Think MAIL |
| Thinking
Internet Management Newsletter: Issue 2.5 |
| Date Issued:
8 August,
2000 |
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.
Thinking has moved
We're actually talking about Thinking, the Company, rather than the grey
matter in your head. Over the past few months Thinking has been working in
rather cramped surroundings on top of a car park.
Last Friday, we moved to real premises inhabited by humans rather than
vehicles. In fact there is no car park in the building at all. The new
address details are:
Level 1
406 Collins Street
Melbourne VIC 3000.
Tel: (03) 9821 5055 Fax: (03) 9821 5588
In this issue
1. New Economy Thinking
1.1 Are you Building a Facility or Marketing a Capacity?
1.2 It's Easier to Keep up with your Audience than Technology.
2. Benchmarking
2.1 How Much does your Banner Ad Cost?
3. Audience Behaviour
3.1 Price does not Rule the Web, Trust Does.
3.2 What Makes Customers Shop for Frozen Peas Online?
4. Marketing
4.1 Women go Online in Numbers.
5. Risk Management
5.1 Privacy; a Big Issue.
6. Email Marketing
6.1 Email; the Online "Word of Mouth"
7. Search Results
7.1 The Growing Search
8. Destination-e
8.1 New seminars. Book Now
1. New Economy Thinking
1.1 Are you Building a
Facility or Marketing a Capacity?
Most of today's companies come from a
manufacturing economy where you could judge success by the organisation's
size, its breadth of machinery and the length of its production line.
So,
when these old economy companies attempt to move into the new economy they
start by trying to build a facility: a manufacturing facility. It's one
major reason why the internet is at the moment consumed by discussion over
infrastructure and technology. If someone mentions e-commerce these days, it
rarely has to do with how their website is catering for a growing audience
and providing transaction options that meet customer's needs.
It's usually
about how their technology is talking to someone else's technology. We have
moved from a manufacturing economy to one based on information. It can
provide you with a powerful tool to communicate your market capacity to a
growing audience. The focus of the tool doesn't have to be technology, it
has to be audience and customers. Without them there is no commerce whether
it be "e" or any other letter of the alphabet.
Do you understand
your audience? You probably understand them better than you'll ever
understand the technology. Take this understanding and transport it to the
internet. To find out how Thinking has helped customers put together an
e-commerce solution, have your technology contact our technology at
newthinking@thinking.com.au
1.2 It's Easier to Keep up with you're Audience
than Technology.
If you focus on technology you may never reach your
intended goal. Technology is moving so quickly. After a few months of heavy
technological investment, many organisations look out at their website to
find an expensive monument to bits and bytes with little relevance to Bill
and Ben.
In some cases we've found that the technology has changed and
evolved before the client has even launched their website. So what do you
do? Here is a simple, realistic path and it is based on getting your
e-commerce right before anything else.
1) State clearly and concisely your
aims and what you expect to achieve from your internet marketing.
2) Build a
presence. (Start modestly, don't overspend, find your audience.)
3) Monitor,
evaluate, adjust, evolve the site. (The internet can allow you to do this
with greater accuracy than any other medium.)
4) Monitor adjustments,
evaluate and extend. (This could go through a number of different
permutations.)
5) Learn, burn, build anew, evolve. (Take your learning and
build something that is more relevant to your online audience. Then begin
the process all over again.) This is a totally new medium for everyone. The
way to survive is to learn and evolve. Audiences have never been into
cutting edge technology. We should have learnt that from the VHS vs Beta
argument many years ago.
For a further explanation of this process contact
newthinking@thinking.com.au.
2. Benchmarking
2.1 How Much does your
Banner Ad Cost?
We'll soon be forced to change the way we think about banner
ads. Not by anything we say, but by consumers who are voting with their
mice. Banner ads are related more to the old economy than the new.
Recently,
I've seen click-through rates down as low as 0.03%. You have to ask
yourself, what cost does this add to the important figure of acquiring
customers?
Take a look at the following example:
Suppose a website charged
you $70 per CPM (Cost Per Thousand customers). That means you're paying 7
cents for each customer exposed to your banner. Not bad. For ease of
calculation, suppose 1% of these people clicked through to your promotion.
Now the cost has gone up to $7 for every visitor to your site. Let's go the
next step and assume just 1% of these were converted into paying customers.
The cost of acquiring that customer has now become $700.
When click through
rates go down, this figure becomes even more alarming. You had better be
certain you have ways of keeping that customer loyal. You have invested far
too much to allow them to disappear for ever. That's the reason for our
sermon on technology earlier.
The technology will remain long after the
customer has gone. Unfortunately, it'll probably still be there long after
you've gone and the company has closed its doors.
Start looking at new
communication models that are more appropriate for the internet, email benchmarking@thinking.com.au.
3. Audience Behaviour
3.1 Price does not Rule
the Web, Trust does.
A recent issue of Harvard Business Review included an
article that looks at the "economics of e-loyalty".
Contrary to
most opinion, the study found that the web could be a very
"sticky" place if you applied the right principles to customer
acquisition, retention and service. You may think that "price"
rules the web.
The startling result was that when online shoppers were asked
to name the attributes that were most important in an e-tailer, the number
one response was "a website I know and trust."
The article
continues: "All other attributes, including lowest cost and broadest
selection, lagged far behind. Price does not rule the web; trust does."
There are a number of visual and actual hallmarks that sites should have
before they can begin to attain that trust. For more, email audience@thinking.com.au.
3.2 What Makes Customers Shop for Frozen Peas
Online?
Grocery shopping is one of those chores that you either completely
loathe or at least dislike. I don't really know anyone who loves it. But
grocery shopping on the internet? What would get people to do it? And are
there pointers for companies looking at e-commerce.
Price Waterhouse
Coopers' recent study on "What will entice customers to shop for
groceries online", rated the following as the leading responses:
Free
delivery for large orders - 46%
Ability to set a specific delivery window
-36%
Can create list of frequently purchased items - 31%
Ability to pick up
your order at the local store - 26%
Nothing will entice me - 21%
Not earth
shattering or revolutionary.
The top responses are about convenience and
expediency. The very same reasons we shop at supermarkets. In many ways the
internet is just another delivery medium for the things we do day to day.
4. Marketing
4.1 Women go Online in
Numbers.
The uptake has been phenomenal. Only a few years ago women
accounted for just 15% of the online population.
Currently, they account for
50%. According to some statistics, 58% of all new users are female. 63% of
those who shop online more than once a week are female. And there has been a
rush of websites that now cater exclusively for this new market: for example
female.com.au.
The interesting point for marketers is that they are making
more use of the web than men.
60% of women believe that email has improved
their connections to family members (as opposed to 50% of men).
71% believe
that email has improved their relationships with friends (51% of men).
56%
would miss email a lot (43% of men).
Women will bring to the web a
sociability and interactivity that they enjoy and do far better than men.
It's a trend that email marketers should take note of.
For ways to reach
more women, contact marketing@thinking.com.au.
5. Risk Management
5.1 Privacy is an Issue.
The Internet Advertising Bureau has attempted to formulate privacy
guidelines that outline ways to ensure you are protecting a person's
identity and the information they have imparted to you.
To comply a company
should:
Post a Privacy Policy prior to asking for personal information.
Provide a direct and easy-to-find link to that Policy on its website.
Include what information is being collected, why and how it may be used for
future marketing to the individual, and possible distribution of the
information to third parties.
Include an individual's choices regarding
collection, use and distribution of information and the consequences of an
individual's refusal to provide information. Indicate whether it supplements
the individual's data with data from third parties.
Allow consumers to opt
out of the data collection when it will be used for an unrelated purpose.
Allow consumers to opt out of future marketing programs or distribution to
third parties.
Notify consumers if their information will be used for
purposes not originally described by the company and allow consumers to
easily opt out of such programs.
The internet is introducing a new openness
between company and customer that has rarely been witnessed before. As with
any transaction, before it can take place successfully an amount of trust
has to develop.
Without it you can't move on to the important issue of
gaining their loyalty.
6. Email Marketing
6.1
Email - The online "Word of Mouth"
Opt in email communities have
become the community centres and meeting places of the internet.
One
research statistic shows that 94% of consumers have opted in to at least one
email community. An amazing 89% of those surveyed believed email was a good
way to get information about products and topics of interest.
To take it
further, when online buyers were asked how they found out about new products
and services the responses were: Visiting a website - 76% Opt-in email
(community) - 58% Friend - 34% Banner ad - 30% Physical mail - 29%
Unsolicited Mail - 12% Email is the online equivalent to the power of
"Word of mouth".
Start your email community today. Contact us at emarketing@thinking.com.au.
7. Search Results
7.1 The Growing Search
One of the signs of a growing market is that it can begin to comfortably
fragment itself and cater for different customer needs and profiles. Due to
the lack of satisfaction with the larger search engines, a number of
smaller, more specialised search engines have recently sprung up.
Here's a
short list:
Somewherenear.com
This British only website allows you to enter
the type of business you're looking for (hotel, cinema or even curry house)
and your location. It then returns the business closest to you.
Webhelp.com
Enter a question and within minutes you'll receive a response from a human.
Financialfind.com
This search engine indexes over 1.4 million financial web
pages.
Xrefer.com
A reference site powered by encyclopaedias, dictionaries,
books of quotations and is backed by such trusted publishers as Penguin and
Oxford University Press.
Rusure.com
A comparative shopping website that
first finds the item you're looking for, then can display a number of online
retailers who stock it and their asking price. Why is there this growth in
such search engines.
The simple answer is that they are becoming more
customer focussed and needs driven, rather than technology driven. Please
take note.
8.
Destination-e
8.1 New
Seminar - Book Now Understanding the business issues for your e-future - A
Seminar not to be missed!
BOOK TODAY for you opportunity to secure your e-future
where & when
wednesday 13th September 2000 Venue Hotel Sofitel Melbourne
25 Collins St Melbourne The Auditorium Seminar 4:00pm - 6.00pm Refreshments
6.00pm
Business
success isn't based on the technology; it is based on a business's ability
to perform in a market. In today's business environment the "e"
phrase has become the dominant factor and often the key to equity market
respect. However, the values that this respect is based on have shifted.
The
traditional economy has respect based on earnings - the new economy has
respect based on speculation, and lots of it. The road to higher returns
isn't difficult if the fundamentals are applied.
Over the past 9 years I've
applied the following basic principles to each brief I've received. Most
outcomes have exceeded client expectation - most have been conservative in
the use of technology.
1. Find the audience & communicate
2. Empower the
consumer
3. Build a relationship based on serving, not leading customers
4.
Do what you promise - not promise what others promise
5. Work on customer
value and manage customer yield
The above list isn't about relational
databases or internet enabled systems, it's about doing business. However,
each of these values must be facilitated both online and offline. The key to
online success is to move your business, based on the market's transition
from the traditional to the new economy.
To delay this move might mean that
your customers have moved to the new economy, looked for your business, not
found it and then found an alternative. Setting up shop too early may
exhaust your financial reserves before returns.
The key is to be ready - be
prepared - establish a base camp and organise a rapid response process to
make your move when the timing is right. The biggest barrier to moving into
the new economy is human resources.
It is people that make the difference
not computers - computers are termed compatible because they are - people
offer a range of dynamics, provide a range of options and multi tasking that
only a human being can offer.
So the key to online success is to develop
human potential, capital and capacity. The destination-e seminars are brain
food for a hungry business community. If your mind is hungry for knowledge
and needs to be empowered then join me for the start of your journey to
destination-e. Become involved in your future.
Personal development is
company development. It's often said that the greatest asset a company has
is its people - isn't it about time your new economy budget invested in the
most important company asset - your people.
The path to your e-future isn't
about technology; it's about business and life. Destination-e provides the
knowledge and empowerment to enable you to pursue a prosperous future.
Understanding the business
issues for your e-future - A Seminar not to be missed!
BOOK TODAY for
you opportunity to secure your e-future
where & when
Wednesday 13th September 2000
Venue
Hotel Sofitel Melbourne
25 Collins St Melbourne
The Auditorium Seminar
4:00pm - 6.00pm
Refreshments
6.00pm
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
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Thinking Australia Pty Ltd
ABN 58
070 357 425
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
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