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September 1998

Will Internet Marketing Replace Direct Marketing?
In Either Case, Inbound Call Centers Will Benefit


We define Internet marketing as the process of creating awareness and brand recognition for a company's goods and services over the Web. This process, conducted efficiently, will generate a) Either sales leads which (handled effectively) will eventually lead to sales; or b) Will lead to actual sales of products and services based on the quality of the information provided over the Web site. To that extent, Internet marketing in the broadest term also encompasses e-commerce, which I define as the process of conducting business over the Internet. Inbound call centers, otherwise known as customer interaction centers, will still be the focal point for your clients and as such, they will still be on the front line, answering customer inquiries, processing orders and generating outbound calls or e-mail.

E-commerce today is enjoying the fastest growth rate of any business sector because, among other things, it is fast, convenient and cost-effective! Consider just a couple of examples I heard a consultant from Arthur D. Little present recently on CNBC:

  1. A typical banking transaction, which costs one dollar, will only cost one cent when conducted over the Internet!
  2. A typical broker's transaction, which costs $150, will only cost $6 when conducted over the Internet!

Do you wonder why e-commerce, which is a direct result of Internet marketing, is experiencing explosive growth?

To place this extremely vital part of every global business in perspective, I have asked several members of the Technology Marketing Corporation staff to share their thoughts with you. I think you will find their comments thoughtful and extremely revealing.

A member of our Web team contributed the following:
The question is not if Internet marketing will replace traditional direct marketing, but when! Such a shift will come however, as an evolutionary process rather than a revolutionary one. As more of the population goes online, the new mass-marketing vehicle is propelled to new heights at the expense of traditional direct marketing. But in order to understand the magnitude and the significance of such a shift, we must consider the factors that are the integral part of the online revolution. These are:

  • According to some studies, over 60 percent of American households still do not own personal computers and, of those who do, half are still off-line. While at first glance this data suggests that the online population is a minority, it helps to consider that the World Wide Web has been around for only four years and is still in its infancy. We have yet to witness a true explosion of the online presence.
  • The Internet is evolving as the medium of choice for many to conduct personal business. An increasing number of people (especially the younger generation) use the Web for shopping, banking, investing, making payments and communicating. This means that they are relying less on the traditional postal mail and more on the Internet.
  • As mentioned above, the Internet is indeed in its infancy. Issues such as security, bandwidth, reliability and general availability are being resolved by many companies and organizations around the world. This will help accelerate the acceptance of the Internet as the predominant global communication tool - the
    signs of which are already evident.
  • Online marketing is also on a revolutionary path of its own, delivering dynamic, accurate and targeted information to the captive audience. This is done by improving the process of intelligent and efficient data collection to reduce the waste and the inevitable backlash against so-called "junk mail."
  • Online marketing has been shown to be more environmentally friendly, more cost effective and more manageable than the traditional direct marketing. It lends itself to faster and more accurate data gathering on its effectiveness, allowing the marketer to quickly adjust and improvise based on the feedback.
  • Online marketing can be easily supplemented and integrated with additional supporting features such as voice and video, allowing the marketer to effectively reinforce and enrich the marketing message, which makes it more appealing to its target audience.

The following thoughts were contributed by one of our editors:
Direct mail has already peaked, as evidenced by the advice commonly dispensed by direct mail gurus. Basically, all of these people advise the ever-more-refined use of existing techniques, the better to outdo everyone else who (no surprise) is also using these very same techniques. The best a direct marketer can hope for is an incremental (and all-too-fleeting) improvement. Actually, that's overstated. A direct marketer would have to be incredibly creative just to maintain his current performance - or even to avoid seeing it slide too much.

Given direct mail's ever-diminishing returns, it cannot be central to any company's overall marketing plan. It is, at best, one of many techniques. That said, it remains to be discussed exactly where direct marketing would fit into the overall scheme of things. And that discussion can't even begin unless we are familiar with other marketing techniques.

Foremost among these techniques is, of course, telemarketing. But even telemarketing may eventually share or even cede center stage to Web marketing. E-mail, for example, in the outbound case, can be seen as being analogous to outbound telemarketing. Another manifestation of Web marketing is the Web page, which is relatively passive, and hence can be seen as being analogous to inbound telemarketing.

We have to be careful about overworking the analogy, however. New techniques are sometimes underappreciated. Sometimes, they are seen as being merely a better version of an existing technique. We risk doing that to Web marketing if we see it as merely a glitzy form of telemarketing. Web marketing will evolve its own distinct ways of communicating a message.

Another of our editors contributed the following "Pros" and "Cons":
With the advent of new technologies, companies seeking to acquire and retain customers need to recognize the broadening scope of the competition for people's attention.

Direct Mail Pros

  • Everybody you might possibly want to do business with has a mailing address;
  • Doesn't require any special software or hardware;
  • Printed medium is a tangible that people at least hold in their hands before discarding - your message has a chance of being absorbed before being consigned to the garbage.

Direct Mail Cons

  • Tends to be expensive for a very low return rate;
  • Consumers are over-saturated with direct mail, most of it goes directly into the trash;
  • To be effective, direct mail must be highly targeted and followed up with a telemarketing/telesales call;
  • Wasting natural resources.

Internet Marketing Pros

  • Mostly inbound, although a few new technologies (see August 1998 issue, "Techno-Talk") allow companies to initiate real-time, outbound text chat contact with Web site visitors;
  • Inbound is a less intrusive communication medium and you know that those visiting your site, or those who have sent an e-mail are genuinely interested in your company/product or service;
  • It's very fast and, currently, inexpensive - you can communicate the same information for less money on a Web site/outbound e-mail than you can in a direct mail piece - and it's already going to someone who's interested in the product and doesn't need to be swayed/convinced into reading your message;
  • Web sites are more dynamic than a simple direct mail piece, no matter how well designed. The key is to make sure your Web site is easily navigated and browsers can find what they're looking for - if not, you need to provide them immediate access to assistance (live or automated), otherwise their next mouse click may take them to a competitor's Web site.

Internet Marketing Cons

  • The Web is far from ubiquitous, only a small percentage of the population has Internet access, and while your business' offerings may be targeted on those in that segment, if your potential customers aren't in that segment, you're just wasting money on a Web presence that could be better spent elsewhere (like on a direct mail campaign);
  • It's just as easy for prospective customers to find/visit your competitor's Web site;
  • Outbound, unsolicited e-mails are generally considered spam and intrusive;
  • E-mail can be very easily filtered and/or deleted on a keyword basis - prospective customers may never even see your marketing message. If you put all your eggs in one marketing basket you may find yourself out of business;
  • With all due respect to Amazon, Dell Computer and many other companies that are currently selling millions of dollars of products and services over the Internet, the Internet medium is uncharted territory. We are currently interpreting its uses by what we've done in the past - it may evolve into an entirely different form or it may fall into disuse, the market will determine its viability as a communications/business medium - the key is to remain flexible and to maximize opportunity as it comes;
  • It takes highly-trained agents and a well-structured organization to handle the flood of e-mails that many predict will inundate corporations as we get closer to the new millennium - taking too long to respond to customer inquiries is far more damaging than annoying them with an unsolicited e-mail or direct mail. You should focus on providing one-day turnaround time - if that's not feasible, then tread lightly.

To sum up, the Internet is poised to become the marketing medium of the next millennium. It is already changing the landscape of marketing, providing a more efficient, cost-effective means to communicate the benefits of your product or service. There is still a need for direct mail, but it should be employed wisely and innovatively through extremely targeted mailings. As always, I welcome your comments.


Nadji Tehrani
Executive Group Publisher

CTI™ EXPO FALL '98 And The Quest For Perfection

If the largest of the large financial institutions still have a long way to go before their call centers provide adequate customer service and they have billions of dollars in assets, what about the rest of us? Every call center needs to provide exceptional service. We've all heard the figures relating the cost of customer retention to acquisition being about a ten-to-one ratio - corporations waste money when they annoy their customers. We must all strive for perfection while realizing the quest for perfection is a never-ending task.

The fact that call centers are still in the early phases of automation and have a long way to go before reaching maximum efficiency is one of the reasons that our last CTI™ EXPO attracted over 8,000 attendees when we expected 3,000-5,000. Preliminary numbers show that our next show in San Jose will attract more than 15,000 attendees, making us the fastest-growing call center related show in history.

It is no wonder that we have such an amazing growth rate when you consider the phenomenal interest CTI has in the call center. Also fueling this growth rate is the interest in the new Web callback buttons that drastically increase sales and service levels of Web sites, and the fact that Internet telephony is being used by call centers to provide an inexpensive mechanism to connect multiple call centers together to allow remote agents to be seamlessly connected to the call center regardless of their physical location.

Over 400 exhibitors will be on hand to demo their latest call center products and the Learning Centers will be extremely beneficial to all our readers. As a reminder, our Learning Centers are free areas set aside for objective education on the following topics: Internet Telephony, PC-PBXs, S.100 Client/Server CTI, Web-based Callback and Remote Access Telecommuting.

We have also hand-picked vendors to be part of our Demo Theater, which will be open during the majority of the exhibit hall hours. TMC has been running call center trade shows since 1986 and we could not have chosen a better facility than San Jose to host a show in. I truly love the pillarless exhibit hall and the easy access to the nearby San Jose airport, local attractions and hotels. CTI™ EXPO Spring has been the talk of the industry and it was so successful that we outgrew the city of Baltimore. Most every hotel room in the city was booked weeks prior to the show. We expect to outgrow San Jose as well with this inaugural Fall Show and hope you will be there to take part in this first ever CTI™ EXPO Fall 1998, December 1-4.


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