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Research suggest that there are now over 100m users of the Web worldwide and this figure is set to rise to 200m by 2001.
In the UK, 85% of large organisations are connected to the Internet and even amongst small businesses, 64% are on-line.
The impetus driving this growth isn’t the consumer, it is business-to-business usage. Currently, two thirds of Internet transactions are business-to-business and this figure is set to rise to 80% by 2001.
The Internet and the Web in particular is going to change the way that business is conducted as profoundly as the advent of the telephone. In every aspect of business from supply-chain management, Electronic Document Interchange (EDI), sales, marketing through to distribution, the Web will become the glue that binds the organisation to its customers and suppliers.
When you look at the fledgling e-commerce market today it seems hard to imagine the future. The real players are not amazon.com and eBay, they are Dell, Boeing and Charles Schwabb. In fact Boeing, a Primary Contact client, moved its entire parts business online and became the largest e-commerce supplier in the world. Dell are selling $13m a day from their Web site while Charles Schwabb, the global stockbroker, handled e-trades worth over $3bn in 1998.
This Viewpoint is intended to help those ready to exploit the vast opportunities the Web offers. In particular, we want to concentrate on building brands online, relationship marketing and e-commerce.
A few years ago just having a Web site was news. Companies held launch parties at cybercafes to show how cutting edge they were. Times have changed. Today, your customers, suppliers and staff expect you to have a Web site and what’s more their demands are growing by the day.
Primary Contact believe that there are three types of Web site:
If your goal is to build relationships with your customers read on.
The recent explosion of free ISPs in the UK highlights the fact that well-known consumer brands are trying to transfer their strong off-line brand on-line.
With the exception of a few content providers, search engines and portals that only exist on-line, Web users search for familiar brands and companies they know. And with over 300 million Web pages this is not surprising.
Migrating your brand on-line is much more than putting your brochures on your Web site. It is also more than just replicating corporate identity, although time is important. It is about how you interact with customers on-line.
Web users expect far more from a company on-line than they do off-line. They want information in seconds, not days. They want cheaper prices and faster delivery. As e-commerce grows and expectations rise, can your on-line brand experience live up to the pressures placed upon it?
The Web and e-commerce have altered the relationship between the manufacturer and the customer more profoundly than almost anything else. The absence of physical presence and truly global access means that your company is now open 24 hours a day.
Traditionally, manufacturers have had a fairly hands off relationship with customers who existed at the end of a sales chain.
In the future, there is likely to be a far simpler structure involving super-retailers and direct customer contact for manufacturers. If you think about the role of the car dealer you will understand what we mean. Currently car dealers sell cars by holding a small number of a manufacturers’ product, arranging test drives and ordering your car from the manufacturer. With the exception of servicing, they add very little value to the process. The diagram below shows how the car buying system may look in the near future.
The consumer has the choice of either going direct to the manufacturer who can arrange test drives, sale and delivery or if they want to compare models, to a super-retailer who carries many manufacturers’ products and will be paid a commission on each sale.
Many companies believe that they can’t change their channel model as it involves the company getting involved in unfamiliar areas like end-user credit control and distribution. These functions can be outsourced, so the question remains, what is the value of direct customer relationships and how do you build them?
If e-commerce is about selling your goods and services on-line, e-business is much broader. It is about managing the full range of customer expectations and relationships on-line.
People buy goods and services on-line in exactly the same way they do off-line. They begin by browsing your site and that of your competitors for goods or services they think are relevant. They don’t come to your site by accident—they are looking for something in particular. Once they have found a potential purchase they look for ways of evaluating it against the competition. Only at this stage are they able to buy. So what can the design of a Web site do to make sure they move from valuation to purchase on your site?
In fact, e-business extends far beyond the confines of the Web site itself, it should permeate everything that you do because it is the most accountable marketing activity you can be engaged in.
At Primary Contact we believe that rigid, discipline-driven, marcomms is a short-sighted view. For your advertising budget to be truly effective you need to integrate all aspects of marcomms into your e-business. Advertising and direct mail should not exist apart from the Web, they should be part of it. The following is a model we use to demonstrate this.
In this model all communications have unique, trackable URLs associated with them. This allows us to track behaviour and subsequent purchase down to the level of creative message and publication. Once at the site, the customer is offered an incentive for data capture and their details are forwarded to a fulfilment house. To see en example of our philosophy in action, visit www.visio.com/marketplan. If the user requests information on sales or fits a pre-defied data profile, an e-mail is automatically sent to the relevant sales person to follow up. The customer’s details are then entered into a direct marketing prospect database. In the future, when any visitor enters the site they are asked to select their areas of interest or the product they already own, and the Web page they see is personalised for them on subsequent visits.
The Web offers a dramatically low-cost means of conducting relationship marketing with your customers. It is exactly those features of on-line communication that make it so well suited to relationship marketing. With one simple piece of data capture on your Web site you could do any of all of the following:
One common pitfall is the use of e-mail. In the US 7.6 billion e-mails are sent every day. As we all know a proportion of these are Spam or unsolicited communication. The solution to this is permission marketing. As long as the mail is sent with the express permission of the user and they have an easy means to unsubscribe, this can be effective. Clearly sending them an e-mail every Friday wishing them a good weekend would be counterproductive, however cheap, but a quarterly/monthly update on products that have real relevance to them would not. Indeed, research Primary Contact has conducted shows that in certain technical fields, a weekly mailing may be highly desirable.
So if used relevantly, the Web can become a powerful means of building strong ties to your customers and prospects.
Like it or not, the Web is with us to stay. Business-to-business marketers have two distinct courses of action. To claim that this is a consumer phenomenon and ignore it or to hold their heads high and embrace the existing opportunities e-business offers.
6 reasons to embrace e-business
