Clickstreams. Hypertext. Digital cash. Forget CPM and mass mailings. These are the sales and marketing tools of the 21st century, and they're triggering a revolution in the way companies think about the fundamentals of winning customers.
Consider TV, characterized by that glib 30-second pitch to sell you something. The flip side is the Internet: 90% information, 10% persuasion. The Net has turned marketing on its head. It's not about selling anymore; it's about people choosing to buy. It's not about mass marketing; it's about tailoring products and services to a market of one. It's not about us versus them comparisons (Coke vs. Pepsi); it's about empowering the customer to do the comparisons for you.
"The new premise," says New York Web marketer Larry Smith, "is that people will sell themselves, so long as they have the information." As never before, consumers decide what messages they're exposed to.
If that sounds like bad news for traditional marketers, then here's the good news: because they're self-selective, Net customers tend to be more committed (read: lucrative) over time. They are also willing partners, providing instant, ongoing feedback for creating new products and shaping new value propositions.
Not that you can sit back and wait for the orders to roll in. To help harness the power of the Net, use this Fast Company guide to understand its complexities — both as a new marketplace and as a resource for accomplishing traditional sales and marketing functions more efficiently. Just because you build a Web site doesn't mean they will come.
The internet is transforming the world of sales and marketing. Nearly all the old precepts you once lived by — advertising efficiency measures, mass-market economies of scale, distribution value chains — don't quite work anymore. If you're feeling disoriented, use this primer to navigate the big-picture changes wrought by the Web.
New Paradigm: The purpose of business, Peter Drucker once said, is not to make a sale, but to make and keep a customer. Think about the Net in the same way. Most companies spend 80% of their marketing dollars on acquiring customers and then do a lousy job of keeping them satisfied, notes veteran Web marketer Larry Smith of New York-based U.S. Interactive. "The Web," says Smith, "is a killer tool for generating brand loyalty." The key is to leverage the medium for what it does best — interacting with the customer. That means using e-mail for quick-time customer service, discussion groups for building a sense of community, and database tracking of buying habits for customizing products.
Link To: For a rich study of the conceptual marketing issues of the Internet, visit Project 2000 http://www2000.ogsm.vanderbilt.edu , a research program at Vanderbilt University. The anchor paper, "Marketing in Hypermedia Computer-Mediated Environments," places the Internet's attributes in the context of traditional media. It concludes that a successful Web strategy must incorporate elements of both the short-term exposure of TV and the longer-term nature of reading detailed information, as in a newspaper.
New Paradigm: The classic "P" elements of marketing — product, place, price, and promotion — are being turned upside down. Thanks to two-way multimedia communications and transactions, just about every step between the producer and consumer of a product or a service — warehousing, wholesaling, retailing, advertising, order-taking — is being eliminated or refashioned.
Link To; Net.Value http://www.owi.com/netvalue/ , a monthly Web magazine, is a good source for finding virtual vendors of everything from condoms to financial services and studying how they are revolutionizing their own marketing processes.
New Paradigm: Information as a brand asset. Indeed, many experts are coming to consider information itself as the value proposition.
Link To: Wonder why Toyota's home page http://www.toyota.com highlights fitness articles, career advice, cultural chat areas, and other features devoid of automobile propaganda? Even if Toyota successfully establishes its "Hub" lifestyle site as a hip center for active young adults, there's no guarantee that they'll buy a new Celica. But Toyota stands a better chance of getting them at least to consider a Celica when they're ready to buy — and that's half the battle for any marketer.
New Paradigm: Forget the old assembly-line model of promoting products to the masses. The Net's inherent interactivity between vendor and customer is yielding a new model of customized production and individualized distribution. It says: "The easier it is for you to tell me what you want, the more efficiently I can tailor a solution just for you — and lock you in for the long term."
Link To: For a glimpse of how such a notion might be built into Web marketing, study the white paper at BroadVision http://www.broadvision.com/tech . Overlook the sales pitch from this vendor of new Web software tools, and absorb how the technology is poised to collect and exploit information on customers. It captures a vision of the future — not yet implemented but just around the corner — that links info files on each customer with databases storing Web editorial and advertising content. Each client's visit to the site is thereby tailored to his interests, potentially resulting in higher response rates and transactions.
Jonathan B.Levine, formerly the European technology editor at "BusinessWeek," writes on high tech and the Internet in Boston.
Sidebar: Five Marketing Missions, Five Sites That Sell
Lessons from the Best: Information, Stimulation, Conversation
Cruise around a few dozen commercial Web sites, and it quickly becomes apparent that the smart ones use the medium to support clearly defined marketing objectives. ("Because my competitor has a site" is not one of them.) One big difference that sharp Webbies have learned to leverage: interactivity. "If you're not asking for some kind of response — a sale, information about the customer's preferences, product feedback — you're wasting the medium," says Charles Sayers, publisher of Who's Marketing Online?
For each of five marketing missions, we've selected one site that exemplifies the best of today's practices.
The Mission: Generate sales
Old Model: Pitch a message to the masses
New Model: Post information tailored to help customers make their own choices
Check Out: Auto-By-Tel http://www.autobytel.com
This service linking new-car buyers and dealers seems to be conquering the ultimate Internet challenge of selling big-ticket items. How? It offers a big carrot: wholesale prices and no-hassle negotiations in exchange for serious customers' willingness to fill out an extensive form about their dream car. Within 48 hours, one of ABT's 1,100-affiliated dealers calls the customer with a best price, which hasn't been inflated by sales commissions and advertising expenses. Dealers get qualified leads for zero effort; clients are reassured that they're getting a good deal by the downloadable vehicle invoices and other objective information provided by ABT. How can you not trust a salesman who's showing all his cards!
The Mission: Conduct public relations
Old Model: Use testimonials to build a case
New Model: Excite and engage each constituency
Check Out: Miller Genuine Draft http://www.mgdtaproom.com
Who is a beer company's most important constituency? Beer drinkers? Distributors? Shareholders? The press? It doesn't matter. Miller Brewing Co. understands the importance of segmenting markets on the Web — something many large corporations haven't grasped. At the MGD Tap Room, Miller presents an inviting virtual pub catering to customers and what they care about, like music (backgrounders on Miller-sponsored rockers like Jimmy Page and Robert Plant), sports (a schedule of Miller-sponsored car racing events) and, of course, how beer is made. Miller posts press releases, a company history, and corporate info appropriate to other audiences on a separate home page http://www.careermosaic.com/cm/miller .
The Mission: Provide customer service
Old Model: Meet the customer's needs within the company's time frame and resources
New Model: Satisfy increasing expectations for immediate gratification — any time, any way
Check Out: Adobe http://www.adobe.com
Anybody can claim to offer 24-hour customer service by putting up a Web file of FAQs. Adobe understands that online service means providing staff who can back up that claim. When Adobe's new PageMill program kept crashing Atlanta publisher Charles Sayers's PowerMac one late night, he fired off an e-mail to the Web site. Within two hours, a return e-mail solved his problem - -and offered a toll-free phone number that circumvents the clogged general line. Now that's responsiveness! Unlike many sites, Adobe includes explicit instructions on how to use its services.
The Mission: Enhance brand image.
Old Model: Assert a style through images, words, and sound.
New Model: Create an interactive experience that engages and compels.
Check Out: Ragú http://www.eat.com
To increase the brand's visibility, Ragú's Web developers adopted the persona of an Italian Mama. She's the best attempt I've seen yet at assuming a strong voice and avoiding the corporate drone of most Web sites. "I'm glad you came," greets Mama. "It's not good to surf on an empty stomach!" You get the idea. Mama is your host at a number of clever functions — a pizza party, a tour of Little Italy and, of course, a recital of her favorite recipes. All are designed to engage readers in the charm of Italian cuisine and culture, and to identify Ragú with it. To complete the feedback loop, Mama doesn't forget to cajole you into filling out a survey of your own eating and cooking habits. Some smart dish, that Mama.
The Mission: Gather customer data
Old Model: Categorize and define your market by segments
New Model: Know every customer; anticipate their preferences and habits
Check Out: Greet St. http://www.greetst.com
This savvy digital retailer of greeting cards demonstrates the Web's unique power to generate valuable information about each customer, then exploit it to maximize sales. Each time I choose to buy, view, or search for a card, its database tracks my preferences of graphics and sentiments by performing a "conjoint analysis" (a search for the common denominator among my various selections). So if I tell it brother Dave's birth date, it will e-mail me a reminder next year — and suggest 10 new cards I might consider based on this year's selection. As Greet St. builds up a log of advance orders for future birthdays and holidays, it will also be able to supply its 40 card publishers with early warnings of the most popular items so they can adjust their print runs.
Sidebar: Online Resources for Offline Work
You've cruised the cool Web sites. Now get some real work done. That competitive analysis is due next Tuesday, and the direct-mail lead list won't develop itself. Consider these tools to help handle those traditional sales and marketing chores more efficiently.
The Mission: Scope out the competition
Go To: Hoover's Online http://www.hoovers.com
Upstart Hoover's is giving mainstay information brokers such as Dun & Bradstreet a run for their money by posting lively, affordable company profiles on 21 online services. Capsule reports (contact info, latest sales and SEC filings, a listing of senior executives, and a brief business description) on about 10,000 public and emerging private firms are free. They're just bait to hook you on Hoover's subscription Web service for in-depth reports (market shares, acquisitions, key competitors, 10-year financials) on the 2,200 firms it deems most influential. At $9.95 for 100 reports a month, or a dime each, it beats D&B's cursory Business Background Reports http://www.dbisna.com at $20 a crack.
The Mission: Keep up with trends in global markets
Go To: STAT-USA http://www.stat-usa.gov
This Web site combines research from 50 federal agencies. It's a gold mine of data on business, economics, and foreign trade. It includes the National Trade Data Bank from the Department of Commerce, featuring comprehensive foreign trade and export information from U.S. consulates around the world. A friend researching the prefab-housing market in Poland found a wealth of insights in a timely 1995 report, such as a source for local distributors and details on a new mortgage financing fund. Perhaps its most useable database features searchable RFPs (requests-for-proposal) from Commerce Business Daily and other U.S. sources. For the $150-per-year subscription, you'll be hard pressed to find as much for the money anywhere else.
The Mission: Build sales-prospecting lists
Go To: D&B's MarketPlace CD-ROM; 800-590-0065
This database puts 10 million U.S. company listings from Dun & Bradstreet on a CD-ROM ($599), along with a fast engine that searches by SIC code, location, type of business, sales volume, and nine other criteria. You build and refine your own list of prospects, run analyses on them, then pay only for the names you download to mailing labels or disk files. Enchanted Gold Inc., a Concord, Massachusetts gift manufacturer selling through independent shops, recently began testing 10 new markets such as museums and garden centers. Marketing director Beth Halbardier sliced the D&B data by SIC code, sales volume, and top metro areas, and tripled her prospect list in four days.
The Mission: Schmooze, exchange knowledge
Go To: Market-L mailing list (Original URL now defunct. Try http://www.amic.com/htmlforums/Market-L/April/2000)
Market-L, started in 1987 by a Florida State University marketing professor, is the granddaddy of the group and still probably the best resource for getting your feet wet. Topics range from direct-mail techniques and pricing tactics to branding issues and database marketing. But be prepared to wade through some noise: Market-L boasts 790 subscribers who proffer about 70 messages a day. The most prolific users seem to be small-business practitioners and consultants. (Don't snicker.) They often bring the most real-life experience to practical problems.
Sidebar: Crush the Competition
Marketing pros will tell you that half of business is built on solid research, the other half on guts. Now from the battlefields of Silicon Valley, marketing legend Regis McKenna has devised a new tool that synthesizes both types of input into a single strategic marketing plan. His CD-ROM, called Crush, is a gem for organizing the disparate elements of a fast-moving business into a clear picture of its competitive position.
McKenna, as an onscreen mentor, leads you through an 11-step process to marketing nirvana. After defining your target market, you identify key trends and competitors, then quantify your own strengths and weaknesses in each trend compared with your rivals. At each step, McKenna offers a case study (Saturn, Porsche, Coca-Cola). You can even download quarterly installments of market research from the Internet home page of Hands-On Technology, the developer of Crush. These competitor profiles get plugged into the Crush model to save time on dredging up relevant documentation.
Coordinates: $499 for Crush. 800-772-2580. Hands-On Technology, http://www.HOT.sf.ca.us
A version of this article appeared in the June/July 1996 issue of Fast Company magazine.