Thinking Australia’s Internet Management Newsletter takes a look at issues that go beyond the web page.
  
Thinking’s Internet Management Newsletter takes a look at issues that affect audiences and audience behaviour on the internet.
 
You received this Newsletter because you either requested it or it was forwarded to you by a friend.
 
If you would like to subscribe or unsubscribe see the instructions at the end of the important information that follows.
 

In this Issue.
  
1. Directions 
1.1 Is your business connected to customers’ computers or their minds? 

1.2 A successful internet presence starts at the top 
  
2. Risk Management 
2.1 Insider Trading scenario by mistake or by lack of procedure? 
2.2 The ‘retailer’ vs the ’e-tailer’ 
  
3. New Economy Thinking 
3.1 Think like the people who made a mouse, a duck and a lion famous 
  
4. Traffic Building 
4.1 How small businesses achieve big results 
  
5. Audience Behaviour 
5.1 Shopping – Moving from ‘Bricks and Mortar’ to ‘Clicks and Mortar’ 
5.2 Source of e-commerce traffic 
  
6. Email Marketing 
6.1 ‘I want’ vs ‘Buy this’

 
1. Directions 
1.1 Is your business connected to customers’ computers or their minds? 
It’s claimed that 70% of Australian businesses have an internet presence. The road to destination-e is being well trodden. Now, the question you have to ask yourself is “once you’re connected, once you’ve worked out all the technology and all the e-commerce you require, what then?” An internet presence goes through three phases: 
  
Phase 1: Information (You have a site, you have content) 
Phase 2: You enable the site to have a transaction with customers 
Phase 3: You build a relationship with customers 
  
At present, the vast majority of those 70% of businesses on the internet are in Phase 1 and 2. They are too busy on the road to destination-e to even consider Phase 3. It seems they are pre-occupied with the technology rather than the emotion that attaches customers to your business. 
  
This has got to the stage where you can now buy a business in a box. What you can buy is some technology. However, as any marketer knows, technology doesn’t create a customer relationship. A successful business is able to connect with its customers. 
  
The next wave of web development won’t be about connecting PCs, it will be about connecting minds. ‘Web development’ will be ‘relationship development’. Technology will be chosen not merely to facilitate a transaction, but to help build that important first step that’s essential to any transaction – a relationship. 
  
The concept of connecting minds needs to be implemented into the strategic thinking and development of websites. Without it, the only thing you have is an unconnected web presence. Start connecting minds today. Email connectedminds@thinking.com.au 
  
1.2 A successful internet presence starts at the top 
On the last page of Thinking’s booklet “Roadsigns to destination-e” is a quote from Bill Gates: “The internet is a fad, it’s not really relevant to our core business.” 
  
Very soon after that comment, Bill Gates changed the direction of Microsoft by embracing the internet. Today, the internet is at the core of everything Microsoft does. The Windows 2000 operating system and its suite of software products are all designed to smoothly interface with the internet. 
  
It doesn’t matter how much discussion there is internally in your company, until the CEO or the Board fully embrace the internet, the company will never be a serious player and its e-future could be severely jeopardised. To demonstrate this point, observe the share price increase of old economy publishing companies such as News Ltd and ACP/eCorp, who have re-invented themselves for the new economy. 
  
Today, the share price and performance of their internet entities are far exceeding their off line publishing interests. Their e-future could be a long and healthy one, because their leaders, Kerry Packer and Rupert Murdoch, are committed to this new economy. There is a lesson in this for all. If you are in a business where the Board is still referring to the internet as an interesting phenomenon or a “fad”, you should start to make a noise. 
  
If you’re a shareholder ask questions. The world has moved to the new economy and a lot of businesses will be left behind. The road to destination-e awaits you now. For “Roadsigns to destination-e’, a booklet put together by Thinking, email info@thinking.com.au. 
  
2. Risk Management 
2.1 Insider Trading scenario by mistake or by lack of procedure? 
Recently the Reserve Bank issued new and long awaited interest rates. Everyone expected them to rise, the question was by how much. Imagine if you had inside information before anyone else. The Reserve Bank provided this inside information to a small group of 70 very lucky people. 
  
The interest rate news was distributed via email a few minutes prior to the official announcement. Anyone on that email list had ample time to make a killing. And some did. One major financial institution admitted gains in the millions of dollars. Corporate Governance and Statutory Requirements, along with their compliance are major factors in the new economy. 
  
Allowing privileged information to leak, or allowing out of date information to remain online could provide potentially dangerous results to corporations and shareholder returns. 
  
Over the last few years, a component of Thinking’s work has been in Risk Management. It has established corporate compliance and procedure management systems for the online distribution of information. 
  
Don’t allow this risk to strike your business. For a greater understanding of this area, email avoidrisk@thinking.com.au 
  
2.2 The ‘retailer’ vs the ‘e-tailer’ 
The greatest issue with traditional retailers going online is that they treat the online audience in a manner that would never be supported in their physical store or offices. 
  
We know of one major retailer that expected customers to wait for long periods, while thousands of listed items downloaded, whether their customers wanted this information or not. A major car manufacturer took two weeks to respond to an email inquiry. 
  
An Andersen Consulting study into online stores, found that a quarter of all purchases attempted over the internet never go through. If you lost a quarter of your orders, what difference would that make to your business? And what kind of questions would you be demanding answers for? 
  
Not surprisingly, “retailers” who were established in the old economy, rate very badly when compared to their “e-tailer” competitors (those who are internet based). Take one statistic – delivery of purchase. The study found that traditional retailers only delivered the order as promised 20% of the time. In comparison e-tailers were on time 80% of the time. 
  
Traditional retailers are leaving themselves at risk. Their audience is moving to a new medium, unfortunately the service they’ve come to expect from their traditional suppliers is not moving to this new medium. 
  
It simply means, this audience may soon be moving to a new e-tailer. Thinking has vast stores of knowledge in audience behaviour and how it relates to e-tailing. For access to this knowledge email etailer@thinking.com.au.
  
3. New Economy Thinking 
3.1 Think like the people who made a mouse, a duck and a lion famous 
The old economy tended to break things down into manageable segments and created divisions in between each segment. For example, a film script is designed to be a visual form of entertainment that happens on a screen, not on a stage or in a park. 
  
The new economy dissolves these divisions and allows you to build bridges to other opportunities. Take this example from Harvard Business Review in relation to Sony and Disney: 
  
In the mid 1990s, Sony had a major hit with Men in Black, while Disney also scored with Lion King. The Sony feature grossed more money in its opening weekend than almost every other movie ever produced. Sony created a profitable vehicle that helped generate revenue sources of over $600 million. 
  
For Disney such revenue figures were just the beginning. Disney also released 150 kinds of Lion King merchandise, turned the soundtrack into a musical sequel and produced a video entitled Simba’s Pride. The total take was approximately $3 billion. Disney also introduced Lion King themes at its existing resorts and ultimately at its new Animal Kingdom theme park. 
  
The new economy is about thinking in new terms. No opportunity is as straight forward as it seems. For further ways on how to extract the potential of your online brands email potential@thinking.com.au.
  
4. Traffic building 
4.1 How small businesses achieve big results 
Not everyone on the internet is a big corporation. However, the beauty of the internet is that you can appear more prominent and have more voice than the big guys. 
  
But how do you do that as effectively and cost efficiently as possible? 
  
a) re-read every Thinking newsletter and pay particular attention to comments on search engine optimisation. 
  
b) save time – read on: 
  
Research company ActivMedia found that small budget online marketers rated search engine positioning as the most effective site promotion technique. Without it, you may as well be invisible. 
 

 
Note that number two is email. The lesson here is that you first need to establish your internet presence, establish your voice then establish your customer database. 
  
For further information on how we’ve been successful in these areas with such clients as ANZ, Repco and Falls Creek, email tothetop@thinking.com.au 
  
  
5. Audience Behaviour 
5.1 Shopping from ‘bricks and mortar’ to ‘clicks and mortar’ 
How quickly are shopping habits changing from the physical shopping mall to the virtual shopping mall? ‘Very quickly’, is the answer, especially if you look at the investments some of the more prominent landlords are making into the e-world. 
  
The main focus of players such as Westfield, AMP, Lend Lease and Gandel, is to protect their rent revenue and their stock price. The danger is that they are viewing this action as reactive rather than pro-active. It’s paying lip service to an audience rather than attempting to understand the shift in audience behaviour that is occurring. 
  
Shopping Centres of the future may change from being ‘retailers’ to being ‘viewtailers’. Take the following example: You wish to purchase a car. You go down to your local Dealer to view it: touch, feel, smell the ‘newness’, open the bonnet, kick the tyres – all those things you can’t do online. 
  
The same thing could happen for furniture, white-goods or brown-goods. It’s the touchy-feely, sensory evaluation. Now, you go online and evaluate features, benefits, comparative products, recommendations and price. So, we’ve gone from ‘bricks and mortar’ to ‘clicks and mortar.’ And in many cases brands have to be visible in both places. 
  
Harris Technologies is an example. As well as a successful online brand, it is also opening physical stores around Australia. Even Amazon.com is considering opening physical stores. It is a way of providing the perceived permanence and implied trust that a physical presence has. 
  
In the old economy marketers would have said they were cannibalising their own business. In the new economy, the rules change. The highly regarded Britannica has cannibalised its business a number of times over the last few years. We all know of its volumes of knowledge in book form. 
  
This changed to a CD format and even more recently to a major web presence where most of the Britannica knowledge can be readily accessed. In traditional marketing you might call this ‘eating your own.’ 
  
In the new economy, you have to evolve very quickly to survive. And one of those actions may involve cannibalising your traditional business to survive. 
  
For a better understanding of how to bridge the gap between physical and virtual, email onlinemall@thinking.com.au. 
  
  
  
5.2 Source of e-commerce traffic 
Here’s an interesting statistic found in Iconocast that further emphasises the evaluative nature of the internet. The following shows where most of e-commerce traffic to sites is coming from. 
  

Source of E-commerce Traffic	Share
Portals	26%
Comparison sites	24
Direct	12
Manufacturer's site (e.g. Sony.com)	8

The cry of the new internet shopper seems to be “I need, I evaluate, I buy”. Pretty much in that order. The risk for most online companies is that their main focus at the moment is on the “I buy”. 
  
Systems are being built to cater for this while neglecting the very important first two steps. Are you helping your customers evaluate? Just as every retail experience has such things as a cash register, bar code and a price tag, these add little to the retail experience. Eighty percent of the experience has to do with the overall relationship between the store, the service and the customer. 
  
6. Email Marketing 
6.1 ‘I want’ vs ‘I buy’ 
We continually trumpet the effectiveness of ‘opt-in’ email newslists (‘opt-in’ being lists that people have chosen to subscribe to). These subscribers have joined a community that shares the same interests. 
  
How responsive is that community? 
  
Forrester Research has found that click-through rates for opt-in email reached 18%. This compares to 0.65% for banner ads. The message is crystal clear. 
  
It’s like moving to a new city. One of the first things you look for is people who have similar interests. You form a bond with these people. You become part of the community. You have more trust in the information they provide than the sandwich board man walking past with a new message that’s screaming out for you to buy something. 
  
The internet city is no different. Start building email communities today. Give its members a reason to belong. All figures show that this audience will remain loyal. For information email, communities@thinking.com.au
  
  
  
  
  
  

THINK MAIL is Thinking Australia’s Internet Management Newsletter. It is compiled and written by Mark Bergin and Joe Di Stefano. For further information contact Thinking Australia.
 
Thinking’s mission is to help our clients establish, develop and maintain successful internet brands. We help them complete the transition from mere internet presence of their brand to the more important phase of internet - brand management which covers the management of their “voice”, “experience” and “audience”.
 
For Back Issues visit http://www.thinking.com.au/thinknews.asp
 



   
  

To unsubscribe, reply to this email with your name and unsubscribe in the subject line. Please send this newsletter to anyone who you believe would benefit from this information.
 
To subscribe, email to newsletter@thinking.com.au with your name and subscribe in the subject line. Thinking Australia Pty Ltd
ABN 580 70 357 425
Level 1 406 Collins Street
Melbourne VIC 3000 Australia
Tel: 61 3 9821 5055
Fax: 61 3 9821 5588
Email: info@thinking.com.au
Web: www.thinking.com.au