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| e-Xpertise in Industry - Issue #4 March 2000 | ||
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CONTENTS: TIME FOR NEW VALUES?
- FEATURE ARTICLE SPAM! - -
IF IT CAN GO WRONG ... - GOOD PRACTICE CUSTOMERS.COM
- BOOK REVIEW IS THIS THE FUTURE
OF IT SELLING ON THE INTERNET? - e-CHAT THE 11TH ANNUAL CAMBASHI SEMINAR - Register now for this seminar on the April 5th 2000 which explores more sales and marketing via the Internet issues. FROM THE EDITOR...... SELLING IT TO INDUSTRY. In this issue, we look at what it takes to 'move up market' as a route of competing with Internet start-ups and other low cost competitors. We also review what an expert says about creating a profitable Internet business (if that is not a contradiction in terms), what can go wrong and a new web site that aims to replace the IT sales person and technical support. Quote for today: "The reasonable man adapts
himself to the world. The unreasonable one persists in trying to
adapt the world to himself. Therefore, all FEATURE ARTICLE - TIME FOR NEW VALUES? With the entrance into the market of low cost dot.com start ups, is it time to reinvent yourself? The downward pressure on prices intensified
recently because of the Internet. There is a stark choice for the
majority of suppliers: move The latter option is extremely difficult and to my knowledge, apart from Think3, only successfully achieved by acquiring or setting up a totally separate company which then competes with the established business. Even if this route is chosen it is likely that the established business will need to generate the majority of the short-term revenue and so it still has to move up the value chain in order to remain competitive. If you decide to improve the value in your proposition, you can still get many Internet related benefits. Many companies have strategies to move up the value chain, for example by increasing the service content in their solution. However the tactics - the sales messages, marketing materials and publicity activities frequently remain stuck in the product sell. This is not to say they are describing features and benefits. They may be describing productivity gains in terms of time or money. It is just that even these gains do not match the values now sought. There are lessons to be learnt from the retail industry. In the early 1900s, local high street shops dominated retail. Then came a massive change, the department store. These stores offered a wide range of goods in one location and this enabled them to have 2.5 times the stock turn over of the shop - a winning formula that led to healthy profits and lower prices. Later the department stores came under pressure from the introduction of shopping malls. Their out of town locations reduced costs, whilst there formula of large numbers of individual stores provided both breadth and specialisation. The most recent competitor is the dot.com e-tailer. These companies have a stock turn over 5 times that of the department store and this enables them to offer even lower prices. What is interesting to note is that dot.com organisations, like the department stores when they started, began by selling simple goods, as their staff lacked the specialist skills and knowledge of the established provider. In each instance, the response of the department stores was to move up market. Whilst they changed the products they sold and added many services, these alone did not move them up market. What worked was the extended guarantees and the no quibble return policies, which implies better quality products. They took away the risk at a reasonable premium in price. There are parallels with the IT industry.
Initially there were individual software products. Then came the
integrated UNIX solutions, which Then came the dot.com suppliers with, relatively simple, yet low cost solutions. The last few months have seen simpler editions of those products sold by developer's e-stores rather than by resellers. This is forcing specialist Windows applications into the space occupied by the integrated solutions and in turn forcing them further up the value chain. The learning point from retail is how businesses can successfully move up market and generate healthy margins. The key is not so much about changing products or adding services, it is about changing the value being delivered. Integrated solution suppliers must
move from offering value based on return on investment, which is
now being offered by integrated PC This means investing in different
areas: moving funds into improving the breadth and depth of professional
staffing, expanding service The commercial frameworks are based on risk and reward sharing. This requires capturing past experience to gain an understanding of the risks to be managed. Such knowledge is unlikely to be available to a new Internet entrant or the inter-operating Windows applications supplier. It therefore provides a value that other competitors lower down the chain are unable to match. The emphasis on the commercial framework
as part of the high value solution also requires that it be sold
at a higher level within the Unfortunately, most sales and marketing
materials still do little to recognise different needs and focus
on 'pushing' a predefined solution. In some cases the only concession
to recognising individual needs may be changing the graphics from
one industry to another. They are so predefined that companies are
able to produce 10,000 copies. The use of these traditional product/service
brochures as the main selling tool re-enforces the view that supplier
has not moved upmarket. It is also likely to encourage The next step is to set about the task of design, copy and production to meet the needs of this environment. The answer is unlikely to be a glossy brochure describing your new service offering. Ian Dabney
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IF IT CAN GO WRONG ...... - GOOD PRACTICE Spam! Cambashi wants to avoid the cobbler's barefoot children syndrome. If we tell our clients it's a good idea, we try to do it ourselves. We therefore decided to introduce a direct mail campaign to promote our annual seminar with a mailshot to those contacts who had given us their email. We organised our list server software and cleaned our data. The day came; we pressed the button, and unintentionally fell into the trap of feeding spam sandwiches to our contacts. The list server knew how to cope
when people it had sent emails to replied "Out of Office".
However, when our email arrived at one trigger contact via an alias
translator, who "Replied to All" with "Out of Office",
the list server got confused. It decided that this was a new instruction,
not a response to its own outbound message. As we had failed to
restrict permissions sufficiently, the list server decided to send
the reply message, which was in fact the original message, to everyone
again. As it now arrived via the alias You would never believe how difficult it was to turn off the taps once all this is going. You need a lot of passwords. Switching off and on merely invokes the recovery procedure and opens the taps faster than you can find the handle. Our thanks to those of you who alerted us early to what was going on and our apologies to all our contacts who were fed unintentionally with spam. Mike Evans, Cambashi How to create a profitable business
strategy for the Internet. The book sits squarely in this e-zine's
area of interest and although it was written in 1998, a long time
ago in netspeak, it remains relevant because the principles espoused
are long established marketing practice. A recurring theme is 'make
it easy' and the secret of business success on the Internet is apparently
very similar to success in traditional business - focus on existing
and prospective customers, what they want and need and how you can
make their lives easier. Once you have the fundamentals of good
marketing, The author advocates redesigning core business from a customer perspective. She puts forward eight critical factors for success. These include targeting the right people; owning the customer's total experience; letting customers help themselves; helping customers to do their jobs; delivering a personalised service and fostering a community. The case studies are chosen to illustrate
each of the critical factors and presented methodically with comment
from the author and information on the technical solutions chosen
to support new business processes. The case studies are absorbing
and they are not all about the low-cost, frequent and familiar consumer
purchases so suited to the Internet. They illustrate how companies
achieved success through a blend of innovation and attention to
detail. What comes over most strongly is the strength of teamwork
between Recommendation: A practical book likely to stimulate thought on how to use the web more effectively to interact with customers. Although it appeared rather dense at first, it was easy and enjoyable reading. To download an excellent, very comprehensive road map for a customers.com strategy go to the Patricia Seybold Group Inc web page at http://www.customers.com Reviewer: Jennifer Hand e-CHAT - IS THIS THE FUTURE OF IT SELLING ON THE INTERNET? 'InterX's site ( www.itnetwork.com ) puts (Internet) technology to good use: a huge amount of information stored on the database covers all IT equipment. But the site can also be personalised for each customer and can deliver the product information in many forms, from text to video. It offers a comprehensive tracking system that builds up valuable information on what buyers are looking for, what makes them buy, and what puts off prospective purchasers - information that is valuable to companies'. Sunday Times 13 February 2000 THE 11TH ANNUAL CAMBASHI SEMINAR - ARIADNE'S ASSISTANT OR NAVIGATING THE LABYRINTH The theme for the 11th in Cambashi's annual series of seminars is a pragmatic look at how the Internet is changing the sales and marketing process. Cambashi examines current best practice including ideas for web sites and e-zines and suggestions for Intranet to support sales representatives. The guest speaker is Mike Evans, a director of systems integrator Logsys, and immediate past president of the CSSA. He is probably best known for his time at Oracle, where he was a director for ten years. His talk shows how Internet based products and services, via ASPs, will provide a far wider range of possibilities than anything we have seen before, and what the partners and their clients should realistically expect from them. Cambashi researches best practice and assists IT suppliers in best practice implementation. For more information on Cambashi services please email info@cambashi.com e-Xpertise in Industry operates as an opt-in email. The opt-in policy means we never intentionally send any email to anyone who does not wish to receive it. To subscribe: send an email with the word "subscribe" in the subject line to : expertise@cambashi.com For removal : send an email with the word "remove" in the subject line to : expertise@cambashi.com © Copyright 2001 Cambashi Ltd
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