Online Exclusive: Online Marketing Is Supplanting Snail Mail, Brick-and-Mortar Retailers

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It was not long ago that merchants felt the Internet was a passing fancy. Then they thought it could be an adjunct to their normal operations. Now, Internet sales are surging, dwarfing the sales of many traditional merchants.


Indeed, there are Web companies that only sell on the Internet and are doing a spectacular amount of business. Not just the well-known names such as Amazon.com and Sony Music, but also smaller companies such as Home Shopping Network's Improvement Catalog, Cooking.com and Appetizerstogo.com, none of which have walk-in stores.


L.L. Bean has said that it expects its online sales to exceed those from its hard copy catalog in just two years. Right now, many catalog companies don't realize the substantial amount of sales they can earn on the Web. Even service companies such as accountants and lawyers have developed Web sites, use direct marketing and draw in a considerable amount of business.


The key to online marketing is one-to-one selling. Amazon.com, for example, knows each of its customer's preferences, and it offers books to suit each individual's interests.


In effect, customers give particular merchants the right to sell directly to them. Permission marketing is what gets and keeps customers coming back to their favorite Web sites. Of course, merchants must provide excellent service and products or bloggers will trash their names throughout the Web and no one will want to deal with those merchants.


To be successful online, one must understand the intricacies of Web marketing.


One must begin by creating a Web marketing plan; it's something that many of the old brick-and-mortar companies aren't doing. Such merchants are happy to grow by 15 percent per annum. Web merchants, however, experience exponential explosions of growth from year to year.


Toys 'R' Us tried selling directly on the Web in the late 1990s, but it failed because it didn't have a marketing program that took in all the variables necessary for a successful operation. Any Web merchant that does not have a coherent Web platform will not succeed.


Another company, Sony, thought it couldn't sell its merchandise online without alienating its wholesalers and diverting sales. However, it achieved dramatically increased sales and revenue by creating new venues for sales without diverting sales from its wholesalers and retailers.


Cooking.com began in 1998 as a pure Web company. It started with an excellent understanding of the Internet as a new media. It developed a robust affiliate network. It concludes each sale by asking each of its customers, "Can we send you information about items that will be of interest to you?" It subsequently sends e-mails to consumers almost every day -- and it is getting new customers every day from tens of thousands of affiliates.


The vast majority of those customers became repeat customers as a result of permission one-to-one marketing. In addition, its special newsletters for both customers and affiliates keep them pumped up about new promotions and sales opportunities.


Here's another example: A major law firm had been using its Web site as nothing but an online brochure. There was no interaction between lawyers and prospective clients. In addition, to attract those prospective clients to its seminars, the law firm had been spending hundreds of thousands of dollars on hard-copy brochures and postage. With a new interactive Web site that includes updated newsletters and a regular blog, however, the law firm is now reaching out to prospective clients at a fraction of its previous marketing costs.


For Web-savvy companies, exhaustive research of thousands of prospective potential Web affiliates must be undertaken before an affiliate network program can be put in place. Once the research has been complete, affiliates are invited to participate in an affiliate marketing program. Each affiliate becomes the recipient of direct marketing materials, which turns them into affiliated merchants.


For example, affiliates not only receive regular e-mail messages that keep them excited about the potential for increasing their commission income, but each affiliate also receives an e-mail newsletter that contains multiple success stories and new selling ideas and techniques.


Affiliate networks are not passive entities. They are integral and essential elements of a successful direct marketing campaign. As one uses permission marketing to sustain customer relationships, so one must use the same direct marketing techniques to keep affiliates as successful members of the marketing team. No Web site achieves success by waiting for customers and affiliates to come knocking.


While affiliates are identified by the kinds of customers they can attract, one's own customers must be identified by their shopping preferences, solicited, and lured by direct marketing appeals to their self-interest so they arrive (credit card in hand) at one's Web site.


In addition to garnering a dramatic increase in one's sales and revenues through Internet marketing, there is a further financial incentive: there are no up-front advertising costs. Depending on size and ad budgets, companies spend thousands or millions of dollars on conventional advertising. With Internet affiliate marketing, however, one pays a commission only when a sale is consummated. There's no waving goodbye to ad dollars that escape and never bring a return on one's investment.


The affiliates are commission-based sales people with a hungry incentive to produce customers. The best way to reach them and maintain relationships with them is through direct marketing on the Web. And the best way to maintain Internet customers is also through a direct marketing campaign that is based on the concept of permission marketing.


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