Boom, bust and more insight

In the second of this two-part series, Michael Shostak explores the legacy that dot-com mania left behind, and how businesses and consumers are better off as a result. You can find part one in the Aug. 13/01 issue of Strategy or online at www.strategymag.com by searching for 'Boom bust insight'.

In the second of this two-part series, Michael Shostak explores the legacy that dot-com mania left behind, and how businesses and consumers are better off as a result. You can find part one in the Aug. 13/01 issue of Strategy or online at www.strategymag.com by searching for ‘Boom bust insight’.

We had boom hype. Now we have gloom hype. But consumer Internet adoption continues to grow steadily and smart organizations in ‘traditional’ industries are now, more than ever, embracing new opportunities online.

The difference today, of course, is that organizations have learned from the fall of the dot-com’s. They’ve learned that business fundamentals – marketable products, profitable operating models and strong organizational leadership – are at the heart of any successful business. And most importantly, organizations have awoken to the realization that the Internet is – and should be – nothing more than an extension of their business.

Consumers are the real winners in this fundamental shift, so let’s examine three benefits they derive from the Internet – convenience, connection and content – and what the impact is for marketers.

Convenience

Welcome to the era of ‘anytime, anywhere’ service. The 24/7 nature of the Internet has changed consumers’ expectations of what is acceptable. Gone are the days when I would spend my lunch hour lining up at the bank to pay a bill, transfer money or talk to someone about a loan application. Gone are the days when I would have to wait to get home at the end of the day to get the latest news coverage. Gone are the days when I would have to wait on hold for twenty minutes to order cable services.

The impact for marketers: whether you’re doing business online or not, be prepared for changing consumer expectations about the accessibility of your business. Nine-to-five customer support hours will not cut it. If you don’t offer greater convenience for your customers, your competition will. Fortunately, more so than ever before, new self-serve technologies are allowing organizations to offer customers greater accessibility (and hence, greater convenience) at a lower cost to the enterprise.

Connection

As a direct result of the proliferation of the Internet, consumers are becoming more accustomed to electronic forms of communication – most notably, email. The impact to business is significant. As an example, last year I researched and booked my ski vacation to Europe via email, never actually speaking live to a human being. I booked my trip to Austria, conversing electronically with a travel agent in Florida, while busily going about my everyday life in Toronto. That could not have happened pre-Internet days.

For marketers, if you don’t arm your sales and customer support staff with the power of electronic communications, your competition will – and take business away from you. I should mention that in my ski vacation example above, I contacted several local travel agencies by phone (most didn’t have e-mail addresses listed), many did not return my call, or returned it days later. I ended up buying my travel services from an agency in Florida not because they had the cheapest prices, but because they were the most prompt in responding to my inquires – via e-mail.

Content

Most profoundly, the Internet has given consumers new powers because of the unprecedented depth and breadth of content available online. Gone are the days of ‘buyer beware’. Now, it’s very much ‘seller beware’.

Think about a category like automotive. Gone are the days of going into a car dealership without being equipped with the right research and information to make the right purchase decision. Today, consumers have access to heaps of online data about cars at their disposal – from dealer pricing to recall history, cross-brand comparisons and ratings from current owners. The balance of power has shifted and categories of consumer products have been affected.

Allow me to share a personal example. Recently, I was in the market for a PocketPC. First, I went to the Microsoft site (manufacturer of the PocketPC operating system) to get a list of hardware manufacturers. Then I went to several hardware manufacturer sites (Compaq, HP, Casio, Toshiba, etc) to get a comparison of different products available. Finally, I consulted several online publications like C|NET to read the latest product reviews and get the perspective of the community of PocketPC users who post product ratings on the site.

By this point, I had narrowed my choices down to one. And as a last measure before walking into a store, I visited several online retailers (Future Shop, Radio Shack, Chapters, etc.) to see who carried the product I was looking for and whether there was a significant variation in price. By the time I arrived at the local electronics retailer, I was likely more knowledgeable than most of their staff on the product I was looking to purchase (including information about a manufacturer rebate program that the store wasn’t even aware of).

For marketers, if you’re not tapped into your customers’ purchase decision process and how access to online information can help influence their purchase decisions, you’re losing sales!

To the untrained eye, my purchase behaviour in the above example appears to have not changed at all – I still buy my gadgets at the local electronics store like I did before. But if this was 1995 the purchase decision process would have looked quite different. And unlike in 1995, the entire process, from initial research to final purchase, took less than two hours. More importantly, I am fully satisfied that I picked the best product for my needs based on information I was able to obtain myself, not information provided to me by the sales staff at the place of purchase. That’s the power of content!

And so – while the media continues to report on the latest technology failures, consumers are quietly reaping the benefits spurred by the proliferation of the Internet: convenience, connection and content. And savvy marketers everywhere, with new-found business sensibilities and an understanding of the shifts in consumer behaviour, are using technology to tap into demanding customer needs, engage in deeper customer dialog and provide an unprecedented level of service to keep those customers coming back.

Michael Shostak is president of Wideframe, a Toronto-based Internet professional services firm that specializes in helping organizations make better use of technology to build more profitable customer relationships. Wideframe is a Vickers & Benson Arnold Inc. company. Michael can be reached at mshostak@wideframe.com or at (416) 480-3760. (www.wideframe.com).