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In
my view... following the frenzy
to get websites built, with an expectation of reaching distant audiences or
selling widgets to customers on the other side of the world, it is now
becoming apparent that the single most productive use of the Internet is,
in fact, to better reach current audiences and serve current customers.
To
extend and enhance traditional relationships. This viewpoint describes all
manners of Internet activity – news and entertainment, supply chains,
communities of common interest and, yes, even the selling of widgets.
Businesses, large and small, with
established real-world presence, are now assuming their rightful place as
winners in productive and profitable online business activity. These
successes aren’t coming from previously unknown customers, but from
current customers. Customers who know and trust the businesses, have
traded with them before and are happy to occasionally or regularly trade
with them online now.
We all know the metrics that demonstrate
it costs 10x as much to create a new customer as it does to keep a current
customer. In recent years, an over-enthusiastic embracing of the Internet
caused otherwise savvy operators to conclude that the Internet would
rewrite these metrics and dramatically reduce the effort and cost of
creating new customers. Like magic, the Web was going to cause customers,
thousands of miles away, who otherwise knew nothing of the business, to
flood the operator’s website with widget orders. And like magic, this
expected reduction in effort and cost was an illusion.
As much as any other factor, the failure
of Internet-only businesses, lacking in real-world presence, has resulted
from the
unexpected and consequently overwhelming cost of customer acquisition and
retention. Not only have dot.com businesses needed to spend significant
sums of money both online and offline to build name and brand recognition,
they have regularly needed to bribe customers to trade at their websites.
Below wholesale prices, free shipping, order size discounts, gifts with
purchase – all have been contributors to the problem of low or negative margins
that challenge Internet-only retailers. As every
successful retailer knows, you cannot buy customer loyalty. Service
excellence earns customer loyalty.
It is not surprising that Internet
business initiatives arising from established, real-world businesses are
winning the online retail competition. Bricks ‘n’ clicks businesses
already have worked long and hard to build a brand, known to thousands or
millions of current customers. Bricks ‘n’ clicks businesses already
have thousands or millions of customers with whom they trade on a regular
basis. In most circumstances, bricks ‘n’ clicks businesses have
facilities available for customers to visit.
Extend and enhance your established,
traditional customer relationships online first! Do not focus on the
acquisition of long-distance customers before attending to every need of
the wonderful folks who are currently paying the rent. Use the Internet
to improve your service to your existing customers. Do it with excellence
and new customers and lapsed customers that also visit your site will stay to
make a purchase and will most certainly tell others about the excellent online service
they enjoyed.
If you haven’t already done so, take a
couple of minutes to read through the twenty-four item Internet
integration checklist contained in the recent VIEWPOINT
article, "Retail
is Detail Online Too!" This checklist can get you started
or keep you sure-footedly on the trail to profitable online sales and
customer service success. Leverage every competitive advantage that you
have worked long and hard to create - your excellent reputation, your
in-demand products and services, your knowledgeable and accessible sales
team and your established customer base.
If you are not a retailer but are in any
way engaged in reaching an online audience, whether to inform, entertain,
buy, sell or serve, the first fundamental of Internet success is the same.
Use the Internet to extend and enhance established or traditional
relationships first. Execute well and you will succeed. It’s that simple!
If you are endeavoring to connect to a
new, unknown or disparate audience, whatever the purpose, you must first
address your target audience’s what and why. What is their gain in what
you are doing? Why you and not someone with whom they are already
acquainted? Your success in answering these questions will directly
determine success in your online initiative.
Happy
retailing,
Peter
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