Essential Business Tactics for the Netby Larry Chase, Nancy C. Hanger
While aware of the Web's potential, most businesses and corporations are unaware of exactly how to mine it to reduce costs and increase profits. This book reveals how to do precisely that. Businesses both large and small will learn how to reduce costs of travel, printing, handling, postage, distribution, purchasing, and other operating costs, as well as lower costs and improve the efficiency of recruiting new employees. They'll also learn how to use the Web to test new products, services and ideas while increasing customer loyalty, how to mine information about competitors and existing customers as well as prospective clients, how to establish a brand identity, and more.
Includes Companion Web Site with... Chapter-by-chapter resource listings, and updates for the book.
Read an Excerpt
How to Run a Tighter,
More Competitive Ship
Skeptics of the Internet's influence on businesses often ask the question: "How much money have you made on the Internet today?" For most companies, that's the wrong question to ask at this time. A better question to ask companies right now would be: "How has the Internet made your operation run faster, smarter, and cheaper?" Whether you're a purchasing manager in a global enterprise, or a two-man startup in a basement, you will both have certain practices in common. Both companies buy office equipment, utilize communications networks and instruments, travel, employ personnel, and need to further exploit the Net to their respective ends in order to keep a competitive edge. This chapter will help you do this for your own company. You'll learn the basics about the following:
* Optimizing your purchasing power
* Buying the tools of your trade
* Customer service savings
* Data mining
* Strengthening sales support via the Internet
* Distributed printing
Optimizing Your Purchasing Power
In "geek-speak," the Internet is known as an open-computing environment. This openness has a monumental impact on the marketplace as well. Putting scores of competitors within one click of each other makes for a truly open, and often brutal, marketplace. Purchasing professionals are starting to take advantage of this open marketplace. The American Management Association (AMA) queried 3500 of itsmembers on a wide range of their Internet usage patterns as of 1997 and what they're anticipating by 1999. The AMA found that 6 percent of purchasing professionals are using the Internet for purchasing in the first half of 1997, while 46 percent plan to use the Net for such activities by 1999. The cited statistic refers to a sample of 3500, which included purchasing professionals, who operate as purchasers. That's a dramatic increase for what is usually considered a conservative group of professionals. What are they seeing out there that is causing them to move in such numbers? Let's take a look.
There are two ways to look at buying on the Net. First, you can look at things that all businesses have in common, such as office supplies, travel, and communications. Then there are indigenous purchases for the particular trade you're in. If you're in dairy, you may be in need of a 400-gallon vat with a rapid-pour spigot, while a guy in reprographics might get excited about a Heidleberg Press at half price. Let's start with those things that everyone has in common.
Using the Internet to Clip Communication Costs: Sending Faxes over the Net
Whether your company is large or small, you send faxes. You send them from point to point and very often, from one point to many. Using the Net to transmit faxes in any number seems like a no-brainer, given the cost savings in long-distance bills alone. Why make a toll call for a traditional fax if you can make a local call by connecting to the Net? Unlike sending voice over the Internet, there's little or no qualitative difference when sending faxes this way. There are several basic kinds of fax services currently offered via the Net, and we'll look at each in detail.
Sending a Fax Point to Point
FaxStorm is a product offered to local Internet Service Providers (ISPs) by NetCentric (http://www.netcentric.com) that enables you to send faxes over the Internet (see Figure 1.1). How long does it take to send a fax? Well, it depends on how much information is on it. If it's a cover sheet, with basic information such as how many pages the fax is, the date, and so forth, it doesn't take long at all, maybe 30 seconds. If a fax page is intensive with graphics, detail, and wall-to-wall text, it will take longer. If you're sending a lot of faxes, try to keep the graphics to a minimum. In fact, many people use low-resolution graphics on their faxes for exactly this reason.
At the time of this writing, you can often get the same rate of 15 cents per minute using traditional methods of faxing using the telephone. Those rates, however, are often off-peak (i.e., after business hours). Many people find this perfectly acceptable, as fax machines are often overloaded during the day. In fact, many companies prefer to transmit their faxes at night precisely for the cheaper rates and easier access to the receiving fax machines. Nevertheless, many business phone plans can and do charge considerably more, up to and exceeding 55 cents per minute, especially when faxing overseas. By the time you read this, I strongly suspect that the prices will have dropped considerably, as online faxing takes off and competition heats up as a result.
ITSG (http://www.itsg.com) offers some interesting options in this area as well. For example, in addition to sending to someone's fax machine from your computer, you can send to that same machine from your email account or from your fax machine. ITSG's rates are comparable to NetCentric's. A minimum usage of $10 per month is required.
You can even set up an 800 number with HTNET (http://www.twsp.com). With this service, clients don't incur long-distance charges when faxing you. Of course, you might find it infuriating if you have to pay high amounts each month for unsolicited faxes. This package will end up costing you $29.95 per month, plus $19.95 for a one-time setup fee. Additionally, any fax to the 800 number costs 15 cents per page.
Send Faxes for Free ... Sometimes!
There is a host of free faxing services out on the Net, too. Typically, you fill in a form that includes the message you want to send, along with the fax number you're sending to. You then click on Submit and these services will send it for free, often in exchange for an ad of theirs on the faxed page. I wouldn't advise sending faxes like these to your clients because it looks cheap and is confusing. Additionally, these services have a very high turnover rate, so you'll probably find yourself switching from a service that no longer works to a new one that is just starting out. If the churn is worth your time and effort, then check it out. But I find it very tedious searching "free fax," coming up with way too many search results, and having the first handful not work because the service has gone out of business since the search engine last updated its page results.
Broadcast faxing over the Net works pretty much the same way as over traditional channels. If you send broadcast faxes often, your savings will be more substantial since the more you use, the more you save. Of course, the same can be said for broadcast faxing through the telephone networks. Since the quality is basically the same between the two media, I suggest you compare prices and play one off against the other. Look for the Internet to apply downward pressure on the cost of communication, both on and offline. In other words, traditional fax services and telephone services have a whole new bevy of competitors. Because of this intense competition, a good number of these services will not survive. Therefore, make sure that whomever you go with, online or off, has a good track record and is apt to stay around. The last thing you need is to wake up one day, only to find that your fax provider no longer exists. For this reason, it's wise not just to shop on price alone but on constancy, credibility, and continuity as well.
Fax Mailbox on Your Computer
Using the services of a firm such as JFAX, you can have not only faxes show up on your computer, but voicemail as well. Here's how it works: For $12.50 a month at the time of this writing, you get a phone number from JFAX (see Figure 1.2). When people call, they're prompted to either leave a voicemail message or start sending a fax. You can pick up your faxes and messages from your laptop computer even while you're on the road. If you see that you have three faxes waiting, you can look at them and respond accordingly. You can then play the voicemail messages and do likewise.
This ingenious system was created by a German rock-and-roll musician who was frustrated by missing his faxes while on tour. He also accrued large expenses by picking up his voicemail, since many of his calls to receive his voicemail were international. Through JFAX, he was able to stay in the loop and cut costs simultaneously. If you travel to Europe and your client wants to fax you something, you're also saving the client money. He or she doesn't have to send your fax overseas, where the tariffs are high. Clients have to love you for this.
According to a survey conducted by Pitney Bowes and published in tele.com (http://www.tele.com), a publication worthy of your review on these matters, 40 percent of a large company's telephony budget is dedicated to faxing. If you can save even a fraction, it's well worth your time to investigate this area. In addition to the online fax providers cited, you may wish to check out ISPs that are offering similar services at similar prices. Well-known providers, such as NetCom and PSINet, are currently offering online fax services to their customers. They need to, since Internet connections have quickly become loss-leaders for service provider companies--simply providing "on-ramp services" no longer pays all the bills for most ISPs. These ISPs must strive to keep the customers they have and attract new ones by offering such services as online faxing, as well as transmitting voice calls.
Sending Your Voice over the Net: Internet Telephony
Many skeptics out there say that widespread use of the Internet as a phone network is a fad. Weather it manifests itself as a medium for voice, fax, or document sharing, there is a place for Internet telephony. It's in your best interest to see if this place is in your company.
Let's start with using the Internet to transmit and receive voice. There are three ways you can do this:
1. Computer to computer (where your computer is the telephone)
2. Computer to telephone (where you call someone from your computer and he or she answers on the phone)
3. Phone to phone (where you use the Internet as the network between two telephones, rather than traditional long-distance companies such as AT&T or MCI)
Computer-to-computer telephony on the Net is fun; how productive it can really be is something else. However, you must be aware of the following: While ongoing service is free, there are some one-time costs that you initially incur when buying the software and a soundcard. You may even want to buy a duplexed soundcard for optimal results, so you can both speak at the same time. I remember buying early software that allowed me to talk to my colleague in California. Our phone bills were out of control. Our conversation was pretty comical. We were both shouting at our computer microphones, with a substantial time delay. The conversation went like this:
"... ear you!"
"... 'm fine. _ow about _ou?"
"_ear the delay?"
We went back to using the telephone. To its credit, the telephony software has gotten better over the years. A company called VocalTec offers NetPhone, a package for your computer with a one-time cost of $49.95. There are software packages that are free, but you will not get a great deal of technical support. In addition, the other person has to have the same package in order for it to work.
Another downside to this option concerns your IP address, which is the actual address of your computer when you are on the Net. Typically, when you dial in to your local ISP, you are assigned a random number as your address. This means that every time you log on, your address is different. Just think what life would be like if everybody's phone number changed every day! To sensibly succeed at using Internet telephony, you need to have a static IP address, which most Internet service providers do not offer anymore, due to the proliferation of Internet users. If they do offer it, you usually have to pay a premium. For example, at the time of writing, Panix (an ISP in New York City) offers Internet access with a static IP address for $35 per month. Other services that offer similar technical support and few busy signals charge you $20-25 per month, but you do not get a static IP address for that price. For all these reasons, I doubt you'll find your investment of time well spent pursuing this particular avenue for telephony. However, keep an eye on this segment; the software is improving, and PCs are becoming more powerful, which means voice processing will become faster and more effective.
Computer-to-phone telephony allows you to call someone's regular phone from your computer. This can be handy while you're using a laptop and connected to the Net, where you're online and talking to someone simultaneously. The cost per minute for such services at the time of writing is around 8 to 11 cents. IDT, another ISP, offers such a service. It's called Net-to-Phone. The quality is better than the computer-to-computer transmission, and there seems to be less delay. Call me old-fashioned, but I like my telephone to be a telephone and my computer to be a computer. Similar to computer-to-computer calling, you'll also need a soundcard or a duplex soundcard to enjoy fluid and normal conversation. Otherwise, you'll be communicating CB-radio style, by saying "Over" when you want the other side to speak.
As I write this, IDT, in addition to other companies, is starting to roll out phone-to-phone long distance (see Figure 1.3). This works by first dialing an 800 number in order to get into the IDT network. The network then routes the call over the Net, instead of MCI or Sprint. The current cost is around 8 cents per minute, but I'm sure that will come down shortly. For my trial run, I called Karen Egolf in Chicago, editor of Business Magazine and Net Marketing. Karen was also the editor of Telephony Magazine. The two of us had an interesting time analyzing the quality of the call, and we came to the conclusion that it wasn't all that bad. It reminded me of a cellular call on the rim of its primary coverage area. The delay was substantially shorter than the other methods previously examined.
The reason that the phone-to-phone calls sound better is simple: When your voice travels over the Internet, it gets broken up into thousands of packets that all have to be reassembled at the other end. That requires a great deal of computing power. The phone-to-phone system uses more powerful computers than the ones on a typical desktop. The software needed to send and receive these packets that make up your voice are Web servers that are using a good deal more bandwidth than someone with a 28.8K modem. So, the overall quality is improved, while the delay is shortened.
As the prices come down for phone-to-phone connections, you may find yourself using this type of system for talking to your field offices and reserving your primary long-distance carriers for client calls, which require a clearer signal.
Also, keep in mind that as these voice services flourish and compete for your business, they will provide you with additional services, such as call waiting, threeway calling, voicemail, and so on, in addition to reducing the per-minute cost. Calling Europe will cost a small fraction of what it costs now using traditional long distance circuits. It will be interesting to see if the existing phone companies move to impede the use of this type of telephony, which bypasses their networks altogether.
Companies with wide area networks (WANs) are looking at this phone-to-phone system closely. If they're only using 50 percent of that network at a given time, why not fill it up with some phone calls, or faxes, for that matter?
TIP Before you make an investment in the hardware, try it on a short contract with an outside provider. You might want to test the medium before plunging in. Simply farm out those functions that you're considering and test them during short-term contracts that you negotiate with a provider of such services. If it works, replicate the scheme in house. If it doesn't, you've just bypassed beaucoup headaches and investments.
In any of these scenarios, it seems likely that you'll maintain a primary long distance telephone provider and siphon off some of the traffic to a secondary voice network where you can save some money. Here again, look to the ISPs such as IDT, NetCom, PSI, and the like to aggressively market voice on the Internet the same way they do with faxing. The more bundled services they can offer you, the more apt you are to stay or join up with them in the first place.
Sharing Documents on the Net in Real Time
In October 1997, MCI rolled out a service called NetConferencing, which allows you to share a document in real time with other people on the Net. Here's how it works: Your document is posted to a Web site at an arranged time. You invite other people to come and see that document, while you are presumably on the phone with them at the same time. Only the people you specify can manipulate or change this document that everyone is seeing. This application can be very handy for investor relations, press conferences, or distributed workgroups. It takes advantage of NetMeeting, which is part of the Internet Explorer 4.0 application that sits on a user's PC. NetMeeting allows one PC to share a document with another PC. Whereas NetConference is one-to-many, NetMeeting is one-to-one, or point-to-point, communication. At the time of launch, NetConference costs $180 an hour for 10 users and uses 15-minute billing increments. Watch the clock closely. Both graphics and text can be manipulated in these sessions. If you're using Netscape 4.0 or Microsoft Internet Explorer 4.0 or greater, the software needed is already baked into these programs. If you're not, you'll need to download an application from MCI or from Microsoft's homesite. You will need a true TCP/IP Net connection for this program to work. If you are connected through AOL or CompuServe, you will need to dial in, then start up the NetMeeting software separately.
ICQ from Mirabilis, Inc. (http://www. mirabilis.com) offers direct conversation with another party using point-to-point chat (with unlimited users joining the chat session), instant messages, offline messaging (if your party isn't on the ICQ network when you want to call, you can leave a message for later), file transfer, mail message checking, and interconnectivity with almost all major Internet telephony and voice programs, including the aforementioned NetMeeting. If someone doesn't have ICQ, he or she can even "page" you and leave you an ICQ message through regular email. It's a pretty small program and allows for privacy. Be aware that your instant messages do go through their servers; however, if you open a direct point-to-point chat with another user, you are connected directly, for security's sake. More and more small businesses appear to be using this method for communication with customers and remote employees.
Video on the Internet
For a small business user, I don't think it's practical to use videoconferencing on the Internet yet--maybe someday. It does, however, deserve mention here. With a 28.8k modem or better, it's rare that you're going to get more than four or five frames through per second. You can buy a black-and-white Connectix camera (which looks like a disembodied eyeball with a cord on it) for under $100; color costs about $150, at the time of writing. Many PCs will require an additional videocard and possibly video RAM as well. The more sophisticated Macintosh models have this built in; however, I found the audio quality to be extremely choppy with these systems.
One of the most popular videoconferencing schemes on the Internet is CUSeeMe. Developed at Cornell University, it has spread worldwide quickly (see Figure 1.4). When you visit a CUSeeMe reflector site, you see two, four, six, or more frames of people who are participating in a choppy discussion. Since the audio is problematic, there is also a text box in which people can write their messages to everyone else participating. The conferencing is free and random. I've known people who occasionally use CUSeeMe with the audio turned off (thus allowing more video frames per second). Then, for the audio, they simply call the other party on the telephone. Even optimizing for video quality produces a funny-looking product. Everyone looks very pixelated and stilted.
If you think you can use CUSeeMe as a conferencing vehicle, keep in mind that these reflector sites are public and, therefore, are viewable by perfect strangers who may saunter in and offer their unsolicited input to your business meeting. If you want privacy, you have to set up a reflector site of your own.
Since CUSeeMe's introduction, there has been a whole gaggle of videoconferencing schemes, some of which claim to offer up to 15 frames per second (fps). I remain skeptical for the small business user, because the bandwidth that a typical modem provides and the processing power needed to process all the video images do not usually meet up with the task at hand. If you have ISDN or better, it may be worth your time to investigate. Keep in mind that whatever system you find that is optimal for your circumstances will have to be duplicated at the other end. Also remember that the actual size of the picture is approximately that of a 35mm slide. If you increase the size of that picture, the imagery becomes more stilted. If you have a video accelerator board in your computer, this becomes less of an issue. Since there is no ubiquitous standard, you'll need to coordinate with the people with whom you plan on conferencing, be they employees, suppliers, or clients. A whole book can be written on this topic and be outdated by the time you read it. Therefore, I point you to http://www.yahoo.com/Business_and_Economy/Companies/Telecommunications/ Conferencing/Videoconferencing, or http://www.freenet.msp.mn.us/people/drwool/ webconf.html as resources that will be more specific to your circumstances and the time frame in which you need the technology.
In addition to using the Net as an alternative network to buying long-distance services and the like, you can also use it to purchase and compare rates of traditional carriers like AT&T and MCI. At http://www.callcost.com/usform.html, you can compare U.S. and overseas rates between the well-known carriers and lesser-known players who offer substantial discounts. This calculator seems to be very honest in that it shows who has stronger pricing at various times in different parts of the world. Even though your current long-distance provider may be providing you with an overall good deal, your calling patterns may warrant a service more finely tuned to your needs.
Cutting the cost of communications can save you substantial amounts of money, but be forewarned. Very often, what happens when you cut the cost of communication is that you simply wind up using it more. Additionally, there are times where it will be a necessity to travel in order to have a face-to-face (f-2-f) meeting. Speaking of travel, let's now take a look at how to use the Net to transport yourself from point A to point B less expensively.
Using the Net to Trim Travel Costs
Travel is one of the fastest-growing industries on the Internet. Airline seats and hotel rooms are known as "vanishing commodities." It is considered sinful to let an airline seat fly empty; it would be better to have someone in that seat at 30 percent on the dollar rather than at nothing on the dollar. An airline never recoups the cost of transporting an empty seat, and there is always a potential customer who would be delighted to have an airplane seat for a discount. Travelocity, at http://www.Travelocity.com, brings the carrier and such customers together (see Figure 1.5).
This site allows a traveler to map out where and when he or she is going. The service will then show the traveler what is currently available, as well as email updates of alternatives. I've known executives at Fortune 100 companies who note that online prices are often considerably less than their in-house travel desks, who are supposed to have good prices due to their purchasing volume. Microsoft's Expedia at http://www.expedia.com offers similar services. Both sites offer good and in-depth information on destinations, as well as helpful travel hints, which is to be expected these days. With more and more of these sites arising, each one must differentiate itself in a visitor's mind by providing a unique service or an outstanding deal. This is the result of that highly competitive marketplace referred to earlier. As the Internet expands, the unexpected can, and often does, happen. Keep this in mind from both a selling and a consumer point of view. Exploit this to your own benefit.
In addition to paying close attention to Travelocity, Expedia, TravelWeb, and other travel center sites that will undoubtedly come online by the time you read this, keep tabs on the airlines that fly in and out of your airport as well. Many of them offer their own discount programs, such as American Airlines' NetSaver, which emails you every Wednesday with the latest bargains. USAir, Continental, and other carriers offer similar update services. At this point, it almost goes without saying that these sites also offer ETA (estimated time of arrival) and departure times online, for tracking flights.
While we're on the subject of airlines, let's make sure you get the best frequent-flyer deal possible at WebFlyer (http://www.insideflyer.com). This site will keep you posted on which airlines are offering the best deals on fly miles. There's a calendar that charts who's doing what and when. Be sure to sign up for the email updater when you visit (see Figure 1.6).
As you might expect, there is also a flurry of constant, ever-changing hotel deals. Many of these deals will be found on the Travelocity-type sites mentioned earlier, while others will run standalone promotions on their own sites. I also noticed that hotels and car rental companies will do package deals with airlines. Just like the rest of the Internet, there is no one source that has a comprehensive listing of all deals that are happening at all times. You may get a great deal on an airline seat with one carrier and not realize that there's a package deal offering you more savings through another airline, hotel, and car rental company. If you're a frequent traveler, it is especially important to sign up for email update services offered by each site. Let's face it, unless your core business is only travel, you're not going to spend most of your time constantly surfing all these sites. If you did, you wouldn't have much time to travel!
Since you're buying airline reservations and hotel rooms online, you might as well consider buying your next company car on the Internet. Whether you're buying a single company car or leasing an entire fleet, the chances are good that you'll only pay a little bit above wholesale on a vehicle. Lots of people are already doing their research online for their next vehicle, so why not you? It makes perfect sense, since a car is a considered purchase item. In other words, once you're spending a great deal of money, you will want to do your homework in order to make an educated buying decision. As you know, the Internet is excellent at providing this in-depth information.
Nowhere else is the open market principle more apparent than in the scores of auction sites that now populate the Web. Some are real-time auctions, in which the price goes up with each competing bid (http://www.onsale.com), while others are Dutch auctions (http://klickklock.com), in which the price keeps dropping until someone buys the merchandise. Still others are silent auctions; you put a bid in and return now and again to see if someone else has countered your offer. Rather than going to every single site to see if they're hawking what you're in the market for, you should check out http://www.usaweb.com, where you'll find a search engine that keeps track of what many auction sites are selling (see Figure 1.7). Enter the word printer in the BidFind search field and it will present you with those sites auctioning off printers. This site also points to over 100 auction sites on the Web, and even many auctions offline as well.
If you're looking for the state-of-the-art computer that just came out yesterday, you may not find it on these auction sites. More often than not, the merchandise auctioned off is close-out products. Very often, there are odd lots bought up that aren't worth putting in the manufacturer's catalog again because there aren't enough left. The computers may be last year's model, without the various bells and whistles, but you may not want or need these extra features anyway. I recommend that you check brand names very carefully, along with the warranties and return policies. In many cases, sales are final.
TIP Put your bids in early. When there's a tie, which often happens, the person who put his or her bid in first gets the merchandise.
The first auction site I knew of was wehkamp.nl in Holland. It used its Web site to "blow out" old inventory. An enterprising student tracked how much each item typically sold for and charted it on his own Web pages. Much to the chagrin of Wehkamp, bidders could visit the student's site to see the highest and lowest prices a product would sell for. It won't be any surprise to me if such information also becomes available for the U.S. auction sites. It enables the potential buyers to make smarter bids. Perhaps by the time you read this, these sites will spring up state-side. Look around for them!
Be careful. These auction sites can be addictive to the point of distraction! People get caught up in the bidding excitement and sometimes pay more for things than they might have elsewhere. I also know people who buy things for which they have no need, just because the costs are low.
Buying the Tools of Your Trade
Chances are there's something significant already happening on the Internet in your niche in the purchasing area. Most industries now have their early starters grabbing the first, second, and third slots.
The fact that computers are the biggest category doesn't surprise anyone. Since it's the most mature thus far, it's worth looking at how merchandise in this category is being traded on the Net. One of the first commerce centers in the hightech/telecommunications arena was MarketPlace 2000 (http://www.themarketplace.com). You can learn a great deal about how your industry's commerce center might look in the future by visiting this site (see Figure 1.8). You will find auctions for fully configured computers or components, such as motherboards, monitors, hard drives, and so forth. Very often, you can buy these components one at a time, or save a bundle of money by buying in volume. You can bid on a mainframe computer in an auction room if you like, or meet other people in the sales chain with whom you can forge a buy/sell relationship on or offline and read news updates about the industry. Simple classified listings are now a staple of just about all industry commerce centers.
News, in this case, has become just one commodity to be had at this trading post. Is the MarketPlace 2000 a publication? Yes, but it is also a type of commodity pit. It's two mints in one! Is it redefining how we think of a trade publication? Well, weren't there always classified ads in the back of trade publications where people sought buyers and sellers for their brand of arcania? Of course. The Net has simply made this traditional practice more interactive.
"Big deal," you say. You expect computers and travel (because they're merely packages of information that the Net can easily promote and sell), but what about an industry that doesn't cater to such a wide group of people? Perhaps I can interest you in a refrigerated shipping container that can be transported from ship to flatbed truck and then to railroad. If you're interested, take a look at TransAmerica Leasing. This site can match up your needs with a seller. At the time of this writing, the transaction happens offline, but so what? The commodity of serving as a conduit between buyer and seller is the Internet's first point of value. This site does more than match up goods with a customer, though. We'll return to TransAmerica later in this chapter to see how it serves an overlapping community of interest: its existing customers.
Intermodal refrigerated containers don't really turn you on? How about a cappuccino machine that will make 200 cups of coffee for your closest friends? Or perhaps you'd like to buy a diner booth for your living room? Check out the food service site that serves as a crossroads for such restaurateur supplies at http://www.supplysite.com. It's quite conceivable that indigenous products for a given industry might have an outside market. I don't think that people will be putting 4-ton steel fittings on their front lawn, but I could see where they may want their own milkshake machine, or an industrial-rated stove or refrigerator.
A Business-to-Business Buying Standard in the Works
Many business-to-business purchases involve large dollar volume. When that sort of volume is changing hands, the seller wants to be very sure that you are who you say you are. Rather than each seller developing his or her own standards to authenticate and run a credit check on you, in order to process payments in real time or near real time, a single system is being devised to make it easier for both buyer and seller to transact large purchases online. This is similar to the SET standards that are being developed for online retail customer buying, which is covered in Chapter 6, "Retail: Setting Up Shop on the Net."
The Secure Electronic Transaction (SET) standard is undergoing development at the time of writing. Its purpose is to provide a widespread standard for the average consumer to make credit/payment card transactions online, with even more security precautions than are currently in place.
This business-to-business system is called Open Buying on the Internet (OBI). American Express, wanting to play a pivotal role in this process, was heavily involved in the initiation of OBI. Big players on both the buying and selling sides, such as Ford, Microsoft, Oracle, GE, and Office Depot, are participating. This process is particularly helpful when dealing with a vendor or supplier from whom you may buy various services or products over the course of a month on an ongoing basis. Among other things, OBI is designed to have purchases that take place in different buying sessions consolidated and reconciled. The amount of bookkeeping is reduced substantially on both sides of the transaction, and the single payment at month's end can be transferred quickly.
Customer Service Savings
Okay, I won't drag out the Federal Express example and tell you how it saves $3.00 or more each time someone uses the Web to track a package instead of calling its 800 number and having a human do it. Nor will I roll out Amazon's searchable database of over two million books, or the U.S. Post Office's ZIP code locator, or Visa's ATM finder. "Been there, done all that," you say. While these are very good examples, there are others coming online now that can show us new things to learn from. It's well worth your while to dig deeper into using the Net as a tool for customer support. In the survey of the American Marketing Association referred to earlier, 19 percent of respondents said they are currently using the Net for such purposes, while 53 percent plan on having some component of customer service on their Web site by the end of 1999. You may not be planning on utilizing your site for such activities; however, the chances are good that your competitors are.
Very often, there's friction between the manufacturer of a product and the existing sales channels when that manufacturer opens up a Web site that speaks directly to the end user. 3Com has gone in the other direction. It uses its site to support its sales channels, even for complex network configurations. The Network Designer (which I had the pleasure of critiquing while in beta) lets end users put together their own network with all the different options and variations. The site then directs customers, using their newly customized network, to a nearby reseller.
3M is a very good example of a company that has designed a customer-focused Web site. With the use of a search engine that accesses relational databases, visitors can easily find their way to over 50,000 products that 3M offers in nearly every industry imaginable. 3M had the good sense to look at itself from the outside in, rather than the inside out, which is a discipline any company needs to consider when designing its Web site. We will discuss this further in Chapter 5, "Your Brand Image and the Internet."
As we know, answering customer service questions that can be answered on a Web site instead of by an actual person saves significant amounts of money. But simply slapping up a bunch of help files and product offerings will not induce the customer to use your Web site rather than the telephone. The challenge here is to make your site not as effective as the alternative phone call, but more effective. One solution that I respect a great deal in this category is the step-search feature offered by Saqqara. Step-search asks you only a few questions at a time (see Figure 1.9). Based on your answers, step-search will come back and present you with an appropriate array of options. This solution goes a long way toward avoiding the user frustration found at many customer service sites on the Internet. Here's why: Very often, customers are asked to fill out lengthy forms on a site and then submit them. Imagine if you take 20 minutes to fill out one of these long forms only to find at the very end that "You cannot get the red Chevrolet Lumina with manual transmission and air conditioning. Please start over!" Step-search avoids both wasted time and frustration.
Another way to keep customers hitting your Web site instead of your 800 customer support phone lines is to have a discussion group in the customer service area of your site. This discussion group can have many "threads," or discussion topics. It looks something like a Usenet group or a bulletin board. Each thread may represent a particular product of yours. Thereunder, you might find subthreads, where customers can discuss various aspects of that product. You'll most definitely want to moderate these discussions and interact with them often. There are many free and reasonably cheap software programs that your Webmaster can put up on your site that run very easily managed discussion lists/bulletin boards. Take a look around, and discuss your needs with your site designer. Make sure you use a program that either you or an assigned employee can learn quickly and easily, since you'll want to update it regularly to provide fast customer support.
This solution has an upside and a downside. The upside, as previously mentioned, is that it can save you money. You'll also be delighted when customers answer questions to problems other customers pose. Some of these answers are ones that you might not have even thought of. You can simultaneously collect more solutions about your own products from your customers, while not having to answer those questions yourself: additional input with less output--a powerful combination. The downside is that you might find irate customers trashing your product on your own Web site. To your horror, you may indeed be sponsoring a revolt aimed at yourself! If the complaints are legitimate, then you're going to have to face the music sooner or later. Isn't it better for you to see this happen on your own site rather than in an open Usenet newsgroup? Most definitely. At your "home," you can handle the "spin control" much faster and more effectively.
If your public relations people start squawking, tell them this is a policy of containment. If you deal with the problems in a forthright manner, it will be seen as such, more often than not. If you try to squelch the complaints in a heavy-handed manner by editing them or replying in an arrogant manner, you're opening up an online can of worms that is best avoided. If the complaints are not warranted, and they're posed by a few persistent cranks out there, the rest of the discussion group will typically see this and appreciate it for what it is. There is something to be said about dealing with your vulnerabilities in an open and upright manner. It can add luster to your credibility and that of your products.
I'll Have My Database Call Your Database
As you know, data mining is becoming a hot topic. Companies are often frustrated by not being able to easily access their inhouse information. For example, you may know that you have a product shot somewhere in your organization, but don't know where it is. Since you can't find it, you have to schedule a photo shoot to capture a new picture of something you already have... somewhere. Both you and your customer will benefit greatly if you can have your databases all relating to each other and participating in a search name-relational database configuration.
One of the early entrants to this arena was Micro Strategies Inc. Michael Sailor, CEO, speaks of a "query tone," as in dial tone, whereby someone can easily ask an involved question and receive a response that draws on numerous databases. He wants customers to be able to ask questions that aren't easily answered right now: "Which airline that flies between New York and San Diego has the highest customer approval rating?" The information is currently known; it's just extremely hard or tedious to find it. Having Sailor's "query tone" will make accessing such information much easier. Researchers, marketers, customers, and others will have a field day as this capability comes online in the foreseeable future. How can you take advantage of the concept in the meantime? Start itemizing the information you currently have isolated in different places within your organization. Think of what system you can put in place that will make that information more accessible for you, other parts of your company, and customers. Note that more and more information that used to be uniquely internal is now being shared with clients across many industries.
Distributed databases are another way to provide data for both customers and inhouse employees. APL StackTrain (http://www.apl.com) does much more than simply give departure and arrival dates of cargo ships at various ports around the world. At its Web site, you can fill out a form that can immediately be transferred into a bill of lading. It also updates you on the availability of cargo space on ships. You can pull up maps that show its shipping lanes. This is an extraordinary example of pulling information from a very diffused array of sources. The ships, the ports, and all the links within that chain feed into this database presented to you on the Web. It's a labyrinth of satellite feeds and land lines. This is cutting-edge use of networked customer support technology at the time of writing, but as the velocity of commerce increases, it will become commonplace and we'll wonder how we ever lived without it. Look for the sourcing of numerous distributed databases to start gaining attention.
Strengthening Sales Support via the Internet
As noted earlier, the potential for the Net to create friction between manufacturers and sales and distribution channels is very real. But when done correctly, utilization of the Internet can actually enhance those all-important relationships with your channels of sales and distribution. 3Com wisely spent money on developing and marketing its Network Designer (Figure 1.10). Turning well-qualified leads over to its resellers can only enhance those existing sales channel relationships and quite probably attract more due to the extra sales support offered. Helping your vendors locate what products are where is another tactic that can be employed.
The Lee Product Locator allows partners, or anyone else for that matter, to search for a distributor that has specific product line in the colors, quantities, and sizes needed (http://www.rsvpcomm.com/scripts/foxweb.exe/findlee). Once the specific item is located, users can then find out how many miles that distributor is from them.
BuildSoft (http://www.buildsoft.com) sells construction management software, including tools for CPM Scheduling, Historical and Take-Off Estimating, Purchase Orders/Work Orders, Job Costing, and Accounting. The BuildSoft site also acts as a clearinghouse for building and construction information on the Web and as a gateway to BuildNet, the BuildSoft online services network.
Exide makes it just a little bit easier for its value-added resellers and sales partners to promote their products with the Exide Electronics VAR Guide (http://www.exide.com/varguide.htm). The VAR kit enables resellers to "snap in" Exide Electronic product Web pages. The kit provides product pages, including photos, a UPS buyers' checklist, and educational information on power protection. Also included is coding for online sales and more. The kit is distributed via CD-ROM or from the Exide site. This is smart thinking: In addition to solidifying relationships with existing sales channels, it extends the company's message that much further.
One of the most effective sales support case histories I've come across has more to do with the powers of observation than with technology. Jim Roth works for Document Services Sales Support. The Web site he administers is behind a firewall, so we can't look at it from the open Internet. The site is devoted to supporting the salespeople out in the field. He checks the logs on the search engine to see what people are keen on. If he sees that a particular product is searched for often, he's apt to put up more information on that product. Remember, though, that what people don't find can be just as important as what they do find. When he sees salespeople searching for things they aren't finding, he moves to put that information on the site.
In a very real way, Jim is using the extensive tracking information as a type of barometer. What's hot? What's not? Since these sites support the people in the field, they get a real pulse for what the marketplace is asking for through the queries submitted by their sales and field analysts. This Web site now handles 75 percent of the traffic, while the phones handle 25 percent. The Web site is actually faster because it finds the information in real time, whereas the telephone support team would first have to assign the search and then have someone physically go and get the information and send it to the person who asked for it. Depending on the depth of the request, a physical search can take hours or even days.
"We're a cost center," Roth explains. "This means we're supported and funded by our product divisions. They always ask, 'What have you done for us lately?' The unit of measure we use to answer that question is the amount of returned hours to the field." He points out: "Since the Web site gets them the information faster, they can return to sell more in the field, or simply get back faster to the prospective or existing client with answers. On average, we return about two days to the field using this method. The old way would have that person out of action because she was either doing the research herself, or waiting for someone internally to complete the task. That's all time out of the field not selling." On the telephone, that person's case would be put in a queue, where it would stay until that queue was looked at twice a day, then assigned to a researcher. The phone system isn't a simple help desk. The questions are more profound than that. Much of the information requested is dynamic. A salesperson might want to locate a particular machine in order to train someone on it, but it's been moved out of his locale. "Where is that machine now?" is such a question that might be asked. While many people do ask the appropriate question of "How much money has the Net saved you?" this case study points out how much time the Internet can save your firm. Many people will rightfully argue that time and money are in fact one and the same.
By pushing the production of printed information out to the end user, small and large companies can save enormous amounts of money, time, real estate, and labor. This can apply to running high-resolution, four-color brochures closer to their distribution points, or printing a single coupon by a grocery shopper. Let's start small and expand out to larger applications from there.
Supermarkets.com was created by a division of Catalina Marketing Network, the folks who currently deliver purchase-based electronic coupons in more than 10,800 U.S. supermarkets. A shopper goes to this Web site and fills out his or her standard shopping list, which is then saved as a profile for later use. Each week, the customer returns to the site to see what items on his or her shopping list are being discounted with coupons. She then prints the coupons on her own printer and takes them to the store the next time she goes. In turn, the store scans and redeems those coupons, just like any others, at the register. The customer saves time and money, as does the manufacturer, and often the participating supermarket as well. Every coupon distributed online is one less that they had to print, handle, and distribute themselves. This is distributed printing in its most diffuse form, right down to the customer level. Keep in mind that not every coupon the manufacturer prints and distributes gets used. For the sake of argument, there may be 50 coupons distributed for every one redeemed. In reality, that manufacturer is saving not only on the printing and distribution of a single coupon, but that of 50 coupons.
Let's go now from the end user of Sunny Delight to the end user of Sun Sparc computers. Sun (http://docs.sun.com) puts all its documentation--manuals, guides, and answer books--on a Web site. The user can then use a Web browser interface to view and print a variety of technical information for Sun products that may reside in the docs.sun database. Over the next few months, docs.sun will include all product documentation from Sun Microsystems, including new books as well as existing books, and in multiple languages. The docs.sun online documentation system provides a robust search engine integrated with a powerful browse functionality that enables users to find information throughout all Sun document collections quickly and efficiently. You can dynamically customize your view of a very large document database, choosing only the subjects you are interested in and the types of documents you want to view.
Pushing the printing of documents down to the end user for everything from cookies to computers is only one form of the distributed printing model. What we'll look at next is a more sophisticated printing model that includes higher-volume runs and higher resolutions. While a collateral piece for a trade show in California might be created in New York, it might as well be produced in Los Angeles, rather than paying for it to be shipped across the country. The Worldwide Electronic Publishing Network (WEPN) at http://www.wepn.com offers you this capability. By using its QuickQuote calculator, you can estimate how much it will cost you to print your document in over 55 cities around the world. By the way, the actual documents are sent via private network to the local printing facilities, not the Internet. But who cares? The point is, the Internet puts you in touch with the capability and the company that offers it.
There is a convergence of the fields of distributed printing, publishing on demand, or what some call just-in-time publishing. Xerox plays a major role in these arenas. I helped roll out a product for Xerox a few years ago called DocuTech; in fact, I was part of the crew that helped name it. DocuTech lets someone produce a limited print run of manuals, or even compilations of bits and pieces of editorial, from different sources. It takes electronic files on disk, or transmitted through the Internet or an intranet, and prints them as if they were coming from an offset press, but using Xerox's print technology instead. A binder unit can turn the product into neatly bound books. For short print runs, it is an excellent solution. A number of efforts have been under way to put a Web interface up that would feed DocuTech materials to be printed widely. So anyone, from anywhere, could conceivably print to a remote location where a DocuTech machine resides; perhaps within your own company or at a local print shop.
While people have been talking the talk, I haven't yet seen one walk the walk. The idea will happen; it's just a question of time. Perhaps it will turn the corner into reality by the time you read this. One of the hurdles is keeping track of royalties. Let's say you want to buy only Chapters 3, 7, and 8 of this book. What would you owe me? Maybe you only want certain subchapters of those selected chapters? What then? If information does get parsed down to smaller pieces, you might see new types of promotions, like a two-for-one special on a chapter. Buy one chapter of my book, get one free. Let's see if it happens.
Distributed printing of documents is in a type of metamorphic stage where it's still being defined and redefined. Another interpretation of this concept comes again from Xerox, which calls itself "The Document Company." DocuWeb, at http://18.104.22.168, allows creators and users of documents to access collections they share in common. For example, a company may have an ever-changing personnel phone book for all its employees around the world. Each local office can simply print the latest rendition of that manual on an as-needed basis. Unlike Microsoft's NetMeeting, where documents are shared live and all or some can manipulate them, these documents are tightly controlled by the creators. The recipient can change a few things on the job ticket attached to the document. He's apt to change the amount of documents to be printed, but not the contents of the document. This is similar to the way Adobe's Acrobat (http://www.adobe.com) files function: you can distribute them, but once they are created, they cannot be altered by the recipients.
Another application of DocuWeb could be as a service manual for BMW dealers. Sales promotional literature with changing specifications, 4-color visuals, on a 12-panel brochure can be sent to a local commercial printer on an as-needed basis, rather than having boxes of them collect dust in each sales office, only to have them go out of date.
These sorts of applications help companies work smarter. There's a difference between working smarter and working faster. It's fine to work faster as long as you're not simply running in place at twice the speed. Working smarter makes better use of all your resources, money, materials, and the most valuable of commodities, your time.
The larger projects described toward the end of this chapter are geared for larger operations; however, the Internet is typically utilized for smarter operations by small companies. Large firms would be wise to think small and act accordingly. See how small businesses apply the Internet to make them work smarter, faster, cheaper, and then apply those lessons on a larger scale.
Web Price Index http://netb2b.com/wpi
This helpful tool from NetMarketing puts Web site development costs into perspective. Web Price Index is a monthly survey that looks at three hypothetical companies and their ongoing Web needs. Charts offer comparisons of site development and specific upgrades in six major U.S. cities. Each chart gives the national medians, highs and lows, for small-, medium-, and large-sized projects.
Whether you travel virtually via mousepad or hold out for the real thing, this Microsoft site is the cherry on top of the traveler's ice cream sundae. Part online magazine and part ticketing service, the site features a travel agent, a hotel directory (with more than 25,000 choices), a flight fare tracker (get quotes via email), a slew of forums with places to trade stories with fellow travelers, image galleries, weather reports, and multimedia tours of international destinations. It gives Microsoft's motto "Where do you want to go today?" a whole new meaning.
Net2Phone enables any Internet user with a sound-equipped PC to initiate calls from a computer and transmit them over the Internet (via IDT) to a telephone. The benefits? Lower rates, as calls are carried over the Internet until they reach U.S.-based phone switches; in effect, all calls originate in the United States. This seems to be a good deal for people outside the States calling in. Sales jargon on the site promises that callers can save up to 95 percent. Only the caller needs to be online and multimedia equipped. Sound quality is still dependent on the Internet. Test it for yourself by downloading the software and calling toll-free numbers before you set up a user account.
American Airlines http://www.americanair.com
This site is a prime example of how classic direct marketing practices can be migrated and employed on the Net. AA lures you in (call this an acquisition program) with its Net Saver discount program, which emails you every Wednesday with last-minute cheap seats. The incentive for you to buy tickets online is the offer of an additional 1000 frequent flyer miles. You can also find out how many fly-miles you've accrued by giving a PIN that lets you see your account information. Cross-merchandising tie-ins with Avis are featured, just like they are in the monthly hardcopy statements received by snail mail. The more you drill into this site, the more you learn about how to market smartly on the Net.
Auto-By-Tel is a free service that lets you buy or lease vehicles wholesale. Are you tired of those icky slicky car sales sleuths giving you "the deal of your lifetime"? Auto-By-Tel provides you with a convenient, easy, and more affordable way to buy your next car or truck. Be sure you know all the details of the vehicle you plan to lease or buy, such as make, model, series, extras, and so forth. Submit the online request form and a subscribing dealer in your geographical area will contact you. The good part is that you have the option of choosing whether you want to buy immediately, in a couple of months, or later. You can still get the information you seek without worrying about being bugged by a salesperson. Great use of the World Wide Web for customer sales and support.
BidFind is a search engine that's linked to about 30 online auction houses, including AuctionWeb, OnSale, and eAuction. Type in the product you're looking for, and BidFind provides a list of items and the auction houses where they're up for bid. Click on the item and jump into the action.
Those in the market for commercial real estate can access information about properties for sale, conduct preliminary underwriting, and make certain offers via the Internet at the RealBid site. Buyers can keep their fingers on the market by filling out a profile that is then matched with new properties entered into the RealBid database. When properties matching the buyer profile are entered, the buyer will get an email notification. Seller listings cost between $5,000 and $25,000. Buyer participation is free.
Everything you need to stay up to date on trends, events, and news in the manufacturing arena. This is a prime example of a trade magazine publisher, Cahner, converting content and contacts into an Internet community of interest. The interface is clean, attractive, and functional. Features such as the buyers' guide, industry forums, news and features, trade show listings, a jobs database, and more make this the consummate location for manufacturing resources.
Holiday Inn http://www.holiday-inn.com
This hotel site offers the standard information about services, promotions, and locations, but also adds the powerful capability to search for a hotel by multiple criteria, check availability, and book rooms with secure transactions (in Netscape and MSIE browsers).
As you can see from the descriptive name, this site is a bit short on creative marketing voodoo. However, DocuWeb's XDOD (Xerox Document On Demand) technology is a savvy solution for online document management. Participating members utilize a dedicated Web server for network access to document libraries. Documents (such as sales and promotion materials) can be viewed online and then easily channeled to a high-quality printer via a Java applet XDOD job ticket interface. The document library features split-screen viewing, customizable searching capabilities, and print request and document access reports for the use of the document manager.
It all started with a paper clip. The OBI Consortium, spearheaded by American Express, is attempting to create an efficient, secure, online purchasing system that meets the needs of big-budget buyers and sellers who service them. As a general framework for business-to-business transactions, Open Buying on the Internet (OBI) offers multiple payoffs: It discourages software vendors from populating the Web with proprietary systems that can't interact; it encourages participation from multiple vendors (rather than the dominant few); and heavy-hitters such as Office Depot, Microsoft, General Electric, and Oracle have already jumped on the bandwagon. AmEx is betting that OBI will foster more online transactions, and that many will be authorized, invoiced, and paid through its purchasing card programs. Interested? The OBI Consortium offers a variety of membership options to meet your needs.
Business Tools from ADP http://www.adp.com/emergingbiz/tool/index.html
Small business owners and managers have a new place to turn for sound advice on day-to-day management issues such as finding funding, payroll obligations, and human resource management. The Business Tools section of Automatic Data Processing, Inc.'s (ADP) Web site has plenty of advice and articles about small business management. Can't find the form to apply for a federal identification number? ADP has it, and several others, available for free downloading.
Trafford Publishing http://www.trafford.com
On-demand publishing removes the printing, marketing, retailing, and distribution hassles that small software companies, self-publishing authors, and government agencies routinely face. For approximately $1,000 and a manuscript, Trafford will partner in your creation by providing an online bookstore, marketing services (including an individual homepage and search engine registration), and on-demand printing and shipping. Trafford hopes to appeal to micromarkets that are vitally interested in their offerings to generate slow but steady sales around the world. The author sets the retail price and earns 75 percent of the retail markup. All in all, it's an interesting alternative to the competitive world of traditional publishing.
Meet the Author
Larry Chase is an international Internet consultant, author, and speaker. He has consulted with Fortune 500 companies such as Con Edison, New York Life, 3Com, and EDS, as well as some of the Internet marketing pioneers themselves, like Hotel Discounts, Auto-By-Tel, and 1-800FLOWERS. Since Chase saw the potential of the Net early on, he was prominently featured in the pivotal Business Week cover story, "How the Internet Will Change the Way You Do Business," way back in November of 1994. The New York Times, USA Today, Inc. magazine, Bottom Line Business, CNNfn, CNBC, plus scores of trade magazines and newsletters regularly seek him out for his insights. Reviews from Larry Chase's Web Digest For Marketers newsletter, (http://wdfm.com), which is read by more than 150,000 people each month, have been syndicated to Advertising Age, DM News and Business Marketing magazines. His columns and seminars are seen worldwide.
Chase started one of the first of two commercial websites in New York City. Prior to that, he worked for New York's most celebrated ad agencies as an award-winning strategic copywriter. After working on consumer brands such as Heinz, Volkswagen, Polaroid, CBS, and Avis, he chose to focus on high-tech products and services, "since there are always new and unique selling propositions worth writing about." Chase worked for technology clients such as AT&T, Compaq, IBM, Digital Equipment Corporation, GTE, Xerox, NYNEX, and "just about anything that had an 'x' in it." He specialized in technology ten years before it was fashionable to do so: "Now, it's chic to be geek."
Chase lives and works in New York City, and can be reached via email at email@example.com. For more information on Chase and his services, visit his firm's website at http://www.chaseonline.com. If you have questions thereafter, call 212-876-1096.
Eileen Shulock is an Internet marketing, e-commerce, and merchandising expert. As Vice President of Retail Strategy for Knowledge Strategies Group, an omnitailing development company, she works with clients to generate maximum sales and establish meaningful and long-lasting customer relationships via the Web, kiosks, mobile and wireless applications. She has over ten years of real-world retail management experience with some of the world's most successful specialty retailers and manufacturers, and more than six years of experience in the Internet business, where she has worked in the areas of online marketing, public relations, business strategy, and e-commerce development. For over five years Shulock has also been the managing editor of Web Digest For Marketers, and is publisher of the newly launched eTrendWire. As the former director of Webgrrls International, she continues her role with the organization as the volunteer director of Webgrrls New York City, the founding chapter of the 40,000-member network. Shulock is a frequently published author and speaker. She lives and works in New York City and can be reached via email at firstname.lastname@example.org.
Most Helpful Customer Reviews
See all customer reviews