NetMarketing

When people talk about the internet (especially in places like Italy, where a widespread knowledge of the Net is quite recent) they generally think of the World Wide Web. And they are quite confused. In a prime time television debate, a few days ago, they were talking about "addresses with http and @", which of course don't exist. I believe we should think a little more about those @ addresses, when we discuss the growth potential of the Net. In Italian net jargon the @ is called a chioccioletta, a little snail. There were such snails, and there were sysops, long before there were webs or webmasters. E-mail (which is fifteen years older than the Web) has become quite a large global animal - maybe a caterpillar that could turn into an unexpected and unpredictable butterfly. In any case, it's not slow.

With much less noise than the current web-hype, it has been spreading and is still on the move. Extensively for private use, but even more so in business. As companies begin to understand how expensive it is to use telephone and fax, e-mail will spread further. We shall feel in Italy, and worldwide, the effect of global "traction": not only the local offices of multinational companies and organizations, but all those who have frequent international relationships (that's practically everybody) sooner or later will find it necessary to use e-mail every day. It's not easy to understand how much it has already happened, or when it will happen on a larger scale. Daily experience confirms, once again, that the driving force is not technology, but human behavior. How many people do we know who have a mailbox but hardly ever use it, and out of habit continue to prefer telephone and fax?

This type of trend is strongly influenced by aggregation: when in a set of relationships (personal or business) a "critical threshold" is reached, it accelerates. As happened for cellular phones, a day will come when an e-mail address on a business card or a letterhead will no longer be seen as snobbism, but as normality. At that point we may see the growth curve turn sharply upward; though nobody knows when.

But... there are two "buts". The first is that use of e-mail does not imply net navigation. There are, and will be, large numbers of people that use only e-mail. We know that half of the people using e-mail never, or rarely, use other internet services. This has a practical consequence: many people that potentially could read our message will not be reached, unless we find a way, that is interesting for them, to inform them of what we have to offer.

The other problem is not, at this stage, easy to understand; but potentially quite relevant. We don't need to read the monumental study by Philips Tarifica to understand that telephone companies worldwide are under pressure, because of the internet and because of the increasing competition stemming from "liberalization"; and that as a result there will be a further, and considerable, decrease in long-distance phone prices. Already today the cost of a London - New York conversation is 15 US cents a minute - and it's expected that it will drop to 3 cents.

There are also urban cellular networks, such as DECT, competing with wire service; new wireless options, including satellite systems; the development of "paging" and "short message" services on digital telephones... the entire telephone system is going into a stage of radical change.

The difference of cost between the internet and other means of communication, such as phone and fax, could be reduced to the point of being irrelevant. At the same time, more and more companies and organizations are developing internal networks, that communicate mainly with themselves with only a few "doors" to the internet - as has always been the case with some large universities and other big private or public systems.

What influence can all this have on the growth of e-mail, and even on the structure of the internet? I don't know, and I wonder who can make any reliable prophecies; but its seems likely that the evolution of telephone and data transfer services will lead to a complex system, where the internet as we know it now could be just one of several components. Once again, one thing is sure: the factors (and interests) at play are so complex that the future is unpredictable.

But if we base our study and discipline on human relations, not on technology, all of this is only marginally relevant. Tools may evolve in surprising ways, offering unexpected opportunities and creating unpredicted difficulties. But what we can learn in the experience of interpersonal relations will continue to build up as a "capital of knowledge" - therefore a competitive edge - for those of us who will have the patience and the consistency to experiment and learn.

Three books, many years ago, helped to grow in me the curiosity that eventually led me to navigate every day on the Net. A fourth, more recently, contributed some basic thoughts to my understanding of the general evolution in which new communication systems have a crucial role.

Two were published in 1980: when it was almost impossible to imagine the widespread availability of technology that we experience today.

One was Le Défi Mondial, by Jean-Jacques Servan-Schrieber, who explained how new technologies open spaces to human thinking that were unimaginable before; and how in today's world the dominating factor is no longer the control of resources, but information and thought. He said: "In the post-industrial era the "finiteness", that had always oppressed and imprisoned us, is broken. Within the reach of people is, at last, the infinite resource: information, knowledge, intelligence.". This may sound like poetry, or a dream; it's a theory that we have heard many times and we seldom see practiced. But it's no utopia - even though, so far, we have been unable to turn it into facts.

The other was The Third Wave, by Alvin Toffler. There are three "waves" in human history. The first was agriculture; the second, industry; the third is communication. Of course communication has always been an essential element of human nature; but only in recent times (an tiny fragment in the history of our species) communication systems have become as widespread, and as fast, as they are today. In the information age there are totally new possibilities for marketing; even a new definition of product, which van be much more personalized. Toffler talked about a new kind of customer, which he called a prosumer: producer and consumer at the same time. This goes far beyond "do it yourself" or "semi manufactured" products; more broadly, it means involving the customer in the production process. Of course this concept is already practiced in many industries, but we have only scratched the surface of its potential.

Another book that opened new perspectives was published in 1982: Megatrends by John Naisbitt.

Among many other interesting observations on how the world can change with new technologies, there was one that I think is as true today as ever. High tech - high touch was Naisbitt's formula for the way people respond to technology. Each time a new technology is introduced, a human drive is needed to re-establish the balance - or the technology is rejected. The more there is high tech, the more we need high touch. Fifteen years later, this observation is largely confirmed by facts. It's a principle that, I think, should be kept in mind when communicating on the Net.

In 1994 the same author published a new book, Global Paradox. The "paradox" is: The bigger the world economy, the more powerful its smallest players. I think that is very relevant for the subject we are discussing. With today's telecommunication systems it becomes possible for a small business to manage its market "segment" on a global scale - with a level of specialization and customer dedication that can hardly be matched by larger companies. Of course this doesn't put the biggest players out of business, but they must learn to be flexible - a change that can be quite difficult for large organizations.

John Naisbitt says: "Telecommunications is the driving force that is simultaneously creating the huge global economy and making its parts smaller and more powerful... In the process, the telecommunications industry has moved into a period of thrashing, creative chaos." This turbulence continues; the notion of "chaos" may scare or confuse people and organizations that don't understand its laws... but for those who can move with courage and imagination the opportunities can be extraordinary. As I said... many Italian companies are quite well suited for this challenge.

There are fascinating, though sometimes obscure, elaborations on the Theory of Chaos and complexity. But to operate effectively it is not necessary to understand all of its theoretical and scientific implications. This reminds me of an old fable, quoted sometimes in business schools.

A scientific study of the bumble bee's wing structure, body weight etc. proves that it can't fly. But the bumble bee can't read, so it flies...

In practice, it's enough to understand that the most obvious or "high probability" scenarios are hardly ever the most interesting; to know how to use "lateral thinking"; and to know how to take risks without jumping of a cliff. The practical history of many companies proves that all this is perfectly possible, and much easier in practice than it seems in theory. One of the greatest values of interactive communication is the opportunities it offers to widen and multiply experimentation, to feel your ground as you go, with relatively low investment and risk.

This is a true story, though (for reasons of confidentiality) I cannot name the company, nor the consultant. But I think there are several other such cases.

A large multinational company went to an internet communications consultancy and said: "We are not asking you to help us get into the Net. We want you to help us get out."

Like many others, it had hurried into a "presence on the net" without figuring out why or how. It had no clear strategy, but wanted "to be there". It didn't check out the project, not the technical implementation - the cost would be quite invisible in it's balance sheet, so why worry? The company's management knew it was there, but had set no precise objectives or performance yardsticks. The departments and divisions, including marketing, had much more important and urgent things to look after.

Two years later... they found themselves trapped. Not many people had come into contact with them on the net, nut some were important. Customers, distributors, counterparts that could not be ignored. They were all disappointed and irritated. Suddenly the company realized that they had not just wasted (not much) money, but they were positively hurting themselves.

So for the first time they analyzed costs, objectives and results: and they discovered that to solve the problem they needed not only to provide better service on the net, but also to change many things in their corporate culture and operating systems. A complex and time-consuming operation, with no projection of "return on investment" that could justify not only the expense, but the waste of management time and the cumbersome re-training of staff. They had rushed down the wrong road and found out too late that it was a dead alley. The only practical solution was to count their losses and close down - then stay out of the net or re-think from scratch.

But now they know it isn't easy. Without realizing what they were doing, they have established relationships, made promises and commitments. They can no longer just "close".

Unfortunately I am not the consultant involved in this project... and in any case I could not reveal the details, nor explain the solution for this specific problem.

But a lesson can be learnt from this story, that can be summarized in three simple points:

Don't go on the Net without a clear strategy.
Move gradually, step by step; keep testing and learning.
Be ready to change direction, or move back, before you reach the edge of the cliff.

If you don't have the time, or the money, to take these steps... probably the project is not well defined, and needs re-designing. That is much less expensive than fixing the mistakes caused by poor planning.

Obvious, isn't it? But when I say to someone who is working in this field "You should insist that your clients have clearer strategies, and provide them with better planned projects" the answer often is "Do you think I'm stupid? I know that; but I must earn a living... most of my clients say "don't waste my time, just do me a pretty homepage" or "this is my catalog, take at it is, add a few frills and put it on the net" - and I must obey". Of course we all understand that with so few years of experience we can't expect much of an offering of qualified service and advice; but the most serious problem is that, in spite of the lessons that can be learnt from the obvious failures and the delusion-disappointment cycle, we still have too much unqualified demand.

It's temptation - and it's dangerous. There are many offerings of technologies that can invade someone else's ground, to try to "manipulate" the way in which our site is accessed, or to collect information.

There are serious legal risks in any invasion of privacy or interference with someone's computing systems. But, even when it's legal, it's a minefield. I have already discussed in this newsletter the problems of spamming; elsewhere (but only in Italian) I wrote about the dangers of something a simple as a cookie. I don't want to get into the complex technical debate about the differences between several types of "objects", such as ActiveX, generally considered quite dangerous, or Java beans, which may be safer (and smaller) but may not be totally safe. Quite apart from any technical elaboration, there is a basic matter of manners and relationship.

There is a little tale being told on the Net; and I think it's a true story, because it's quoted by reliable sources. Apparently there is an explicit "sexy" website somewhere that offers viewers a piece of software to "see better". If it's downloaded, that software blocks the modem signals, closes the connection, re-dials to a pay line in Moldavia, then puts the modem back to normal condition. "Victims" don't know what is happening until they receive their telephone bill.

There are many more examples, less picturesque but not less worrying. If we decide to put something on our site that is "invasive", we run a double risk. Expert users will probably turn down our offer - and there is a strong chance that they will take our address out of their bookmarks, and cancel our name from their shopping list. Inexperienced users probably won't even notice what we are doing; but if later something goes wrong, or simply when they learn better they realize that they have been tricked... they will not be our friends.

Before we allow technology to "intrude", in our name, in someone else's home or office, I think we should ask ourselves if the potential benefit justifies the risk. Using technology "just because it's there" (as many, unfortunately, do) is not just useless: it can be a serious mistake.

Which real advantages could we gain? Which real and better service could we offer to our customers? Are the benefits worth the risks? Is it really necessary to use that technique or could we obtain the same results in a simpler, and less dangerous, manner?

Quite often, we shall discover that it's not in our best interest to do anything of this sort. And even when it is really convenient for us to use an intrusive technology or collect private data, I think there is a simple solution. Tell visitors clearly, so they understand what we are doing and share in the decision. It can be surprisingly easy, if we really offer something interesting, to have people's agreement and cooperation. This will protect us from risks, improve the relationship, and can have an added advantage: selectivity. People who choose to cooperate (if the offer is related to our business, and not just entertainment) are likely to be those that are more interested in what we have to offer.