eMarketing, Internet and Business Strategy

Rob's eMarketing Strategy Must Reads:

Useful Technology
eCommerce: Formulation of Strategy
by Robert T. Plant. A very nice approach to doing what the title suggests.
Experiential Marketing : How to Get Customers to Sense, Feel, Think, Act, and Relate to Your Company and Brands by Bernd H. Schmitt. Schmitt argues for managing the total customer experience, paying especial attention to the emotional component of the experience. His approach is an interesting effort, but strikes me as too centered on the poly-geographic post-modern man. A tolerable read if you've a chunk of time to kill.
The Social Life of Information by John Seely Brown, Paul Duguid. This book is a welcome voice in the sea of voices transfixed on the communication technologies that transport information from person to person. Brown and Duguid step back and explore the social purpose of information, how information fits within our lives. Afterall, information is only as useful to the extent you can apply it to something if import to you. Brown and Duguid also have interesting takes on the direction social information will flow and how higher education might be transformed. What they propose is not the party line. For example, with information easily accessible via the Internet, it is widely assumed that information impactedness is an economic concept of the past (Oliver Williamson provides the classic treatment of information impactedness in his book Markets and Hierarchies). From their perspective, Brown and Duguid offer a compelling argument the information impactedness is alive and well in this Internet era. A great read!
Web Rules : How the Internet Is Changing the Way Consumers Make Choices by Tom Murphy. If you like war stories, this book is for you. This book features interviews with a number of web luminaries. If you've had your head in the sand for the last five years, you will find this book interesting. If' you've been paying attention over the duration, this book has little new to offer.
Blown to Bits : How the New Economics of Information Transforms Strategy by Philip Evans, Thomas S. Wurster. Evans and Wurster make the basic point that retailers are confronted with a breadth and depth dilemma. Given limited shelf space, they must negotiate the trade off between offering lots of products (breadth) with limited choice within in product category (low depth) or offer fewer products but greater variety within each category. Evans and Wurster argue that information technologies allow us to break the bredth-depth constraint; that available information technologies allow us to now offer breadth and depth simultaneously. For example, it is now possible to offer large quantities of advice on myriad topics (e.g., epinions) or lots of selection across myriad product categories (Amazon.com is the oft cited poster boy here).

Customers.Com: How to Create a Profitable Business Strategy for the Internet and Beyond by Patricia B. Seybold (Contributor), R. T. Marshak, Ronni Marshak.

Customers.com is an interesting read. Sybold's "8 lessons" are important. The case studies detailed in the book are interesting. Customers.com tries hard to avoid being yet another "look at the cool things information technologies let us infuse into our marketing programs!" book. Yet, as the Patty's RX sections reveal, the book is weak in providing forward-looking guidance. I suppose this weakness stems from the book's failure to lay out a generative conceptual model that motivates the key lessons. As Sybold notes in the book, the treatment of community in particular is weak, demonstrating limited understanding of why community is important and, perhaps more importantly, when community can be an important (essential) element of a marketing mix. In short, customers.com does a nice job illustrating what works for the companies profiled (although, my personal dealings with LL Bean suggest that her glowing praises of their systems over state the capability of LL Bean's programs). Yet, when it comes to explaining why those elements work, customers.com comes up short. That short coming aside, I classify Customers.com a "maybe read." (Review written December 14, 1999).

Digital Capital: Harnessing the Power of Business Webs by Don Tapscott, David Ticoll, Alex Lowy.  

Growing Up Digital : The Rise of the Net Generation by Don Tapscott. Tapscott is an unabashed promoter of digital culture. Kids populating chat groups seems as natural to him as kids gathering to play after school. Tapscott is a firm believer that the Internet is bringing about profound changes in society, work, and parent-child relations. Tapscott's rosy scenario is grounded in observations derived from contact with an unspecified number of young net-savvy informants (my phrase, not Tapscott's). And therein lies the rub. Tapscott generalizes his observations of net-savvy youth to the entire Baby Boom Echo generation (i.e., those born from about 1977 to 1997), renaming it the Net Generation. "Net Segment" would be a better description of the interesting patterns Tapscott identifies and discusses at length.

One of Tapscott's pet theories is that the Net Generation is heralding a new paradigm for parent-child relations. Specifically, he sees parents increasingly relying on their children for guidance through the digital landscape. And he believes this parent relying on children for advice pattern is a permanent shift. This assumes kids will always be more info tech savvy then their parents. Of this, I'm doubtful. I prefer to believe Tapscott has identified a temporary phenomenon. Yes, at present, some kids have more knowledge about things digital than their parents. Yes, some kids are leading the digital charge. Yet, I suspect this pattern applies primarily to kids of parents working jobs that have yet absorb the benefits of Internet enabled information technologies. I wonder if children of parents who work in information industries evidence this inverted influence pattern. Casual observation makes me doubtful. In this era of multi-million Internet startups, I'm also doubtful that the now legendary CD-Now can ever be repeated.

About the impact that Internet enabled information technologies can have on education, Tapscott is optimistic. I share Tapscott's vision of how educational systems must be reformed to leverage the benefits of the info technologies currently available. Education (primary, secondary, and college levels) remain mired in the conventional broadcast model in which the professor teaches the students content. Unfortunately, many educators are oblivious of the exciting ways they can leverage the Internet and info technologies to revamp their content and teaching approaches. For this to happen, most educators must retool themselves. Unfortunately, there are few incentives in in education, as pursued today in the United States, for teachers to undertake such an adventure. Indeed, the innovative, experimental, risk-taking educator runs the risk of annoying his peers and wrath of administrators who desire to oversee status quo institutions rather than dynamic learning institutions. Little wonder the home schooling movement has gained such force.

Tapscott is a strong advocate that parents are responsible for their child's use of the Internet. I applaud this stand. I'm sick and tired of parents who whine about the media their children consume, hoping someone else will assume their parental responsibility of monitoring their kids activities. I also find refreshing Tapscott's view that Internet access isn't a factor that can divide society. Rather it is having the requisite cognitive skills necessary to leverage the information available that matters. Which brings us back to education.

You've probably surmised by now that Growing Up Digital got me thinking. I don't agree with every thing Tapscott proposes. Indeed, I feel strongly that he over states the generality of the Net Segment. That aside, the book is thought provoking and worth a read. (Review written: Tuesday, December 14, 1999)

Information Rules : A Strategic Guide to the Network Economy by Carl Shapiro and Hal R. Varian. This book provides an excellent discussion of how traditional economics apply to digital products. Written in a very accessible manner, even those unschooled in economic theory should have little difficulty following their prose. So, you wonder, are the laws of economics being rewritten in this digital era? Read the book to find out. A good read. (Comments written Wednesday, March 29, 2000).  
Relationship Marketing : Successful Strategies for the Age of the Customer by Regis McKenna. Most eCommerce books topping the charts these days tout relationship marketing. Rather than settle for an abbreviated, watered-down version, get a solid shot of RM from Regis McKenna, the guy who set all this in motion.  

The Loyalty Effect : The Hidden Force Behind Growth, Profits, and Lasting Value by Frederick F. Reichheld (Contributor), Thomas Teal (Contributor). Loyalty, if discussed at all, tends to be treated in a fragmented manner. The popular press overflows with articles decrying the demise of customer loyalty to brands or companies, of employee loyalty (i.e., it is difficult for companies to retain talented employees) and investor loyalty (all the column inches lavished on daytrading, give the impression that investors stick with a stock no longer than a few hours). In short, loyalty is out of vogue. Reicheld's book effectively demonstrates that loyalty matters; companies that master the loyalty equation will prosper, those that don't will languish.

My key takeaways from Reicheld's book are:

  • Loyalty matters in a bottom-line, profit-maximization sense.
  • Customer, employee, and investor loyalty are three sides of the same process; each requires and reinforces the other. The book's multiple case studies to illustrate this point. The case studies also provide multiple examples of effective customer, employee, and investor loyalty programs.
  • Loyalty is a process that must infuse a company's entire organizational structure. Loyalty, adopted as the strategy du jour, is a waste of time.
  • A loyalty strategy is the most effective route available for the many companies seeking to reduce costs and improve profit margins.

As much as I like this book, I must say that it contains the most tortured explanation of customer net present value analysis that I've ever seen in print.

All in all: A must read.

Executive's Guide to E-Business : From Tactics to Strategy by Martin V. Deise, Conrad Nowikow, Patrick King, Amy Wright, PricewaterhouseCoopers.  
The Tipping Point : How Little Things Can Make a Big Difference by Malcolm Gladwell. I have to admit up front that Gladwell's Tipping Point left me fascinated, amused, and the social scientist in me frustrated. Gladwell's examples fascinated me. As one would expect of a journalist, Gladwell has a good eye for assembling details into an intriguing pattern. Most notably, is his assembly of examples drawn from a broad variety of contexts (marketing, criminal behavior) brought to gether to illustrate how a small change in one area can produce a disproportionate impact in another area. Gladwell invokes a model of epidemic expansion to drive his narrative. Anyone with a background in quantitative statistics will instantly recognize that Gladwell is talking about situations in which predictor variables have a nonlinear effect on an outcome variable. The logistic, or s-shaped, outcome function is a popular form of non-liner relationship. Catastrophe theory offers, what I find to be, a more compelling way to map multiple predictor variables into a response surface that can yield dramatically different qualitative outcomes, including abrupt jumps, depending on the values of the predictor values. Gladwell's choice of featured individuals left me amused as a number of them are professional colleagues that I happen to know beyond the his mono-dimensional portraits. What frustrated me about this book is how it winds down. Gladwell begins the book by laying out a nice frame work for understanding when modest changes in certain factors may yield large changes in a key outcome. Unfortunately, as the book progresses the journalist in Gladwell takes over. The framework is abandoned and the desire to wow the reader with memorable examples dominates. OK, not great.  

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