Customer Focus Leads Internet Talk
A space age future with refrigerators complete with built-in databases to track and order food products and toilets equipped with sensors connected to healthcare providers to measure output, was described by keynote speaker Chuck Martin, chairman of Net Future Institute and author of "Net Future" (McGraw-Hill, 1999), to a packed room of pre-conference DMA show attendees in Toronto this past weekend. "And we think privacy is an issue now?" joked Martin.
Even before the toilets become de rigueur, direct marketers will have the opportunity to drive the integration of online marketing, said Martin. "The people driving this are going to be the people connecting with customers," said Martin. He said that change will be led by the big brands and established companies, not Silicon Valley entrepreneurs.
Most companies aren't close to being ready yet. An informal poll conducted by a show of hands at the top of the session revealed that most delegates either feel their company is behind or simply keeping pace with the Internet, and only one felt his company was ahead of the curve.
Surviving and succeeding in the net future, according to Martin, requires adjustments to the corporation's structure and a devoted focus on the customer, neither of which are new ideas to direct marketers.
"Direct marketers move up the value chain in the corporate entity because they understand already that it's about the customer," said Martin. Companies that understand that idea are reorganizing around the customer rather than the product.
Disintermediation is an old idea, according to Martin. Re-intermediation is the new opportunity, a return to the value of the intermediary between the consumer and the brand, but one where focusing on single channels of communication no longer suffice.
What most companies are beginning to realize, he said, is that their physical retail stores are an asset, rather than a liability, and are beginning to leverage that asset with its online efforts. With promising statistics such as 80 percent retention rates for Peapod, the online grocery store, Webvan will spend $1 billion next month building a food warehouse to store and ship merchandise, he said.
And at the center of it all are the customers, who will tell the marketer what they want; it's up to the marketer to hear and react. Direct marketers may have an edge since they're used to having a close relationship with the customer. "The poster child of the Internet is Amazon.com," said Martin. "Amazon used it's customer set to do direct marketing" through features like book reviews and other interactive participation at the site. "Amazon used the network to drive the environment," rather than the environment to drive the network, he said. In the wired companies of the future, he said, "the company reorganizes around the customer, not around the product."