| Although every business should be taking full advantage of e-commerce opportunities, not all businesses are e-commerce companies.
Yet even those that dont currently fit an e-commerce model can take advantage of Internet strategies and techniques. Over the long-term, it may be just as important to learn the lessons of the Internet than just to use it.
Here are a series of e-commerce-inspired concepts that can benefit any company:
Become a multi-niche marketer. At one time, it was location, location, location; now, thanks to the Internet, its niche, niche, niche. Customers using the Internet gravitate to those Web sites that provide products and services that most closely meet their needs.
From a marketing perspective, the task is to take this insight and apply it to a companys overall marketing strategy. For example, most businesses sell to a variety of market niches, but they fail market to them as niches.
A good example is a material handling equipment distributor. The management team reviewed the companys customer base and identified five industries where they were doing substantial business. Over the years, the company had developed expertise in each of these fields and had both sales and support staff who were highly competent to deal with the industry-specific issues in each one. The distributor changed its marketing to focus on the needs of each niche. Instead of seeing itself as monolithic material handling distributor, it came to view itself as a company with five business units.
Save customers time. Dont just say it; do it. A dry cleaning company tells customers its home pick up and delivery service saves time. Yet, to check on an order, the customer must go online. If the customer wants to pick up an order at a store location after hours, arrangements must be made in advance for a locker, and, of course, pre-pay the bill. Is this convenience? Does this save time? Isnt it more complicated and time-consuming than stopping by the dry cleaner on the way home from work? This is a case in which saying it doesnt make it so. And the demise of more than one highly touted e-commerce home delivery company seems to verify the need to deliver on promises as well as the groceries and dry cleaning.
While competitive pricing is, of course, critical, theres indication that time may be equally, and in some instances, even more important to many time sensitive customers. This is another effect of the Internet. Do people really shop for price when theyre surfing? Those who use priceline.com seem to. Yet, its pointed out that customers purchasing annuities via the Internet fail to search for lower priced products, even though they are quite readily available.
When time is the valued commodity, price is far less a deciding factor. Those who place a high value on time are willing to spend less of it finding the lowest price. To have their needs satisfied quickly, they are willing to pay a price.
Give the buyer permission to take control. The Internet is all about surrendering control to customers taking it out of the hands of the seller and placing it in the hands of the buyer. This is a revolution of unequaled proportions. Nothing else comes close. While it seems rather obvious, its difficult and in some cases impossible for companies to grasp.
For the last 100 years, the funeral business understood that control of the casket meant control of the funeral, and the funeral home was the only place to buy a casket.
What seemed like an immutable law is gone thanks to the intervention of the Internet. One dotcom casket maker advertises their price and our price for the same casket. One is $595 and the other is $1,995. Now, funeral homes must accept caskets purchased by customers elsewhere.
Priceline.com is built on giving the customer control. How many shoppers want to spend time telling a seller what they are willing to pay for a box of cereal? More than we might imagine. For a hotel room? Many more. Round trip air fare to London? Lots of customers. These sites are virtual classrooms, teaching the customer how to take charge.
Whats happening on priceline.com and in the nations funeral homes is anything but idiosyncratic. Its pervasive. The customer is in charge. Progressive businesses will recreate themselves to meet the challenge.
Portal the business. Whether youre excite.com or amazon.com, youve positioned yourself as a portal, the magnet thats designed to pull the Web surfer to one place instead of another. Its value is making a variety of stores available in one place with ease of access.
Amazon.com tiles are everywhere on the Web. The company gladly pays a commission for sales from anyones Web site. Even though it became the largest book dealer in the world, it never saw itself in the book business. It was a portal from the start, pulling millions of online customers to virtual venues. The customer looks for easy, quick, and reliable ways to do business and thats what amazon.com provides.
As a browser portal, Excite as well as Yahoo and others lets the customer build a virtual home, a place to live. Its not Excites homepage, its yours. You can customize it to fit your interests. You can do everything from email to order flowers and find a person from this one address. This is home.
Whether youre into e-commerce or not, the concept computes.
Give customers what they want information. The venerable Encyclopedia Britannica is a classic case history of both the instant decline in a traditional business and the rise of a new one on the Internet. The Britannica people thought they could charge customers for accessing the encyclopedia via their Web site. Few subscribed, apparently shocking the company. EB failed to take one fact into consideration: Information is free in an e-commerce environment. What makes the Internet different? The answer is simple: The Internet knocks down all walls of access.
Salesdoctors.com, for example, pulls visitors because it offers helpful information, and so do other companies. Most of the early online stockbrokers offered low fees and little or no information. Thats changed. Just check schwab.com. The site is advice rich because this is what customers want today.
The key, whether an e-commerce company or not, is to be an information resource for the customer.
Never stop recreating the company. The post-World War II business model continues to linger. Essentially, the concept was to get the company up and running smoothly and then it would, in effect, run itself. By implication, of course, this meant that the owner or owners could move into a virtual retirement mode about age 45. Following such a model today is to take a bankruptcy path.
A primary e-commerce lesson suggests that recreation must be constant. Companies are downsizing and hiring at the same time because required skill sets are continually changing.
Interviewing for a middle management position, a service company discovered that the applicants fell into two groups: those with 20 or more years in the work force and those with minimal experience. One group had outdated skills, while the other lacked experience to handle responsibility. It was easy to see what was happening: Those with 20 years of employment had been downsized, the second group would soon take their places.
Companies see the need to recreate themselves quickly and constantly. The cycles are shorter and shorter as customer expectations and competition drive the process.
Get serious about change. As the haze clears, its almost 100 percent certain that many businesses are in trouble as a result of the e-economy. Even with lots of fast footwork, the survival hurdles are high, too high for those who fail to respond properly.
Banks, as we know them today, will all but disappear from our street corners. Few, if any, of todays teenagers will ever step inside a bricks-and mortar bank. If this trend is even remotely accurate, why are some banks continuing to build branches?
Bankers arent alone, however. Real estate will become an online industry. When this happens, the real estate agents tight grip on properties will be broken and the ranks will thin. Fueling this demise is customer resentment over having to pay a commission for minimal services.
Insurance agents arent exempt, either. PricewaterhouseCoopers predicts 50 percent shrinkage over the next 10 years as the business moves online.
Car dealerships will undoubtedly undergo change as fast as any industry. A combination of product inventory inefficiency (Why keep so many cars in so many places?), high-valued and under-utilized real estate, and salespeople who are distrusted by the public, spells a quick demise for many dealers. All sales will be made on the Net and cars will be picked up or delivered. Dealerships will become service centers.
Travel agencies and personnel recruiters will fall victim to the Internet. Only those who are savvy enough to see new opportunities and seize them will stay in business.
All of life is lifestyle. With longer working hours and more stress both before and after we get to the job, its not surprising that the Internet thrives as entertainment... its fun to surf the Net, particularly in the middle of the afternoon. A dry-cleaning company notes that it gets many hits for its contest page at 2 p.m. (also, 2 a.m.). Isnt Starbucks success at least partially due to treating ourselves to a bit of low-cost luxury? Having a little fun. The rich aroma is the Starbucks experience.
And then there are our trucks. What makes them so popular with both men and women? Built to take us into the wildest reaches of civilization, they rarely leave the freeways. For those of us who feel tied to our jobs, our trucks and SUVs break the bonds and give us freedom. Nothing can hold us back. Its the experience that satisfies.
All of life is lifestyle. The Web is wonderful because it can transport us to so many places so quickly. We literally become lost on the Web. We escape the clutches of the job and home. We can be free even when were hobbled to our cubicles.
Amazon.com has perhaps the best grasp on the lifestyle issue. Between offering regular customers recommended products based on their purchasing patterns, there are product reviews and the opportunity to write your own appraisal. In a sense amazon.com is community or even family, perhaps more interactive than many families today.
To be sure, the customer is looking for a satisfying experience that includes a simple, quick, fun-type transaction. But it is the appeal of feeling understood that attracts. Whether it is an e-commerce business or not, the issue is the same. Give the customers the right experience and they will reciprocate with giving their endorsement (making purchases).
The business world is not divided into two distinct groups: bricks and clicks. Thats an artificial distinction. The clicks are discovering that virtual businesses require bricks. This is why many retailing e-commerce companies are building their own distribution networks. At the same time, the bricks can learn from the clicks, particularly when it comes to understanding and serving customers.
(Editors Note: John R. Graham is president of Graham Communications, a marketing services and sales consulting firm. He is the author of The New Magnet Marketing (Chandler House Press), the revised and updated version of his original book, Magnet Marketing, and 203 Ways To Be Supremely Successful In The New World Of Selling (Macmillan Spectrum). Mr. Graham writes for a variety of publications and speaks on business, marketing and sales topics for company and association meetings. He is the recipient of an APEX Grand Award in writing. He can be contacted at 40 Oval Road, Quincy, MA 02170 (617-328-0069; fax 617-471-1504; j_graham@grahamcomm.com). The companys web site is www.grahamcomm.com.). |