E-commerce is all about customer communication

Communication World, Oct-Nov, 1998 by Sheri Rosen

First e-mail, now e-commerce - doing business over the Internet. For a while now, experts have been touting it. Finally people are making money at it.

In a recent survey by CIO magazine (www.cio.com), 51 percent of respondents claimed a net project added revenue to an existing money-making unit at their companies.

Among those same respondents, 81 percent had personally used e-commerce to purchase something. That percentage is a reflection of the chief information officers who are undoubtedly more comfortable with technology than the masses.

The rest of us may be just a little too worried about whether sending our credit card numbers over the Internet presents a security risk, according to Robert Mittelstaedt, vice dean of the Wharton School, University of Pennsylvania (www.wharton.upenn.edu), who talks with executives around the United States about e-commerce and technology topics.

"I buy things over the Internet," he said, "but I have a shredder at home to shred receipts and bank statements. I am more concerned about what I put in my trash can. What we really have to worry about is who is at the other end of the transaction, not that someone else will intercept it."

Increasingly, the "someone" at the other end of the transaction is a respected name in the marketplace. Airlines, banks, insurance companies, and publishers are making money online. Ticketmaster can sell 2 million tickets in a quarter online, and computer networking company Cisco Systems can earn $4 billion - yes, billion - over the Internet. But Mittelstaedt is convinced that the actual transaction doesn't have to happen online to make the Internet an e-commerce success. Information will determine success.

This information takes two forms.

The first is the information the business receives about the customer as a result of any transaction. "Information will become inseparable from the product or service. We'll know who bought it and the decision variables," Mittelstaedt said.

And he poses this question: "What if accounting standards required you to put a value on the information you have on your customers?" Mittelstaedt points out that this value on information will have a bigger effect in business-to-business e-commerce than on the more highly visible consumer side.

The other side of information is the education offered to customers. "Consumers increasingly are learning ways to get educated. They have an insatiable desire for information," he said. "Combining education with selling products will be increasingly important in differentiating your company."

Mittelstaedt wonders just how many products sell because the customer doesn't have good information. If we knew more, would we find out that a competing product is better and change our buying habits?

"We' will have to live with smarter customers." Toyota, he said, has determined that 25 percent of its customers got information off the web before making a purchase.

Internet marketing pioneer Seth Godin, featured in the April/May 1998 issue of Fast Company magazine (www.fastcompany.com), concurs that the new challenge is to persuade consumers to "raise their hands" to agree to learn more about companies and products - instead of interrupting people with commercials and advertisements.

Getting people to volunteer their attention is a formidable task for any communicator, but Mittelstaedt offers this advice: "Your clues will come from people on the front lines. What do we need to educate customers about? What do we need to educate our non-customers about?"

That's key in his mind - reaching customers as well as non-customers. "E-commerce sites frequently include FAQs - Frequently Asked Questions. But it's the questions people don't ask that we need to figure out. Do customers have enough knowledge to buy appropriate products? We should be raising questions in people's minds, like, 'What are the options?'"

Dialogue is the way to get there, according to Godin: "You tell consumers a little something about your company and its products, they tell you a little something about themselves, you tell him a little more, they tell you a little more - and over time, you create a mutually beneficial learning relationship."

It's not about enough systems security to get people to key in a credit card number; it's about developing enough trust to get people to key in details about themselves. "The information becomes the business," Mittelstaedt reiterates.

It's logical, but learning to create the required educational relationship with customers doesn't happen in theory. You can see it in practice on the Internet. Mittelstaedt advises spending time on the web: "Look at what others are doing. Look outside your industry for models that may apply.

"E-commerce might change your business - especially if someone else does it better."

Sheri Rosen, ABC, is director of organizational communication at USAA, a financial services company in San Antonio, Texas. She invites your online thoughts on digital experiences at 76547.2001@compuserve.com.