After the Hype, What Now?

Spring Internet World, 1999
by Elaine Morris Palmer
As seen on

State of the Art:

The frontier landscape has changed once again.  The last two Fortune 500 companies who weren’t on the Web came on in 1998. The days of experimentation are over. The Internet’s reach is equal to radio and cable TV and still growing. So is cost of entry. Interactive activities can no longer be a skunkworks funded in a small area of the company. Second generation e-commerce is characterized by the self-service commerce model and the technology used to guide the

consumer through the process.

Strategies for Now:

Þ        Estimates need to be made in pencil.

Þ        Forget traffic! Trends are more relevant than statistics.

Þ        Categories count more than sales.

Þ        Session depth is more important than time spent.

Þ        Identify your business goals and define your metrics around them.

Þ        Measure thoroughly and regularly.

Þ        Get into customer segmentation strategies now.

Þ        Be operationally excellent.

What You Need to Know:

Two terms saturated the marketing track at Spring I World ’99, here in Los Angeles:

personalization and integration.

What it all boils down to is:

•           Who is the target, what do they need from you online? And,

•           People will use the channel to your company that’s most appropriate to

their needs and preferences.


Ask yourself: Are you sitting on your brand laurels? That is, do your users know you in this medium? Are they same as your users offline? Do people know you as a company or do they know your products? Are you developing strategies for an audience that might not care? Investigate who your customers really are, not whom you think they are.  Perhaps you need to extend the brand or build a sub-brand for your online customers.

Once you’ve answered those questions you must know: how effective is your advertising and marketing?  Will people coming to your site use the Internet for the business you intend them to use it?  And most importantly, are you ready to deliver whatever that is? Is there a disconnect between what ought to work and what people are actually doing on your website?

Know your customer.

E*Trade used their site to perform a little online research. They found out at what point people were leaving to go to other sites. They were able to strategically deploy a section  (research) on their site to keep those users there and migrate them up the value chain. Continually adding value to information given was key to the early Web success stories.

Plus, targeting users can double click-through rates and double conversion. There are concrete business metrics we can use to increase the volume of opportunities and have a measurable impact at the point of sale.

You can model your customer base with increasing levels of intelligence:

Level 1)  You know how many users you have but nothing about them;

Level 2)  You know nothing about them but know when they come back;

Level 3)  You have an anonymous user profiles; and

Level 4)  You have “discreet user identities” at which point you can integrate their online with their offline behavior. Bingo! You’re light-years ahead of “how many hits did I get?”

Building a holistic understanding of your consumer will help you achieve differentiation, customer preference and domination of your market.


Less than 5% of the top merchants surveyed (including Cyberian Outpost) are planning to renew their portal deals. Portals are a part of long-term strategies, for sure, but traffic is not enough.  Integrating by adding promotional programs, restructuring your value proposition, using targeted direct response moves customer engagement across channels tying together relevant information. The result: the right offer to the right person at the right time.

ROI is not the right metric. It’s the return on loyalty. Reward faithful customers with a loyalty proposition with tangible benefits. By tying your brand in with others, consumers gain leverage from being part of the network you create. Now, you have the power to turn the tire kicker to a buyer to a repeat buyer to a network buyer.

Directions and Trends: The whole is greater than the sum of the parts.

Deep Personalization means the customer sets the strategy! The Web is a personal medium. Organize business in the Internet space around the customer experience (without it there is no relationship!). Customize information. Give as much of it as possible, keep it up-to-date and relevant; tighten the feedback loop, improve customer service by shaping and directing communications. This pro-active engagement sets the stage for long-lasting and profitable relationships.

Channel Management means no matter what channel the customer comes from onto the Web, you recognize him, know his patterns, and you have all the information handy. You can deftly adjust service offerings relative to where the customer is in the sales channel.  Customers at any stage of  the decision process can use the channel that’s most appropriate to them: buy from you, call you, email you, visit you.

Partnership Strategies can drive your business, extend your brand and product and make greater value for your customers. Circle the wagons around special interests. Be innovative.

Loyalty Programs are all the buzz. Relationship = brand = trust. But if you’re just into digital green stamps, you’re only a fast follower. You should be looking at customer co-ops where customers band together and negotiate collectively for lower costs and services.

Customer Segmentation Strategies uses sophisticated metrics to calculate the lifetime value of each customer and how the return on those relationships can maximize those segments. This has a measurable impact at the point of sale. Gross margin increases.

Beware of Price Boosting. In case you have this in mind, customers are making us work a lot harder for their money than ever before.  They will not tolerate discounts dropping because you think you have them for life.


Though, as Seth Godin says, “The Web is the greatest marketing medium of all time,” the fact is that this is just the beginning. The communication revolution is taking place on multiple fronts.

There will be 700 million wireless users in the next 4 years. 40 million people will log on today and stay online 30-40 minutes or more. The exposure rate has no limit in site. Rich McGinn of Lucent Technologies, sees the Internet as part of the communications spectrum “seamlessly woven with software between wired and wireless networks”. And consumers have come to the conclusion that you need them more than they need you.

Words to the wise: Count on your market growing up and moving on; keep a perspective on customer expectations; keep listening to your market, and be relevant from a brand/value standpoint.

For more on Spring Internet World and on other marketing strategies for the Internet space, contact Elaine Morris Palmer at