Internet Interest Group: Getting Results From Your Web Site

April 30, 1998

We all know how it goes:

’It says here we should be on the Internet’
’Doesn’t say’

E-Business is the latest fad, and looks likely to be the most importantchange in the Internet over the next few years. January’s Internet InterestGroup meeting on web site design gave us the hard facts and future trends on whyand how we should be developing our web site strategy.

Steve Bowbrick of Web Media gave us an overview of how the IT sector ischanging the way we think about business, while Michael Kaye of Kaye, Tessler& Co tied down specific web site strategies that turn web sites into feeearners.

Key Trends

In the first talk, Steve Bowbrick outlined the seven key technology trendswhich will affect our web site strategy.

The ‘Plug in’ Service Sector

The Internet will empower the customer at the expense of the producer. Thisthreat is especially present in the service sector. Customers will be able totailor the services they require, reducing the effectiveness of cross-selling.The ability of the Internet to compartmentalise will allow the customer tocherry pick ‘plug in’ services, based around a main brand. Thus, the aim forevery service web site will be to reinforce their brand as a trusted supplier.

Core & Periphery Functions

Core functions of a business will be threatened by IT. However, they can bedefended by offering peripheral services. Steve concluded that firms shouldre-examine what services they provide, and which they charge for, re-evaluatingthe value of these services to the client. Customers will be looking for morethan the core value of a service. As a result, peripheral services will increaseas a support in selling the core services. Core product development cycles mustaccelerate, while peripheral services reinforce customer loyalty and investigatecustomer needs for new core services.

Customer Retention Costs Rocket

Traditionally, acquiring a new customer is the most expensive marketingactivity. The information processing ability of technology is changing this. Forthe Internet customer, product search and comparison costs, as well as productswitching costs, are low. The implications are that retaining customers is goingto become far more expensive than just acquiring them.

Service Pricing Can Only Fall

The closer the industry to the technology sector, the closer the link to thefreefall in prices. Just as in the IT sector, prices freefall once the ‘newproduct’ premium is exhausted. The services sector will follow this model.Lessons from the IT sector help us anticipate the potential changes this willbring.

The Brand of Trust

As the Internet continues to grow, successful Web sites will differentiatethemselves by being the customer’s trusted brand name. Branding will be a keymarketing tool of web sites. Companies must guard their reputation as serviceproviders through the quality of service provision and defending from outsidethreats to the brand.

Hyperintermediation’ – a chance to go direct

New kinds of service providers are emerging, analysing product and servicevalues for consumers. Whilst consumer reports have always been available, theInternet equivalents will be more pervasive and more challenging to producers.Potential clients will be able to differentiate between firms much more easilyand faster.

Connectedness Feeds Itself

A critical mass of Internet users has been reached. Just as the fax machinechanged the way we worked, so too will the Internet, making it the crucialbusiness tool of the late 1990s. As the online community grows the value of aweb site presence will too.

Selling Legal Services

Michael Kaye talked the group through the development of web sites and howtoday’s innovative web site strategies can help sell legal services.

Traditionally web sites were ‘brochure sites’ transferring marketingmaterial direct onto the web site. These ‘First Generation’ sites addedlittle value above that of the paper equivalent. ‘Second Generation’ sitesmoved to exploit the new technology. Their special design mainly exploited thehypertext nature of links to other sites. Users could tailor the site’scontents to their need.

Today’s legal web sites are starting to become fee-earners in their ownright. Michael used his own web site –– to show how a High Street firm approaches the routine aspects of initialclient contact, using the web site to prepare client information. This effect ofusing ‘form-filler’ web sites transformed the previous loss leader willsservice into a profitable activity by cutting the processing time in half.Despite the relative ease of such a technique, few firms are developing suchsites. For instance, in the case of recruitment, few firms allow graduates tofill in and submit application forms on their web sites.

But what of tomorrow’s web sites? ‘Fourth Generation’ web sites willincorporate newly viable technologies. Up-coming Internet security systems looklikely to transform the risks of using the Internet. These new standards ofsecurity will allow clients access to their own case files over the Internet.Payment over the Internet will be more common-place. Fraud will still be aproblem, just as with other payment systems. Perhaps the turning point will bewhen the available services offer the customer enough value to outweigh theperceived risks.

For information about the Internet Interest Group, please contact NigelMiller of Fox Williams on 0171-628 2000 or by email to