Web Site Donts
| Category: Database Marketing | Date: 2001-07-24 |
Increasingly consumers would rather sit at their computers searching for information than spend another hour sitting through another execrable sitcom or over-hyped sporting event. This trend should cause some waves of fear at companies like Gillette, Procter and Gamble and other mass marketers of the past, who still spend upwards of 80 percent of their communications budgets on T.V.
The market for their products is increasingly splitting up into millions of individuals who do their own research and find what they want to do on the Net. It is interesting to note that according to a recent Harris-Poll survey, Amazon.com ranks 35th among the most widely recognized brand names. Especially considering they came into existence only four years ago.
As baby boomers age, they’re looking for leisure activities that require less effort, less physical exertion, less risk and fewer "projects." Stressed-out, time-starved consumers demand good service. This is particularly true of baby boomers who have become jaded after two decades of shopping and spending. Consumers are not satisfied with the current level of service they are receiving. And because of the tight labor market, it will
become even harder for companies to meet the consumers’ high expectations.
The Net is just not another medium. It is a profoundly different experience. The Net is about choice, freedom and control. It is a place to escape, temporarily, the incessant interruptions of marketers whose products are less distinguishable, except for the advertising that promises different lifestyles and never seem to pay-off.
For the online advertisers, the challenge is to educate, entertain and entice because users can not be compelled to pay. Online consumers need more than someone to entice them with toothy smiles and kissing-sweet breath, because they won’t be compelled or trapped into paying attention.
"Solution selling" is a promise that provides on-line advice from merchants who have discovered that the net has a tendency to drive prices to zero, if they are not astute enough to provide value concepts. There are also cost advantages in letting customers construct their own online solutions. Think about the economics of teaching thousands of Home Depot employees to give helpful advice to weekend do-it-yourselfers from experts who know how to build a porch from scratch.
Will consumers pay more for grocery shopping on-line? Consider how much are most Americans are willing to pay to have a pizza delivered to the home: $10 - $15, when they could easily pay only $5 at the local store. If consumers are willing to pay this kind of premium for a single pizza, what might they pay to
get the week’s groceries delivered to their doorstep? It is the on-line value proposition that has not been delivered properly yet.
Clever producers and retailers will develop hybrid models that give the consumer the best of both worlds. In a study of 850 consumers, Ernst & Young found that 64 percent of Internet users research products online and then buy them at stores or by telephone.
Web sites increasingly offer incentives to convert shoppers to buyers and to keep them loyal customers. Do they work? The 1,905 net users polled by NFS, 53 percent said they would gladly increase the amount they spend at specific web sites if incentives, such as reward points, were offered; 47 percent said they would increase loyalty to sites for incentives; and more than 50 percent said they would provide personal information for incentives. Only 15% said that rewards would have no influence on their purchasing decisions.
So, what do you commit to your web site? First, and most important, you must clearly define your on-line goals. This often gets confusing while listening to your many internal audiences. Some will what the site to be the technology one stop spot with web search engines that visitor can design themselves. Others will want the site to deliver operation cost savings. Still others will want online sales as long as it doesn’t conflict with the existing channels.
Once the goal is defined, take the time to design a site that will deliver it better than anyone else’s site. But be careful. Here are five sure-fire "don’ts" that can destroy your web site’s marketing potential in record time.
Mistake #1: Scrimp On The Budget.
It is no coincidence that the top performing web sites have big marketing budgets. Harris Interactive research shows that Amazon, Priceline, eBay and E*Trade are the most recognized ecommerce sites on the web. Intermarket Group reports that in 1998, Amazon.com had the biggest web site marketing budget
($133 million), followed by E*Trade ($71.3 million). Even the little guys arent skimping: Intermarket reports that companies with less than 100 employees spent an average of $2.2 million to market their sites.
Okay, so you don’t have millions to spend. But of the amount that is available what percent is devoted to the site? It’s probably a paltry sum, as it is with most companies. Two years ago, it cost an average of $35,000 to construct an ecommerce site. Today, the figure can easily reach into the millions of dollars. And this is not for promotion. This is the simple price of entering the field. The average cost of advertising is in the hundreds of millions of dollars among the companies that are legitimate marketers.
Mistake # 2: Only Advertise Online.
The effectiveness of banner ads continues to drop. "Click for more." Already, only 14 percent of top e-merchants advertise exclusively online, according to Forrester Research. The rest spend 44 percent of their ad budget on off-line media, and plan to increase the off-line share to 52 percent.
Mistake #3: Believe The Cost Will Be Cheaper Next Year.
New computers may cost less next summer, but it will never be less expensive to build an on-line presence than it is right now. Top Internet marketers and many university professors predict that brands are the key to on-line success because they help people sift through a glut of choices.
Mistake # 4: Have No Champion.
This is a guaranteed method for making your web site mediocre. Without an in-house champion to research the newest and most exciting possibilities for your site, it will quickly dissolve into deadly brochureware, and your once golden opportunity will quickly turn into a dead-zone.
Mistake # 5: Ignore The Image Of "On-line."
Net shoppers are more likely to tell their friends about an online shopping experience than a favorite movie, according to Opinion Research Corp. International (ORCI). The typical Internet consumer tells 12 people about their on-line shopping experience, compared to the average U.S. consumer who tells eight people about a favorite film.
Marketers who do any of the above can expect negative results within three months. Do them all and you may as well get a head start on bankruptcy proceedings right now.
Doing business on the web can change a lot of things for the better. But one thing remains the same. You still have to spend money to make money or to boost the bottom line through cost savings.
Here are some examples of firms that are reaping major benefits through the Internet. Cisco Systems has used the web to convert its expense reporting system to a self-service process that requires only two people to handle 15,000 reports filed each month. The system costs $5 a report, compared with $50 a report
for the industry. Thats a saving of $675,000 a month. Pete Solvik, Cisco chief information officer, says the system paid for itself in three months.
New electronic billing schemes are slashing the cost to users like utilities to send bills and to customers to mail back payments. Businesses and utilities save on sending bills and customers save on mailing-back payments. IBM figures that these systems, which allow customers to pay bills with a few mouse clicks, will
save banks, billers and customers as much as $46 billion a year.
By using the Internet to sell tickets, airlines are reaping millions of dollars in saved travel agent commissions. Travel agent commissions cost airlines almost 15% of total revenues, the third in expenses after labor and
fuel. America West, for example, figures it costs an average of $6 to sell a ticket over the Internet, versus $26 through a travel agent.
IBM saved $300 million in telephone support costs by directing 14 million customer questions to self-service web sites. The company expects to save an additional $240 million this year by using the Net to sell $15 billion in products and to buy $12 billion in parts and services. Moreover, the company figures it will save $100 million by training employees online.
About the Author.
Robert McKim.
:To contact see details below.
DBMarkets@aol.com
http://www.msdbm.com
The market for their products is increasingly splitting up into millions of individuals who do their own research and find what they want to do on the Net. It is interesting to note that according to a recent Harris-Poll survey, Amazon.com ranks 35th among the most widely recognized brand names. Especially considering they came into existence only four years ago.
As baby boomers age, they’re looking for leisure activities that require less effort, less physical exertion, less risk and fewer "projects." Stressed-out, time-starved consumers demand good service. This is particularly true of baby boomers who have become jaded after two decades of shopping and spending. Consumers are not satisfied with the current level of service they are receiving. And because of the tight labor market, it will
become even harder for companies to meet the consumers’ high expectations.
The Net is just not another medium. It is a profoundly different experience. The Net is about choice, freedom and control. It is a place to escape, temporarily, the incessant interruptions of marketers whose products are less distinguishable, except for the advertising that promises different lifestyles and never seem to pay-off.
For the online advertisers, the challenge is to educate, entertain and entice because users can not be compelled to pay. Online consumers need more than someone to entice them with toothy smiles and kissing-sweet breath, because they won’t be compelled or trapped into paying attention.
"Solution selling" is a promise that provides on-line advice from merchants who have discovered that the net has a tendency to drive prices to zero, if they are not astute enough to provide value concepts. There are also cost advantages in letting customers construct their own online solutions. Think about the economics of teaching thousands of Home Depot employees to give helpful advice to weekend do-it-yourselfers from experts who know how to build a porch from scratch.
Will consumers pay more for grocery shopping on-line? Consider how much are most Americans are willing to pay to have a pizza delivered to the home: $10 - $15, when they could easily pay only $5 at the local store. If consumers are willing to pay this kind of premium for a single pizza, what might they pay to
get the week’s groceries delivered to their doorstep? It is the on-line value proposition that has not been delivered properly yet.
Clever producers and retailers will develop hybrid models that give the consumer the best of both worlds. In a study of 850 consumers, Ernst & Young found that 64 percent of Internet users research products online and then buy them at stores or by telephone.
Web sites increasingly offer incentives to convert shoppers to buyers and to keep them loyal customers. Do they work? The 1,905 net users polled by NFS, 53 percent said they would gladly increase the amount they spend at specific web sites if incentives, such as reward points, were offered; 47 percent said they would increase loyalty to sites for incentives; and more than 50 percent said they would provide personal information for incentives. Only 15% said that rewards would have no influence on their purchasing decisions.
So, what do you commit to your web site? First, and most important, you must clearly define your on-line goals. This often gets confusing while listening to your many internal audiences. Some will what the site to be the technology one stop spot with web search engines that visitor can design themselves. Others will want the site to deliver operation cost savings. Still others will want online sales as long as it doesn’t conflict with the existing channels.
Once the goal is defined, take the time to design a site that will deliver it better than anyone else’s site. But be careful. Here are five sure-fire "don’ts" that can destroy your web site’s marketing potential in record time.
Mistake #1: Scrimp On The Budget.
It is no coincidence that the top performing web sites have big marketing budgets. Harris Interactive research shows that Amazon, Priceline, eBay and E*Trade are the most recognized ecommerce sites on the web. Intermarket Group reports that in 1998, Amazon.com had the biggest web site marketing budget
($133 million), followed by E*Trade ($71.3 million). Even the little guys arent skimping: Intermarket reports that companies with less than 100 employees spent an average of $2.2 million to market their sites.
Okay, so you don’t have millions to spend. But of the amount that is available what percent is devoted to the site? It’s probably a paltry sum, as it is with most companies. Two years ago, it cost an average of $35,000 to construct an ecommerce site. Today, the figure can easily reach into the millions of dollars. And this is not for promotion. This is the simple price of entering the field. The average cost of advertising is in the hundreds of millions of dollars among the companies that are legitimate marketers.
Mistake # 2: Only Advertise Online.
The effectiveness of banner ads continues to drop. "Click for more." Already, only 14 percent of top e-merchants advertise exclusively online, according to Forrester Research. The rest spend 44 percent of their ad budget on off-line media, and plan to increase the off-line share to 52 percent.
Mistake #3: Believe The Cost Will Be Cheaper Next Year.
New computers may cost less next summer, but it will never be less expensive to build an on-line presence than it is right now. Top Internet marketers and many university professors predict that brands are the key to on-line success because they help people sift through a glut of choices.
Mistake # 4: Have No Champion.
This is a guaranteed method for making your web site mediocre. Without an in-house champion to research the newest and most exciting possibilities for your site, it will quickly dissolve into deadly brochureware, and your once golden opportunity will quickly turn into a dead-zone.
Mistake # 5: Ignore The Image Of "On-line."
Net shoppers are more likely to tell their friends about an online shopping experience than a favorite movie, according to Opinion Research Corp. International (ORCI). The typical Internet consumer tells 12 people about their on-line shopping experience, compared to the average U.S. consumer who tells eight people about a favorite film.
Marketers who do any of the above can expect negative results within three months. Do them all and you may as well get a head start on bankruptcy proceedings right now.
Doing business on the web can change a lot of things for the better. But one thing remains the same. You still have to spend money to make money or to boost the bottom line through cost savings.
Here are some examples of firms that are reaping major benefits through the Internet. Cisco Systems has used the web to convert its expense reporting system to a self-service process that requires only two people to handle 15,000 reports filed each month. The system costs $5 a report, compared with $50 a report
for the industry. Thats a saving of $675,000 a month. Pete Solvik, Cisco chief information officer, says the system paid for itself in three months.
New electronic billing schemes are slashing the cost to users like utilities to send bills and to customers to mail back payments. Businesses and utilities save on sending bills and customers save on mailing-back payments. IBM figures that these systems, which allow customers to pay bills with a few mouse clicks, will
save banks, billers and customers as much as $46 billion a year.
By using the Internet to sell tickets, airlines are reaping millions of dollars in saved travel agent commissions. Travel agent commissions cost airlines almost 15% of total revenues, the third in expenses after labor and
fuel. America West, for example, figures it costs an average of $6 to sell a ticket over the Internet, versus $26 through a travel agent.
IBM saved $300 million in telephone support costs by directing 14 million customer questions to self-service web sites. The company expects to save an additional $240 million this year by using the Net to sell $15 billion in products and to buy $12 billion in parts and services. Moreover, the company figures it will save $100 million by training employees online.
About the Author.
Robert McKim.
:To contact see details below.
DBMarkets@aol.com
http://www.msdbm.com
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