Firing on all cylinders

In early December, I was asked by a Silicon Valley North high-tech association called the Ottawa Centre for Research and Innovation (OCRI) to talk about the future of the Internet. They asked me to provide a bit of Y2K free-wheeling on...

In early December, I was asked by a Silicon Valley North high-tech association called the Ottawa Centre for Research and Innovation (OCRI) to talk about the future of the Internet. They asked me to provide a bit of Y2K free-wheeling on where the Internet’s going to take us next.

Wow, I thought – what an opportunity to gel the last five years of my experience as an Internet marketing executive with my 15 years in the information technology (IT) business. Here was my chance to play Stanley Kubrick and compose 2001: A Next Economy Odyssey.

Easier said than done! There are so many interesting technologies, so many compelling trends, and so much research. So where to begin?

Let’s start with the term ‘next economy.’ All you have to do is look at e-commerce statistics to understand that the lines between old economy and new economy firms are blurring.

When Ernst & Young compiled a list of the top e-commerce retail sites in 2000, the lineup offered a startling observation. Two of the top five business-to-consumer (B2C) sites – Barnes & Noble and J.C. Penney – are what we used to define as ‘old economy’ companies. Yet, clearly they are mastering ‘new economy’ technologies. And if you follow the business press and views of analysts, the three new economy companies on the list – Amazon, Ebay and CDNow – are suffering from Internet Pioneer Illness Syndrome (IPIS), a terminal disease for many pure-play Internet companies.

To prevent IPIS, both old and new economy companies are going to have to graduate to a next economy business model that uses Internet technologies to support all the channels that can touch customers. As TD Waterhouse CIO Michael Foulkes pointed out at a recent e-business conference sponsored by the Federal Treasury Board, his customers have never met a channel they didn’t like. And TD has built its long-term success by learning how to master all of these channels and deliver products and services consistently across all of them for a unified customer experience.

My take is there are several Internet-inspired approaches that can make life easier for all marketers. Their promise is to deliver customer experience through an ongoing innovation stream – a continuum of service if you will – rather than a series of constant disruptions. This isn’t such a nutty idea. More and more technology companies – Microsoft for one – are talking about their next economy innovations as services offerings, as ongoing subscriptions to an evolving set of capabilities made possible by the Internet.

Think about it. What if, using Internet technology, marketers were able to entice customers into ongoing innovation-based relationships? What if enterprises could rely on their marketing partners to deliver long-term on a brand promise of consistent, high-touch relationships? The kind of relationship that’s common to a bank or retailer that’s been around for generations and less like that of an Internet start-up that has a half-life of a piece of chewing gum.

If you think the term ‘next economy’ is hot, how about ‘convergence’? Convergence is an overused, over-hyped word these days, but it applies well to this discussion. If we can learn how to converge the power of secure, reliable bandwidth with relationship management tools, we can do amazing things.

With customers locked into long-term relationships, we can concentrate hard on extending and innovating on the brand promise. Hit-and-stick versus hit-and-run.

If you’ve read The New New Thing by Michael Lewis, you know about Jim Clark, who has been key to the development of companies such as Silicon Graphics, Netscape and Healtheon. I find it really interesting that Clark’s ‘new new thing’ is based on an Internet-inspired customer relationship management model.

MyCFO.com is a technology-based services organization that most of us would dream to be a customer of, because it caters to what Clark calls ‘the wealthy masses’ – people who have lots of wealth to manage but little time to manage it.

Whereas the Netscape business model was to maximize the number of eyeballs and downloads from an Internet site, MyCFO is markedly different. It tries to use Internet relationship management technologies to maximize the number of dollars it gets from customers in a long-term relationship. And as Canadian bankers will attest, there’s not much in this world longer term than a banking relationship!

As a business, Netscape touched millions of people with its revolutionary browser technology, but didn’t make a profit. Conversely, just one year into its launch and backed by $45 million in venture funding, MyCFO has just 275 clients, but those clients represent – wait for it – $42 billion.

There is a strong multi-channel component to MyCFO. As well as having a very robust customer-of-one interface via the Web, each MyCFO client has phone or in-person access to a dedicated wealth management advisor.

So here you have one of North America’s most celebrated online entrepreneurs moving from a mass-market, single-channel Internet play to a deeply steeped multi-channel services approach that emphasizes long-term relationship and profit.

It’s not a bad way to play as we cap the first year of the new millennium. Not bad at all.

Nathan Rudyk is vice-president, retail solutions for Nurun Inc. (www. nurun.com). He can be reached via e-mail at Nathan.Rudyk@nurun.com.