MarketLoop #8, January 1998

Corporate Internet Use

As part of its research programme, Through the Loop has been working with EAP European School of Management to develop an understanding of Internet usage by European companies. Research undertaken by a multi-cultural student group has added a significant layer to our knowledge in a rapidly-evolving area and will provide an important addition to the knowledge we can apply to client assignments.

While it is widely acknowledged that US companies are leading the field in Internet usage and understanding, the focus of this project is to analyse European companies. We are looking to discover the level of sophistication amongst European companies in the development of Internet awareness and implementation.

The research undertaken by EAP included face-to-face and remote interviews as well as a detailed analysis of Web sites within a number of selected product and service categories.

Level of Development

The research showed that 40% of large companies had a Web site compared with only 20% of small companies. These were developed either in-house or through an external consultancy. However, there was no clear correlation between company size and where the Web site was developed. The fact that a lower number of small to medium companies had a Web site suggests that they are not fully aware of the extra benefits of a Web site to a small company. A Web site can enable a smaller company to look bigger than it actually is and communicate globally at very low cost. It narrows the size difference.

The research identified three main reasons for a Web presence:

• In order to have a presence but no precise strategy.

• An additional communications channel though not adding anything substantial, in content, to existing communications.

• Fully integrated into the company's marketing strategy including on-line transactions or other forms of real-time customer interaction.

Many of the companies analysed had identified the younger audience on the Internet and were using it is a channel to reach this target market, for example, carrying recruitment opportunities.

Amongst the companies surveyed, only a few offered Internet access to all employees. Those more likely to have full access tended to be senior managers with those lower down the hierarchy having restricted or no access. However, many companies were planning to extend the level of access offered as the Internet is seen to enable time and money savings to be gained. There is still the feeling, however, that the Internet tends to be a distraction for many employees.

Identifying Best Practices

An analysis of Web sites identified Best Practices for Web marketing. Again, this extends the work previously undertaken by Through the Loop in this area. Six sectors were chosen for analysis:

• Airlines

• Banks

• Consumer Goods

• Cosmetics

• High-Technology

• Non-Profit Organisation

User Friendliness

The first best practice identified is user friendliness. This was seen to be crucial to success, in particular it could play a major role in encouraging repeat visits or recommendation. Well-designed Web sites have a clear index to the main areas of the site, allowing easier navigation and understanding of the Web site structure. The non-hierarchical nature of a Web site makes the navigation more important than, for example, in a magazine. The use of graphics as an aid to navigation is seen to be a bonus for a number of reasons such as ease of understanding in a multi-national environment.

Within the issue of user friendliness we have included adding value through external links. This adds to the image and credibility of the site. A site that is able to use the Web to its advantage will gain added exposure and credibility.

User friendliness is a wide issue and covers a number of other areas. The first page visited is arguably the most important of the whole site. Not only must it download quickly to avoid alienating any users on slower connections but it is an advantage if the page provides an indication of the content within the site.

Make the Style of Communication More Informal

The Web allows a company to develop personalised relationships with consumers. This not only addresses the "cold" nature of distance communication compared with face-to-face but it also creates user ease through a more human feel. Barclays Bank and Commerzbank's use of images of consumers is seen to be helpful in this respect. They help consumers identify with the products and services on offer.

The creation of "brand ambassadors" is also a possibility for a company marketing on the Web. This involves working with Web sites not under the company's control and could include consumers'' own Web sites. A number of on-line retailers are using this approach by rewarding Web site owners for encouraging visits to the e-store.

Create and Maintain Consumer Interest

The content and layout of the site should be attractive to the consumer so that he or she is encouraged to spend time investigating what is offered. The style should match that used in other forms of communication for the brand or company. Once an initial visit has been made, then it is necessary to encourage the consumer to return to the site. There are a number of devices used for this such as regular updating and weekly or monthly e-mail newsletters.

Customisation and Interactivity

The Web has a major difference compared with traditional communications channels as it is a two-way medium. TV, radio and press, on the other hand, are "push" media that deliver set messages to viewers or listeners. Direct mail is able to perform greater segmentation to reach more accurately targeted audiences with semi-personalised messages. In addition to this, direct response feedback mechanisms do not use the same channel and are rarely instantaneous. The Web allows companies to develop individual messages for consumers and respond in real-time to individual requests. Furthermore, the cost of providing a response can be significantly cheaper than more traditional means such as call centres. An example of customisation is Clinique. This asks users to input the characteristics of their skin and beauty product preferences. The Web site can then not only recommend the most appropriate products from the company's range but also provide the opportunity to purchase on-line. This type of approach will also build a customer database and collect valuable research data.

Consumer feedback can be provided through a mix of automated and human-generated e-mail. An important point to note here is not only must an e-mail be answered but the answer is expected to be very quick. On the Web timescales are severely shortened.

Summary

The survey has shown that use of the Web by European companies is certainly rising although the US is still seen as more advanced. However, an increasing number of companies are seeing the potential of the Web and those which were on-line earlier are steadily improving their on-line marketing. Companies are moving along the learning curve. They recognise that on-line marketing represents a different way of communicating and that their offer must evolve as they and consumers learn more about the capabilities and opportunities inherent in the medium.