16 Ways To Keep A Business Alive As Commerce Goes Online


1 Verified Reviews - 4 of 5.0

 'So dawn goes down today, nothing gold can stay.'

Robert Frost

 'There are no more power elites.'

Manuel Castels in The Information Age

The painfully obvious implication of these quotes can be seen in the business world: IBM pulls its PCs out of retail venues because it no longer considers them profitable. The Wall Street Journal reported that in 1998, there were $301 billion in sales via the Internet, while the manufacturing sector did $350 billion in overall business. It took the Internet roughly 36 months to reach this figure; manufacturing needed 150 years.

However, Bill Gates once warned that Microsoft's supremacy could be temporary. Nothing stays in place because there are no more power elites, pillars, safe harbors, or certainties.

This leaves the question of how businesses can stay on track and out of trouble in this new and totally different environment. Here are some guidelines:

1. E-commerce isn't for every business. That might sound somewhat shocking these days, but look around. Levi-Strauss, for example, made a valiant effort to sell customized jeans over the Internet. It just didn't work. Visiting a Levi's store might be the best way to get the right fit after all, at least for now.

Dry cleaners often tell customers that they can check the status of their orders via the cleaner's website. This is a good example of using technology to take a step backwards. It's high-tech, but it isn't useful. Give customers same-day service, and they don't need to check on when their clothes will be ready.

'We want to get into the E-economy,' says an insurance agency vice president. 'Why?' asks the marketing executive. 'Everybody in our office thinks it's the way to go,' the vice president responds. More nonsense. Unless there's a valid, compelling reason to commit extensive resources to E-commerce, don't jump.

2. The Web isn't the only game in town. Flip through the ads in The Wall Street Journal. A majority of them are there for one purpose: To promote a website address. This should send a message to anyone wanting to increase website traffic.

Don't count on 'bookmark this page' instructions or overworked search engines to drive traffic to your site more than a few times. And don't rely on third parties to direct visitors your way.

You need carefully crafted and properly funded promotions using a variety of marketing tactics and plans to keep customers coming to your website.

3. Traditional marketing channels are still valid. The aim is to get attention. The Internet makes this job more complicated, not simpler. You need to use the full range of marketing techniques. Direct mail, for example, is far from dead. In fact, it appears to be becoming even more effective as the junk moves to E-mail. What finally arrives at someone's desk or mailbox has a better chance of getting attention. The rush to fax and broadcast E-mail comes under the 'quick hit' heading.

'Don't do it right, just do it fast and cheap.' This idea is more menace than marketing. Whether it's advertising, direct mail, print newsletters, marketing brochures, or public relations, the goal is to understand customer needs and focus on them as precisely and effectively as possible. Traditional marketing channels can still do all of this quite effectively. Anyone ready to abandon these channels should realize that these are the vehicles being used to bring traffic to websites.

4. Marketing is an exercise in expert juggling. The Web hasn't changed this, although it offers brilliant new opportunities to accomplish one primary goal: Meeting the specific needs of individual customers in ways they want to be served. To accomplish this goal, even small companies need to maintain multi-faceted, integrated marketing programs consisting of self-promotion, public relations, and advertising. You need to approach customers in a number of ways simultaneously to capture their interest. This requires careful coordination and management to succeed.

Placing all of a company's marketing eggs in any one basket, such as the Internet, can be dangerous. A website requires continual infusions of dollars and time, which can siphon away resources from other parts of a marketing program that includes the Internet but also recognizes the need for an integrated marketing effort.

5. Plan or perish. Strange as it might sound, although there's always value in bringing order out of chaos, a well-organized and properly implemented marketing plan isn't the complete answer. Even with the best research, things sometimes don't work out as planned. Former Coca-Cola marketing guru Sergio Zyman says that it's equally important to have a 'destination plan.' The marketing task isn't so much about answers as it is about asking the crucial questions. In many cases, the marketing plan sounds the alarm when reaching the destination appears to be in jeopardy -- allowing you to change your course.

6. Use the Web as a bellwether. Successful E-commerce seems to reflect directly what customers don't like and what they want changed. For example, selection is important to many customers. If they're shopping for luggage, they want to know what's available, and going from store to store takes too much time. Going to E-bags.com, however, is quick and easy. Traditional booksellers were shocked when websites selling books appeared. Of all products, this is the one that customers need to touch and browse, they said. Evidently all customers aren't like that, particularly when they heard, 'I'm so sorry, we don't have that book, but we'll order it for you. It will take only a week or two.'

Transforming unpleasant and painful experiences is where the Internet shines.

7. All that counts is the customer. Aren't those words obvious? Not always. Consider your personal experiences with banks, bakeries, doctors' offices, restaurants, electronics stores, supermarkets -- anywhere! Do they always treat you as if you come first? Then there's that common voice-mail message, 'Leave your name and number. I'll get back to you when I can.' How about the number of unanswered voice-mail and E-mail messages?

Does this sound as if the customer comes first? We tend to put our agenda first, not the customer's; we want to be in front of prospects when we're ready. Look at most sales letters and literature. Most are written from the point of view of the company doing the selling. Where's the customer? According to Forrester Research, online (or 'click') merchants generate greater customer loyalty than their bricks-and-mortar counterparts. Even if you've been buying home appliances from the same dealer for 30 years or clothing from a particular store for 15 years, those businesses probably have made no effort to understand your behavior or buying habits. But the first time you visit Landsend.com, you're viewed as an individual they want to understand.

8. Get outside of yourself. It's easy to be self-centered in business. It's also dangerous. Companies, like people, tend to think mostly about themselves -- who they are and what they want. 'Most business theories are too inward directed,' wrote Regis McKenna in Real Time. 'More attention should be paid to the external forces of change.' When auto manufacturers focused on what customers wanted, cup holders appeared in cars. Are splashy-looking computers friendlier? Ask Apple. Marketing breakthroughs are the result of looking outward. It's surprising how few companies are willing to invest in research but are willing to bet the ranch on gut instincts. Outside of the world of business, such behavior would be described as foolhardy.

A sales-seminar speaker asks participants how many read USA TODAY every day. It turns out only about three in 100 do. Yet this popular publication describes new trends daily. If you're one of the 97 not reading it, ask yourself why.

9. Get rid of company mission statements and core values. If mission and vision statements, core values, and company cultures were nothing more than innocent diversions occupying the time of underworked (and overpaid) executives, they might be justifiable. Actually, they're quite destructive. They create limitations that inhibit creativity, thwart agility, and defy change. Vision statements erect barriers and create set patterns of thought and behavior. This used to be IBM's problem, and it has raised havoc at General Motors for decades. A middle manager might be concerned about whether a particular job candidate will fit into the company culture. This might be the most important reason to hire that person!

10. If you see it, don't believe it. Doppelgangers pervade business. There's a lot of talk about innovation, but talk is all it is. Business strategies are clones of the competition. Apple brings out its unique and colorful iMac, and then along comes Compaq with its knockoff. The colorful iBook laptops were quickly disdained by the competition-but almost immediately IBM offered color inserts for some of its laptops.

Do customers want colorful computers? Perhaps. Just because Apple thinks so doesn't make it right for another company. Just because one business appears to have an E-commerce edge doesn't mean it's right for another company in the same industry. Seeing isn't believing.

11. Not all ideas have equal value. The Internet has truly leveled the playing field for ideas, so any thought, no matter how ignorant or ill-informed it might be, has a place on the Web.

In business, critical thinking is now necessary more than ever. It's painfully common for an executive to say, 'I never watch those shows' and veto a media buy on the strength of this formidable evidence. Or the president, passionate about his or her story, proclaims to the public relations team, 'This is front page stuff!' without having an editor's background to recognize genuine newsworthiness. An idea isn't great simply because someone had it.

12. Just because it works doesn't mean it's right. This is a strategic issue, not a moral one. Business was very good for a New York-based manufacturer as orders rolled in. Recognizing that the company was starting to plateau, management called in a marketing consultant. A series of customer interviews revealed very high customer-satisfaction ratings. This was a valued supplier, but it was shipping one kind of product: What customers needed fast. It worked, but it wasn't the right focus for the manufacturer. Other vendors got the 'regular' orders. Anyone who could meet the manufacturer's delivery schedules could take its business away. Although the manufacturer's systems worked efficiently, the company was vulnerable. To avoid a possible catastrophe, the company planned and implemented a shift in focus by introducing a proprietary product line.

13. On the Internet, the watchword is 'free.' Perhaps the farthest-reaching change brought about by the Internet is the value of 'free.' Netlibrary.com is a free public library. Borrow or buy a book-it's your choice. There are many free books, and for only $29.95 a year, you can access an even larger collection. Encyclopaedia Britannica tried to sell access to its 30 volumes online for $5 a month. It didn't work. Then it offered the access for free, and 10 million people attempted to visit the site the first day. With such a powerful pull, Britannica is attracting advertisers.

E-greetings Network, Inc. had the same experience. When it sold greeting cards on its website, it attracted 300,000 users. When it gave the cards away, 7 million visitors arrived. CEO Gordon Tucker said, 'Charging for cards was a small idea. Giving them away is a really big idea.' David Cowan of Bessemer Venture Capital added, 'People expect a lot of things for free. And if you don't give it away, some other start-up will.'

So 'free' doesn't mean that the companies have to lose out. Advertisers are now paying visitors to visit their sites.

14. There will be no more hunters. In selling, the image of a 'hunter' (a male) going in for the kill remains intact. The notion of the 'gatherer' (a woman) as a salesperson is disdained. Now this notion is crumbling like the Berlin Wall. The Internet turns the tables -- the successful salesperson will be the gatherer.

Selling today requires nurturing prospects, and the gatherer uses a cultivation and harvesting process to make the sale. There's an interesting implication in all this. With such dramatic changes in buyer behavior, it's probable that sales, like other professions, will be rejuvenated by people in whom the traits necessary for cultivating and harvesting are often observed: Women.

15. It's 24/7 for everyone. Although some people erect firewalls between work and their personal life, the direction is toward a blending of the two. A wired world sets no boundaries on place or time. This translates into changing customers' expectations.

In an amazing about-face, customers are less willing to travel to make purchases. Online buying is breaking the back of a deeply ingrained 50-year shopping-center mentality. You might want to check out the luggage at 7:35 a.m., browse again at 12:19 p.m., and make the purchase at 10:07 p.m.

16. The customer is in charge. Forrester Research concludes what might seem obvious about online buying behavior: Customers want convenience first and foremost. 'Dell or Be Delled' intoned a Wall Street Journal headline. Focusing on the main reason for computer mogul Michael Dell's success, the writer stated, 'Dell has bypassed traditional distribution channels and gone directly to the customer.'

Although the mom-and-pops adhere to their 'We give personal service' mantra, the customer sees it differently: 'I'll shop where it's easy and convenient, and where someone is paying attention to my needs.' Such a statement marks an abrupt and far-reaching shift in buyer behavior.

It's ironic that a debate is raging over privacy on the Internet at the same time that customers are eagerly providing online retailers and service companies with an enormous amount of personal data. Customers know that the information is needed if they're to be served in precisely the way they want and expect. The more information available, the better the service.

There's a message in all this. There are no more power elites. The changes brought about by the Internet aren't just about doing it better and faster, although this is essential for survival. These 16 strategies might not cover every eventuality or solve every problem, but they can point a business in the right direction.

John R. Graham is president of Graham Communications, a marketing services and sales consulting firm. He wrote The New Magnet Marketing (Chandler House Press), an update of his book, Magnet Marketing, and 203 Ways to Be Supremely Successful in the New World of Selling (Macmillan Spectrum). He also writes for a variety of publications and speaks on business, marketing, and sales topics. He can be reached at 40 Oval Road, Quincy, MA 02170 (800) 659-0069, fax (617) 471-1504, E-mail [email protected], or at the company's website at www.grahamcomm.com.
Login or Register (for FREE) to gain access to thousands of other great articles.

There are no comments posted.
Search Articles/Libraries 
Select a Category
Choose a Content Package
Content Packages 
  • ~/Upload/Images/ContenPackages/editor@completemarkets.com/imms_logo.png
    This article is part of the IMMS Library, which contains more than 2451 documents published by industry-leading authors.