The Internet has taught us the value of permission-based marketing, but it has also demonstrated the importance of customer permission: what and how will your customers permit you to sell to them?
The Internet spawned exciting new companies like Amazon and Ebay which found innovative ways to communicate with and sell to customers. It also rewarded existing players that grasped how to reengineer themselves while still delivering a consistent brand experience. Dell provides a great example of the latter case, famously incorporating an Internet strategy—disintermediating the channel—into its brand with its “be direct” slogan.
Recent statistics on e-commerce transactions and an announcement in a shift in strategy from Dell demonstrate yet again that customer permission remains a critical consideration when contemplating a web strategy.
In its assessment of best selling product categories for July’s top 10 e-commerce sites, Nielsen/NetRatings reported that EBay led the pack in total purchases with 26.4 million in July, followed by Amazon and Symantec with 4.6 million and 1.1 million purchases, respectively.
It’s interesting to see what their customers are buying from the companies, notably that a brick-and-mortar company, Wal-Mart, has succeeded in winning customer permission to offer a new product, while Internet players like Ebay and Amazon remain constrained, to varying degrees, in the product categories in which they started:
- Photo services accounted for 52 percent of online purchases at Wal-Mart.com, with photo pick up at brick and mortar Wal-Mart locations.
- Ebay’s top selling product category was Toys, Games & Hobbies, the company's original product offering. But this category only accounted for 29 percent of its customers’' purchases.
- Amazon continued to rely heavily on book sales, which constituted 57 percent of purchases on that site.
On the Dell front, the company has announced a new higher-price line of consumer PCs. Marketed under the existing “XPS” name, the new machines, Dell says, combine “the ultimate in performance, experience, and service.” While it still sells machines for as low as US$299 after rebates, the company is hoping this fundamental shift to move into a higher priced product will reverse poor sales trends by delivering a higher average selling price.
By doing so, Dell will be testing its customer permission, not just what product it will be permitted to sell, but also at what price point. More significant, it will also be testing how it will be permitted to support the new product. Dell’s service has become a mini-Internet phenomenon, which has prompted the company to announce a beefed up service offering for the XPS machines.
