Although net advertising’s being touted as God’s gift to marketing,
Morgan Holt sees a possible minefield
Believe the pundits and advertising in cyberspace will reach out to
individuals in a way not yet imagined. Yet companies persist in merely
converting paper brochures into Web pages where one message is supposed
to apply to everybody.
It is easy to forget that the Internet is just one more aspect of
interactivity alongside the fax, touch-tone phone and point-of-sale
kiosk. They’re all platforms that have a unique and distinctive appeal
but finding a use for the Internet other than shouting ‘I’m great; buy
me’ is proving difficult. Will your site be a personal space for each
visitor or one of the growing number of dead hoardings and ghost sites?
Backed by the American marketing guru, Don Peppers, a new mode of
Internet marketing is sweeping the Web as strategists find ways of
responding to what the customer wants.
Back to basics. Peppers restates the three rules of busines: know your
customers, ask them what they want, and give it to them. ‘The process of
‘interactively’ refining what the customer wants,’ he says, ‘ensures
that the customer is yours for life’ - and there’s no reason why the
Internet should be any different.
‘Get into the technology for the right reason. If you simply strap the
Net into your selling channels, you will inevitably fail,’ he warns.
‘The Net will never live up to the hype. It’s like strapping a jet
engine on to a railroad train to see how fast it will go. The jet engine
just wasn’t made to be part of a train.’
So companies looking for custom on the Internet should be aware that
there are rules to follow. ‘We’re in the age of information and the age
of customer information. When you embrace it, make sure you have a
customer bill of rights,’ he says. ‘Privacy is indispensable. It is
vital for customers to know their information is safe with you.’ If you
jeopardise it, you will never get your customers back.
Rule two is less simple. You can’t enter unless you know the identity of
the person who ultimately pays the money. Learning the identity of a
customer is more than getting a name and address. It involves learning
tastes and preferences by asking pertinent questions and watching what
people do. There is little point, for instance, in telling everyone what
great camera equipment you have when only a few will be interested. How
much better to find those few and tell them directly, perhaps offering
them some bargain deal for being so special.
The ideal focus for this information hunt is the cybermall, where people
will someday go shopping on the Internet. There are more than 700
already but each one is a daunting landscape of anybody and everybody.
The new brand of cybermall will be selective, personal and responsive.
First of the block will be the online service, Prodigy, in the spring,
closely followed by Virgin. Both will welcome you with some basic
offerings and gradually learn about you as you wander around. By the
time you register, your welcome page should reflect your hobbies and
Alex Dale, publishing director at Virgin’s Internet division, VNet,
says: ‘One of the biggest problems with the Internet is finding the
information, services and products you’re really looking for. This
[personal profiling] does it the other way round. It goes looking for
Adrian Wistreich, a director of the research specialist, Market Tracking
International, and author of the Campaign report, the Interactive
Future, says that ‘the majority of users already claim to have used the
Web to shop’.
Wistreich continues: ‘Forecasts of online expenditure of dollars 200
bilion by the year 2000 might seem wild, but it will still only be a
tiny share of total expenditure. Neither the current lack of intelligent
navigator software nor bandwidth will be limiting factors by then. The
Internet is ideally suited to the sophisticated loyalty club marketing
already widely used in mail order, and has many advantages over
traditional TV shopping channels.’
Few software companies have grasped this idea and the only one in Europe
so far is Broadvision Inc with its database that is tailored to what the
‘Changing the Web monologue to a dialogue is essential,’ Phelong Chen,
Broadvision’s president, says. Breaking away from ‘brochure-ware’ means
you can confidently say you own so many customers. That, and only that,
will draw the advertisers. ‘Gradually build a customer profile and
psychographic. Let the customers know they’re in control and that the
more information they give you, the more you can offer them. Then bribe
them,’ Chen adds.
Incentives are an important part of the customer profile. If customers
feel treated as individuals, they will reward you with their loyalty.
‘If you know your customer, you will cement your relationship forever,’
Rewarding that loyalty with incentives - air miles, discounts -
sprinkles a magic dust: on the Internet, small companies can compete
just as effectively as the giants.
In 1980, 17 per cent of the US workforce was employed by the Fortune 500
companies. After a decade of eliminating whole layers of management, the
same companies have 10 per cent. Information technology and the personal
touch has opened a hole in the ground where economies of scale don’t
matter like they used to - and the larger you are the more easily you
will topple into it.
And knowing the customer works both ways. Advertising your latest lowest
prices also advertises them to your competitors. You have a momentary
advantage, but it is quickly matched and competition forces everyone to
offer the lowest price to everyone.
Peppers sees the Internet’s future as one in which after-sales matters
as much as getting value for money. When you know a customer, you’re not
just selling products, you’re selling a service.
The Interactive Future is available from Keely Baker at Campaign on 0171
413 4306, price pounds 495 (paper version) or pounds 595 (CD-Rom plus