Outline marketing plan for Asuk Creative Limited a B2B provider of Internet services continue...

Objectives

The objectives are each built around the SMART criteria (specific, measurable, actionable, realistic and timed).

• Increase market share. ASUK Creative Limited currently holds 2 per cent (200 servers) of the UK dedicated server market (approx immediately 10,000 dedicated servers). ASUK should plan to increase this steadily to 16.7 per cent after four years. Since the market share has risen from 0 to 2 per cent in one year without increased marketing, this is a realistic target.
• Streamline ordering processes. The new web site called DediPower.com should incorporate online facilities for order processing, upgrades and support. The development of these features can continue over time but a fully featured site should be ready for launch.
• Increase brand awareness/brand building. By launching a new site, ASUK can take advantage of a fresh start but still use all the advantages of an established company. A brand image of power and quality, yet competitive prices should be established through intensive marketing and excellent CRM. The company plans to have a powerful brand name within six months of launching the site.
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• Create self-contained entity for possible initial public offering (IPO) or trade sale.
• ASUK can aim for an IPO within three years, being sold either to a competitor or to a diversifying larger company. The sell value is currently £300,000. A target should be set to have this at £1 5 million within three years.
• Expansion into international markets. The launch of DediPower means that foreign clients will become more accessible. The improved site will have support for international sales.
• Improve CRM and customer support. By improving these fundamentals, ASUK aims to sell additional products to its current clients. Currently, 25 per cent of clients have bought additional services, and the aim is to increase this to 55 per cent within a year.

Strategies by target markets

• Current customers. By rebranding, enforce customer loyalty and improve service level. Also provide an easier product upgrade path. Better support and customer self-service should also be provided.

• Domestic. Build brand as a high-quality service with lower-value pricing. Offer three core incentives to show confidence in the product: thirty-day money back guarantee, UK price matching initiative, no minimumcontract. ASUK will be the first company in the UK industry to offer all these incentives together in a genuine fashion.

• International. Key strengths to marketing include sustainability and experience. The product will be positioned in the market as a high-end service, offering good performance for companies that have interests across Europe.

The marketing mix

• Price. Although prices should be offered on a price match guarantee within the UK, they should be based around a product-line pricing strategy; that is, each customer can start with a basic product and build layers on top to create their custom product.
• Product. The product is to be sold individually, but a discount should be offered for multiple sales and/or prepayment packages. Customer loyalty could be rewarded with additional free services.
• Promotion. ASUK should base the promotion around an online marketing strategy, using online targeted banners and search engines, complemented by increased exposure on the major Web hosting guides. Publication to online and offline trade magazines of press releases and adverts will reinforce the respectability of the brand.

Evaluation and control

• Monitor market share and company growth rate. Frequently obtain market share statistics. An estimate can be made by obtaining the total number of dedicated in the market segment and calculating the percentage of them that ASUK holds.
• Occasional customer surveys to ensure support satisfaction is increasing. ASUK already has the facility to conduct customer surveys online. These should be conducted half-yearly to ensure that satisfaction objectives are met.

• Demographic analysis of buyers and potential buyers. To determine whether ASUK is penetrating all potential markets sufficiently, customer account details should be collated and analysed to produce maps of customer distribution.

Loyalty Programmes and Personalization

Despite the problems listed above, it does seem that relationship marketing at east has the potential to enhance customer satisfaction. Although it is easy to be cynical, a satisfied customer is more likely to be loyal than one who is not. A loyal customer base has a number of benefits to a company:

• Higher returns will accrue, from repeat sales over time.
• Increasing levels of competition means that service quality may be the only differentiating factor between otherwise similar companies.
• Higher costs are associated with recruiting new customers than with managing existing ones (because of the need to conduct credit checks, take up references and other administrative tasks).
• It provides scope for cross-selling.
• It creates possibilities for strategic partnerships.
• Loyal customers will recommend the company to others by word of mouth.
• Promotional costs to acquire new business are reduced.

Loyalty programmes (also known as 'reward schemes') can be introduced to increase loyalty. For example, successful programmes have been introduced in recent years by airlines such as BA and supermarkets such as Tesco. The costs of the rewards given away can be more than offset by the additional business gained through repeat or additional purchases. For example, Tesco's Clubcard loyalty programme now covers more than 14 million customers, and special offers can be customized, based upon analysis of transactional data in order to enhance the brand image and build trust. By 1996, 200 million in-store purchases per day were being tracked by the programme, and over 5,000 distinct customer segments identified, each receiving personalized coupons. Profits have grown from £500 million in 1995 to nearly £1 billion in 2000 (www.ltol.com). When Tesco began selling goods online (admittedly after a shaky start, when the company's computer systems were not sufficiently integrated and orders had to be rekeyed manually!), the company was a 'known quantity' in comparison with the unproven Internet `pureplays' that were setting themselves up in competition. Additional Clubcard points were awarded for online purchases, and Tesco now has over 1 million online customers. In 2000 it sold half of all online groceries in the UK (www.datamonitor.com). It dominates the home delivery market to such an extent that many competitors have accepted defeat. Safeway, for example, decided in 2001 to stop selling its goods online and concentrated instead on refurbishing and upgrading its retail outlets.

Another popular method of boosting loyalty is personalization. Tesco is moving in this direction with its online service, which is now becoming more sophisticated in its analytical capabilities in terms of suggesting particular products or special offers that might appeal to individual customers based upon their purchase history. Personalization software allows the name of the user to be incorporated into the Web pages, any previous transaction details to be displayed, and related areas of interest to be flagged. Personalized email messages can be distributed to highly targeted groups of customers at a very low cost. This type of marketing is also being driven by research such as that by Cyber Atlas (www.cyberatlas.com), which established that Web users who configure, person. alize or register on Web sites are more than twice as likely to buy online as those who do not. A combination of a reward scheme and personalization can therefore be a powerful tool to drive loyalty. Such mechanisms are of course ideally suited to online transactions, and this aspect will be considered in more detail in the next section.

As with relationship marketing as a whole, there has been a lot of hype recently claiming that personalization is a panacea for success. This ignores the fact that in many circumstances, customers are quite happy to receive a 'mass market' approach, and find any degree of personalization an intrusive invasion of privacy. Examine the mini case study below and make up your own mind — do you find such approaches valuable or intrusive? Why?

Customer-Retention Methodologies

Most companies focus their activities on acquiring a customer. For example, they may provide a toll-free number for pre-sales information. However, after the customer purchases, she may be required to pay for any support received from the company—including asking questions.

True customer retention and relationship marketing address the entire purchase and support cycle throughout the lifetime of the product and the lifetime of the relationship with the customer. When products need replacement, the hopeful intent is for the customer to return to the company that stood by her side when she needed help.

1. Good Customer Service—A Customer Requirement

Good customer service is not only a customer requirement, it is also a fundamental methodology in a store's customer retention strategy. Nearly three-fourths of online customers surveyed said they would discontinue conducting business with a company if they experienced poor customer service.

For multi-channel stores, this integration becomes imperative. If a customer has a problem with a catalog order, he will not understand why the same company's physical store will not take the item back as a return. But this is still often the case. Now with online shopping, ease of returning products—no matter what the reason—is essential, and some retail outlets now provide for this customer need. They recognize that a customer's bad experience with a store's online business transfers in the customer's mind to all of its sales channels.

2. Privacy and Security

Customers need to know they will be protected while accessing your website. If they feel at risk, they can't offer their loyalty. Guaranteeing their protection is crucial if they are to provide personal information.

Building trusted relationships depends on delivering secure credit card transactions, protecting the consumer's privacy and personal information, gaining permission to contact customers on the web, and preventing virus activity.

There is a direct correlation between offering a strong privacy policy as part of an overall CRM program and increased profits. This information that customers provide is the cornerstone to developing strong customized programs.

Emotionally, the online customer needs to feel safe. Selling names or lists for use by other websites will degrade the trust that your customer has built with you. It may also violate some legal regulations globally.

Credit card transactions must be secure as well. Companies offering ways to circumvent posting card numbers on the web are perceived as providing an extra service. Some creative ways to manage credit card privacy include establishing codes, pre-authorizing by phone, or setting up an Internet or company-only card that will later transform to the authorizer's credit card.

Determine your risk vulnerability frequently by auditing your site. Hiring independent security firms will give you the best results. Verify your system internally often to ensure that your security systems are intact, and find ways to reassure the customer. Anyone can claim that transactions are secure. You must prove it.

Many companies now employ chief privacy officers (CPOs) who operate on the same level as COOs and other executives. Their primary responsibility is to protect the privacy of their customers' personal information. Establishment of the position is in direct response to increasing legislation to protect consumer privacy—especially their medical and financial records. In addition, reports of corporate abuse of personal data has put pressure on companies to ensure that records are not misused and that there is no intrusion into the privacy of their customers.

Employing privacy programs requires companies to conduct complete audits of their systems to determine what information they hold and what they ultimately do with the data. These programs have also been extended to ensure employee privacy and link with suppliers to create seamless protection.

Online stores have access to customers' names, addresses, credit card numbers and other sensitive data. It's prudent not only to protect the information from web hackers, but also to secure the information within the company itself.

The Customer Lifecycle

How do you monitor your customer throughout the lifecycle? Each customer enters the buying process at a different stage. This is most apparent with technology products and is not necessarily transferable to a commodity.

However, the Internet is, in essence, a technology product from an adoption perspective. Understanding how the customer interacts with your site or your products and when will help you target the correct intervention point. Pinpointing your communications to lifecycle stages will avoid a shotgun effect and will solidify your relationship with your customer as an evolutionary process.

Identifying Your Most Valuable Customers

You can identify your top customers by analyzing historical sales for dollar volume and frequency of repeat purchases. The data must be carefully analyzed because repeat customers can be more valuable over time than one-time, large ticket item purchasers. This analysis must then be matched up with the demographics and other attributes and characteristics you've previously identified in your customer segmentation. Integrating all of these elements gives you a good picture of your key customers. You will also need to include customers you want to have in your cultivation plan.

The opportunity equals the combination of customer retention and the value of all future profit plus those customers you deem to be potentially valuable over the lifecycle—minus the investment required to keep and to acquire them. It also includes future profit made by referrals. Prospective customers who visit your website prior to purchase are much more likely to become buyers than to become non-visitors.

Investments in personalization, promotions, and communications depend on the ranked value of your customers.

It's equally important to establish the identity of the consumers that do not measure up. Spending time and money on this group drains the company of the ability to cultivate new and more attractive customers.

Direct mail companies use a similar technique to determine their mailing investment to each customer segment. After dividing the customer base into ten equal groups, they then rank based on profit potential. These companies must ensure the cost of catalogs is worth the ultimate customer value.

After customer segments are defined, the data are incorporated into future forecasts to make product selection, pricing, inventory management, and promotion decisions.

Business-to-Business Relationships

Up to this point, we have used the terms "customer" and "consumer" interchangeably. Consumer package goods companies normally focus on the consumer as the end user and reserve "customer" for other businesses, resellers, and distributors. Manufacturers and retailers with business-to-business relationships know that these customer relationships can be among the most profitable.

A one-to-one system with a company must still focus on an individual. Each functional area will approach the relationship uniquely. Depending on whether you're dealing with a professional purchaser, a technical specifier, or an administrative assistant, the customer's needs will vary. Simplifying routine purchases by offering custom lists or access to prior purchase invoices is critical for those tasked with frequent purchasing responsibilities. Ordering expensive or technical products may require justification and additional information.

Environmental information should be easily accessible along with health and safety materials data. Customized web pages address individual company requirements and purchaser needs. Automated ordering and delivery systems can be linked to other systems for integrated purchasing, billing, and supply-chain management.

Many mid-sized companies worldwide will use or plan to use the Internet to purchase supplies and equipment in the near future. While personal calls by sales reps could be construed as true one-on-one marketing, busy business managers perceive time as money. They don't want a sales pitch: they want to order and receive services their way. Convenience, speed, and cost are the main drivers.

Usage Behavior

We've examined shopping behavior, lifestyle, demographics, and other factors that influence customer purchasing and loyalty. How products are used, at home or in business, may also have an impact on web-based shopping. For instance, if a web designer knows that a customer routinely purchases a spare product in addition to a regular order, he may bundle two products together or offer an online reminder. If segment data confirm that most customers purchase two products together, a promotion may be offered to customers still purchasing the single item.

Historical purchasing data will be useful to monitor usage behavior. The best way to thoroughly understand customers and how they use the products they purchase is to visit representatives of your top segments in their homes or offices. Following them for a day or two will give you invaluable insight that you cannot achieve in a sterile test environment.

The analysis of customer behavior over time must be measured to get an accurate picture of usage. This is best managed with a permanent program rather than a one-time research project.

Predicting the Success of the Customer Relationship

Relationships between customers and merchants are very much like other typical relationships between people. Understanding what makes a relationship successful with your employees, spouse, children, or co-workers helps you determine how to measure a good relationship with a customer.

Relationship studies conducted by the University of Denver indicate that marital failure is predictable to a surprising degree. This means that, for many couples, the seeds of divorce are present prior to marriage. The study was grounded in understanding how to prevent marital failure and determining how prediction can lead to better interventions designed to help couples reduce the risk of divorce.

Dr. Howard Markman, Department of Psychology at the University of Denver has identified the steps in a relationship and potential danger signs and patterns in his book, Fighting for Your Marriage: Positive Steps for Preventing Divorce and Preserving a Lasting Love (JosseyBass, 2001).

Once a relationship is established by two partners, problems can develop. Escalation occurs, which can be resolved, ignored or neglected. Continued neglect implies invalidation, and contempt usually follows. Negative interpretations, withdrawal and avoidance lead to indifference. These are danger signs and patterns of a relationship headed for failure.

The same patterns and principles can be applied to the customer relationship. By reducing risk factors and increasing protective elements, you can preserve a fragile relationship. How the customer "feels" at every point of contact with an online store influences the relationship. Points of contact can be shopping on the website, asking a question of the customer service department, returning a product, or tracking an order. At each of these touch points, a customer must feel important, appreciated and respected.

The large group of people called "customers" must now be narrowed down to specific individuals. When you think of these individuals less as "targets" and more as "partners," you begin to get the idea of how powerful a relationship can be. The customer is not someone we do something "to"—the customer is someone we do something "for." It's a symbiotic relationship in which we have to give something of value.

Shrinking the World

If e-commerce mirrored the actual composition of the world, it would be very diverse. Marianne Williamson, noted author and speaker on world issues, presents a new way to look at the people of the world:

"If we could at this time shrink the Earth's population to a village of precisely 100 people, with all the human ratios remaining the same, it would look like this:

1. There would be 57 Asians, 21 Europeans, 14 from the Western Hemisphere (North and South), and 8 Africans.
2. Seventy would be nonwhite; 30 white.
3. Fifty percent of the entire world's wealth would be in the hands of only six people. All six would be citizens of the United States.
4. Seventy would be unable to read.
5. Fifty would suffer from malnutrition.
6. Eighty would live in substandard housing.
7. Only one would have a college education.

As web shopping gains adoption throughout the world, human factors engineering becomes even more critical. The Internet used to be a domain of technology aficionados and game-playing teens. Truly understanding the customer and designing for the future demands that you stay abreast of the changes in the population at large as well as feel the pulse of the shopping environment.

Major changes are usually addressed at the strategic level of a business. Yet, as soon as a belief about the customer is ingrained in a corporation's culture, it tends to be perpetuated. That's why many major corporations still believe that Internet use in the U.S. is dominated by men.

Subtle changes are even more difficult to acknowledge or track. Continual customer contact, whether through individual or group research, is the primary guard against complacency. Monitoring secondary research and staying in touch with customer advocacy groups will give dimension to growing customer needs.

Often, one channel will spot change faster than another. Even if your company uses only one channel—a pure-play web merchant, for example—it's still critical to understand how the customer shops in a variety of modes, what they prefer in each, and how a best practice can be replicated in another domain. Each channel can learn from the other because they take different approaches toward helping the customer have the best possible shopping experience.

Hostage Programs or Loyalty Programs?

The most popular loyalty program among retailers today is the loyalty or affinity card. Consumers are issued a card with the promise of rebates, access to special prices, or promotional merchandise. In exchange, the customer furnishes personal information to the company and allows the monitoring of future purchases.

Since the programs have proliferated, consumers are now inundated with wallets full of plastic or cardboard affinity cards. Each time they make a purchase, they have to search for their "special" cards in order to get discounts that they were able to receive without cards before the programs were enacted.

Few companies have been able to use the data collected effectively. Hallmark has been at the forefront of the movement and is an exception. The card manufacturer created a "Gold Standard" rewards program. Purchases at Hallmark stores are credited to an account developed for each customer. At certain dollar thresholds, consumers are mailed certificates redeemable for merchandise.

Many of these programs, however, have fallen short of their objectives. It's true that companies have been able to collect consumer data. Unfortunately, by the time systems have been designed to utilize these databases, the information is usually too dated. Some firms never even get that far and wind up in a perpetual collection mode, while consumers keep digging for the cards.

In the 1950s and 60s, green and blue stamps were offered with many purchases. The stamps were redeemed for merchandise at special redemption centers. Popular with consumers, the stamps did not differentiate merchants because they were so widely distributed—even gas stations presented them with each purchase. But customers did notice when they were not available. They looked forward to pasting the small stamps into specially provided books so they could ultimately exchange them for luggage, lamps, and dishes. Consumers were disappointed when the stamps were no longer offered. Banks, gas stations, and other industries vying for the same customers supplied them with gifts and cash as substitutes.

If affinity cards disappeared tomorrow, would customers be outraged? Not likely. Some, such as frequent flyer airline programs, enjoy popularity. However, supermarket and drug store cards are often viewed more as an annoyance. The key to profitability is building long-term relationships with customers, and that requires connection and interdependence.

The true measure of loyalty as opposed to a hostage situation is if the customer would continue to purchase or use a service if there were no monetary incentive. With the lure of valuable hotel points and frequent flyer miles, how would a company know that the customer would stick by them if those programs were no longer available? Is the customer loyal to the company or loyal to the program? It could be that a customer is just waiting for something better to come along, and when it does, he will switch.

Measuring loyalty helps you track results over time. An index based on value, intent to recommend, and intent to repurchase is a good indicator of the degree of a customer's loyalty. Current loyalty program offers must be factored in, however, because programs may or may not be ongoing. Comparing the loyalty index during and after a program gives you a more precise loyalty metric.

Catalog Lessons for E-commerce Sales

Is the Internet merely a distribution channel for catalogs? So many e-commerce sites are nothing more than line or alphabetical product listings on a page, but as we have seen here, that's not what constitutes a catalog. That's why the web, in order to gain parity with catalogs, needs to add sophistication in presentation and efficiency in delivery.

Today, customers are fluid. They will shop in a store, online, and through a catalog all in the same week. While they purchase `safe" products on the web—those that they are sure will materialize exactly as they envision them—such as books, CDs, and tickets—they are also somewhat willing to experiment as long as the result is in their favor.

Convenience is the major driver for web-based sales, but the desire to touch a real product is the main reason for shopping at a store. If convenience and simplicity are the catalysts for non-traditional sales, web resellers can emulate the catalog industry's success. But for home consumers, it's often easier and faster to pick up a phone and place an order than it is to log on to the Internet. The selling proposition must enhance the channel because the web, by itself, is no longer so compelling that customers will try it just for fun.

Shoppers love the web when they have a product in mind. They can run a search function for a specialized item and find a supplier. But the Internet is not conducive to browsing. Searching for common items will bring thousands of hits. This is like_ being confronted with an index for a catalog that is twice as large as the catalog itself. And it has no sorting capabilities, presents itself in random order, can be several years old, and may not even be functional.

But more than 30 percent of the U.S. population goes online every day, and well over half of all Americans have used the Internet during the year. There are nearly 130 million people in the U.S. connected to the Internet—representing a substantial pool of prospective buyers. The opportunity is huge for e-tailers who want to remove some obstacles for the common consumer.

Identifying the Obstacles

Unless the customer has a relationship with an e-retailer, he has to search through a maze of providers to find someone to take his order. But ordering through a catalog is a fairly standard procedure. And if a cataloger can afford to produce a glossy mailing, the company is most likely not a fly-by-night operation. Not so on the web. Anyone can set up a site, and the company may or may not be reputable. Before sending someone money or sharing a credit card number, customers want to be sure they will get their order.

Customers believe quality of service is critical when selecting a catalog provider. Yet, they actually expect a higher level of service when shopping on the Internet than in traditional retail stores or through a catalog. Most e-merchants do not have a holistic e• service program that is integrated throughout their companies. The future will require a "live" person to help select merchandise and place orders 24 hours a day—as many catalogers now provide.

1. Catalogs take advantage of imagery and have mastered the use of photographs. Photos are mandatory for selling products but often take too long to materialize on the web. They are usually too small to see a product in detail, but catalog photos are large enough to view and enjoy. If speed can be overcome, the opportunity for web resellers is to provide full-page photos with a click. Their progress will be hindered by inadequate consumer equipment, such as slow modems.
2. Production diligence is the hallmark of catalog success, The intimacy of the printed page can be replicated on the web using the right techniques. Each web page requires micro-management to ensure that no detail is overlooked. The speed of the Internet should not translate to throwing a site together quickly.
3. Cross-selling is a technique that catalogers adopted with relish. Web retailers can maximize sales by encouraging customers to add to their shopping carts. These sales cost lessand bring in more revenue than art original sale. Rather than enhancing sales with banner ads, try adding a valued service with recommended compatible products from a "personal shopper."
4. Catalog companies have become proficient at managing their catalog businesses and unifying them with their e-businesses. E-commerce must also close the gap by creating seamless websites and smooth transactions. Integrating all aspects of the business and delivering dependable fulfillment will ensure that there are no inconsistencies in operations for the customer.
5. Trust is a major factor in catalog sales. Catalog firms have already predisposed customers to watch for marketing tricks. For example, a well-known floral company sent out a catalog that proclaimed there would be no delivery fees through a set date for any item ordered out of that particular catalog. Unfortunately, the price of nearly every item in the catalog had been raised an average of $10. "Free delivery" wasn't exactly free, and customers are not fooled easily. This sort of deception is not as common in the catalog world as in the Internet arena. E-merchants have to work even harder to regain consumer trust.

Catalogers have learned how to present merchandise in the most effective ways. The interactive nature of the web lends itself to some unique capabilities that are under- used. For instance, clicking on an image could produce a video clip of the product in operation or a common application in use. One click could bring up an image of the packaging, another could show the product unwrapped, and still a third could picture the back of the product. Furniture could be presented in a mock room setting that the customer designs to replicate his own home. The possibilities are unlimited—but information, speed, and excitement must offer the customer more than a printed page, or there's little advantage to using the internet over a catalo. The web offers the possibility of movement and sound two sensory delights that catalogs will never be able to offer. Interactivity will drive websites in the future, and static environments will be passé.

Integrated Businesses

Because customers don't differentiate between separate divisions of a company, it's critical to integrate catalog, retail, e-commerce, and direct marketing functions. If these divisions are competing with each other, they are unlikely to share sales and customer information that will be essential to establishing a lasting relationship.

A customer may be acknowledged as a loyal customer on the web but may be ignored in a

store. In order to build a Ware relationship,every point of contact must be reinforced through con._

sistency. The customer should be "recognized" wherever she chooses to shop. Click-and-mortar companies have unique advantages. A customer's web history can be shared with the retail store nearest her home. Promotions and service should be the same, regardless of whether she conducts her business online or in the store.

Building Competency

Catalog companies have built competency over the years and have spent time perfecting their craft. They have a loyal following and offer consistency and compelling product presentation. When e-merchants fail to deliver basic services, confuse consumers with awkward ordering methods, or don't provide enough information to make a purchase decision, consumers walk away with their pocketbooks intact. Some not only stop shopping or purchasing at the website where they experienced problems, but they also will cease shopping online entirely. Building competency in the channel should be a concern for all online companies.

Many websites have been built in stages and lack the flow of a continuously designed site. Because they appear fractured, customers have difficulty following through the entire site with coherency. Designing and promoting are two different disciplines but must be. integrated on a website. Conducting online research will help build expertise and customer knowledge. Bench- marking other companies with expertise in critical competencies will give insight into best practices and highlight success factors as well. Reading and critiquing catalogs will help provide the focus for competency basics.

Prospecting and Promoting

E-mail is a form of direct marketing and also a technique used by catalogers to provide lead generation. Online merchants are using e-mail as a prospecting tool. In fact, direct marketers of all types are using the vehicle as well—and most expect to increase the practice. The majority of direct marketing efforts are targeted toward acquiring new customers. In addition to e-mail, they're using traditional direct mail, direct response promotions, and other aggressive methods to both build their markets and retain existing customers.

The list is key, and catalogers manage their own databases and purchase names from select lists. These are widely available, but in order to choose the appropriate list, catalog firms must be very familiar with their target and potential customers.

Special offers and coupon insertion in catalogs bring in additional orders. Internet coupon use has grown by a third, even though only half of all coupon redeemers have Internet access. E. customers go to the web expecting to find bargains. These tools and others help remind customers of the opportunities awaiting them on the web or through a catalog.

Retaining customers may take different tactics than acquiring new customers. Of course, it's less expensive to keep loyal customers, but it will be necessary to broaden the customer base if e-tailing is to grow. Keeping the ordering process simple will ensure repeat sales. Customers should be reassured at each ordering step and given final confirmation for their orders. Otherwise, customers wonder if their orders really did go through or wound up in a "black hole."

The online population is changing and becoming less technical. Early adopters loved the technology, but today's customers are more concerned with convenience and are less technically. sophisticated. The newest opportunity focuses on late Internet adopters. Techniques that e-merchants used two years ago may be outmoded today. Today's consumers have new needs and less patience for technological glitches. These customers want to emulate store shopping in the convenience of the home. They don't surf; they browse. That's why learning from catalogers, who have perfected selling to this same audience, is important.

Some Internet companies are promoting their websites through traditional methods such as FSIs, the freestanding inserts found in Sunday papers. With the website address printed for customers along with information and a coupon, new prospects are enticed to give the web a try.