Morphing Offline Into Online

Strong online brands such as CDnow, eBay and AOL have built customer loyalty and captured market share, proving that cyberspace success is within reach to those properly armed and ready.

Meanwhile, offline brands are fast realizing that an online presence is not only desirable – in fact, it is critical – to meet customer expectations and stay competitive.

Both face the challenge of reassessing their marketing strategies to attract customers via the Internet. For example, emotion-laden, television-style advertisements just don’t translate on the Net, and pop-up advertisements are tagged as annoying interruptions to the online experience.

Even banner ads on individual sites are losing steam. Companies are left wondering what works, what doesn’t, and why and scrambling to ensure their web sites make the grade.

Marketers building brands in the online world have to factor in customer participation. Often, the real-world emotional seals of traditional brand marketing (the path that links “Disney” with “family” or “Volvo” with “safety”) need pairing with concrete Internet services. The goal is to meet the needs of customers – both online and offline.

Online, effective branding must simultaneously move and help consumers. In essence, the marketer “pays” the consumer to endure the brand message by performing some kind of service, such as offering a customized product tailored to the user’s preferences and needs.

This tactic poses a challenge to companies with consumer goods. There are few ways to make soap or soda useful in the virtual world, for example. Indeed, of the top five buyers of TV advertising – Kodak, Kraft Foods, Budweiser, Revlon and Coca-Cola — most are nearly invisible online.

The three development stages

Web site development can be divided into three stages:

Stage 1. Our company has a website
Many companies already have a presence in cyberspace. However, that presence does not guarantee an increasing market share, a global reach or stronger customer relationships.

Companies that have a website may not necessarily have well-defined online goals. Up to 80% of Australia’s top 5000 sites have websites because they felt they had to get online. They are not using their web sites as business and customer building tools, merely following the trend.

Stage 2. Our company’s website adds value to our customers
Creators of successful web sites have assessed a site’s value to the customer and considered how to use the site to offer a unique selling point or new servcies.

Certain industries have been quick to offer special benefits to online customers: insurance companies allow customers to file claims online, finance companies provide online applications with a same-day email response and airlines offer online bookings. By visiting these sites, a customer can save time and conduct business effectively and conveniently. Thus the customer has an incentive to visit them.

Using Internet marketing tactics effectively strengthens an online brand. While a brand’s TV image may focus on emotions such as safety, loyalty, and friendliness, the online image may concentrate on the brand’s efficiency, price and customer service. The TV watcher is looking for entertainment. The Internet surfer is looking for service and added benefits.

When General Motors Corp’s Saturn revamped its web site to offer more help and less hype, the site visits tripled to as many as 7000 per day. Eighty percent of Saturn’s customer leads now originate on the Internet. The original Saturn site offered car information, data comparisons and dealer referrals. Last year, Saturn added an online order form, lease price calculator and interactive design shop for choosing car options. The website went from a passive information site to an interactive selling tool.

Customers who benefit from value added interactive Internet tools feel they have received better service and are likely to return to a site. The websites that provide these tools are the success stories, and will ultimately drive the preference for online business. Travel.com.au offers its customers a 5% discount – enough to entice customers away from traditional agents. By allowing site visitors to customize products, order 24 hours a day, and purchase items at below retail cost, a company enhances its customer relationships.

The company could choose to go one step further and send copies of gift vouchers to be redeemed with an online order, or use email as a customer response tool which directs them to the site rather than to a call center.

Stage 3. The website has become instrumental to our company
Once a web site is up and running, companies will find that it impacts not only their marketing department, but also sales and distribution, customer service and even product development. Often internal changes are necessary to cope with the effects Internet business has on a company.

So far, few companies have reached this stage but more will follow. Imagine an Internet bank branch where all bank services are available, even contact with a personal advisor via videoconferencing. What role will brick and mortar branches – only open from 10 a.m. to 4 p.m. on weekdays, and imposing high charges for over the counter transactions – play in the future? When the consumers no longer regard the branch network as the focus of their banking, and prefer to conduct transactions from home in the evenings and weekends, great structural changes will ensue. Although this shift in mentality will not happen overnight, in the US the process has already started and certain industries, such as travel and car sales, have already begun to see the effects. The destruction of well-established value chains will prompt the disappearance of ‘middle men’ unless they redefine their roles. And that will be difficult because in many cases, the Internet can offer a faster, cheaper service because of global presence and diminishing transaction costs.

Industries which deal in products which can exist just as easily in a purely digital version will be the first affected – booksellers, libraries, record shops, newspapers and magazines, the film industry and the financial sector.

For example, the Yellow Pages Australia site was one of the world’s first Yellow Pages sites. One year ago, the Pacific Access group announced that the Yellow Pages Australia website would be their primary focus as they realized that in time, the paper version may become obsolete. This is a dramatic move considering that the paper version generates most of their revenue today.

Because of its first-mover advantage, Yellow Pages Australia has had time to “think” and not just “act.” They studied their consumers, realised that their needs are changing, and pioneered a site which offers information more up to date than the paper Yellow Pages. They also reaslized the importance of becoming an online market leader before their competitors.

Moving an offline brand to an online environment is not easy. Several guidelines have emerged over the past five years:

1. Ensure that a web site adds value to a customer’s experience of the company. Don’t just copy an off line brand and expect success online.
2. Create a synergy between the two worlds. Even if playing to emotions in the offline world, facts might be the key message in the online world.
3. Create a feeling of intimacy between the company and online customers. For example, personalized welcome pages for return visitors, emails advertising special discounts for frequent customers, or online competitions.

Merely having a web site will never be enough to nurture customer relationships via the Internet. A company wishing to be successful in the online business community must strive to offer its Internet customers those value added services and personal touches which will ensure they return to the site again and again – bringing their business with them and ensuring brand loyalty.