BUSINESS ON THE WORLD WIDE WEB:

where "word of keystroke" begins

January 7, 1999 -- The new Web business environment and how to cope


Transcript of the live chat session that took place Thursday, January 7, 1999. These sessions are normally scheduled for 12 noon-1 PM Eastern Time every Thursday. Please note that the US is now on Standard Time. So in international terms, we are on at GMT -5.

These sessions are hosted by Richard Seltzer. If you would like to receive email reminders of our chat sessions, simply send a blank email message to businessonthewebchats-subscribe@yahoogroups.com or go to http://groups.yahoo.com/group/businessonthewebchats and sign up there.

For transcripts of previous sessions and a list of future topics, click here .

For an article on how to make "business chat" work (based on this experience), click here .

Since the chat itself happens at a rapid pace, it's often difficult to note interesting facts in particular URLs as they appear on-line. Here's a place to take a more leisurely look. I've rearranged some of the pieces to try to capture the various threads of discussion (which sometimes get lost in the rush of live chat).

Please send email with your follow-on questions and comments, and suggestions for topics we should focus on in future sessions. So long as the volume of email responses is manageable, I'll post the most pertinent ones here for all to see.


Threads (reconstructed after the fact):


Today's participants


Introductions

Richard Seltzer -- All -- We'll be starting in about an hour, at noon (Eastern Time) today (Thursday). As you connect please introduce yourselves and let us know your interests. That will help us get off to a fast start.

Bob Zwick -- Hello everyone. Bob here, an independent consultant in the Dallas, Texas area.
Also the moderator of the Distance education Chat at www.cottagemicro.com/education/

Richard Seltzer -- Welcome, Bob. Thanks for joining in.

Barbara -- I work for Health Dialog, a healthcare information service company. I do some research on the Internet about healthcare issues, especially videos about healthcare issues.

Bob Zwick -- Barbara - have you had a chance to read the transcript form our interview with Carle Foundation Hospital concerning their use of the internet to train staff and the public?

Ron Rothenberg -- Hello, Everyone.

Richard Seltzer -- Welcome, Ron. All -- please dive in and react.

Tantra -- Hello everyone, Tantra Here. I just have one Question: Have you heard about this company call AMP publications? Is located in Laguna Hills CA.

Richard Seltzer -- Welcome, Tantra. What is AMP publications? What do they publish?

Todd -- Hello. I'm Todd Moyer, a software developer and part-time web content developer. 


What has changed and what should be do about it?

Richard Seltzer -- Today we want to talk about the recent changes in online behavior that are likely to impact all Web business. It's been crazy before, but it's getting even crazier now. I'm hoping to hear of other instances of compelling online activities that get people really addicted; and creative ideas on how to compete for the time and attention of users in such an environment.

Over the last year, the Web reached a new level of maturity -- not just the new mobs of people coming online, but what people spend their time doing once they are there. The Web is no longer a curiosity, a gimmick. Many people out there aren't just surfing. They also aren't just using this as a way to save time doing things they did before (like reading news). The Web/Internet experience is becoming an important part of their lives.

The activities I'm talking about were there before. But through experience and tweaking and also spreading by word of mouth and reaching crtical mass, they are much more compelling than before. I'm talking about person-to-person email (not spam), chat, auctions, interacative games, gambling, playing the stock market online, also online porn. These are compelling activities that are getting many people hooked, leading them to spend many hours online.

I feel that the business environment of the Internet is going through another major change. I'd like to hear examples and possible ways of coping.

Barbara -- One of the ways to get people to come back to your website is to send out a weekly newsletter of different articles that can be seen at your site.

Bob Zwick -- Richard - as we all have seen this holiday season, shopping on the internet is for real and is here to stay. As an internet consultant I realize that offering product and service sales in now "required" for a business site.

Todd -- I agree with Bob. In many areas, I see the Web as having replaced the yellow pages as the primary way to choose a business to patronize. For movie times and many purchases I go online.

Barbara -- On Healthcare websites there is now more information, links, chatrooms, newsletters, etc., available than ever before.

Barbara -- Getting links from affiliated websites is one way to drive people to your site.

Richard Seltzer -- How does this affect us? (the fact that there are now a variety of truly compelling online activities, which are hooking millions of people) There are only a limited number of hours in the day and event he most addicted user needs to sleep, eat, work, etc. some time. More time spent in compelling online activities means less time available for other activities -- both in the real world and online. While these sites may not sell products or services that compete with yours, they are competing for your customers' time and attention.

Ron Rothenberg -- there were a very large number of Internet IPOs this week. priceline.com, mining company, onemain.com, zdnet.com

Ron Rothenberg -- ebay has many people hooked on the excitement of auctions.

Richard Seltzer -- Ron -- yes, eBay and other auction sites seem to be growing like crazy. yes, many more people shopped online this Christmas at ordinary online stores as well. but ordinary shopping is no where near as compelling as auctions. so how are those stores going to pull in the numbers of customers they need without the gift-giving season as an impeller?

Richard Seltzer -- What I'm getting at is that to build a successful Internet business today is going to take psychology rather than technology. Just putting up a catalog, just setting up to do secure transactions, even providing lots of useful free information is not likely to be enough. What else is needed? I don't think everyone is going to want to turn their site into an auction. But we will have to do things differently. 


Auctions

Bob Zwick -- Ron - how do you build people's confidence for an online aution to alleviate fear of fraud and scams through credit card useage ?

Ron Rothenberg -- ebay helps to do it by soliciting feedback about your trade partner. People don't want to deal with those with negative ratings. It is actually the best confidence builder - testimonials from happy customers, given freely, presented by a third party. ebay tries to build the concept of community. People are mostly very trusting. Many of them send cash, and I wish they wouldn't. I just had an ebay buyer contact me from singapore this very minute about how much shipping will be.

Ron Rothenberg -- there are services like BIZRATE that collect feedback on bigger retailers in order to build (or kill) confidence.

Richard Seltzer -- Yes, trust is essential for auction-type business to succeed. But I see that the main sites seem to be doing a pretty good job of that. So how can ordinary sites adapt to this new situation? I don't think that banner ads at the compelling sites are likely to be very useful, unless your site provides a very similar experience (like one porn site advertising at another). These activities are so compelling , people are so hooked that they are very unlikely to click on a banner that will take them away.

Ron Rothenberg -- Whenever I buy something from insight or egghead, they send me a bizrate questionnaire. I don't think many people are filling them out, whereas on ebay, most people give feedback. Feedback is the ultimate confidence builder/killer. One of the strenghts of the internet can be to have that sort of feedback immediately available.

Ron Rothenberg -- some credit card companies are GUARANTEEING internet transactions -- guaranteeing that you are protected from online fraud. In fact, they are more often the victim of online fraud than any consumer.


Ambassadors

Richard Seltzer -- Ron -- feedback and confidence are great. But what is going to make it compelling? What is going to draw people in and get them to come back again and again? Here's one off-the-wall suggestion -- say you set up recruitment/incentive programs. People who demonstrate that they know your site and its content and products and services -- through participation in online discussions and also through online purchases -- get them to act as "email ambassadors" in exchange for discounts and other rewards. So when you buy something from an online store, instead of getting an automated questionaire, you get a friendly personal email message from a fellow shopper, wishing you well and asking for your reactions and providing helpful suggestions.

Ron Rothenberg -- many sites let you email messages or specific items to your friends. Ebay has a "tell a friend" feature. They disguise this advertising as doing a favor for you and your friend. Very crafty.

Richard Seltzer -- Ron -- right on target. Also the six-degrees-of-separation site. I get another message from them every other week that someone else that I know has left my name/email there.

Todd -- Richard - six-degrees-of-separation? Is it a particular site? Also, I like the idea of variable reward for buying.

Richard Seltzer -- That's http://www.sixdegrees.com

Richard Seltzer -- There's a people message to what I'm saying. Automated functions don't tend to be compelling (with the exception of gambling, which hits us directly with variable reinforcement). Take, for example, the Microsoft real estate site -- homeadvisor.msn.com They have lots of techie calculator, decision-support thingies surrounded by soundbyte-style text. It looks good at first glance, but you soon leave it for sites that are truly helpful and that engage you in the real world (like the site of a realtor or buyer's agent in the area where you want to buy). We have to move from high-tech to high-feel, high-touch. (Once again, porn leads the way. Static dirty pictures are not compelling, nor is one-way static video -- the compulsion comes with live interaction).

Barbara -- I still like the idea of emailing people when something of their personal interest comes up. This is tricky, though, because there is a fine line between letting people know something they have expressed interest in has new material and simply bothering them.

Bob Zwick -- Barbara - email is fine as long as it is specifically requested by individuals and is just as easy to un-subscribe. I can't stand sites that automatically add someone to a mailing list because you vistited or requested info.

Barbara -- I agree Bob. The person should have requested the email before a website sends it out.

Richard Seltzer -- Barbara -- I think that the "ambassador" idea is worth exploring. Then the person sending messages has similar interests and concerns to the person being addressed.


Price -- random discounts -- variable reinforcement

Richard Seltzer -- Another off-the-wall idea -- consider using variable reinforcement. Giving a discount of 50% to every fifth visitor would probably be more effective than 10% to each (of course you have to set it up to encourage buying -- e.g., the counter is reset for you when you buy something, not just by going away and coming back again).

Barbara -- Rich, I thought you taught that if you have good varied content, people will come to your site. Now you are talking gimmicks.

Richard Seltzer -- Barbara -- I'm not sure what the solution is. Good varied content is a necessary starting point. But, realistically, to compete with compelling sites is going to take more. That more need not be a "gimmick". I don't consider "email ambassadors" gimmicks. I'm looking for better ways to draw people in and encourage them to act as a virtual extension of your company to then engage your visitors personally, in a way that you could never afford to do with paid employees.

Bob Zwick -- Barbara - content in itself can be a gimick. Like Richard's list of all the boos he has read being indexed at AltaVista will bring traffic to his site from people looking for a novel.

Richard Seltzer -- Bob -- amen. "gimmick" is a tricky word. what we are looking for is ways to compete for time and attention. not that we need to drive people to spend hours per week at our site. but we need to incent them to come back, again and again. otherwise, our traffic will decline even as the number of Internet users and the number of total online hours soars.

Todd -- How about the age-old way of drawing in customers: low prices.

Bob Zwick -- Todd - if you have the lowest prices in the country, but only advertise in the Elizabeth, NJ phone book, how many customers do you think you'll attract. The point is convenience, easy to find, and user friendly are the ways of doing business on the Internet.

Ron Rothenberg -- Todd - low prices work, but only for a while. Remember all the cut-rate video stores (like Crazy Eddie) of 15 years ago?

Ron Rothenberg -- didn't amazon and b&n start out by discounting EVERYTHING 40% or so? That didn't work for them as they thought it would. You can buy most bestsellers on the net for 50% off, but w/o the service you get from amazon or b&n. and in a related story: Amazon announced to its investors that even though sales were at least 3.5x last years, don't expect that to diminish losses.

Barbara -- Ron, how can sales be so high and still not diminish losses?

Richard Seltzer -- Barbara -- Amazon keeps reinvesting in its own activities, keeps spending to broaden its services and its range of products; rather than generate "profits", it is building its business and its marketshare. For a startup (and Amazon really is still a startup in real-world terms), that's the right thing to do. You only start milking profits when you don't see tempting opportunities for further rapid growth.

Ron Rothenberg -- amazon is doing an amazing volume, but their costs and problems are far higher than they ever planned for.

Todd -- I've bought books at amazon, CD's at CDnow and Second Spin and movie tickets online. The only one I'm eager to try again is Second Spin (they sell used CDs) because they're cheaper. The movie tickets were several dollars more expensive because of the fees, and I still had to wait in line to pick them up. Amazon was more than list because of shipping fees. Only Second Spin actually offered an advantage.

Ron Rothenberg -- todd - try www.pricescan.com to find you the best price on any book. Freqauently you can get better prices than amazon

Richard Seltzer -- Yes pricescan does books, computers, etc. They only include a dozen or two vendor, but if price is what really matters to you, they make comparison shopping easy (and take away any traffic draw your low prices might have had; because everybody quickly matches them or betters them; soon the market settles down and everybody sells at the same price -- unless they try my variable discount scheme :-)

Richard Seltzer -- As for discounts/low prices -- yes, those are good, but things change a bit on the Web. Now for most categories of consumer products you can go to a price comparison site. All of a sudden that really low price that you thought was going to pull people into the store and then they were going to buy other high-profit items as well -- that all goes to waste. The customer interested primarily in price buys your loss leader from you, and then clicks elsewhere to buy someone else's loss leader. Random, variable discounts, like I suggested, would take you beyond that. Also, if you knew that because you bought at that store before, when you go again you'll be eligible for another, probably higher discount award, you'll go back. (NB -- I don't know of any place that is doing this right now, and I've looked at lots over the last few weeks, writing a book about online shopping for Macmillan. This is an idea that just occurred to me today. I'd like to know if anyone picks it up and runs with it.)

Richard Seltzer -- Barbara -- you may call it "gimmicks" but I believe that people need immediate rewards, personal feedback, immediate gratification. The satisfaction can be variable -- you don't need to provide the same high-touch experience every time, -- if it isn't predictable and yet comes reasonably frequently that (psychologically) drives people even more than a regular reward. That fact makes this kind of thing far more doable than if you had to provide it for everyone. That's part of human nature. And I've always said that human nature and connecting people to people is more important than technology. I guess where I'm headed is the notion high-touch can succeed with the right level of randomness and the right programs to recruit "ambassadors". It's just an idea. I'd like to see it in action.

Barbara -- I like the convenience of shopping for groceries on-line. I haven't done it for awhile, but I'm thinking of doing it again. Sometimes just convenience is a good seller of a website, but I see people's points that you need that extra pull to get someone to come back to your site. 


Tie-ins with real-world activities

Richard Seltzer -- Another approach, I believe, is to work harder to tie online activities to real world ones. This might be on the order of what Bill Wendell does with his Real Estate Cafe in Cambridge, with face-to-face gatherings for folks looking for roommates and face-to-face courses on subjects related to what he has at the Web site. 

Customer satisfaction at online stores

Ron Rothenberg -- I am especially disheartened the last few weeks by the apalling lack of customer service on the 'net. Just try to email or call shopping.com or egghead.com with a problem. I have been trying to get through to them for weeks. that will catch up with them, sooner or later. One bad experience is costly. people tell many friends online.

Ron Rothenberg -- in just the past few weeks I have become very discouraged by internet retailers. I have been buying heavily for reselling, and when things go right, everything's ok. But when things go wrong, they go very wrong. Fortunately for some of these web stores, I can not find a substitute for them right now.

Bob Zwick -- Ron - I think you are on track. As the newness of the discounts wears off and the frustrations of surfing grow, people are going to be more loyal to convenience and customer support than saving a few bucks after surfing for an hour to save $1.00.

Richard Seltzer -- Ron -- re: bad experiences. They will happen. mistakes happen. But if a company is set up so when it does happen and someone complains, someone gets back to them almost instantly, then the problem can become an opportunity, and the disgruntled shopper may eventually become an ambassador.

Ron Rothenberg -- RS, that's exactly the problem -- frequently there is no phone number given -- no email address -- webmaster doesn't answer. What's a complainer to do? If there is a customer service email address, it isn't answered. Just try to complain to egghead.com, chase manhattan credit cards, or shopping.com. The email goes one way. The scorned buyer is left to stew.

Richard Seltzer -- Ron -- amen. those big sites need to scramble to find ways to provide the high-touch that online customers are going to expect/demand.

Bob Zwick -- Ron - when I don't see a phone number I think there must be a reason. I have had an 800# on a community web site for over a year and have recived less than a dozen calls. Most of those complementary or asking for information not included on the site.

Ron Rothenberg -- i don't care if it's an 800 number or not. If you have a "customer service area" andfill it with faqs, what's a person to do if his problem is not covered by a faq. You have to answer either your email or your phone. Most sites answer neither. 


Wrapup

Richard Seltzer -- All -- time is flying by. I'd like to continue this topic the week after next, if others are interested. (I'm going to have to skip next week -- have to speak at and chair an Internet marketing conference in San Francisco). Please send me email to let me know if you like this topic or to suggest others. seltzer@samizdat.com

Richard Seltzer -- All, as usual, I'll post an edited version of the transcript in the next few days. Check www.samizdat.com/chat.html Please send email with your followup questions and comments for inclusion with the transcript. All -- please, before you sign off, post here your email and URL addresses, so we can stay in touch. (Don't presume that the software will capture it.)

Barbara -- Thanks for an interesting topic. I'll see you in two weeks.

Todd -- Todd Moyer, tmoy@erols.com, http://kinetikos.com

Ron Rothenberg -- Ron Rothenberg, Homebase@world.std.com

Bob Zwick -- Bob Zwick bob@cottagemicro.com, Cottage Micro Services 103 Vinyard Drive, Waxahachie, TX 75167, PH: (972) 435-2446 www.cottagemicro.com ICQ 779704,
EDUCATION ON THE INTERNET www.cottagemicro.com/education

INDEPENDENT CONSULTANTS/EDUCATORS www.cottagemicro.com/consult
WAXAHACHIE TEXAS www.cottagemicro.com/waxahachie

Richard Seltzer -- All, thanks very much for joining us today. Please come back in two weeks (Jan. 21), for the continuation. And please spread the word. And please send me your feedback seltzer@samizdat.com I sense that this is an important topic and that the solutions are not obvious. 


Followup

Keenos -- a dynamic way of presenting info at a Web site

From: Todd Moyer <tmoy@erols.com> Date: Sun, 10 Jan 1999 11:24:31 -0500

Here's a novel approach to showing data that I believe you will find interesting.

I'd be interested in hearing your impressions and suggestions regarding Keenos as a way of presenting data.

Best wishes.

Todd Moyer, kinetikos.com


Previous transcripts and schedule of upcoming chats -- www.samizdat.com/chat.html

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The full text of Richard Seltzer's books The Social Web, Take Charge of Your Web Site, Shop Online the Lazy Way, and The Way of the Web, plus more than a hundred related articles are available on CD ROM My Internet: a Personal View of Internet Business Opportunities.

Web Business Boot Camp: Hands-on Internet lessons for manager, entrepreneurs, and professionals by Richard Seltzer (Wiley, 2002). No-nonsense guide targets activities that anyone can perform to achieve online business
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