Capturing Customers in Your WebInternet consumers can hardly be described as an audience. They are proactive participants in the marketing process - and that's what makes Internet marketing and Web TV so very different from traditional television advertising.
In fact, the Internet and television are spectacularly different from each other. Narrowcast and broadcast media display totally different attributes when it comes to reaching out to a company's lifeblood - the connected customers who hold your future in their hands.
Much debate about the dynamics of it all now makes it clear that a whole set of new rules - many of which have their origin in the world of direct marketing - must be adopted to achieve Internet success.
Interactivity linked to one-to-one targeting is the key difference between Internet advertising and anything that came before. A message delivered to someone who has gone to your site might be powerful in a broad sense, but it will need to become much more personalized once the viewer has penetrated the site more thoroughly. The more a potential customer gets involved, the stronger his desire to investigate, making buyer/seller signals much more crucial.
With its interactive capabilities and customer loyalty-building attributes, the Net offers the chance to double or even triple profits. But many advertisers are making the mistake of trying to use it for customer acquisition - whereas its major benefits may well lay in enabling marketer to connect with customer.
As master motivator Bob Pritchard wrote in his article "Creative Counts, Budgets Don't" in Marketing & e-Business (February 1999), Procter & Gamble gathered together competitors, ad agencies and Internet experts to sort out why Web advertising wasn't working. And guess what? The consensus was that advertisers were barking up the wrong media tree in their efforts to force-fit general advertising to the Internet. The Net was found to be great in every sense in which direct marketing works well, yet nowhere near as effective for what used to be achieved by "mainstream" advertising.
Why? James Rosenfeld, another eminent contributor, gives us a clue on the same issue. While the Internet carries direct marketing to a new level, interactivity is as essential to online marketing as it has been to traditional DM, whereas it is inconsistent with general advertising, he said. "Enter the Net" categorically states that the two will never converge. "We fail to understand how profoundly different direct marketing and general advertising are," he said, making the point that successful DM requires a proactive audience, while advertising is for passive spectators. Consumers can't be active and passive simultaneously - so the two disciplines can't be combined.
Good direct marketing changes our behavior, successfully initiating and closing sales transactions, sometimes building relationships and enabling us to measure the effectiveness of a communication. General advertising, on the other hand, is about altering our perceptions. It does well at building categories and sometimes brands, but, most important, it creates a climate for a product or service to thrive in the consumer environment.
Whichever medium is used in DM, it commands attention and can precipitate incisive decisions for which consumer action is of the essence, while general advertising aims to have its messages assimilated in a hazy, semi-conscious fashion, the idea being that you'll order the "right" beer once a certain indoctrination level is reached. The Internet and Web TV will, however, pose an intrinsic demand for interactivity, which is why the advertising rule book has to be rewritten.
The notion that what's good for the goose isn't necessarily good for the gander is underlined by Susannah Petty, writing in B&T Weekly (Jan. 15, 1999) on how direct marketing and general advertising each have a distinct part to play. Intel director of worldwide marketing Ann Lewnes presented a case study of her company's approach to global marketing, recognizing the Internet as a killer application that's set to bring about the upheaval of the entire business.
Like Procter & Gamble, Intel questioned whether the Internet was a medium for creating awareness, a direct response tool or a lead-generation device, eventually coming to the conclusion that its true worth lay in creating high-value, long-term loyalty. Likewise, traditional advertising emerged as a vital ingredient of building brand awareness, winning out when the goal is to build brand preference.
For the time being at least, broadband television provides the most effective vehicle. Yet when it comes to building loyalty and conviction, the narrowcast Internet offers unparalleled opportunities for one-on-one dialogue, in Intel's case digging deep into the customer's psyche to discover needs for information or byproduct services. No other medium provides that capacity for connecting with the consumer in the same way.
Writing in Professional Marketing (February 1999), Simon van Wyk declared the Internet to be without parallel. For while many believe the Net is just like television, its only true similarity is the use of a screen. He quoted Marshall McLuhan's statement, 30 years earlier: "While television is the ultimate cool medium, it is a low-participation, passive experience." In the same way, the Internet is a hot, high-participation multimedia environment that's getting hotter with each passing day, and Van Wyk clearly understands Intel's crucial point about customer connection. That's why he insists that we should rid ourselves of the term "audience" in relation to Internet marketing and replace it with the more apt "participant."
In the metamorphosis between mass marketing and one-to-one that is taking place right now, customer intervention is what makes the difference. But the big risk for marketers is that their communications agencies may well fail to appreciate the need for that vital one-to-one dialogue which direct marketers practice as the norm.
Yet the Internet's unprecedented levels of connectivity, huge potential for return on investment and extraordinary capacity for accountability may well mean that advertisers themselves will turn toward it as a viable and deeply serious means of connecting with their customers.
But advertisers should guard against intrusive ways of increasing impact, since it's all too easy to annoy someone visiting a site with a specific purpose in mind. Eyeballs easily become desensitized when customers are trying to concentrate on what they really want, rather than being forced to look at what advertisers want them to. The key to the Internet, full of searchers and shoppers, is winning the user's attention, then creating and maintaining a dialogue in an atmosphere of choice.
Personalization - a keyword of the direct marketing industry for years - is all about making messages meaningful and relevant. So moving TV commercials to the Web calls for a definite shift in mind-set. To make the message work more effectively when served directly to the consumer, advertising and direct marketing offers must be interactive, as well as absorbing.
A growing number of diverse e-commerce sites now offer customized products and services, such as the female-oriented Reflect.com and the golf-dedicated Chipshot.com. And they all sing the "have it your way" jingle to show they know that "it" has to be what the individual wants, rather than what the company wishes to convey.
Don Hagel III, principal of McKinsey & Co., is pragmatic about participation. While we do react to traditional media, he said, we interact with online media in a very personal way, and community builders such as Amazon.com and Intuit are lifting the Net to a new level. While personalization is important, the real trick is in relationship building - getting to know the customer so well that content and traffic frequency mean less than the ability to service the customer.
Central to this new thinking is an understanding of how to harness customer profiles to help drive sales and profit, Hagel said. Internet marketers that have learned to leverage their customer relationships by getting a grasp of demographic and transactional profiles might expect a three- to tenfold increase in the number of customers acquired for the same cost - an annual net profit increase of up to 60 percent per customer with an incredible 100 percent retention rate.
Highly respected market researcher Max Sutherland, writing in Professional Marketing (October/November 1999), also stresses the value of building customer knowledge, suggesting that the first objective of a company Web site should be to set up a vehicle for direct dialogue. He agrees that the Web is where dialogue and meaningful customer interaction is going to take place in the future, with the tempting possibility of being able to continuously track site visitors in time and space.
Who are they? Where do they come from? Which pages do they visit? What are the hot spots? What do they buy? While Web traffic measurement programs may yield unintelligible information now - largely caused by users leaping around from one area to another so that they can't be fully tracked - there's a myriad of intelligent agent software around that will soon overcome these problems.
Things can only get better, and personalization goals will become ever more achievable as new standards are adopted. Van Wyk has indicated that the service offer lies at the heart of responsiveness. In this medium where attention, interest, desire, action, sales and after-market care can take place concurrently, he says, the lesson is clear: Marketers need to get their heads around use of the online technology that allows customers to do what they can't elsewhere.
Walid Mougyar, author of "Opening Digital Markets," emphasizes the benefits of "arresting your customers through the experience they gain and the customer service that you can give." He adds, "Make your customers comfortable first, then startle, surprise and delight them. Ultimately, companies will be judged on not what their customers can do on the Web, but what they can only only on the Web." He adds that businesses that put aside the spreadsheets and focus on giving customers an unmatchable experience are the ones that will win.
Endorsing the point that we need to transcend good offline experiences with something even better online, Patricia Seybold writes in Business 2.0 (November 1999) on the currently epidemic information overload. She appreciates the fact that customers visit a site for information, to buy something or gain customer support but she also says that loyalty is won by making it easier for site visitors to do whatever they came to do, also tending to skepticism about the way customers will come to the e-marketer.
She stresses the need to go out to e-customers and be there for them. The whole community idea relies on delivery, content and relationships between users, she says. But while that might lend itself to a million niche interest areas, it isn't where the money is: "The way to get customers is not to try to force them to come to your site, but to be in your face wherever they are. You don't want to be in their face with advertising. You want to extend yourself with searchable product attributes and interactivity."
Seybold suggests focusing on individual customer needs, providing solutions to what they are trying to accomplish. "One-to-One Manager" author Dr. Martha Rogers reportedly goes even further in an article by Joe Ashbrook Nickell in the same issue: "If I'm a company in the Information Age, the most valuable thing I can make is not a product or a factory or a pipeline - it's a customer. Unlike in the mass-market era, I will realize that the information from customers isn't a commodity I can sell. The information I have about that customer is the very heart of my business going forward."
That, of course, means superb customer service - all part of the equation. But the very best way to influence consumers is to give them as much relevant information and as many purchase avenues as possible - phone numbers, directions to stores and so on. For in addition to service, online consumers will demand the freedom to do it their way - which is now seen as being much more crucial than rock-bottom prices.
So it's not just a case of customer relationship management. The customer as an individual must be enabled, as well as related to with understanding - which applies in face to face, telephone, snail mail, cyberspace, or Web TV. And the messages themselves must be truly personalized, coherent, directly connected and capable of substantially increasing profits.