The Internet is transforming customer buying behavior, with major consequences for how the new breed of consumer develops familiarity with, and ultimately loyalty to, brand. Marketers who strive to capitalize on these shifts as all successful marketers must do will have to better align their branding investments with new data about how customers shop and buy online. Only by strategically recomposing the marketing mix can marketers drive traffic, build brand equity and capture customer loyalty in the Internet age.
According to a recent IMT Strategies research study, there is a severe disconnect between how customers find new web sites and where companies are focusing their branding investments. In a phone survey of 360 web users, we asked customers to identify the primary way they discovered new web sites. Without any prompted choices, fully 45.8 percent cited search engines as their top choice. Another 20.3 percent cited recommendations from friends, and 19.9 percent credited “random surfing.” In fact, the 2.1 percent who cited “by accident” as their primary means of finding new sites outranked virtually everything on which marketers are actually spending money television, banner ads, newspaper and radio each of which was the top pick of fewer than 1.5 percent of respondents. (See figure below.)
Top Customer Methods of Discovering New Web Sites Source: IMT Strategies, 2000
Marketers, meanwhile, continue to rely heavily on traditional brand-building investments, including print, TV and radio ads. Consider that 55 percent of e-commerce sites report investment in newspaper ads, 54 percent in magazine ads, 35 percent in radio and TV ads and 35 percent in print catalogs, according to a 1999 Intermarket Group survey. By contrast, “sponsorship on other sites” a powerful mechanism for reaching the nearly 20 percent of customers who find new sites via “random surfing,” and roughly equivalent to the affiliate networks discussed below is cited as an investment by only 26 percent of e-commerce sites in the same study.
While print, TV, radio and related marketing vehicles are hardly superfluous, the data does suggest that “old media” investments will be less effective in building visibility and brand equity over the web than a range of alternative programs and tools that better align with online customer buying behavior. Successful marketers will experiment with these emerging strategies to reach out to and connect with their web-savvy constituents. The following strategies appear particularly promising:
- Search Engine Optimization
With nearly half of all web users citing search engines as their primary portals to new sites, marketers must re-examine their strategies for optimizing their rankings in search results. Appearing among the first few pages of search results on the top engines is a black-magic science practiced by (usually expensive) outsourcers who specialize in the real-time adjustments that are the key to maximizing search engines. Such outsourcers include BeFirst.com, Did-It.com, Fat Traffic, SearchEngineWatch.com, Web-Ignite and Web Site Results.
- Affiliate Networks
Online marketers need to carefully plan and manage partner programs that give them a broad reach of links on affiliate sites across the Net. Where 20 percent of web users cite “random surfing” as their top means of finding new sites, marketers must have extensive links in place to maximize their reach to customers throughout the Internet. So-called “affiliate networks” which typically reward referring sites with a commission or bounty based on click-throughs, sales leads or completed transactions are generally much more cost-effective than standard cost-per-thousand banner campaigns.
- Advocacy Marketing
Often the most powerful recommendation for a company is that of a satisfied customer to a friend. With 20 percent of surfers citing word of mouth from friends as their top means of finding new sites, companies need to provide incentives (e.g., discounts, loyalty currencies) and simple mechanisms (e.g., web-based email forms, pass-along email newsletters) to enlist their customers as marketing advocates to their friends, a strategy often referred to as “viral marketing” by online marketers.
- Permission Email
When customers explicitly opt into permission marketing relationships, email can be one of the most cost-effective and brand-positive means of acquiring new customers and remarketing to existing customers. Savvy Internet marketers have realized that “email marketing” does not need to be synonymous with “spam.” Instead, a range of strategies such as customer relationship email, corporate email newsletters, reminder services, permission networks, sponsored independent newsletters, discussion lists and partner co-marketing can drive online traffic and enhance brand equity.
- Personalization and Mass Customization
Marketers can dramatically enhance customers’ online experience by personalizing their web presence and allowing customers to configure products and services (enabled by mass-customized back-end processes). Sites can improve customer loyalty and build exit barriers with services such as personalized customer interfaces (` la MyYahoo), behavioral-based recommendations and individual product configuration. Personalization is the very essence of experiential branding, whereby customers impact a product or service to reflect a bit of themselves through a one-on-one interaction with the brand.
A key component of any brand experience is the quality of customer service and support. While companies have long striven for customer service excellence in the offline environment, they are finding that customer expectations for online service present many unfamiliar challenges, such as managing a torrent of customer email inquiries and enabling efficient self-service knowledgebases. With the proper allocation of resources, however, companies can experience brand-positive efficiencies, delivering quality customer service more efficiently online than through traditional channels. Companies that disappoint user expectations, however, will damage their online brand equity.