_______
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How The Internet Changed
Marketing Forever
by Jay Neuman
. Print Friendly Version
This article is an excerpt from: The Complete Internet Marketer: A Practical
Guide To Everything You Need To Know About Marketing Online
A new marketing terrain was created at the end of the Twentieth Century. A
generation of pioneering entrepreneurs set out on a great adventure. They
invented new technologies and carved out new business models from an
uncharted virtual frontier. Many did not understand the terrain they would have
to pass through. Hundreds of failed Dot-Com startups would litter the landscape
of the, so called, “New Economy.” Those who did succeed figured out what the
new terrain looks like. As time went by, they adjusted their business plans to
meet the realities of that terrain. In the process, they forever changed the way
marketing is practiced. Those days are over now. But the lessons still remain.
Everyone who hopes to succeed with Internet Marketing will be following in the
footsteps of those original innovators and must learn the lessons their
experiences teach.
This article puts the field in perspective by looking at exactly what happened to
Marketing when the Internet came on the scene. In a few short years, the
Internet has gone from being an obscure new idea to being an essential part of
any marketing strategy. Something changed dramatically when the Internet
came on the scene. To be successful marketing on the Internet, the first lesson
is to understand what did change and the role the Internet now plays in the new
marketing world.
How Did We Get Here?
In the opening years of the Twenty-first Century, we find the practice of
marketing is noticeably different than it was throughout the Twentieth Century.
In the decade of the 1990’s, the field of marketing went through a rebirth of
sorts.
It was similar to another rebirth that happened a hundred years earlier.
Advances in the technology of mass production at the beginning of the Twentieth
Century created a need for marketing as a strategic tool to bring products to the
masses. Traditional textbooks still emphasize things such as balancing product,
placement, price and promotion to appeal to the largest possible audience.
Fundamental marketing needs like these “Four P’s of Marketing” have not
disappeared. However, they have been expanded. Throughout the 1990’s
marketing began focusing more and more on building relationships with
individual customers, one at a time.
Three phenomena came together in the 1990’s to make this possible. To
understand today’s Internet Marketing world, we must start with a basic
understanding of these three.
(1) Database Marketing
(2) One-to-One Marketing
(3) The Internet.
None of these are new. In fact, in one form or another they have all been
around since the early 1970’s. However, advances in technology prompted their
explosion into the mainstream in the 1990’s. As a result, the Twenty-first
century finds no company insulated from the need to interact with their
customers as individuals.
Database Marketing
The advent of database marketing can be thought of as the first step in the
evolution of today’s Internet Marketing environment. In the early 1970’s,
innovators began experimenting, using computing technologies to take the field
of direct marketing to a new level. For the first time, companies began to put
their entire customer lists into databases with the specific purpose of learning
about them to maximize direct marketing efforts. These early efforts were very
costly and involved huge mainframe computer systems to make them work. So
only very large companies and direct marketing list vendors made use of the
new technology.
In the early 1990’s, microcomputers and local area networks made it possible
for every company to have a customer database. Database marketing moved
into the mainstream. Forward thinking companies put that technology to work to
better understand their customers. In turn, they were able to target their
marketing efforts to meet their customers’ wants and needs. These forward
thinking companies began to raise the bar for their competition by reaching out
to customers on a more personalized basis. The trend which continues to drive
marketing innovation today was born. Database marketing technologies were
put to use by savvy marketers to reach customers in ways they had only
dreamed of before.
One-to-One Marketing
At the same time as database marketing technology was becoming popular, a
little revolution in how we think about the practice of marketing itself was
sparked. Writings like “The One-to-One Future” by Don Peppers and Martha
Rogers (1993) changed the way we think about Marketing itself. Marketers
started to think in terms of using the new technologies to build long term
relationships with their customers, one at a time. As with database marketing,
the basic concepts of One-to-One Marketing were not new. In fact, the basic
concept is to reproduce an earlier time when shop owners got to know each one
of their customers and built loyalty by meeting each one’s specific wants and
needs. Early examples of one-to-one marketing ideas include such things as
store membership programs where customers received birthday cards, gift
reminders or other personalized communications.
The revolution of one-to-one marketing was a change in perspective. Marketers
traditionally focused on maximizing market share across entire customer
segments. This began to change. Some began trying to maximize the share of
each customer’s expenditures that their company was able to capture. New
technologies were to be applied to the customer database to transform it into a
learning engine. This would allow companies to discover the wants and needs of
each customer. Then through automated, customer focused communications
that same technology was used to maximize the share of each customer’s wallet
that the company was able to meet. Pepper’s and Rogers coined the term
“share of wallet” as a contrast to the traditional focus on market share.
Back in the early 1990’s this seemed more like a pipedream than a realistic
goal. Nevertheless, the ideas were having a big impact on direct marketing and
customer relationship practices at the time. We did not realize that a new
technology was about to make the pipedream a reality.
The Internet
In the late 1990’s the Internet brought the revolution right into customers’
homes. Most marketers today know the basic history of the Internet. It first
came online in 1969 as a way to share information between universities and
government agencies. But, it was the invention of Hypertext Markup Language
(HTML) and the World Wide Web (www) in the early 1990’s that created the
websites we know today.
The basic design of a website makes it an engine for collecting detailed customer
information. Right from the start, there were companies applying statistical
algorithms to transform that information into learning that could drive
personalized marketing messages. Once again, savvy marketers started using
the new technologies to do what we only dreamed of before. Today, customers
themselves are raising the bar by going to those web sites which best meet their
needs and wants as individual customers, rather than as generic members of a
target audience.
Successful Internet Marketing strategies will combine components from all three
streams.
Database marketing provides the technological backbone to capture and utilize
the flood of customer information coming into your company through the
Internet. It also provides the tools and techniques to transform that information
into actionable intelligence and to maintain customer communications. The
principles of one-to-one marketing provide practical guidelines for using
technology to build and maintain customer relation-ships. Finally, the Internet
provides technology which transforms the customer communication process into
a real time interaction which takes place in the customer’s home or cubicle at
work. One way to think about it is that the Internet has turbo-charged database
marketing technologies to make the dream of one-to-one marketing a reality.
The New Marketing Terrain
Traditional businesses, spend years cultivating relationships with their
customers. They must now compete against businesses online to keep those
customers. We live in an age when customers need to go no further than their
living rooms, or offices to get satisfaction. New, virtual businesses have rushed
in to occupy that space in the customers’ living rooms. Still, they must offer a
superior online experience if they are going to sway customers away from
businesses they are loyal to.
Who will win the battle for your customers?
Businesses today have no choice except to enter the competition to satisfy the
ever-increasing expectations of online customers. Even if a customer comes in
person to buy a product or service, chances are they first researched it online.
Businesses themselves have made this even easier for consumers. They have
put high speed Internet access on their employee’s desktops.
The Internet is doing for consumers in the early Twenty-first century what labor
unions did for workers in the early Twentieth century. It is leveling the playing
field. The old saying, attributed to PT Barnum, goes “A sucker is born every
minute.” Today, the Internet is turning that saying on its ears. An informed
consumer is born every minute. Businesses no longer have a choice. They
must use the technology available to them to meet their customers on their own
terms. Otherwise those customers will go to someone else who will.
People still go to the local mall after work to shop. But today, they can take five
minutes out of their lunch break to research the products they are planning to
buy first. Savvy online marketers are capturing those customers before they
ever take that trip to the mall.
The watershed moment for online buying was the 1999 holiday shopping
season. Shoppers spent over $5 billion through the Internet. That far exceeded
all expectations with a 300% increase over 1998. There were no skeptics
anymore. Online buying had become a permanent fixture on the retail
landscape. As we crossed the threshold into the twenty-first century, the
corporate website, which four years earlier had been little more than an
afterthought in marketing departments, had moved to center stage. The
landscape had changed.
What does the new terrain look like?
The Internet came upon the marketing world like a flood. The rate of
technological and organizational transformation that took place in it’s wake was
enough to make your head spin. It seemed like every couple of months the
pundits were declaring a new “paradigm shift” and heralding the triumph of the
latest eBusiness innovation over old economy dinosaurs. Now the waters have
receded. We are able to see what has actually changed and what has not.
As it turns out, the Internet did not create an entirely new economy. The hype
was clearly overrated, to the point of almost being comical. However, to be
successful, marketers must be aware of the forces that are shaping the Twenty-
first Century marketing terrain. Figure 2 shows what changed and what did not
change in five areas where the new economy was to have put to death
traditional marketing practices.
Customers still behave in predictable ways. They still respond to advertising
messages and marketing promotions.
The Fifth “P” Of Marketing
We do not need to create a new economic model to successfully navigate this
new terrain. But we do need to re-think some parts of our existing business
models. In the 1990’s, using database marketing to promote loyalty among
your customers, one customer at a time, was an opportunity. In the first decade
of the Twenty-first Century the explosion of Internet Marketing has made it a
necessity.
The secret to understanding the new marketing terrain is found in the
convergence of three marketing streams: database marketing, one-to-one
marketing, and the Internet. The tried and true principles of marketing are still
being used to reach a mass audience. But now, technology makes it possible to
extend the reach of your marketing efforts. Marketing activities can now be
personalized for each customer. You could say there is now a fifth “P” of
Marketing – the Person.
This is how Internet Marketing has forever changed the marketing terrain.
Marketing in the Twenty-first Century can be personalized for every customer.
Personalized marketing uses technology and ideas that themselves are not
entirely new. As we saw, they have been around in one form or another since
the 1970’s. However, personalized marketing is truly a new marketing paradigm
because of at least two very critical differences:
(1) The individual customer—the person—is an interactive
participant in real time.
(2) New technologies give businesses the ability to make that
real time interaction a unique—personalized—experience for
each customer.
Personalization Technology vs. Personalized Marketing
One of the major features utilized in Internet Marketing programs is
“Personalization.” The term usually refers to technology features that can be
used on a website to modify – personalize – the content for each user. The two
most common examples are customizable content and dynamic
recommendations. In the first case, registered users of the site are given the
ability to choose what information they see when they “log on” to the site or in
email messages. In the second case, the site observes what a customer
purchases over time. Dynamic recommendations are given based on other
customers who have made similar purchases. Both cases involve learning about
the customer. The online experience is modified to better suit his or her
individual preferences.
Personalization is a tremendously important development. But, by itself,
personalization is nothing more than adding bells and whistles to a website.
What is needed to be competitive in your customer’s living room or office is a
strategic marketing outreach to each individual customer. Personalization
techniques are a component of that strategy. There are many other
components. Some of them are drawn from the principles of one-to-one
marketing. Some of them come from the off-line world of database marketing.
Some of them are entirely new with the advent of the World Wide Web.
How do you put together a personalized marketing program?
A successful personalized marketing program is somewhat like a jigsaw puzzle.
There are many pieces. The secret to winning over your customers when they
are visiting your business from the comfort of their own home or office is not
just to have all the pieces. The secret is to be able to put all the pieces together
in a way that allows each customer to have a truly personalized and rewarding
relationship with your business. Your customers should not see a jumble of nice
features on your site. They should see the picture that emerges when all those
pieces are fit together to meet their individualized needs and wants.
==========================
This article is an excerpt from The Complete Internet Marketer: A Practical
Guide To Everything You Need To Know About Marketing Online by Jay Neuman.
Since 1994, Jay Neuman has been helping businesses as varied as Fortune 500
companies, startup Dot-Coms and nonprofit organizations overcome their
Internet Marketing and Database Marketing challenges. Jay is currently Sole
Proprietor of the KnExT Consulting Group. - www.knextconsulting.com.
He can be reached at jay.neuman@knextconsulting.com
Marketing Forever
by Jay Neuman
. Print Friendly Version
This article is an excerpt from: The Complete Internet Marketer: A Practical
Guide To Everything You Need To Know About Marketing Online
A new marketing terrain was created at the end of the Twentieth Century. A
generation of pioneering entrepreneurs set out on a great adventure. They
invented new technologies and carved out new business models from an
uncharted virtual frontier. Many did not understand the terrain they would have
to pass through. Hundreds of failed Dot-Com startups would litter the landscape
of the, so called, “New Economy.” Those who did succeed figured out what the
new terrain looks like. As time went by, they adjusted their business plans to
meet the realities of that terrain. In the process, they forever changed the way
marketing is practiced. Those days are over now. But the lessons still remain.
Everyone who hopes to succeed with Internet Marketing will be following in the
footsteps of those original innovators and must learn the lessons their
experiences teach.
This article puts the field in perspective by looking at exactly what happened to
Marketing when the Internet came on the scene. In a few short years, the
Internet has gone from being an obscure new idea to being an essential part of
any marketing strategy. Something changed dramatically when the Internet
came on the scene. To be successful marketing on the Internet, the first lesson
is to understand what did change and the role the Internet now plays in the new
marketing world.
How Did We Get Here?
In the opening years of the Twenty-first Century, we find the practice of
marketing is noticeably different than it was throughout the Twentieth Century.
In the decade of the 1990’s, the field of marketing went through a rebirth of
sorts.
It was similar to another rebirth that happened a hundred years earlier.
Advances in the technology of mass production at the beginning of the Twentieth
Century created a need for marketing as a strategic tool to bring products to the
masses. Traditional textbooks still emphasize things such as balancing product,
placement, price and promotion to appeal to the largest possible audience.
Fundamental marketing needs like these “Four P’s of Marketing” have not
disappeared. However, they have been expanded. Throughout the 1990’s
marketing began focusing more and more on building relationships with
individual customers, one at a time.
Three phenomena came together in the 1990’s to make this possible. To
understand today’s Internet Marketing world, we must start with a basic
understanding of these three.
(1) Database Marketing
(2) One-to-One Marketing
(3) The Internet.
None of these are new. In fact, in one form or another they have all been
around since the early 1970’s. However, advances in technology prompted their
explosion into the mainstream in the 1990’s. As a result, the Twenty-first
century finds no company insulated from the need to interact with their
customers as individuals.
Database Marketing
The advent of database marketing can be thought of as the first step in the
evolution of today’s Internet Marketing environment. In the early 1970’s,
innovators began experimenting, using computing technologies to take the field
of direct marketing to a new level. For the first time, companies began to put
their entire customer lists into databases with the specific purpose of learning
about them to maximize direct marketing efforts. These early efforts were very
costly and involved huge mainframe computer systems to make them work. So
only very large companies and direct marketing list vendors made use of the
new technology.
In the early 1990’s, microcomputers and local area networks made it possible
for every company to have a customer database. Database marketing moved
into the mainstream. Forward thinking companies put that technology to work to
better understand their customers. In turn, they were able to target their
marketing efforts to meet their customers’ wants and needs. These forward
thinking companies began to raise the bar for their competition by reaching out
to customers on a more personalized basis. The trend which continues to drive
marketing innovation today was born. Database marketing technologies were
put to use by savvy marketers to reach customers in ways they had only
dreamed of before.
One-to-One Marketing
At the same time as database marketing technology was becoming popular, a
little revolution in how we think about the practice of marketing itself was
sparked. Writings like “The One-to-One Future” by Don Peppers and Martha
Rogers (1993) changed the way we think about Marketing itself. Marketers
started to think in terms of using the new technologies to build long term
relationships with their customers, one at a time. As with database marketing,
the basic concepts of One-to-One Marketing were not new. In fact, the basic
concept is to reproduce an earlier time when shop owners got to know each one
of their customers and built loyalty by meeting each one’s specific wants and
needs. Early examples of one-to-one marketing ideas include such things as
store membership programs where customers received birthday cards, gift
reminders or other personalized communications.
The revolution of one-to-one marketing was a change in perspective. Marketers
traditionally focused on maximizing market share across entire customer
segments. This began to change. Some began trying to maximize the share of
each customer’s expenditures that their company was able to capture. New
technologies were to be applied to the customer database to transform it into a
learning engine. This would allow companies to discover the wants and needs of
each customer. Then through automated, customer focused communications
that same technology was used to maximize the share of each customer’s wallet
that the company was able to meet. Pepper’s and Rogers coined the term
“share of wallet” as a contrast to the traditional focus on market share.
Back in the early 1990’s this seemed more like a pipedream than a realistic
goal. Nevertheless, the ideas were having a big impact on direct marketing and
customer relationship practices at the time. We did not realize that a new
technology was about to make the pipedream a reality.
The Internet
In the late 1990’s the Internet brought the revolution right into customers’
homes. Most marketers today know the basic history of the Internet. It first
came online in 1969 as a way to share information between universities and
government agencies. But, it was the invention of Hypertext Markup Language
(HTML) and the World Wide Web (www) in the early 1990’s that created the
websites we know today.
The basic design of a website makes it an engine for collecting detailed customer
information. Right from the start, there were companies applying statistical
algorithms to transform that information into learning that could drive
personalized marketing messages. Once again, savvy marketers started using
the new technologies to do what we only dreamed of before. Today, customers
themselves are raising the bar by going to those web sites which best meet their
needs and wants as individual customers, rather than as generic members of a
target audience.
Successful Internet Marketing strategies will combine components from all three
streams.
Database marketing provides the technological backbone to capture and utilize
the flood of customer information coming into your company through the
Internet. It also provides the tools and techniques to transform that information
into actionable intelligence and to maintain customer communications. The
principles of one-to-one marketing provide practical guidelines for using
technology to build and maintain customer relation-ships. Finally, the Internet
provides technology which transforms the customer communication process into
a real time interaction which takes place in the customer’s home or cubicle at
work. One way to think about it is that the Internet has turbo-charged database
marketing technologies to make the dream of one-to-one marketing a reality.
The New Marketing Terrain
Traditional businesses, spend years cultivating relationships with their
customers. They must now compete against businesses online to keep those
customers. We live in an age when customers need to go no further than their
living rooms, or offices to get satisfaction. New, virtual businesses have rushed
in to occupy that space in the customers’ living rooms. Still, they must offer a
superior online experience if they are going to sway customers away from
businesses they are loyal to.
Who will win the battle for your customers?
Businesses today have no choice except to enter the competition to satisfy the
ever-increasing expectations of online customers. Even if a customer comes in
person to buy a product or service, chances are they first researched it online.
Businesses themselves have made this even easier for consumers. They have
put high speed Internet access on their employee’s desktops.
The Internet is doing for consumers in the early Twenty-first century what labor
unions did for workers in the early Twentieth century. It is leveling the playing
field. The old saying, attributed to PT Barnum, goes “A sucker is born every
minute.” Today, the Internet is turning that saying on its ears. An informed
consumer is born every minute. Businesses no longer have a choice. They
must use the technology available to them to meet their customers on their own
terms. Otherwise those customers will go to someone else who will.
People still go to the local mall after work to shop. But today, they can take five
minutes out of their lunch break to research the products they are planning to
buy first. Savvy online marketers are capturing those customers before they
ever take that trip to the mall.
The watershed moment for online buying was the 1999 holiday shopping
season. Shoppers spent over $5 billion through the Internet. That far exceeded
all expectations with a 300% increase over 1998. There were no skeptics
anymore. Online buying had become a permanent fixture on the retail
landscape. As we crossed the threshold into the twenty-first century, the
corporate website, which four years earlier had been little more than an
afterthought in marketing departments, had moved to center stage. The
landscape had changed.
What does the new terrain look like?
The Internet came upon the marketing world like a flood. The rate of
technological and organizational transformation that took place in it’s wake was
enough to make your head spin. It seemed like every couple of months the
pundits were declaring a new “paradigm shift” and heralding the triumph of the
latest eBusiness innovation over old economy dinosaurs. Now the waters have
receded. We are able to see what has actually changed and what has not.
As it turns out, the Internet did not create an entirely new economy. The hype
was clearly overrated, to the point of almost being comical. However, to be
successful, marketers must be aware of the forces that are shaping the Twenty-
first Century marketing terrain. Figure 2 shows what changed and what did not
change in five areas where the new economy was to have put to death
traditional marketing practices.
Customers still behave in predictable ways. They still respond to advertising
messages and marketing promotions.
The Fifth “P” Of Marketing
We do not need to create a new economic model to successfully navigate this
new terrain. But we do need to re-think some parts of our existing business
models. In the 1990’s, using database marketing to promote loyalty among
your customers, one customer at a time, was an opportunity. In the first decade
of the Twenty-first Century the explosion of Internet Marketing has made it a
necessity.
The secret to understanding the new marketing terrain is found in the
convergence of three marketing streams: database marketing, one-to-one
marketing, and the Internet. The tried and true principles of marketing are still
being used to reach a mass audience. But now, technology makes it possible to
extend the reach of your marketing efforts. Marketing activities can now be
personalized for each customer. You could say there is now a fifth “P” of
Marketing – the Person.
This is how Internet Marketing has forever changed the marketing terrain.
Marketing in the Twenty-first Century can be personalized for every customer.
Personalized marketing uses technology and ideas that themselves are not
entirely new. As we saw, they have been around in one form or another since
the 1970’s. However, personalized marketing is truly a new marketing paradigm
because of at least two very critical differences:
(1) The individual customer—the person—is an interactive
participant in real time.
(2) New technologies give businesses the ability to make that
real time interaction a unique—personalized—experience for
each customer.
Personalization Technology vs. Personalized Marketing
One of the major features utilized in Internet Marketing programs is
“Personalization.” The term usually refers to technology features that can be
used on a website to modify – personalize – the content for each user. The two
most common examples are customizable content and dynamic
recommendations. In the first case, registered users of the site are given the
ability to choose what information they see when they “log on” to the site or in
email messages. In the second case, the site observes what a customer
purchases over time. Dynamic recommendations are given based on other
customers who have made similar purchases. Both cases involve learning about
the customer. The online experience is modified to better suit his or her
individual preferences.
Personalization is a tremendously important development. But, by itself,
personalization is nothing more than adding bells and whistles to a website.
What is needed to be competitive in your customer’s living room or office is a
strategic marketing outreach to each individual customer. Personalization
techniques are a component of that strategy. There are many other
components. Some of them are drawn from the principles of one-to-one
marketing. Some of them come from the off-line world of database marketing.
Some of them are entirely new with the advent of the World Wide Web.
How do you put together a personalized marketing program?
A successful personalized marketing program is somewhat like a jigsaw puzzle.
There are many pieces. The secret to winning over your customers when they
are visiting your business from the comfort of their own home or office is not
just to have all the pieces. The secret is to be able to put all the pieces together
in a way that allows each customer to have a truly personalized and rewarding
relationship with your business. Your customers should not see a jumble of nice
features on your site. They should see the picture that emerges when all those
pieces are fit together to meet their individualized needs and wants.
==========================
This article is an excerpt from The Complete Internet Marketer: A Practical
Guide To Everything You Need To Know About Marketing Online by Jay Neuman.
Since 1994, Jay Neuman has been helping businesses as varied as Fortune 500
companies, startup Dot-Coms and nonprofit organizations overcome their
Internet Marketing and Database Marketing challenges. Jay is currently Sole
Proprietor of the KnExT Consulting Group. - www.knextconsulting.com.
He can be reached at jay.neuman@knextconsulting.com
The Complete
Internet Marketer
Internet Marketer
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