Tuesday, March 4, 2008

How Has the Internet Changed Marketing Strategy?

The answer is that changes have been great, but I don’t know of anyone who has verbalized the changes in a specific way. I’m going to cut off a chunk and give it a try.

I like to try to boil what we do as marketers, which often gets pretty complex, down into simple concepts. As far as I’m concerned marketers basically do three things. We acquire customers or sales leads. We convert leads into actual customers. We retain existing customers. There are many things we have to do in order to accomplish these three key goals. In addition, marketers of frequently-purchased consumer goods and services and some lower-priced business goods and services may not be in the lead conversion and generation business. With those provisos customer acquisition, conversion and retention form the core of what marketers do.
Internet 1.0 changed all those activities irrevocably. As this blog has often pointed out Web 2.0 is already here and the requirements for marketers are changing again before we fully came to grips with Web 1.0. This is a good time to sit back and try to organize the changes we know about into a simple, understandable form.

So, over the next couple of weeks I’m going to write a series of four posts, with this being the first. In the second I’ll discuss customer acquisition. Then over a few days I’ll write about conversion and then retention.

I keep being reminded that many of us who are now in the higher echelons of marketing were educated in traditional mass media marketing and it’s hard to get away from that and understand how fundamentally marketing has changed. Understanding the changes that have taken place--and maybe looking ahead a bit--is the purpose of this series of posts.

Please stay tuned!
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Anonymous said...

Hi Mary Lou,

Do you mind if I try to challenge you a bit on this one? You are very right that our web analytics industry always talks about the ACR framework. However, this turns out to be a limited view on what marketers and customers do.

For one, look up the original e-metrics whitepaper by the gurus Jim Sterne and Matt Cuttler. It was written for NetGenesis back in 2000 or so. This paper already had more than these three steps in it for the customer life cycle.

Ditto, for direct marketers in the offline space who also use many more steps, e.g. Raise awareness, improve brand perception,
facilitate research, offer trial, convert, service,
up-sell & cross-sell, gain loyalty, prevent
attrition, and win-back should that fail.

Now, you could summarize these steps within the ACR framework. Please feel free to do so. Just don't fall into the lousy trap that many of web analytics pundits have fallen into, namely to neglect key activities that fall into these 3 steps.

For instance, the examples given for the retention phase in web analytics have almost always been very lame. The very name, retention, does not capture the essence of this step which is to grow life time value.

If only online and offline marketers worked more closely together, they would not fall into these traps. That is my pet peeve and the reason why I wrote a book on multichannel marketing metrics recently.

Look forward to reading your work on ACR. Thanks for your awesome blog!

Akin Arikan

MaryLou Roberts said...

Hi, Akin. I wanted to say thanks for a wonderfully insightful comment. I'm familiar with the Sterne/Cuttler white paper; I know I used it in the first edition of my text. I'll try to dig it out of the archives. And the multiplicity of choices is a large part of where I'm going, I hope! I tend to describe them as objectives, not steps with the view that they are choices at any given time/for any given program, not prescribed steps in a process. I'm working on the next post now; we'll see if I can articulate it well. I look forward to your comments over the series and wish you the best on your forthcoming book. Multichannel is absolutely the heart of what's going on, at least in B2C, and the book looks awesome!

Anonymous said...

I wanted to make a comment on this subject and would like to hear what you have to say about my thoughts.

I wrote an article for Electronic Commerce World Magazine back in 1999 regarding the "New Order" that was beginning to take place regarding traditional marketing and the effects that the Internet was having on it. It was kind of a prediction on things to come.


I addressed how some companies were looking at business in a traditional sense in a world that was clearly changing. At the time I think my thoughts were correct. Even though the article deals with a specific idea regarding dealers and how products were sold traditionally and with the new Internet in mind, I think it lends well to the area of marketing as well. The correlation being traditional sales channels and the new Internet based models - traditional mass media marketing and new Internet marketing.

That being said, I have a though that everything is beginning to come full circle with respect to marketing and mass media. Here is what I think is happening:

Traditional mass marketing - moving to Internet focused marketing - moving back to traditional mass marketing focusing on Web based destinations - moving to a point of balance between both mass marketing and Internet focused marketing.

With my company basketballgoals.com, I found that in the beginning I had great sales just from the Internet and natural search placements. As competition grew, I was forced to use Pay-Per-Click advertising in order to maintain sales. As competition grew for Pay-Per-Click advertising, I was forced to move to Mass marketing such as newspapers, radio, magazines and television in order to drive customers to my site and maintain sales.

I think that is what we are seeing today, companies and marketing/advertising firms scrambling to find a balance. Am I on track with my thinking?

MaryLou Roberts said...

Yes, Brian. What you're seeing in your own business makes sense to me. As the net itself changes and--maybe more important--as more marketers begin to use it better, various techniques gain and lose effectiveness. I just wouldn't assume that it's come full circle and stabilized. There will be disruptive change on the Internet for as far out as my limited vision can take me. Web 2.0 and social networks seem to be the current disruptive innovations. After that, I have no idea, but I'll bet there will be something to keep marketers on their toes!

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