One of the rules mentioned in the previous article “The New Rules of Marketing, PR & IR in Web 2.0 Online World” was reaching buyer/customer directly. This is the key for successful Web 2.0/Internet marketing, and this and upcoming articles will be discussed from this viewpoint.
1. Is reaching buyers/customers directly to be done the same way as direct marketing in offline world?
The author would answer “yes and no”. What she means is that as in many other marketing topics, basic concept, framework and theory of traditional marketing and offline marketing needs to be based on; however, in many cases they need to be tailored to meet online world requirements, based on the characteristics of the Internet world. Such characteristics include the following, to name a few.
Characteristics of the Internet
1) Ubiquitous: Boundary-free, connected worldwide.
2) Interactivity: Two-way of one-to-one, or even one-to-many, many-to-many, meaning interactive conversation is possible.
3) Continuous operation: 365 days a year / 7 days a week / 24 hours a day.
4) Pull media: Web users need to access the web page to get information, or register for RSS and e-newsletter etc. to receive “pushed” information, meaning permission marketing is required.
5) Richness and reachness: Basically there is no limitation of information volume unlike printed materials, audio and video is available besides still or moving pictures using flash and text in Web 2.0 online world. Also, everyone is equally able to reach information as long as they are connected to Internet and search the web page they desire.
6) Flexible information update: This is especially in Web 2.0 online world, in which people can upload web content without HTML and other web technology knowledge nor expertise.
7) Personalization/customization: Navigating separately to ultimately different landing pages developed according to different customer segment is possible, “my page” is possible etc.
8) Data-oriented: Web statistics and e-newsletter metric statistics such as CTR (Click Through Rate) is obtainable with ease in a timely manner in comparison to traditional media.
It is because of the characteristics #1, #5 and #7 that companies are to reach their buyers/customer directly, and in doing so, companies need to plan and execute taking into account the above 8 points.
2. How to plan Web 2.0 / Internet marketing?
1) First, segmentation, positioning and targeting must to done, aligning with the company’s mission statement, vision/goal and strategy.
Similarly to traditional marketing, market and customer segmentation, positioning and targeting need to be done, starting with segmentation, and the author feels that these are even more critical in Internet/web online marketing than traditional offline marketing. What she means is that because of one of the characteristics of IT marketing “switching from one brand to another is difficult”, it is almost impossible to reverse the market share and become leader in Internet marketing once a competitor becomes a leader in the market segment the company targets. This is easily understood when compared with BtoC marketing of FMCG (Fast Moving Consumer Goods in offline world in which customers can switch from one brand to another with ease.
In general, IT marketing consists of many factors that make customers difficult or unwilling to switch from one brand to another once they started using products of a particular brand. Such factors include compatibility of application/OS etc. often accompanied by software issues and war for industry standardization, customers required to learn and get used to utilizing application/OS etc., and importance of customer information DB. This is why in cases, despite short-tem loss, companies implement enormous campaign to acquire and retain customers in the seeding phase before competitors enter their marketing segment, and leverage CRM (Customer Relations Management) to maximize CLV (Customer Lifetime Value), for ultimate long-term win.
2) Rules of Web 2.0 / Internet marketing needs to be applied.
The difficulty of switching in IT marketing is the reason the two Ries (2001) state that one of the 11 immutable laws of Internet Branding is be first in the market segment to be targeted. This means that first mover advantage in the targeted market segment is vital to succeed in online business. This explains why an offline book giant Barns & Noble struggles to take the initiative in online book business from Amazon.
The prerequisite of benefiting from first mover advantage means that speed is inevitable in Internet business, hence the term “dog year” has long been used.
3) There are some possible solutions in entering a market already established by a competitor.
If a company should plan to target a market/customer segment that a competitor already leads, re-segmentation and re-positioning (even a little) followed by careful targeting based on its business domain and core competence are required in order to successfully start and grow business without directly competing with the market leader. This can be easily understood by online advertising business. Yahoo! was the leader in this business, primary business including banner advertising, then Google made a market segmentation of “search-engine advertising” leveraging its core competence and leading position in search engine and positioned itself as the leader in that market segment. And then with successful customer segmentation and targeting, Google successfully become the market leader in the segment, creating a new online advertising market, as is well known. This often means new business model.
Other possible solutions are based on starting destructive innovation, i.e. apply Christensen’s theory of The Innovator’s Dilemma and Solution. Such solutions are proactive strategies, leading to change in the external business environment of the company, such as industry trend and rule(s) and competitors’ positioning and strategy.
Emergence of something new such as government policy and technology is the optimum timing to adopt this kind of solution/strategy, also meaning new business model. Amazon, eBay, Dell and Fedex to name a few are such examples, which might be of Web 1.0 online world. Web 2.0 online world is still very new and it is impossible to define a good example agreed by everyone; however, the author feels that Facebook, Twitter and LinkedIn could become such examples, and there are others that have potential to become such candidates as Second Life. This is because the three companies are generating revenue and their profitability seems to be sound when many dot.com companies remain in the red for many years, in addition to the growth in number of their web users. They seem to be entering online advertising business and/or recruiting/job matching business market, and this could trigger paradigm shift(s) in the future online business.
The upcoming article is to be about targeting and directly reaching buyers/customers.
References:-
Ries, Al, and Laura, Ries (2001), The 11 Immutable Laws of Internet Branding, Harper Collins
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