The definition of insanity, according to Steven Covey, is to keep doing the same things and expect different results.

When it comes to web strategy—for both internal and external web presences—some people behave as if Covey’s definition doesn’t apply. Cool new technology keeps coming along that, by its nature, enables us to do things differently, guaranteeing that we will see different results.

The latest wave of this game-changing, new-results-generating technology is social media, or intranet 2.0 when utilized within an organization. The promise is substantial, especially when costs are factored in.

According to the results of Prescient’s Intranet 2.0 Global Survey (561 organizations of all sizes from across the planet), for example, 46% of those with 2.0 tools have spent nothing or very little on the solution.

So are these inexpensive, powerful tools delivering satisfactory results? Not yet:
• Satisfaction rates with executives is dangerously poor: 38% of executives rate the 2.0 tools as poor or very poor; a lowly 23% rate them as good or very good.
• Employee satisfaction is almost as poor: 35% of organizations say employee satisfaction with the 2.0 tools is poor or very poor; only 27% rate the tools as good or very good.


These results do not reveal intrinsic flows in Intranet 2.0 technology, but rather suggest that some people are forgetting George Santayana’s observation that those who cannot learn from history are doomed to repeat it.

In the case of intranets, for example, it wasn’t that long ago when organizations saw an opportunity to deploy the same cool web technology that had revolutionized external communications to enhance internal effectiveness by building an intranet.

While some organizations enjoyed strong results from their intranets, many others discovered that easy-to-use technology created site proliferation which resulted in the number one complaint of intranet users: I can’t find what I’m looking for.

The lesson from successful intranets is the importance of measuring success and linking the site to an organization’s unique business objectives, rather than simply building and launching without a plan.

One company that has developed a strong set of metrics to prove intranet success is Sodexo. Their intranet dashboard, which is visible to all intranet visitors, presents such data as: the percentage of employees that view the intranet as a valuable resource that helps them do their job; and the percentage that thinks their division makes good use of the intranet to communicate with the field.

While this data is important for proving the need for an intranet, according to Angelo Ioffreda, who was Vice President, Internal Communications, Sodexo, for a team that wants to gain the perception that the intranet will address a company’s unique challenges the best advice is: “look at your business.”

In Sodexo’s case, that meant adding value to a dispersed workforce by contributing productivity, effective and efficient communications (including reducing print) and enabling people to find one another.

The lesson for intranet 2.0 is clear: those organizations that develop a strategy founded on clear business value and a measurable plan for execution will achieve breakthrough success with the technology.

Those who ignore their history lesson and repeat their mistakes will start to experience Covey’s symptoms of insanity

An all too common complaint from web managers is that their website does not enjoy the support from executives it deserves.

 

But is lack of support the fault of the executives who fail to grasp internet value, or the web manager who fails to talk their talk and present the website value in a concise, impactful way that will motivate executives to support the web?

 

The fault lies squarely with the web manager, according to a practical, helpful white paper “Best Practices for Creating a Web Strategy: What Web Managers Need to Know,” produced by J. Boye, a vendor-neutral analyst firm.

 

“The key is to make the problems tangible enough, so they can be understood by executives who generally have little web understanding,” say the report's authors Dorthe R. Jespersen and Peter E. B. Nissen of J. Boye. “It is crucial to speak the language of top management. Focus on high-level business problems, rather than low level problems and technical details. Such details may be problematic in the everyday life of the web manager but they are of little importance to the organisation’s key tasks.”

 

In addition to the helpful suggestions on how to present the strategy to executives in a meaningful manner, the report provides many practical ideas and examples on how to avoid the six common pitfalls of developing a web strategy, which the authors identify as:

1. Creating the strategy without documentation on users
2. Not involving internal stakeholders
3. Not understanding your executives as an audience
4. Not following up on whether the strategy brought results and revising the strategy accordingly
5. Describing the strategy in abstract and vague terms
6. Making the strategy too operational

 

The document makes a strong case for the benefit of utilizing the services of neutral, third-party expert to assist with the strategic plan, but it emphasizes the importance of having the web manager take responsibility for developing it.

 

“We don’t advise that you let someone else write your web strategy,” the authors observe. “You need to go through the process yourself, involving stakeholders along the way. If not, you will probably have a hard time implementing it because of lack of buy-in across the organisation and lack of knowledge of the strategy process inside the organisation.”

 

While most strategy books are targeted at the CEO-level, this 35-page report guides the web manager in creating a solid web strategy that speaks to the executive suite. Although the report is targeted mainly at the web managers for public websites, much of the advice will also apply to intranets.

                

The report is supported by research gathered from interviews with 19 European organizations—including governments, for-profit enterprises and NGOs—and draws on collected experiences with web strategy from several conferences and a European community of practice with 250+ members facilitated by J. Boye.

 

Download the report Best Practices for Creating a Web Strategy: What Web Managers Need to Know.

While driving through Michigan last Thursday, I learned something new and was reminded of something important. And that got me thinking about intranet strategy: (Someone has to make these connections. And anyway, it’s a long drive).

 

The fresh piece of information was that Michigan is pretty big, which I discovered when driving past Flint on the I-75 and chatting to a friend who lives in the state. He informed me that we couldn’t meet for coffee because he was several hours away in Grand Rapids (Google Maps contained the same data, but I was so focused on the route that I missed the big picture—there must be a metaphor in there somewhere).

 

He also reminded me that even in a terrible economy, there are opportunities for companies and individuals who take a strategic approach to seeking them.

 

My friend rejoined the ranks of the employed after a brief period between jobs, becoming a product manager with a large imaging company. His new employer was among the many companies that had recently announced lay-offs in some areas of the business, but the CEO had ensured that a message went out through their intranet that the company was also investing in growth areas, which included adding head count.

 

Today, in Digg, hundreds tagged an item from Reader’s Digest called Nine Recession Proof Careers, which provides a useful source of data on where job opportunities still exist. The list included Energy, Environment, Government and perhaps surprisingly, Financial Services: “Rising from the ashes of a very bad year, financial services have a bright future. Corporate America’s wretched excesses mean more government regulation. Workers who are retiring will need advice on how to make their money last. Small businesses may outsource accounting services. As we get to the middle of the recession, there will be a wave of mergers and acquisitions.”

 

Which brings me to intranet strategy. You’ll have noted that the CEO at my friend’s company was able to connect with employees through a well utilized intranet, which is an invaluable business tool during times of corporate stress.

 

And, within the nine sectors mentioned by Reader’s Digest, an effective, well utilized intranet will be a crucial means for companies to engage with existing employees, ramp up new hires and employees joining the firms though acquisitions and enable staff to collaborate with one another.

 

Unfortunately, as Toby Ward points out in an article called “Selling an Intranet Redesign”, too many organizations are failing to make a connection between business opportunities and their intranet. “While there is hope that more executives will realize the intranet's value to their organization, there is still a pause for concern. The study finds that only 14% of the respondents consider the intranet as ‘business critical.’ This is unfortunate because the intranet is a key business tool. Other organizations may not have allowed the intranet to become business critical, because senior management believes they should not invest in the intranet or a redesign.”

 

Not everyone will have the luxury provided by a long drive through rural Michigan to reflect on the connection between the current economy and an intranet strategy. But it’s still a connection worth making. Your company’s ability to execute on its strategy in this economy will benefit.

FREE WEBINAR:

Reserve your spot Putting Social Media to work in your Intranet Strategy (February 26th, 2009, 12PM EST). Reserve your spot today.

Aside from an entertaining observation that “French hotel clerks and young American women learn non-verbal communication at the same place,” Mike Schaffner’s recent article in Forbes.com, “Why Companies Need Web 2.0,” provides a brief but helpful overview of Web 2.0 technology and quick thoughts on how to utilize it. Schaffner, who directs IT for the Valve and Measurement Group of Cameron, suggests applications such as:

 

• Have employees use a MySpace- or Facebook-type site to introduce themselves to the company. These can also be a resource to help employees find a potential car-pool mate, someone with a background in product design or specific experience on a product you are thinking about launching.

·        Mashups can bring together production and operations data from a variety of sources, allowing a production manager to get a good overview of her operations.

·        YouTube-style videos can be used for training or distributing important messages, such as the CEO announcing a new product launch or Joe, the IT help desk guy, receiving an award.

More significant than the “how” of Web 2.0, however, is Schaffner’s observation about the “why”:

The point in all this is that there is a new generation of potential employees and customers that are accustomed to a variety of technologies being available, and they expect to see and use them in the corporate world. Whether and how we deploy these technologies likely will have an impact on our ability to attract new talent to our companies and to find and retain customers.

 

Give me Facebook or give me a new job

His observation about the expectations of a new generation to have access to this technology is strongly reflected in Prescient Digital Media’s intranet consulting services. Executives, right up the CEO level, are showing increased interest in bringing Web 2.0 technology into their environment in order to meet demands from younger employees.

 

A recent survey of a 1,000 European office workers reveals that this concern is well founded. Conducted by IT services firm Telindus, the survey found that:

• 39 per cent of 18 to 24 year-olds would consider leaving if they were not allowed to access applications like Facebook and YouTube.
• A further 21 per cent indicated that they would feel ‘annoyed’ by such a ban.
• The problem is less acute with 25 to 65 year-olds, of whom just 16 per cent would consider leaving and 13 per cent would be annoyed

 

While the varying adoption rate of Web 2.0 technology between consumers and corporations is well documented, the Telindus survey reveals that this delta is becoming a business challenge that organizations must start to take seriously.

 

If you need to get started on your adoption, ideas from Schaffner and others will assist  in planning your strategy, as will  Prescient’s Social Media Adoption Checklist .

For the increasing number of healthcare consumers who appreciate the value of finding relevant health content, a recent article in the New York Times, Google and Microsoft look to change healthcare, offers hopeful insights into how the tech giants plan to enable people to make smarter choices about their health habits and medical care.

 

The article also provides helpful insights for those who must construct online strategies for their organizations, especially when bringing an established value proposition to a new market.

 

Controlling health content

Steve Lohr, the Time reporter, writes that:

 

The Google and Microsoft initiatives would give much more control to individuals, a trend many health experts see as inevitable. “Patients will ultimately be the stewards of their own information,” said John D. Halamka, a doctor and the chief information officer of the Harvard Medical School.

 

Already the Web is allowing people to take a more activist approach to health. According to the Harris survey, 58 percent of people who look online for health information discussed what they found with their doctors in the last year.

 

It is common these days, Dr. Halamka said, for a patient to come in carrying a pile of Web page printouts. “The doctor is becoming a knowledge navigator,” he said. “In the future, health care will be a much more collaborative process between patients and doctors.”

 

Microsoft and Google are hoping this will lead people to seek more control over their own health records, using tools the companies will provide. Neither company will discuss their plans in detail. But Microsoft’s consumer-oriented effort is scheduled to be announced this fall, while Google’s has been delayed and will probably not be introduced until next year, according to people who have been briefed on the companies’ plans.

 

A user defined value proposition

While we can only speculate at this stage on Google’s health plans, it’s a safe bet that the company will continue to extend its well established value proposition.

 

Google’s breakthrough was PageRank, a method of using the link structure of the web, rather than just the characteristics of documents, to provide better search results. Google’s databases maintain billions of pages and employ a proprietary alogorithm to "score" the relevancy of websites for each search query. The highest ranking, or "most relevant" websites for a specific query are listed first in the search results.

 

But Google does not define its value proposition in terms of technical functionality, it expresses it in terms of user experience, according to Tim Armstrong, its VP of Advertising: “Our search index is the value proposition that we offer to our users. The reason people come back to Google every day … is that we offer them non-paid, relevant information, both quickly and totally objectively.” That simple message, based on a clear understanding of customer experience, has provided the company with its growth opportunities in advertising, he adds.

 

The Time article also demonstrates that its value proposition is leading the company into health, because Google is the default starting point for most health searches. “And people are increasingly turning to their computers and the Web for health information and advice. A Harris poll, published last month, found that 52 percent of adults sometimes or frequently go to the Web for health information, up from 29 percent in 2001.”

 

Related items

EHR enhances the doctor-patient relationship

The tragedy at Virginia Tech is a horrific, unforgettable event. My heart and prayers go out to all the family and friends affected by the hell they are going through.

Earlier this week, Tim O'Keeffe and Michael Clendenin both talked about VT’s response to the crisis and mused about the use of a second website or ‘dark site’ for crisis communications. The killings and the ensuing confusion of fearful parents and family was accentuated by the loss of the school’s website in the immediate aftermath of the shooting. One only hopes that VT was only not prepared for the potential spike in traffic and that the crowds of concerned visitors crashed the website (for it would have been an extraordinarily bad decision to have made the conscious decision to pull down the website voluntarily during such a crisis).

In short, there were likely many tens-of-thousands of concerned people attempting to access the VT website for more information on the tragedy – and likely were hoping to glean some information about a loved one. The website though was not available.

A secondary or ‘dark site’ that could be published quickly in a crisis to communicate breaking news and information would not have solved this dilemma. Proper infrastructure planning and hosting could only have prevented a site collapse. If the university lacked the ability to publish information to the home page and therefore decided to turn-off the website, then shame on them. With modern content management and near instantaneous publishing capabilities for even the lowest-tech luddites, VT wouldn’t require a special dark site to communicate details of the unfolding tragedy. The university would merely publish information to the website as it became available and provide links from the home page and media center. For example, after I write this column in MS-Word, it takes about 60 seconds to publish it live (but I could do it in as little as 20 seconds).

Dark sites have their place and purpose, and are particularly valuable in large, planned and complex events (such as a merger or acquisition), but the use of a dark site for crisis communications has largely been supplanted by modern publishing technology and the advanced content management system. Every organization should have a crisis communications plan, and every organization should be able to publish very quickly as the need arises. Furthermore, in the event of a crisis and a landslide of unexpected traffic, it is wise to plan in advance with your website host to ensure they can accommodate large spikes in traffic should the event arise.

A 3,600% surge in page views on the day a new website debuts would certainly qualify as a success, and validate a decision to perform a comprehensive revamp of the site. That success is what the Town of Banff and its partners enjoyed last Thursday when it unveiled its new website.

 

As anyone who has even a passing familiarity with websites knows, a comprehensive site redesign is a process not an event. They also know that visits, while critical, are only one success indicator for a site.

 

In Banff’s case, the process that culminated in its successful launch began a number of months ago when it set out to improve a site it knew was not working. In tackling this project, Banff had to achieve a goal that few other municipalities with under 10,000 residents would require: bringing a unique experience online.

 

Prescient was fortunate to be chosen as the partner to collaborate with Town and its partners on this project, which let me experience first-hand the qualities that had to be captured on the site.

 

That experience can best be summarized by the first day of one trip. Walking down Banff Avenue, I had a 360-degree view of the spectacular Canadian Rockies which, because the town sits in a national park, were unobstructed by commercial development. I paused to watch some kids from the local school playing soccer on a pitch by the school before bumping into several people I’d met on previous visits. And at the end of a meeting, I was invited to go canoeing, rock climbing and running. I opted for the run, after which I dined on Buffalo cheeks in a terrific restaurant.

 

Banff, in other words, provides unmediated access to one of the world’s most spectacular environments, which makes it an exciting place to visit. It also attracts residents who have a passion for enjoying that environment. They have a deep-rooted respect for the values of the national park, and are happy to disclose their knowledge of how to enjoy the Rockies. They also appreciate that sharing the town and park with visitors is a reality of living in one of the world’s premier tourist destinations.

 

Research on the old website resulted in a number of key findings, with one emerging strongly: visitors wanted to understand what made Banff special, and residents wanted to see their experience of the town and park reflected on the site.

 

This research played a vital role in driving the process that resulted in last week’s launch. In addition to the spike in visits, Banff’s webmaster Kevin Elliott cites a number of features that have resulted in the site’s positive reception by town residents:

• There’s a lot of information on the site, and it’s easy to find thanks to an intuitive Information Architecture and other navigation aids.
• The look-and-feel incorporates many images of Banff and conveys the Banff experience online.
• The acquisition of a Content Management System (CMS) means town staff can up-date information in minutes instead of hours.
• There’s good information for visitors, but residents can still find the information they need easily.
• The weather appears prominently on the home page.

 

Another excellent feature, one that enables the residents to share their passion for enjoying the Rockies, is “what the locals do”. It means one doesn’t have to step into a Banff watering hole to learn the best way to experience the town and park from the people who know it most intimately.

There was no missing the unveiling of Apple's iPhone last week. It electrified the media and had the audience at Macworld whooping. Almost eclipsing the phone itself was Steve Jobs, and his vision for applying ease-of-use and aesthetic design principles to every device his company produces.

 

A cult of personality was not evident in the presentation by Bill Gates in the same week at the Consumer Electronics Show, however, and the media reaction to Microsoft’s flagship announcement, Vista, had little of the delight that greeted the iPhone.

 

Microsoft’s new operating system has generated interest, but not enthusiasm. While there are passionate exchanges among a certain set whenever Microsoft does anything, the mainstream emotion has been one of resignation about the software giant’s ability to brute force its OS into the market.

 

The contrasting appearances by two giants of the technology world provides an excellent opportunity to think about the role that vision plays in a company’s strategy, and a leader’s responsibility to establish and maintain that vision.

 

The Globe & Mail’s Simon Avery picked up on this opportunity to offer a useful discussion on the styles of Jobs and Gates. In the article, he quotes Roger Kay, president of Endpoint Technologies Associates Inc., a research firm in Wayland, Mass. who observes that: “Microsoft has a certain cult of personality. Gates is thought of as a special guru, and people sit at his feet trying to understand what he’s thinking. That’s totally different from Steve Jobs. He’s an autocrat. He’s a sun king. He’s very capricious, autocratic, and creative and charismatic. He’s all kinds of good things, mixed with some pretty strange things. It’s a totally unique formula.”

 

Where Jobs sets a strategy based on a vision of innovation and elegance, Gates has positioned Microsoft to be a “fast follower,” letting Netscape or Google develop a market and then moving in to dominate it.

 

Famously, before it followed Netscape, Microsoft pursued and then overtook Apple. This story is told in the remarkable PBS documentary “Triumph of the Nerds.” The series not only documents the birth of the rivalry between Jobs and Gates, it also reminds us that the vision on display from both men was present when they conceived their companies decades ago.

 

Consider this statement from Jobs: “The only problem with Microsoft is they just have no taste, they have absolutely no taste…I don’t mean that in a small way I mean that in a big way. In the sense that they don’t think of original ideas and they don’t bring much culture into their product… if it weren’t for the Mac they would never have that in their products and so I guess I am saddened, not by Microsoft’s success - I have no problem with their success, they’ve earned their success for the most part. I have a problem with the fact that they just make really third rate products.”

 

According to Apple’s ex-CEO, John Sculley, Microsoft succeeded because, “The problem was the industry wasn’t measured by who has the best selling personal computer or who has the most innovative technology. The industry was measured by who had the most open system that was adopted by the most other companies and the Microsoft strategy ultimately turned out to be the better business strategy.”

 

The unique qualities of Jobs and Gates could foster admiration more than emulation. But while few of us possess the intelligence, ego, insight, charisma, and drive required to transform industries, the success of both men teach valuable lessons about vision and strategy that we can all apply:

• First, a strategy requires a vision, and it’s the leader’s responsibility to ensure it exists, whether she creates it or facilitates her team to do so.
• Second, it requires a commitment to sustain the vision even when the external environment changes. The same focus on design principles that drove the Mac is guiding the iPhone today, just as Gates is promoting a world of networked entertainment.
• Third, the leader can’t allow the organization to deviate from the vision, especially by trying to emulate a competitor’s strategy. Jobs may begrudge Microsoft its success, but stays focused on inventing products with culture. Gates may admire the elegance of the iPhone, but he’s not going to be first to market with one.

 

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Respect the competition

The NY Times has redesigned their website to make it more like the paper version (credit to Tom Marciniak ).

 

Famed Canadian media guru Marshall McLuhan, called the "Oracle of the Electronic Age", coined the phrase and book title, The Medium is the Massage (not ‘message’ but massage… though it’s assumed that this was a carefully crafted pun). While this quote has largely been bastardized and misinterpreted, McLuhan espoused that the medium or channel that conveyed the message shapes the message (or alters it). In other words, the complete message or meaning of a story on TV could be different than the same story communicated in, for example, a newspaper.

 

 

The NY Times is attempting to make the website look and feel more like the newspaper with a five column layout, less color, etc. However, a website is not a newspaper and shouldn’t be mistaken for a newspaper. People read very differently online than they do when actually holding a physical newspaper. When reading a newspaper you can be sitting in almost any position with no screen glare, no animation, no up-to-the-minute stock quotes, etc.

 

However, I must admit, there are things that I really do like about the new site… and the more I look at it the more I like perhaps better than any other newspaper site.

 

The home page is rather busy with its five columns – I don’t know quite where to start reading. But I like the white space. It looks clean. I very much like the three column layout they use under the Today’s Paper tab which includes an enlargeable JPEG of the actual paper version.

 

When reading an article, the page offers the reader a number of interactive options including E-mail, Print, Reprints, Save This and Single Page (though I’m not sure what this option actually does except strip out one or two ads). Also presented a tabbed box called Most Popular. It lists the top 10 most e-mailed articles, the top 10 most blogged articles, and the top 10 most searched terms (top searches were ‘immigration’ and ‘Colbert’ (as in the very funny current affairs comedian and talk show host).

 

 

 

I like the new site; it works for me. What is agreeable to me though is not necessarily agreeable to the masses. (In fact, I guarantee you the NY Times get a handful of both complaints and kudos.) Users generally like a far more simple layout and less cluttered look. In addition to it hugely effective search engine, there’s a reason why Google is so popular. The Google home page is simple to digest and fast to load. The trend to simplicity is more than just a trend – users demand simplicity.

 

Should you consider a five column layout or try to emulate a hard copy publication? I certainly wouldn’t do it. The medium is the message. However, more important than media theory, is an intimate understanding of the needs and expectations of your users and delivering flawlessly.

Building a brand is tough. And it’s getting tougher. Advertising Age numbers reveal that, for example, the number of brands on North American grocery store shelves has tripled since 1991 from 15,000 to 45,000 products. At the same time, the number of your competitors with websites likely has grown ten-fold (or perhaps even greater) since 1995.

 

On the Web, the power of Google has leveled the playing field between the haves and the have nots – big brands can’t necessarily spend their way to a better brand, and new kids on the block are constantly emerging from seemingly nowhere.

 

A recent McKinsey article (Better Branding; subscription only) highlighted the dilemma for marketers: “Building strong brands isn’t getting any easier. An explosion in the number of brands—as well as a proliferation of ways to communicate them, from hundreds of cable channels to the Internet, product placement in movies, and even mobile-phone display screens—has made it tougher to get messages through,” writes McKinsey’s Nora A. Aufreiter, David Elzinga, and Jonathan W. Gordon in Better Branding. “In addition, converging product-performance and service levels in many industries have made it more difficult to sustain existing brands. Meanwhile, the economic downturn has hamstrung marketers by cutting their budgets.”

 

All of that clutter and competition makes it harder to stand out in a crowd. Cash fueled advertising campaigns may create awareness and recognition, but not necessarily build a ‘better’ brand. The brand is all encompassing – from product to service to perception. Understanding your target audience, your users and their expectations and needs, and delivering accordingly, is tantamount to success.

 

Easier said than done.

 

Understanding the user audience requires an analytical approach to consumer research. Although research itself cannot build a brand, the adoption of both old and new analytical approaches to understanding customer behavior and preferences can build sounder strategies for enhancing the corporate brand and winning the hearts and wallets of consumers.

 

“The solid analytics at the heart of the new approach may not only require new skills in the marketing department but also highlight steps that other parts of the organization—from product development to operations to customer service—must take to help deliver the brand,” say Aufreiter et all. “Moreover, some marketers may worry that adopting more quantitative techniques will compromise their creativity. In our experience, though, getting analytical about customer needs and the brand identity helps channel the imagination into areas in which it makes a difference. And the ability to avoid costly trial and error and to build a better brand more efficiently is too compelling to pass up, particularly in challenging economic times.”

 

The good news, however, is that the web is still a relatively new media, when compared to, for example, the ultra competitive retail world. Yet the Internet, as we are coming to know by experience, can propel no names and young kids working in garages into branding superstars.

 

Brand building

 

It goes without saying that building a web brand is far more complex than marketing. A number of key contributors must be carefully mixed and executed to create a valued resonation:  

 

• Site design
• Usability
• Site layout
• Content quality
• Product value
• Order fulfillment
• Customer service

 

Of course these are not the only contributing attributes to the web brand. Some attributes, what Mckinsey calls “antes”, are auxiliary or added benefits that some customers might, for example, expect from a competitor. Think of Amazon.com’s free deliveries – now commonly offered by many of its competitors. Or a hotel website that offers 360 degree pictures of their rooms and property.

 

Successful brands deliver on both customer expectations and also differentiate from the competition.

 

 

Those web brands that have high relevance and a high degree of differentiation from the competition include Ebay, Google and MySpace.

 

Understanding your users

 

Notwithstanding more complex methodologies such as pathway modeling (see Successful Brand Repositioning: Aspirations vs. Achievable Strategies) and conjoint analysis that you may not be looking to digest in a 45 second blog read, there are a number of key measurement tools you should know and use…

 

• One on one interviews
• Customer surveys
• Focus groups
• Usability testing
• Call center tracking
• Market segmentation
• Benchmarking
• Etc.

 

A multiplicity of tools is recommended using both quantitative and qualitative tactics. Depending on your site’s position in the evolutionary curve, some tools and tactics are better than others (see When to use what research tools and Measure your efforts).

 

Moments of Truth

 

Brand is built and reinforced at web touchpoints or moments of truth. Moments of truth would include the initial impression of the site (color and design), product information, checkout process, search engine use, etc.

 

It goes without saying that there are a lot of touchpoints in a standard web transaction – whether or not e-commerce is involved. So, to leave on a practical note after many wasted paragraphs on Mckinsey influenced brand theory, here are some practical suggestions for reinforcing you web brand:

 

•         Prominently display your organization name/logo (upper left corner is now considered standard)

•         Organization’s “tag line” or “value proposition” should also be prominently featured

•         Design that differentiates from competitors

•         Emphasize the most frequently used and high-priority tasks/information

•         A single “Home Page” that is clearly distinguishable from all other pages

•         “About Us” and “Contact Us” sections are clearly labelled in the global navigation or footers on all pages

•         Sections and categories designated with customer-oriented language

•         Site offers multiple navigation paths to priority content and tools

•         Primary navigation area is prominently situated and similar items are grouped closely

•         Straightforward, informative language

•         Succinct grammar, with consistent capitalization and design standards

•         Concise instructions for necessary tasks

•         Search engine optimization (strong page titles, active links, keywords, etc.)

•         Clearly communicated and supported customer service and privacy policies

•         Deliver on your promises

 

Last word of note: branding is not a one-off exercise. Web branding is a continual, fluid journey that requires constant attention, tweaking and care.

 

Here is some additional reading (all the articles are more than a year old but all have offer good lessons – both implicit and explicit):

 

Don't Shout, Listen (Fast Company)

On the Web, Branding Is Back (Business Week)

Web branding is more than skin deep (Gerry McGovern)

A common issue unites all companies, regardless of size and industry: there is never enough money to throw at every opportunity or threat. That fixed budget means investments in one area of the business come at the expense of others.

 

For Small and Medium Sized Businesses (SMBs), those budgetary decisions are especially difficult and visible. By definition, there’s fewer dollars available than in large corporations. And when there’s less than 100 employees and a relatively small customer base, it’s very apparent where resources are going and where they aren’t.

 

As result, investments are made in the areas that offer the most obvious return, and for many SMBs that is not perceived to be their website. Research indicates that 57% of SMBs are making money from their websites, either online or via offline sales. While it’s a growing percentage of revenue, it’s not yet reached the level where every SMB can quantify the benefits of investing in their website.

 

Every company can calculate the benefits of adding salepeople or investing in improved supply chain management systems, however, so it’s easy to understand why the website can lose out to other areas of the business.

 

This question of how to justify website investments was an important part of a seminar we presented to a group of business owners this week. Their companies ranged across a variety of sectors. Their websites, in turn, varied widely in functionality, content quality and visual appeal.

 

We reviewed ROI models that quantify the company-wide benefits created by a site that strongly links to organizational objectives. While each company worked with numbers that were unique to their business, there was one measure they all factored into their plans: 1/20^th of a second.

 

That’s the amount of time in which viewers judge your site, according to researchers in Carleton University’s Human-Oriented Technology Lab. They reached their conclusion by flashing websites for 50 milliseconds and asking study participants to rate them for visual appeal.

 

“Unless the first impression is favorable, visitors will be out of your site before they even know that you might be offering more than your competitors,” says Carleton’s Dr. Gitte Lindgaard. The research, which is reported in E-Commerce Times, suggests that the first impression forms an initital bias that dictates long-term opinions.

 

A positive first impression carries over to other features of the site, such as content. Since people like to be right, Lindgaard reasoned, they will continue to use a website that made a good first impression.

 

It’s an eye-catching stat, and one that certainly captured the attention of the business owners. While the benefits of a well designed site are difficult to quantify, the risk of creating a negative impression in a fraction of a second can be quickly understood.

 

And with that understanding comes an obvious justification for improving the design of a website.

                                                 

 

 

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Which comes first: resource allocation or strategy?

Design I: Making your site pretty can get ugly

 

 

When you launch your web browser, are you engaging in civic-related communications? Or are you initiating a commercial transaction? Your answer may determine what role you would accept for government involvement in your online experience and what responsibility you believe corporations have for enabling your communications and transactions.

 

Why is this significant for web strategy? Because, in western democracies, we have the luxury of assuming that businesses and their customers will have guaranteed access to the Internet at a reasonable price. That assumption rests on decisions made by governments regarding how to regulate, or not, the Internet. It is also shaped by how the companies who create and manage the backbone of the Internet interpret their responsibility toward customers and shareholders.

 

In a high-profile example of what can happen in countries that lack our democratic tradition, we witnessed Google agreeing to censor its site in China. The move has been criticized, but not by Bill Gates, who defended his rival’s decision. Gates said that Internet technology contributes to political freedom and added that “I think [the internet] is contributing to Chinese political engagement . . . Access to the outside world is preventing more censorship.”

 

A recent article in The Nation, “The End of the Internet?” suggests we shouldn’t take inexpensive Internet access for granted in North America. The writer, Jeff Chester, states that: “If we permit the Internet to become a medium designed primarily to serve the interests of marketing and personal consumption, rather than global civic-related communications, we will face the political consequences for decades to come.”

 

People who launch their browser to participate in political dialogue will nod enthusiastically at this point, lobby their government for greater regulation and propose clear responsibility for corporations in enabling citizens to engage in free discourse.

 

Many, many more people, who use the Internet to research and make purchases, will roll their eyes, perceive no role for the government and expect corporations to be responsible for delivering better products at a cheaper price.

 

Chester’s article can’t be easily dismissed, however. For one reason, telecos and cable companies have a responsibility to their shareholders to deliver a return on their investment. To that point, he quotes Ed Whitacre, chairman and CEO of AT&T, who told Business Week, “Why should they be allowed to use my pipes? The Internet can’t be free in that sense, because we and the cable companies have made an investment, and for a Google or Yahoo! or Vonage or anybody to expect to use these pipes [for] free is nuts!”

 

For another reason, Chester points out that these large corporations are aggressively lobbying the U.S. government to enact legislation that will support their revenue goals. “Under the plans they are considering, all of us—from content providers to individual users—would pay more to surf online, stream videos or even send e-mail.”

 

An imminent threat? No, but it’s certainly an issue to include in your “environmental scan” as you assess your Internet strategy.

 

In the meantime, you can take in the ACLU’s projection of how web technology and rich data can turn a simple transaction, ordering pizza, into an interaction with Big Brother.

Last week Yahoo! reported record profits – double the profit of last year. What was Wall Street’s response? Hammer it. The stock dropped quickly because it failed to reach the expectations of a few analysts. Those ‘expectations’ were off a couple of pennies per share. Yahoo’s stock is now less than it was a year ago despite doubling its profit on tremendous grouwth. Yahoo’s price-to-earnings ratio now sits at under 27.

 

Pessimism continues to proliferate Wall Street and Main Street. Ironically, this is the complete opposite of the trend six years ago when Wall Street couldn’t buy enough Internet stocks – sending prices to outrageously high and unconscionable levels. Those same sage investors now turn down their noses at Internet stocks, driving the prices to levels lower than would otherwise be seen as reasonable to outside onlookers. USA Today’s index of 50 Internet stocks increased just 1% in 2005. Without Google, it would have lost 8.2%.

 

Does this mean you should hesitate to invest in your website? An informed decision is required. Let’s take a look at some of the numbers:

• Almost 80 percent of North Americans have Internet access.
• More than 50 percent have made online purchases.
• A majority use the Internet as a decision-making tool.
• Online retail sales in the two weeks preceding Christmas were up 29% over last year to US$3.03 billion.
• The Internet is cited as the most influential channel on luxury purchasing (cited by 44 percent of affluent purchasers).
• 35% of first-time buyers consider the Internet to be their most important informational tool, as compared to 8.2% naming TV
• Online newspaper reading is up 30% to 53.6 million visitors a month during the fourth quarter of 2005
• 39%of North Americans use online banking.
• 73.5% of e-commerce sites estimate sales growth of 15 to 35% this year.
• 60% of chain retailers estimate web sales growth of 25-200 percent.
• Time spent online by adult Canadians has increased 50% since 2002 and Internet use is ready to overtake watching television.

Those numbers reflect a different story then the dogged, pessimistic tale woven by Wall Street. Its credibility as it relates to Internet stocks was ruined in the bubble of 1999 – 2000. That credibility continues to fail today.

 

“And it's not for a lack of profit,” writes USA Today’s Matt Krantz in Dot-coms' song and dance no longer entertains investors. “Forty-eight of the current members of the Internet 50 that were public in 2000 have seen their profits as a group quadruple since then. Google and Salesforce.com were private in 2000, so that doesn't even include Google's massive profit contribution.”

 

Here’s another key fact: according to the IDC FutureScan, all the indicators depict an expectation of 5% growth in U.S. IT spending this year. In other words, off the street and in the offices, business is investing in IT and the Web.

 

Don’t be scared away by Wall Street. Instead, listen to and embrace what your customers demand.

 

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Online Marketing: Mastering the Basics

 

© 2006 Toby Ward - Prescient Digital Media

“While companies might have an intended strategy, the strategy that actually emerges can be very different.”

 

There’s no arguing with this statement, made by Harvard Business School professor Clark G. Gilbert, especially when applied to Internet strategy. An extensive body of literature addresses how to ensure that an organization’s intended strategy is executed. Gilbert, along with professor Joseph L. Bower, have contributed to this important topic in a new book they have edited, From Resource Allocation to Strategy.

 

Gilbert and Bower’s book examines how strategy is developed and implemented in multinationals, but their insights should be of interest to any size of organization that is developing a strategy.

 

In particular, this is a topic that gets to the core of developing and executing an Internet strategy, because the functionality of web resources should play a fundamental role in determining the strategic possibilities that exist for an organization. Unfortunately, as Gilbert and Bower discuss, the disconnect between the strategic process managed by senior leaders and the resource decisions made at the operational level can result in a strategy other than that described in the official plan.

 

Organizations are becoming increasingly aware that they must understand and manage the resource allocation process because it can get in the way of the strategy. But the authors point out that those allocation decisions, which are most often made at the operational level, are important because they are also where the ideas often come from in the first place.  

 

In an interview with HBS Working Knowledge, Gilbert and Bower provide an example that probably sounds uncomfortably familiar for too many organizations:

 

Operating managers often constrain strategy adaptation in ways that are very powerful. We have seen this in the response of print media organizations to the Internet. For example, senior management at a U.S. newspaper company says, "We need to get into the Internet, we need to prioritize this and make a big investment." But then at the operating level of the firm you have a sales rep who is used to selling a display ad for $40,000. The new business has a lower gross margin, the customer who is buying it isn't the rep's traditional customer, and the price point isn't the same. And so that sale rep says, "Well, I can sell a $40,000 display ad, or I can go out and find one of these new customers and sell them a $2,000 banner ad." Every day as that sales rep comes into work he makes a resource allocation decision at the operating level—how to allocate his time and attention—which de facto keeps the investment from happening, even though financial resources have been procured.

 

The solution to eliminating the disconnect between strategic formulation and resource allocation is clear: conduct a thorough assessment and planning phase prior to strategic development. Ensuring this phase includes input from customers as well as key operational stakeholders ensures the good ideas are captured in the strategy, and early buy-in is secured at the operational level. In particular, the organization can determine what resources to allocate—not just for technology, but for change management initiatives to ensure behavior changes to support the strategic intent.

 

Why doesn’t this obvious step happen more often? Lack of resources. Either leadership doesn’t know to budget for it, or the operational level doesn’t request it in their budget proposals.

 

So what do you think should come first?

If your website is delivering true value, it’s no longer just a communications channel.  The website is a subset of the business that includes communications, customer service, sales, fulfillment, vendor relations, etc. Treat your website as if it is your business.

 

In a BusinessWeek Online article (Businesses must learn to let go) Linda Sanford, an SVP with IBM, recommends “focusing on core expertise and collaborating with partners in innovative ways are the keys to growth.” While specifically speaking about the businesses, the same is true for the website in a competitive environment.

STAY FOCUSED.  Companies outperforming their peers today -- and not teetering on the edge of the flattened globe -- have adopted an approach to building the 21st-century business in which they find their place not by strengthening their command and control posture, but by focusing on core expertise, collaborating with partners in innovative ways that drive value and growth for all participants, and strategically sourcing the rest. I call this philosophy: "Let go to grow."

Here are a few examples:

Leaders in many industries are embarking on projects involving collaborative innovation -- opening up their borders to work with others -- in a profound shift from the past. Procter & Gamble (PG), for example, now has an entire division devoted to collaborating with external partners on new products and technologies.

That was the genesis of the Mr. Clean Magic Eraser, a household cleaning tool that has flown off the shelves since it was introduced in 2003. P&G CEO A.G. Lafley has declared that half of all new P&G products should originate outside P&G. Talk about letting go to grow.

TAKE IT OUTSIDE.  As P&G understands, no company today can corner the market on innovation. For the first time ever, we have the luxury of a global market for brainpower -- largely because of the Internet -- and this talent does not have to be on the payroll for a company to leverage it. U.S. pharmaceutical giant Eli Lilly (LLY) has set up the Web-based InnoCentive to build a virtual talent pool of more than 50,000 scientists in 150 countries. Lilly posts R&D problems any scientist can tackle if he or she has the right expertise. The success rate has been far higher than in-house performance, at around one-sixth of the cost of doing it all in-house.

To let go to grow, the first step a company must take is to zero in on the things it does well and that are differentiating -- and identify functions that can be done more effectively either through process change or partnerships. This analysis is done by componentizing your business -- breaking it down into interchangeable building blocks of functions, processes and services.

The components in which a company excels should be used companywide. If there's no advantage in continuing to perform an activity in-house, that component should be passed to an outside specialist or sold. This allows the company to devote its energies to enhancing its core differentiators, where it can demonstrate true innovation.

THINKING AHEAD.  Even BMW, which is built on its reputation for exceptional engineering, has found value in opening up various elements of car design and manufacturing to partners. BMW recently formed a relationship with Magna Steyr, an Austrian company, to handle all aspects of manufacturing for the BMW X3 sports utility vehicle, including a pioneering four-wheel-drive system.

This move freed up BMW engineers to work on designing new vehicle models. The relationship has allowed BMW to add a new model every three months; five years ago, BMW experienced gaps of three years between models.

It's a mistake to think "letting go" is just another way of saying "outsourcing." Collaboration takes many forms. Not only can it lead to new innovation in product design but it can create entirely new business models that drive organic, sustained growth for leaders willing to let go.

THE RIGHT RELATIONSHIPS.  Take Li & Fung, a Hong Kong company that supplies apparel to retailers in the U.S. and Europe. It's interesting to note that it doesn't make anything. Instead, it draws on a web of 7,500 suppliers to orchestrate the manufacture and delivery of apparel to meet quickly the specifications of its 350 customers around the world. In a low-margin trading business, Li & Fung has parlayed its role as master collaborator into remarkable business performance, doubling revenue and tripling profits over the past three years in an industry with a 2% growth rate.

The common denominator in all these examples is enlightened leadership. The leaders who understand the implications of a flat world are changing their business models and their company cultures to let go of some control, opening up their organizations to work with external partners in new, deeper ways than traditional supplier relationships.

In our collaborative age, this is the right formula for creating breakthrough innovation, which will ultimately drive growth for all successful companies in the flat world.

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AOL’s success not failure

AOL has always been one of the great Internet success stories. It’s on the same tier as Yahoo!, Google, Amazon, and E-Bay.

 

Tom Grubisich, a former AOL editor, has written a piece in the USC Annenberg Online Journalism Review criticizing Steve Case for ‘fumbling’ the company. From Who 'shackled' AOL - and when?...

 

Aol.com was supposed to throw off those shackles and offer compelling new content, according to Case's strategy. But it never happened. Case let AOL retreat from his ambitious plans and the company failed to develop high-speed content and platforms that it could test with its potential new audience that was exploding on the Internet. Aol.com wound up becoming nothing much more than a docking station where AOL members could read their e-mail at work and where non-members could sign up for AOL's Instant Messenger service, or try to join the invitation-only ICQ social network.

 

So why didn't Case follow through on his pledge to let AOL grow beyond its walled garden? I believe the answer is embedded in the company's need to continue producing solid quarterly financial results that would keep the stock going up -- results based on membership, not on edgy content. In 1997, subscriptions for the main service were pumping more than $1.5 billion annually in AOL's coffers -- 80 percent of all revenue. Case and his top decision-makers did not want to tamper with the Wall Street-pleasing metric of subscriber growth -- even though they made public gestures toward a revenue model more balanced by advertising. (We now know, of course, that a lot of that advertising was a phantom).

 

In one sense, you couldn't blame the Case team. AOL's numbers seemed invincible in 1997 -- a third of all Internet users in the U.S. were AOL members at that time. Throw in the existing placeholder site, aol.com, and AOL controlled 50 percent of Internet traffic. If you had an office on the fifth floor of AOL's headquarters in Dulles, Va., you could imagine you were on top of the Internet world.

 

Alright; I’m sure Mr. Grubisich is a fine person, but if he’s going to step up to the soapbox he better understand the maxim “live by the sword, die by the sword.” The article is well written, but Grubisich shouldn’t quit his day job as an aspiring screenwriter (his byline says he is a screenwriter though a search for published work did not reveal any published scripts… though he maintains an MSN email account – the hallmark of screenwriter superstardom).

 

Firstly, this article on AOL makes references to shackles, fumbles, and blame. Is there anyone on the planet that thinks of AOL as a failure or a case study for losers? AOL is a massive success story. AOL’s success is so massive (28 million subscribers and billions of dollars in revenue) that only a fool would intimate that AOL has somehow “fumbled.”

 

Yes, AOL has been overtaken by others in terms of total revenue and eyeballs. Much blame could in fact be laid at the feet of Time Warner that has done almost nothing with it since acquiring it years ago.

 

However, Grubisich blames AOL’s ‘fumbling’ on Steve Case and a failure to invest in content. Talk about sour grapes from a former disgruntled employee.

 

Did I mention that he was a former, AOL editor who was paid to write content for AOL?

 

Grubisich claims AOL’s failure stemmed, in part, from a lack of investment in high-speed content. Good lord; please name for me one high-speed content site that makes significant money?! The answer is none. The vast majority of users are not willing to pay for it and most get if for free. AOL’s strategic focus was never content – it’s not a newspaper nor a magazine nor a video channel. To the contrary, AOL’s success has come as a result of its strategic focus on subscribers.

 

I mentioned a few leaders in my opening line: Google, Yahoo!, Amazon and E-Bay. Each of these companies built successful strategies based on a principal focus – to be the very best at their core expertise:

 

• Google – the top search engine
• Amazon – the top e-commerce site
• E-Bay – the top auction site
• Yahoo! – the top integrated portal

 

AOL’s focus: be the top ISP subscriber. AOL stuck to its focus and found massive success. Had it invested in content it would have failed miserably. Just ask Yahoo! who only recently got cocky enough to hire its own dedicated writers to cover current affairs with underwhelming results. Grubisich lays blame for allowing Google and Microsoft to overtake AOL. Google is a search company, with a lightning focus on search; Microsoft is a software company. AOL is neither a search company nor a software company. AOL’s primary focus is being an ISP. (And of Microsoft, ask them how their stock price has been for the past seven years trying to be an Internet company and how their Internet revenues compare to their software revenues).

 

Note that I say ‘primary’ as every large company diversifies and AOL is no exception. However, the primary focus continues to be that which has made them a success: subscribers. Not subscribers of content, but subscribers of ‘access’ (to the Internet). I am not suggesting that AOL should never invest in any content. They should, but only as a means to an end, not as a primary strategy.

 

Here’s the lesson that I will underscore using the first and most important of the 22 Immutable Laws of Marketing penned by the great Al Ries and Jack Trout:

 

Law #1: The Law of Leadership

It’s better to be first than it is to be better.

 

To quote Ries and Trout: “It’s much easier to get into the mind first than to try to convince someone you have a better product than the one that did get there first.”

 

AOL would fail horribly if it shifted strategies to focus on content – it’s not a newspaper, magazine nor video channel. And the paying public would never fail to mistake AOL for anything but an ISP. Others focused on content and beat them to it. Despite Time Warner’s meddling (or lack thereof), AOL has enjoyed massive success because of its primary focus on adding and maintaining subscribers. For AOL, content is not king.

’Tis the season for retail to be to top of mind, whether it’s because you’re making your list and checking it twice, fighting crowds or anxiously watching sales data to gauge the health of consumer spending, the main driver of our economy.

 

In the Internet world, retail is particularly fascinating now because analysts are trying to gauge on-line versus bricks-and-mortar purchases in the wake of U.S. Thanksgiving, the accepted start date in the frenzied race to acquire goodies to cram under the tree. This year, the story has been about how “Cyber Monday” would compare to “Black Friday.”

 

The latter phrase was coined to capture the importance of Thanksgiving Friday, the biggest shopping day of the year in the U.S., when retailers enter “the black” after months of luring semi-disinterested shoppers into their stores with discounted pricing.

 

The former phrase has only been in usage for a few weeks. It’s the day when shoppers return to the office and start shopping on-line, the location from which 58% of us make our on-line purchases according to comScore Networks.

 

The phrase also provides more insight about how savvy manipulation of hype-driven media gains attention, rather than providing an accurate measure of retail trends, according to BusinessWeek. 

 

The article reports that Shop.org, an association for retailers that sell on-line, coined the phrase in a November 21 press release claiming Cyber Monday to be “one of the biggest on-line shopping days of the year.” It is, in fact, the 12^th busiest day according to comScore and even trailed November 22 for sales this season.

 

So should we accuse the on-line retailers of living in a past era, one in which behaviour is driven by hyped events? Not all. This savvy industry understands as well as any that the Internet changes the rhythm of our lives, and is at the forefront of developing web tools that fundamentally change the way we shop.

 

In its new ranking of the Top 50 Retail Sites, Internet Retailer provides an interesting list of the innovations these companies have developed, including:

• Musicnotes.com developed software that displays a page of music, then plays the piece being shown while a cursor indicates which notes are playing.
• Peapod.com is equipping its delivery fleet with GPS navigation devices and providing customers with an update on delivery time with an e-mail, text message or phone call when the truck is 10 minutes away.
• BestBuy.com offers a kitchen and laundry planner that allows shoppers to create on-line plans of their rooms, then populate them with appliances. They can e-mail the resulting plans to friends, family or builders and print them out to take to the store when they buy the appliances.
• Circuit City Stores Inc. guarantees that items bought on-line will be ready to pick up in the local store in 24 minutes.

What the “Cyber Monday” phenomenon demonstrates is that much of the media will respond to a well-written press release with as much alacrity and obedience as parents will to a child’s demand for a hot toy. That approach, and the growth of blogs it helps fuel, is the topic for a different article.

 

In the meantime, I have to find a pink guitar for a three-year old girl. And I don’t care if I find it on-line or in a store, as long as I find it in time to put under the tree on December 25^th.

When was the last time you used “salesperson” and “Internet strategy” in the same sentence? If you did, the sentence probably also included either the phrase “reduce costs by using fewer,” or the verb “avoid.”

 

Salespeople are much maligned. Customers resent their pressure tactics, executives often question their commission cheques and the Kids in the Hall made them the subject of plunger jokes.

 

Worst of all, marketing strategists often ignore them, launching expensive campaigns that always factor in the Internet but frequently neglect the sales force. And that leaves the sales team still on the street, representing the company’s product and brand. But doing it badly and with poor information.

 

Tim Riesterer, in an article for MarketingProfs, describes this space as “no brands land”: the gap that exists between the 30,000-foot ad campaign and the 3.5-foot level, which is where the company’s sales team is persuading prospects to make a decision. Only they might persuade a customer to look elsewhere because their information and positioning is inconsistent with the company’s web site. Which the customer checked a few minutes prior to meeting with the sales person.

 

As Riesterer points out, many companies—especially those in complex b2b selling environments—have embraced consultative selling methodologies to differentiate themselves in a world of product parity. He quotes Evan Hirsh, author of Channel Champions, who writes that: “From these [sales] channels flow customer satisfaction, market share, revenue gains and profitability.” However, they have not translated the high level positioning on the web site into street-level value propositions and solution-messaging that align with the sales team’s training.

 

The effectiveness of these solution selling techniques can be boiled down to access to up-to-date information and productive use of sales time. In other words, sales effectiveness screams intranet.

 

That point has not been lost on CMS vendors or intranet thought leaders. For example, Prescient Digital Media's President, Toby Ward, wrote in a posting called “The intranet bolsters sales” in Prescient's companion blog that: “While there is a certain amount of guesswork involved it is easy to see that the intranet can have a positive effect on the bottom line and impact an organization’s sales.”

 

Which might explain why too few companies talk about their Internet strategy and their sales force effectiveness in the same conversation. Not only do marketers often create the strategy without considering the sales team, the methodology for developing an effective intranet strategy—which can be ideal for creating an effective sales intranet to complement an on-line presence—is often created by the HR or communications departments, who work in a different silo to sales and marketing.

 

So the next time you’re developing an Internet strategy intended to boost sales revenue, make sure you think about the sales team that is responsible for delivering those numbers. And if you need any help in determining how to help them manage information effectively, ask Communications how they developed their intranet plan.

The growth of VOIP and the threat it poses to the trillion dollar telephone industry is attracting well justified attention and creating lessons in Internet strategy no one can ignore. But the performance of the established telecoms demonstrates that while there’s never a good time to dissatisfy a customer, a “cable guy” approach to customer service is particularly ill timed now that alternative technology is available.

Web guru Tim O’Reilly forecasts that VOIP’s participatory technological model will disrupt the established telephone players. The father of disruptive innovation, Clayton Christensen, cites VOIP as an excellent example of why all industries should evaluate the opportunity or threat created by the radical business models it exemplifies.

Another theory, enthusiastically articulated by a friend of mine who has chosen VOIP over her landline, is: don’t piss off your customers.

While not grounded in the same academic rigour as O’Reilly or Christensen, her experience provides a case study of what happens when an industry facing intense competition fails to provide even basic customer satisfaction: she eradicates them from her life.

The growth of VOIP is remarkable. Japan already has over 8 million subscribers today andIDC predicts that the number of residential VOIP subscribers in America will grow from 3 million at the end of 2005 to 27 million by the end of 2009.

Such growth inevitably captures the attention of the business press, such as The Economist which produced an in-depth report on telecoms and the Internet. It provides startling evidence that the telecom industry will be devastated by VOIP.

The report holds up Skype as a leading example of a disruptive agent terrifying the incumbents, and not because of its current business performance. The three year old company will only make US$60 million in revenue this year and will likely not be profitable.

Skype earns attention because of the credentials of its founders who clearly grasp the participatory, collaborative nature of Internet technology. Niklas Zennstrom and Janus Friis also founded KaZaA, and its their combination of of philosophical insight and business acumen that has drawn the attention of Tim O’Reilly, an influential proponent of Internet-enabled collaboration.

Skype is also a poster child for Christensen’s theory of disruptive innovation, a player that can take out entrenched incumbents by kneecapping them with superior pricing tactics. Consider Skype’s model:

§         It can add 150,000 users a day without spending anything on new equipment or marketing.

§         With no marginal cost, Skype can thus afford to maximise the number of its users, knowing that if only some of them start buying its fee-based services—such as SkypeOut, SkypeIn and voicemail—Skype will make money.

§         As a result, according to Zennstrom: “We want to make as little money as possible per user. We don't have any cost per user, but we want a lot of them.”

§         This is the exact opposite of the traditional business model in the telecom industry, which is based on maximising the average revenue per user.

Not only does the Skype business model have experts like Rich Tehrani, the founder of Internet Telephony, predicting that in the future all voice communication will be free, recently released statistics demonstrate that VOIP may completely eliminate traditional phone service.

According to the Telephia Emerging Personal Communications Options (EPCO) survey of high-tech households, Internet-based telephone service (or Internet telephony) is replacing traditional landline phone service among those who have chosen VOIP.

§         53 percent of high-tech households subscribing to Internet telephony have completely replaced and disconnected their landline phones. (High-tech households are identified as those who currently subscribe to at least three bundled or emerging services—e.g., wireless data, video-on-demand, Internet-based telephony, satellite radio, broadband, DVR, etc.—or expressed an intent to purchase four or more services.)

When asked what the primary reasons were for subscribing or having interest in Internet-based telephone service, the high-tech households responded with explanations that strongly reinforce the pricing model implemented by Skype:

• 59 percent said savings on calls within the United States was the top factor in making the switch.
• Among those who showed interest in adopting Internet telephony, but have not subscribed to a service, 30 percent said that bundled package deals were a key reason for their interest.
• For these “intenders,” 17 percent said interconnectivity across different communication services was important.
• 15 percent cited the ability to switch between telephone networks.
• 11 percent mentioned caller ID on TV as a reason for interest.

Which brings us back to my friend. An executive with a multi-national software manufacturer, she and her husband fit comfortably into the high-tech household category. But she never mentioned the factors above when telling us why they have removed their landline and are now exclusively using VOIP and cell phones for their voice communications.

She chose to disrupt her telephone provider after it was unable to resolve a technical problem after seven service calls (all of which required her to be at home and not all of which resulted in the appearance of a service technician) and long-winded explanations from CSRs about how she might not actually have a problem with her phone line.

There are few industries in which the stakes are as high as telecommunications and the differences in business models between disruptors and incumbents are as stark. Nonetheless, everyone evaluating an Internet strategy must be following the developments in the industry because of the important lessons it provides.

But one can only hope that we don’t need to read the work of business and web theorists to understand that forcing a customer to endure seven service calls to not resolve a problem will motivate them to switch the moment an alternative is available.

For anyone who likes a great story about strategic achievement, the tale behind Motorola’s Razr phone has a lot of excitement: single-minded focus on one goal, a small team of passionate innovators, timely high-level intervention, clandestine development and a product that an industry thought was impossible. It even has a great ending: sales that exceeded total lifetime projections in three months, one million units of the US$450 phone sold within six months and an iconic product that revitalized Motorola’s image.

 

This yarn unfolds in an insightful article in a recent Harvard Business School Newsletter describing Motorola’s strategy for producing the Razr. The article also provides a great example of how reinventing the strategic process is critical for achieving success. While not as sexy as the topics described above, managing the process intelligently is important in any strategic development, and critical when developing an Internet strategy.

 

Scott Anthony, the article’s author, notes that Motorola’s new product development process allowed representatives from the major sales regions to assess the concept and then develop a forecast which helped Motorola decide whether to invest in that phone. “It was a complicated dance,” writes Anthony. “If a development team ignored features that a specific region deemed critical, that region would project low sales for the phone. The lowered forecast would make it tougher to get approval to move the project forward. Design teams knew they had to appease each region or their projects would die on the vine.

 

“Obviously, this system has pluses and minuses. On the one hand, it ensures that products reflect some critical in-market feedback provided by the regions. But, it can force designers to develop compromised products that end up being acceptable to everyone yet delightful to no one. More distressing still, the process can systematically stamp out highly differentiated, counterintuitive innovations such as the Razr.”

 

Early on, the Razr development team realized that the usual process would prevent it from maintaining a singled minded focus on one goal, which was simplicity. While they respected the rules of the game that governed product development, they knew the system wouldn’t work for them. So they invented new rules, positioning the product as one that didn’t need to produce high revenue.

 

“We kept on playing the icon card,” explains Roger Jellicoe, a director of operations who managed the Razr development project. “This product was represented as this iconic, image-leading, low-sales-volume program. I think the Razr got by all the internal processes because it was characterized from the outset as an exception.”

 

A web site isn’t a product, but the Razr story offers some important lessons for developing an effective Internet strategy. First of all, successful Internet strategies require a small, committed team and visionary high-level support. They also call for the correct process. Frequently, organizations fall into one of two traps when developing an Internet strategy. The first trap is insisting that the Web team adhere closely to established processes for project development, which may impose creativity-destroying requirements on the site. The second trap is assuming that because the Web isn’t a product, it doesn’t need a process, which results in no connection to business goals and no measurable objectives for the site.

 

Avoiding these traps requires a process that enables the complicated dance described in the Motorola case. To be effective, an Internet strategy must include the perspectives of all stakeholders and users, link to organizational goals, incorporate best in class lessons from other Internet sites but still allow the Web team to innovate, which often means challenging long-held assumptions within their organization. For this reason, Prescient’s approach to strategic planning emphasizes process. The methodology is a collection of tools and techniques that enable each project to benefit from previous experience, successes, and leading best practices. Key advantages of our methodology include consistent terminology across projects, streamlined and repeatable processes, and most importantly, predictable results.

 

Of course, we love a great story about strategic achievement, and hope that if you have one you’ll share it. We like yarns in which they said it can’t be done, by the way.

 

 

 

We’ve come a long way since a business leader could pin a poster on the office wall displaying a picture of a lion sitting atop a line of text reading “the customer is king,” congratulate himself for creating a customer-focused culture and stroll off for a three-martini lunch.

 

All businesses now grasp that exceeding customer satisfaction has become the table stakes for staying in the game, and appreciate the intense effort that must go into truly understanding their customers in order to surpass expectations. They also know that the combination of sophisticated databases and web-based technology allow for unprecedented customer knowledge.

 

We’ve also learned that phrases like “exceeding customer satisfaction,” “table stakes,” and “unprecedented customer knowledge” have become mandatory in Internet strategies, and may occur more frequently than correct punctuation. And we also know that the powerful technology is frequently under-utilized. Despite ubiquitous statements professing the desire to know customers better, and the unprecedented technical ability to truly analyze their needs, it’s still rare to see companies which genuinely execute a web-enabled customer satisfaction strategy, and illuminating to witness the positive business improvements when they do.

 

A “cool” strategy

A recent case study in CIO Insight provides an excellent example of how Ben& Jerry achieve terrific results by using its site to execute a simple task: ask their customers what they want. Author Edward Cone observes that the site promotes brand consistency, important for such a “cool” brand, but in addition collects data that is critical for managing operations.

 

“The Web site also supports Ben & Jerry's hippie-licious brand image with prominent links to an anti-global-warming page, and another page that promises ‘50 ways to support peace,’” writes Cone. “But however altruistic the corporate culture, the site is built to sell ice cream. The Flavor Locator, which uses scanner data from Information Resources Inc. to track inventory in real time, is the most popular customer-service feature.”

 

The latter feature enables customers to find stores in their area that stock particular flavours, and in turn, allows the company to forecast demand for product and plan production. Anyone who has had to manage a supply chain based on the vagaries of sales forecasts will instantly appreciate the implications for cost and efficiency, and we can all relate to the customer satisfaction that results when a popular product is available. And students of Peter Drucker will recall his observation that the essence of marketing is having the right product in the warehouse at the right time.

 

In our experience, clients that retain Prescient Digital Media to provide strategic planning services are all seeking to link their Internet strategy to their overall business objectives, they all know that they must incorporate customers’ feedback into their plan and they know that executing the strategy requires hard work and dedication.

 

Because they often lack specific methodology for collecting user input on their web sites, however, they are always impressed by the detailed feedback we gather through a comprehensive heuristic evaluation of their existing sites, for example, which provides invaluable data regarding how customers rate the usability of the site.

 

Such strategic insight ensures that when the Internet strategy is presented internally, it contains phrases like “exceeding customer satisfaction,” “table stakes,” and “unprecedented customer knowledge,” but the phrases have genuine meaning and the strategy is supported by a thorough execution plan.

 

By the way, if anyone has ever had a three-martini lunch, please let me know. From my experience, they exist only in legend, along with marketing budgets too excessive to deplete and executives who don’t expect a return on their marketing investment. Of course, three-martini customer appreciation events, after official business hours, are another matter and I don’t need to hear about those.

Respect the Competition

 

Andre Agassi’s run at the U.S. Open has provided a topical reminder of a key strategic lesson: never underestimate your competition.

 

In an interview, Agassi recalled preparing to meet a then-19-year-old Pete Sampras in the 1990 U.S. Open Final. Having beaten Sampras easily in their previous encounters, the brash Agassi told his coach: “I feel sorry for him. I’m going to keep making him hit balls until he implodes.” As all tennis fans know, Sampras demolished Agassi to win his first of 14 Grand Slam titles. And as even casual sports fans know, Agassi has since lost that cocky attitude, along with his mane of hair, and is now an intense competitor, but one who always respects his opponent.

 

A Safe Little Experiment?

With Steve Jobs announcing the new iPod nano and Motorola Rokr E1 cellphone, we have another topical reminder of the same lesson, but this time from the business pages.

 

In a useful discussion on Apple’s strategy, Business Week On-line notes that: “When Apple unveiled its first iPod in Oct. 2001, the market was a smattering of little-known devices used mostly for playing songs illegally downloaded off file-sharing Web sites. That's one reason why the music labels agreed to CEO Steve Jobs' plan to sell their music for just 99 cents a song. Besides, with Apple's anemic 3% PC market share, few record execs figured Jobs would be able to win over anyone other than his loyal base of Mac buyers. It would be a safe little experiment, letting music execs learn about the market while Apple picked up most of the tab.”

 

To paraphrase Business Week: Ooops.

 

Apple has sold half a billion digital songs and now claims 85 percent of the world market for digital music sales. As a result the record executives are suffering from the inflexibility of the 99 cents pricing model and cheering for other players who might be able to knock Apple off its leadership perch.

 

It’s easy to understand how a cocky young athlete could dismiss a competitor, especially one he’s easily handled in the past. But should we be surprised that seasoned executives would make the same mistake? Not really, because it happens all the time.

 

In the case of the record executives, it’s easy to understand how the error happened. Apple wasn’t a traditional competitor, so they lacked the insight into the computer manufacturer that they would have regarding players in their own market. For example, they did not grasp the significance of Apple’s strong competencies in usability, elegant design and great advertising, and the impact that strength would have in a market dominated by hip, tech-savvy consumers. Instead, they took a cursory look at easily accessible data—i.e. marketshare—and dismissed Apple as a threat.

 

Gain the tools to evaluate competitors

Unfortunately, we constantly see examples of business leaders who either fail to analyze their competition at all, or only give them a superficial glance. It’s a surprising error, especially when developing an Internet strategy, because competitors make all the necessary information readily accessible on their own sites!

 

Much like the record executives who lacked the methodology and knowledge to assess thoroughly the risk posed by Apple, many companies don’t have the tools necessary to properly evaluate competitors when developing an Internet strategy.

 

The thorough competitive benchmarking methodology and SWOT analysis that form the basis for our strategic recommendations, for example, consistently elicit positive feedback from our clients. They not only receive valuable insight about how they stack up, they often appreciate the reminder that they need to evaluate the competition.

 

For example, The Ontario Realty Corporation (ORC) strategically manages one of Canada’s largest real estate portfolios: over 6,000 buildings, comprising more than 50-million square feet of space, and 95,000 acres of land on behalf of the Ontario government. ORC has moved away from providing direct services to becoming a strategic manager of services with web-enabled communications being a key enabler. Therefore, their website needed to be able to fulfill this mandate, and they retained Prescient Digital Media to assist with the strategy.

 

ORC saw tremendous value in our competitive benchmarking strategy, which enabled them to make improvements to their strategy and incorporate valuable enhancements to the resulting site. Their Internet strategy has played a key role in attaining their overall objective  of becoming an innovative, service-oriented and customer-focused organization; in essence, becoming a “digital enterprise.”

 

For organizations like the ORC, the intent came before the methodology. Unfortunately, too few organizations have the intent and, unlike Agassi, learn to respect and truly analyze their competition. This is surprising when you consider that they don’t have the option of staying fit and waiting for their nemesis to retire, an approach that has allowed Agassi to continue his remarkable career. Along with his mature respect for the player across the net, of course.