What Is Electronic Marketing?

Any transfer of goods or services from seller to buyer (the broadest definition of
marketing) that involves one or more electronic methods or media can be
considered electronic marketing (EM).

Electronic buying and selling started by telegraph in the nineteenth century. With
the advent and mass acceptance of the telephone, radio, TV, and then cable,
electronic media have become the dominant marketing force. New permutations of
these four electronic methods � as well as the microcomputer explosion �
continue to create many new forms of electronic media.

Marketing through an electronic medium ranges from the familiar to the cutting
edge of technology. This book covers the gamut. Which of these electronic
marketing forms are you familiar with or do you now use?

Broadcast or cable TV Radio

In-bound or out-bound telemarketing Audiotape

Audiotext Voice mail

Talking ads Sponsored telemedia

In-bound or out-bound faxmail Fax-aided ads

Video brochures Video catalogs

Video media ads in videocassettes Video premiums

Movie ads on planes and in theaters Interactive ads on com-

Interactive computer disk catalogs puter disks

EDI E-mail

Information and entertainment Computer bulletin boards

computer networks

Online marketplaces Online catalogs

Electronic multimedia kiosks in CD-ROM catalogs and mar-

retail businesses ketplaces

Electronic kiosks in public places Other in-store electronic

and trade shows media

TV shopping networks Direct-by-satellite business

Audio- and teleconferencing TV marketing

Electronic vending machines

Although this book devotes many chapters to individual electronic media and how
they are successfully used, the larger context is also essential. Final chapters
devoted to electronic customer service; electronic aid for your salesforce; electronic
public relations; and the integration and enhancement of EM into all marketing give
you a guide to making EM a powerful force in your successful company.

Which kinds of electronic marketing now impact your business most? Which will
most affect your career? How soon? Nothing that I or you make, import or sell, no
service we offer, no job that you can hold or aspire to will not be very soon
significantly affected by electronic marketing, perhaps more than by any other force
in your business life. And EM change is accelerating.

Whom Does EM Most Concern?

Electronic media and their marketing applications will soon touch virtually every
aspect of business. EM knowledge is critical for those who hold the following jobs in
big firms: CEO, CFO, VP of marketing, director of sales, advertising manager, direct
marketing manager, head of PR, promotion manager, market research manager,
telemarketing manager, product brand and category managers.

EM know-how is now vital for any new college graduate, even an MBA who is
marketing-oriented, computer-trained, and innovative. But any trainee concerned
with marketing, sales, advertising, display, promotion, PR, research, or service, will
advance more quickly by demonstrating an understanding of EM. In addition, EM
can be a life saver for career changers seeking a growth field in marketing.

Marketing specialists without EM know-how are becoming outmoded in many areas,

including: advertising agency CEOs, account executives, creative heads, media
buyers, research directors, or ambitious trainees in advertising agencies; catalog
managers, creative heads, phone marketers, list brokers; marketing consultants in
direct marketing; or principals, account executives; senior writers, and beginners in
public relations.
Advancement or even getting hired in any field is becoming difficult without EM
know-how, particularly in the areas of broadcast and cable TV, radio; new electronic
media; mass and targeted print media; electronic information providers; trade
magazines and newsletters; and trade associations.

Small businesses without EM facilities and expertise face a bleak future. EM know-
how can save jobs and mean survival for a small firm. EM can make the difference
between firing or advancement for an executive. And for home office business and
other start-ups�whether you're a rep, consultant, or other type of one-person
operation�electronic marketing know-how can make the difference between
success and failure.

Each New Medium Affects Others

Any change in media affects the marketing mix. For sophisticated marketers,
electronic media provoke these questions:

Is it too early to use new forms of EM?

Which work? Which fail? Which are too small to matter?

Can older EM forms still work as new ones surge ahead?

Does electronic media take away enough audience from print media to make print a
poor buy as their rates go up?

EM Is No Panacea

No form of EM is a shortcut to success for failing ventures or people. If your

company is unprofitable, or if your products are failing or are not responsive to
promotion despite spending as big a percentage of sales as your competitors, your
chances of getting help from EM are slim. Most businesses, products, and people
who succeed via EM are already successful. Those who previously failed in business
are more apt to fail using EM. However, some start-ups, "retread" products, and
failed entrepreneurs do subsequently succeed in EM for reasons specific to
individual cases.
What Failures Teach

Big organizations with highly promoted products and ample capital have sometimes
failed in their use of EM. Some big companies acted like "King Canutes," ordering
the public to use a new, untried medium, even expecting people to buy expensive
equipment to do it. Huge sums have been squandered in misguided EM ventures.
Other big companies start in EM more to keep others out than to truly succeed;
some enter EM markets just to be able to proceed in earnest if it proves necessary.
Most failures come from the following:

A lack of understanding of, interest in, and commitment to the EM project of all
those concerned within the company.

Lack of flexibility, or a failure to change the original plan as constraints and

opportunities change.

Starving EM efforts through the fear of cannibalizing old income source by new EM
forms.

Halfhearted efforts. EM advocates in management get undermined by others who

are dubious and resistant.

Small companies often fail in EM for the same reasons they suffer high mortality
rates overall: underfinancing, poor management, lack of research, know-how,
control, and planning. Small companies tend to underinvestigate and to dive in too
fast. They fail sometimes by choosing a form of EM that's mismatched to their
products, presentation and market. But some companies can be marketing
bumblebees�who, according to scientific principles, can't fly�but by trial and error
find a way to succeed.

Both large and small companies often fail with electronic marketing because they
fall in love with the technology but lack the know-how to use it. Many companies
have failed because the technology they used cost too much at that time. The irony
is that based on today's improved technology cost, many of the same tests would
succeed.

Dramatic and Frequent Failures but Overall Success

However great the total losses in all electronic experiments to date, the overall
profits by electronic marketers are already many times more. Big losses are easy,
but profits can be obtained only by someone with the right products, profit margins,
offers, and presentation making the right decisions, usually made possible by study
and know-how. Winners are the most competent and entrepreneurial, the most
adventurous and scientific, the most practical and realistic marketers who accept
and select and use EM most effectively. My job is to help you become such a
winner. Regardless of every EM disaster, plenty of bright and brilliant people have
demonstrated the vision, courage and the practicality necessary to create EM
successes.

In Chapter 21, I describe how American Airlines transformed itself when it created
SABRE�the first PC-based airline reservation network and the basis for its
revolutionary frequent flyer program. American Airlines' travel agent business went
way up, it air freight zoomed up, and its profits leaped. American Airlines became
the number-one airline and made over a billion dollars in additional profit from just
this one form of electronic marketing.

Plenty of other big companies have been surprisingly flexible in setting up

decentralized, profitable EM operations run like small companies. Often they have
backed innovative, small EM firms. Chapter 22 describes how Greg Kolodziejzyk, a
commercial artist from Calgary, Canada, first created a new business and then
started a new industry through electronic marketing. He bought a Mac and a laser
printer and founded Image Club Graphics, with a mail-order ad which sold clip art
and type fonts on floppy disk. But then he created a whole new way to market his
art on a CD-ROM disk. This new electronic marketing technique is responsible for
driving many companies today.

Electronic Marketing�Your Business from Home

With electronic tools, sales reps and consultants can now market themselves so well
from home that they sometimes double and triple their incomes. Telephones and
fax machines, personal computers and modems, copiers and printers, and other
new technologies are helping to proliferate electronic home businesses. Writers can
become desktop publishers.

EM is rewarding and fulfilling and can give you a lifestyle you may prefer; it may
make you rich. Many software companies start this way. But EM also could cause
you to go broke. Success takes the following:

Self-sufficiency to plan, start, and finish yourself

The initiative and curiosity to find and master each electronic tool

Entrepreneurial ideas on how to use each electronic tool

The ability to match the right electronic tool to the right product

Creative flair for an electronic presentation

The financial ability to estimate costs accurately at each step

Practicality, frugality, confidence, and judgment

The right product, right cost, right market, and right timing

The ability to persuade and a willingness to work very hard

Electronic Moonlighting

Starting a business after hours is safer than quitting your job to launch a business.
Overall, start-up business mortality is lower, and, often, firms started this way are
sounder. In addition, EM is a great husband-and-wife business. First, both can work
at jobs full time and moonlight evenings and weekends. Then, the lower earner can
work half-time at a job and half for the new business. Finally, both can work full time
for the new business. In bad times, the process can be reversed. Here are some of
the many ways to start an electronic marketing business:

Outbound telephone marketing to businesses, hospitals, schools, and individuals

with mail follow-up

Answer phone inquiries from low-cost ads, first yourself, and then via a low-cost
voice system

Using a computer bulletin board ($2000 or less) to provide an online catalog that
you advertise with small ads to your trade

Use of $500 worth of computer add-ons and programs to target prospects, produce
personalized letters and labels

With a fax board (under $400), send explanatory ads and catalog sheets to inquiries
from small ads in trade and business publications

Any other low-cost electronic tool or method described in this book that is most
suited to you

Why EM Succeeds
Electronic marketing succeeds for a wide variety of purposes and kinds of
companies because each EM form has special advantages. But there are two
advantages common to most EM:

Electronic "friend-making," via a seen and/or heard spokesperson, can be more

compelling than a printed message. Sights and sound can start a relationship
between seller and prospect�and secure the loyalty of a customer. The same
spokesperson can give a short message by TV or radio and a far longer explanation
in a video. Different spokespeople can talk to distinct audiences on separate
different audiocassettes, even in different languages. Electronic testimonials from
real people are more personal. Entirely new uses for a product, new benefits, and
new reasons for using it come across on EM as news, in a very personal way.
Electronic service information help is also more personal as well as faster, and can
lower your cost of doing business. With a caller-paid 900 number, customer service
can even become a profit center.

Many companies cannot have their complete range of product available

everywhere. Retailers only handle certain brands, and they choose selectively from
the brand's line of products. The greatest waste in advertising is a customer's
inability to find the product advertised. EM, in many ways, can cut this waste
through instant referral or by actually taking orders. Failure to integrate marketing
into every available electronic system (especially inventory control) amounts to
throwing away a percentage of each dollar you make from your advertising.

Other general and specific advantages of each of the major and most promising
forms of electronic marketing media are detailed in subsequent chapters, including
how each medium is used by big, middle-sized, and small marketers. The electronic
marketing Help Source Guide then refers you to far more detailed source material.

Picture Yourself Sitting in My Office

Imagine that you are asking me how to start in electronic marketing. You want to
know what form best suits your business and what can be experimented with in the
least-risk, least-expensive way. But you also want the maximum chance of success.
I've just met you. I want to raise questions that stimulate you to ask yourself more,
to get answers, and to make a sound decision. If you are with a big firm, and it
already uses some EM, I would ask: What kinds of EM mentioned in this chapter has
your company already attempted? Why were they chosen? What was the objective
of each type of electronic marketing in your overall marketing plan? How did that
type of EM enhance and integrate other media? Did it ask for action? Were specific
results measured? If so, did your EM fail or succeed? Why?

How organized is your firm for doing business via EM? Ask yourself questions like
these:

How much does it cost you to process an order from a salesperson? By mail? On the
phone?

Does your salesforce or dealer network follow up leads you send them? Do you
know your cost per sales versus your lead cost?

Is the "people cost" too high for your firm to distribute information as it now does?

If your firm is small, I would ask you to confirm with your accountant your profit
margins and determine the following:

What are your successful products?

Are they now responsive to any form of promotion?

How much money do you have to spend on marketing?

What percentage of sales can you afford for advertising?

Is that percentage comparable to that of your competitors?

What can you afford to lose in a failed market test?

Whether your firm is large or small, you need to hold off on any one form of EM until
you get an overview of the field. This will raise a lot more questions for you to
answer. Read through this book first and then turn back to the chapters that
concern you most.

Now refer to the Help Source Guide and follow up on the sources suggested for
more detailed information. These Help Source Guides also will help you select
equipment, plus refer you to the directories, associations, magazines, and
newsletters for more information and the latest lists of sources.

Most big firms can use EM profitably to a far greater extent than they currently do.
Even a small company with a very limited budget has a choice of inexpensive ways
to use electronic marketing. Later chapters will discuss how others have overcome
problems and money constraints and succeeded. Let's go on to Chapter 2 on "How
to Get Started."