">Hello <cfoutput>#firstname#</cfoutput> it is so nice to see you</p>

But instead of saying "Hello Bob it is so nice to see you"

it says

"Hello #firstname# it is so nice to see you."

I'm using xammp for apache and using dreamweaver. Can anyone help me figure out why this isn't working correctly?