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Don't Let That Pendulum Hit You...
in the Derriere

Know what? About 90% of all new businesses fail. Period. Product, service, bricks-and-mortar, mail order, B2C, B2B, A2Z - you name it. It happens for any number of reasons: bad planning, poor location, shabby customer service, short-sighted management decisions, insufficient cash flow, weak marketing, and more. But no matter how you slice it, lasting commercial success comes to very few. So why should we expect e-commerce to be any different? We've got to ask an even louder “why” when we look at the fact e-commerce has only been around for a couple of years. Heck, we’re still just figuring it out.


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See the GROK at the e-commerce summit in Rome, Italy 10/03/2001 - 10/05/2001


Best of 2000: WINNER -
Grok Dot Com


Venture capitalists who couldn’t wait to pour in cash just a few months ago suddenly have been afflicted with a deafness of Biblical proportions when they hear “dot com.” The NASDAQ has beaten the dot coms to a pulp. And, sadly, some pretty innovative and strong players are biting the dust. Word on the street, word in print, word online, word on the air: Internet B2C is dead. Just one problem: nobody told the consumers, who keep buying more and keep buying more often.

Admittedly, some of us forgot to buckle the belts on our Reality Seats, but what's going on out there is not the Decline of Western Civilization a la Web. All we are witnessing is that old, familiar pendulum swinging back from its latest peak. So it turns out the Internet isn’t a get-rich-quick machine that defies all logic and all history. Big surprise. The thing to remember about a pendulum is that it keeps swinging.

Fortunately, there are folks out there who view all this for what it really is: a bump in the road of continuing e-commerce progress. And what they are saying should be music to your ears.

EMarketer co-founder Geoffrey Ramsey predicts that despite a slowdown in growth, 2001 will see e-commerce sales increase 57% over year 2000 figures. "The fact is that the Internet is not going away, and we're going to continue to see a migration of dollars," says Ramsey. "E-commerce is chugging along … It's a snowball that's grown and grown, and people [who] have bought online before will continue to buy online, and they're going to buy more," although, "businesses are really having to tighten their belts and [get] smarter about running their business."1

A separate forecast by Gartner Group, Inc., predicts the North American Internet retailing market will grow from $16.7 billion in 1999 to $142.4 billion in revenues by 2004, a compound annual growth rate of 53%!2

Nice, non-scary numbers, huh? But to get there, we're going to have to make some changes. Stephen Dull of Andersen Consulting reminds everyone that Internet-based commerce as it is currently being practiced is not close to meeting consumer's needs. "Half the people we surveyed are neutral to very disappointed with current Web offerings. That's an enormous well of dissatisfaction. No business can survive with that strength of dissatisfaction."3

I probably sound like a broken - uh - CD, but instead of focusing precious dollars on marketing, advertising, promotions and price discounts, e-tailers need to pay attention to creating value for their customers and earning loyalty. They need to rethink their privacy policies and the value of personalization, support more than the “idea” of Customer Service and get real about the consumer's desire for speed rather than media richness (to name just a few).

Mark my words; the pendulum will come back. Already, wide scatterings of seeds are being sown for a "Back to Basics" movement in e-commerce as, right and left, folks are recommending stuff like "knowing one's customers", "delivering a Web experience that customers really want" and "earning money" (you will recall this is e-commerce). Of course, folks are also recommending it's a good idea to have enough capital to ride out the bumpy spots along the way!

Personally, I think Dana Blankenhorn, in his inimitable style, has said it best:

"To many reporters, especially those with friends who lost their careers reaching for dot-com riches, [this downturn] proves the lesson of Dorothy in "The Wizard of Oz." You should stay home, you shouldn't take risks, and there's no place like home. But the real lesson of the film is different: Everyone grows up, and without adventure the world's just gray. …

"Even if you loved a start-up and lost, however, you've had an adventure and are ready for another one. Another ship will beckon and another and another. Some will founder, but some are bound for glory. The only way you'll know which is which is to get on board."4

So are you going to hibernate, or are you going to meet the challenge? Check the weather, dress right, and get going. And oh, yeah … don't let that pendulum hit you in the backside on your way out the door!

1 "E-Commerce to Grow 57 Percent in 2001." Jon Weisman, January 8, 2001. E-Commerce Times.
2 "Retailing Web Sites Face Tough Future." Candace Talmadge, December 24, 2000. Internet Report.
3 "Retailing Web Sites Face Tough Future."
4 "Start-Up Love Will Go On and On." Dana Blankenhorn, January 11, 2001. ClickZ. <http://www.clickz.com/cgi-bin/gt/print.html?article=3152>


click here for a printable version of this entire article


Coming soon to a website near you – 
in fact, maybe YOURS!

Dear Digital Entrepreneur:

You guys and gals have been asking and asking, so OK: on March 1 I’m gonna start making house calls. That’s right, I’ll be visiting your own websites and then writing in future issues about how you can apply the stuff we talk about here.

So, want a free Grokanalysis of your site? It’s simple. Just click here, fill out the form, send it to us, and if I think your site illustrates something that will be of interest to a lot of our readers, you’re in!

Good luck!!

The Grok

Buying is Not a Rational Decision

You've heard me say it many times: to succeed out there in commercial cyberspace, you've got to speak to the need your customer feels. I don't say it just because I think it sounds clever - I've got lots of good reasons, not to mention all of the history of successful selling to back me up. And remember, online the customer rules like never before. You go ignoring your customers' needs and feelings and you won't be online for long. It's one of the caveats in convention sales training, too - if you want to sell, you've got to think like your customers rather than try to make them think like you. Or in Grok-talk, you gotta surf a mile with their mouse.

But underlying that is an even deeper principle:



Excuse me for shouting, but it’s that important. The single biggest motivator in buying is not data, nor is it facts, it’s emotional response. Humans buy when they feel comfortable, when they feel they can trust you, when the process feels natural and reassuring, and when they come to the feeling that buying will make them feel good. (And by the way, Martians are no different.) Fail to address that, and most of your prospects will bail out sooner or later in the process. Tap into that correctly and your conversion rate will go up dramatically.

No, this isn’t some kernel of interplanetary wisdom I imported from Mars. You folks have known this about yourselves for a long time. My job is to tap you not-so-gently on the head and point out you’re not using it in the design and implementation of your site.

Even a cursory search on the Internet gets you this sort of information:

People buy on emotion and justify with fact. You may resist this statement. You may want to shout, "No! No! No! I am a rational, cognitive human being! I make calm, considered, well-thought-out decisions! I do not buy on emotion! … By the time you've finished this book, I hope you'll have this principle scrawled across your time manager, emblazoned on your desk blotter at work, taped to the dashboard of your car, and posted on your refrigerator at home.”

All buying decisions are emotional.

People have both logical and emotional buying motives. Recent consumer surveys show that, in most cases, 20% of the decision to make a purchase is logical and 80% is emotional. Logic is reason supported by facts. Emotions are feelings that cause us to act and react and can be a large influence in our buying habits.

What is more important when persuading people, facts or emotion? Easy question, huh? … I don't mean to imply that customers never want cold, hard facts. Of course they do. You should always have them available and prepared in a very professional manner, and present them when the time is right. But it is not facts that convince customers to go with your company. It's emotion.

Picture someone going into a bookstore to browse for something new to read. While exploring the shelves, the thing that will compel her to browse a book first and foremost is the cover. It might be the color that is eye-catching, or a picture on the cover, or a design, or the way the title is printed. Yes, she might read the blurb about the book, but only after the “presentation” attracted her by how it made her feel.

Now think of a parallel non-retail example. Let's say you are hiring someone to oversee backend fulfillment. You’ve culled a handful of resumes that present you with lots of facts about the people who seem most qualified. Do you just call the one with the most “points” and offer them the job? No, the next step is you meet them face to face. One applicant has all the right qualifications and presents himself well, but you’re looking for that Certain Something that convinces you he's your guy, and you can’t feel it. Another applicant has similar qualifications, but she comes across as charming, effervescent, determined, a team player and an innovator. Bingo! Your Certain Something Meter lights right up. Who are you going to hire? Qualifications being reasonably equal, you're probably going to choose the person you feel better about.

The truth is, you probably decided which person you were going to hire based on your emotional reactions even before you gave the final decision any focused thought. Deep within humans is a core of essential values that ultimately governs how you interact with the world. The filters between this core and all the physical stimuli outside you are your thoughts and emotions - and emotions lead the field when it comes to the decisions humans make. Far more often than not, a person knows how she feels about a particular choice long before she has articulated it in actual words. Most of the time by far, thought clarifies, justifies and rationalizes what is fundamentally an emotional impulse.

How this can help your conversion rate ought to be pretty clear by now. There's tons of stuff out there clamoring for your prospects’ attention - lots of products and services, lots of competition, lots of messages. So how are you going to distinguish yourself? What is it about you and your enterprise that’s going to reach out and grab those potential customers and proclaim, "We’re the people you want to be doing business with!”? The answer: your ability to deeply engage your prospects’ emotions in addition to, and even above, their intellect. Your design, layout, copy, balance between graphics and text, download speed, even your colors and fonts, much less your overall information architecture and usability, all either draw your prospects in or push your prospects away - emotionally. And your implementation of online expert sales processes, or not, will determine precisely how well you engage different personalities in the different ways they prefer to be engaged, as well as how effective you are in guiding them to a buying decision that feels right.

It works online the same as it does offline (and why did anybody ever think otherwise?). Folks want to buy from businesses that make them feel good. If you're going to close more sales, you must acknowledge their need for trust. You must mirror their values. You must inspire confidence. You must appear empathetic. You must communicate that you are responsible and dependable. You must offer them a delightful shopping experience (this is not to say you must entertain them … that's proven to detract from buying). And through it all, you must convey persistently that you understand their emotional needs as well as their material ones.

According to one company out there, "The most successful salespeople possess the noteworthy ability to effortlessly get into the buyer's mind and create exceptional value based on "the buyer's" thinking." They’ve got it right, they just haven’t articulated it right. “Thinking” from the buyer’s point of view helps you get them feeling all of those things we just listed, which is what gets them to want to buy from you. If you can get their Certain Something Meters vibrating, you are well on your way to distinguishing yourself from the crowd and increasing your online sales, by a lot.

click here for a printable version of this entire article

GROK is taken from the landmark novel "Stranger in a Strange Land", by Robert A. Heinlein. It is a Martian word that implies the presence of intimate and exhaustive knowledge and understanding. Our "GROK" is a keen observer of the world around him and he takes a particular interest in the World Wide Web. The folks at Future Now like him a lot because he's taught them that "sometimes the price of clarity is the risk of insult."

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