BMUG Roadside Resources 2/BMUG_Roadside_Resources_2_CD-ROM.dmg/Complete Books/eMarketing by Seth Godin

Text File | 1995-06-27 | 530KB | 11,133 lines

NOTE!

This is the entire text of eMarketing, by Seth Godin, published by Perigee Books,
part of The Berkley Publishing Group.

The text is copyright 1995 by Seth Godin. You may not reprint or excerpt this
text in any way without written permission. You should feel free to distribute
this electronic document as is, as long as you do not edit it, format it or sell
it.

The actual eMarketing book is available at all local bookstores. If for some
reason the store is out of stock, they will gladly order it for you. The ISBN is
0-399-51904-1. The book retails for $14.

The bookstore version of the book is handsomely designed, sits nicely on your
shelf and is easier to read in bed.

Comments? Send them directly to the author at [e-mail].



Foreword

"The future is not what it used to be."

Paul ValÇry

Paradigm shifts don't come along very often. But when they do occur, they change
all the rules. Because they're so rare, most of us don't recognize a paradigm
shift while it's happening. And then by the time we recognize it, it's too late.

The invention of the supermarket led to a paradigm shift. So did the success of
the car and the creation of the suburbs. Think of how your parents could have
profited if they had seen these seismic shifts coming.

eMarketing is about the greatest paradigm shift of this century. It revolves
around two critical issues:

1.    Companies can have dialogues with large numbers of individuals at very
little cost.

2.    Companies can keep track of individual habits, estimate individual desires,
and work to satisfy them.

Over the next few years, there will be countless bumps on the Information
Superhighway. Companies will fold, billions of dollars will be lost. The
naysayers will call it all a fad, and turn back to their traditional businesses.

The naysayers are wrong. The changes occurring as you read this are profound, and
they will fundamentally change the way business is conducted. Consumers will find
it far easier to spend money, and astute companies will find it far easier to
generate a profit.

Some of the technologies described in this book are crude at best. They're the
equivalent of silent movies in the evolution of the motion picture. But they
work, they generate profits, and businesses are using them to great effect.

You can't profit from this revolution until you get yourself involved. The
learning curves are steep, there are risks, and the payback may not occur for
months or even years. But the entrepreneurs who take advantage of the changes
happening today will establish beachheads in the markets of tomorrow.

Let us know what you find on the Information Superhighway. Maybe we'll see you
along the way.



Seth Godin

[e-mail]



Introduction

WELCOME TO THE THIRD

MARKETING EPOCH

We're at the dawn of a new age of
marketing _ the Third Marketing Epoch. It's an
age in which smaller businesses can easily
outmaneuver large ones. Where once large
companies will falter and die. An age in which astute entrepreneurs can make
astounding profits.
The paradigm of business is changing
for the first time in more than a hundred years.
This irrevocable change will affect the
way we buy and sell goods and services.
It will alter the structure of business
forever, and companies that ignore
the shift do so at their own risk.

Like all true paradigm shifts, this change will create mammoth opportunities for
those who see it in time. When the rules change, the companies that dominated the
old markets will have little advantage. These large companies will be hindered by
inertia and blinded by their previous success _ most of them won't survive the
transition. Just as the railroads were decimated by the shift to air travel fifty
years ago, and typewriter and word processor manufacturers never recovered from
the birth of the personal computer (remember Wang, Olivetti, and Lanier?), this
paradigm shift will create countless winners and losers.

The First Epoch

During the First Epoch, which lasted more than 4,000 years, people bought
products and services from their neighbors. Anyone who could grow corn, shoe a
horse, or make a candle could open a business, and it was easy to succeed.
Society was local, and commerce was needs-based. Virtually everyone was a small
businessperson, and each person lived and died by his reputation.

While it was easy to go into "business," it was difficult to make much money
unless you were a banker or a king. John the corner barber built his reputation
on the quality of his haircuts and his conversation. He never aspired to be rich.
One can only cut so many heads of hair in a day. This limit on the number of
hours in the day meant that few farmers, butchers, or tailors were rich.

In this First Epoch, the consumer was king. If a few villagers took their
business elsewhere, the blacksmith couldn't feed his family. If a wealthy
customer wanted a particular type of shawl or a certain spice, the small
businessman would do everything he could to fill the request. Shopkeepers and
craftsmen knew each customer by name, and relationships lasted for generations.

The Second Epoch

The Second Epoch began with the Industrial Revolution, and came into its own at
the beginning of this century. With the birth of the chain store and the Sears
catalog, the same product could be sold not just in one store, but in hundreds of
stores nationwide. Society became non-local, and commerce became wants-based.
Incomes rose, and the desires of consumers rose with them. A successful product
could generate millions of dollars in profit. Naturally, manufacturers were
ecstatic.

Several critical shifts in power took place during this epoch. Merchants gained
power, because they could decide what products were carried in their stores.
Producers gained power, because their brand names and their advertising drew
consumers into the store. The individual consumer, however, lost power. Suddenly,
his particular needs mattered a lot less.

The years immediately after World War II were the glory days of the Second Epoch.
Supermarkets, shopping malls, and television advertising created a culture that
could be addressed en masse, rather than individually. It was difficult for a
small businessperson to break into the rich world of mass marketing. Companies
such as General Motors, General Foods, and Radio Shack spent enormous amounts on
mass consumer advertising. By capturing market share, these companies generated
profits and prevented new competitors from entering the marketplace.

When small businesses occasionally did this _ Apple, Nike, and Volkswagen come to
mind _ they made headlines. They were the exception to the rule.

Breaking into the market wasn't easy, or cheap. Steve Jobs and Steve Wozniak
started Apple Computer in a garage on a shoestring. But they didn't capture
America's attention until they spent $750,000 to air a commercial during the
Super Bowl. They had to get their product into 4,000 stores nationwide, and onto
the cover of 17 magazines in one month, before they could turn an interesting
hobby into a truly profitable company.

When we think of marketing, the activities of the Second Epoch usually come to
mind: gray-flanneled men on Madison Avenue, mysterious food-testing labs run by
fictional people like Betty Crocker, and huge assembly lines churning out
slightly inferior products. The much-maligned mass-marketer was a target for
critics, as intellectuals yearned for the personal touch and high quality of the
nearby craftsmen.

The Third Epoch

In the 1990s, computer networks, fax machines, sophisticated telephony, and cable
television have transformed the marketing landscape. The Third Epoch has arrived.

For the first time since the invention of money, we can deliver products and
services directly to millions of people _ without countless middlemen, huge
advertising budgets, and the tremendous risks of mass marketing.

In many ways, it's a lot like the First Epoch. Once again, it's vital to reach
individual consumers and satisfy their desires. Companies succeed by providing
personal service and high-quality products to very specific markets. But today,
those markets aren't local. They're global.

Consider the way we buy flowers. In 1800, during the First Epoch, you bought
tulips from the merchant on the corner, who had purchased them from a local
hothouse. The hothouse didn't have very many customers, since there was no
efficient way to ship the flowers across the country.

By 1970, at the height of the Second Epoch, FTD had cornered the flower market.
You could pick a bouquet out of a catalog at a local florist shop. The florist
sent the order by wire to another florist closer to your friend. FTD took a cut
on the transaction, which it used for its multimillion-dollar national ad
campaign. FTD chose a limited number of bouquets that would appeal to the maximum
number of people _ ensuring a level of quality, but also guaranteeing a level of
mediocrity.

In 1994, at the dawn of the Third Epoch, PC Flowers sells more than $10 million
worth of flowers a year, generating well over a million dollars in annual profit
for its founder. PC Flowers has no store, no catalog, and only eight employees.
It sells bouquets over the Prodigy computer network. The company uses the FTD
network to deliver flowers efficiently, but has done away with expensive
overhead. Prodigy offers PC Flowers a market of two million potential shoppers.
Having become FTD's largest single outlet, they're now in a position to change
the way FTD does business.

Even better, look at Calyx & Corrolla. Call their toll-free number and order an
exquisite bouquet of orchids or lilies. The order is transmitted by computer
directly to an appropriate grower, who ships the flowers the next day, by Federal
Express, directly to the recipient. Calyx keeps detailed records of each
customer, and uses this data to expand its offerings and the sales it makes to
each customer.

Not only are traditional businesses succeeding in this new era, technology has
opened up all kinds of new business opportunities for savvy entrepreneurs.

Neil Shapiro, for instance, serves more than 150,000 people every day from his
spare bedroom. His job didn't even exist 20 years ago. He moderates twenty
forums, or discussion areas, on an online computer network called CompuServe. He
makes sure members have easy access to files, advice, and companionship. In
exchange for his services, CompuServe pays Neil a handsome commission. To earn
his living, Neil doesn't even have to leave home.

Barriers Are Falling, Yet Others Are Being Built

The barriers that prevented competitors from entering the marketplace during the
Second Epoch are rapidly falling. Calyx & Corrolla doesn't compete with FTD or
the local florist. Real estate isn't nearly as important as it once was. The size
of your marketing budget isn't the factor it used to be.

At the same time, other competitive barriers are rising, and quickly.
Relationships with customers are precious, and marketers who have the foresight
to establish them aren't going to surrender them easily. Once a consumer has
established a bulletin board account, or a database at the local grocery store,
or a preference list at the local record store, it will take more than a 20%-off
sale to entice that customer to switch.

Astute marketers have realized this and begun the race to establish customer
relationships. The companies that build mutually beneficial relationships with
consumers will profit mightily, and will build barriers that will last for
decades.

This book discusses the technology that makes the Third Epoch possible. More
important, it tells you how you can use these tools to your advantage.

The Third Epoch is still young, and excellent opportunities are still available.
Now is the time to build this era's version of IBM, Ford, or American Express _
before another entrepreneur rushes in to serve your niche.



Regis McKenna on the future of marketing

Regis McKenna is the founder and president of Regis McKenna, Inc., one of the
country's leading technology marketing and public relations firms. Best known for
its work with Apple, RMI has been on the cutting edge of the marketing revolution
for years. These comments are excerpts from a speech McKenna gave at the
Advanstar conference in Chicago in 1994.



There are three changes raging through our environment that are going to
radically alter the way we do business.

The first change is diversity. In 1982, there were about 80 television stations
in all of Europe. Today, there are almost 900. There are more automobile
companies today than there were 25 years ago. There are more cookie companies;
more ice cream companies. You name it, there's more of it. The average grocery
store in America has gone from 10,000 items on the shelf to about 25,000 items in
the last decade alone. There's diversity of products, goods, and services, which
means more competition, but also diversity in our society. By the end of this
decade, a majority of Californians will be minorities. There are about 250
different languages spoken in California right now.

Choice. We have more choice in our lives. If you went out to buy a personal
computer, you have a choice of 1,000 brands. If you went out to buy an
automobile, you have 650 different brands. If you went out to buy mustard, you
have 1,000 different brands of mustard on the American marketplace.

Speed is the next change. The pace of life is faster. We don't seem to have much
time much anymore. I remember several years ago talking about the 4-day work week
and the 4-hour work day. And we all looked forward to that day, that somehow or
other we would get to a stage where we would have this 4-day work week. It would
be wonderful. And instead we find ourselves on call 24 hours a day. We have fax
machines in our hotel rooms, cellular phones in our automobiles and briefcases.
And so the day is now filled with communication.

And the next thing is mobility. We are more mobile as a society. One hundred
years ago when the immigrants came to this country, they never expected to go
back to the old country, to the land of their birth. Today, people come to this
country, and even people of low income go back and forth constantly. We are
finding ourselves more mobile as a society. And people are more willing today,
because of job situations, to pull up stakes and move anywhere where there's a
job.

Finally, through all of this, we're full of information, we're more aware, we
have instantaneous access to almost anything around the globe, yet we're more
discontented as a people. And this is not just the discontent of us in this
country. There are over 50 ethnic conflicts on the European continent, and in
fact we may see that all of the individualization that information and awareness
creates may not just create this homogenous world that we all thought was going
to happen, but indeed a more conflicted world.

It's my thesis that society's institutions _ business, government, education, and
so forth _ are built on the models of the technology of the era. The technology
of the Industrial Revolution was mass production. That also happened to be the
way we designed our education systems. We put children into rows, we give them
all the same textbooks, we give them the same tests, IQ tests, move them up at
the same levels, grade everybody the same way, and any deviation you expel, which
turns out to be a manufacturing term.

In our organizations we did the same thing; we divided management and labor. It's
not efficient to have people thinking and doing, so we divided thinking and
doing. We created a design box, a manufacturing box, a marketing box, a sales
box, a quality box, and a customer box. Each person in those boxes was given a
job description and levels within those. You passed things off. It wasn't your
job to design the process. You worried about your box. Recently we found out, in
the last decade, that quality belonged in every box, and it shook everybody up.
This is a revolution, to think that everybody's job was quality. That used to be
the guy in the quality box's job, and if you had a problem with quality, you
fired that person.

So we are different today because the technology models are different. In the
Industrial Revolution, the model of mass production was largely controlled by
collaboration between large institutions and government. If you look at the
telegraph, and television, radio, the automobile _ you had to get a license to
operate all those things. And you had to have government involvement in the early
stages of these activities to allow that technology to move progressively through
society. The automobile, which was invented in the 1890s and mass-produced in
about 1914, didn't really change us as people until the 1950s or 60s when the
superhighways were created by government agencies.

So technology was very highly controlled by these large institutions and by
government involvement. We had regulated institutions, and then eventually we saw
social change. But the world is changing fast. The average home in America 25
years ago had 25 fractional horsepower motors. Today, the average home has well
over 100 microchips. My car has 56 in it. Take a look at the impact of
technology. Twenty-five years ago, there weren't 25,000 computers installed
anywhere in the world. Today, we sell about 50,000 computers a day. And now you
have 60 million homes in America that have computers in them. And you see the
growth of technology to the extent that we now have about 150 million computers
installed around the world.

So the technology moves rapidly and diffuses into society almost instantaneously.
Do any of you have a license to operate your computer? There are 25 million
people on the Internet, adding a million people every month. You don't have to
have a license to operate it. There are millions of fax machines out there. You
don't have to have a license. You can hook up and talk to anyone, anywhere,
without any interruption.

There are three factors that I see that are most important that are occurring
because of technology. One is diversity _ not only as people, but there are more
places, things, services, and so forth, and if you look at the underlying cause
of this, it has to do with programmability. Seventy-five percent of the machine
tools that are produced in the United States produce 50 items or less at any one
run. Fifty items or less at any one run! We've created the capability for an
infinite variety of short runs, for programmability. If you have a computer
processor in a product, you have a programmable system; it allows you to create
an unlimited number of applications. So programmability underlies diversity,
which gives the consumer more options. That means segmentation. We can now
segment people into smaller groups, because we can program everything. We
couldn't segment without programmability. We couldn't create these refinements
without programmability.

The second thing is that we are now in a real-time world. It used to take maybe a
week or two to confirm a transaction between London and Singapore. Now it takes
less than a second. By the end of this decade, we will be able to move all of the
information in all of the libraries of the world from point to point in under one
second. So things happen instantaneously. We live in a real-time world. We have
cut design cycles down from years to weeks and months. We have created
programmable manufacturing that says you can now manufacture in shorter cycles,
shorter runs. You don't want to have inventories anymore because the diversity
around the globe will eat away at you. And so you can't afford the cost structure
you used to have, so all organizations are downsizing in order to compete, to be
faster on their feet. Let's have less inventory, so we're now saying, let's get
that customer and the design people closer together.

The real-time world is upon us and coming even faster, and putting great demands
on marketing, because your marketing is either enhanced by or limited by your
design and production systems. If you can only mass-produce a particular product,
then your marketing is already defined for you. If everything is customizable, if
you have shorter product runs and you can customize things or program things, or
you can provide variations, now we're talking about service. Because service
means adding value, means working with customers to put feedback into the loop.
We didn't need service 25 or 30 years ago because you just put the goods out
there and there was less competition, in a mass-production environment.

Finally, the connections. In a highly diverse world that's real-time, you can't
deal with it unless you're connected. You know, you've probably recently read
about Ford Motor Company saying it was going to reorganize worldwide. Why do
that? Well, you can't have 25 different locations buying parts, because you're in
a competitive world today. You've got to have one region or two regions and
they've got to be connected so you don't have 25 different inventories all
duplicating efforts. With telecommunications and satellite technology, we can now
connect the world and provide more efficiency.

Let me get back to diversity for a second. Here's a question for you: Who owns
the largest market share of the personal computer business? The answer is
"other." And who owns the largest market share of beer in the United States? It's
not Budweiser, it's other. And cookies? It's not Nabisco. And fast foods? It's
not McDonald's.

So think about what it does to the consumer. Forget about the manufacturer for a
second. Think what happens to the consumer when the consumer has lots of choice.
What happens when you have lots of choice is you can be fickle. When you have
that many goods, you have diverse products on the shelves. When you have diverse
products on the shelves, you have customer choice. Which means the decline of the
megabrand.

So the major brands have been declining, and what brands are growing? Other. And
they're growing because they can be produced cheaper, and we are more aware as a
society, and we know that all soaps have phosphates in them, and they're all the
same anyway. It's demanding more of us in terms of service, of understanding the
consumer.

The Conference Board, a nationwide research organization, did a survey of about
300 senior executives from major corporations around the world a few years ago.
And one of the conclusions was that they believed that the marketplace would
continue to be full of surprises, that extrapolation of past business trends into
the future is no longer possible. All business is based upon looking at the
history and extrapolating the future. But the future has very little to do with
the past these days.

Porsche lost 80% of its U.S. market share in the last five years. It wasn't
because they have a bad product; they have a fairly good product. But what
changed? The economic environment changed. The value of the deutschmark relative
to the dollar. Gas guzzler tax and luxury tax added thousands of dollars to the
cost. Social changes. The yuppies of the 80s now have kids and are buying
minivans in less than a few years. The whole world around us, economic,
political, social, and technological changes occurred so fast that the old
institutions couldn't keep up. They weren't in touch.

That's why I think that what we're talking about is real-time marketing, the
ability to create a dialogue with the marketplace on a real-time basis. And that
means moving from a monologue to a dialogue. Most promotion today is a monologue.
We sit down and we design advertising to tell our customers what it is that we
want them to think. The language of advertising is, how many impressions did you
make today? Again, that's the old industrial model, as if people are sitting
there waiting for you to go ka-chung, ka-chung, ka-chung, ka-chung, and all of a
sudden, a pattern is established in the brain that says this is brand, and
therefore I buy it.

Madison Avenue says awareness leads to behavior change, but it isn't true. We're
aware of a lot of things we never buy. If awareness led to behavior change, we
wouldn't have any problems in anything. And the companies that advertised the
most would be the most successful. In 1992, the largest advertisers in the
computer industry were IBM and DEC. The largest advertiser in 1973 in personal
computers was Texas Instruments. Where are they now?

IBM spent $100 million on PC Junior, and it failed. The average individual is
exposed to 2500 commercials a day. If you watch television, as a normal human
being, each year you are exposed to 200 hours of commercials. Awareness

doesn't lead to behavior change. What leads to behavior change is a dialogue, is
experience. We change through experiences.

I once heard George Burns giving a little talk, and the commentator was praising
him and Gracie on their successes over the years, and George Burns very modestly
said, "No, it wasn't us, it was our audience that made us successful over the
years." And the commentator wanted to ignore him. But he said, "No, no, no, it
was our audience that made us successful." And he went on to explain that what he
did was that each night they would come up with different routines and play them
to the audience, and they would watch for reactions. And when they got positive
reactions, they would start building on those routines. And when they got a
negative reaction, they'd drop them. That was real-time. They would sense, they
would see, they would watch, they would feel, and then they would build. And
that's what real-time marketing is all about. It's a dialogue of reaching the
marketplace, sensing what's going on. It is not about trying to make a large
number of impressions.

Marketing is a learning process. It is not something that you do, it is not
simply a transaction in which you're doing all the action, you're not marketing
at people, it becomes a learning process so that everything you do, you're
gaining knowledge, in order to enhance, to build, to change, and to incrementally
improve what you do. And everything in the future is going to be integrated with
a service. Everything. Every product is going to become more servicelike. Because
again, the way to differentiate yourself is no longer through the technology
itself, but in the use of the technology to create a tool for improving service.









New Rules for New Media

Redgate Communications Corporation, founded in 1985, builds revenue-generating
interactive new media environments and manages multimedia content databases,
delivering the content via custom publications, CD-ROM, cable, broadband, demand
fax, private satellite networks, online services and digital shopping clubs.



Redgate publishes the Macintosh Product Registry, is an equity partner in the En
Passant digital shopping venture, and created Interactive Information Networks.
The company was recently acquired by America Online, Inc., and is headquartered
in Vero Beach, Florida.

1.    Market digitally.

Everything required to move from the industrial age solidly into the knowledge
age has been invented and will soon be put into place. It's all digital. It's all
for the purposes of storing, retrieving, and making personal use of vast amounts
of information. Think digitally. Breathe digitally. Execute digitally. A new
media basic.

2.    Tell. Don't sell.

Marketing and advertising communications previously aimed for people's emotions.
Now the target is your customer's savvy brain. Knowledge-age customers want to be
well informed, not sold. They know what they're looking for. They're looking to
see if you have it. If you do, tell them. Inform without hype, in depth and with
utter accuracy.

3.    Own the data.

Don't just gather it. It's your surefire route to that targeted customer. Among
other things, owning the data means you own the right to receive data changes and
updates as they happen, not weeks or months later, when it may be too late. And
that same data, so long as it's focused and current and coincident with a sound
strategy, enables you to hold the media accountable for marketing successes or
failures. In fact, accountability is a prerequisite for anything that calls
itself "new media."

4.    Forget mindshare.

"Mindshare" was the coveted goal of industrial-age marketers who practiced
one-way communication. New media, even at its most basic levels, is two-way
communication. It's interactive. If you've done your homework, the customer ends
up getting into your mind...into the heart and soul of your company. You aren't
buying mindshare anymore. You're buying timeshare. You want your customer to want
to spend time with you...as much time as possible.

5.    Hide nothing.

In the industrial age, you told customers what you wanted them to hear when you
wanted them to hear it. In the knowledge age, you have to tell them everything
they want to know when they want to know it. New media like infomercials, CD-ROM,
fax on demand, telephony, and online computer services give you all the time in
the world to do just that. Use that time well. Hide nothing. Show everything.

6.    Create for buyers.

Your customers are turning to new media because they're ready to buy and they're
ready to buy now. Create accordingly. Create for buyers who want every ounce of
information at their disposal. Create as if the purchase is imminent.

7.    Create electronically.

Use the world of digital electronics as your layout pad. Realize that creativity
today must often embrace text, graphics, video, audio and animation all at the
same time, and will most often be an interactive creative product, with your
customers having final say over how the information will be received and fed back
to you. Make the shift now from the world of magic markers to the magic of
computers.

8.    Know your customer's nickname.

There's no such thing as the masses anymore. Targeting and segmenting is crucial.
So recognize the uniqueness of each and every one of your customers. Know ages,
incomes, lifestyles, and habits, as usual. But also know how each customer is
distinctly different from the next. Know their very special needs. Know them by
their nicknames and the sizes of their socks if you have to. Then customize your
message (and your product or service) to suit each one.

9.    Forget your customer's fax number.

Not right away, though. The fax machine is still with us, but it won't be for
long. Get ready for enhanced, sophisticated electronic mail _ e-mail that can
transmit not only text, but also graphics, audio, and video. It's coming.

10.    Generate reality, not image.

Say good-bye to selling status. Stop thinking of your customers as people who buy
just to have more and more possessions or the latest version. Now they're buying
for the best reasons: to make life easier, safer, or more fun. They're buying
because they have a genuine need, and that's because they've become more genuine
as people. Get real. Nothing less will do.

11.    Make acquiring knowledge fun.

New media is about satisfying your customer's hunger for knowledge. If you really
want your customer to learn about everything you do and about everything you have
to offer, take a lesson from the world's best teachers: make it fun. Make the
process an enjoyable, rewarding experience. Your customer will reward you in
return.

12.    Make accessing knowledge easy.

Point. Click. Touch. Retrieve. If you make it any harder than that for your
customers or associates to access knowledge, they won't. You have to think
digitally and you have to function electronically in order to survive in the
Knowledge Age, but your customers want the electronic aspects to be invisible.
Make sure they are.

13.    Be ready to transact.

New media is about having relationships with customers, even entire markets. Get
ready to have millions of transactions each and every minute. The transactions
can last but a few minutes or a few months, depending on the size and complexity
of the need and the offering. A cable TV home shopping channel can respond to
20,000 calls a minute. Is your business up to handling that?

14.    The customer is still right.

And the customer is still king. But in the age of knowledge and new media, the
customer is also prime minister, president, chief information officer, and
controller. Respect customers as you've never respected them before. Satisfy
their very real need for quality, timely and accurate information, and value.
Make your customers as central to your company's success as your employees.

15.    Respect the earth.

New media connects us all in ways that save mountains of wear and tear on the
planet as well as our nervous systems. Working and shopping from home, video
conferencing and other telecommunications will save energy, reduce pollution,
reduce highway accidents, and increase productivity to the tune of $37 billion in
annual benefits by the year 2010. New media is a path to good citizenship.

16.    New media is new revenue.

Information is valuable. And knowledge age customers want to know what your
company knows. So the sooner you can turn your content and information into
digital matter, the sooner it will earn you money. A number of digital content
delivery vehicles now available make this possible, including 900 numbers, fax on
demand, and CD-ROMs. You'll also want to consider owning a cable channel (or two)
in the soon-to-be-delivered universe of 500-channel television. New media is
costs turned into profits.











DATABASE MARKETING

Using technology to improve service is the heart of every concept
discussed in this book.
A recent Bain & Co. study confirms a
commonsense hunch: increase customer loyalty
and you'll increase profits. This theory doesn't
surprise many people, but the sheer power of
customer loyalty did. The study showed that a 5
percent increase in loyalty can translate into a 60
percent increase in profitability.
In this book, you'll learn about all kinds of
technology-based tools that will increase the
effectiveness of your marketing. But all of them are virtually useless without a
brand-new attitude. Unless you sign on to the element of eMarketing that's
the crux of it all _ the basis for all of the other
eMarketing concepts _ you'll remain
stuck in the mass-marketing 1950s.

What is this revolutionary concept? Database marketing. To succeed and grow in
the 1990s and beyond, you have to use database marketing to identify your
customers precisely, market to them efficiently, and keep them as loyal customers
forever.

Database marketing focuses on gaining customer share rather than market share _
that is, using information about the customer to sell more to that customer
rather than selling to more customers. By shifting your focus to customer share,
you can expand your profitability by increasing revenues from each repeat-buying
customer.

Harlequin publishes romance novels that sell millions of copies a year. Yet a
tiny fraction of the population actually buys these books _ far less than 10
percent of all women account for 90 percent of the company's sales.

So why should Harlequin market to everyone? Ninety cents out of every dollar it
spends on mass marketing is wasted.

This 90/10 rule is true for almost every business. In fact, many businesses are
closer to 99/1 _ one percent of the population accounts for 99 percent of their
sales. Yet businesses continue to market to huge populations, constantly trying
to acquire new customers when their old customers are more than willing to buy
more from them.

Database marketing isn't just a game for the big guys with massive computer
capabilities. The principles American Airlines uses to make certain air travelers
"customers for life" are the same ones that can help the tiny pharmacy on Main
Street stay alive in the shadow of Payless and Wal-Mart. New information
technology puts the smallest database marketer on equal footing with the giants,
helping her strengthen her position in the face of the fiercest competition.

The Death of the Mass Market

Although it's been around for years, database marketing is now vitally important
because the mass market is collapsing. It's getting harder and harder to sell one
standardized product to everybody. For the first time since the end of World War
II, the individual customer is king. Early in this century, Henry Ford was able
to build millions of cars (in any color _ so long as it's black) and take
advantage of mass production. With the consumer boom that extended into the
1970s, manufacturers were worried far more about meeting exploding consumer
demand than about customizing their products for niche markets.

The boom sagged in the 1980s. The number of new products began to exceed the
number of people clamoring to buy them. Store shelves are groaning from the
enormous variety of products being offered. The choices are mind-boggling: the
number of products in the average supermarket exceeds 30,000. In 1993 alone, a
staggering 17,000 new products were introduced.

Years ago there were four or five beers to choose from at the corner store. Now
there are dozens. Stores sell hot sauces from 40 countries. Shoes come in a
rainbow of colors, at every price point from $3 to $3,000.

The variety of products is not the only factor at work. The fragmentation of the
media has made conventional mass marketing obsolete as well. Consider magazines:
Life, Look, The Saturday Evening Post, and other mass-market giants have been
replaced by Victorian Decorating and Lifestyle and Doll House Builder magazines.
Marketers used to rely on TV advertising that ran on one of the three networks.
Now you can no longer guarantee that you'll even reach a majority of TV viewers
with an ad schedule that narrow.

The death of the truly mass media has a marvelous upside: you can reach virtually
any category of consumer you'd like. Why waste your time reaching everyone?

Think about the products or services you offer. Are they equally attractive to
every consumer? Probably not. Virtually every product, no matter how popular, has
niches of consumers that find it irresistible. Identifying those niches and
capitalizing on them is the strategy for this generation of marketers.

The Cost of Acquiring a New Consumer

Last year, the average consumer was bombarded by more than 5,000 commercial
messages. Obviously, he ignores and forgets most of them. Think about the last TV
show you watched. What was advertised? If you're like most people, you have no
idea. More then ever, it makes sense for companies to cater to existing customers
instead of paying the significant costs of acquiring new ones.

This strategy is anathema to any old-school mass marketers. The watchword at the
giant food companies was to grab market share. Market share translates into
efficient media buys, efficient factories, economies of scale in everything from
packaging to coupons.

But without the reliance on mass media, many of these economies of scale aren't
as important. Creating a shorter run of a product that will be embraced by its
target audience is far cheaper than producing a huge run for a disinterested
consumer.

In addition to ad clutter, marketers are facing a new skepticism. Years of scams,
lousy products, inferior service, and advertising overkill have led many
consumers to be leery of almost any new product. More and more, we're relying on
the people and the businesses we trust to deliver the products we need.

Share of consumer is now much more important than share of market. How much
business you can generate from each hard-won customer is a more important
question today. If the local drugstore can persuade you to buy groceries, milk,
videotapes, and film from it, the store can increase profitability without
significant media expenses.

Reaching the Individual

Database marketing takes two concepts _ segmenting the audience and relying on
existing customers _ and turns them into a science. With database marketing, you
take the information you gather about your customers and use it to reach them on
a one-to-one basis.

If you know things about your customers, you can offer them products and services
they want. Doing the work for the time-stressed consumer helps both of you.
Database marketing gives you the tools you need to gain information about
consumers and satisfy their needs.

Don Peppers and Martha Rogers, authors of a database marketer's bible called
One-to-One (1:1) Marketing, put it this way: "As good products are offered by
lots of competitors, the best sales go to those who develop good relationships
with individual customers."

There are grand strategies and small ones, and both work. For example, in its
"Friends and Family" program, MCI collaborated with one customer at a time to
create a vast network of calling circles. The strategy brought new customers into
the fold and solidified MCI's relationship with existing customers. Few people
would switch from MCI after working so hard to convince their friends and family
to sign up for the discount. Everyone was talking (and joking a little) about
Friends and Family, and the long-distance wars were nationwide news.

Note that MCI did not engage in a mass-marketing strategy. Instead, it relied on
its existing customer base, and discovered what those people really wanted _ the
opportunity to save money on their most-called friends. By offering their
existing customers a better service, they were able to keep those customers and,
not coincidentally, have those customers bring new ones to MCI.

The more subtle strategies are equally effective. For instance, the Ritz-Carlton
hotel chain quietly maintains a customer database that records every preference
or habit a guest displays. Which hotel services _ dry cleaning, fitness club,
concierge _ does she use? What dishes and beverages does he order through room
service? If a customer goes to the Ritz in New York and orders a glass of white
wine and a glass of ice on the side, that order is recorded in the database. A
few months later, when she goes to the Ritz in, say, Laguna Niguel, and orders a
glass of white wine from room service, the wine is delivered with a glass of ice
on the side, because the Ritz knows that's the way she likes it.

This is not just a stunt. The Ritz-Carlton uses the information it gets about an
individual customer to strengthen its relationship with that customer. This
approach is the opposite of mass marketing, which uses the data about an
individual to project his habits on the whole market. In effect, a mass marketer
creates a prototype of a customer and aims broadly at that hypothetical target.
If he's lucky, he hits a few customers who want his product or service. As
Peppers and Rogers assert, "Traditional mass marketers find customers for their
products. One-to-one (1:1) marketers find products for their customers. The most
valuable thing any company produces is customers."

Take the Ritz. It could poll its customers to discover which cities they usually
visit. If a surprising number of Ritz regulars are visiting Mexico City on
business, it may make sense for the company to build a hotel there. Doesn't this
make more sense than building the hotel first, then trying to find customers for
it?

At Tower Records and other record stores, a customer can take a compact disc he's
interested in to the kiosk at the center of the store. If he has previously
registered, he can swipe his "i˘Card" through the kiosk scanner, then hold the
sealed CD up to the machine.

The kiosk will read the UPC code on the back of the CD, look up the album in its
database, and play him an excerpt! Even better, it keeps track of everything he
listens to and everything he buys.

When he registered for the i˘Card, the system got his name, address, and basic
demographic data. As time goes by, it learns what he likes and what he doesn't.

Soon, overall trends start to develop among customers. The machine learns, for
example, that Billy Joel fans often like Elton John too.

Instead of just acting as a passive preview service for sealed CDs, the i˘Station
can become a superintelligent salesperson. When the new Bonnie Raitt CD comes
out, it knows which customers bought the last three Bonnie Raitt CDs and could
send them postcards letting them know the new album is in the store. Or perhaps
the next time a customer scans a Billy Joel album, it could suggest that she
might like the new album from Elton John _ and play an excerpt for her.

The value of the i˘Station to a record store should be obvious. It changes the
company's business: now Tower Records is more concerned with finding products for
customers than with finding customers for products. The kiosk shifts a lot of
power from record companies to record stores, and guarantees that the satisfied
i˘Station customer isn't going to spend a lot of time bargain hunting at
Musicland or Sam Goody.

But what about the customer? He wins too. For the first time, there's an
effective way for him to find the music he really likes. The discount coupons
that come in the mail as a result of his having used the i˘Station are nice, but
even better is the fact that the store is trying to make him happy. He's got a
full-time music expert worrying about what album he should buy next. That's worth
something.

Rental cars are a lot less sexy than CDs, but National has managed to generate a
significant relationship with its best customers as well. A few years ago, it
introduced the Emerald Club. Geared toward frequent travelers, the club issues an
Emerald Card to club members, who pay $50 a year for the privilege.

When she arrives at the airport, the Emerald Club member goes straight to a
clearly marked island that is surrounded by the cream of the National fleet. She
can pick a car immediately, get in, and drive away. All she has to do is stop at
the security gate and swipe her card through a card reader. The scanner records
all the necessary information from her card and awards her frequent-traveler
points, which she can accumulate for benefits such as airline and hotel
discounts.

The relationship here is quite strong. Emerald Club members never need a
reservation, never wait in line, never fill out a form. The more they travel, the
more frequent-renter bonuses they get. And since it's a business expense, members
don't even notice the small service fee. Why would anyone switch?

National identified all the needs of its very best customers and met them. The
electronic card lets National identify its biggest and best customers, and the
times of the year they travel most. The company can determine which cities need
enhanced facilities. It's also in an excellent position to create co-promotions.
For example, it could offer discounts on hotels in cities it expects its best
customers to visit.

Recognize that National could never have set up the Emerald Club unless it knew a
lot about its customers. It had to know who the frequent renters were, what
cities they visited, what they wanted in a rental car. This customer knowledge,
and the desire to increase the share of consumer among its best customers, led to
a profitable increase in business.

Also note that National is able to charge for the privilege of belonging. This is
not just a marketing gimmick. Instead, National is offering something of real
value to its customers, and they're willing to pay for it.

Acquiring Data and Using It

The easy part of establishing a database marketing strategy is collecting the
data. New technologies make it easy and cheap to discover your customers' habits.
You can use UPC scanner data, membership cards _ even a simple pen and paper _ to
discover exactly who's buying what. The Database Marketing Resources section at
the end of this chapter lists a number of companies that can create database
systems for almost any company.

The hard part of database marketing is figuring out what to do with all that
data. For years, companies collected warranty cards for refrigerators, software,
automobiles, and more _ and boxed them up, unused, in dusty warehouses. The
biggest danger of database marketing is that you'll collect too much data,
overwhelming your systems and leading to paralysis.

The corner grocer never had this problem. He saw all the facts firsthand, and
knew, for example, that if a lot of his customers had babies in December, he'd
better make sure there was plenty of baby food on the shelves in March. However,
predicting the future desires of large groups of people using their current
habits is a trickier task. Collecting lots of data can raise the chance of
success _ if the data is used properly.

The most successful database marketers are constantly testing. A restauranteur
can collect the names and addresses of 1,000 people who had lunch in his
restaurant last week, for example. Instead of announcing a special dinner menu to
all of them, he can mail information to 50 or 100. Of course, the more customers
you work with, the more important it is to test. It's not unusual for a marketer
to have as many as 1,000,000 names in a database.

The cost of testing is dirt cheap compared to the benefits. A company with 10,000
customers in its files can reach groups of 50 with regular mailings on new
pricing strategies, colors, hours, and more. The cost of these mailings is low,
but the information gathered is priceless. For the first time, the company will
know what people really want.

Don't underestimate the value of a conversation. General Electric has hundreds of
engineers standing by to talk with any appliance customer who takes the time to
call. (Try it. Their number is [phone]). While these problem-solvers have
increased GE's loyal customer base, the information GE gains is perhaps even more
valuable. Their engineers know which products are easy to use and which aren't,
and they learn what other features and devices their customers need.

Using Database Marketing in the Real World

Let's say you're the local dry cleaner. Your database file on your customers
includes some vital stuff _ name, address, telephone number, the services the
customer regularly uses. Your customer base is small enough that a stack of index
cards is probably all the technology you need.

Mr. Utopi has been a customer for years. You know he brings his shirts in every
Saturday, likes them with a touch of starch, and needs them folded and in boxes
for traveling. Twice a month he brings in a suit, and maybe a sports jacket and
slacks. He's a customer with the most regular behavior. So how can you do more
for him, based on the information you've gathered on him over the years?

He's a single guy, regular habits, loyal customer. Send him (and a passel of
others like him) a promotional appeal, inviting him, as a valued customer, to
your "Let Us Do Your Sheets" service launch. He gets his sheets done for free as
an introduction, a 10-percent-off discount on his next three uses of the service,
and before you know it, your loyal customer is a loyal customer in a whole new
category _ even better than a new customer, who might just be trying you out to
take advantage of the sheets promotion.

On a larger scale, Waldenbooks, a national bookstore chain, is working hard to
keep track of what its customers buy. The store issues a discount card to
frequent buyers. Every time a customer buys a book, the store's computers record
the purchase. The potential uses for that type of information are numerous.
Walden has already started mailing coupons to frequent buyers when new books (in
categories they've previously shown interest in) come into the store.

Waldenbooks is also using its database to market more efficiently through
catalogs. In 1992, it divided its customer database into 100 distinct groups and
mailed out 12 specialized catalogs. With further testing, the chain will be able
to fragment its catalogs even further, coming closer and closer to a one-to-one
relationship with each customer.

Imagine taking it to the next level. Fans of Stephen King might receive a
postcard heralding a new novelist that The New York Times called "the next
Stephen King." Or a customer who regularly bought several hundred dollars in
books every Christmas could be invited to a special gift-buying session at the
store, when there would be extra gift-wrappers on hand to help out.

Coca-Cola has built a database of information about its 300,000 fountain
customers (stores where the stuff comes in a cup, not a can). The database
identifies the attitudes and requirements of each fountain customer, from
convenience stores to fast-food restaurants to theme parks.

The system constantly measures the customer's satisfaction level, and every
marketing communications or sales call directly addresses the customer's concerns
and interests. The best part is that Coca-Cola gets a record of the customer's
merchandising history, allowing the company to anticipate situations and help
customers increase sales. For example, if a number of stores showed an increase
in Sprite sales due to regional advertising, the sales rep could alert accounts
in the region that they ought to keep extra stock on hand. Even more personal, a
promotional technique that worked in one amusement park could easily be
transferred to a customer at another, noncompeting park.

Lowe's home improvement chain is determined to act as the customer's best ally
when it comes to building something at home. About a quarter of the company's
customers use a Lowe's charge card, so its computers know who's buying what.

Lowe's can use information on purchasing behavior to determine the lifestyle of
its best customers. The company uses this data to send newsletters to customers,
encouraging them to take on new projects, such as building a deck. Armed with
instructions and a materials list, the customer is far more likely to take on the
project. And, of course, they're more likely to buy from Lowe's _ even if they
could get the stuff cheaper down the street at Home Depot. The customer is
satisfied, and Lowe's makes more money.

Note the common theme. In each case, the savvy marketer is working to cement his
relationship to the customer by saving the customer time and money, or by making
selections and recommendations that the customer appreciates. By focusing on
share of consumer, these visionaries are making it nearly impossible for a
competitor to steal market share.

United Artists Theatres, one of the largest chains of movie houses in the
country, is testing a database technique. It gives moviegoers membership cards.
Each time a member attends a movie, the card is swiped through a scanner,
recording the movie, date, and time. The company then mails special promotions to
people they know are interested in certain types of movies. For example, someone
who went to see Terminator 2 would probably be interested in seeing Speed.

United Artists now has dramatic leverage over its competitors, and a valuable
tool to offer to movie studios. Movie marketers' biggest challenge is generating
the first one million ticket sales _ creating word of mouth and buzz. United
Artists is in an excellent position to bring those million people into its
theatres with sneak-preview marketing targeted directly at individual consumers.

Database marketing is an effective tool for reaching your competitor's customers
as well. Catalina Marketing offers direct distribution of food coupons at 80,000
cash registers around the country. For a fee, Catalina will deliver a coupon for
your product to any person buying your competitor's product instead. This precise
targeting has had extraordinary results. It costs a brand marketer $7.50 for
every traditional coupon redeemed by someone who isn't currently using their
product (there's a huge amount of wasted printing). With Catalina, it costs about
$2.42.

Sharing Data

Once you know something about your customers, you have something of value. Use
this information carefully, and you can benefit your customers and your bottom
line. If you sell your customer data to every Tom, Dick, and superstore, you may
generate short-term profits, but you won't develop customer loyalty. Limited
trades and co-promotion make much more long-term sense.

Some analysts predict that innovative companies will increase their data sharing.
If you want to share data with another company, ensure that:

˘    company principals know and trust each other

˘    databases are of comparable size

˘    there are strong market affinities between the databases

˘    you get an agreement in writing

˘    a third party does the data processing

˘    all parties have agreed about what they will and won't share
(confidentiality is key)

At the simplest level, the stores in a strip mall (a dry cleaner, an optician,
and a florist, say) can exchange their customer lists. They know that these
customers are willing and able to come to this mall. Offering the customers of
one store a valuable coupon to try the other store is a win-win promotion. When
the florist shares her mailing list, she doesn't have to worry that her customers
will suddenly start buying bouquets at the optician. But if they come to the mall
to take advantage of the optician's special on contact lenses, they may spot the
florist's display of roses and buy a dozen on impulse. At no risk, the florist
has increased her profitability. So, of course, has the optician.

Rodale Press and the Meredith Corporation exchange data to increase sales for
their book divisions. The typical reader of Meredith's magazine Better Homes and
Gardens is a generalist, but Meredith can determine which readers have specific
interests, such as gardening, cooking, or decorating. This affinity information
is of great interest to Rodale, a publisher of books on such topics. In exchange,
Rodale gives Meredith its mailing list, which Meredith uses for subscription
promotions. Both companies have databases of similar sizes, so one isn't getting
more out of the arrangement than the other. And although technically they are
competitors for readers' dollars, they each have a slightly different position in
the market, so the information they share enhances and strengthens each other's
presence.

Ten Core Concepts of Database Marketing

˘    Frequent purchaser prizes

American Airlines invented this incredibly powerful technique. By giving
customers an additional reason to stay loyal, you increase their investment in
your company every time they buy your product or service.

˘    Reminders

Calyx & Corrolla Florists will call customers eleven months after they sent a
bouquet for a special occasion, reminding them what they did last year and asking
them if they want to do it again.

˘    New products

The best way to perform research and development in most industries is to ask
your customers what they want. Then make it. Hard Manufacturing asked pediatric
nurses how it could improve its line of hospital cribs. Nurses asked for a
built-in scale. Even though the new crib cost more than double the standard
model, hundreds flew out of the factory, generating significant profits.

˘    Predict future habits

People who buy houses eventually buy furniture. Families with babies will need
strollers pretty soon. Track this behavior, predict it, then offer a shortcut.

˘    Segment your audience

Don't send a perfume sample to someone who's allergic. People who like science
fiction want to hear about new David Brin and Star Trek books. Save your money
and your customers' time by sending promotions to interested customers only.

˘    Be a smart friend

You have access to a huge amount of product information. Your customer is too
busy to gain your knowledge. So share what you know and save the customer time
and money. Chemical Bank has a huge, accurate database of corporate clients. Its
bankers can identify programs that will generate profits for these customers and
then let the customers know about them.

˘    Offer discounts

It costs much less to market to an existing customer than to obtain a new one. So
keep existing ones happy and reward their loyalty by offering them special
frequent-buyer discounts. Egghead Software offers customers a CUE card which
generates an instant rebate at the cash register.

˘    Identify the stars

Most businesses have a small core of regulars who pay the bills. Identify these
people and don't let them go. Give them the best seat in the restaurant, a
special line at the checkout, or advance notice of your end-of-season sale. In
Step, a Manhattan shoe store, sends a postcard out two weeks before a big sale,
offering regulars a special day before the public gets the discount.

˘    Co-market

Acquire new customers by leveraging a noncompetitor's relationship with his
customers. The trust is often transferable, so you can frequently acquire a new
customer at a fraction of the cost of persuading a stranger to spend his money.

˘    Identify new markets, locations, and delivery mechanisms

Find out where your best customers like to shop, what they like to buy, and
whether they want home delivery or a subscription service. Then give it to them.
Green Mountain Coffee Roasters polled its customers to discover that a
subscription-based coffee delivery service was at the top of its customers' wish
lists.



Interview with

James R. Rosenfield

In his 25-year career, James R. Rosenfield has become one of the world's most
respected marketing and direct/database/relationship marketing authorities. His
major area of expertise involves the application of direct/database marketing
techniques to nontraditional environments, such as consumer products, financial
services, and travel.

He writes regularly for publications worldwide, and has published over 200
articles and monographs. He is also the chairman of Rosenfield & Associates.



Q:    What are the problems marketers face in the 1990s that database marketing
might solve?

A:    One of the reasons for the fashionability of database marketing is that the
mass market has conspicuously collapsed _ that's pretty old news by now. Combine
that with the fragmentation of media, and it makes the conventional means of
delivering mass messages in fixed forms to large audiences obsolete. It raises
the question, "How do I communicate on a more individual basis with people?" and
that leads to the idea of databases and database marketing.

Q:    When building a database, what kind of information should a company be
trying to obtain?

A:    You need to know who your customers are and what they do, and everything
else is secondary. A lot of companies don't know who their customers are. Does
Procter & Gamble know who its customers are? No. It knows its trade customers but
not its end users.

        Once you know who your customers are and what they do, you can begin
adding demographic, psychographic, and geodemographic data. You then use this
information to draw up profiles of your customers. Patterns start to emerge. You
begin to see similarities between certain types of customers. Profitable
customers will tend to have some commonalities, as will unprofitable customers.
Most customers in most businesses, though, will cluster in a middle region of
marginal profitability or unprofitability. When you compare the profiles of your
most profitable customers against this large middle group, you'll find that lots
of marginal customers look exactly like your profitable customers, except for one
thing: their behavior. Implication: these customers are giving most of their
business to your competitors. By aggressively trying to stimulate them, you can
maximize your share of customer, which is probably the single most promising
short-term profitability tactic of the 1990s, at least in mature categories.

        It's also a way of refining new customer acquisition, by looking for new
customers who match the profiles of your profitable existing customers.

Q:    Suppose you were talking to a large company that has run countless
sweepstakes and promotions where they have asked for names and addresses, so they
probably do know who some of their end users are, but they haven't used that
information or expanded on it. What would you tell them to request on their next
sweepstakes or promotion?

A:    If I were talking to any packaged goods company, I would suggest that they
make an investment in data capture. For example, they should try to find out what
competitive brands people use, because they are fighting for share of customer in
the 1990s. It's no longer just share of market. Brand loyalty has fragmented.
People tend to be loyal to a circle of brands these days rather than to just one
brand. Then, without being obtuse or invasive about it _ people are quite rightly
concerned about protecting their privacy _ I would suggest they try to find out
life-cycle and lifestyle information. That's the kind of thing that facilitates
relevant, individualized communications.

Q:    What could the company do with that information?

A:    Let's use Procter & Gamble and Tide detergent as an example. Suppose they
find out that three million heavy users of Tide also play tennis, a lifestyle
detail. That would enable Procter & Gamble to do a targeted promotion based on
tennis to these three million people. If people are interested in tennis, tennis
has a kind of iconic power for them; they relate to tennis messages and tennis
imagery. They would obviously pay a lot more attention to that particular Tide
promotion if it were tied into tennis than if it were a mass message.

Q:    Is that the goal that the database marketer should have in mind? In other
words, should database marketers be building relationships with customers one by
one?

A:    It depends. You can't literally build relationships one by one if you are
Procter & Gamble. You do it cluster by cluster. Tennis players are a large
cluster. Huge companies can get into trouble if they take the one-to-one concept
too literally. A friend of mine, who works for Ralston-Purina, sells more dog
food than anyone else in the world. He said, "I don't care about this one-on-one
stuff. I don't care what color eyes people have. Just make sure they have dogs."
From a mass-packaged-goods standpoint, what database marketing comes down to is
"make sure they have dogs." Because if they don't have dogs, you waste 72 cents
of every advertising/promotional dollar, since only 28 percent of American
households have dogs. Speaking of packaged goods, it's clear that products that
lend themselves best to database marketing tend to be psychology- and
emotion-intensive _ health and beauty aids, baby products, and pet products, for
example.

Q:    What companies or products are most suited to making use of database
marketing?

A:    Companies who have extended contacts with customers are well suited to
database marketing. The length of the contact allows more time to gather
information. When you sit in an airplane, the airline potentially has your
attention for as long as you're a passenger. When you deal with a bank, you're
usually a customer over a long period of time. It's not surprising, then, that
airlines and banks are among the leaders and pioneers in this kind of work.

        The kind of contact optimal for database marketing usually has an
emotional or psychological dimension, as I mentioned before. Businesses that are
information- or transaction-intensive also have an edge. If your business

doesn't have these traits, you have to invent them. The problem with most
packaged goods is that they don't have any of these traits, with the exceptions I
just listed. Packaged-goods businesses have to synthesize these other
characteristics. It can be done, but it takes some inventiveness.

Q:    Suppose another type of business, a retail clothing store, for example,
wanted to set up a database. What type of information should they be gathering?
What special services could they offer based on this information?

A:    First of all, you capture information at the point of sale. You find out
name, address, phone number. Obviously, if you are a retail clothing store,
you're already finding the sizes customers wear and the kind of items they buy.
Find out birthdays. Get life-cycle and lifestyle data. Then, when you have a slow
season, you can target promotions aimed at your best customers. That is precisely
how a retail store would do it.

Q:    Who are some of the movers and shakers in the world of database marketing
right now?

A:    The categories are financial services, telecommunications, travel, mail
order, and tobacco.

Q:    What is the best example of database marketing you have seen?

A:    I would say American Airlines AAdvantage program comes pretty close, but
there aren't any perfect systems yet.

Q:    Why do you think American Airlines has been successful?

A:    American Airlines has succeeded in detaching its database from the
conventional idea of marketing, and distributing it as the central nervous system
of the organization worldwide. A database should be used in all sorts of ways to
link more closely with the customer. I think that marketing in the past, to quote
consultant Regis McKenna, has pretty much just been selling stuff and collecting
money. Marketing right now is pretty much still that way. Marketing in the future
_ and the future is now if you want to be smart andsuccess-

ful _ is the tissue that connects products and people, companies and customers.
American Airlines has its database distributed throughout its systems worldwide,
so that any American Airlines terminal, anywhere in the world, can call up my
record right away. I have about three million miles on American Airlines, making
me one of the most frequent flyers. Every time I have a transaction with the
airline in South America, or in Europe, or here in the U.S., a flag pops up that
says, "This guy is important, treat him nicely," and they do. That helps cement
the relationship and bond me further with American Airlines. I think they have
taken database marketing to the next plateau, which is not just conventional
marketing, but the actual tissue that bonds me to them on a day-to-day basis.

Q:    Where does the potential for database marketing lie? A lot of companies are
engaging in promotions and campaigns to build their databases. That's obviously
the first step. What should step two be, and where should the companies expect to
be five years from now?

A:    Well, step one really is to have a strategic purpose. Just jumping in
without knowing what you are doing isn't going to get you very far. You also have
to come to terms with the changes in culture and technology. And you need to
realize that if your competitors have a customer database and you don't, they
have a sustainable competitive advantage over you. Remember: most companies are
forced to share their customers with competitors. If your competition knows who
their customers are and you don't, you could be in trouble. One more thing: you
must take database marketing seriously, and not just dabble. Database marketing
does not lend itself to dabbling. You have to plunge into it all the way, or it's
not going to work. A few years ago, I thought that you could experiment with it.
I was wrong; you can't.

        Step two is to allocate a budget based on the impact of customer
retention on profitability. In the last couple of years, figures have shown that
a small increase in customer retention can account for a huge increase in
profitability. That starts to cost-justify the investment.

        Step three is to get into a cultural mode where you love your products
less and your customers more. A database is literally an investment in customers.

         The use of the marketing database five years in the future will be a
progression from using it for site selection, direct-mail targeting, and
telemarketing, to using it more as an infrastructural central nervous system in
the way that American Airlines does. Database marketing will also influence the
way companies purchase media for general advertising. It will influence the way
advertising messages are created both for direct marketing purposes and for
general advertising purposes. The various terms that people use _ direct
marketing, general advertising, above the line, below the line _ are already
starting to blur, and in a few years, we will not be talking about direct
marketing, advertising, sales promotion, PR, or any of those things. I think
we'll just call it marketing, and within 10 to 15 years, anyone who is doing
marketing will be doing some kind of database marketing simply by definition.







52 Ways to Use Database Marketing

1.    Track the use of office supplies and automatically deliver refills

If you notice that a particular customer buys 10 packages of copy paper every
month, deliver 10 more packages three weeks after the last order. Your customer
will be pleased she doesn't have to take the trouble to reorder. If you include a
replacement toner cartridge for the photocopier and a catalog of specialty copy
papers, you'll increase your sales.

2.    Send supporters of the local orchestra notice of a new CD

A record store can get access to a finely targeted list of potential customers by
sharing its mailing list with the local orchestra. Couples with season tickets to
the Baroque series will want to know about the new Vivaldi album. The orchestra
benefits too _ it can use the shop's list to send brochures to record buyers. By
working together to promote interest in classical music, both parties increase
their business.

3.    Offer a formula and diaper delivery service to new parents

Hospitals, pediatricians, or parenting magazines may sell mailing lists of new
parents. What better way to build customer loyalty than to offer a convenient
delivery service at the very time exhausted new parents are looking for ways to
save time?

4.    Offer discounted tire rotation to customers who purchase new tires

Don't settle for one-time business. When a customer buys tires from you, you know
he's going to need to rotate those tires eventually. Use your knowledge to build
your business. Offer him a reason to return, like a discount coupon for a service
he needs, and chances are he will.

5.    Sponsor a nationwide picnic and reunion for loyal customers

Everyone likes to feel valued. What do people do for their good friends? They
invite them over for dinner. Invite all your customers to a picnic and you
increase their goodwill toward you. If your company operates nationwide, hold
regional events to make sure as many people as possible can come.

6.    Sell souvenirs, T-shirts, and other doodads to rabid fans of a rock group

Fans of the Grateful Dead are notorious for their devotion. Many "Deadheads"
spend their vacations (or their lives) following the group from concert to
concert. Build on the loyalty all fans feel for their favorite bands. Ticket-sale
records provide finely targeted marketing lists. Why waste your time and money
trying to sell heavy-metal t-shirts to possible Barry Manilow fans when you can
sell directly to 10,000 people who have already spent $30 each on Metallica
tickets?

7.    Offer free dessert to regular restaurant customers

Remember when your mom used to reward you for finishing your brussels sprouts by
letting you have an extra piece of cake? It made you think twice before leaving
your vegetables on your plate next time, didn't it? Reward your best customers
for their loyalty to your restaurant with a treat. They'll remember your
generosity next time they have to book a family celebration or office party.

8.    Sell sprinkler systems to clients of a lawn maintenance company

A lawn maintenance company wants its clients to keep up their lawns between
visits. It makes the maintenance company look good, and more important, increases
the likelihood that the customer will be satisfied with his lawn. Sprinkler
companies want to find people who have already proven their interest in lawn
care. It keeps them from wasting time on people who don't really care. A joint
sprinkler/maintenance promotion benefits everyone.

9.    Offer gutter cleaning to regular chimney cleaning clients

If you have a set of customers who hire you to clean their chimneys every spring,
why not use that loyalty to generate new business in the fall? Point out that
clogged gutters are as much a hazard as clogged chimneys. If you offer a discount
to customers who use both services, you can just about guarantee client loyalty
and satisfaction.

10.    Regularly poll supermarket customers on new products they liked

A manufacturer introduces a new brand of triple chocolate fudge cookies with a
flashy ad campaign and in-store samples. But three months later, the company
doesn't know who actually bought and liked the cookies. By conducting a customer
survey in supermarkets, the company can get this information and offer satisfied
customers a coupon for the largest package, reinforcing their loyalty.

11.    Offer a Diet Coke coupon to anyone buying non-fat yogurt

Weight-conscious shoppers tend to buy more than one type of low-calorie food. It
doesn't make much sense to buy both low-fat yogurt and extra-rich rocky road ice
cream. Build on certain customers' proven interest in low-calorie products by
offering them discounts on other diet products, or a free sample. New technology
allows you to deliver the coupon automatically, at the checkout.

12.    Sell wedding services (flowers, bands, etc.) to brides ordering a dress

When they're planning a wedding, many brides think about their dresses first.
These big-ticket items are hard to select and take months to make. This early
stage of the planning process is the perfect time to draw the bride's attention
to your wedding-related services. With the escalating prices of a full-scale
wedding, many brides will value a discount for customers who buy more than one
product or service.

13.    Invite season ticket holders to a meet-the-players party

Reinforce your season ticket holders' loyalty to your theatre by making them feel
part of the production. At a meet-the-players party, they can chat informally
with actors, argue with the director about the interpretation of the play, and
find out how the set designer achieved a certain effect. They become
participants, not merely observers, and their commitment to your theatre
increases.

14.    Offer free personal banking services to corporate officers with company
bank accounts

Corporate banking officers already spend a lot of time in your bank. As
executives, they are busy people with many commitments. If you give them a good
reason to move their personal accounts to your bank, you'll make it possible for
them to combine two trips _ the nightly business bank deposit and a run to their
personal bank for grocery money _ into one. They'll appreciate your effort to
make their lives easier, and you'll get grateful new customers.

15.    Sponsor a monthly barbecue with new car purchasers to get new user
feedback

Everybody loves free food. Play on that attraction by inviting all your new car
buyers to a free barbecue. They'll appreciate the free event, and you can ask
them for informal feedback on the cars' performance. They'll be more likely to
respond to a personal question at a social event than on an impersonal paper
survey that arrives in the mail.

16.    Insert an offer for a free newsletter in a product to gather names and
addresses

A software company can offer a newsletter to users of its desktop publishing
package. Users can trade information and shortcuts, and the company can promote
new ways to use the software. Better understanding of the product leads to
greater customer satisfaction. Of course, the company can also use the list of
newsletter subscribers to market related products.

17.    Pay your customers for improvement suggestions

Ask your restaurant customers to fill out suggestion forms, including their name
and address, and offer a cash prize or free meal for the best suggestion received
each month. You'll get a list of customers who care enough about your restaurant
to suggest improvements. You can send these people notices of promotions,
discount coupons, and samples of your new menu. And you'll get useful feedback
and ideas for change.

18.    Watch customer purchases and offer economy-sized alternatives to frequent
purchasers of the more expensive small size

If you give customers at your pet food store frequent-shopper cards, you can
track their purchases. If the database shows that one customer buys four tins of
cat food every second day, send her a coupon for a bulk package of 12 cans.
Anticipate her needs. Perhaps she buys small quantities frequently because she
doesn't have a car to transport larger orders. Offer her a free delivery service.

19.    Call ten customers every day just to ask them how they like your product

Most customers figure that once they buy your product, you'll have no further
interest in them. Surprise them, and they'll remember you. Phone random customers
and ask them what they think of the product. You'll get valuable feedback, and
your customers will be flattered that you asked their opinion.

20.    Offer free rental of expensive tools to your best hardware customers

Keep track of your customers' purchases. Let them know that when they've
purchased $400 worth of supplies, you'll give them free rental of a floor sander
or a jigsaw for the weekend. Once they've "invested" some money in a future
"purchase," why would they spend their money at another hardware store?

21.    Track pizza delivery orders and offer subscriptions at dramatically
decreased prices

Does a family order a pizza every Sunday during football season? Eliminate their
hassle and increase your planning capability by offering a subscription discount.
Bring them the pizza automatically (unless they cancel it) at a great discount.

22.    Create a service that will maintain the houseplants your greenhouse sells
to businesses

Again, don't settle for one-time business. Why should another company profit from
the hard work you did to secure the initial sale? Office managers are often
hesitant to buy live plants because they fear no one in the office will take care
of them. By offering the managers a low-cost maintenance service, you'll overcome
this reluctance.

23.    Distribute easy-to-use, pre-printed order forms for fax paper or other
frequently ordered consumables

Produce specific order forms for products your customers order often. Make it
easy for them to reorder by printing product codes right on the form, saving them
the trouble of looking up each product in your catalog every time. Add your fax
number so they don't have to pay postage.

24.    Track customer ordering habits

If your most loyal restaurant customers order your fettuccine over and over but
rarely order your hamburger, expand your menu based on their demonstrated
preferences. Offer other pasta dishes such as linguine and lasagne. Organize an
Italian Week promotion, with a strolling accordion player and special prices on
Italian wines.

25.    Keep a record of the houses you've painted

Many homeowners won't remember to do house maintenance until some problem _ a
leaky roof, a dripping tap _ reminds them. By that point, damage will have added
to the maintenance costs. The homeowner will feel foolish for leaving the task so
long, and resent the extra expense. If you notify past customers that they need
repainting before expensive rotting sets in, they'll be grateful. You'll create
goodwill along with repeat business.

26.    Offer customers "express ordering"

Poll customers to see if they'll pay for the convenience of having their regular
order ready and paid for when they walk into the store. If you have a record of a
customer's usual order _ three boxes of blue pens, eight packages of legal pads,
and five boxes of double-sided diskettes, for instance _ you can package it in a
box and charge it to the customer's account, saving her the tedium of running
around the store to pick up the items and standing in line to pay for them.

27.    Run a contest, requiring customers to give their name and address to enter


If your business doesn't usually collect information from consumers, run a
contest. Nike, for example, has little data on who is using their sneakers. They
could start a newsletter or club for people who enter the contest. By creating
opportunities to interact with customers, you can gather data and build a
relationship.

28.    Keep the name, address, and charge card data for every customer of your
Chinese restaurant on file

There's no need to ask for every piece of information each time an order comes
in. Because the customer knows he'll save time when he orders from your
restaurant, he will be more inclined to call you when he gets a craving for egg
rolls and less inclined to call your competitor _ even if that restaurant is
having a special on egg rolls this week.

29.    Keep a chart of your busiest periods and account for them

When you opened your diner, you figured lunchtime would be your busiest period.
But you soon realized you were perpetually short-staffed in the late afternoon.
By looking at your records and using a little deductive reasoning, you'll realize
that your most loyal customers are seniors from the nearby high school, who stop
in on their way home to order fries and Cokes. Build on that loyalty by running a
discount coupon in the high school paper. And add more staff in the afternoon to
keep your customers happy.

30.    Track purchases and offer discounts

Many book and magazine buyers are fiercely loyal to their favorite bookshops.
Does one of your regular customers purchase the same three home decorating
magazines every month? Give her 10 percent off her entire purchase, and send her
notices of new decorating and architecture books with a discount coupon.

31.    Send visitors to your last trade show a free pass

If you run a trade or consumer show, most of your profits probably come from your
exhibitors, not visitor entrance fees. If the show doesn't have lots of visitors,
exhibitors won't pay for the privilege of exhibiting. By giving last year's
visitors an incentive to return, you foster goodwill among both groups of clients
_ visitors and exhibitors.

32.    Run specialized supermarket promotions

Encourage customers at your grocery store to apply for a check-cashing card. On
the application, ask for basic information such as name, address, family status,
and occupation. You'll create a perfect database for targeted promotions. Send
all your bachelor shoppers discount coupons for gourmet frozen dinners. Promote
your free babysitting service to busy parents. Tell nurses, security guards, and
other night-shift workers about your new round-the-clock hours.

33.    Register gift purchases

Everyone's familiar with the bridal gift registries at china stores. But there's
no reason why a shop selling children's clothes and toys couldn't offer a similar
service for doting relatives. The "Grandma Club" could keep records of previous
purchases and updated information on children's sizes, and offer members
frequent-buyer discounts.

34.    Sell home-security services to frequent flyers

If an executive is registered with an airline's frequent-flyer club, he's
probably already worried about leaving his home unguarded for long periods of
time. Purchase the airline's mailing list and promote your home burglar alarms,
smoke alarms, and deadbolt locks to these people.

35.    Market to college seniors

If you sell cars, business suits, or credit cards, obtain a list of senior
students at the local college. Send them a direct mail package about your product
in January or February, and follow up just as they're finishing up their final
exams. If they've been hired by an on-campus recruiter, they'll be realizing that
they're going to need a vehicle to get to their new job, clothes to wear when
they get there, and some way to pay for it all.

36.    Send a fitness newsletter to customers of your sports shop

Create a newsletter that gives readers tips on starting an aerobics program,
information on local hiking routes, and details of upcoming cycling marathons.
You may pique their interest in a sport they haven't previously participated in.
If you include a discount coupon for exercise wear, hiking boots, or cycling
shorts, they'll buy from you if they decide to take up the sport. Even better,
consider running novice hiking trips or bike tours for loyal customers.

37.    Market your craft supplies to knitting magazine subscribers

If you run a wool shop, share mailing lists with a knitting magazine. Find out
the magazine's editorial schedule. If it plans to run an article about baby
sweaters, order extra baby patterns and wool, then send subscribers discount
coupons for the products. Customers will think you read their minds.

38.    Market to couples considering retirement

Do you own a retirement resort? Get together with noncompeting firms that also
sell products aimed at retirees. Hire a financial planner to give a free seminar
on budgeting for retirement. Use the mailing list of people who attended the
seminar to launch a co-marketing promotion with the other firms. For instance,
you can offer prospects a free video of your retirement resort, while an airline
offers a discount on flights to Florida.

39.    Offer frequent customers an incentive to purchase more

Cosmetics makers have been using this tactic for years. They send customers who
regularly buy their facial soaps or moisturizing lotions notice of a special
promotion. If the customer buys $30 worth of the company's products, she'll get a
free makeup bag with trial-size samples of lipstick and perfume. Not only does
this promotion give the customer incentive to buy products she already uses, it
introduces her to new ones she may not have known about.

40.    Sell golf-related merchandise to members of a country club

Use a country club's mailing list to market your line of golf-themed prints,
ceramic figurines, and greeting cards.

41.    Run a cooking class

Do you own a cookware shop? Run low-cost, one-day cooking classes on exotic
cuisine: Indian curries, phyllo pastry, French bread. Show students how to use
unfamiliar appliances and cookware. At the end of the class, give them a package
of discount coupons for the products they used. You could share the cost of the
class with a gourmet food store, which could offer the students discounts on
hard-to-find spices and specialty flours.

42.    Give frequent romantic movie watchers a romantic reward

A video store can track who rents romantic movies, and offer these renters a
frequent-buyer reward: a free video of Casablanca, a discount coupon for dinner
at a candlelit French restaurant, or a box of Belgian chocolates. The more they
know about the customer's habits, the more they can help improve her leisure
time.

43.    Market to harried parents

A chain of day-care centers can use its mailing list to market services aimed at
busy families: housecleaning services, pizza delivery, laundry service, lawn
care, even a dog-walking service.

44.    Ask your customers what they need

Do you sell clothing by mail? Offer your customers a $5 discount on their next
order if they complete a mail-in survey. Ask them what kinds of clothing they'd
like to buy but can't find. Customers may ask for pieces that don't wrinkle when
packed or resist stains. They may be looking for colors that suit them but aren't
necessarily "hot" this year. Or maybe they can't find decent business suits in
half-sizes. Offer these items, and you'll increase customer loyalty _ and sales.

45.    Make your premium stand out from your competitors'

Many video stores offer customers a free video after they rent 10. Give your
customers the choice of a book of movie reviews, a tin of gourmet popping corn,
or a bottle of wine.

46.    Promote services to college students

Colleges are strapped for cash, and students frequently spend money like water. A
college can team up with car dealerships, travel agents, bakeries, or even the
local pizzeria to offer a wide variety of services to students. Students save
time and don't have to worry about being taken advantage of. The college benefits
because students are happier, and businesses contribute to the college's coffers
in exchange for access.

47.    Offer incentives to infrequent customers

If a man comes into your jewelery store to buy an engagement ring, it may be the
first time he's ever set foot in such an establishment. Give him a reason to
return by sending him discount coupons for pocket watches or engraved cufflinks.
Remind him of his anniversary every year.

48.    Make frequent customers feel special

Give your best customers a client card that entitles them to services less
frequent customers don't receive: free skate sharpening or ski waxing, same-day
delivery service, at-home shopping, or free gift wrapping.

49.    Offer discounts on computer software upgrades

Microsoft is a master at using database marketing to satisfy customers and enrich
itself. Each new software version solves problems that customers have reported
(note the relationship) and allows Microsoft to sell another product to a
satisfied customer.



50.    Keep in touch

Joe Girard, the most successful car salesman of all time, got that way by sending
greeting cards. By sending every customer he'd ever had a greeting card every
month, Joe kept his name at the top of the heap. By the time the old car died,
Joe was practically a member of the family.

51.    Beat the back-to-school rush

In August, parents are bombarded with back-to-school advertising. Beat the crowd
by mailing details of your store's specials on pencils, crayons, knapsacks,
children's clothing, or computers to parents who bought from you last year. Mail
the package in July, and include special offers on popular products. Even better,
offer regular customers the chance to fax their order in advance or to
automatically receive exactly what they bought last year.

52.    Offer free advice

A large hardware chain runs a toll-free number that provides customers with
detailed advice on how to perform various projects. By interacting with the
consumer, they can discover which products are difficult to use, and can work to
make sure that every project is a successful one.

Database Marketing Resources

Specialists and Marketing Consultants

1:1 Marketing

411 Soundview Ave.

Stamford CT 06902

[phone]

1:1 Marketing is a marketing and management consulting organization that develops
individualized, interactive relationships between a company and each one of its
customers. The firm helps its clients harness new information technologies and
interactive communication vehicles to effect long-term increases in customer
share, one customer at a time.

The firm's services include workshops and seminars on the strategies and tactics
of 1:1 Marketing; opportunity assessments, which help companies make the
transition to 1:1 Marketing; and consulting support on program strategies and
implementation.



DiMark

2050 Cabot Blvd.

West Langhorne PA 19047

[phone]

DiMark is a database marketing consulting firm specializing in the health,
financial, telecommunications, and insurance industries. It refers to itself as a
"vertically integrated direct marketing outsource company," meaning that it has
all the services necessary for database marketing under one roof. It can take
your database, integrate transactional data on a daily basis, analyze and
manipulate the information, and develop marketing tools and techniques to help
you reach your market.

The company specializes in event-driven and milestone marketing programs. In 1992
and 1993, Forbes magazine recognized DiMark as one of the "200 Best Small
Companies in America."



Direct Marketing Resource Services, Inc.

333 Seventh Ave., 20th Floor

New York NY 10001

[phone]

Direct Marketing Resource Services, Inc., was founded in 1983. DMRS is a
full-service, independent marketing database consulting organization. It develops
long-term strategies and campaigns that help clients make the best use of their
database information.

DMRS provides marketing database consulting to business-to-business, consumer,
telecommunications, finance and insurance, arts and entertainment, publishing,
and fund-raising companies. It also works with direct, sales promotion, and
general advertising agencies. The company's clients include Avis, Coca-Cola
Fountain Services, and General Foods.



MarketPulse

Four Cambridge Center

Cambridge MA 02142

[phone]

MarketPulse designs database marketing systems for large-scale marketing needs.
It uses its patented MarketPulse database software to help marketers capture and
manipulate consumer information in order to conduct market analysis and target a
profitable customer base.

The technical staff at MarketPulse offers to help you fine-tune your database and
tailor it to your specific needs. They can also help you develop a long-term
strategic direction for your database marketing efforts. They have set up systems
for many large companies including book publishers, catalogers,
business-to-business marketers, and entertainment and travel companies.



Raab Associates

19 Price's Lane

Rose Valley PA 19063

[phone]

Raab Associates has provided database marketing consulting since 1987. It has set
up database marketing systems for many clients, including Bell Atlantic, General
Mills, and Lenox Collections. Raab Associates can make recommendations about
software vendors, database management, and market research and analysis.

Company president David M. Raab writes software review columns in DMNews,
published the Guide to Database Marketing Systems, and frequently speaks on the
subject of database marketing.



Database Marketing Software and Systems Developers

Customer Insight Company

6855 South Havana

Englewood CO 80112

[phone]

Founded in 1986, Customer Insight Company (CIC), a Metromail/ R.R. Donnelley &
Sons Company, provides desktop database marketing solutions. CIC's newest
product, the AnalytiX System, lets companies perform sophisticated analyses of
large volumes of customer, prospect, and/or transactional data. AnalytiX
facilitates customer segmentation, promotion tracking, profitability analysis,
customer retention, and cross-selling. It also offers in-depth, customized
reporting capability through a graphical user interface.

With more than 600 software installations in the United States, Canada, and
Mexico, Customer Insight Company supports clients in various industries including
financial services, telecommunications, cable, publishing, and direct marketing.
Through its relationship with Metromail Corporation, CIC also offers companies a
wide variety of direct marketing services and products.



D.A. Lewis

PO Box 815

Doylestown PA 18901

[phone]

D.A. Lewis is a technical development company that specializes in creating
databases and in consulting clients about the best way to maintain customer
information in the most meaningful way. It can recommend software programs and
platforms that help marketers organize and manipulate database information.



May & Speh

1501 Opus Place

Downers Grove IL 60515

[phone]

In business since 1947, May & Speh uses proprietary software technologies to
develop customized database marketing systems for inquiries, updates, promotional
tracking, statistical analysis, and management reports. It works with clients to
organize and analyze internal and external list information. It then enhances
that information with geodemographic and census information to create scoring
models that identify the best customers and prospects. Finally, after each
promotion based on that information, May & Speh performs a response analysis and
adds the results to the database system.



OKRA Marketing Corporation

6301 Benjamin Road, Suite 103

Tampa FL 33634

[phone]

OKRA Marketing Corporation, a research-and-development-driven company, creates
and implements database marketing systems. It serves more than 300 clients in
many industries.

OKRA's PC-based customer information systems allow users to better target their
direct marketing efforts, maximize cross-selling, improve customer retention,
measure profitability, and track performance. Additionally, OKRA produces
DOS-based products for business-to-business marketing, mail-management systems,
and profitability measurement.



Database Marketing Publications

Direct

911 Hope Street, Box 4949

Stamford CT 06907

[phone]





The Cowles Report on Database Marketing

470 Park Ave. South, 7th Floor

New York NY 10016

[phone]

For subscriptions, call [phone].

Database Marketing Glossary

Customer share: how much of any individual customer's business has one company
acquired.

Database: a compilation of related data organized for ease of retrieval and use.

Database management system: the software used to create and maintain a database.

Database marketing: a system of analysis of customer data used to build and
strengthen customer relationships.

Market share: the percentage of all sales made in one market by one company.

Market segmentation: breaking a large heterogeneous market into small homogeneous
segments, for which individual marketing programs are developed.

Micromarketing: the use of marketing programs aimed at precisely defined market
segments.

Overlay: the addition of new database fields to existing records (such as
demographics) that help the user craft target marketing programs.

Relationship marketing: a marketing approach that calls for special attention to
the individual customer, as a way of building long-term loyalty.



MARKETING BY FAX

It's 3 a.m. and a programmer is cursing his

hard disk _ it just crashed and he has a

deadline to meet tomorrow.

Five hundred people who took a cruise

a year ago are wondering if they should

take another one.

A stock investor wants to get expert

advice and up-to-the-moment quotes

on his portfolio.

A woman sees an ad for a Ford Taurus

and wants more information before

she goes to a dealer.

How can these people get the information they need? For a long time, companies
could only reach them with 24-hour operators and mass mailings.

These methods were imperfect. The

programmer would get a busy signal, or

he would be put on hold or transferred.

Five hundred letters would go out to the potential vacationers, but one day
later, the rates would change and there would be no way to notify them.

The investor would want something written down, rather than verbal advice that
was easily forgotten. The woman looking for a car would have no choice but to ask
the dealer her routine questions, taking valuable time only to find that the car
was not what she was looking for.

Now these people are getting satisfactory answers. Businesses have discovered
that they can build relationships with potential customers, and provide improved
customer service to current clients, around the clock. One machine can do this
for them. The fax machine.

Virtually every business and over two million American homes have a fax machine.
For important business deals, the fax machine has rendered ordinary mail nearly
useless. Negotiations between a company in England and its subsidiary in
Australia used to take weeks using the postal system. Even the quickest courier
services take at least a day. But the fax machine provides instant written
communication. You can easily use the fax machine's speed and cost efficiency to
boost your marketing efforts.

There are three main ways to use fax technology for marketing:

˘    Fax on demand. Customers call a number and request specific documents, which
they receive right away in their fax machine.

˘    Database to fax. A computer extracts information from a database to respond
to a caller's inquiry, and faxes that information to the caller.

˘    Fax broadcasting. A business sends a personalized document by fax to a
number of contacts.

Use fax technology to give your customers information or assistance as soon as
they ask for it _ or even before they know they need it. Catch prospective
customers right at the moment they are thinking of buying. If you provide answers
to frequently asked questions by fax, you improve your customers' satisfaction
with your products, and they are more likely to purchase these products again.
Surprisingly, you can accomplish all these feats and save money at the same time.
Everyone benefits.

When the California Cable Television Association runs its annual conference and
trade show, the organization's small office is swamped with calls for
registration and exhibition information. Recently, the association set up a
fax-on-demand system to handle these requests. The result? The system dealt with
4,000 callers quickly and automatically, and the association's employees didn't
go crazy.

Still unconvinced? Perhaps we should clear up three common misconceptions about
marketing by fax: 1) it's complicated; 2) it's expensive; and 3) faxed materials
are poor quality.

None of these is true.

First, a basic system is simple for your customers to comprehend. Unlike more
technical solutions, the concepts behind fax on demand are simple and easy to
describe.

Second, for less than $2,000 a year, a service bureau can set up a simple
fax-on-demand system for you that gives toll callers access to 125 documents.
Just a few sales from this setup can cover the cost of the system. The cost per
customer can be less than postal fees _ and you don't have to lick a single
stamp. You won't be wasting money trying to sell to people who aren't remotely
interested in your product. Fax marketing also saves money on printing, and
allows you to make modifications up to the moment of transmission. If you've ever
had to modify and reprint a newsletter, you know this feature alone can save you
thousands of dollars.

Third, it is possible to send high-quality fax documents. The quality of the fax
depends on the quality of the original and the resolution of the receiving
machine. A desktop-published item that is sent to a fax machine with a resolution
of 200 dots per inch (dpi) is almost laser-perfect. Obviously, pictures don't
appear in full color, but a data-intensive document can be delivered with Çlan
and impact.

Fax on demand, database to fax, and fax broadcasting each have advantages,
depending on your type of company and the information you want to transmit.

Fax on Demand

Most people think of fax machines as magic devices that somehow spirit a letter
from one place to another. Actually, the technology is pretty simple. Once an
image is fed into a fax machine, it exists in electronic form. Instead of sending
the image right away, the machine can save that electronic file until it's
needed. Fax on demand revolves around this concept.

Thousands of faxes can be stored in a computer until a caller requests one. Then
the machine sends the appropriate fax image to the caller automatically. No one
has to feed the sheets into the fax.

Here's how a sample interaction might sound:



Welcome to the 1994 Export Hotline. To receive instructions in English, press 1.

Enter the country from which you are calling by pressing,

1 for the United States

2 for Canada

3 for Mexico

or 4 for any other country.



If you are unregistered for 1994 and need the 1994 registration form,

press 1 now.

For market information,

press 2 now.



Please enter your ten-digit account number, which is your registered fax number,
beginning with the area code.



I'm sorry, but the number you have entered is not a valid account number. You may
complete your document selection. However, please note that the Export Hotline
will attach a one-page registration form to your document request. To register
for 1994, please complete the attached registration form and fax it back to the
number indicated. Once you register, you may call as often as you like.



Please enter your five-digit document code now.

You have entered document code number 9-5-0-0-0.

If this is correct,

press 1 now.

To re-enter your document code,

press 2 now.

If you would like to obtain another document,

please press 1 now.

If you have completed your selection,

please press 2 now.

One moment, please.

Once you press the start button on your fax machine, the document you requested
will be faxed to you immediately. Please call as often as you like. Please press
the start button now.



Computer companies have found fax on demand particularly useful. Their technical
support people have to deal with a huge volume of calls. As a result, customers
often have to wait as long as half an hour before reaching a technician.

Microsoft Corporation realized that most users calling its technical support line
were looking for answers to just a few common, basic questions. Microsoft
prepared comprehensive answers to several hundred of these questions and made
them available as fax-on-demand items. Now users can get the information they
need instantly, and technicians have more time to address more complex problems.

Fax on demand can also increase the value of your advertising dollar. Place a
magazine ad promoting numerous products. You have no room to describe each
product in detail; the purpose of the ad is simply to make potential customers
aware of the products themselves. If customers could easily find out more about
individual items, the ad's value would increase tenfold.

It's easy to send them this information instantly. Just print a code number next
to each product in your ad. At the bottom of the ad, ask customers: "Do you want
to find out more about our products? Receive detailed information instantly by
fax! Call [phone] and follow the instructions you hear. When you are asked
for the code number of the product you are interested in, enter the number you
see on the ad next to that product."

Fax on demand is an astonishingly simple marketing tool with nearly unlimited
possibilities. In effect, you are setting up a 24-hour operator who answers your
customers' questions immediately, never takes a vacation, and never asks for
overtime. Customers can get information, technical support, or advice when their
interest is at its peak _ even on Sunday afternoon or at 3 a.m.

The result is increased customer satisfaction, which leads to better
relationships between customer and company, better sales, more revenue, and
long-term customer loyalty. This low-cost venture has high reward potential.

Don't forget that fax on demand saves you and your employees time and money.
Sales reps are especially receptive to these systems. Suddenly, sales calls will
be shorter and more to the point because customers will know the answers to their
basic questions before the sales rep even walks in the door.

What sort of documents should you store? It's completely up to you. You can
create a slick, well-designed document with the visual impact of a magazine ad.
You can include a coupon, to give callers even more of an incentive to buy your
product. You can request the customer's name and address and send him a free
sample.





Don Peppers and Martha Rogers

on Using fax on demand to

Disseminate Information

Don Peppers and Martha Rogers, Ph.D. are authors of The One to One Future, the
groundbreaking book on database marketing that Tom Peters called "Book of the
Year." Don Peppers runs 1:1, a marketing consulting firm in Weston, Connecticut,
and Martha Rogers is associate professor of telecommunications at Bowling Green
State University in Ohio. They were the first to outline the specifics of the
paradigm shift that is forever changing the face of marketing in the 90s.



Nearly any business has a need to disseminate information to its customers and
prospective customers. Occasionally, disseminating highly specialized information
to a relatively narrow audience can be one of the most significant activities a
business has.

Consider the business of selling computer peripherals. People who are in the
market for tape backups, modems, printers, cables, and so forth have a diverse
set of highly specific needs. In most cases, a person will want to understand as
much as possible about the exact specifications of a piece of equipment before
purchasing it.

Often the customer looking for such information will find it necessary to go into
a computer store _ CompUSA or EggHead, for instance _ in order to talk with a
knowledgeable sales person. But if your business is selling this kind of device
you don't necessarily have to rely on physical retail establishments and human
experts simply to distribute specification sheets and diagrams.

MacWarehouse, a catalog service that sells computer peripherals to Macintosh
users, has a fax-on-demand system for disseminating complex specifications and
other information. Find the product you are considering in their catalog, and
chances are it will have a fax-box number associated with it. So you go to your
own fax machine, dial the number for MacWarehouse's fax-response service (the
area code is 203, so you pay the toll on the call), and at the voice prompt you
enter the fax-box number for the item. Then you'll be told to push the start
button on your fax machine, hang up the handset and, on the call you just made,
the specifications for the item will be printed out on your fax machine.

Thus, if I'm particularly interested in a new CD-ROM drive that's fully
compatible with my existing Macintosh system software, I can find out what I need
to know quickly and easily, and MacWarehouse doesn't have to pay for a staff of
computer experts to be available on the phone just to answer my detailed _ but
fairly routine _ questions.

The MacWarehouse example illustrates a single-call fax-on-demand application. But
there is also a two-call fax-on-demand application, and it works like this: to
get information you call not from your fax machine, but from your home or office
phone. Then, following the voice prompts, enter the number of your fax machine,
as well as the fax-box number of the item or topic you want information about.
Within seconds after you complete the call, the marketer's computer dials your
fax machine and faxes the information requested.

Fax-on-demand information dissemination not only eliminates the need for
operators standing by to answer routine questions _ it also reduces the need for
printed brochures, and dramatically shrinks the lead time necessary to update
rapidly changing information. The information you get when you access a
fax-on-demand service is coming directly from a computer. This information

doesn't have to be printed in hard copy prior to your fax machine printing it,
based on the digital stream of data coming directly from the computer.

˘    As a stockbroker, you could use fax on demand to provide a completely
updated portfolio summary to your clients, whenever they want.

˘    As a realtor, use fax on demand to disseminate detailed information about
the houses you have listed for sale, along with pictures, floor plans, and maybe
even the last offer.

One of the biggest marketing advantages of fax on demand is that it represents a
1:1 connection with an individual customer or prospective customer. To the extent
that you can track this interaction, you will be able to follow up the connection
with products, services, offers, and communications that are increasingly
tailored to the individual needs of individual customers.

Therefore, if you set up a fax-on-demand service for your current customers, be
sure to require the use of PIN codes to access the system. That way, you can know
which customers asked for which information and when.

And if you plan on setting up a fax-on-demand system for prospective customers,
you may want to consider paying the extra telephone charges involved in a
two-call system, so that you can at least capture every prospect's fax number
automatically.







Fax on Demand Success Stories

Computer Hardware and Software

Computer hardware and software companies are constantly producing new products
and upgrades. They use fax on demand to give potential buyers basic,
easy-to-understand information on these products as soon as they come on the
market.

IBM, for instance, has a library of fact sheets organized by product types, such
as networking systems, application software, and education information. Each type
has a code. Callers enter the code on their keypad to get information on all the
new products of this type. You can try out the system by calling (800) IBM-4FAX.

Symantec Corporation was deluged with calls in late 1991 after it released
upgrades of two popular products. Many callers wanted a product description. It
took a service representative five minutes to respond to each one of these
requests, costing the company about $65,000 annually. When Symantec set up a
fax-on-demand system, the company improved its customer service, got positive
feedback, and increased sales. The system includes a fax survey feature (to
generate feedback from customers) and transmits an automatic acknowledgment after
an order is received. Call Ibex Technologies' fax line at [phone], ext.
196 for a sample document, the new version of the Norton Desktop for Windows. It
combines easy-to-read text, pictures of the computer screen, and labels
explaining the different aspects of the Norton Desktop.

Hewlett-Packard's fax-on-demand system combines product information and technical
support. Individuals can use both, if necessary. Call [phone], ext. 1 for
a sample. You can request prerecorded troubleshooting tips, installation tips for
HP LaserJet products, information on the DeskJet or DeskWriter printers, a list
of service parts, and other documents.



Travel and Tourism

Does your company encourage people to travel? Provide specific facts about
locations or points of interest to prospective clients via fax.

The California Division of Tourism ran an ad on national television that invited
viewers to call an 800 number for free information by fax or mail. The
information was divided into categories such as "Family Fun" and "Romantic
Getaways." The fax-on-demand system sent three-page faxes of information on each
category that included discount coupons for local attractions. Ninety thousand
people called the service, and 15 percent of them requested materials by fax.

Travel Agent Magazine ran an ad promoting a system giving travel agents immediate
access to information about cruise packages, prices, and promotions. The ad
brought in 25,000 responses and increased cruise sales by 40 percent.

Cruise companies have had tremendous success with fax on demand. MarketFax, a
service bureau, reports that cruise companies are the largest category of
business it handles.



Periodicals

The Wall Street Journal, seeking to draw high-tech advertisers, ran an ad in
Advertising Age promoting a toll-free number that readers could call to find out
how high-tech companies could benefit by advertising in the Journal. The paper
also makes articles from its European and Asian editions available for free by
fax, in a service sponsored by AT&T.

Inc. magazine sells previously published articles through fax on demand (see
"Small Business Support" later in this section). National Business Employment
Weekly offers employment information on 60 to 70 cities by fax, for a small fee.
Readers can receive the information they need almost as soon as they get the
original publication.



Sports

Everyone involved with a recent ad in Golf magazine benefited. Several country
clubs were featured in the ad. Each club had its own extension from the main
fax-on-demand number. The clubs made use of the magazine's strength _ the ability
to reproduce vivid photos of their facil-

ities _ and used fax on demand to supply much more detailed textual information
than the ad could hold. Readers felt much better informed, the advertisers could
trace the effectiveness of the ad, and the magazine could see which advertisers
had the highest volume of calls. The magazine and advertisers will use this
information to plan future ventures.







Publishing

Publishers use fax on demand to distribute advance samples of their publications,
or to provide additional material for existing publications. Doubleday set up a
system that offers samples of its current business books, including The Republic
of Tea: How an Idea Became a Business and The Currency Connection. Houghton
Mifflin's Information Please Business Almanac has additional articles and data
available by fax. Call [phone] from your fax machine and enter 999 when
you are asked for a code to receive a sample document.



Small Business Support

Fax on demand is an ideal method to make fast-breaking news available to the
growing number of small businesses. Inc. magazine offers small-business
management information through a fax-on-demand system. For a small fee,
individuals can obtain articles on topics ranging from advertising to finance to
personnel problems. In the first three months of operation, the system handled
10,000 requests. To get an index of article topics, call [phone], and
enter 16101 when prompted.

Need information on exporting? Call the Export Hotline at (800) USA-XPORT.
Established by International Strategies, Inc., and sponsored by large
corporations like AT&T, this free service for small businesses provides
fax-on-demand documents on all aspects of exporting. Documents include How to
Export, How to Import, Trade Shows, Multilateral Organizations, and documents on
more than 40 countries that include information on agricultural products,
construction materials and equipment, telecommunications equipment and services,
and more.

Many divisions of the government provide support for small businesses. The U.S.
Department of Treasury and the U.S. Department of Agriculture both have
fax-on-demand systems to distribute this information. Call [phone] for the
Department of Treasury and [phone] for the Department of Agriculture. Both
of these are one-call systems, so you have to call from a fax machine.



Tax Forms

With the sponsorship of several newspapers, a fax service bureau called Instant
Information, Inc., offered federal and state tax forms by fax, for a small fee.
Someone in California, for instance, could get a Massachusetts tax form within
seconds _ and avoid a long, expensive call to the Massachusetts Department of
Revenue. The service was tremendously popular, particularly for state tax forms
and unusual federal forms. The biggest demand came on April 12 and 13, when
requests came in for extension forms.



Education

Anyone who has ever registered at an educational institution knows the amount of
paper involved in the process: registration forms, course calendars, and more.
Boston University, New York University, and Northeastern University have used
fax-on-demand systems to provide course information, syllabi, and other
documents. Students can even register by fax. The service, in effect, gives
students a 24-hour registrar and financial advisor.



Hotels and Resorts

ITT Sheraton, the Gramercy Park Hotel, and Vail Ski Resort, among other hotels
and resorts, have made information on meeting facilities, accommodations,
business services, sports facilities, neighboring attractions, and transportation
available by fax.



Marketing

Marketing firms such as Carl Rodia Associates and Globemark Wholesalers provide
product sheets, brochures, specifications, order forms, price lists, and
schedules to clients by fax. Some firms also use fax on demand to deliver
information on product availability and shipping dates to their field sales
forces.



Real Estate

Fax on demand suits the needs of real estate agents and their clients perfectly.
Because houses are big-ticket items and thousands are for sale at any one time,
agents need to reach many buyers, and buyers crave detailed information. Agents
can provide prospects with up-to-date information on mortgage rates, fees, and
available houses and apartments _ including floor plans, photographs, plot plans,
and terms _ even while they're out showing other homes. Better Homes and Gardens
Real Estate, Century 21, and ERA Real Estate are only a few of the companies who
have benefitted from this system.



Oil and Gas

Exxon makes more than 2,000 documents available through fax on demand, including
Material Safety Data Sheets (health, hazard, storage, fire-fighting procedures,
and other safety-related information), which are required by OSHA law for
chemical industry products. The system also provides status updates on Department
of Transportation shipping information to distribution locations, product order
confirmations, and other current information.



Bingo Card Fulfillment

Typically, when magazine readers fill out "bingo cards" _ perforated cards that
allow them to request more information about advertisers by mail _ they have to
wait several weeks for the material to arrive. But if a magazine uses a
fax-on-demand system to fulfill these requests, it reduces the time factor
drastically. The customer receives the information while it's fresh in his mind,
not when he's already forgotten about it. The system also reduces advertisers'
costs to fulfill requests. Because readers get information instantly,
advertisers' sales increase, and the magazine itself enhances its position.

Forbes and Fortune have both used fax on demand for their bingo card fulfillment.
They report excellent response. Enterprise Commun-

ications magazine uses a modified version of the technology. Instead of
requesting faxes, subscribers give their subscriber ID number to the automated
system. Advertisers receive a fax of that subscriber's information immediately,
and they can contact that caller directly. They also report great response.

Fax on demand works best for business-to-business publications, because the
recipient must have access to a fax machine. However, more and more people are
buying fax machines for their homes, so there is a growing consumer market as
well.

British Airways, TWA, and other airlines have bingo cards in their in-flight
magazines and have reported a good response to their fax-on-demand systems.

Database to Fax

Database to fax is a highly specialized form of fax on demand. When customers
call, they get access to a computer. The computer extracts information the
customer requests from a database, assembles it into a document, and faxes the
document to the customer. Such a system is useful in situations where information
changes frequently or is stored in many pieces. A standard fax-on-demand system
holds a finite number of documents, but a database-to-fax system lets users
create customized documents based on hundreds of pieces of information.

This system works well for reporting stock quotes, for example. An investor can
call up and get information on individual stocks from the database. The system
then faxes her a printed record of the information, so she doesn't have to rely
on her own memory or handwriting. In such cases, a hard copy is much more helpful
than a voice message.

The database can be changed at any time. Stock prices change all the time, so the
new quotes have to be entered, as often as every hour. Some investors or brokers
might call several times a day, and receive new data every time.

The phone essentially becomes a remote computer terminal, issuing commands and
sending the output to the fax "printer." Almost anything that now needs a human
and a computer screen can be automated. A caller could find out the nearest
branch of a particular store by calling a database-to-fax service and entering
his ZIP code or area code. Any business whose prices or specifications change
often, or that needs to inform field agents about a product's availability, could
use a database-to-fax system. Firms could limit access to employees or preferred
customers by requiring callers to key in a PIN code. These systems also let
businesses include additional information, press releases, coupons, and other
information on their faxes.

Database to fax is not yet widely used. Touch Tone, a service bureau, is one firm
that sees great potential in the concept, and their clients report high
satisfaction with it. Ibex Technologies, a software provider, is also involved in
database-to-fax marketing, using Windows software to allow businesses to enter
their information quickly and easily.



A Question and Answer Session

with Maury Kauffman

Maury Kauffman is managing partner of The Kauffman Group, an enhanced facsimile
services consulting firm, focused on the sales, marketing, and communications
benefits of fax technology.



Q:    What companies or products are best suited to fax on demand or fax
broadcasting?

Let's take fax broadcasting first.

Information that is best suited for fax broadcasting is anything that's timely or
time-sensitive, dynamic information, information that is changing on a daily,
weekly, or hourly basis, that needs to be transmitted or received by hundreds or
thousands of people geographically spread out. The ease of use of fax
broadcasting allows anyone to transmit dozens, hundreds, or thousands of pages
practically simultaneously to a list of people who need to receive their
information. That list could be changing on a regular basis, as often as need be.

Some examples of industries and companies that do very heavy fax broadcasting:
number one, the travel industry. Cruise lines, for example, were very early
adopters of fax broadcasting. Once the cruise ship sails, any berths that are not
full are lost revenue for the cruise lines. So cruise lines, as they get closer
to their cruise date, will fax broadcast the information about available berths
to thousands of travel agents nationwide. The travel agents, in turn, see that
there is a special offer on ABC Cruise Line for a ship leaving to a destination
next week and they can get 50% off on that particular berth. The travel agency is
quite excited about that because they can call their best customers to try to
sell that space to them. The customers are quite happy because they can get a
quick vacation at a greatly reduced rate. The cruise line is also happy because
they can fill a berth quickly and inexpensively.

Another industry that was quick to appreciate fax broadcasting, and probably has
the largest number of pages broadcast on a daily basis, is the mortgage lending
and banking industry. Every business day mortgage rates change, and there are
dozens if not hundreds of mortgage initiators (companies that provide mortgages),
who fax out their rates to mortgage brokers and agents telling them what the
latest rates are. Many times these rates can change during the day. They listen
to what the Chairman of the Federal Reserve says, and if he hints that interest
rates will go up, every rate will change in the whole industry and tens of
thousands of pages need to be tranmitted immediately. These are rate sheets that
list adjustable rate mortgages, fixed rate mortgages, with different points,
closing fees, and so on. There are pages upon pages of rates that are constantly
changing. When a consumer goes for a mortgage, the mortgage or loan agent will
look at the faxes that he or she receives from the mortgage lenders telling them
what the most up-to-date rates are. The mortgage lending industry used to do
everything via phone, and you could wait on hold for hours trying to get the
rates. By the time you got the rates, they had changed.

Other organizations that should use fax broadcasting are companies that do
business-to-business marketing. If you're currently selling a product or service
and using direct mail, business to business, an excellent suggestion is to add
fax broadcasting to your marketing mix. Take 10%, for example, of your
direct-mail budget and allocate it to fax broadcasting. Do several tests. If
you're used to dropping mail pieces to 50,000, test a fax broadcast to 5,000.
Remember, with broadcasting you want to make the point clear, succinct, and easy
for people to respond to, just as you would for direct-mail copywriting. A
well-designed fax broadcast should have space for, "Yes, I like the information,
let me sign and place the order." If it is designed well, the fax out can also be
the order form faxed back in.

I'll give you an example: a bicycle manufacturer may have an overstock of a
particular bike, so they fax broadcast every bike dealer in the United States
that they are overstocked on model 123. If you would like 10 bikes or 20 bikes of
model 123 at a reduced rate, sign your name here at the bottom of the page, give
us the quantity you want, and fax it back. That's a quick and neat marketing
campaign that could be pulled off for a fraction of what direct mail would cost,
plus the fact that the turnaround time is absolutely minuscule.

That in a nutshell is an example of where fax broadcasting is successful. Anybody
who is doing any business-to-business direct mail should give it a shot. However,
you want to make it succinct, you want to make the message clear, you want to
make it easy for them to respond. And you don't want to do this every single day.
You have to be careful about what's becoming known as "junk" fax, which is much
like junk mail. All of us in marketing don't like those terms, but nonetheless,
they're here to stay. You want to make sure that what you're fax broadcasting is
a message that you know the recipients are really going to want to receive. This
way, when they get your fax, they will like it and respond to it. If it's a
special offer, you can put a deadline on it. I would never send them anything if
they may not think, "Wow, I would like to get this," because you'll defeat the
message and after a while they will throw away your faxes whether it's real news
or not. So don't inundate them. Use it sparingly and you will get much higher
rates of return.

What companies or products are best suited for fax on demand? Any company or
organization that does any literature fulfillment whatsoever. This can range from
the smallest manufacturer's rep who is sending out price lists of what he/she is
selling, all the way up to the largest manufacturers like IBM and AMP. Their
fax-on-demand services have literally thousands of pages of spec sheets, price
lists, press releases, and practially every piece of literature they've ever
printed is put into their system. Any company that ever receives a call from a
prospect or a lead or a current account or a customer, just asking for more
information, is absolutely suited for fax on demand. This is because
fax-on-demand literature fulfillment is much less expensive than conventional
means of literature fulfillment.

It is certainly less expensive than putting an item through the mail. It's much
more timely and less labor-intensive than someone who is answering a phone,
looking for the literature, and hand faxing it. On top of all that, the bonus is
that you're putting your information out "live" to the people who want it 24
hours a day, seven days a week. Many of us work longer hours or don't work 9 to
5, and others may want your literature on the weekends, when they are reading a
magazine, or when they are following up on their direct mail, or looking at your
catalogs. Putting fax on demand live 24 hours a day is the most cost-effective,
cost-efficient way of fulfilling literature.

More and more manufacturers are adding this just for specification sheets. Every
major software company in the country, not just the Lotuses and Microsofts,
Symantecs and the Adobes, offers a fax-on-demand service. Even the smaller
companies are putting in fax on demand for basic technical support.

Companies that staff inbound call centers with highly trained professionals to
answer customer service questions especially need fax on demand. These are highly
paid professionals, and it is not very cost-effective to have them fulfilling
literature requests. In the computer field, when someone has a basic question
like, "How do I write a macro?" or, "How do I cut and paste?" it is very simple
for the representative to say, "If you pull up document 123 from my fax-on-demand
system you can get step-by-step instructions. If you have a problem then, call me
back."

Another organization that is perfect for fax on demand is the association. There
is an association for everything. Every single association has the same concern
and the same department: membership. Every time somebody wants new membership
information they call up and get the person in charge of membership and that
person mails or faxes. All membership information can be put on fax on demand.
All the information about the upcoming conferences or conventions the
organization has, the dates, the place, the speakers, the format, the
registration forms, the housing forms, can quite easily be put up on fax on
demand. So could all the copies of the magazines or newsletters that they publish
and lists of the books or periodicals, audio tapes, videotapes, and everything
else that the association sells. These are all member benefits that are basically
the reason the organization exists. And they can be put up live 24 hours a day,
seven days a week for their members.

One last industry that is really ideal for fax on demand is the publishing
industry. Magazines such as Forbes, Fortune, Inc., Consumer Reports, Travel
Weekly, all have fax-on-demand applications. One basic use for periodicals like
these is bingo card fulfillment. Magazines using fax on demand automate the
entire process. Instead of circling a number and mailing it in, you call an 800
number, you punch in a code for the advertiser you're looking for, and out comes
the information instantly, 24 hours a day. It is instant gratification for the
magazine or newspaper reader. Also the advertiser is quite happy about it because
it puts their information in the hands of the lead when they want it, when they
are thinking about it, and that certainly is when a lead is the hottest.
Publishers are also selling information via fax on demand. They are selling
article reprints from articles that have been published in the magazine in the
past. They are putting together bundles of magazine articles, everything we wrote
within the last five years on this particular topic, you can get now for $9.95.

In essence, anyone sending out any type of information on a regular basis should
take a serious look at fax on demand. Let me add that in terms of the market
research end of fax on demand, when an individual retrieves a document (let's go
back to the magazine for example), when they receive a document you know that
document 123 was requested on January 1, 1999, at 2:00 in the afternoon and you
know the fax number of the person who retrieved it. In its most raw sense, that's
all you know. But that in itself is information because it can tell you which
documents on your system are being requested the most and which ones aren't, and
which ones should be updated most often. Take this a step further, if you're a
magazine publisher and you want more market research than that. Every magazine
has a subscriber code, an ID number, generally printed on top of the mailing
label. So as a magazine publisher, you can have your readers call the
fax-on-demand application, punch in the code for the advertiser they want, then
punch in a subscriber ID number. You as the publisher now have instant
information in terms of all the demographic information on that particular reader
that you've collected over the years. You know who they are, what they are, what
they retrieved, and when they retrieved it. That information can be forwarded
directly to the advertiser immediately, letting them know that this particular
person has retrieved their information.

Q:    In setting up the menu for the fax-on-demand system, businesses have the
option of requesting additional information such as the name and phone number.
What kind of information do you recommend businesses request?

That depends on a couple of factors. If you don't feel you actually require the
market research information, don't ask for anything, because as soon as you ask
for the name or the phone number, or the address or even the customer ID number,
your response rate and call volumes will drop. Customers are not stupid. They
know that Big Brother is watching, that someone is collecting that information.
So if you're not as concerned about receiving hard sales leads, let that
information go. Just provide the service. You can get feedback from your
customers. They'll tell you if they like the fax on demand. If you don't feel
like you need to follow up on every lead, if that's not the nature of your
business, don't request the information.

However, if you feel that you do want to request the information, then generally
the way it works is one of the voice prompts will say, "At the end of the tone,
please leave your name, phone number, and address and your fax will be sent
promptly." Callers generally don't consider the fact that the whole process is
automated and their name is not actually going to appear on the cover page of the
fax.

However, it is more expensive and much more cumbersome for your business, because
that information has to be transcribed, and transcription is expensive and not
always reliable. People will not spell their name, they will not talk
phonetically or slowly, so that you can understand exactly what they have said.
If your service is national, there will be different dialects. It's going to be
very difficult. Expect that somewhere between 30 and 60 percent of the people
will respond and leave their information. Don't ever think that everybody is
going to leave their name and address and phone number for you. You may also find
that some people will hang up when they are asked for this extra information
because they do not want to be identified. So you will lose calls by asking
people to do this. As an alternative, the voice prompt can simply say, "If you
would like, please leave your name and phone number at the tone." This way, you
give them a choice, and they know that they will receive their fax either way.

If market research and marketing is the absolute key to this service, and your
number one goal is to build a database, then I highly suggest you offer some sort
of inducement. For example, "At the tone, please leave your name and phone
number. After you do so, a discount coupon will be included with the information
that you've requested." Now you don't have to tell them what discount coupon it
is, and it could simply be a generic discount for 5% off any order over $1,000.
However, you're giving them something for them giving you their name. Every
company in the world does some sort of couponing or discounting. Consider doing
something like that as an inducement to raise response rates, and to also raise
the number of people who will leave that information on their application.

Q:    Do you have examples of creative ways businesses can use fax technology?

I'll use a manufacturing company as an example, called ABC. ABC sells 5,000 items
and they are all commodity items. You can get them from a hundred different
suppliers, all over the world. Each competes on price and service. Let's say
they're baseballs and you can buy them anywhere in bulk. Manufacturer ABC has
decided to put up a fax-on-demand application describing all the different types
of baseballs and sporting goods and products they manufacture. So the first thing
they do is put up a very basic application with 20 documents in it, one on
baseballs, one on bats, one on gloves, one on helmets, each product they have in
their line.

ABC then tells its customers that when they call, they must enter their customer
ID number. Then they punch in their requests and receive the documents. Phase
two: at the end of the month, management receives a report on the fax-on-demand
application and sees every single customer and what documents they received. They
track their sales volume for the last month to see if those customers actually
purchased the products for which they requested information. Phase three is where
we get a bit more sophisticated. As soon as the customer pulls up the document
they want, they receive the literature. Simultaneously, a fax is sent to ABC
headquarters telling ABC's director of sales and marketing that this particular
customer, with this customer number, just pulled up the document for gloves. He
now has instant information in his hands saying customer 123 just pulled up
information on gloves. That's a sales lead. He can now pass that lead to one of
his sales reps to follow up. Ten minutes after the customer receives the
information on gloves, he or she should get a call from the ABC sales rep asking
him if he wants to buy those gloves. Phase four: ABC Manufacturing is a big
company. They have offices in nine states nationwide. When that customer enters
their customer ID number, we know who they are. We're going to look at that ID
number and instead of just sending a fax to headquarters to the director of sales
and marketing; we're simultaneously going to send the same fax to the regional
office of ABC Corporation that is closest to the customer. So if that customer is
in Omaha, the Omaha office is also going to get a fax saying customer 123 just
retrieved documents on gloves. The local sales rep in Omaha should contact that
customer. Now, not only does headquarters know, but the regional office knows.
The next phase: headquarters gets reports at the end of the month. They can check
their regional offices and see if Omaha is actually following up on their leads
because they can look at the end of the month and see how Omah
 is doing as compared to the other regions with their customers using the
fax-on-demand application. It's almost a bit "big brotherish" but if you're in
the headquarters of the corporation, you want to make sure your satellite offices
are following up on leads, and this is a wonderful, cost-effective way of doing
it.

Q:    What do you think has been the most successful use of fax technology?

The most successful use of fax technology has probably been the ability to fax
right from your PC. Nothing is easier or more user-friendly or more efficient
than hitting a function key or flash key and being able to fax exactly what's on
your screen to an individual or as many people as you want. That has been the
most successful use of basic fax technology. The more successful use of enhanced
fax technology in terms of the most successful fax-on-demand application I've
ever seen are business-to-business niche-oriented applications.

An extremely successful fax-on-demand application is a state newsletter to
attorneys. There is a publication called Lawyer's Weekly Publications which puts
out a newspaper every single week in six or seven different states. And each
state is completely independent. So Massachusetts Lawyer's Weekly is a newspaper
that comes out every week and in there are headlines and summaries of every
single court case that is handed down in that particular state through every
level of court in the one-week period. In that state in that week, there could be
3,000 pages of decisions handed down. They could never completely be reproduced
in the newspaper, and no lawyer needs every single decision ever handed down.
Instead, this company provides the headlines and one or two sentences about each
case, and then if you're an attorney and you want information on that particular
case or you want the whole opinion, you call the fax-on-demand application. It is
a revenue-generating application, so you are invoiced for the information you
retrieve.

The information is highly specific to attorneys. No one else would use the
service. It is updated on a weekly basis. It is extremely timely and it is
extremely effective. It would never work for the general public. It wouldn't make
any sense because consumers or businessmen don't need to pull up court opinions
handed down every single week. But something highly targeted like that is always
the most successful application.

Q:    Where do you think fax technology will be five years from now?

The real question in my mind is whether or not we can assume that sometime within
the next five years, virtually every consumer in the United States will have a
fax machine in their home. Currently there are three things stopping consumers
from putting fax machines in the home and all three of these barriers are
falling. The first one is the price of the machine. We've now seen thermal fax
machines fall under the $200 mark, where you can walk into a Staples, Office
Warehouse, or Office Depot, and purchase a full-featured thermal fax machine for
$179. This is at the same price point that VCRs have fallen to. Years ago, VCRs
were much more money than that. Now you get a full-functioned, fully programmable
with remote control VCR for about $175. You will see that fax machines will hover
around the $150-$175 range. But you will add more and more functionality at that
range. It is a reasonable price for consumers to put the fax machines in their
homes.

The second barrier to putting a fax machine in the home is what's known as "line
arbitration." Line arbitration is the problem of having to install a second phone
line into your home to handle the fax machine. Consumers are not going to want to
install second phone lines into their homes. It is difficult, it is costly, and
basically it is a pain in the neck. However, line arbitration is not much more
than a switch that will reside inside the fax machine that will allow the fax
board inside the machine to listen to and understand the incoming call, and to
differentiate phone calls from fax calls. The technology is available now. It is
not that inexpensive and it is not yet 100%, but we are moving very rapidly
toward it being highly successful and more cost-effective.

The third barrier to fax machines in the home in five years is basically a
compelling reason. There have to be compelling reasons for consumers to put the
fax machine in their home. I guarantee you when the price comes down and the line
arbitration issue is solved, marketers across the country will give individuals
hundreds, if not thousands, of reasons to put fax machines in the home. I
envision it something much like what I call the "Polaroid strategy." That's
basically, "We will give you the camera, so buy the film." My interpretation of
that is that long-distance carriers, Regional Bell Operating Companies, and local
exchange carriers will basically give fax machines to consumers. All they want
them to do is use the lines.

Take the combination of these three issues: inexpensive machines, line
arbitration problem solved, and applications available. Put it together with the
fact that the RBOCs are going to be trying to convince consumers to purchase
machines, and you're going to see everyone having a machine within five years.

Just think about it. Teachers could fax home extra credit or even homework
assignments to parents to make sure they are completed correctly, and make sure
younger children don't lose or forget them. In fact, every teacher in the company
could leave all of their long-term or even extra-credit assignments in
fax-on-demand systems. So parents could pull down extra information via
fax-on-demand systems any time they want. Whenever a child is sick, for example,
a parent could pull down the entire lesson plans for that day via fax on demand
and make sure the sick child is still kept up to date, thereby not missing
anything from staying home from school.



Q:    Suppose every business utilized fax technology to market its products so
that every commercial and every advertisement was accompanied by a phone number
to receive more information via fax. Is this an area within the realm of
possibility? If it were to happen, do you think consumers would be dulled by the
capabilities and stop responding or would it add to the enthusiasm?

First of all, this is absolutely available and in the realm of possibility. In
fact, I think it's going to happen. Every single company that offers an 800
number because they want consumers to call them for free will be offering a
fax-on-demand number. Instead of having to staff these 800 numbers, the inbound
call centers, around the clock, 24 hours a day, 365 days a year, they will be
able to staff down because much of the information that they're providing you'll
be able to get via fax on demand. Once consumers have fax machines in their home,
it could be a Sunday afternoon, they could be watching a ball game or an
infomercial or anything, see something on television that they like and respond
to it to retrieve the information, any time they want. Anybody in marketing will
tell you, and certainly anybody in marketing already knows, that a lead or a
prospect is hottest when in their minds suddenly they decide they want more
information on a particular product or service. At that second, they are the
hottest lead money can buy. If they have to wait one week, two weeks, three
weeks, even a couple of days, for information to be mailed to them or faxed to
them they become cold. They may even forget why they requested the information in
the first place, which is why fax on demand is so wonderful. It provides instant
gratification. If you see a gizmo on television and you want to get more
information on that gizmo, you can get it instantly. Not only will you get that
information, but you can get an order form for that information, too, which
basically means all you have to do is sign your name, fill in your credit card
number, and fax it back.

Think of the economies of scale from a marketing point of view. The most
expensive part of what I just described, using conventional methods, is having an
operator stand by and take those calls. If consumers will accept information via
fax, and then order it via fax, that's like simply filling out a form and faxing
it back, which they can do from the comfort of their own home. The cost saving to
the manufacturer, to the company providing the product, will be astounding.
Furthermore, I think that after an initial learning period, consumers will like
this much better. Because many times consumers don't like to dial an 800 number
and talk to a salesperson on the other end. They know it's a salesperson. They
know they're going to be upsold. They know they're going to have to repeat all
the information they give them, spell out their names, spell out their address,
give them their phone number. Consumers don't like to repeat their name and
address 300,000 times over and over and over again. With the fax, they can simply
fill out the fax whenever they have a moment and fax it back. It may take a
little bit of a learning curve in the beginning, but I think you will find they
will like it much better.

On top of that, because they filled out the order form and faxed it back, they
will automatically have a written record for their files that they have placed
this order. This will save marketers in the long run countless amounts of money
and hours from callbacks and chargebacks. Consumers will have the order form in
their hands. It will be an instant reminder when the credit card bill comes. Yes,
they did order this. Yes, they want it and here's the information that came along
with it. So I really think it will solve more than one problem.

In terms of whether it will add to consumers' enthusiasm or they will stop
responding because it will be dull, I absolutely believe it will add to
consumers' enthusiasm. When a consumer can have his wishes fulfilled instantly
via fax on demand or via any method, they like it. They respond well and they
will continue to respond. Once consumers become accustomed to fax-on-demand
applications, they will use them over and over again. The motto I like to use is,
"Don't ever forget, repeaters repeat," and that's a very important saying. If you
know the law of sales that 80% of your sales comes from 20% of your customers,
that's the same thing _ repeaters repeat. Once a customer understands fax on
demand, realizes how easy it is to use, he or she will use it over and over
again. That has been proven many times by many current ongoing fax-on-demand
services that are out there. They know what people call for repeatedly and they
know that certain groups of people do call constantly. In it are people they have
been marketing the service to for years. Once they become accustomed to it, they
will use it. They will look for it, and they will look for new information on it.

Q:    Do you think that fax technology is or will be eclipsed by electronic mail
and online capabilities?

There is no easy answer to this question. In the next ten years, I don't think
so. The reason is this: people reading this book are sophisticated marketers.
Many understand the benefits of being online, and electronic mail and the
Internet and other online services. You and I are sophisticated marketers. We are
looking for new technologies. We are considered early adopters. I'd like you to
think to yourself about your next-door neighbor. I'd also like you to think about
your parents, or your brother and sister. You may be very sophisticated. You may
be online. You may love electronic mail and you may think it's absolutely the
future. But what do your parents think? What do your next-door neighbors think?
What about your brother and sister? Are you online with them? How long do you
think it will be until you are online with them? You'll be online very quickly
with your colleagues, not only in your office but in other offices because you're
early adopters, because you may love technology. But I want to wait and see how
long it takes for everybody to be online.

In my opinion, it is going to take much longer than ten years. First of all,
compare e-mail to sending a fax. There is nothing easier than picking up the
telephone, punching in a number and sending a fax. Literally, a child could do
it. There isn't a machine in any office that is as user-friendly as a fax
machine. With e-mail you still have to log on a computer. You have to turn on a
modem. You have to make sure it's all connected properly. You have to dial into a
communications software package. Put in the correct protocols. You have none of
those difficulties whatsoever when you're sending a simple fax. From the sales
and marketing point of view, look at the large online services that are out
there, the Prodigys, the America Onlines, the CompuServes. America Online is a
public company but some of the other companies are owned and managed, for
example, by Sears and IBM and H&R Block, that have spent hundreds of millions of
dollars on these online services and in over ten years they have yet to break
even. They have yet to make money. They are way ahead of the curve and in my
opinion, it is going to take at least one generation before every person in this
country is online.

Second, when it comes to transfer of files, the technology is difficult to
understand. Currently there are five different common modem speeds. That's the
first question. What modem speed are you on? Then you have to worry about bits
and parities and handshaking and all of the other concerns and questions that
need to be answered before you can actually log on with someone else. If you've
never done it before, it's not as simple as it sounds. And even people who have
done it, and do it every single day many times, have to spend 10 or 15 minutes
talking to someone first before they can connect with them and transfer files. At
this point, it's more convenient to send a fax.

Here's an analogy I would like to make. AT&T introduced the 800 number
approximately 27 years ago. At that point, they were the only long-distance
carrier, and 800 was a new type of billing service, where consumers or any
individual that dialed an 800 number did not have to pay the toll call. The toll
call and the toll charges were to be paid by the company providing the 800 line.
It seems kind of silly for me to say that to you today. However, 27 years ago no
one understood that. It was quite revolutionary. It took AT&T more than 10 years
to convince consumers that the prefix 800 equaled toll free and that when a
consumer dialed an 800 number they were not going to pay for that charge. That's
why years ago, when 800 was advertised, it was also always advertised, "dial the
toll-free number 1-800." It took more than ten years before consumers felt
comfortable dialing 1-800 numbers and before they fully appreciated the fact that
800 meant that they did not have to pay for that particular call. And that was
with all of the marketing muscle of AT&T thrown behind it to let consumers know
that this service was free to them.

Now, it's been ten years since a number of the larger online services have come
around, and their penetration rate in the homes is absolutely minuscule. Worse
than that, they are losing more subscribers every year than they are gaining. And
worse than that, even when these online services can keep new subscribers coming
online, the usage level of subscribers peaks very, very early and then levels
off. It's a bell curve. It goes back down. And yes, there are early adopters and
people who love online services and use them every day, but the percentage of
those are quite low. Generally, there is a curve in the beginning, in the first
couple of months where they ramp up and from that point on they drop off. Many of
them pay for the services for a while and then almost never use them.

Twenty years down the road do I think that fax will be taken over completely by
e-mail? It's hard to say. I think there will be a great deal more e-mailing going
on because there are some advantages to e-mail once the whole world has it. Do I
think that fax will completely go away? No. There were people who thought that
television would replace radio, and radio would be history. Well, radio is not
history. Do we listen to it nearly as much as we watch television? No, absolutely
not, but radio has its niches. There are times like in the car and at home that
we listen to radio more than other times. Fax will find its niche, perhaps
anything that needs a signature because there are yet to be really good
signature-verification methods online. I'm not sure there will ever be good
signature-verification methods online. It's just too easy to fake that. So
perhaps whenever a document needs to be signed and then verified, fax technology
will take care of that. So yes, I think fax will be around for quite a long time
and yes, e-mail will eat into that in the long run, but you're talking 20 years
plus until you get to that stage.

Q:    Please talk about the advantages and disadvantages of in-house fax systems
versus fax service bureaus.

When a client comes to me and wants to put up an enhanced fax application,
whether it's fax broadcasting, fax on demand, fax mailboxes, whatever, there's a
series of questions I ask to determine what I think is best for this particular
client. The first question is: what is the nature of the application? What
problem do you want to solve? Once I have a clear understanding of the
application, there are basically four different ways to go using enhanced fax
technology. The first way is to purchase a small system, a two- or four-line
system that will do everything you need for a small investment. The second way is
to purchase quite a large system. Instead of two or four ports, we are now
talking about 12, 24, 48 ports, something that would be used in an inbound call
center for a very large operation. The third way is to purchase software and to
configure your own system. We're not talking about off-the-shelf software. We're
talking about software that starts at about $10,000 and goes up from there. The
fourth way is to hire an enhanced fax service bureau.

In terms of configuring your own system, purchasing software, purchasing the fax
and voice board, purchasing the computers to run it and the telephony lines and
putting the whole system together, it's wonderful if you're a technology company.
If you're a high-tech Silicon Valley company, if you're already in the software
business or the computer business or the telephony business, you've got computer
programmers, and telephony engineers on staff, who know how to put these systems
together, then purchasing the software and building your own system is for you.
However, very few companies know how to do this. Don't think if you know how to
have a network of PCs that you know something about telephone engineering. If you
don't have telephone engineers on staff, then this is not something you want to
do. This is not something that should be handed over to an MIS department. They
don't know anything generally about telephones and if they don't know anything
about telephones, this is not something they are going to get involved with. It
is much more involved than simply computers. However, for a certain segment of
the business-to-business community, purchasing software and building a system
does make complete sense. It really depends upon the nature of your organization.

The second way to do it is purchase a very small system. When I say very small,
these systems are about the size of a VCR and cost around $5,000. They can store
up to 1,000 pages of documents and they'll typically have two or four phone lines
connected to them. These plug-in-and-play systems (as they are called), are
excellent if you have a very small organization and you handle anywhere from 20
to 50 calls a week. If you want to have the appearance of providing a service
like many larger companies do, and if the information you want to provide doesn't
change much from day to day, then a small system like this makes a lot of sense.
However, that's not usually the case for many of the companies that are reading
this book right now.

The third and fourth way to get an enhanced fax is to use a large system. We're
talking about 12, 24, or 48 ports that start easily in the $10,000 _ $15,000
range and can certainly approach $100,000 very quickly. Or you can hire an
enhanced fax service bureau. An enhanced fax service bureau operates much like
other conventional types of service bureaus, like a telemarketing service bureau,
for example. When you may not want to have a bank of phones in-house and hire
people who do nothing but do your outbound telephone marketing, you would hire a
telemarketing bureau. For the same reason that if you do direct mail, you don't
have the printing in-house, you go out of house and you hire a printer. It's the
same with fulfillment. If you are doing a lot of mail fulfillment or sample
fulfillment, you probably do not do the fulfillment in-house. You've probably
hired a company that specializes in fulfillment and does nothing else, and that
way they can do a better job than you can do yourself. For those same reasons,
you would consider hiring an enhanced fax services bureau. A sophisticated,
better enhanced fax services bureau will have several hundred phone lines
attached to a UNIX-based operating system. They will have computer programmers
and technicians on staff full time who can engineer an application, and keep it
up and running all the time. They will have customer service representatives on
staff who understand enhanced fax technology and can help, not only you, but help
your customers if they are having problems using your service or using your
application. They will also maintain and upgrade their equipment on a regular
basis to make sure that it's the fastest, most sophisticated equipment on the
marketplace and ensure that your application never goes down.

Another advantage of hiring a fax service bureau is that there is no large
capital outlay. You are not buying equipment. You are simply hiring someone and
using their equipment already in place. A large service bureau will have many
clients, and those clients will all use the same equipment, just as a printer
uses the same press for many different press runs and for many different clients.
Therefore, a service bureau is able to offer you rates much in line with what you
would expect to pay if you had tried to do this in-house without the standard
capital outlay. It shouldn't cost you more than several thousand dollars for even
a very sophisticated application. Ongoing fees will not be much when compared to
conventional forms of direct marketing and direct mail.

The disadvantage of using a service bureau is the lack of control. You will never
have 100% control over your application. Many people don't want 100% control over
their application because that's not the business they're in. You have to decide,
and again you look at the nature of your organization, the nature of your
company, what type of business you want to be in. That depends on what you're
already doing. Most magazine publishers, in fact every magazine publisher that I
know of and that I referred to in the past, all hire fax service bureaus.
Magazine publishers know how to put out a magazine. They know how to write. They
know how to sell advertising. They know how to find subscribers. What they don't
know is how to engineer and program a fax-on-demand application. So they go out
of house to hire people to do it for them. Larger companies that do know how to
do it, for example, IBM and Hewlett-Packard, have in-house systems because they
have the expertise on staff to know how to engineer and program an application.
They know how to purchase the equipment. They know what equipment to purchase.
They know how to maintain it, how to upgrade it, and how to keep it active and
keep it live. It wouldn't make much sense for IBM, which has close to 100 phone
lines, 1,100 documents, and tens of thousands of pages of information on their
system, to take all of that information over to a service bureau. It wouldn't
make much sense for IBM to take all of the information that they have, and the
fact that they need to update it on a daily basis, and move it over to a service
bureau. Their information is updated regularly. Their database of customers is
updated on an ongoing basis and they want to be able to track it much more
closely and print out reports on a regular basis so they know who is retrieving
what and when on a much more timely basis than a service bureau would be prepared
to offer them. Furthermore, due to the nature of their company, their corporate
culture, their philosophy, and the fact that they know what th
y're doing with enhanced fax, it just simply makes sense for them to purchase a
large piece of equipment. The same is true for Hewlett-Packard. The same is true
for many of the computer companies, Lotus and Microsoft, Adobe, Autodesk. Since
the capital is not that great for a very large company and they may already have
the computers, fax boards, voice boards, and other equipment in-house, it makes
sense for them to set up their own system. However, that is the nature of their
company.

Finally, if you're going to be setting up a fax-on-demand application that ties
into a database of individuals or subscribers, it may make sense to install a
system in-house. Let's go back to the ABC Manufacturer example of baseballs and
gloves and hats. If ABC is going to force you to punch in your ABC account
number, and then ABC is going to track very closely who you are and that you've
retrieved a document, it may make sense to have an in-house system. It would
depend pretty much upon how large ABC Manufacturer is and who they have on staff
and what they know how to do. If they get thousands of calls a week, then it
probably makes sense for them to purchase equipment rather than go to a service
bureau. It simply is one of the first questions that needs to be addressed and
it's not an easy answer. There are the four ways to go. There are the two main
ways to go, purchase a piece of equipment or hire a service bureau. You really
have to look at your question. You have to look at what you want to do now. You
have to look at what you want to do in the future, what your long-term goals are
with fax on demand and what other applications you may want to put up once you
have the basic application live.

I will say that approximately 80% of all enhanced fax applications nationwide are
run at service bureaus. Even large corporations that know they want to purchase a
system and bring it in-house often go to a service bureau first because they can
try it before they buy it. As I've said, you can engineer an application and put
it up live for several thousand dollars, or even less. It is much less expensive
to try it that way and then purchase equipment when you know the application is
successful, rather than purchasing the equipment and then hoping that the
application will be successful. Because not every application succeeds. I call
this line the "Field of Dreams." "If you build it, will they call?" Just because
you build an application, or you put up a fax-on-demand service, it does not
guarantee that people are going to call the service. That's why I suggest if you
are putting up anything more than a basic service or especially a
revenue-generating service, something where you are going to try to make money, I
suggest you test it quite carefully and get outside help to make sure that you're
not putting up something that is doomed to fail. Certainly half to 75% of all
complimentary fax-on-demand applications are successful. But for
revenue-generating applications, more than half of them fail, which is why you
want to be careful. If you're looking to put up a straight literature-fulfillment
application, like a magazine bingo card or more information about your particular
company or product, then you probably have a sure-fire winner. I wish you the
best of luck.







Fax Broadcasting

A fax broadcasting system sends one or more personalized documents to multiple
locations, automatically. If you need to transmit information to a large number
of people quickly, fax broadcasting can make your life easier.

You might want to send product updates to your best customers. If you send them
by fax, they will get there nearly instantly, and you won't have to stuff a
single envelope. The fee for the fax service is lower per document than postal
costs. You'll save on printing fees, which can be high, particularly for
multi-page documents. You can make modifications to your document almost up to
the moment of transmission, ensuring that your customers get the most current
information. Furthermore, the documents can go out after hours, when fax machines
are idle, and the system requires no supervision.

Following are some examples of ways in which businesses have customized fax
broadcast technology to suit their needs.



Newsletters

This is probably the most popular use for fax broadcasting. Newsletter publishers
can cut their costs drastically by sending the newsletters entirely by fax, or by
using a combination of fax and print. Sarah Stambler's Marketing with Technology
News is a newsletter published by TechProse, Inc., an electronic publishing firm
that specializes in the creative use of electronic alternative media in
customer-driven marketing and research. It is distributed, appropriately enough,
by fax.

The Boycott Law Bulletin, a newsletter that covers enforcement of U.S. federal
anti-boycott laws that prohibit U.S. corporate compliance with certain aspects of
the Arab boycott of Israel, used to come out once a month. Now, a shorter version
is released twice a month by fax, which saves the publisher money and allows for
more timely reporting.

The Tindall Report, a bimonthly newsletter published by ADT Research, analyzes
the nightly newscasts of the three main television networks. The newsletter is
printed and sent by mail. In addition, a weekly, one-page supplement to this
newsletter, called The Tindall Weekly, is distributed by fax. Subscribers can
order the newsletter alone, or the newsletter and the update.

Random Lengths, the most widely circulated market report in the forest products
industry, comes out in print each week. In addition, the publisher offers
frequent updates via fax or e-mail. Fifteen percent of the report's 13,000
subscribers have ordered both the newsletter and the updates, with 98 percent of
these opting for fax transmission.



Political Issues

Businesses and organizations involved in political issues have found fax
broadcasting to be an invaluable method of disseminating fast-breaking news. When
a decision is made in the White House, or when an incident occurs anywhere in the
world, these groups want their constituents to know about it immediately. The
National Wildlife Federation has 450 state leaders as members. Its fax-broadcast
system sends relevant news to each of these leaders minutes after it happens.



Restaurants

Even the smallest businesses may find fax broadcasting useful. The owner of the
Hudson Deli in Westchester County, New York, used to fax menus to about 50 people
every morning. The task took up to two hours at the busiest time of the day, just
before lunch. The deli's simple fax-broadcasting system now sends the menus
automatically, keeping customers happy and allowing the owner to spend those two
hours in more productive ways. And when the deli has a special offer, the owner
sends a fax about it to those same customers.



News Releases/Public Relations

Companies who promote a product by sending news releases to the media benefit
greatly from fax broadcasting. Media professionals prefer to receive personalized
news releases, and editors do not want to receive calls to verify receipt of the
information. Fax broadcasting allows a marketer to send faxes with personalized
cover pages, and the verification receipt confirms that the fax has arrived.



Periodicals

A number of publications have found that fax broadcasting complements their
regular print run. Each day, Dow Jones & Co. sends a JournalFax to paid
subscribers. This two-page update of world and national news includes the Dow
Jones Industrial Average. Call [phone] to get a free sample. Dow Jones
subscribers can also get real-time news on selected companies through a service
called CustomClips.

For a small fee, Home Office Computing provides further information on some of
its articles.

Magazines also use fax broadcast to reach their advertisers with updates on
editorial calendars, rates, and special offers.



Recreation

To help it sell darts, Valley Recreation Products promotes regional darts and
pool leagues in bars nationwide. Because the leagues have grown, the company
needed a system that let teams exchange scores quickly. Now, teams fax their
scores to an operator, who processes them and returns standings by fax within 24
hours. The system combines optical character recognition software with a database
program.

Fax Broadcasting/Fax on Demand Combination

Used in combination with a fax-on-demand system, fax broadcasting becomes even
more powerful. Once a potential customer has called your fax-on-demand number,
you have that person's fax number, phone number, company name, and other
information you have requested. You can create a database with this data, and
build on potential clients' demonstrated interest. For example, Adobe alerts its
fax-on-demand customers whenever it offers a special deal on a new typeface.

Once you have a database of names and addresses, you can set up a system to fax
documents automatically. You can even personalize these documents with the
recipient's name and other information.

You can also use fax broadcasting to promote your fax-on-demand system. If you
already have a database of contacts, you can send a document by fax broadcast and
include a list of additional documents that are available by fax on demand.

The Central Dallas Association's newsletter, Downtown This Week, focuses on
improving Dallas's downtown area. It is faxed to CDA's members at no charge.
Included in the three-page newsletter is a menu of various documents available by
fax, such as a schedule for the Dallas Education Center and an update of downtown
construction projects. Advertising in the newsletter covers the publication's
costs. About 80 percent of the recipients distribute the newsletter to others in
their offices, and less than 1/2 percent have asked to be taken off the
distribution list. In the first month of operation, 144 people called the
fax-on-demand system and made 216 requests for documents.

DFW GolfFAX, produced by a service bureau called Fax Resources, is a two-page
document containing listings and ads. Readers can get more information on
companies and clubs mentioned in listings and ads by calling a fax-on-demand
number. The newsletter is distributed free of charge to golfers whose business
cards were gathered at golf shows and country club directories. In its first two
weeks, the fax-on-demand system handled 183 calls and 271 document requests.

The Economics Press in Fairfield, N.J., publishers of business training
materials, announced its new fax-on-demand system in its newsletters. Callers
could order articles on topics such as business writing and personal success
strategies, for $6 or $7 per article. The company mailed the newsletters to
70,000 people. In just two weeks, 90 people called the service and purchased a
total of 187 documents. While the magnitude of the project isn't large, it
establishes an interactive relationship where none had existed.

Setting Up a System

You can set up an enhanced fax system in-house, or work with a service bureau.
Because the cost of buying equipment isn't small, service bureaus currently
handle 80 percent of all applications. Look for this number to drop as equipment
prices decrease.

Callers make a toll call, dial an 800 number, or dial a 900 number. It's your
choice. You can also choose a one-call or a call-back system. In a one-call, the
customer dials the number using the handset on his fax machine, follows the
instructions, and then presses the "start" key on his machine to receive the
requested information. In a call-back, the customer enters a fax number, and the
information is faxed to him a few moments later.

You can store your documents in the system's electronic library in several ways.
The simplest method is to fax or scan the documents in. Some service bureaus let
you transmit information from any fax machine. These methods are the simplest,
but the images produced are not as clear as those sent directly from a computer.
SprintFax, Ibex Technologies, and other companies offer software that allows you
to upload high-quality images directly from your computer.

What if the customer's machine is out of paper, or she is receiving another fax?
Some systems have an automatic retry feature. If the fax does not go through the
first time, the machine will keep trying until it succeeds.

You can easily track transmissions. Many service bureaus provide a management
report, a fax that records each completed broadcast immediately.



Application Tips

Before setting up a fax on demand or fax-broadcasting system, ask yourself the
following questions:

˘    What do my clients request most often?

˘    What kind of information is important to them, and can I provide it easily?

˘    Can I prepare special reports suitable for fax distribution?

˘    Can I use the system to provide hard-to-find forms to customers?

52 Ways to Use Fax Technology

1.    Transmit weather info to farmers, and include an ad for your business

If you sell farm implements, seed, financial services, or other goods and
services of interest to local farmers, you want to build community goodwill.
Offering localized weather information by fax _ either through broadcast fax when
emergencies strike, or on a daily basis _ is a low-cost, high-impact goodwill
generator. You can include an ad for your company with each fax sent.

2.    Distribute ticket availability information

Ticketmaster and the local box office spend tens of thousands of dollars on phone
lines and extra operators _ even though more than half the callers ring off
without buying a ticket. Each and every ticket-selling transaction requires a
long discussion about available seats. By offering a listing of available seats
through fax on demand, ticket sellers could dramatically decrease time spent on
the phone while increasing customer satisfaction.

3.    Promote last-minute vacation deals

An unsold seat on a cruise ship or airplane is worthless. Unfortunately,
last-minute travel companies are hindered by the enormous cost of notifying
clients of available trips. Using broadcast fax and fax on demand, an
enterprising broker can easily and inexpensively notify her best clients of any
available deals.

4.    Distribute coupons for specials at the local market

Large supermarket chains can afford to run expensive free-standing inserts (FSIs)
and full-page ads in the city papers. Local markets and specialty stores don't
have this luxury. By offering broadcast fax to their best customers, these stores
can fight back with precisely targeted promotion.

5.    Transmit updated price lists

If a large business updates its prices monthly, the cost of notifying its 10,000
customers of each change can quickly become prohibitive. An alternative is to use
broadcast fax to contact the most steady customers, while permitting intermittent
customers to get the latest list using fax on demand. For example, a sports card
broker could load his latest price list into the machine daily, eliminating
confusion and frustration over old prices.

6.    Broadcast news releases to the media

If your company has just won a national award or secured a major government
contract, that's news. Unfortunately, by the time the postal service delivers a
news release, it's old news. You may get more media exposure if you broadcast a
release to editors by fax. Freshness is vital to the news media. The faster you
can get your release to them, the greater the chance they will use it.

7.    Broadcast product information to sales reps

Manufacturers often make slight changes to their products that will interest only
a few customers. It isn't cost-effective to rewrite the product brochure.
However, the company can fax details about the new features to its sales reps,
who then tell interested customers.

8.    Broadcast a newsletter to subscribers

Most newsletter publishers find that printing and mailing costs are two of their
largest expenses. But if a publisher prints only one copy of her newsletter, and
faxes it to subscribers in off-peak hours, she can save thousands of dollars. The
subscriber benefits too, because he gets his valuable news more quickly.

9.    Provide currency information

Currency prices change by the hour as the markets fluctuate. A company working on
a major international deal can make or lose thousands of dollars, depending on
the exchange rate when the contract is signed. A bank could fax frequent updates
to its biggest customers, earning lots of goodwill for very little money.

10.    Advertise seat availability on airplanes

When an airline offers a major fare reduction, its switchboard is overwhelmed
with callers, many of whom are unable to find available seats at the advertised
price. This frustration hurts the relationship that the airline is trying to
build. The airline could offer a simple fax-on-demand system that would identify
the flights with the most availability on a given route.

11.    Supply auction information

A major auction house like Sotheby's could fax information on pieces up for
auction to clients who have previously purchased similar or related items.
Collectors who bought a Max Bill abstract sculpture last year, for instance, may
be very interested in the upcoming auction of a Sonia Delany.

12.    Send record release information to radio stations

DJs are always looking for bits of news and trivia to drop into their patter
between records. A record company can fax a one-page sheet of interesting tidbits
about a new CD ("Did you know that the new Cockroaches album was recorded in the
Paris sewers?") to hundreds of DJs several days before the record arrives in the
stores, creating listener interest at the most crucial time.

13.    Provide instructions for office equipment

Technical consultants can spend hours answering straightforward questions such
as, "How do I change the toner cartridge on my photocopier?" A fax-on-demand
system can solve this problem by allowing users to request instruction sheets for
various common tasks. Everyone benefits: Users get clearly printed information
and drawings, and consultants get more time to answer complicated questions.

14.    Provide how-to instructions for homeowners

A publisher of do-it-yourself books can set up a fax-on-demand system offering
tips on fixing common household problems. On each tip sheet, the publisher prints
an ad for a related book. For instance, the sheet on fixing leaky faucets
includes an ad for The Complete Guide to Home Plumbing. Even if the customer
doesn't buy the related book right away, the publisher has positioned itself as
an expert in home repair.

15.    Distribute medical advice to parents (sponsored)

A hospital might set up a fax-on-demand service to provide medical information to
couples who have recently had babies at the hospital. A related business, such as
a baby food manufacturer or a children's clothing store, would cover the cost of
the service by paying a fee to advertise on the information sheets.

16.    Produce special reports

Supplying fact-filled reports on issues of importance to potential clients can
create goodwill for your company before you even make a sales call. A nursing
home could fax a report on changing trends in elderly care to people who
subscribe to a seniors' publication. The recipients will be grateful for the
hard-to-find information, and will remember the home's name if they are ever
seeking extended care for a family member.

17.    Broadcast lobbyists' position papers

Lobbyists often face a daunting challenge: getting new information out to
hundreds of U.S. Representatives just days before a crucial vote. By faxing their
position papers directly to each office, they get the information into the right
hands quickly without the hassle of playing telephone tag with busy legislators.

18.    Augment ads

A picture really can be worth a thousand words. A cycling equipment company can
run a magazine ad featuring pictures of its most popular bikes, gloves, helmets,
and cycling shorts, with a brief description and a code beside each product.
Readers can dial the fax-on-demand number displayed in the ad, punch in the codes
of products, and receive more information than could ever be printed in a
magazine ad.

19.    Distribute catalogs on demand

A mail-order company selling women's casual and business clothing may notice that
some of its customers buy sweatshirts and leggings but never buy business suits.
The firm can offer these customers the option of receiving a casual-only catalog
by fax. These customers get only the information they need, and the company saves
on printing and mailing costs.

20.    Provide photos and layouts of houses that are for sale

A real estate company can set up a fax-on-demand service offering prospective
home buyers information on houses for sale, broken down by price, neighborhood,
size, or other characteristics. The fax answers the buyers' basic questions. An
agent can call them a few days later to discuss more detailed concerns.

21.    Advertise car dealership specials

Car dealers carry dozens of used cars, each unique. By offering a regular update
of the stock on the lot, the dealer can save the shopper time, and increase the
number of motivated prospects.

22.    Send phone lists to politically active supporters

An oil spill has just clogged a major harbor, and an environmental group wants to
urge its members to call local, state, and national authorities to demand a quick
cleanup. The organization can immediately fax lists of legislators' telephone
numbers to active members. It can also send the list via fax on demand to people
who respond to a newspaper ad _ generating a list of potential members as well as
political action.

23.    Distribute charts and tables from government data (sponsored)

The government creates reams of data _ most of it unseen by the general public.
An information publisher can capture this data and make it available to the
public through fax on demand.

24.    Supply job seekers' rÇsumÇs on demand

An association of freelance writers can send a directory of its members to
editors across the country. If an editor wants more information on a particular
writer, he can call the association's fax-on-demand service to receive a detailed
rÇsumÇ and samples of the writer's magazine articles. Similar services would work
well for employment agencies, unions, and student placement bureaus.

25.    Transmit job descriptions on demand

A Fortune 500 company places a career ad in a national newspaper and is suddenly
flooded with calls for more information on the three positions advertised. A
fax-on-demand system can send job descriptions to callers automatically, helping
interested people target their applications more precisely.

26.    Broadcast sports information and lineups (sponsored)

The local hockey team can make the game's roster available to interested fans at
virtually no cost by providing it through fax on demand.

27.    Distribute travel brochures

A customer may want to find out about yak tours of Tibet or luxury villas in
Spain, but most travel agencies only have enough room to stock brochures on
all-inclusive Caribbean resorts, bus tours of France, and other popular packages.
A fax-on-demand system, however, can offer interested clients a choice from
thousands of brochures, increasing the agency's potential to make a sale.

28.    Supply inventories of comic books for sale

Collectors are searching for particular comic books, but answering every inquiry
is a time-consuming task. By placing the shop's entire inventory on fax on
demand, collectors can quickly find the object of their search.

29.    Broadcast poison and snake bite information (sponsored)

Six months to a year after a baby has been born at a hospital, the hospital's
poison control center could send information on child-proofing medicine cabinets
_ just as the baby is learning to walk and open doors. A pharmacy could advertise
on each sheet, covering the cost of the service.

30.    Broadcast dental appointment reminders to existing patients

Every Monday morning, the receptionist at a dentist's office can fax a standard
reminder notice to patients who have appointments scheduled that week.

31.    Broadcast bills

Utilities can broadcast one standard bill to all customers paying the same fee,
saving money on printing, envelopes, and postage. Database-driven fax
broadcasting can send out personalized bills, further decreasing the utility's
cost. A discount could be offered to those willing to receive bills this way.

32.    Handle reservations for a popular restaurant

When a hot restaurant opens, the owner must deal with overflowing phone lines and
angry people who couldn't get a reservation. By allowing individuals to request
seating information through fax on demand, everyone wins.

 33.    Provide information on the status of truck shipments

Truckers have become far more sophisticated in their ability to track shipment
status. Database fax can take this sophistication one step further, offering
up-to-the moment written information.

34.    Provide proof of delivery

Federal Express has captured most of the market for overnight delivery. But a
competitor could offer automatic fax confirmation, sending a fax to the shipper
the moment the package arrives. The cost to the competitor _ less than forty
cents a shipment.

35.    Distribute a large corporation's capabilities brochures

An international consulting firm offers many services, such as accounting,
outplacement counseling, public opinion research, and policy analysis. Every
month, the company gains new clients, which it would like to mention in its
literature. Instead of frequently updating one general bro-

chure _ a costly procedure _ the company can distribute finely targeted,
up-to-date brochures on each of its services through fax on demand.

36.    Distribute book samples

The promotional ads for a new romance novel say the book is "hot, hot, hot," but
the owner of a small bookshop is not convinced. She's stocked books based on that
claim before, only to have her regular customers complain after buying them that
they were about as exciting as C-SPAN. A fax-on-demand system would allow her to
read selected scenes and plot synopses from books before they're published, and
decide whether they would appeal to her regular customers.

37.    Offer a sneak preview of the latest issue of a magazine

The publisher of an entertainment magazine can fax excerpts of an interview with
a notoriously reclusive director to those interested by a teaser campaign.
Certain to boost newsstand sales.



38.    Provide transcripts of a politician's position papers and latest speeches

If a politician suddenly rises to national attention, her office may be swamped
with media requests for information on her earlier career. A simple fax-on-demand
system would allow reporters to obtain copies of position papers and speeches
that would lend depth to their profile pieces and analyses.

39.    Supply international stock information

A stockbroker can fax updated information on international stocks to important
clients on a regular basis. By supplying hard-to-find data, the stockbroker
positions himself as a knowledgeable expert. And the investors, confident that
they are well informed, may buy more stock than they would without the
information.

40.    Provide portfolio information

Stockbrokers and mutual fund administrators spend a lot of money printing and
mailing portfolio statements to investors. Many investors may prefer to receive
this information by fax.

41.    Distribute application forms

Universities publish scores of application forms for different groups:
undergraduate students, Ph.D. candidates, foreign students, aid applicants, and
more. University admissions offices spend hours each day answering phone calls
from students seeking specific forms. A fax-on-demand system would allow students
to receive forms immediately, at any time, and would free up admissions officers
to deal with complicated questions.

42.    Create a fan club newsletter

Fans of a pop singer could get daily updates on their hero through a
fax-on-demand service. Cost to the singer _ less than $2,000 a year. Certain to
increase his concert sales and album play.

43.    Provide up-to-date sports scores

Many sports fans can't get out to afternoon games, and can't listen to the radio
at work, but they still want to know how their favorite teams are doing _
especially during the playoffs. A radio station could build loyalty by
broadcasting up-to-date results to interested fans.

44.    Answer frequently asked financial questions

To attract new clients, a financial planner can advertise a free fax-on-demand
service that offers answers to common financial questions, such as "How can I
save for my child's education?" or "What are the advantages of mutual funds over
savings bonds?" The service lets potential customers try out the planner's
services in a nonthreatening way. The planner can then contact these prospects
directly to set up a follow-up appointment.

45.    Supply information on the top-selling products of the week

A record store or bookshop can fax information on the week's top-selling albums
and books to local media outlets. The press attention will translate into
increased store traffic.

46.    Distribute company profiles

An organization that fields constant requests for company information, such as a
credit-checking firm, a municipal Chamber of Commerce, or the local Better
Business bureau, can make standard company profiles available through a
fax-on-demand system.

47.    Promote ways to improve gas/oil/electricity usage (sponsored)

An environmental group can team up with a utility to share the cost of faxing
seasonal tips on saving gas, oil, or electricity to utility customers who request
the service. In the summer, the tip sheets could outline ways to cut down on air
conditioner use, while in the fall they could urge customers to clean their
furnace filters.

48.    Supply demographic information

Market research firms that have compiled detailed demographic information can
make that data available to clients for a fee through a fax-on-demand service.
The client would punch in a ZIP code and receive information on the age, income,
family status, and buying habits of the area's residents.

49.    Share mailing lists

A tourism and convention bureau in a major city can earn some money and save time
by making mailing lists of its members available to marketers through fax on
demand. Marketers, who would pay a fee for the lists they request, could get a
list of all the bureau's members, or lists broken down by neighborhood or type of
business.

50.    Broadcast product recall/safety notifications

A car company can ensure that its customers receive immediate notice of recalls
by broadcasting the information by fax. The car company saves postage costs, and
the customers will be happy to know about possible safety problems as quickly as
possible.

51.    Notify interested parties of deadline changes

When a government department extends the deadline for bids on a contract,
potential bidders need to know that information as soon as possible. And all
bidders need to know about the extension at the same time, to ensure fair
competition. By broadcasting the information by fax, the department informs all
bidders of the extension quickly.

52.    Provide exhibit information for trade shows and conventions

By faxing information to potential exhibitors, trade show and convention
organizers can contact many more companies than they could afford to contact by
mail. This increases the chances that the organizers will be able to fill all the
available booths.

Fax Resources

Service Bureaus

Delrina Communications Services

895 Don Mills Rd.

500-2 Park Centre

Toronto, Ontario

Canada M3C1W3

[phone]

Delrina is a provider of fax mailboxes, a service that stores your faxes until
you're ready to retrieve them. Your PC will never be left on, senders will never
get a busy signal, and your own phone line will always be free. You can retrieve
your faxes from anywhere in the world simply by downloading them to WinFax PRO
4.0 or forwarding them to a fax machine. Delrina also provides fax broadcasting.
Compose documents using WinFax PRO 4.0 and distribute them using Delrina's phone
lines.



Instant Information, Inc.

5 Broad Street

Boston MA 02109

[phone] fax [phone] demo

(800) USA-XPORT (The Export Hotline)

Instant Information is a full-feature service bureau specializing in fax on
demand and fax broadcasting services. Forbes, Fortune, Voice Processing, The
Export Hotline, and others have set up systems through Instant Information.
Instant Information is the recipient of the first Enhanced Fax Award for Service
Bureau Excellence by Voice Processing magazine.



The Kauffman Group

324 Windsor Drive

Cherry Hill NJ 08002-2426

[phone] fax [phone]

The Kauffman Group is an enhanced facsimile services consulting firm that focuses
on the sales, marketing, and communications benefits of fax technology. It often
launches enhanced fax applications to solve a particular problem or augment a
marketing campaign. Clients of The Kauffman Group come from a broad range of
industries. The company can manage applications, evaluate delivery methods,
evaluate and recommend products or applications, and do application strategic
planning.



MarketFax

One Bridge Street

Irvington NY 10533

[phone] fax [phone]

fax line [phone] ext. 105 or 106

MarketFax is a proprietary fax-on-demand service that sends information from any
touch-tone phone to any fax machine anywhere, 24 hours a day, 7 days a week _
instantly, automatically, and unattended. It can be accessed via an 800 number
using any touch-tone phone including cellular.

MarketFax can track all pertinent caller information, including date, time of
call, caller location, fax and phone numbers, caller frequency, and more. You can
change or update information on the MarketFax system as often as you wish _ on
demand. You can also access response activity reports at any time. According to
the company, closing ratios of converting callers to sales via MarketFax range
from 20 percent to 70 percent.



SprintFAX

[phone] fax line [phone]

SprintFax offers fax on demand, broadcast fax, and interactive voice response
systems. It also offers SprintFAX OnLine software for Windows, DOS, or Macintosh.
Broadcast distribution features include automatic retry, smart retry (if an error
occurs in mid-transmission, transmission will resume beginning with the last page
sent), management reports, and alternate delivery. Volume discounts are
available.



Touch Tone Services

P.O. Box 2994

Renton WA 98056

[phone] fax line

[phone], request document 101 for general information

Touch Tone is a telecommunications service bureau specializing in interactive
voice and fax applications. It offers fax broadcasting, fax on demand and custom
voice-fax programming for large and small clients. This service bureau is an
innovator in bingo card fax on demand and database to fax systems.



Hardware and Software Providers

Copia International, Ltd.

[phone] fax [phone] fax line [phone]

Copia International provides FaxFacts, a union of a PC, voice, and fax board
featuring easy-to-use pull-down menus. It allows you to create the prompt menu
yourself in your own voice. Copia holds the patent on the one-call system. This
system and the call-back system can operate simultaneously.



Ibex Technologies

550 Main Street

Placerville CA 95667

[phone] fax [phone] fax line [phone]

Ibex Technologies provides software, called FaxLine for Windows, for businesses
interested in setting up their own fax-on-demand system. Named one of the 50 Best
Buys for 1993 by Corporate Computing magazine, FaxLine provides users with an
easy-to-use, data-driven Windows interface for building fax-on-demand
applications. It also has a broadcast feature.



SpectraFax Corporation

3050 Horseshoe Drive, Suite 100

Naples FL 33942-7908

[phone] fax [phone]

info line (800) 833-1FAX

SpectraFax is a market leader in providing fax and voice information
retrieval/delivery systems to corporations, associations, government markets, and
service bureaus. The Special Request product provides all fax and voice
information retrieval/delivery applications, including fax on demand, data on
demand, fax broadcast, fax order processing, and fax messaging. Other hardware
includes devices to connect Special Request with LANs, fax boards, and more.





Reference Sources

National FaxList

P.O. Box 9777

Trenton NJ 08690

[phone] fax [phone]

The database of National FaxList is claimed to be the largest compilation of
business fax records in the country. It helps users reach multiple points in
specific industrial or regional markets via fax. Each record in the database
contains an address, telephone and fax numbers, an executive contact, and a
business classification that allows the creation of groups of records selected by
type of business in any area of the country. The National FaxList database
comprises more than 940,000 records. National FaxList also offers clients with an
existing database of businesses without fax numbers a match-up service that
updates their records.



Sarah Stambler's Marketing with Technology News

$99/year (12 issues) available from

TechProse, Inc.

370 Central Park West, #210

New York NY 10025

[phone] Orders [phone]

This four-page monthly newsletter is distributed solely by fax. It covers
businesses' use of alternative electronic media to market and deliver their
products. Alternative media include fax broadcasting, fax on demand, videotext,
CD-ROM, multimedia, FM subcarrier, cellular communications, audiotext, and more.
MWT examines the companies using these techniques, compares competing techniques
for different applications, analyzes new trends, and reviews new products.

Other publications available from TechProse include ($84 each) "Selecting a Fax
Broadcast Service Bureau," 24 pages, "Selecting a Fax-on-Demand Service Bureau,"
24 pages, "Selecting an In-House Fax-on-Demand System," 25 pages. The first two
reports include a comparison table of major service bureaus.











Fax Glossary

Bingo card fulfillment: an automated advertiser-response system used by
magazines. Each ad in the magazine is given a code number. Readers can request
information on advertisers by calling a central number and keying in the relevant
code.

Call-back fax on demand: a system in which customers call a number from their
phone, enter their fax number, and request documents. The documents are then sent
to their fax machine.

Database to fax: a fax-on-demand system in which the documents are not
pre-scanned. Instead, the computer compiles information from a database and sends
it to the caller.

Dots per inch (dpi): a method of measuring how clearly a fax machine will
reproduce a document. The higher the dpi of the receiving machine, the clearer
the document will be.

Enhanced fax: any system of using fax technology other than for basic
transmissions. It includes fax on demand and fax broadcasting.

Fax broadcasting: a form of fax marketing in which personalized documents are
sent out to current or prospective customers en masse.

Fax marketing: using a fax machine to provide information to customers, sell
products, or provide support.

Fax on demand: a form of fax marketing in which documents are available to
customers upon request. A customer dials a number and requests the appropriate
document. The document is then sent to the customer's fax machine.

One-call fax on demand: a system in which customers call a number from their fax
machine and request documents. The entire transmission is completed with one
call, at no additional expense to the marketer.

Service bureau: a company that provides enhanced fax services. It offers an
alternative to an in-house system.





AUDIOTEXT

Despite all the hype about the Information Superhighway, there's currently only
one interactive device that's available to everyone. It's simple, easy to use,
rarely breaks, and has a great reputation. The telephone is about as interactive
as many of us get.

During the 1940s, every phone call was connected by hand. Phone use was growing
so fast that one

Bell System estimate predicted that if

current growth continued, every single woman

in America would have to become a phone

operator in order to keep up with demand.

Fortunately, the automated telephone switch was developed, preventing the
collapse of the phone system. Two decades later, touch-tone telephones, digital
phone switches, and computers have changed, once again, the way telephones work.

Until audiotext was developed, every phone call had to be answered by someone _
there was a one-to-one relationship between customers calling a business and
employees at the business answering the phone. The cost of living up to the
promise of "operators standing by" scared off quite a few businesses from widely
publicizing their phone numbers.

Now the paradigm has shifted. A virtually infinite number of people can call your
business _ and they'll all get an answer on the first ring. You can offer a huge
range of information and services to customers. You can conduct polls, and inform
people of product or price changes.

What Is Audiotext?

Audiotext is based on a technology called interactive voice response (IVR).
Customers use the keypad on their touch-tone telephones to respond to prerecorded
or digitally created instructions. Without ever having to speak to a live
operator, callers can obtain information about a product or service, respond to a
survey, enroll in a sweepstakes promotion, or track a lost Federal Express
package.

Audiotext is available for both large and small usage installations. One system
can handle more than 10,000 phone calls simultaneously, making it a viable tool
for live radio and television promotions.

But you don't have to do business on such a large scale to benefit from
audiotext. Many computer companies sell audiotext circuit boards that plug into a
personal computer. These boards allow you to build a simple audiotext system that
will work on a single phone line.

Think about audiotext from the computer's point of view. All we're asking the
machine to do is accept a simple input and then generate a simple output. Most
people use keyboards to get access to a computer, but there's no reason not to
think of the keypad on a telephone as a primitive keyboard.

A flowchart tells the system exactly how to respond to any input from a user.
It's simple. If the caller presses 1, the system jumps to one portion of the
flowchart and delivers a message. If, however, the caller presses 2, a different
part of the chart comes into play.

When integrated with a database, audiotext becomes an even more powerful tool.
Federal Express uses audiotext to speed delivery information to customers. Dial
[phone] and the system will ask you to input the airbill number of your
missing package. Within seconds, the computer searches the FedEx database, finds
the status of your package and reads it to you. Federal Express saves time and
money, and the caller avoids the hassle of being put on hold or explaining his
problem to an operator.

Is this marketing? Sure it is. By investing in a system that makes life easier
for its customers, FedEx has created goodwill. If the customer has a warm feeling
about the company, he'll keep coming back. And because the inquiry is handled by
computer, Federal Express can easily keep track of which customers are eager to
track their packages, and even better, which customers are most often
disappointed. By personalizing their service on a mass scale, Federal Express has
avoided a classic danger of growing big.

When choosing an audiotext strategy, consider pricing first. For many consumers,
price is a real issue. While a toll call will put a cap on your exposure, a
toll-free call is guaranteed to increase response, even among business callers.
And for many potential callers, a high-priced 900 number is out of the question.

More than 300,000 American businesses have one or more toll-free lines, and these
lines are estimated to generate revenues of more than $7 billion each year. New
digital technology means that service can be installed on existing telephone
lines. Toll-free numbers are now portable, so you can keep one if you relocate or
change carriers. Compared to mail-in response marketing, where the marketer pays
for printing and postage, toll-free lines are relatively cheap.

Using Audiotext

In its simplest form, IVR can answer incoming calls automatically, allowing you
to provide 24-hour service without hiring round-the-clock operators. Do you get
frequent calls requesting catalogs, coupons, or dealer location information? Use
an audiotext system to provide prerecorded answers to common questions and to
record names and addresses of callers who want catalogs or other publications.
Your staff will then have more time to deal with complex customer inquiries. Be
sure to keep track of hang-ups. A system that saves you time but costs you leads
is no bargain.

You can also use IVR to expand your customer base and generate promising leads,
as in the following examples.

Sample and Coupon Distribution

The makers of Mott's Applesauce created a marketing program to inform the public
that the product could be used instead of sugar or vegetable oil in some baking
recipes. The company used an 800 number to distribute a free recipe booklet,
product coupons, and substitution hints. Put a sample or coupon into consumers'
hands, tell them how versatile the product is, and you'll generate sales as
customers put the product to new uses.

The Minwax company also wanted to showcase its products' versatility. It
published a magazine of decorating ideas, woodworking projects, and expert advice
called "Wood Beautiful," which it promoted through TV ads and point-of-purchase
displays. Consumers could call an 800 number to receive a free copy.

"A refund or cents-off offer will not bring new users," says Seth Bostraom,
promotional services manager at Minwax. "The book was developed to give consumers
new ideas and ways to use the products, thereby encouraging more product
purchase." Of course, everyone who received the free magazine is now in Minwax's
computerized database of hot leads for future launches and promotions.

Makers of nutrition products or cosmetics can link their products to specific
physical benefits by positioning a brand name in the midst of valuable health
information. Smith Kline Beecham used a toll-free audiotext line to promote its
Os-Cal line of calcium supplements. Callers registered to receive calcium-related
health information and product discounts throughout the year.

Warner Lambert, makers of Lubriderm skin care products, also ran an
audiotext-based promotion. The company placed print advertisements inviting
consumers to measure their "Skindex," which gauged their susceptibility to skin
problems. Callers dialed an 800 number and answered audiotext questions about
their lifestyle, exposure to pollution and tobacco, and exercise habits. The
company mailed callers the test results and a coupon good for 75 cents off any
Lubriderm product. Audiotext allowed the company to collect a gold mine of
intimate consumer information.

Just as important as the database, Warner Lambert gained customer loyalty and
respect. By offering valuable medical advice at no charge, it established a
relationship with the consumer _ one that could lead to one purchase or a
lifetime's worth.

Evaluate Media Placements

Systems such as Media Tracker, developed by Scherers Communications, Inc., of
Worthington, Ohio, let companies monitor the effectiveness of their ads easily.
Companies using the system add the phrase "ask for operator xx" to ads featuring
their phone numbers. Each television or radio spot, point-of-purchase display,
free-standing insert, newspaper or magazine ad, or classified listing has its own
"operator number." When customers call, the audiotext system asks them to key in
the operator number. Scherers can then supply a report showing how many callers
responded to each ad, and when they called.

Before audiotext, operators would ask callers that perennial question: "How did
you hear about us?" Many callers couldn't remember, so it was impossible to
relate their call to a particular ad. Audiotext conquers this problem. Callers
need the operator number to get access to the system (of course, those who forget
are helped along by a human operator).

Contests and Promotions

You can develop eager, engaged consumers by inviting them to play a skill-related
game. When the marketers of 15-Year-Old Pinch Scotch wanted to attract young
sophisticated buyers, they launched a phone-based stock market game with ads in
The Wall Street Journal and The New York Times. Contestants began with a set
amount of "play" money and made it grow by investing it in the stock market. The
person who made the most money won a trip to Scotland to see how Pinch Scotch was
made. This contest was particularly suited to audiotext since telephones are
integral to buying and trading stocks in real life.

But such a link isn't vital to a contest's success. Contests for limericks,
slogans, mottoes, jingles, and new product names have traditionally been run by
mail, but you can run them more efficiently using audiotext. If contestants
record their entries, you can quickly select a few dozen finalists which can then
be transcribed. You don't have to sort through paper entries, hire additional
staff, or decipher illegible handwriting.









Customer Polling and Surveys

The less inconvenient and costly it is to answer a marketer's questions, the more
likely it is that consumers will do so. The publishers of McCall's magazine knew
this when they opted for an audiotext format to gauge consumer satisfaction of
their magazine. Instead of inviting readers to fill out and mail back a lengthy
questionnaire, or hiring a focus group, they mailed a list of questions to
subscribers and invited them to respond via an 800 number. The response rate was
high. Readers obviously appreciated the convenience.

Telephone polling has another advantage: it can generate almost immediate
response. Right after President Clinton's 1994 State of the Union Address,
pre-selected viewers called an 800 line at CBS News to comment on the speech.
There is no reason why companies couldn't use the same kind of polling to record
consumers' opinions on new products or advertisements.

If you sell through retailers, you can use instant consumer feedback to track
which items are selling the fastest, which retailers are providing the best
service, and how your pricing compares with the competition. The technology is
simple and relatively inexpensive. It's also extremely flexible _ you can change
your questions within minutes.

Polling can also be used as a fundraiser. In 1993, Ralph Nader's advocacy group,
Public Citizen, proposed a bill that would forbid lobbyists and special interest
groups from influencing congressional legislation. The group encouraged concerned
citizens to dial a toll-free number. Callers could pay Public Citizen $5.75 to
send letters to President Clinton and their U.S. Representative on their behalf.

Register Applicants for Prizes and Drawings

In sweepstakes, unlike contests, winners are chosen at random. Popular mail
sweepstakes run by Reader's Digest, American Family Publishers, and Publishers
Clearing House have given these companies a nationwide profile. Other companies
are finding similar success with toll-free telephone sweepstakes. Consumers like
these sweepstakes because they're completely free _ not even a postage stamp is
needed _ and easy to enter. Companies like them because they're easy to monitor
and they generate thousands of leads.

During the 1993 football season, Coca-Cola ran television advertising promoting
its "Monsters of the Gridiron" sweepstakes. Coke drinkers could win prizes by
calling a toll-free number and punching in a special code printed on the bottle.
The promotion generated an astounding 32 million calls, and marketers could prove
the TV ads were effective because the number of calls often jumped dramatically
right after an ad aired. While most marketers would have trouble paying for 32
million phone calls, Coca-Cola was delighted. It gained insight into its customer
base, built a database, and most importantly, enhanced its relationship with its
consumers. The NutraSweet company ran an innovative sweepstakes that used every
NutraSweet product as a game piece. It invited consumers who had purchased
NutraSweet products to call an 800 number. By using a touch-tone phone to key in
the UPC code on the side of the package, the caller qualified to win a $10,000+
shopping spree. During the heaviest response times, calls were coming in at a
rate of 52,000 an hour.

Thanks to the flexibility of interactive voice response, you can run a
sweepstakes in conjunction with other marketing programs. Xerox Corporation set
up a hotline offering businesses new ideas on how to use existing color copiers.
Callers on the toll-free line could use a menu of recorded information to enter a
sweepstakes, or transfer directly to a live operator or a color copier dealer.

NOTE: Before running a sweepstakes (in which skill isn't involved), check the
legality of using the telephone to run the game. If there is a charge associated
with the call (not a problem with 800 numbers), then there may be regulatory
difficulties. Ask your lawyers first to be safe.

Operators Standing By

You can give customers more reasons to choose your company over a competitor by
providing automated services over the telephone. Charles Schwab, the discount
brokerage firm, has established an interactive voice response system called
Telebroker that allows customers to obtain stock quotes, trade options, and
short-sell stocks using a touch-tone phone. Callers can make up to eight
different transactions in one call. They even get a 10-percent discount on
commissions for using the service.

Harper Leather Goods, a Chicago-based pet product manufacturer, encourages
customers to register descriptive information about their pets in a computerized
database. The company sends the customer a special pet collar with a phone number
on it. If the pet is ever lost, the finder can call the number and Harper will
contact the pet owner. For its efforts, Harper Leather Goods collects a database
of concerned pet owners and important information about the pets themselves.

Registration day at most universities is an unqualified nightmare. Many courses
are filled on a "first come, first served" basis, so students camp out overnight
to get the classes they want. Lines are long and tempers are short. But several
universities have set up IVR systems that allow students to register by phone. At
the University of San Diego, a dial-up computer verifies students' eligibility,
then the caller picks courses using simple commands. The system can handle up to
18 calls at once. Students save time and frustration, and schools are reporting
annual savings of $100,000 or more.

At the University of Nebraska at Kearney, students can use a system called EASI
(Electronic Access of Student Information) to find out their individual grades or
their grade point average, get information on class schedules, or even register
for two consecutive terms at once. The school's financial aid department offers
several IVR services, including an answer line for routine inquiries, and a
missing documents information line to inform students if they need additional
paperwork to complete their aid application.

Barrington Capital Management's audiotext information service, Fluent, provides
up-to-date investment advice. Investors call five to ten times every day, and the
system handles approximately 24,000 calls daily.

Vanity 800 Numbers

Vanity numbers are dialing codes that spell a word or short phrase such as
800-ICANSKI or 800-ILOVENY. If audiotext is a cornerstone of a marketing
campaign, it may be a good idea to find a catchy phone number to help make the
campaign memorable.

Hooked On Phonics, Inc., sells an audiocassette reading program. What phone
number could be easier to remember than 1-800-ABCDEFG? In fact, the entire
business was built around this phone number. Before spending a dollar on
marketing or product development, the company paid $10,000 to another company to
entice it to change its number and allow Hooked on Phonics to take the number
over.

Teleway Florists knows the power of a good vanity number. The company that runs
800-FLOWERS has been so successful, it is reaching out to Spanish-speaking
customers. More than 50 percent of the Hispanic population buys flowers each
year, so the company has launched a second number: 800-LASFLORES.

900 Numbers

Horoscopes? Sex entertainment? Psychic talk networks? These are the businesses
that come to mind when premium pay-per-call 900 numbers are mentioned. Some
companies refuse to operate 900 lines because they're afraid the exchange alone
will make them look like a fly-by-night operation.

The stigma hasn't always been there. In fact, the first national application of
900 pay-per-call technology was undertaken by NBC in 1980, to gauge the country's
response to a debate between candidate Ronald Reagan and then-president Jimmy
Carter.

Like a long-distance call, a 900 call costs the caller money. But the sponsoring
company, along with the phone utility, receives the money spent on a 900 call.
That's the appeal of these numbers to companies. The fees raised from charges to
callers can help cover the cost of whatever service is offered on the line.

Sales via 900 numbers rose steadily throughout the 1980s, cresting at nearly one
billion dollars a year. The market tumbled in the early 1990s as public annoyance
at the seamy side of the industry grew. Parents discovered that their children
were racking up hundreds of dollars in fees to listen to a prerecorded message
from Santa Claus, or, worse, dialing the adult numbers.

The major carriers responded by offering call blocking and by refusing to pursue
collection for unpaid 900 charges. Uncollected charges

didn't hurt them because their revenue came from service providers who paid a
per-call rate to lease the 900 exchange. Service providers were forced to absorb
the uncollected "chargebacks." When unscrupulous callers realized the charges
would not be aggressively collected nor their credit harmed, they called the 900
services with impunity, forcing many entrepreneurs out of business.

The industry is undergoing a slow but steady rebound. Sex-oriented pay-per-call
lines are here to stay, but many carriers have set aside a separate exchange for
them, leaving room for less controversial pay-per-call services. In New England,
lottery information lines are the most frequently dialed 900 service, followed by
personals services, sports lines, and events listings.

Entrepreneurs who offer quality services, desirable premiums, or valuable
information will always be able to find a profitable niche in the 900
pay-per-call industry.





Don Peppers and Martha Rogers

on Reverse-900 Numbers: Electronic Couponing and Tracking



Marketers distribute three hundred billion coupons in this country every year,
mostly as freestanding inserts in newspapers. About 8 billion are redeemed, a
little less than 3%, but some industry experts estimate that 20% or more of these
are redeemed for the wrong product, the wrong size, or for a fraudulent sale.

However, coupon issuers have overlooked a new, addressable technology _ a new,
1:1 medium _ right under their noses.

Local phone companies provide 900-number services to marketers. If you want
information, you dial a 900 number, and a charge appears on your phone bill.
Identifying every incoming calling number, 900-number technology ensures that the
caller's phone bill is properly charged for the call. Such "900" numbers,
provided by long-distance phone companies, collect money from individual
consumers for information or entertainment services that other companies provide
over the phone.

Why not use the same exact method of transferring money _ via the phone

bill _ to pay consumers for their interactions? If a 900 number charges a
customer's phone bill in exchange for information a customer wants, why doesn't a
marketer credit the customer's phone bill in exchange for information the
marketer wants _ about the customer?

Suppose, as a packaged goods marketer (or any other kind of coupon issuer), you
were to place a different, individual ID number inside each product package, to
serve as a "proof of purchase." Then, instead of printing millions of coupons and
placing them inside newspapers, you run an ad in the food shopping section of the
paper that lists your products and the types of coupon rebates you're offering
for each. Your ad could publicize the fact that you are rewarding first-time
buyers with a special bonus for sampling your product. The ad might read:

"After purchasing a family-size box of Eggo Frozen Waffles, call

1-900-KELLOGG, punch in the 'proof of purchase' number found inside the

box, and we'll credit your phone bill with a 50-cent rebate. First-time Eggo

users will get an extra $2.00 _ so if you haven't tried Eggo Frozen Waffles,

try them now. It's our treat."

How would this work? Very easily, and totally automated. Using currently
available telephone and computer technology on your own end, your computer will
be able to identify the incoming calling number as each call is received. (Think
about it: The phone company has to know whom to bill for current 900-number
services, right?) If you've heard from that phone number before, your computer
will know it. When the unique proof-of-purchase number is punched in by the
caller, you'll know whether a 900-number coupon for that type of product has ever
been redeemed by that particular calling household. Each proof-of-purchase number
can only be redeemed once.

Naturally, since Kellogg is a multiple-product agency, a caller might call in to
redeem more than one coupon at a time, for more than one type of Kellogg's
product. The smart marketing company will have one reverse-900 number to call for
all coupon redemptions, to encourage multiple coupon redemptions on the same
call, and minimize telecommunications expense. Fraud would be far more
controllable than for paper coupons, too.

When each phone call is connected and the computer identifies the calling number,
you should offer different, additional values to different types of users. You
might offer multiple coupon users additional, "hidden" coupons (not printed and
distributed with the Sunday papers, but communicated over the phone during
incoming calls from such coupon-sensitive households). First-time coupon users
could be offered extra values for their second purchase, in addition to the high
values they received on their initial purchase. And while you have a caller on
the line to receive some coupon rebates, why not ask one or two multiple-choice
questions for extra money?

The biggest advantage to you as a marketer, however, is that this kind of system
is a perfect means for electronically differentiating one individual household
from another, addressing tailored offers to each, without using the mail. You
could use reverse-900-number couponing to begin identifying and tracking your own
customers inexpensively today, in much the same way that airlines do, without
ever having to deal with the postal system.

Once you get a customer on the line, engaged in an interchange of some

type _ even a "touch-tone conversation" with your computer _ then you can begin
to identify how much more business that customer does, and which of your
competitors is getting it now. The more you can get a customer to communicate to
you, the more likely it is that you'll be able to secure a greater share of his
business. Paying for his time and trouble, with added services "on the house," or
additional coupon rebates, or money, is often a wise investment.

What ought to be clear is that the benefits of this kind of program would be
immense, but only if you are prepared to re-orient the way you visualize your
marketing task. When you can differentiate your customers individually, then a
whole new dimension of competition is possible _ a share-of-customer dimension,
building your business one customer at a time. If you aren't the first in your
industry to adopt a 1:1 perspective, you may still be one of the first to feel
its effects, as your competitors begin to pick off your own best customers, and
keep them, leaving you with the dregs.

Earlier, we mentioned the possibility of reverse-900 numbers, using technology
currently available to credit customers' phone bills in exchange for interacting
with you. Reverse-900 numbers offer variable-value coupons for optimal
incentives, and also provide a way to track customer transactions and
participation.

Even if you don't print coupons on a regular basis, you could use reverse-900
numbers for a wide variety of other customer-differentiation purposes. Gathering
survey information, for instance, would be much easier if you paid a customer to
interact with your computer telephonically.

You could tie a reverse-900 number to a commercial, or an infomercial, so that if
a viewer watched your video long enough to hear the "control" number, then he or
she could call it in for a monetary credit _ and you get the name, phone number,
and address of a genuine prospect. You could combine 800- and reverse-900-number
technology, so when a customer calls your customer service line you offer a small
payment as a refund, or as compensation for a minor complaint, or in return for
information about other brands being shopped.

Imagine how this might work: Locate owners of VCR Plus, the handheld device that
controls program recording on your VCR when you enter the string of numbers from
the TV listings. Using Polk or other syndicated data, you match up owners of VCR
Plus with cable TV subscription and, say, certain car ownership. A postcard
encourages recipients to record your infomercial, which you run on inexpensive
cable time slots. In exchange for calling in the code words which will be
revealed on audio during the program, you will credit the viewer's phone bill
$5.00 _ a small price to pay for 25 or 30 minutes of a prime prospect's _ or
current customer's _ time and attention.

In a world such as ours where enough money is spent on advertising and promotion
for every American to be exposed to 2,000 to 3,000 messages every day, this kind
of explicit bargain will characterize advertising in the one-to-one future.





Professional Services

Michael Cane, president of TeleLawyer, warns entrepreneurs away from attempting
to launch a pay-per-call advisory service in professional fields such as law,
medicine, or accounting. Citing different state licensing restrictions, and the
difficulty of providing responsible service over the phone, Cane says only
professionals who happen to be entrepreneurs should wade into the 900 waters. Of
course, Michael Cane runs such a service himself, so take his warning with a
grain of salt.

It's true that you're unlikely to profit from a stand-alone service that does
nothing but offer advice by phone. But if you use an audiotext advice service to
enhance your existing business, it may be a dynamite combination.

An accountant, for example, could offer quick advice on a 900 number for $3.00 a
minute, then offer callers an in-person consultation at a fraction of that rate.

Every day, about 2,000 people call the Small Business Administration's 900
number, which provides general information to small businesses. The perceived
quality of the information, along with the urgency of the callers, explains the
public's willingness to pay for this information.

Cadwalader Associates, an architectural firm, lets potential customers try before
they buy. Callers on the company's 900 line can discuss residential home and
design problems with a licensed architect for $4.99 a minute. They can also fax
drawings and sketches during the consultation. Cadwalader probably won't make
much money on the 900 service, but they will gain the goodwill and trust of
hesitant customers.

Consumer Savings Information

A customer will spend a few dollars on a 900-number call if she thinks the
information will save her money in the long run. Many companies have had success
with these information lines. La Onda, Ltd., runs a 900 line that links people
looking for discount travel with airline companies that have empty seats.

A.M. Best Company, which publishes Best's Insurance Reports, lets consumers check
their insurance company's solvency on its 900 line.

If you're thinking of setting up such a line, make sure that the information you
plan to distribute isn't easily available for free elsewhere. You must also keep
the number before the public by advertising constantly _ an expensive,
time-consuming job that has doomed many would-be infopreneurs.

Polling/Surveys

Polling can increase a TV audience's involvement with a program. Fox Television
invited fans of the show Living Single to call a certain number to choose which
character would go out on a date with a new beau. The proceeds from the call went
to Literacy Volunteers of America, Inc.

TV newsmagazines such as Hard Copy and A Current Affair use the pay-per-call
format to solicit opinions about splashy stories such as the O.J. Simpson case.
And USA Today invites readers to "vote" on controversial editorial issues through
its 900 line.

Many callers enjoy giving opinions on their favorite shows or current issues.
That enjoyment is the reason they spend money on a 900 call. But promoters in the
manufacturing sector must combine a 900-line survey with a premium, a valuable
coupon, or some other enticement in order to make the call worthwhile for the
customer.

Pay-per-call Corporate Customer Service

Microsoft, like some other companies, has recently switched part of its free
helpline to a 900 number to offset the cost of staffing a support services
department. While they continue to offer service over a standard phone number,
the callers to the pay-per-call service get priority.

Game software publishers use 900 numbers to provide support to their customers.
For 75 cents, players can call the LucasFilms Video Games line to get tips on
navigating the higher levels of popular games such as Indiana Jones and The Last
Crusade. Chargebacks to these numbers are low, even though many callers are
young.

But be careful. In many cases, customers will become angry if they have to pay
for service. On the other hand, companies can save money without offending anyone
by offering different levels of service. A software company could charge $3 a
minute for immediate access to a top-notch technician, while offering toll-free
service to the average consumer who is willing to sit on hold for a few minutes
to save the fee.

Even banks are using this approach. Customers of the Society Bank of Ohio, First
Interstate Bank (California), and Wells Fargo Bank can call a 900 number to
verify checks. The banks recoup some of the costs of providing a service that
customers value.

Replacing Traditional Media

Newspapers and newsletters survive because they provide information too timely or
too complicated to be delivered in other ways. But with the immediacy of
audiotext, a marketer can grab part of this pie.

Brite Voice Systems, Inc., has set up an audiotext version of that perennial
newspaper moneymaker, the singles ads. Callers can place an ad describing
themselves at no charge. Other callers pay to listen to the ads. In 1993, the
number of calls to the system rose 250 percent, and the number of customers
jumped by an astonishing 376 percent.

Audiotext may soon give radio traffic reporters a run for their money. Project
Northstar, a service of NYNEX, provides travel information and traffic updates in
metropolitan New York, New Jersey, and southern Connecticut. Callers can request
directions, traffic reports, names of restaurants and service stations, and so
forth. Avis has equipped 60 of its rental cars with cellular telephones and asked
customers for feedback on the service. Avis has conducted similar tests in
Florida and San Francisco. If this test is successful, nationwide service may not
be far away.

Combining 800/900 Services

Some businesses take advantage of both toll-free and premium pay-per-call
options. Marianne Szymanski uses a toll-free number to attract new subscribers
for her toy safety newsletter. In addition, she operates a 900 line which offers
callers information on current toy research, for $2.00 a call.

Corporations can combine both types of calls with a service called Vari-A-Bill.
When callers contact the company through an 800 number, they are offered a menu
of services that includes some 900-style pay-per-call options. This hybrid is
currently under review by some legislatures, but offers some legitimate
advantages if used properly.







Getting Started in Audiotext

To provide audiotext services, you need a phone system linked to a computer that
can receive calls, answer automatically, provide specific caller-prompted
information, and, in some cases, record customer voices. While a single-line
service is cost-effective and relatively easy to install, the cost of setting up
a major in-house system with dozens of lines is prohibitive for many companies.
In most cases, it makes more sense to lease time on an existing system through a
service bureau.

Like the building contractor who coordinates the efforts of plumbers,
electricians, carpenters, and masons on a job, the service bureau links you, the
major telephone carriers, and the customer. A service bureau can:

˘    Provide automatic response services or live operators

Some promotions use both touch-tone response systems and live operators to ensure
all customers can get access _ including customers who may be confused by the
prompts, or those who have pulse or rotary telephones (amazingly enough, as many
as one-third of all American phones don't use touch tone).

˘    Verify credit cards

Uncollectable credit card debts are a huge potential liability. If cash is
exchanged in your promotion, you must be able to verify credit cards during
transactions.

˘    Provide statistical data on incoming calls

A service bureau can record the frequency of calls, broken down by geographic
area. Some can even fax hourly call reports to your office _ an important service
if you're tracking the effectiveness of television or radio spots.



When selecting a service bureau, keep your needs firmly in mind. For instance, do
you really need a service that can handle 10,000 calls every 90 seconds?

Check references carefully. Call some of a bureau's existing programs. Place
orders and see how long fulfillment takes. Contact the local Better Business
Bureau, and ask about any association memberships. According to the Secret
Service, there are many scam operations in this industry. Keep your eyes open.

Budgeting for Audiotext

How much does it cost to operate an 800 or 900 number? It depends. A number that
generates thousands of calls a day will cost more than one that gets only a
hundred. A complicated application will cost more up front than a simple service.
Be prepared to pay a one-time fee to get a service up and running.

If you can't afford to pay for an unlimited number of toll-free calls per day,
make sure your service bureau can limit the number and length of calls.

Most service bureaus are wary of new 900-number accounts. They will ask you for
references and a substantial deposit to cover the cost of potential chargebacks.
(If someone calls your $2-a-minute number, stays on for five minutes, and doesn't
pay her bill, you're liable to the service bureau for at least $6.) Until you've
tested this area thoroughly, limiting the number of calls received each day on
your 900 number is a prudent policy.

52 Ways to Use Audiotext Technology

1.    Provide movie schedules

The local multiplex may have 12 different movies playing on any given evening.
Audiotext can give callers basic information such as show times. It can also be
used as a more aggressive selling tool to entice callers to see movies they might
not have considered. At the touch of a button, callers could listen to plot
descriptions, reviews, and bits of "behind-the-scenes" gossip about current
features.

2.    Provide automated banking services

Many consumers rarely enter a bank. They pay their bills, transfer funds, check
on their account status or make investments by calling a toll-free number and
keying in information on their telephone keypads.

3.    Offer railway schedules and prices

A sophisticated audiotext system can provide callers with detailed schedules for
any route they want to follow. Callers select a departure point and a destination
from a menu, and receive a list of schedules, seating options such as coach or
sleeper, luggage restrictions, ticket prices, and ticket availability.

4.    Supply a variety of catalogs

An automobile parts supplier may have dozens of different catalogs, for different
makes and models of cars, or for different products such as touch-up paint,
mufflers, or radios. By listing them all on an audiotext system, the company not
only relieves its operators from the job of answering multiple catalog requests,
it creates a powerful sales tool: callers who didn't know the company supplied
certain products will discover the fact as they use the audiotext menus.

5.    Offer basic tax information

An accountant could set up an audiotext information line to answer callers'
questions about deductions, credits, and other basic tax information. Then she
can phone the caller back and offer a free, no-obligation consultation on tax
preparation.

6.    Supply comparison-shopping information

An enterprising infopreneur could set up a 900 line to offer pay-per-call
information on the prices of big-ticket items at major stores in a particular
city or region. Callers to a computer shopper line, for instance, could choose
options from menus to get the current prices for a popular model of laptop
computer or desktop publishing package at eight different

stores _ all without leaving home or contacting a salesperson.

7.    Let students register in continuing education courses

School boards, colleges, and independent organizations often offer hundreds of
courses in a given semester, on everything from Spanish for beginners to car
repair to Indonesian cookery to massage for couples. An audiotext system allows
students to peruse courses and register at their leisure.

8.    Take requests for cookbooks

To encourage consumers to buy and use more milk, milk marketers can print a
toll-free number on thousands of cartons of milk. Callers can use menus to choose
from a variety of enticing recipe books _ Decadent Desserts, Great Shakes,
Rib-Sticking Casseroles _ and have them delivered right to their home.

9.    Provide information on colleges

High school students face thousands of choices when it comes time to pick a
college or university. Popular printed guides to schools exist, but an audiotext
line can offer something a printed book can't: information that is as up to date
as today's newspaper. Students could call to find out whether a particular school
has secured an important grant, approved a sexual harassment policy, or finished
building a new athletic center.

10.    Distribute public health information

Understaffed government public health offices have to handle hundreds of
information requests every day _ thousands if a crisis such as a measles epidemic
or a food-poisoning scare is in progress. An audiotext line could give callers
basic information such as AIDS prevention tips, and the hours and locations of
public health clinics.

11.    Offer schedules of events

A city magazine can increase its profile in the community by offering a free
local hotline that readers can call for information on upcoming concerts, plays,
and exhibitions. By positioning itself as an authority, the magazine gains
credibility. By offering timely information in a convenient format, it fosters
goodwill.

12.    Provide information on new CDs

A chain of record stores could set up a phone line to promote new albums. Callers
could narrow their search by choosing a type of music _ country, classical, hard
rock, folk, or pop _ from a menu. Then the system would provide them with a list
(and sample cuts) of all the new releases that are arriving in the stores that
week in that category.

13.    Offer programming information

Unlike TV listings, information on radio programming can be difficult to find. A
station that broadcasts talk shows, documentaries, or ethnic programs can make
its schedule available through an audiotext line. It can promote the service
through ads in publications that reach its target market.

14.    Get feedback on drivers

If you run a trucking company, you want to know if your drivers are driving
safely and responsibly. You can paint the number of your 800 line on the back of
every truck. Callers will be prompted to enter the license plate number and
location of a truck they want to complain about, then asked to leave a detailed
message.

15.    Promote a comedian's career

A struggling comic offers excerpts from his routine by phone. He publicizes the
number by mailing it to booking agents and media across the country.

16.    Provide information on physicians

Newcomers to a city need to find a new family doctor. An automated information
line, paid for by local physicians, can give callers information on doctors
accepting patients, broken down by neighborhood and specialty.

17.    Ask for feedback on a programming change

A radio station that has just switched formats can solicit feedback from
listeners about the change. Listeners can call an audiotext line to answer
detailed questions about the new format. Would they like fewer commercials? More
music by The Carpenters? A new morning DJ? Audiotext can collect detailed
information more efficiently than a telephone surveyor.

18.    Run a free draw for your products

If you've just introduced a new brand of videocassette recorder, promote it with
a toll-free contest. Callers, who can make a maximum of two calls to the line,
test their wits on a movie trivia quiz. Callers who get all the answers right are
entered in a draw to win one of your VCRs. All callers, of course, supply their
names and addresses, which you can add to your mailing list.

19.    Supply information on popular toys

Remember the Cabbage Patch doll craze? In the weeks before Christmas, distracted
parents ran from store to store in search of the sold-out toy. Today, a
manufacturer can set up a toll-free hotline to let shoppers know the location of
the nearest shop that still has some of this year's hottest toy in stock.

20.    Provide employers with information on contractors

A volunteer association of freelance editors can set up a hotline that matches
people looking for an editor with members seeking new assignments. Callers key in
information on the type of job, such as magazine editing or technical editing,
and the system supplies the names and phone numbers of association members with
experience in that area.

21.    Provide up-to-date information on city buses

When it's cold, there are few things worse than waiting at a windy bus stop for a
bus that's 20 minutes late because the driver got caught behind a traffic
accident. The city bus company can run an audiotext service that lets riders key
in the number of their bus stop to find out whether the bus is running on time _
before they even set foot outside their house.

22.    Offer news and gossip for soap opera fans

A TV station can keep interest in its afternoon soaps high by offering a phone-in
service for dedicated fans. Callers can find out what happened on their favorite
soap that day, hear bits of new trivia and gossip about the main hunk, or listen
to teasers about upcoming episodes. That way, when they forget to watch or tape
the show one day, they don't lose the thread of the story and stop watching the
program altogether.

23.    Provide information on hotel rates and room availability

A local tourism bureau or group of hotels can share the cost of operating a
toll-free hotline that gives callers current information on available hotel
rooms. The information can be broken down by price range and neighborhood, and
can include additional details on each hotel's services.



24.    Offer free samples of magazines

A company that publishes ten different magazines can offer free samples of one or
more of them to interested callers _ and send a subscription form and a discount
offer along with the free issue.

25.    Distribute information on benefits

The personnel office at a large corporation may spend hours each day answering
routine questions about the company's benefits plans: Does the dental plan cover
root canal work? How do I apply for self-funded leave? What are the maternity
benefits? All of these questions can be handled easily by an audiotext line.
Callers can request specific forms or brochures, which the system can have mailed
or faxed to them.

26.    Offer stress management tips

People working on tight deadlines are caught in a double bind: the deadlines
cause stress and don't allow them any time to relieve the stress. A psychologist
who sets up a phone line offering free, quick stress management tips will find a
grateful audience. Several weeks after a call, when the caller's life may be
somewhat more sane, the psychologist can contact the caller to offer a
personalized stress management session.

27.    Handle account inquiries

Credit card customers often need to verify their balances or increase their
credit limit in a hurry. With the proper security precautions, an audiotext
system could handle these routine inquiries quickly.

28.    Offer information and trivia about a rock band

A record company or savvy manager could set up a 900 line that gives eager rock
fans information on a band's upcoming concert dates or lets them answer a quiz
about the group's history. Callers would receive advance notice of the release of
the band's next album, and discount coupons for t-shirts and posters.

29.    Promote a law firm

By providing basic information on a number of topics, a law firm can
inexpensively make itself an on-call expert. The system can record the fax number
of callers and send them even more information on the topic.

30.    Give members information on programming and services

A professional association can set up a toll-free line to give its members basic
information about upcoming seminars, member benefits, or an upcoming national
conference. Nonmembers can also call to find out more about the group and request
a brochure or application form.

31.    Provide fashion advice

Are hemlines long or short this year? What are the hot colors? A busy executive
probably doesn't have a lot of time to spend reading Vogue, but she needs to keep
on top of the latest trends. An upscale clothing store can offer this sort of
information on audiotext _ and then contact the caller to offer a shop-at-home
service or discounts on silk blouses.

32.    Run a fantasy sports league

A national sporting goods chain can run a contest to attract the attention of
diehard hockey fans. Fans create their own "fantasy teams" by picking a set
number of players from all the players in the league. Contest entrants can check
their rank in the standings as often as they like by dialing a toll-free number.
At the end of the season, the fan whose "team" has scored the most points wins a
package of sports equipment from the store (and all the other callers get a copy
of the store's catalog).

33.    Survey constituents

A congressman wants to know how his constituents feel about an upcoming bill, but
knows his staff will be paralyzed if he asks everyone to call his office. He can
set up an audiotext number that constituents can call to record their opinions.
He can also use the line to poll constituents for their views on less urgent
issues, or even on his success as a representative.

34.    Provide updated weather information

Sailing clubs and private airports can set up audiotext lines that provide
short-term and long-term weather forecasts related to their particular activity
(wind speed for sailing clubs, visibility for airports).

35.    Offer pet care advice

A veterinarian can offer answers to simple pet care questions on a free local
line, such as how to prevent cats from getting hairballs, or how to get skunk
scent out of a dog's fur. Later, he can send the caller a discount coupon for a
service related to his or her type of pet.

36.    Give companies municipal information

Economic development offices, which try to encourage companies to set up shop in
their city or region, can make information on zoning, tax incentives, the local
work force, and vacant commercial properties available on an audiotext system. A
sales representative can then contact the caller and arrange to present a
detailed slide show about the city and its advantages.

37.    Sell antique cars

The market for antique cars is small. But because these cars are such high-ticket
items, a dealer can benefit from an audiotext line. Callers can select from a
menu to choose the make they're interested in, and get details on the price,
color, and condition of any available models. They can also request photographs
or other printed information.



38.    Offer photography tips

A camera manufacturer could promote its products with an 800 number offering tips
on taking pictures at night, underwater, or on foggy days. When appropriate, the
tips would mention lenses, flashes, or filters made by the manufacturer that
would help the caller take better pictures under various conditions.

39.    Give diet and fitness tips

A publisher that produces health and exercise books can run a phone line offering
callers basic advice on diet and fitness. Callers could also order books on
related topics through the system, or add their names and addresses to the
publisher's mailing list.

40.    Distribute travel discount coupons

A group of hotels, restaurants, and attractions in a particular region can share
the cost of an ad in the travel section of a newspaper in the next state. The ad
would promote packages of discount coupons that callers could get by calling a
toll-free number. The system could offer several packages of coupons, aimed at
segmented groups such as families, seniors, or honeymooners.

41.    Provide real estate information

A real estate agent can provide house-hunting tips and current mortgage rates on
an audiotext system. It can also promote upcoming open houses. Callers can key in
information about the sort of house they're seeking _ neighborhood, size, price
range _ and request that an agent call them back with a list of suitable
properties.

42.    Supply answers to common library reference questions

The overworked reference staff at a public library can set up an audiotext line
to answer common questions, such as the populations of various countries, names
of state capitals, names and terms of office of various presidents, and dates of
famous battles. The system could also give callers information on library hours,
overdue fines, reserved books, and library locations.

43.    Create an alumni directory

Alumni of a university can pay a small fee to have their addresses and phone
numbers listed in an audiotext system. Other alumni can call to use the service
to track down information on fellow students they've lost touch with over the
years.

44.    Provide information on projects in process

A repair center can permit customers to call in to discover the status of the
work on their broken computer. Or a furniture manufacturer can give the patient
customer a chance to track the progress on their six-month-back-ordered etagere.

45.    Run a contest for TV fans

A local TV affiliate can whip up interest in television programming in general by
running a contest in which callers try to guess the winners of the upcoming Emmy
Awards. Each menu would let callers choose one show or actor from a list of
nominees. Callers with the highest percentage of right answers are eligible for a
draw for a big-screen TV.

46.    Supply transcripts

A university can set up an audiotext line to allow students and alumni to order
copies of their transcripts, a replacement diploma, or other official documents.

47.    Provide game schedules

A basketball team can provide its schedule for the entire year on an audiotext
system, including dates and locations of out-of-town games, and information on
special promotions like two-for-one nights or specials for families.

48.    Offer information on action campaigns

A wildlife association can set up an audiotext system to give callers information
on endangered species, boycotts, and letter-writing campaigns. It can also
promote its fund-raising products, such as books, posters, and t-shirts. Every
nonmember caller would later receive a direct mail package asking her to join the
association.

49.    Provide information on lowest prices

A consumer watchdog group could regularly update a recording pointing out the
best buys on certain items.

50.    Provide hospital information

A hospital can set up an information line that allows callers to find out
visiting hours and the room numbers of various patients, get information on
outpatient clinics, or make a donation to the hospital's fund-raising campaign.

51.    Offer lottery information

Lottery ticket buyers want to know if they've won. A 900 number listing the
winning numbers in a variety of lotteries, going back several months, can save
anxious ticket buyers hours of scanning back issues of newspapers in the local
library.

52.    Advertise available spaces at a campground

Travelers looking for a place to camp could call a central number from a pay
phone on the road to find out which parks are full and which still have room for
more campers. The line could also provide general information on each park and
campground, such as which locations have shower facilities, supervised beaches,
or snack bars.

Audiotext Resources

Call Interactive

2301 N. 117th Ave.

Omaha NE 68164

[phone]

Call Interactive, a business unit of First Data Corporation, is one of the
nation's largest interactive 800 and 900 service centers. Call Interactive can
provide fulfillment, real-time updating, database management, and crisis
management. Call Interactive also has a patented telephone broadcasting service,
Corporate CommuniquÇ, which lets companies link thousands of callers at one time
with a guest speaker. The company's clients include AT&T, CBS, and Avon Products.



Intervoice, Inc.

17811 Waterview Parkway

Dallas TX 75252

[phone]

Intervoice, Inc., is a public company that builds voice automation solutions for
customer service applications. Intervoice has designed a turnkey software package
that can answer your phones for you. The Robot Operator System handles routine
calls by promptly providing callers with routine information. It answers on the
first ring, 24 hours a day, 7 days a week and never puts a caller on hold. The
smallest package runs from $27,000 for a 4-line system. It includes the
application, and interface with the database and the user.



Matrixx Marketing, Inc.

2121 N. 117 Ave.

Omaha NE 68164

[phone]

Matrixx Marketing helps to design and execute telemarketing programs for leading
advertisers who use 800 numbers to sell products, offer services, or provide
information. The company specializes in closed-loop marketing using inbound and
outbound marketing, and dealer locator information. Its services are best suited
to programs that generate at least 5,000 calls per month. Some of the companies
they have worked with include Motorola, Clairol, Microsoft, and Quaker Oats.



Network Telephone Services, Inc.

6233 Variel Ave.

Woodland Hills CA 91367

[phone]

With more than five years of experience, Network Telephone Services handles
thousands of numbers and answers hundreds of thousands of calls per day. The
company offers 800, 900, and 976 numbers with recorded or live service. It
answers calls, processes billing, and provides 24-hour customer service, daily
call reports, and advertising support. Customers can choose from every access and
caller billing option available in the U.S., as well as the company's own
proprietary plans. Network Telephone Services has worked with such companies as
Capitol Records, Warner Brothers Records, NBC Gemstar, Revo Sunglasses, and Pizza
Hut.



Phone Programs, Inc.

40 Elmont Rd.

Elmont NY 11003

[phone]

Founded in 1972, Phone Programs creates phone-based programs designed to develop
an ongoing dialogue with a target audience. PPI blends technology, full-service
creative capabilities, and computer database technology with in-house marketing
support services, including media buying and fulfillment. It also offers
fax-on-demand services and automated transaction processing via phone. The list
of companies for which Phone Programs has developed campaigns includes American
Express, Cadbury Schweppes, and PepsiCo.



The Product Line

2370 South Trenton Way

Denver CO 80231

[phone]

The Product Line is an 11-year-old, fully automated 200-position telemarketing
service agency that provides inbound telemarketing, outbound telemarketing, and
fulfillment services to national clients. It can take orders, refer dealers, make
sales, and qualify leads. Among the technologies in use at the company are
automated scripting, predictive dialing, and voice response (see glossary). The
Colorado Board of Tourism is one of The Product Line's clients.





Scherers Communications, Inc.

575 Scherers Court

Worthington OH 43085

[phone]

Scherers provides a variety of 800/900 services, including passive and
interactive audiotext, polling for marketing purposes, and live operators.



Telecompute Corporation

1275 K St. N.W.

Washington DC 20005

(800) USA-VOICE

Telecompute was founded in 1986 and has been providing AT&T 800 service ever
since. It provides direct or online connections to a variety of vendors,
operators, database matching services, and credit and/or phone card debiting
facilities through the use of dedicated circuits, its own switched network, and
the public network. Over the years, the company has worked with many types of
clients, including local radio and TV stations, software support offices, and
nonprofit associations.



Teleshare 900

227 North University Ave., Suite #103

Provo UT 84601

[phone]

Teleshare 900 is a service bureau that specializes in programs for entrepreneurs,
small businesses, and professionals. The company hosts training workshops all
over the country, aimed at new information providers, on topics such as
evaluating a 900 idea and using broadcast media effectively.



Zycom Network Services, Inc.

200 South Los Robles, Suite 305

Pasadena CA 91101

[phone]

With more than six locations in the United States, Zycom Network Services, Inc.,
processes more than 10 million calls annually. Zycom has the capability to
capture 1,500 leads per minute. It helps clients manage everything from initial
program design to the implementation and day-to-day operation of their programs.
The company's services include voice and data capture, passive and interactive
programs, and fraud control. It has worked with many Fortune 500 companies to set
up 800 audiotext programs and self-liquidating 900 numbers (see glossary).

Audiotext Glossary

Audiotext: the technology that allows a computer to stand in for a human
telephone operator.

Automated services: in audiotext, the use of a telephone and a computer to do
work formerly done by an operator.

Automated transaction processing: using computers to verify charge cards and
generate databases.

Chargeback: a chargeback occurs whenever a cardholder or cardholder's bank
disputes a sale or credit transaction posted to the cardholder's account. If the
dispute can not be proved as legitimate, the operator of a 900 line will have to
cover the cost.

Circuit board: an insulated board on which interconnected circuits and components
such as microchips are mounted or etched.

Contest: a promotion in which entrants have to submit entries to be judged or
answer skill-testing questions in order to win a prize.

Freestanding insert: a stand-alone advertising circular stuffed into newspapers
that usually contains a business reply card or coupon.

Inbound telemarketing: fielding calls that come from consumers in response to
advertising.

Interactive voice response (IVR): the technology that allows callers to interact
with a marketer through the telephone by using the keypad on their touch-tone
phone to respond to prerecorded or digitally created instructions.

Outbound telemarketing: calling consumers, either at home or at work, to sell a
product.

Point-of-purchase promotion (POP): a display or demonstration that takes place at
the physical place where the purchase or sale occurs.

Predictive dialing: a computer-aided system that allows an outbound telemarketer
to dial more numbers per hour.

Premium: goods offered either free or at low cost as an incentive to buy a
product or service.

Response rate: the number of people who respond to a particular marketing
vehicle, such as a television ad. Companies use this number to evaluate and
compare the success of marketing techniques.

Self-liquidating 900 number: a service in which the income from 900 numbers
matches the cost to the marketer of providing and advertising the service.

Service bureau: in audiotext, a company that specializes in telephone marketing.
A service bureau usually provides services such as setting up a telephone number,
answering a large volume of calls at one time, and sending products and
literature to interested callers.

Sweepstakes: a promotion in which winners are chosen at random and not as a
result of a special skill or judged entry.

Toll call: a telephone call for which a higher rate is charged than the standard
rate for a local call.

Voice and data capture: a type of database system that will remember the inputs
and voice messages left by callers.

Voice response: a type of system that can recognize voice commands in addition to
touch-tone signals.



MULTIMEDIA

Ten years ago, computers revolutionized

publishing. Desktop publishing programs

made it easy and inexpensive for anyone

to create handsome documents.

Three years ago, the same technology

came to video. Using computers and video

technology, it is relatively quick, cheap, and simple to create multimedia
presentations that combine

the impact of television with the interactivity of computers and the flexibility
of print.

Multimedia uses text, graphics, video, animation,

and audio recordings to convey information.

It has great potential as a marketing tool.

If you sell, promote, explain, or educate,

you can use multimedia to meet your

objectives in all kinds of new ways.



If you need to capture the attention of consumers already addicted to computer
games and video movies, a printed brochure just isn't going to cut it anymore.
Multimedia can bring your products to life right before a consumer's eyes, in
living, moving color. Why settle for two-dimensional, static black and white?

What Is Multimedia?

That's a hard question to answer. Some multimedia products use a TV or computer
monitor to display video and sound. Others use inexpensive devices at the point
of purchase to attract the prospect's attention. Many encourage interaction:
viewers can stop the action, focus on a particular image or fact, and get more
information.

To set up a multimedia presentation, you need a computer or chip, a storage
medium, and a way for viewers to interact with the presentation.

The computer that runs the presentation can be as complex as a custom-designed
kiosk or as simple as a $300 CD-I player or a $4 chip in a point-of-purchase
display.

Because they take up huge amounts of memory, many multimedia products are stored
on a CD-ROM _ a compact disk that holds data instead of music. A standard CD-ROM
can store the equivalent of 500 floppy disks. But there are other storage
options, including inexpensive custom chips for point-of-purchase displays, and
online systems (see the Internet chapter).

Multimedia is appealing to both marketers and the public because it invites
consumers to touch, to play, to get involved. Some presentations use touch
screens, while others bring people in with a mouse, a keyboard, or a joystick.

Using Multimedia

The uses of multimedia are only limited by your imagination. The technology is
particularly effective for point-of-sale kiosks and displays, electronic
catalogs, sales presentations, and training tools.

Warning! Just using multimedia technology to do business the old way is a direct
route to failure. Many large companies are transferring traditional flat media
(brochures, catalogs, etc.) to multimedia without reaping the benefits of the new
technology.

Using multimedia at the store level is one of the best uses of the medium. It's
the critical moment: the consumer is in the store, wallet in hand, wondering
which product to buy. Grab his attention with an arresting kiosk or
point-of-purchase (POP) display.

Which system you choose depends on your product, your budget, and your potential
customer. Kiosks are multifaceted, expensive devices that can be very useful if
consumers are motivated to use them. POP is far cheaper and easier to use, and
doesn't require much effort on the consumer's part.

Kiosks

The most familiar type of interactive kiosk is the automatic teller machine
(ATM). More than half of all Americans use ATMs regularly. While ATMs are merely
computer terminals capable of spitting out money, multimedia kiosks offer more
flexibility.

Kiosks are incredibly powerful. Virtually any consumer can use them. They attract
curious passersby and hold their attention with sophisticated graphics that
demonstrate and promote your product in vivid color.

Because they're interactive, kiosks can both distribute and collect information _
piles of it. Users can print out answers to very specific questions, and you can
collect massive quantities of data for use in future marketing efforts.

These freestanding units can set your product or service apart from your
competitors by providing "branches" of your company in many locations _ all
without the expense of hiring a human attendant.

American Greeting Cards played on consumers' fascination with interactive
technology by developing Create-A-Card kiosks. Users choose options from a menu,
add a name, and the kiosk prints out a personalized card. The company installed
the kiosks in drugstores and gift

shops _ places where customers were already comfortable buying cards. The system
is essentially a gimmick, but a popular one.

But kiosks can be far more practical. IBM Kiosk Integration Services group has
designed a kiosk that allows Minnesota Twins baseball fans to buy tickets at any
number of locations, at any time of day. Using a handsome, easy-to-understand
screen, fans can check the schedule, search for available seats, and even see
photographs of the view from different areas in the stadium. The Twins have found
a low-cost way to keep their fans happy. Buying tickets is now a quick and easy
transaction, not a drawn-out ordeal.

Consumers' Catalog Showroom has installed in-store kiosks that let customers
display pictures or full-motion video ads of selected items, search for
competitive products, and make purchases. The kiosks also serve as active sales
tools, much like a knowledgeable salesperson: when a customer makes a purchase,
the kiosk suggests related products. If someone buys a camera, for instance, the
kiosk may ask the customer if she is interested in film, filters, or a tripod.

The kiosks have led to a 50-percent increase in sales of in-stock accessories,
and a 100-percent sales increase for special-order accessories that are mailed to
customers or picked up at a later date.

The i˘Station, discussed in the database marketing chapter, is another example of
a multimedia kiosk. The kiosks allow listeners to sample five short selections
from an album, view album art, watch music video clips, read record reviews, and
obtain information on upcoming concerts. The i˘Station, developed by Intouch,
Inc., currently provides information on 32,000 compact disks. At a store in St.
Louis, i˘Stations were responsible for a 6-percent increase in sales, prompting
Randy Davis, an executive with Streetside Records, to roll out the kiosk to all
24 of his stores.

Think about the i˘Station from the retailer's point of view. Instead of hiring a
platoon of expensive, intelligent salespeople, the store can rely on the
wide-ranging expertise of the i˘Station. It has complete information on more than
30,000 records, never calls in sick, and is rarely rude.

But the kiosk doesn't simply replace salespeople. It increases sales by actively
helping the user find new music. For instance, it can recommend an early Steely
Dan disk to anyone buying a Michael MacDonald record. The consumer might not have
realized that MacDonald sang on these albums, and will be delighted to take a
minute or two to listen to a cut. And the more the kiosk learns about an
individual customer's buying habits, the more useful it becomes to him. Soon, the
customer can't imagine buying CDs anywhere else.

Blockbuster, Inc., is testing video kiosks that let customers preview tapes at 20
of its outlets. Many video store customers head straight for the new release
racks, and are invariably disappointed if all the copies of the latest hit movie
have already been rented. According to the Video Software Dealers Association, as
many as 65% of all video renters leave the store without renting anything. By
using the kiosks to promote lower-profile movies that customers might not notice
otherwise, Blockbuster can decrease the chance that customers will leave the
store empty-handed.

Singers have a hard time finding sheet music, especially music transcribed to the
key they need. Often, they have to buy music in another key and transpose it by
hand. Musicwriter, Inc., has developed the Notestation, an interactive kiosk that
will print out music in any key for $3.95 per song _ about 50 cents higher than
the price of traditional sheet music. For an additional charge, the customer can
get accompaniment on a diskette. The kiosk can hold thousands of songs,
dramatically decreasing the cost of carrying inventory, a particular problem for
small stores.

Clairson International, manufacturers of Closetmaid organizers, uses small
interactive video units to dispense information about its do-it-yourself
organizer kits, including easy-to-follow video installation instructions. By
avoiding the untrained retail sales clerk and going straight to the consumer,
Clairson is able to control the transaction and boost sales.

K-Mart Canada uses interactive kiosks to provide store directories, dispense
coupons, and inform customers about special promotions and events. Since the
kiosks were installed in 1993, sales of highlighted products have jumped by an
average of 70 percent. Some products showed an astounding 500-percent increase in
sales.

Bissell, Inc., makers of the Big Green Clean Machine, has installed multimedia
displays in some warehouse-type retail stores. Shoppers can see demonstrations of
various features of the product on a small, interactive video screen. The unit
keeps track of which features users ask to see, and records users' responses to a
set of questions about the product. Because the company originally introduced the
cleaner in an infomercial, it already had a lot of footage to use in the display,
reducing production costs.

Kiosks work extremely well at trade shows. They give visitors a risk-free way to
obtain information. Users are more likely to ask for information if they're not
afraid of being trapped by an aggressive salesperson, and they can walk away from
a kiosk at any time without appearing rude.

AT&T's Network Systems had a problem with trade shows. The company's Integrated
Services Digital Network (ISDN) technology is hard to explain quickly, especially
in the festival atmosphere of a trade show. However, people had to understand the
technology before they would consider buying it.

Multimedia bridged the gap. Customers turned off by complex concepts and
confusing jargon didn't mind using a kiosk at their own pace to find out more
about ISDN. As a result, they developed a greater understanding of the product.

Not only did AT&T make more sales, it also saved money. The company spent $30,000
to develop the multimedia program, and another $2,500 in computer hardware and
monitors for the kiosk itself. But it saved about $100,000 per year by dispensing
with expensive presentation tools such as live ISDN lines. In addition, it could
decrease the number of staff needed to run the booths.

Stew Leonard's, an innovative supermarket in Connecticut, has an in-store kiosk
called the Cuisine Screen. Customers use the kiosk to find and print out recipes,
then go through Stew's and buy the ingredients. Not only does the kiosk generate
increased food sales, it makes shopping at Stew's more fun, giving the store a
competitive advantage.

Multimedia and Database Marketing

The opportunities to integrate these two cutting-edge technologies are
tremendous. For database marketing to work, you need to know who's buying what.
Customers will line up at a multimedia kiosk to give you this kind of
information, because the kiosk gives them valuable coupons, information, and
other feedback in return.

Imagine a fast food outlet where a talking kiosk takes the customer's order. The
customer slides a membership card through the reader, and immediately the kiosk
"knows" her name, her favorite sandwiches, and whether she likes extra ketchup
with her fries. Using this data, the kiosk suggests daily specials that might
appeal to her. Of course, it also keeps track of her frequent buyer points,
automatically giving her a free sandwich after ten visits.

Even better, a kiosk at a pharmacy could keep records of every customer's medical
and shopping history. In addition to filling his prescription, it could make sure
he isn't allergic to the medication, automatically file his insurance forms, give
him coupons on other items in the store and suggest items that he bought a while
ago but hasn't stocked up on lately.

POP Displays

Point-of-purchase devices sit on a store shelf or in an aisle display. Using
audio or an LCD display, they give consumers a chance to get accurate information
on the spot, before choosing a product.

Interactive Audio: It's easy and inexpensive to create a tiny POP audio device.
Think of the power of a celebrity's voice promoting your product whenever a
customer presses a button on a display. Or imagine a display in a drugstore that
plays a message every time a customer removes a bottle of shampoo. The message
could offer the shopper an instant discount on the shampoo, or encourage her to
pick up a bottle of the same brand's conditioner.

An audio device can also play a message every time someone walks by, drawing
customers' attention to a product on display. But be careful of noise clutter!
Push-button displays might be better suited to high-traffic areas.

These devices are usually battery-activated. Simple devices start at $50 each in
quantity.

Interactive LCD: While sound is an impressive gimmick, you can't use it to
present much information. For slightly longer messages, try LCD displays. With
these low-cost devices, which use the same technology found in digital watches,
you can present one or two lines of text, prompt consumers with questions, or
answer simple queries.

Warner-Lambert Canada, a pharmaceutical company that sells cough, cold, and
allergy medicines, created an interactive LCD it calls the "Cough, Cold, and
Allergy Relief Directory." Consumers use a keypad to respond to questions about
symptoms, then the device recommends a product to relieve them. The computer in
the product is programmed to recommend one of about a dozen different remedies.
Eight are made by Warner-Lambert. Pharmacists like the device because it takes a
burden off them and helps their customers.

You can use LCD POP displays to collect basic information. For example, if you
own a winery, you could place an interactive LCD device in wine retail shops that
asks people what foods they typically eat when they drink wine. You may learn
that most respondents eat foods that go best with white wine. Using this
information, you can create a white wine promotion. Or, if you know a particular
retailer carries 75 percent red wine and 25 percent white, you can use these
statistics to convince him to carry more white wine.

Electronic Catalogs and Brochures

Why should you consider an electronic catalog? CD-ROMs can hold much more
information than a printed catalog _ a boon for manufacturers with large product
lines. Photographs can be as large as a computer screen, not simply the size of a
standard printed page. Most importantly, an electronic catalog is "smart." Once
it learns the likes and dislikes of a consumer, it can skip some pages, highlight
others, and present new items that are particularly likely to interest the user _
just like a smart salesperson in a high-end specialty store.

Most electronic catalogs are used in point-of-purchase locations, because
relatively few households have computers equipped with CD-ROM drives. Still, some
home markets exist. MCS Group, Inc., developed a CD-ROM catalog for buyers of
Star Trek paraphernalia. Selling for $79, Greenberg's Guide to Star Trek
Collectibles describes 3,000 items and includes 400 pictures along with pricing
information. Because there's a huge overlap between Star Trek fans and CD-ROM
users, the match is perfect.

Business-to-business applications are more common. Pacific Bell Information
Services publishes an electronic catalog of PC networking software and hardware.
For $99, subscribers receive four quarterly issues of ReSource on disk. The
catalog covers thousands of products and features interactive advertising.

The cost savings can be substantial. A CD-ROM can be duplicated for less than 75
cents, and mailed for another 50 cents. A four-color catalog is expensive to
design, expensive to print, and expensive to mail. And for buyers with the right
hardware, a CD-ROM is likely to have more impact and absorb more of a prospect's
attention.

Even Hollywood has discovered the benefits of multimedia. Casting agencies, which
used to keep huge files on the actors they represent, now store the same
information on CD-ROM. The catalog of present and future stars not only displays
their photographs and rÇsumÇs, but also short video clips of their acting styles.
Users can enter desired attributes, such as "tall, blonde, attractive, unknown,
24 years old," and the software will list all the actors on the disk who meet the
description. Actors pay about $100 each to appear in the catalog.

Apple's new CD-ROM catalog, en Passant, features well-known direct-mail merchants
like the Pottery Barn, and allows the user to cross-index them. For example, if
the user is searching for a $25 wedding pres-ent that can be used in the house,
en Passant might present candlesticks from one company, a vase from another, and
a tortilla press from a third. Press a button and the en Passant catalog will
display all the ordering information. Future versions will allow a user to order
by modem, guaranteeing fast delivery and avoiding any time-consuming phone
interaction.

Techno Marketing helps companies create interactive floppy disks to promote their
products. The disks cost about $1.50 each to produce and mail to prospects. After
using the disk, prospects are encouraged to print out a form and fax it back to
the company. The form is encoded so that Techno Marketing can see how prospects
used the disk. How many times did they look at the disk? What information did
they select, and what did they ignore?

One major car manufacturer created a floppy disk about one of its high-end cars
that gave users information about available colors, the engine, the tires, the
stereo, and other features. Researchers analyzed the forms users faxed back and
discovered that lots of people had looked at information about the engine and
colors, but nobody was really interested in finding out more about the tires.
Armed with this data, the company can delete the tire information from future
disks and replace it with something else. Even better, the company can instruct
its salespeople to talk about features that really interest customers _ anything
but the tires.

A salesperson can use a CD-ROM catalog to bring a business-to-business sales call
to life. Using a color laptop computer, she can show the prospect video clips and
testimonials, and cross-index products according to the prospect's needs. She can
even print out a spec sheet on the spot.

Let's say you make roofing shingles. While visiting a prospect, you can input the
dimensions of his house into your laptop computer. The multimedia program will
create a diagram showing the house with new shingles. You can also produce a
spreadsheet that shows the customer exactly how many shingles he needs to buy and
how much they will cost.

On-disk Presentations

The overhead projector, light pen, pointer, slide projector, and VCR that used to
be the tools of the presenter at trade shows, sales seminars, and client meetings
have been replaced by a single freestanding monitor with a disk drive and a
mouse.

At its Resource Center in Atlanta, the State of Georgia uses a multimedia
presentation to sell businesses on the advantages of relocating to Georgia. The
system provides information on infrastructure, taxes, and educational facilities
in each of Georgia's 159 counties and cities. State officials can even design 3-D
models of a theoretical "plant" and transfer the image to different sites across
the state, so clients can see the layout that works best. The center produces 40
to 50 of these custom presentations each year. It will even transcribe the
presentations in either text or video format so the client can take the
information back to company headquarters. "It goes a long way in making a sale,"
says Roy Plott, Resource Center manager.

Multimedia presentations are not limited to the size of a computer screen. The
following companies manufacture video scan converters, which allow you to put
your multimedia presentation on a large-screen or projection TV.



Adda [phone]

Advanced Digital Systems [phone]

AlTech International [phone]

Boffin Limited [phone]

Communications Specialties [phone]

Computer Friends [phone]

Consumer Technology Northwest [phone]

Dextra Technology [phone]

Digital Vision [phone]

Dih Shin International [phone]

Extron Electronics [phone]

Genoa [phone]

IEV International [phone]

Jovian Logic [phone]

KDI Precision Products [phone]

Magni [phone]

MediaFX [phone]

Telebyte Technology [phone]

UMax [phone]

VideoLogic [phone]

Visionetics [phone]

Willow Peripherals [phone]



It's not necessary to have all your viewers in the same room at the same time to
run a successful multimedia presentation. Harvard Graphics for Windows 2.0 has a
conferencing feature which allows the user to distribute a presentation to up to
64 systems simultaneously over a network.

At the simplest level, a multimedia presentation is nothing more than a series of
slides created on a computer. You can add sound and movies for a more
sophisticated, professional presentation. It's easy to import videotape into a
computer, especially if you use a Macintosh.

While most multimedia presentations aren't interactive, it's not difficult to
make them appear to be. If you can anticipate your prospects' questions ahead of
time, you can build pieces into your program that let you present answers to
these questions if they arise.



Don Peppers and Martha Rogers

on USING CD-ROM TO MAKE

A COMPLEX SALE



A friend of ours runs an advertising agency, and one of his clients is a major
maker of corporate aircraft.

Now, selling airplanes to corporations has to be one of the most daunting and
difficult of all sales tasks. Imagine the obstacles to the sale. First, there is
the simple question of expense, which is enormous. But more than the simple
dollar amount, a company must deal with the justification of it, when this
enormous cost is being spread over the T&E budgets of a relatively few,
high-level corporate executives.

Then there is image. While many, if not most, corporate executives may personally
aspire to the status and power of being flown around in a small private jet, the
truth is that for most firms the image of senior officials being pampered so
luxuriously is not something to be cultivated.

In any case, convincing an executive that purchasing a corporate jet is
worthwhile requires a good deal of persuading. Buying a corporate aircraft is
truly a "considered purchase." The decision to buy can only be made after a great
deal of thinking, analysis, and, in many cases, soul-searching.

There are many questions a potential aircraft purchaser will ask himself or
herself before agreeing to such a sale. What about the cost of operating and
maintaining the aircraft? How about its usefulness in reaching out-of-the-way
destinations? Would it be better just to lease an aircraft on an occasional
basis? What's the advantage of a jet over a turboprop, or is there one? What
about weather? Pilot hiring and scheduling? Range before refueling?
Dependability?

Then, after he's asked himself all these questions, the prospect is also likely
to ask himself if he can really visualize himself with such an expensive "toy."
What will his business associates think? His stockholders and investors? His
employees?

The only reason to go into all this is that our friend was wrestling with the
task of helping his client sell more jets, and he already knew that selling more
jets was not something for which traditional advertising would be much help.
Rather, he wanted to figure out how to equip his client's sales force with some
kind of tool to help answer prospects' questions, and overcome the obstacles.

So our friend hit on the idea of an interactive CD, which could serve as an ideal
reference tool, in addition to helping the salesman use personal references to
resolve even the "soul-searching" issues!

It should be easy to understand how the reams of charts, specifications, and
illustrations that are traditionally used to explain a product as complex as a
jet or turboprop aircraft could be more easily carted around, and accessed more
quickly, by using a CD-ROM device. But that was the easy part. Our friend had
other ideas, too.

Imagine the aircraft manufacturer asking a number of aircraft owners and recent
purchasers to speak about their own experiences with the firm's product. When is
having a dedicated aircraft really indispensable? Does it save cost in terms of
valuable senior-executive time? How hard is it to resolve scheduling conflicts?
How about hiring pilots and maintaining the aircraft? And what strategies have
been useful for explaining the need for the jet to stockholders, or to employees?


Now imagine that the firm conducts such an interview, asking all the most
difficult questions, with each of several hundred current owners. Don't forget
that each has already spent a good deal of time wrestling with these very
questions, and justifying, to his own satisfaction, the benefits of owning a
corporate aircraft, when compared to the costs.

Each executive interview is tape-recorded, and each interview is subdivided into
the sections that answer various specific questions. The interviews are also
keyed by industry, by size and nature of company, by geographic location, by
flying patterns, and by the name, position, age, and gender of the interviewee.
Each executive is also photographed once or twice.

Then these tape-recorded interviews and photographs are stamped onto a compact
disc and indexed for CD-ROM retrieval. The firm's sales people are given laptop
machines with CD-ROM drives. They are now armed and dangerous.

Consider the possibilities: Maybe a sales prospect is in the
wholesale-distribution business. While he's a small company, he's rapidly
growing, and he's often required to go somewhere off the beaten path of scheduled
airline travel. Occasion-ally he's had to charter aircraft, and he's now trying
to decide whether it makes sense to own one. So the salesperson asks him if he'd
like to see other wholesale distributors who currently use the firm's planes.

"Oh, you know Bill Weston at Weston Warehousing? Here's what he says about his
new turboprop_"

And with that the photo image of Bill Weston comes up on the computer screen,
while his voice is heard explaining how he first decided that getting an aircraft
was the right thing to do, particularly when he found himself chartering aircraft
to get to those smaller destinations. He talks about missing an important sale
once because he couldn't get there in time, and he couldn't get a charter. That,
he says, is when he decided to take the plunge.

"Here are the specs on the first aircraft Bill Weston purchased, although he's
now on his second upgrade."

"Here's a list of the other executives who travel a lot to the upper midwest,
like you do_"

"Here's how one executive dealt with the issue of scheduling the aircraft_"

You get the picture, right? But the example we just gave is only from one
industry. CD-ROM could be used in any number of industries and situations in the
same way _ to resolve complex product and service questions, as well as to
provide references and recommendations from currently satisfied customers.

If your business is selling to other businesses, especially if you use a direct
sales force, chances are pretty good that a CD-ROM tool would prove very helpful.





Interactive Training Manuals

In 1993, businesses spent $47 billion on staff training. For many marketers,
training the staff who deal with the public _ salespeople, receptionists,
operators, and technicians _ is the most important, and most difficult, part of
their job.

Using multimedia, you can standardize your training sessions, build in
performance tests and make changes in a flash. It's often cheaper to hire a
programmer and buy the necessary computer hardware than to hire a tutor or send
employees to orientation programs. More and more large companies are opting for
this approach.

A 1993 survey revealed that 45 percent of Fortune 1000 companies use multimedia
applications for in-house training. By combining databases, text, audio, video,
and interactive computing, multimedia creates a learning environment that can be
more efficient than tutor or text-based learning. One study showed that trainees
remembered only 10 percent of the material presented by a live trainer or
textbook. But if they used a multimedia application for the same length of time,
they remembered 50 percent of the information presented. Trainees using
multimedia are not passive. They are reading, listening, watching, and keying in
commands on a computer in the same lesson, all at their own pace. Some analysts
believe that's why they remember more.

Federal Express installed 1,200 interactive training sites in 800 of its 1,400
service centers. As a result, the company reported a 30 percent reduction in
errors and cut training time by 60 percent. Holiday Inn had the same sort of
success. It reduced training time for employees from 14 days to 6 by using
multimedia training programs.

Since multimedia does not have to be text-based, a company could create a CD-ROM
training application for foreign employees that uses animation, video, and
graphics to communicate its message. A copier technician could see exactly how to
replace a component by watching a video clip of the process. Pictures speak
louder than poorly translated words.

When United Airlines added the Airbus A320 to its fleet of planes, Airbus offered
to help train United's employees. The two companies produced a tutorial on CD-ROM
and delivered it, along with the machinery to run it, to flight attendants
worldwide. The interactive software cost $150,000 to produce, but it cut training
time from 8 hours to three. United estimates it saved $9 million in travel,
hotel, and other expenses by using this tutorial.

Getting Started in Multimedia

Multimedia disks are created using computers, disk recorders, and special
authoring software. If you want an interactive introduction to the world of
multimedia, you can order "The Guided Tour of Multimedia" for $39.95 by calling
[phone].

Authoring software gives the programmer step-by-step instructions for compiling
the different media into a seamless production. Multimedia World magazine has
reviewed the following 12 packages designed for people who want to create
multimedia presentations quickly and easily:



Company    Software    Phone Number

Gold Disk     Astound 1.5    [phone]

Micrografx     Charisma 4.0    [phone]

Macromedia     Action 2.5.1    [phone]

Asymetrix     Compel 1.0     [phone]

Q/Media     Q/Media 1.2    [phone]

Lotus     Freelance Graphics 2.0.1    [phone]

SPC     Harvard Graphics 2.0     [phone]

Microsoft     PowerPoint 4.0    [phone]

Ask Me Multimedia     Super Show & Tell 1.0    [phone]

Corel     CorelDraw 4.0    [phone]

Zuma Group     Curtain Call 2.0    [phone]

WordPerfect     WordPerfect Presentations 2.0    [phone]



You create and test the software on a computer with a large hard drive, then
transfer it onto a blank CD-ROM using a recorder. The PlayWrite recorder from
Microboards works with DOS, Unix, and Macintosh systems and lists for $3,899.
(Prices are dropping fast.) For more information, call Microboards at (800)
225-4414.

Making copies is as easy as running blank disks through the recorder and
downloading the information from the PC. With blank recordable CD-ROMs costing
less than $20, short-run reproduction is relatively cheap. For longer runs, you
can send a master CD-ROM to a duplicator, who will copy it for as little as 70
cents per disk.





Marketing Reference Information Available Through CD-ROM

Tools available to marketers fall into three basic categories: census and
demographic data, information for generating telephone lists and mailing labels,
and atlas and geographic marketing information.



Census Data

Marketers of everything from toasters to cars need to know the demographics of
their potential audience. After all, if you know how many Hispanic households
there are in Seattle, you'll have a better idea of how much to spend there.

Fortunately, the U.S. Census Bureau has compiled an astounding array of
information on every American, available in virtually any format. You can find
the wealthiest 9-digit ZIP code in the U.S., the home of the most disabled
veterans, and the percentage of homes with pets in San Diego. Until recently,
however, this data was expensive to decipher. No longer. There are many resources
out there if you need demographic data. Try some of these products, available
through American Demographics magazine, [phone].

Key Indicators of County Growth 1970-2015 is available on floppy disk created by
NPA Data Services, Inc. This product provides basic demographic and economic data
for all 3,096 counties in the United States on one disk. State and national
totals are also provided, along with twelve basic growth factors for eight
different years.

1993 MSA Profile is available on floppy disk created by Woods & Poole Economics,
Inc. This disk contains metropolitan area forecasts to the year 2015 and
historical data back to 1970. Census data for all states, metropolitan
statistical areas (MSAs), primary MSAs, consolidated MSAs, and regions are
included. You can look up information such as ethnic makeup, population numbers,
employment makeup, and income per capita.

CEDDS: The Complete Economic and Demographic Data Source is available on CD-ROM
created by Woods & Poole Economics, Inc. More than 2.8 million statistics and the
equivalent of more than 3,600 pages of demographic and economic data are stuffed
onto one CD-ROM. The database lets you analyze the data, prepare special reports,
and generate graphs.

Demographics USA Zip Edition 1993 is available on CD-ROM created by Market
Statistics. This product sorts and summarizes 40,000 ZIP codes on one CD-ROM. The
enclosed software lets you rank, search, analyze, and customize the data to your
needs. The disk includes information about retail sales projections, buying power
indices, consumer expenditures, employment, and more.



Telephone and Mailing Labels

The huge data capacity of CD-ROM has dramatically increased the availability of
other data as well. Several vendors offer phone numbers for every household in
the country, with various levels of search capability. With a few keystrokes, for
example, you could find everyone named Wong in Tucson. The more sophisticated
products allow you to print a mailing label for each person you find.

The software is even more useful for marketing to businesses. You can find
companies by SIC code (which identifies the type of business) and hit, say, every
butcher in the Southwest.

Some of the available packages are listed below.

˘    PhoneDisk from Geographic Data Technology, Inc., [phone],
Matchmaker/2000 (software). This geocoding system contains more than 12 million
address ranges and can match street addresses with ranges of longitude and
latitude coordinates.

˘    Business America on CD-ROM from Optical Products Division, P.O. Box 27347,
Omaha NE 68127, [phone].

˘    Phonedisc USA Business from Digital Directory Assistance, Inc., 6931
Arlington Rd. #405, Bethesda MD 20814, [phone].

˘    Phonedisc USA Residential from Digital Directory Assistance, Inc., 6931
Arlington Rd. #405, Bethesda MD 20814, [phone].



Atlas and Geographic Data

For $125, Street Atlas, USA offers detailed street-level maps of the entire
United States on one disk. The atlas includes ZIP codes, place names, phone
exchanges, and even address ranges for metropolitan areas. Anyone managing a
territory or planning new store sites will find this software useful. Available
through software retailers.

Global Explorer is a world atlas that includes street maps of 100 world cities,
comprehensive country profiles, and a network of world air routes.

New software from Microsoft and other companies will allow marketers to overlay
statistical data on geographic areas, then produce colored maps of the result.
For example, such a map could show that certain neighborhoods in Buffalo are
buying more than twice as many Twinkies as other neighborhoods. This visual data
representation can turn mind-numbing statistics into mind-blowing facts.

52 Ways to Use Multimedia

1.    Create a ticket-generating kiosk for your travel agency

Put the kiosk in an easily accessible public place, such as a supermarket or
mall. After booking a trip by phone, clients can print out their tickets at the
kiosk. Clients can even use the kiosk to complete simple transactions, such as
booking train tickets, without involving the agency at all. The agency can reach
out and gain new customers with this convenience.

2.    Provide information on available seats

Ticketing companies and performance halls can create an interactive kiosk that
provides reviews of current plays, schedules of upcoming events, and ticket
information. Users can call up a diagram of the venue for a particular
performance that shows which seats are still available. Users select the seats
they want, the kiosk prints out tickets, the customer pays for them with a credit
card. People are more likely to pay $100 or more for tickets if they know the
seats will be good ones.

3.    Recommend albums to record store customers

Some record stores are installing a multimedia system that gives customers
background information on artists and types of music. Customers can conduct
searches by artist, name of song, name of album, or a host of different options.
If a customer tells the system which bands he likes, the system can recommend
related albums he might also enjoy, and play sample cuts from them.

4.    Offer more specialty goods to customers

A company that makes expensive niche items such as crossbows, for example, might
have a difficult time convincing a major retail chain to stock them. But the
company could set up an in-store interactive kiosk so that customers can get
information on the products and buy them directly from the manufacturer. The
manufacturer makes more sales, the retailer can "carry" new products without
spending money on stock, and the customer can easily purchase unusual goods.

5.    Present and modify blueprints

Architects and contractors can show a client blueprints and drawings on diskette
using a multimedia program. If the client wants modifications, these can be done
on screen instantly, with no need to make new drawings.

6.    Provide how-to information to increase sales

Customers can use an interactive display in a hardware store to get instructions
on simple household repair jobs. The display can list the materials required for
the job, provide prices for various brands, and even direct the customer to the
aisle where the items are stocked.

7.    Help customers choose pet food

A pet food manufacturer can place an LCD display on the shelf in the grocery
store to help customers determine which kind of food is best for their dog.
Customers can punch in what type of dog they have, how much the dog weighs and
how old he is. The display will tell the customer which food to buy and when and
how much to feed the animal.

8.    Show customers how they'll look using various cosmetics

Place a video camera and computer screen in your store. Offer to scan in
photographs of your customers. On the screen, you can use a multimedia program to
show customers how different brands and colors of eye shadow, blush, foundation,
and mascara can change their appearance.

9.    Distribute personalized catalogs

Did a customer place a big order with your mail-order clothing company last
month? Send her a personalized catalog on floppy disk that features items to go
with her earlier purchases. If she bought a red skirt, for example, her
personalized catalog could include a matching red striped blouse, a navy jacket,
red pumps, and red-and-blue earrings.

10.    Put all your catalogs on CD-ROM

If you put all your catalogs on one CD-ROM, you can save your customers time and
increase your sales. For instance, a customer looking for a birthday present for
his mother could specify the type of gift he wants and how much he wants to
spend. The CD-ROM will take that information, search the different catalogs, and
propose an appropriate gift package.



11.    Sell carpeting

A carpet manufacturer could use a floppy disk to calculate how much carpeting a
customer needs to buy for a room of a specific size. A good graphics program can
even show her what it will look like when it's installed.

12.    Propose interior design ideas

Designers and interior decorators can use multimedia to show customers how
specific carpets, upholstery, drapes, wall coverings, and furniture will look in
combination. Customers can easily make changes and try out endless variations _
with no need to thumb through endless books of upholstery swatches, wallpaper
samples, and paint chips.

13.    Produce customized dress patterns

A pattern company can set up an interactive system in fabric shops that asks
customers for their measurements, then prints customized versions of standard
patterns for each user. Customers are happy because the finished item will fit
better, and the company gets useful data on the measurements of actual users of
its patterns.

14.    Mail promotional CD-ROMs to prospects

A company with an extensive product line, such as an automobile manufacturer, can
send a CD-ROM to prospects' homes that gives detailed information on complex
features like anti-lock brakes and computerized navigational systems. The disk
might have separate files for dozens of models.

15.    Produce sophisticated instruction manuals on disk

Complicated products such as computer workstations can require instruction
manuals that are several volumes long. Now, manufacturers can provide detailed
instructions, including video clips and audio information, on a CD-ROM. It is
easier for the customer to use, and cheaper for the manufacturer to produce.

16.    Put extensive price lists on disk

A hardware company that makes thousands of types of nuts, bolts, screws, and
nails can produce a price list on diskette for its biggest customers, and update
it frequently as prices change. That way, customers can easily calculate the cost
of a large order without scribbling down prices from an outdated catalog or
calling the supplier for an estimate.

17.    Provide an easy-to-use store directory

A large department store can make its store directory available through a
touch-screen video kiosk. Customers could select the department they wish to
find, see a picture of it on the video screen and print out a diagram showing the
route from the kiosk to the selected department. The kiosk could even print out
discount coupons for items in that particular department.

18.    Suggest books

In a bookstore, a customer could use a multimedia terminal to request a
bibliography of books on a certain topic or a list of books by a particular
author in stock. Based on information he keys in about his favorite authors and
reading habits, the system could suggest books he might enjoy.

19.    Create custom cassette tapes

Record store customers could use an in-store kiosk to make customized tapes. The
customer would key in a list of 10 songs and the kiosk would copy them onto an
audiocassette.

20.    Answer questions at a trade show

At a trade show, an electronics manufacturer could provide a display panel that
lets buyers ask questions about the company's products. If the user wants to
place an order, he can press a button to summon a sales representative.

21.    Handle information requests

Visitors at a trade show could input their name, address, and information
requests into an interactive display, so that exhibitors could send them
information or arrange a sales call after the show.

22.    Run an attention-getting interactive game

By setting up a multimedia game at a trade show, exhibitors can attract
attention. If players have to enter the name and address of their company, the
exhibitor can collect a database of hot prospects.

23.    Demonstrate new hairstyles

A hair salon could scan a client's picture into a multimedia system, and then
show her how different hairstyles would suit her face _ before cutting even one
lock of her hair.

24.    Encourage multiple purchases

A small audio device in a display of perfume bottles can play a brief audio
message when customers pick up a bottle, informing them that they'll save a
dollar if they also purchase talcum powder in the same scent.

25.    Provide information on artworks

A small gallery may represent dozens of artists, but it only has enough room to
display a few of each artist's pieces at any one time. A CD-ROM system allows the
gallery to maintain detailed information, including high-quality photographs, on
all the works each artist has for sale, and to provide that information to
potential buyers in a user-friendly format.

26.    Produce interactive travel "brochures"

A tour company could produce an interactive presentation on its package tours. A
prospective customer interested in a bus tour of Italy, for example, could use a
kiosk at a consumer show to see a video clip of a gondola plying a Venice canal,
hear Luciano Pavarotti singing in Milan, and print out detailed information on
the tour company's prices and schedules.

27.    Market a specialized encyclopedia on CD-ROM

Encyclopedias are extremely useful reference books, but they can be somewhat dry
and unappealing, especially to children. But put an encyclopedia on CD-ROM, and
you can liven up an article about the South American rain forest with video clips
of brightly colored toucans in flight.

28.    Distribute electronic catalogs of craft supplies

A craft supply store often stocks thousands of tiny items such as embroidery
threads and ceramic beads, in dozens of colors. By putting its catalog on CD-ROM,
it can show shoppers vivid, larger-than-life pictures of every item. To increase
sales, it could include video instructions for dozens of projects using the
store's materials.

29.    Demonstrate video games in a toy store

A multimedia display would not only let customers try a game before buying it, it
would allow them to find out more about the game, such as the price of the game
and whether any games are left in stock, whether there are any related games
available. It could also recommend other games the customer might enjoy.

30.     Provide information to writers at a conference

At large conferences, editors are often besieged by eager authors looking for
information. Most of the questions are similar: What types of novels are you
buying? Do you have writer's guidelines? Do you accept multiple submissions? A
stand-alone terminal and printer at an information booth could handle these
routine questions, leaving the editors free to discuss prospective authors'
manuscripts in more detail.

31.     Provide information to visitors

In some popular tourist areas, the visitor information office in high season
looks like Grand Central Station. A multimedia kiosk or two could take a lot of
the pressure off harried clerks. Not only could it offer general information on
attractions and events, complete with sound and video clips, it could provide
up-to-the-minute information on vacancies at particular hotels. Of course, the
computer will remember what questions were asked, allowing the town to alter its
signage next year.

32.    Store documents from a historical society

Local historical societies have archives of hard-to-find information, such as old
diaries and letters, that writers and historians would be willing to pay to use.
A small, volunteer-run society can't maintain a full-scale library. It could,
however, record the materials on CD-ROM and sell the CD to researchers. That way,
the society could make some money, distribute its materials more widely, and
preserve the original artifacts from possible loss or damage.

33.    Provide airport information

Kiosks scattered throughout an airport would be a great help to tired, often
disoriented travelers. As well as providing information on flight arrivals and
departures, the kiosks could give the users information on services such as
duty-free shops, currency exchanges, and lounges for first-class passengers,
complete with maps. Restaurants could put their menus on the system. Car rental
agencies could offer users a discount.

34.     Sell expensive homes

A multimillionaire from Texas wants to buy "a little vacation house" in New
England _ somewhere he can entertain, say, 35 guests for the weekend. He wants
information on available properties. A Connecticut real estate agency can send
him a CD-ROM containing information on dozens of exclusive homes, including
detailed diagrams of every room, photographs of the view from various properties,
and audio clips of the sound of the surf pounding the shore.

35.     Train chefs

Let's say you own a nationwide chain of hotels. The executive chef at each
property makes an innovative dish that has customers clamoring for more. You want
all the chefs to learn how to make all of these dishes, but some of the
techniques are fairly complicated, and it's impossible for all the chefs to get
together at the same time. Produce a multimedia cookbook, with recipes and videos
of each chef making his special dish.

36.     Demonstrate exercise equipment

An exercise equipment manufacturer with a booth at a consumer show has several
problems: he doesn't have room to display all his machines, and he doesn't have
enough sales reps to demonstrate the ones he can display. By setting up a
multimedia presentation, he can let prospects see videos of all his machines in
use. Customers can also view price lists, watch testimonials from satisfied
users, and read newspaper articles about the benefits of exercise.

37.     Persuade prospective franchise buyers

A fast-food chain is trying to convince an investor to buy a franchise. After
explaining that single people aged 15 to 29 are the chain's best customers, the
sales rep can use a multimedia program on his laptop to call up maps of various
cities, highlighting areas where the number and income of young singles is high.
Then he can find out the price of each available franchise, and retrieve
information on each city's tax rates, bylaws, and business climate.

38.     Promote books to bookstores

A book is distinctly low-tech: just paper and ink. But a publisher can bring its
upcoming titles to life for a bookstore buyer using a multimedia program. On a
sales visit to the buyer's office, the publisher's sales rep could call up video
clips of a famous actor who is profiled in an upcoming biography, and full-color
pictures from a children's book.

39.     Sell training materials to doctors in remote locations

In rural areas, physicians don't get much opportunity to watch top-flight
surgeons in action or attend symposia on new drug therapies. A medical publisher
can sell these doctors a CD-ROM containing videos of tricky new operations or of
panel discussions from a conference. The disk could also hold hundreds of related
research papers.

40.     Produce a multimedia annual report for your investors

Companies produce expensive, four-color annual reports because they want to
appear prosperous and exciting in the eyes of their investors. A CD-ROM annual
report can give a company an even more attractive image. It can include a
videotaped message from the president, clips of positive television stories about
the firm, and massive amounts of statistics that the user can manipulate himself.

41.     Promote community arts organizations

A group of local theatres, dance companies, art galleries, and ballet companies
could pool its resources to set up a multimedia kiosk in a busy shopping mall.
The kiosk could display videos of current productions, provide biographies of
featured artists, list upcoming events, and even sell and print out tickets.

42.     Reinforce your product's association with a current movie

Remember how E.T. loved Reese's Pieces? Today, the candy manufacturer could
install an audio point-of-purchase device in high-traffic areas where its product
is sold. Curious customers would push a button to hear a message like "I always
choose Reese's Pieces" in the movie character's voice.

43.     Help customers choose hair coloring products

A hair-care company could put an interactive LCD device near its product display.
Shoppers would key in information on the length, natural color, and condition of
their hair, as well as the color they wished to dye it, and the display would
recommend the appropriate product.

44.     Sell seeds

A seed company can produce a CD-ROM catalog showing every available variety in
blooming color. The user can search the catalog to find out which plants grow
well together and which survive best in the shade. Video clips could show how to
transplant a delicate rose bush or get rid of aphids.

45.     Promote a flying school

At a trade show, a flying school could use a simple multimedia presentation to
show prospective students videos from inside the cockpit. Prospects could also
print out information on course schedules and prices.

46.     Produce a portable fashion show

Instead of mounting a full-scale fashion show in 20 different cities, a major
designer could store a video of one show on a CD-ROM. Exclusive retailers could
set up the presentation on an in-store monitor. Interested customers could stop
the action to take a closer look at a particular dress, or call up detailed
information on fabrics, colors, sizes, and prices.

47.     Promote a convention center

A convention center could set up an interactive multimedia display at a trade
show that would give prospects information on its facilities, diagrams and
photographs of each convention hall, and sample menus from the catering
department. The prospect could key in the number of people attending her upcoming
banquet, select a menu, and hit a button to receive a price estimate.

48.     Survey customers of a bank

Offer customers an incentive, such as no-charge checking for a month, if they
take a minute to use an interactive kiosk to complete a survey. With the kiosk,
your bank can gather information on your customers' likes and dislikes. Do they
want faster service, longer hours, more locations, or free financial planning
seminars? The kiosk can gather this sort of information in seconds.

49.     Provide route maps

An auto club could set up a multimedia kiosk to provide route maps for club
members. A user would key in his destination and interests. The kiosk could then
print out a customized route map that indicates the locations of factory outlets,
historic sites, amusement parks, or any other sites that might interest the user.

50.     Produce a video-by-mail catalog

Many companies rent or sell videos by mail. A company specializing in foreign
films could put clips of various movies, along with reviews and pricing
information, on a CD-ROM, and mail the disk to people who recently bought tickets
to a prestigious film festival.





51.     Promote a lottery

An LCD device near the cash register of a convenience store could display
information on the estimated jackpots of a dozen different lotteries.

52.     Promote a children's camp

A multimedia display can provide parents with detailed information on a
children's camp, including schedules and prices, video clips of kids riding
horses or canoeing on the lake, audio clips of campfire singsongs, estimated
travel times to the camp from various cities, and testimonials from happy
campers.

Multimedia Resources

RTC Industries, Inc.

2800 Golf Rd.

Rolling Meadows IL 60008

[phone]

Interactive point-of-purchase specialists.

RTC Industries is a leader manufacturer in the world of point-of-purchase
displays, merchandising systems, specialty packaging products, and premiums. They
specialize in interactive point of purchase and develop programs for clients that
involve one of three different types of electronic technologies _ interactive
audio, interactive LCD, and interactive video. RTC has developed interactive
displays for clients such as K-Mart, Warner-Lambert Canada, Olin Chemical, and
Sega Games.

The cost of RTC's interactive products ranges from as low as $50 for an audio
unit to $2,500 for an interactive video system. RTC can take a stock product and
tailor it to your needs or develop a unique interactive package for your product
and/or retail location.



MediaShare

2035 Corte Del Nogal, Suite 200

Carlsbad CA 92009

[phone]

MediaShare is a business software and consulting firm that specializes in finding
uses for multimedia applications in marketing environments. Since opening its
doors in 1990, MediaShare has become one of the leading developers of interactive
sales presentations. Using its own trademarked software package called PBPlus,
MediaShare can incorporate your company information and product literature into a
powerful multimedia sales tool.

MediaShare has also recently ventured into the world of interactive, electronic
catalogs. They can take your product database and turn it into a full,
stand-alone, catalog with full-motion video, audio, and an interactive order
form. They specialize in being a one-stop shop for catalogers who need multimedia
database design services, video and audio editing, graphic arts and animation
design, and interactive software and hardware expertise.



Techno Marketing, Inc.

5170 West 76th St.

Edina MN 55435

[phone]

Creators of multimedia presentations and campaigns for marketers.

Techno Marketing, Inc., formed in 1987, produces custom-designed interactive
multimedia programs created to meet each specific client's needs for a particular
application or project. They can produce programs designed to run on anything
from a single floppy disk to a complex interactive multimedia kiosk integrating
CD-ROM, stereo, and touch-sensitive screens.

Even on a low-end platform, TMI can deliver such features as 3D animation, full
motion video, voice and music, database searches, and personalization. And that's
just scratching the surface. TMI has produced interactive products for clients
such as Apple Computer, Holiday Inn, Lexmark, Carlson Companies, and the NFL.
They specialize in producing multimedia solutions to sales presentations and
interactive training.



Murray Multi-Media

Eight Carhart St.

P.O. Box M

Blairstown NJ 07825

Murray Multi-Media produces interactive multimedia programming for sales, public
relations, point-of-purchase, promotional, and training applications. Their
primary focus is on the creation of portable, interactive sales presentations
using CD-I or CD-ROM technology. They have created presentations for Fortune 500
companies and their biggest success stories have involved Forbes magazine and
Schering Plows.

Originally a design firm, Murray has evolved into its role as one of the top
presentation designers in the market. They are a full production house, capable
of writing your script, producing the audio and video, determining its
interactivity, and mastering the disks.

Telestar Interactive Corporation

11541 Goldcoast Dr.

Cincinnati OH 45249

[phone]

Telestar manufactures a microchip speech technology used in the production of
their interactive audio product called "Microtalk." Microtalk has been used as an
audio point-of-purchase device by packaged-goods companies, fast-food
restaurants, and automobile dealerships, among others. It allows customization of
a series of interchangeable audio messages that can be triggered by either motion
or push-buttons. According to Telestar, Microtalk increased product sales of
eight national brands an average of 24% during controlled testing (without
couponing).



Ohana Communications

233 East 70th Street

New York NY 10021

[phone]

Ohana Communications is the U.S. licensee of a multimedia software package called
Engage. Originally developed in France and used internationally by companies like
Mars and Kellogg, Engage is an interactive media technology used primarily at
point of purchase in kiosks and CD-ROM applications.

Specializing in meeting the needs of the cosmetic, apparel, and computer
industries, Ohana uses Engage to create entertaining interactive media and sales
presentations and stand-alone kiosks for marketers. They also produce marketing
programs that can be used online and, eventually, they hope to use the technology
in the arena of interactive television and home shopping. Ohana can help you
develop your interactive marketing campaign starting from concept and ending with
installation and maintenance of the system.



Interactive Marketing, Inc.

2200 Pacific Coast Highway, Suite 103

Hermosa Beach CA 90254

[phone]

Interactive Marketing, Inc. (IMI), was created in 1992 by Andrew Batkin, one of
the founders of the interactive industry. Since then, IMI has branched out into
five divisions and has served a variety of Fortune 500 companies' interactive
needs.

The Creative Services Group is an interactive media agency specializing in the
use of a variety of interactive technologies for advertising, promotion, and
marketing purposes. They have developed multimedia marketing campaigns for such
clients as Anheuser-Busch, Coca-Cola, FOX Broadcasting, and Walt Disney.

IMI also produces the Interactive Marketing Newsletter, acts as an interactive
consultant in the areas including interactive education and analysis, and
produces interactive TV shows and CD-ROM titles. They have also organized and
maintained the Interactive Marketing Conference Group, a series of educational
and networking conferences for high-level corporate marketing executives.



Multimedia Publications

Multimedia World

[phone] x501 to subscribe

Multimedia Glossary

CD-ROM (compact disc read-only memory): a technology that stores information on a
diskette. A scanner reads the diskette and projects the information onto a
computer screen.

DOS (disk operating system): the operating system used by most IBM-compatible
PCs.

Download: to send information from one source, such as your computer, to another
source, such as a disk.

Kiosk: a freestanding unit which uses multimedia technology to dispense consumer
information.

Laser disc: also known as a "video disc." It is similar to a music CD, but it
holds visual images as well as music. In fact, laser discs can store entire
concerts. The signal is fed into your television or video monitor as with a
videotape, but the quality is better.

LCD (liquid crystal display): a low-cost digital display device. Your digital
watch uses an LCD to display the time.

Multimedia: a form of providing information that combines text, graphics, video
animation, and audio.





Online: a term used to describe two or more computers that are communicating
through a modem or a network. You need to get online to send or receive e-mail or
to use a bulletin board service.

Programmer: the person who writes the coded instructions that tell the computer
what to do.

Read only: a term used to describe a file you can look at and print, but not
change.

Software: the instructions that make computers work.

UNIX: a software system that lets multiple users work on a computer network
simultaneously.

Upload: to use your modem to put one of your files onto a network or an online
service so other people can use it.





INFOMERCIALS

A New Generation of Long-Form Television Commercials

What are infomercials, notorious for

spray-on baldness cures and

Thighmasters, doing in a book on

cutting-edge marketing?

eMarketing is about establishing

relationships with consumers _

finding people who want your

product or service and then cementing

your relationship with them.

For many markets, infomercials

are the perfect first step in this process.

A Quick History of the Infomercial

Fifty years ago, direct-response magazine and newspaper ads were the marketer's
most effective tool. These long, text-filled ads informed as well as sold. They
often encouraged readers to send away for a free sample. Marketers turned these
initial inquiries into sales.

This direct-response technique gave marketers adequate time to teach readers
about a complex topic, answer questions and objections, and close the sale.

The introduction of television saw these ads make the transition to broadcast.
The long ads just moved to the small screen, in the form of commercials that
lasted as long as 30 minutes. Many marketers capitalized on the power of the
televised sales pitch. In 1958, however, the FCC banned all commercials longer
than two minutes in length. Short, expensive ads for easy-to-understand products
such as soft drinks, toilet paper, and cigarettes became the norm. Marketers
could use TV to generate name recognition and store traffic, but no longer had
time to educate the consumer.

Cable television changed one part of the equation. With hundreds of alternatives
to the big three networks, the cost of putting a commercial on the air dropped,
and it became much easier to target a niche market. Then, in 1984, the FCC once
again allowed long-form commercials.

Suddenly, infomercials were back.

Unfortunately, the first advertisers back on the air were the shlock artists
selling forgettable junk at high prices. They had realized a fundamental truth of
direct-response advertising: if your commercial generates more profit than it
costs to run, you can dramatically increase your advertising budget instantly.

Using Infomercials

The days of overnight infomercial millionaires are gone. The market is too
crowded now. The second generation of infomercial producers is relearning the
lesson learned by early TV advertisers: an educated customer is a motivated
customer.

Niche cable stations let marketers target their message more precisely than ever
before. They make it more likely that the infomercial can successfully sift
through millions of consumers to find the thousands who want the product.

The second-generation infomercials aren't an end in themselves. They're the first
step in a two-step process. Their only goal is to generate a phone call from an
interested consumer. Then the advertiser has to take the second step: scheduling
a dealer visit or a sales call, or sending the caller a free sample.

Both steps are critical. The infomercial breaks down consumers' resistance to an
unknown product or company. Once they feel comfortable with the company and
believe the product might solve a problem for them, the second step can close the
sale.

Volvo has a reputation for making safe cars. But it's hard to explain safety
features in a magazine ad. So when the company introduced a new line of cars a
few years ago, it created a half-hour infomercial that told Volvo's safety story
in detail. The company obviously wasn't trying to convince consumers to pick up
the phone and buy a Volvo on the spot. It simply wanted to create interest, so
that qualified prospects would call and set up a test drive.

After the infomercial ran in Southern California, more than 20,000 people called
Volvo for more information. At this point, one-to-one marketing took over. By
handling every inquiry swiftly and personally, the company could make prospects
feel like a valued member of the Volvo family. This second step was crucial, but
dealers never could have taken it if the infomercial hadn't generated qualified
prospects in the first place.

General Motors broadcast a half-hour documentary that described the creation and
production of its new Saturn cars. Because the company was more interested in
building brand identity than selling cars immediately, it didn't invite viewers
to call. But the infomercial still taught a huge number of prospects about the
new car.

Burger King understands that selling a franchise is far more complex than selling
a hamburger. Unfortunately, it's hard to reach people who have the money to buy a
franchise who haven't already considered the possibility. By using an
infomercial, Burger King can tell a compelling story to a huge number of
consumers, then winnow this audience down to the few who are both interested and
qualified. With the fee for a franchise at well over $100,000, Burger King can
afford to run quite a few infomercials even if the sales rate is low.

Do you market an expensive product? Then you know that a business-to-business
sales call can cost well over $200. An infomercial, on the other hand, can cost
just $3 to deliver to a likely prospect on videotape. For the price of one
personal sales call, you can reach more than 60 qualified prospects with an
infomercial. And you can do even more in an infomercial than you can in a sales
call: discuss product specs, show product in use, use testimonials, show product
construction, discuss guarantees, and make competitive comparisons.

Accountability

Unlike most television ads, an infomercial lets you measure results immediately.
Within an hour, you'll know whether the ad generated any phone calls. Within
weeks, you'll know if the calls resulted in sales.

Understandably, infomercials make some advertising agencies nervous. They've
spent the last 40 years telling clients about the benefits of "brand building" or
"awareness," confident in the knowledge that there was no way to measure the
effect of particular ads.

There will always be image advertising and short messages. But effective
infomercials are proving their worth as a way to give potential customers more
detailed information.



Timothy Hawthorne on

Infomercials

TIMOTHY R. HAWTHORNE is president of Hawthorne Communi-

cations, a leader in infomercial marketing. As the first agency focusing
exclusively on Fortune 500 infomercial advertising, Hawthorne has gained
tremendous experience using this medium as a two-step selling tool.



It's 1849; Sutter's Mill, California. The hills and valleys are alive with men
and women dreaming of newfound fortunes. They come from all walks of life,
merchants, farmers, laborers, even doctors and lawyers. A few hit the mother
lode; most watch their dreams washed rapidly downstream_.

Fast forward to 1984. Southern Californian Bob Murphy strikes gold. Only this
time it's infomercial marketing. And word of potential riches travels as fast as
it had 135 years earlier. Soon there are dozens of adventurers laying claim to
the infomercial gold vein.

They're bankers, educators, computer executives, attorneys, fast-buck artists _
no longer called "Forty-Niners," but entrepreneurs.

In 1849, all you needed was a strong back, a pickax, and a pan to reach
millionaire status. In 1984, it didn't take much more. A unique product, a hot
pitch man and an 800 telephone number. And within months, these TV
direct-response moguls individually created 10 to 50 million dollars in sales.

The first generation of infomercial marketers peddled get-rich-quick homestead
courses, diets, kitchen gadgets, health and beauty aids. If a product had a 300%
mark-up, was not available in stores, appealed to the masses, appeared new and
unique, and met common needs of greed and vanity, it was a potential infomercial
gold mine.

For eight years, from 1984 to 1992, the mavens of TV infomercials harvested their
fortunes, ignored by mainstream advertisers and traditional advertising agencies.
Annual, industry-wide gross sales leapt from 10 million dollars to 750 million.
While 1984 saw perhaps five infomercials launched, in 1992 nearly 200 long-form
shows debuted.

The currents of change, though, had been flowing quietly all along. As more
infomercials competed for a limited number of media time slots, the cost of a
half-hour had risen dramatically. By 1992, long-form media buyers paid an average
of three times more for the same time period than in 1984.

The consequences were twofold: 9 out of 10 infomercials tested were failures; and
"successful" infomercials made less profit on the front end and relied more on
"aftermarket" sales. Consumer response to infomercials hadn't gone down; it
simply cost more in media expenditure to generate one sale. The net result: the
long-form market was ready for a change.

That transformation took the form of a Texan riding in on a political white
horse. His name: Ross Perot.

In the fall of 1992, only one Fortune 500 advertiser used infomercials:
Time-Life. But when Perot premiered his fourth quarter 1992 presidential campaign
infomercials, suddenly Madison Avenue woke up to the power of the half-hour.

Showing him sitting in a denlike setting, referring to hand-held charts, Perot's
simple, inexpensive infomercials were revolutionary. With 8 to 10% of all TV
households tuned in to watch, ratings were nearly 30% higher than the networks'
entertainment programs Perot's shows preempted.

Immediately, in boardrooms across the nation, corporate execs consulted with
their ad agencies. "Why can't we tell our products' stories in a half-hour?" they
asked. Infomercials had come of age overnight.

From 1992 to the present, the corporations listed below have all tested
infomercials.

Apple Computer, Inc.

Avon Products, Inc.

BankAmerica Corp.

Bell Atlantic Corp.

Black & Decker Corp.

Braun

Century 21

Club Med

Coca-Cola Co.

Dayton Hudson Corp.

Eastman Kodak Co.

EstÇe Lauder

Fidelity Investments

Fischer Audio

Ford Motor Co.

General Motors Corp.

GTE

HarperCollins

Hyatt Resorts

Johnson & Johnson

Mattel, Inc.

MCA Records

McDonald's Corp.

Norelco

Panasonic

PepsiCo, Inc.

Philips Electronics

Playboy Enterprises, Inc.

Prodigy

Prudential

Redken

Revlon

Scott Paper

Sears, Roebuck & Co.

Slim˘Fast

Smith Kline Beecham

Texaco, Inc.

Time-Life

Visa

Volkswagen

Volvo

Warner Music Enterprises

Weight Watchers

Every major advertiser now has long-form TV advertising routinely considered as
part of its marketing mix. But along with big corporate infomercials came a
change in marketing goals and strategy.

Even at media prices averaging now five times the cost of infomercial time in
1984, half-hour media is still a bargain. On a per-minute comparison basis,
infomercial media is roughly one-fifth the cost of a 30-second commercial.
Established brand companies realized they could use an infomercial to accomplish
marketing goals beyond the traditional one-step offer ("Use your credit card.
Call the 800 number and order now.").

For Fortune 500 companies, infomercials could generate leads (the two-step
offer), establish brand awareness, and become a powerful public relations
vehicle. The Fortune 500 even revolutionized TV direct response with their
discovery that infomercials can even drive retail sales. An accidental
discovery....

In 1989, the entrepreneurial infomercial company named Quantum hit a home run
with its Daily Mixer show. The product was an Italian made, handheld, single-stem
food mixer priced at $129.95. Within one year, Quantum sold $50 million worth of
mixers.

Coincidentally, the American division of the German manufacturing giant Braun had
a like-styled mixer on the shelves at retail. When the Daily infomercial went
big, Braun's mixer flew off the shelves. And when the infomercial died after 18
months, Braun's retail sales dropped significantly.

Braun decided to take control of its own retail fortunes. It asked Hawthorne
Communications, the first Fortune 500 infomercial advertising agency, to make a
new infomercial with Braun's mixer as the star. Rolled out in the fourth quarter
of 1992, Braun's infomercial not only sold well direct over TV, but, as
predicted, drove retail sales dramatically.

Braun's MaryAnn Connelly said, "Braun is particularly interested and impressed by
the tremendous impact infomercials have on retail sales. Braun's ultimate goal
was to cover most, if not all, of the cost of media with direct sales and drive
sales for our retail partners. Braun's infomercials have met this goal admirably.
We have seen retail sales increase dramatically."

The "retail driving" infomercial was a true advertising innovation. For 50 years,
television direct-response commercials have typically sold products "unavailable
at retail." The TV exclusivity was thought to build immediate telephone response.
But a look at the numbers shows why infomercials impact retail sales.

Research has indicated that only 20 to 30% of consumers are inclined to buy a
product directly from a television offer. Most Americans still like to touch and
feel a product before purchasing. But 99% of consumers watch television. And they
can't help but come across an infomercial sooner or later.

In fact, only 1/10 to 1% of all infomercial viewers actually pick up the phone to
order. That means 99% of infomercial viewers have spent anywhere from three to 30
minutes learning about a product's features and benefits but don't call the 800
number to order, leaving millions of highly educated sales prospects much more
willing to buy the product if they discover it at their favorite retail outlet.

Because infomercials have the power to inform and entertain so many retail
buyers, in-store sales of an infomercial product can amount to two to 20 times
the direct-over-TV sales volume. "Driving retail" is now the preferred strategy
of the infomercial industry's second generation: major brand advertisers.

Philips Electronics successfully used this strategy to revive its listless CD-I
(Interactive) sales. In 1992, Philips had spent nearly $12 million in image
advertising, and struggled to move any product. In 1993, it spent half as much on
an infomercial campaign and cleared retail shelves within three months. The
infomercial, in fact, was briefly taken off the air until inventory could be
restocked.

But creating an infomercial success is not as easy as it looks. Traditional ad
agencies have thus far struggled with the format. There are different rules of
persuasion for 30 minutes versus 30 seconds. The first "sit-commercial" was a
classic boondoggle.

Bell Atlantic commissioned its agency to create an infomercial for its add-on
phone services: call waiting, call forwarding, and the like. Bell's agency spent
$750,000 hiring a Hollywood sitcom writer to craft a situation-comedy
infomercial.

The plot revolved around an Archie Bunker-style family called "The Ringers."
Ralph Ringer, a plumber, tried for 30 minutes to keep peace in his family by
introducing them to the add-on Bell Atlantic phone features. Unique, innovative,
entertaining_but the infomercial was unable to create sufficient response. A
basic selling rule had been violated.

The writer had placed Ralph, a fictional character, in the role of "asking for
the order." Periodically, Ralph stepped out of character, turned to the camera,
described the phone features available, and asked the viewing audience to "call
the 800 number on your screen now."

Those experienced in infomercial marketing recognized the blunder immediately:
few people will do the bidding of a fictional character. Especially when it
requires making a purchase.

Such are the lessons the Madison Avenue copywriters must learn in the emerging
era of "elective" advertising.

Infomercials are the forerunners of this new era. A revolution is happening in
how advertising will be delivered and viewed. The world of interactive television
will make the 30-second copywriter useless.

For 50 years, television advertising has been based on "intrusion": interrupting
viewers glued to Jeopardy! and Home Improvement to present a commercial message.
Until 10 years ago, the TV audience had little choice when intruded upon: watch
it dumbly or head for the kitchen or the bathroom. The 1980s gave the viewer
another choice _ zap commercials with his remote control. Forty-six percent of
viewers now zap all commercials.

Interactive television presents an even more serious threat to advertisers than
the remote control. When the home viewers can watch anything they want at any
moment, how will we get them to watch our product message? Will anyone, given the
choice, choose to watch ever again a commercial for Dove, Crest, Tide, Coke, or
McDonald's? No. Not unless you give them an incentive.

Television advertising is moving from the age of intrusion to the age of
"attraction." Viewers will elect to watch commercial messages for two basic
reasons: they will be compensated by advertisers for their attention through
product discounts, coupons, contests, cable TV fee discounts; or they will decide
of their own volition they want product information because they're in the market
to buy. The former category of products will be low-involvement, low-ticket items
such as food and packaged goods; the latter category will be high-involvement,
high-ticket items such as electronics, appliances, and autos.

No matter what the product, the ad messages will be required to be highly
"attracting." Otherwise, the consumer will move abruptly to one of the 499 other
viewing options available.

This "attracting" quality is exactly what infomercials have to possess even
today. Audiences watch infomercials not because they have to, but because they
want to. Long-form ads never intrude; viewers choose to watch them because they
appeal to their desire for product information: information presented over a
30-minute period in an entertaining way.

In the TV interactive age, commercials neither will be 30 seconds nor 30 minutes
long. Most likely, a product will have 6 to 10 chapters of information available
to screen, each 2 to 6 minutes long. And the goal of the 21st century advertiser
will be the same as the 1990s infomercial producer: keep the viewer watching as
long as possible. The venerable merchants' axiom yet holds true _ the more you
tell, the more you sell.

Advertisers would be advised to learn the art of infomercial creation today,
because tomorrow's advertising will follow closely in its footsteps.





Success Stories

GTE ran an infomercial for a new service. An astounding 70 percent of the callers
to the 800 phone number ordered the service. GTE advertising manager Victoria
Lins says she liked the infomercial because it was "100 percent measurable to
sales. We saw greater returns than we did on some traditional ads." GTE is
developing a second program.

Gemstar Development Corp. developed the groundbreaking VCR Plus. It lets users
tape TV shows more easily. Instead of fiddling with a VCR timer, VCR Plus owners
simply key in a code that appears beside each program in the television listings.
After convincing newspapers around the country to carry the numeric codes, the
company faced the daunting task of persuading consumers to try a brand-new
technology.

Market research showed that most people had heard of VCR Plus but had never tried
it. So Gemstar created an infomercial that demonstrated the product and featured
testimonials about how easy it is to use. The infomercial is part of an
integrated marketing strategy including radio spots and TV product placements.

Some people still associate infomercials with junk, but you can't get much
farther away from shlock than The Salvation Army. As one of the country's three
largest charitable organizations, the Army is continually struggling to maintain
its presence, its impact, and its funding. The Army had never used paid
advertising. However, following the lead of other nonprofit organizations, it
created a 30-minute infomercial.

"The purpose of the campaign was to present a contemporary and accurate image of
The Salvation Army and generate leads for people in service ministries, and to
increase attendance at The Salvation Army," says Jeffery Goddard, president and
executive producer of The Video Agency, which produced the infomercial.

The program, hosted by actor and AT&T spokesman Cliff Robertson, invited viewers
to call an 800 number to request a free 10-minute videotape, "Happiness From
Having a Life Money Can't Buy." A Salvationist delivered the tape to the caller's
home. The nationwide campaign was so successful that the Army translated the
infomercial into Spanish.

While compilation albums have always been sold on TV ("Now you can get every
record ever recorded!"), leading record labels have rarely used TV ads. However,
record companies such as Arista, Mercury, and Warner Music Group are now working
on infomercials. These ads will use clips of music videos, concert footage, and
canned interviews to jump-start sales of languishing acts _ the same techniques
that made MTV such a powerful force in the record business. The ads will
encourage viewers to call an 800 number or visit a particular record store.

Playboy Home Video uses infomercials to market two of its best-selling videos:
"Secrets of Making Love to the Same Person Forever" and "Ultimate Sensual
Massage." The ads also offer audiocassettes of "Play-boy's Music for Lovers,"
vitamin E massage oil, and jasmine massage balm. The company has overcome video
stores' reluctance to stock its products by marketing directly to the consumer,
with marked success.

Hoover used an infomercial to solve two problems: its difficulty in reaching male
consumers, and its inability to control the way its product was demonstrated in
retail outlets. The show featured the company's 16-gallon Hoover Wet/Dry Vac
Supreme cleaner and a 12-piece tool set. It ran primarily on weekends during the
day, and was originally released to promote Father's Day sales.

At first, Hoover was afraid that retailers would see the infomercial as
competition. On the contrary, retailers appreciated the ads because they
increased sales by educating consumers. According to David Gault, Hoover's Vice
President of Marketing, "With fewer and fewer salespeople in any given outlet,
the more demonstration and selling that takes place before customers enter the
store, the better the sales will be."

Planning Media Placement and Distribution

Ten years ago, you could buy a half-hour of local cable time for about $50.
Today, that same spot will cost you $500 _ if it's even available. As more
companies have entered the infomercial field, time slots have become more
difficult to find.

The placement of an infomercial has always been the single most important factor
in its success. With rising prices and increased competition, it's more important
than ever to study the market carefully before buying air time.

Most infomercials should be aimed at a niche, not the entire population. The
tighter your focus, the more efficient your advertising. Fortunately, the
explosion in the number of cable TV channels makes it easier than ever to target
your market. There are channels devoted to food, golf, and talk shows _ and
several that will feature only infomercials.

Buying air time directly is a difficult and expensive undertaking. It's far more
efficient to hire a media-buying firm. In many cases, these firms have pre-bought
blocks of time around the country _ cornering the market in some areas.

Remember VCR Plus, the technology that helps consumers program their VCRs easily?
It's also a boon to infomercial advertisers.

Now, you can save money on placements by running your infomercial in the very
cheapest time slot (3 a.m.) on the least watched channel, and letting prospects
know they can tape it by setting their VCR Plus to your show's code. Of course,
you can also tell other VCR users just to set their VCR timer. Either way, you
can generate interest for very little money _ if your infomercial truly offers
useful information to your target market. No one is going to bother taping a
straight sales pitch. You have to make it worth their while.

You can promote your infomercial in a variety of ways. CBS sells a package called
Spot Plus+ that combines your dead-time infomercial with a series of short
30-second daytime commercials promoting the infomercial.

Tri-Star used Spot Plus+ to advertise the movie Guarding Tess. In its daytime
ads, the company told viewers that it would air a 10-minute preview of the movie
at 2 a.m., and that the preview would include information for a phone-in contest.
Despite the extremely low cost of the 2 a.m. time slot, Tri-Star received 2,000
calls from people who had seen the preview and wanted to enter the contest. More
than 75% of the callers had taped the preview.

To attract the attention of a more specialized market, you can use magazine,
newspaper, and direct-mail advertising. Let's say you're running a 30-minute
infomercial to explain the features of a new computer. You can promote the
infomercial to computer-savvy consumers with full-page ads in PCWorld and similar
magazines.

Or, like many advertisers, you may decide not to broadcast your infomercial at
all. Instead of paying to beam your message to hundreds of thousands of homes
with no interest in your product, you can send a videotape to likely prospects.
For about $3 per 30-minute videotape _ $2 to duplicate the tape and $1 to package
and mail it _ you can deliver a high-impact message right to a prospect's door.

Very few people will throw out a videocassette. And if your list is carefully
targeted and you follow up, most of the recipients will actually watch it.

In 1991, Hart Schaffner & Marx, the men's clothier, replaced its Christmas
catalog with a videotaped infomercial. Customer reaction was quite positive, and
the company got hundreds of unsolicited calls for more video catalogs.



Interview with Bill Thompson

William M. Thompson is the president of TV Inc., an infomercial marketing and
research firm in Largo, Florida. He is also the author of Inside Infomercials,
and is a recognized expert in the infomercial field.



Q:    Who are the new major marketers entering the infomercial arena and why do
you think they are entering now?

A:    Let's start from the beginning. In 1984, the government very quickly
relaxed the rules on the amount of commercial air time that could be placed
during any one half-hour or hour period. Any time there is an opening to a
frontier, you get the Sooners. You know what a Sooner is?

Q:    The Oklahoma Sooners?

A:    Yes. They called them Sooners because when the government opened a strip of
land, some people would sneak in the night before to stake their claim. The first
into the market are like the carpetbaggers who went to Atlanta in 1865 to set up
businesses and make money as quickly as possible and then get out of town.

        These are the types of people who were involved in infomercials when it
first got started. The slicers, the dicers, the diet program, that type of thing.
Traditional marketers always sit back and wait to see how things shake out and
what effect it is going to have because they have corporate images and major
dollars to consider. Whereas an entrepreneur operates by quickly throwing a few
hundred thousand dollars in this thing, making some money and seeing what
happens.

        As major marketers enter the game, the market is in transition. As a
result, air time is becoming much more expensive. The consumers have stated that
they are willing to watch half-hour-long or hour-long informational commercial
programs. The major marketers in different industries, the Fortune 500, so to
speak, are looking at long-form advertising as another vehicle they should
consider.

Q:    Can you give me some examples of who you see of these industries that are
entering now?

A:    We don't know of anyone who isn't. We have met with some of the top
companies that are recognized on the American and New York Stock Exchanges, even
entire countries that are looking into this vehicle. Infomercials have been
established as consumer-acceptable. Since they are accepted by consumers, major
marketers are now looking at how they can proceed into the market.

Q:    How do you think the new infomercial marketers are using the technology to
build connections with their existing and potential customers?

A:    The weakest link in any distribution program is always the firing line.
That's the person who is actually behind the counter, in the salesroom, who is
talking to the potential customer.

        In the past, salespeople were relatively well trained and usually worked
on commission. That's expensive. With today's high-energy, fast-lane type of
merchandising and marketing, you can not afford to put that type of person on the
firing line. Yet consumers still demand, even more so as they get older, more and
more information about the product they are going to acquire before they are
willing to spend the money.

        The infomercial gives the manufacturer the opportunity to speak at
length, in a controlled way, with his potential customers about his product so
they get the information. It is like having your very very best salesmen at the
top counters all the time.

Q:    How does the concept of one-to-one marketing play itself out in the
production and use of infomercials?

A:    The infomercial is exactly that; it is an information-based piece. No one
ever bought a television to watch commercials. They bought a television for
entertainment and for information. The infomercial allows the manufacturer to
give the consumer entertainment and information at the same time that he's
selling something.

        The fine line between what is commercial and what is entertainment is now
being totally erased. The product is becoming very much a part of the production
itself, the entertainment vehicle.

        With a 30-second, 60-second spot ad, where you're focusing on brand
awareness, brand identification, and image advertising, you are asking the person
to remember the name of your product when he gets to the retail marketplace, and
hopefully to opt for that product over the competitor. An infomercial goes much
further, because you can now tell the person all there is to know about the
product, and you can develop a relationship with the customer through the
television. So not only does he want to buy the product, but he knows as much
about it as, if not more than, the salesperson behind the counter.

Q:    Why do you think major marketers are using a two-step process versus a
one-step process?

A:    Because they are already in the distribution business. A company came to us
and said, "We'd love to get this product out there on infomercials. The problem
is, we have distributors, we have retailers, and we can not possibly appear to be
competing with them directly. We've got to come up with a program that supports
our retailers and moves merchandise at the same time."

Q:    Do you think the reason for the two-step process is to create a long haul,
whereas a one-step is for get-money-quick schemes?

A:    I don't think that all one-step commercials are quick-money schemes. There
are many one-step commercials that we have designed for $39, $49, or $59
programs. The whole idea was to develop a customer base, so you could sell to
them again and again. Victoria Jackson has done that very successfully with
cosmetics. Now there are still one-step, strictly one-step; Ginsu knives for
example, Tony Robbins is a one-step, although he is moving into multiple steps by
flooding the customers with mailings of this program and this vehicle. Don't
forget the purpose of an infomercial is to build a customer base.

Q:    Do you think the entrance of major marketers who can spend greater amounts
of money will affect the infomercial market?

A:    Not at all. And it won't for this reason: two-step, three-step, image-type
infomercials require more prime-time, more conventional time base. One-step
commercials require that you catch the person one hour after they wake up or one
hour before they go to sleep. So those times are not of interest to major
corporations.

Q:    Do you think infomercials will become alternatives to prime-time
programming?

A: They already are. Look at "Oprah Winfrey Interviews Michael Jackson Live."
That was a two-hour infomercial. It was produced by CBS, who also produced his
newest and latest album. They spent 90 minutes talking to Michael Jackson, and 30
minutes talking about his album.

Q:    What about using videotape for infomercials?

A:    The power and versatility is terrific. It's just one more step toward total
control. You're not limited to making a 30-minute commercial and saying it is
going to be on at 11:30 at night on channel 69. You can do anything you want
because people are crying for and demanding more and more information. The video
concept answers that problem.

Q:    What has been the biggest problem for major marketers entering the world of
infomercials?

A:    Having dealt with a number of the larger companies, I have found they have
a tendency to look at something innovative and then apply traditional techniques
in order to get it solved. This kind of thinking typically has proved
unsuccessful. In fact, I can't think of an infomercial that has been produced by
a major company by its major agency (and those are two important things that have
to be tied together) that has ever been successful.

        Philips has done a decent job with their CD program on the continuity
basis. Get the unit and then buy the discs and so forth from them. Eastman Kodak
tried it. They have a one-minute spot for their photo device that puts them on a
disc. But they have found that their short form, their one-minute spots, do much
better than the 30-minute spots.

Q:     Why do you think that is so?

A:    The people who would use the product are already predisposed to it. You are
talking about people who enjoy picture taking and would be willing to spend
significant money in order to improve their picture-taking experience. They
haven't pitched it to the non-converted as introducing something new.

Q:    But isn't another goal to attract people who are marginally interested?

A:    They found that it does. However, they found there is enough of a base
already there that is more actively interested in taking advantage of it rather
than having to re-educate. Re-education is a very expensive process. Now, if you
have a million people who are willing to buy your product right now and you can
reach them for $100, that's your first step.

        If you have ten thousand people who are interested in buying your product
and it is going to cost you $200 to reach them, well $200 isn't that bad, but if
I could only spend $100 to reach the first group, I'd get that many more sales.
So they prioritize. What is working best is what they are doing right now. I am
not saying the infomercial didn't work. I am saying the short form was more
effective financially.

        Now, those are the only two that I know of that have actually produced
significant results. Volkswagen just came out with one. It was a very nice
infomercial about the car you love and the history of the Volkswagen _ it tried
to develop customer loyalty. They had an 800 number at the end and they wanted to
drive the people to dealerships.

        They weren't able to drive the people to the dealerships because when you
dialed the 800 number, the person who answered the call would say "What's your
ZIP code?" and you would say, "My ZIP code is 81818."

        "Oh, okay, your local dealer is Fred Morris. Do you need his phone
number?" That's the response they're giving them. They dropped the ball. They did
not use effective receiving techniques. The telemarketing service did not do a
sufficient job of completing the process. All the steps from buying air time to
fulfillment need to be consistent. Volkswagen did not do this. Why? Because they
are using traditional techniques in a direct-response atmosphere.

        Why is it that DDB Needham, which owns one of the largest direct-response
companies in the world, is talking to people like me to do their infomercials? If
you look at a script for an infomercial that is really well done, you see you'll
suddenly become just enwrapped in the story and you can't wait to get the
product.

        An infomercial is about the management of the whole marketing program as
compared to buying some print space or running a 30-second spot, putting your
finger in your ear and hoping somebody calls you. Infomercials are advertising
vehicles that are accountable, and most agencies don't even want to think about
that. We know immediately how well a program did. How well it did in the time
slot, how well it did in the demographic, in the psychography. We know that
within 24 hours. No other advertising vehicle allows that.

        In the end, infomercials will be successful if people plan and execute
the marketing strategy from the beginning to the end. As I have said
before,"Future profits are not the result of technology alone, but the proper
management of that technology."







Creating Content

It's easy to make a bad infomercial. Remember the first wave of infomercials,
with their unctuous, untrustworthy hosts delivering never-ending sales pitches?
These "one-step" infomercials tried to convince viewers to buy immediately.

Infomercials have evolved. They now use the dramatically different "two-step"
approach _ educating the viewer before trying to sell to him. Remember, the
viewer can and will change the channel the moment the program stops interesting
him.

Don't underestimate the willingness of a consumer to get into details. In an
infomercial for a car, you can visit the factory, explain the computer-controlled
antilock braking system, or discuss tire design. Any information that will help
your prospect make a better decision benefits both of you.

Producing Mini-Infomercials

To date, we've talked about infomercials that are widely distributed. But
infomercials designed to be seen by 1,000, 100, or even one person can be just as
effective.

If you can identify a targeted audience that needs to know more about your
products or services, it may pay to deliver your message on videotape instead of
using a traditional brochure.

Hard Manufacturing is the nation's largest producer of hospital cribs. There are
just 2,000 hospitals in America big enough to buy more than a few of these $1,000
to $5,000 cribs.

Hard mailed the head pediatric nurse in each of these hospitals a 30-minute video
on crib safety. Produced in conjunction with a cable TV network, the video
consisted primarily of an interview with the president of the company.

Evidently, many nurses watched the video. The whole promotion cost less than
$15,000, but it led to more than $50,000 in new crib orders.

Producing an Infomercial

It may be tempting to produce your infomercial in-house, but that's rarely wise.
Production expenses are a tiny fraction of the total cost of your infomercial
campaign. Don't skimp.

Technology has substantially lowered the cost of creating broadcast-quality video
in the last five years. Dozens of companies now specialize in infomercial
production. When assessing a production company, start by asking for its reel,
which will include excerpts of past infomercials. Try to ignore the product being
sold and focus instead on the quality of the script, set, and lighting.

Remember that you can create 30 minutes of infomercial for just about any price.
Your goal is not to pay the least, but to be sure that you get what you pay for.
Instead of asking producers for a price estimate, ask them to describe what they
can deliver for a given amount.

If you're doing a mini-infomercial, you may not be able to afford a production
house. However, you may be able to cut a deal with the local cable station to
shoot your commercial during the day, when many cable studios are empty.







Don Peppers and Martha Rogers

on Host Computers: The Market in Information Exchange



Imagine you're watching a Mitsubishi commercial sometime in the interactive
future. You've been thinking about a new car, and this one looks pretty good. So
you punch your remote to call up some information about leasing, warranty, and
options currently available _ even though you're not sure whether to buy just
yet.

As you sit down to dinner that evening, however, the local Mitsubishi dealer
calls you to discuss things personally. The next day, the local auto insurance
companies drop by your office, and in a few days, your mailbox is crowded with
glossy automotive promotions and brochures.

You feel hustled. Would you ever raise your hand _ electronically _ again?

Today's mail-order and credit card information gets freely passed from marketer
to marketer. Buy clothes from a catalog and you'll soon get more clothing
catalogs in the mail. Make a donation to muscular dystrophy, and pretty soon the
heart and cancer people will also hold out their hands _ either in the mail or on
the phone.

But the interactivity available on the Internet will speed these practices
intolerably, creating junk mail at light speed. Consumers will soon loathe the
volume and pace of commercial solicitations, and the invasions of privacy that
accompany them. Transaction-happy mass marketers will have much greater power to
track individual customers, but the customers themselves will probably stop
responding altogether _ thus crippling the economics of interactivity.

The solution lies within the technology that created the problem. Using currently
available technology, tomorrow's media company must insulate consumers and
marketers from direct contact with each other.

Imagine the media company of the future not as an information pipeline connecting
marketer and viewer, but as an information pool instead _ a repository of
information acting as a buffer between marketer and consumer. This is the role
the Internet could play, or else it will attract hosts who will themselves serve
as buffers.

Such an information intermediary gathers detailed information from each user and
sells it to marketers _ including all kinds of information about the consu-

mer _ except the individual's identity or any form of address. In turn, the
marketers who are most interested in particular individuals will make highly
targeted offers to them _ offers so attractive, or so narrowly focussed no
marketer could make them available to every consumer, or even every consumer in a
certain "segment" or "niche."

The offer can be made only within the host's own interactive system. With no
name, Mitsubishi or Club Med or Waldenbooks cannot contact any customer by
e-mail, phone, or snail mail. Nor can he sell the information to competing
marketers.

The savviest marketers will realize that even if they get the customer's ID
(which they will if the offer is just right), they are better off keeping the
information to themselves. In the 1:1 future, success will accrue to those
marketers with real relationships with consumers, and those relationships will be
based on superior learning about each individual customer. One-to-one marketers
will use the information they have about a customer to get a greater share of
that customer's business, and will find that endeavor more profitable than
selling off the information to competitors.

Thus the consumer's privacy is protected by the value of the relationship. The
marketer holds information that gives a bankable competitive advantage. The
intermediary host makes a living by serving as an information buffer. It's the
only way consumers will play, and it's fast becoming the only game in town.





52 Ways to Use Infomercials

1.    Create a "news" program about your new car

Make a documentary about the development of your new family sedan. Ask designers
how they came up with ideas for the vehicle. Show the state-of-the-art plant
where the car is made. Interview workers on the assembly line about quality
control, and ask them to demonstrate some of the ways they double-check the car's
safety and structural integrity. Viewers will come away feeling confident about
the product.

2.     Link your product to a charity

Do you sell books? Run an infomercial promoting a literacy foundation, showing
how the charity uses your books to teach adults to read. Do you run a bakery?
Produce a program about a food bank, and include an interview with the executive
director mentioning how you have donated thousands of loaves of bread to the
charity. You'll create goodwill for your company by associating it with a worthy
cause.

3.     Conduct market research by inviting customers to call you with feedback

If you're promoting a diet supplement, tell viewers they can try it and then call
your 800 number to give you their opinions. After a few months, update the
infomercial by including some of the positive comments from the feedback line.

4.     Run a quiz show about a tourist destination

Are you trying to promote a popular tourist destination such as Mexico, Hawaii,
or London? Produce an infomercial that combines alluring video of your
destination with a series of trivia questions such as "Where are the Crown Jewels
on display?" Viewers can mail in their answers for a chance to win a free trip.
They'll feel more involved in the program, and you'll get a list of hot prospects
for future marketing campaigns.

5.     Offer free samples of a new brand of energy bar

Many athletes put great stock in energy bars _ bars of healthy ingredients and
vitamins that are designed to boost performance. Manufacturers do detailed
studies to determine the best combination of ingredients. In an infomercial, you
can interview researchers, as well as successful athletes who have used the
product. But viewers won't be convinced enough to buy a box of 24 until they've
tried one themselves. A free bar can overcome their reluctance to buy.

6.     Promote a chair to new dentists

Using a mailing list from a dentistry school, send a mini-infomercial about your
dental chair to new graduates. Show the chair in an actual dentist's office and
describe its features in detail. Does it tilt to 12 different positions, or
include a retractable step to let children climb into it easily? Follow up with a
sales call offering a delayed payment plan.

7.     Promote a video camera with samples of actual home movies

Run a contest for your current customers, offering cash prizes for the best
movies made using your camera. Put the best of those entries in an infomercial.
Include interviews with the winning entrants, in which you ask them how they got
such great shots with your product.

8.     Interview satisfied buyers of your vacuum cleaner in their homes

This promotion works especially well if the happy customer has white carpeting, a
dog, kids, and a lot of houseplants. As you chat with the customer, the dog can
come tearing through the formal living room, followed by several small children.
They knock over a plant stand, sending potting soil and begonia bits everywhere.
When the serene customer sucks up every last bit of dirt with your vacuum
cleaner, you'll have struck a chord with every frazzled homeowner.

9.     Create an educational program based on your encyclopedias

Many potential encyclopedia buyers are afraid the books will sit on a shelf
gathering dust after they buy them. Show these skeptics how they can use the
books to pursue subjects they didn't have the time or money to study in school:
art history, philosophy, physics, geography, world literature.

10.     Promote stained-glass supplies with a how-to program

Stained glass can be an expensive hobby. Glass and soldering irons aren't cheap,
and it can be hard to find quality supplies. People interested in the hobby may
be reluctant to invest in the supplies if they're not sure they could use them
properly. Produce a program showing how to make a simple project using your
materials.

11.     Show viewers how your maid service will make their lives easier

A short "before-and-after" program, showing one of your maids cleaning a typical
house, can be a very effective sales tool. Viewers who feel guilty about their
messy houses will sympathize with the hapless homeowner at the beginning of the
ad, and feel wildly jealous of her at the end. Perfect for a local audience.

12.     Produce a public safety message to promote a related product

A life-jacket manufacturer could run an infomercial on the general topic of water
safety. The product could be mentioned frequently. Of course, in every shot
showing boaters, swimmers, and campers how to behave responsibly around water,
everyone will be wearing one of the company's life jackets.



13.     Challenge real people to test your product

So you claim your suntan lotion is the best? Prove it to viewers. Go to the beach
and offer free samples to sunbathers. Convince them to try your product. Later in
the day, interview them and let them tell viewers that the product smells nice,
isn't greasy, and didn't let them get so much as a freckle.

14.     Produce a talk show about books for a bookstore chain

Many people are curious about authors. Unlike movie actors and rock stars,
authors aren't immediately recognizable, although they may have millions of
devoted fans. Use this cachet to promote several authors' books at once. Run a
roundtable discussion about the books in which authors can describe the plots and
talk about where they get their ideas.

15.     Show how your golf clubs can improve a player's game

In a store, golf clubs are just lifeless pieces of wood and metal. To inspire
people to buy, show real golfers using them to win games. All the brochures and
persuasive retailers in the world can't equal the impact of an actual golfer
booming them off the tee.

16.     Produce a show on veterinary health to promote your pet food

Many pet owners are fanatical about their pets' well-being. Provide useful
information on keeping pets well groomed, slim, and free of fleas, and you'll
catch viewers' attention. Mention your full line of dog and cat food, and viewers
will associate your brand name with good health and good advice.

17.     Broadcast a program showing how donors' dollars are used

Some people don't like to donate to charities because they're afraid much of the
money raised goes to administration. Allay their fears with an infomercial
documenting your charity's work with underprivileged children, refugees, or
endangered species. If your offices are small and cramped, include footage of
them to inspire further confidence that money is really going directly to the
cause.

18.     Test your company's car against the competition

Seeing is believing, and many consumers are suspicious of auto manufacturers'
claims that their vehicle performs better than a competitor's model. Run a road
race pitting your all-terrain vehicle (in flashy red) against the competition (in
dowdy beige). Have it sanctioned by an independent organization. When your car
easily plows through bogs and tackles rough, winding mountain roads, while the
competition breaks an axle, viewers will have visual proof of your claims.

19.     "Make over" customers to promote your cosmetics

Cosmetics companies like Avon and Mary Kay have realized the power of in-home
consultations for years. If you can't visit all your customers individually, do
the next best thing _ broadcast a step-by-step makeover. By showing viewers
exactly how certain products make a real person look, you'll increase sales.

20.     Produce a photography show to promote camera equipment

Amateur photographers are always looking for new tips on capturing sunsets,
children, or historic monuments on film. Show them how to take better pictures,
in a documentary featuring your lenses, filters, tripods, and cameras.

21.     Promote a tourist destination with a show about a typical family vacation


Parents want to make very sure that a destination offers lots of fun attractions
for kids before they undertake the ordeal of a long car trip. Put their minds at
ease with a documentary showing an actual family seeing the sights in your city.
Once they've seen other kids laughing at the aquarium, staring in fascination at
dinosaur skeletons, and picnicking in a riverfront park, they'll feel much more
confident about taking their own family there.

22.     Produce a cooking show to sell kitchenware

You know your electric steamer is the best on the market, but consumers have told
you in market surveys that they can't imagine buying a special appliance just to
cook rice. In a half-hour cooking show, you can show customers dozens of ways to
use your steamer. Show viewers how to prepare sole almondine, steamed puddings,
and crunchy vegetables. Once they realize the appliance cooks more than rice,
you've overcome their major resistance to buying your product.

23.     Produce a home-improvement show to promote hardware

Home-renovation fanatics are already your best customers, and you've already sold
them just about every type of hammer, wood screw, and varnish in stock. But many
other homeowners don't know the difference between a jigsaw and a jigsaw puzzle.
If you give them solid information on basic tools and simple household jobs, you
may pique their interest in home repair. Suddenly, you've created a new customer
who doesn't own so much as a pair of pliers.

24.     Share the secrets of your restaurant chain's best recipes

Is your restaurant famous for its four-alarm chili and honey-garlic chicken
wings? Ensure surefire viewer interest by sharing the recipes in an infomercial.
Include lots of testimonials from satisfied customers eating in your restaurant.
By positioning your restaurant as an "expert" on certain dishes, you'll improve
your profile.

25.     Target one customer with an infomercial

If your company is pushing for a million dollar contract from a major supplier,
create an infomercial just for that customer. Allow them to meet your staff, see
your facilities, and understand your enthusiasm. Deliver a copy of the tape,
along with a rented TV and VCR, directly to the office of the president.

26.     Produce a show about the history of your product

Do you make a product that's a household name, such as Coke or Levi's jeans? Many
established products have fascinating histories. Draw in viewers who already
enjoy documentaries with an infomercial about your product's background. Did
Queen Victoria once buy it? Did it play a part in a presidential election? Does
it have its own museum? Create a mystique for your product.

27.     Produce a video dance party

A record company can get more airplay for some of its lesser-known acts by
producing its own version of MTV. Copying the music station format, the company
can use a "VJ" to introduce videos and include interviews with the artists
themselves. Viewers could call a toll-free number to get a free CD sampler of
songs featured in the infomercial.

28.     Run an educational program about computers

The technical language of computers intimidates many people who might otherwise
find the technology useful. If you produce an infomercial explaining basic
concepts like "CD-ROM" and RAM "memory," you'll earn their trust. Offer a free
booklet of definitions, and you'll get calls from people who are obviously
interested in computers but don't yet own one.

29.     Introduce viewers to your language course by broadcasting the first
lesson

A language course on videotape is the perfect product to sell through an
infomercial. With a brief introduction and a closing message urging viewers to
call for more information, the first lesson can be your whole infomercial. Your
production cost will be almost nothing, since you already have the video. And
viewers can test the actual product for themselves before ever making a call.

30.     Produce a program on recent sleep research to sell beds

Science documentaries have a hard-core group of fans. An infomercial that
explores the reasons why we sometimes wake up tired after an eight-hour rest will
attract these viewers. The infomercial can also contain information about your
company's beds, showing how they can help viewers wake up refreshed. Why not run
it late at night to reach insomniacs?

31.     Show how tough your dinnerware is

Do you claim that your dishes are unbreakable? Use a funny infomercial to impress
this point on viewers. Let a hockey team use one of your dessert plates as a
puck. Support a Jeep on four overturned teacups. Drop ball bearings from a high
diving tower into one of your cereal bowls. David Letterman has made himself a
household name with these kinds of tricks. You can too.

32.     Show how your company makes your city a better place to live

Raise your profile in your city by running an infomercial that demonstrates your
company's impact on the community. You can show clips of your president
participating in a food-bank drive. Provide statistics on the amount of money you
pump into the local economy. Boast a little about your company's exemplary
environmental record.

33.     Profile the lucky winner of one of your contests

If you're responsible for promoting a state lottery, track down the winner of a
previous jackpot and do an infomercial showing how her newfound riches changed
her life. Take viewers along on her boat as she sails across San Francisco Bay,
or put them in the passenger seat as she drives her Aston Martin up the
California coast.

34.     Let your company president promote your products

A Canadian line of private-label grocery products, President's Choice, used
company president Dave Nicol in all its television advertising. Dave told viewers
how he found the recipe for "his" jerk sauce on a recent trip to Jamaica, and fed
his dog President's Choice kibble. The approach worked because Dave was so
affable. If your president is similarly charming, this approach could work for
you.

35.     Promote your newspaper with a documentary

In the early days of newspapers, reporters resorted to outrageous tricks to beat
their counterparts on competing papers to a "scoop." Some tied up telegraph lines
for hours until the competitor's deadline had passed. Others siphoned fuel out of
the rival's gas tank. Produce an entertaining infomercial showing the lengths
your publication's writers have gone to to get a story.

36.     Show reluctant customers how to use dental floss

Every day, hundreds of dentists tell thousands of patients about the importance
of flossing. Every last patient agrees, but few actually follow up because
they're afraid of cutting their gums. If you make dental floss, produce a short
infomercial showing viewers how to use it correctly.

37.     Show the success of your diet plan

You can produce a pair of two short infomercials. The first one introduces a
dieter who is using your calorie-reduced milkshakes to lose weight. The viewers
learn how much weight she wants to lose and how your product will help her. The
second spot, which airs two months later, shows the newly thin dieter, who gives
your shakes a glowing testimonial.

38.     Demonstrate unconventional uses for your product

Show viewers how they can use your vacuum cleaner to inflate air mattresses or
clean hot air registers. Use your hot chocolate mix in recipes for cappuccino or
brownies. Tell viewers they can use your video camera to keep a permanent record
of their possessions in case of theft.

39.     Sell furniture with tours of well-decorated homes

Most people would be thrilled if their home looked like a picture in a magazine.
But most people are also pragmatic. They need furniture that can stand up to
Super Bowl parties, destructive cats, and rowdy children. Use an infomercial to
show your furniture actually being used by real families who happen to live in
fabulous homes.

40.     Produce a parody of a soap opera or old movie where the plot turns on
your product

Taster's Choice has had great success with this tactic in its traditional-length
commercials, which show a witty urban couple pursuing a somewhat rocky romance
over cups of coffee. Maybe your hero and heroine could spend a romantic evening
cleaning their kitchen with your mops and brushes.

41.     Produce a fashion show featuring your brand of clothing

Most fashion shows take place on a plain, boring runway. Use the flexibility of
an infomercial to showcase your products in exciting locations. Models can dance
in your evening dresses at a fashionable New York restaurant, frolic at Vail in
your skiwear, or go hiking in Vermont in your 100% wool sweaters.

42.     Show male viewers how to buy gifts for their wives

Allay men's insecurities by showing them how to gauge their wives' tastes, and
you'll have customers for life _ for your products.

43.     Push outdoor equipment to its limits in real-life conditions

A gleaming mountain bike looks great in the store, but how will it perform in the
real world? Produce an infomercial about a cyclist who travels across the country
on one of your bikes. Let viewers see how well the brakes work in a rainstorm, or
how steady the bike is on a rocky path. Test the bike in conditions most viewers
would never even consider riding in.

44.     Interview writers from your magazine

Travel and entertainment magazines are particularly suited to this approach
because many viewers think writers for these publications live exotic lives.
After all, wouldn't we all like to earn our living by relaxing on the beach in
Bali or chatting with Harrison Ford? Even though the reality may be somewhat more
prosaic, an infomercial about the fun side of your writers' lives can give your
publication cachet.

45.     Create a gardening show featuring your products

If you sell garden tools, produce an infomercial showing viewers how to start a
brand-new garden. Viewers who don't know a rake from a Roto-Rooter will soon see
how easy it is to grow beautiful roses and hardy tomato plants _ easy, that is,
if they use your products.

46.     Promote your auto parts with a do-it-yourself show

Many people resent the money they spend at garages on simple maintenance jobs
such as oil changes and tire rotation, yet they don't have enough confidence to
tackle these jobs on their own. Give them step-by-step instructions, featuring
your products, and you'll create brand-new, enthusiastic customers.

47.     Set a detective show in your store

If your chain's stores have a standard layout, write a mystery (preferably one
that doesn't involve violence and corpses) set in your store. The detective can
search for "clues" _ various products you wish to promote _ in different
departments, giving shoppers a feel for both your store and your merchandise.

48.     Run a "reverse testimonial" to intrigue jaded viewers

We've all seen movie and TV stars promoting exercise machines, hair care
products, and diet plans to regular Joes. But have you ever seen regular Joes
promoting a product to a celebrity? Play on a celebrity's well-known habits to
make a humorous infomercial. For instance, if a singer is famous for her
outrageous, revealing costumes, have ordinary businesswomen trying to convince
her to buy one of your tailored suits. They'll succeed, of course.

49.     Present the science behind your product

Why does Alka Seltzer fizz? Why does a pregnancy test strip turn color? And what
makes Jell-O set? An infomercial explaining the science behind your product can
give viewers more confidence in the item.

50.     Promote your driving school

Show viewers the value of driving instruction by producing an infomercial
describing the accident-avoidance techniques students at the school learn.
Include interviews with graduates of the school in which they describe how these
techniques helped them avoid gruesome accidents.

51.     Produce a biography of a successful graduate of your school

Did a famous CEO, singer, astronaut, or author graduate from your college?
Produce a biography of one or more of these celebrities, in which they frequently
mention the role your institution played in their future success.

52.     Promote a book of financial advice by interviewing successful investors

A group of grandmothers from the Midwest has become one of the country's most
successful investment clubs. The women have written a book about their methods.
They also appear in a video, discussing how their investment success has allowed
them to travel, build the home of their dreams, or pursue expensive hobbies.

Infomercial Resources

Publications

The Infomercial Producer Report

Published by Television Time, Inc.

178 Barsana Avenue

Austin TX 78737

[phone]

This report includes an index of infomercials, product categories, producers, and
products.



Response TV

201 East Sandpointe Avenue, Suite 600

Santa Ana CA 92707-5761

[phone]

This company also produces a videotape called "Dynamics of DRTV." Response TV
sells the video for $29.95 and you can order it by calling [phone].



Steve Dworman's Infomercial Marketing Report

11533 Thurston Circle

Los Angeles CA 90049

[phone]

The leading newsletter in the field.





Infomercial Consultants and Associations

Brandt-Thompson Group

10810 72nd Street North, Suite 210

Largo FL 34647

[phone]

Consultants in all areas of the infomercial business.



William Thompson TV, Inc.

10810 72nd Street North, Suite 210

Largo FL 34647

[phone]

Author of Inside Infomercials: The Industry Overview of Infomercials and Direct
Response Commercials.



Cannella Response Television

488 North Pine Street

Burlington WI 53105

[phone]

Company founder Frank Cannella has more than 15 years of experience in the
television direct-market-response industry. The company offers introductory and
exploratory consultations; analysis of media buying and results; on-site
evaluations of existing offers and marketing methodologies; back-end review and
recommendations; freelance media buying; brokering of national cable
availabilities; and project supervision.



Hawthorne Communications, Inc.

300 N. 16th Street, P.O. Box 1366

Fairfield IA 52556

[phone]

Hawthorne Communications plans, produces, places, and manages infomercial
campaigns for a wide variety of goods and services. These infomercials are aired
on cable networks and broadcast stations across the country. In their book The
Great Marketing Turn-Around, authors Stan Rapp and Tom Collins dubbed company
founder Tim Hawthorne "King of the Infomercial." The firm's Fortune 500 clients
include AT&T, Time-Life, Black & Decker, Braun, Nordic Track, BankAmerica, Weight
Watchers, MCA/Universal, The Disney Channel, and Paramount.





Score Productions, Inc.

254 East 49th Street

New York NY 10017

[phone]

Score operates Infoscore, a music service tailored for infomercial production.
Score will absorb the cost of producing the music for your infomercial in
exchange for the writing and publishing royalties associated with broadcasting
the infomercial. Score also works on a traditional fee schedule. Call for more
information.



Jordan Whitney, Inc.

17300 17th Street, Suite J-111

Tustin CA 92680

[phone]

This direct-response television consulting firm publishes the Direct Response
Television Monitoring Report and the Greensheet TV Merchandiser newsletters. It
is also a monitoring agency that keeps track of direct-response TV infomercials
appearing on national networks.



National Infomercial Marketing Association (NIMA)

1201 New York Ave. NW, Suite 1000

Washington DC 20005

[phone]

This association promotes the infomercial industry in the best interests of its
members and the public. NIMA works to maintain and develop a commercial
environment in which the consumer can make an informed choice, based upon the
information provided through the industry's unique programming. NIMA advocates
industry interests before state and federal government entities and enforces
program content and advertising policies and guidelines among its members.
Consumers, the media, and other interested parties use NIMA as an informational
and educational resource.



Infomercial Production Companies

Blue Marketing, Inc.

20 Valley Stream Parkway, Suite 220

Malvern PA 19355-1407

[phone]

Blue Marketing takes a personal stake in the creation of a company's infomercial
by putting up its own capital. The company believes that this vested financial
interest in the infomercial's success drives it to keep costs down and quality
high. Blue Marketing's clients include insurance companies, manufacturers of both
industrial and consumer products, associations, financial firms, nonprofit
organizations, and travel firms. The company can provide marketing proposals,
market research, media and list recommendations, creative supervision, production
and fulfillment management, and analysis of results. It also develops sales and
fulfillment packages, and telemarketing scripts.



Direct Hit Productions

3 Piedmont Center, Suite 300

Atlanta GA 30305

[phone]

Since 1981, the company has combined direct-response and image advertising into
infomercial packages. Direct Hit can work with clients in any phase of
infomercial development, from conception to production. Dick Bennett, the
company's award-winning director, has 20 years' worth of TV productions to his
credit. He has directed and produced more than 50 half-hour infomercials for
major marketers including Bally's Health and Tennis, Time-Life Books, Time-Life
Music, Six Flags/ Astroworld, St. Jude's Children's Research Hospital, and The
Regina Company.



E&M Advertising, Inc.

60 Madison Avenue

New York NY 10010

[phone]

Founded in 1980, E&M Advertising provides a full range of direct marketing
services. E&M has aired client infomercials on more than 800 broadcast stations
and cable networks. The company uses the Direct Response Media Analysis System, a
Windows-based application that allows their buyers to create schedules, track
response, perform analysis, and generate activity reports. In addition, E&M can
channel clients' products through a variety of aftermarket vehicles. Through its
marketing affiliate, MICO Productions, E&M provides clients access to a wide
range of other media and sales vehicles such as catalogs, print, direct mail,
bank card syndication, outbound telemarketing, and home shopping networks. The
company's client list includes Parker Brothers, Pepsi USA, Showtime, Time, Inc.,
and RCA Records.

Guthy-Renker Corporation

42-080 State Street, Suite A

Palm Desert CA 92211

[phone]

Guthy-Renker sells products through infomercials, home shopping channels, and
other media. The company began in business by marketing audiocassette series such
as Napoleon Hill's "Think and Grow Rich" and Tony Robbins's "Personal Power." The
latter is one of the most successful products ever marketed by infomercial and
remains the number-one seller in the motivational category today. In its
long-form commercials, Guthy-Renker works with celebrities such as Victoria
Principal and Vanna White to drive sales through endorsement or partnership. Greg
Renker voluntarily testified before a congressional subcommittee to provide the
views of direct-response marketers, and Guthy-Renker helped found the National
Infomercial Marketing Association (NIMA). In 1993, two out of the three
top-selling infomercials were Guthy-Renker productions _ an industry first.



McNamara & Associates

5301 Calhoun Avenue

Van Nuys CA 91401

[phone]

This creative production company specializes in direct-response spots and
infomercials. Company president Jim McNamara has been creating direct-response TV
advertising for almost 20 years. Infomercial succes-

ses include sales in excess of $120 million for Thighmaster, $65 million in sales
for Mindpower, and $35 million for "How to Get a 2nd Paycheck Without Getting a
2nd Job." McNamara & Associates has worked with EstÇe Lauder, MCA/Universal,
Jenny Craig Weight Loss, Easter Seals, and others.



National Media

1700 Walnut Street

Philadelphia PA 19103

[phone]

This producer of program-length infomercials has invested heavily in order to
control media time. It pioneered a multichannel marketing strategy that
capitalizes on the infomercial's ability to drive profits across all mass
distribution markets. The company has built its own fulfillment and service
center, and has expanded worldwide to take full advantage of proprietary air time
on satellite and international cable channels. The company operates under two
divisions: Media Arts International in the U.S. and Quantum International abroad.
It has produced infomercials for a variety of products: automotive ("Colorcote
2000"), beauty and personal care ("Frankie Avalon's Zero Pain"), kitchen and
household goods ("Power Steamer," "American Harvest Dehydrator"),
self-improvement ("Megamemory"), and health and fitness ("Bruce Jenner's
Stairclimber Plus").



Prescott/Levinson, Inc.

2727 Philmont Avenue, Suite 110

Huntingdon Valley PA 19006

[phone]

Prescott/Levinson is a full-service advertising agency that has specialized in
direct-response advertising for more than 10 years. Although it develops
advertising for its clients in all media _ broadcast, print, and direct mail _
television is the dominant medium. The company works with all types of clients,
from large corporations to individual investors, to place both infomercials and
short-form commercials on local and national buys. Prescott/Levinson can also
provide complete creative and production services for infomercials and
commercials.



Media Buyers

American Television Time, Inc.

178 Barsana Avenue

Austin TX 78737-9075

[phone]

American Television Time, Inc., is a media-buying agency specializing in cable
and broadcast TV time. It offers media management and infomercial planning
services, including daily and weekly profitability and costper-order reports. The
company's clients include Ronco, Inc., Avon, Ginsu, Transglobal Media, Inc.,
Great Expectations, and Bill Clinton.



Barry Jacobs and Associates

5408 Nagle Avenue

Sherman Oaks CA 91401

[phone]

BJA is a direct marketing agency that consults on all production, creative, and
marketing needs. It can also provide media planning and buying services. The
company's clients include Guthy-Renker, National Marketing Media, Clark National
Products, Tony Robbins Research, and Vista Advertising. Media buying has been the
cornerstone of BJA's growth.



Cable Shows Unlimited

422 Route 206, Suite 192

Sommerville NJ 08876

[phone]

This is the company that re-introduced the program-length commercial in 1983 with
its "Showmercials," built around the concept that "The show is the commercial."
The company pursues high-ticket, lead-generating products and services, such as
kitchen remodeling, aluminum siding, and dating services.



Mediaworks, Inc.

1845 Walnut Street

Philadelphia PA 19103

[phone]

Mediaworks, Inc., specializes in TV direct response, tracking, and managing.
Buyers and program managers use computer systems to analyze and negotiate results
daily. The company has experience with both long-form and short-form commercials.



MercuryMedia

1750 Ocean Park Boulevard, Suite 204

Santa Monica CA 90405

[phone]

This media-buying agency specializes in the placement and servicing of
direct-response paid programming accounts. Its buyers negotiate air time on
broadcast and cable facilities throughout the U.S. and Canadian markets. The
company has successfully rolled out such infomercials as Tony Robbins's "Personal
Power," "Snakmaster," Victoria Principal's "Principal Secret," Popeil's "Pasta
Maker," and Kathy Smith's "Fat Burning System/Walk Fit." Mercury can coordinate
tape trafficking and videotape distribution, and package new-product test
schedules to gauge commercial effectiveness and profit potential. In addition,
Mercury can plan media schedules, analyze and track orders via an 800-number
service, provide computer-generated profitability reports and airdate lists,
audit station invoices, and prepare computerized client invoicing.



Meridian Marketing Management, Inc.

221 East Glenoaks Boulevard, Suite 200

Glendale CA 91207

[phone]

Meridian provides media buying and analysis services to the infomercial industry.
It can work with clients and vendors to develop a targeted market test, analyze
the test results and present computerized results along with recommendations.
Meridian will negotiate targeted air time in designated markets. The company also
provides additional services such as order tracking, tape traffic management, and
consulting.



Williams Television Time, Inc.

3130 Wilshire Boulevard, Fourth Floor

Santa Monica CA 90403

[phone]

This full-service direct-response advertising agency, founded in 1987,
specializes in media buying. The company believes strongly in the accountability
of the infomercial. It can assess the success of an infomercial on a day-to-day
basis and adjust strategy accordingly. CEO Kathleen Williams has years of
experience in the industry and in buying media time. The firm's clients include
Time-Life, Inc., Warner Music Enterprises, Philips Consumer Electronics, Braun,
Inc., M&M/Mars, Inc., and The Hoover Company.

Infomercial Glossary

Back-end marketing: selling additional products to your existing customer base.

Call-to-action: a request during an infomercial for viewers to take action,
usually by calling an 800 phone number.

Continuity: sales that continue on an ongoing basis, such as subscription
programs that send a customer one product every month.

Dealer locator: a commercial that gives viewers a phone number to call to find
out the location of the nearest dealer that carries the advertised product.

Direct-response TV: programming that provides a means for a viewer to interact by
mail or phone.

Fulfillment: the process by which products are delivered to customers.

Image enhancement: the use of infomercials to increase brand loyalty and improve
the image of a company or product.

Inbound telemarketing: the process of handling of incoming calls for product
orders or information.

Infomercial: a commercial advertisement of at least 10 minutes in length.

Lead generation: the use of infomercials to produce names of potential customers
for future marketing efforts, rather than to make immediate sales.

Long-form commercial: an infomercial.

Media buyer: a person who buys air time in which to run infomercials or other
commercial programming.

One-step process: the use of infomercials to create immediate sales.

Outbound telemarketing: the process of handling outgoing calls for product orders
or information.

Pledge solicitation: a television commercial designed to generate pledges or
donations.

Psychography: the buying patterns of a specific viewing audience.

Reservation solicitation: a commercial that encourages callers to make a
reservation.

Short-form commercial: a traditional television ad, usually 30 or 60 seconds
long.

Tracking: the process of recording responses to an infomercial in order to make
adjustments and assess the success of the program.

Two-step or multiple-step process: the use of infomercials to create interest in
the product and obtain names of prospects.





BULLETIN BOARDS

Wouldn't your sales force of 50, located

around the world, be thrilled to have an inexpensive way to check in with the
head office daily?

Wouldn't your biggest customer love to

get direct access to your warehouse and find out what's in stock? Wouldn't your
customers

 be pleased to get quick answers

to their most frequently asked questions?

You can make all these people happy with

one low-cost technology: an electronic

bulletin board system, or BBS.

All they need to use your system is a

computer, a telephone, and a modem,

a device that takes incoming phone calls

from other computers and converts

the phone signal into something

the computer can understand.

By now, you've probably heard about the tremendous success of CompuServe, America
Online, and other commercial online networks. These huge bulletin boards allow
millions of people to use a computer, a modem, and a telephone line to get access
to vast storehouses of information stored in huge computers hundreds of miles
away. Users can receive (download) files, send messages, and exchange
information. Thousands of people all over the world can use these systems
simultaneously.

Once online, users can choose from more than 20,000 different computer files on a
huge range of topics, from typefaces and computer games to job leads and recipes.
With about a million members each, these commercial services are as big as small
cities, and provide their members with a form of electronic community.

While these services offer sophisticated technology and access to huge audiences,
most marketers will get more bang for their buck using a home-grown bulletin
board running on a personal computer (PC). In this chapter, we'll refer to
services such as Prodigy and America Online as commercial bulletin boards, to
differentiate them from the more common small-scale bulletin boards.

The Small-Scale BBS

For less than $5,000, you can create a BBS that will help you create and maintain
a strong one-to-one relationship with your customers. A BBS combines the wide
reach of traditional mass marketing with the immediacy and intimacy of the
electronic world. You will reach lots of people, but you can still answer their
questions individually. A BBS also gives your customers convenient 24-hour
service. They don't have to call during business hours, deal with time
differences, wait on hold, or wander the maze of voice mail.

Need to get a new technical manual to your 100 largest accounts? You can post the
manual in seconds, and your customers can retrieve it at their leisure. Need to
answer questions from customers? With a BBS, your technical specialist doesn't
have to spend all day on the phone.

Charles Schwab, an investment firm, runs a bulletin board that gives customers
access to real-time price quotes, stock trades, even market research and tips.
Bulletin boards are particularly useful to investment companies because financial
information changes rapidly, and customers want to know about fast-breaking news
immediately.

How It Works

ABBS is nothing more than a simple PC with one or more modems attached. BBS
software lets you create an electronic "bulletin board," where anyone can post a
notice that anyone else can read. Your staff can check these notices regularly
and post responses. You'll be amazed how many of your customers share the same
concerns, and you'll wonder how you ever kept them happy before you set up your
BBS.

A simple BBS might have as many as a dozen forums. Each forum focuses on one
subject, such as "Pricing" or "New Features." Callers choose one of the forums,
then type a note that all future callers will be able to read. For example, a
user might write:

"I wish that the XL2000 provided a user-interrupt switch. My office spends at
least an hour resetting it after a power failure."

The next day, another caller could read this notice and respond:

"Good point. We jury-rigged a user-interrupt with a Tandy 34-JT DIN switch. Call
me with your fax number and I'll send some instructions right over."

With no effort on your part, the bulletin board has helped your business in
several ways. Your engineering department now knows that customers want a
user-interrupt switch, and one user was able to vent his frustration with the
XL2000 and find a solution.

Except for conferences (see below), BBSs are not "real-time" systems. That means
that only one notice can be posted at a time. On the plus side, however, the BBS
gives you a clear record of customer inquiries that is easier to decipher and
archive than a transcript of phone calls to your technical support center.

In addition to postings, BBSs now offer users several other services:



Electronic Mail

E-mail lets your customers or salespeople send private messages to one another or
to you. This low-cost correspondence can dramatically change the way your company
interacts with the outside world. It can save you time and money, and shorten
many of your development cycles.

After a consumer electronics company in California installed e-mail, the
development time for a new stereo speaker dropped from seven months to three
months. Why? E-mail allowed engineers and marketers to communicate quickly,
easily and, above all, clearly.

A sales manager can use e-mail to tell her entire sales force about price
adjustments or sales contests, in seconds. More importantly, she'll receive
constant feedback from the field _ even if she's out of the office when a sales
rep calls in.



Posting Files

Users can post large files on a BBS, including manuals, images (pictures of
products, for example), and computer programs. Software companies, for instance,
can just post updates of popular programs on a BBS instead of mailing an
expensive floppy disk to users. They can also use the system to transmit short
multimedia presentations to customers.



Conferences

Some BBS systems can now handle conferences, which are structured differently
from any other element of a BBS. Conferences let several parties trade
information simultaneously.

Using the conference feature, the company president might invite six customers
and six sales reps to call in at a given time. The system displays each person's
comments for all the others to see. For example:

˘    President: What's the best feature of the new XL2000 you've been testing?

˘    Tom: We've found that the new voice mail management feature is terrific.

˘     Bob: Really? We haven't used it at all. It's too complicated.

˘    Susan: Complicated! Bob, you should have called me.

˘    John: I'm with Tom. We've got twice as many people using it in half the
time.

This real-time conferencing is far more effective than a voice conference,
because only one person talks at a time. Better still, it leaves a written record
for all participants to review.

Using a Bulletin Board

Bulletin boards are an invaluable way to monitor your existing customer base or
"eavesdrop" on potential customers. Electronic discussions tend to be extremely
frank. People seem more willing to say what they really think on a BBS than in a
focus group or a survey, perhaps because they can't see or hear the person on the
other end.

Here's an example of the way a BBS can help you read your customers' minds. A
factory in Muskoka is having trouble with the tolerance level on your
plastic-forming machine, and posts a notice on your BBS. Other customers see it,
and suddenly you're hearing from a dozen other people with the same problem.

What happens next? Most commonly, one of your customers will post a solution, as
seen in the earlier example about the user-interrupt switch. Alternatively, you
may be able to help the customer yourself. If no one has a quick solution, ask
your engineering staff to come up with a fix and to notify the customer as soon
as possible.

Public postings make a lot of people nervous. "That gives my customers too much
power," skeptics say. "If they realize that other people are having problems too,
they may go to the competition." Actually, the opposite is true. If your
customers are frustrated and you don't know about it, you're in trouble. But if
you can "eavesdrop" on their complaints, you can satisfy their concerns quickly
and create customers for life.

A BBS helps you anticipate and answer customer questions before they even post
them. You can store answers to frequently asked questions, technical notes, or
price lists in an electronic "library" where customers can download them at their
leisure.

Other BBS Advantages

Ford Motor Company currently distributes a floppy disk containing detailed
information on its various cars. If the company posted these files on a BBS
system, it could reach thousands of other customers at virtually no additional
cost.

Sometimes, you can use the enhanced speed and information of a BBS to create an
entirely new business. SportsNet links 3,500 trading-card stores and dealers in
the U.S. The service reports daily price changes and allows dealers and buyers to
rate the collectability and quality of baseball and trading cards. First created
as an information network by a dealer, SportsNet has become the dominant way to
determine the final price and value of cards.

Up to $5 million worth of cards changes hands every week on SportsNet. Dealers
can find a card anywhere in the country more quickly than they could by calling
dealers directly. They can buy a spot on the bulletin board to post their
buy-and-sell messages for as little as $49 a month.

A BBS can handle large amounts of information more efficiently than other
automatic systems, such as those driven by touch-tone phone menus (see the
chapter on Audiotext). For example, customers of a food broker could use a BBS to
find out quickly and easily which of the company's 10,000 different items are in
stock. Trying to find the same information on an audiotext system, pushing
buttons for menu after menu, would be a nightmare.

Just a few years ago, only technowizards owned and used modems. But in 1993_94,
62% of all computers sold came equipped with modems _ up from 39% in 1991. More
and more consumers are finding out how fun and useful modem computing can be. So
don't be afraid to set up a BBS because you think your customers will be
reluctant to use it.

A BBS can even help your international marketing efforts because it helps
overcome barriers of language and distance. Customers who might be hesitant to
phone because they feel uncomfortable speaking your language will be much more
willing to write you a message. In addition, you can send your reply any time,
without having to negotiate international calling codes and time zones.

Setting Up a BBS

Once you've purchased the computer and software, the only cost of maintaining a
BBS is the standard monthly fee for the phone line. Because users are calling
you, not the other way around, you don't have to pay long-distance charges. The
simplest bulletin boards allow only one incoming line. As the BBS becomes more
popular, you'll probably want to add additional lines. Most popular BBS systems
allow you to add up to eight lines without upgrading your computer, other than
adding modems. Some systems let you add up to 64 lines.

Boardwatch magazine, which covers the BBS industry, asked its readers to rate
various BBS software packages. Their top five choices were TBBS (The Bread Board
System), PCBoard, Wildcat!, Major BBS, and DLX.

If you want to set up a sophisticated BBS, you'll probably need to customize
these packages. The software companies can recommend programming firms that
specialize in customizing their software.

Before investing in one company's product, call up a BBS that uses the software
you've chosen and try it out. The features and interfaces of each vary greatly.

Deciding Whether You Need a BBS

Ask yourself these questions before setting up a BBS:

1.    Do my customers and prospects care very much about our product?

Obviously, people who chew Wrigley's Gum are less committed to their product than
factory managers dependent on a $1.5-million Heil web press that operates around
the clock.

2.    Do my customers have computer access?

While some companies may find it worthwhile to buy computers for customers so
that they can use the BBS, you'll probably want to make sure that your customers
have their own machines.

3     Is time critical?

A BBS isn't practical for a manufacturer of heart valves. Surgeons can't wait
around in the middle of an operation for an answer to a critical question. They
need 24-hour live technical support.

4.    Is there a manageable number of customers?

If you expect more than a few thousand people to use your board regularly, you
should consider using a commercial service such as CompuServe (see "Commercial
Bulletin Boards," below) or the Internet (see the next chapter).

5.    Will my sales force benefit from this sort of access to both customers and
headquarters?

Even if your customer base isn't committed enough to use a BBS, your salespeople
may be.



Don Peppers and Martha Rogers

on Tapping In: Putting Your

Best Customers in Touch

with Each Other



One of the most important roles for newspapers in rural America during the
Agricultural Era was keeping local residents informed about happenings around the
world as well as in their own community. The local paper provided a forum for
citizens to voice their opinions and share ideas and viewpoints. The basis of the
community was geographic, not only for the newspaper, but also for churches,
schools, charities, and political groups.

The paradigm shift of the Information Age renders obsolete the need for
geographic proximity. Residents of Telluride, Colorado, occasionally commute
through the Denver airport, but more often over their phone lines and cable,
using fax modems, teleconferencing equipment, e-mail, and other interactive media
that allow them to communicate with offices and clients without leaving home. One
futurist predicts that 80 million Americans will earn all or part of their living
from their homes by the year 2000. Families are able to keep in touch from across
the country more often and at much lower cost than our grandparents, separated
from their loved ones, could have imagined.

Communication creates communities. Geography is, less and less, a factor in
communication. And thus we see that electronic communication creates electronic
communities.

Not long ago, a group of quilters met in person for the first time in Bowling
Green, Ohio. But they had already exchanged quilting patterns as the Prodigy
Quilting Club. (It should not be surprising that bidding was hot for the quilting
software package that calculated yardage in the blink of a cursor.)

In April of 1994, Toyota went online. Finding 140,000 Toyota owners among Prodigy
users, the company set up a bulletin board exclusively for these Toyota owners.
Access to the bulletin board requires a Vehicle Identification Number (VIN),
which qualifies the would-be participant as a Toyota owner. Those who wish to
participate in Toyota Interactive can say anything they like; one topic area that
emerged early was "I Love My Honda."

Early returns indicated that the positives far outweighed the negative comments,
and many of the negative comments were about dealers by Toyota owners who loved
the automobile but felt unfairly or badly treated by the local shop. (In some
cases, nearby dealers have been recommended to the mistreated owners by other
owners, which, as Toyota hoped, carries more weight than a recommendation from
the manufacturer.)

Of course, Toyota can send messages to bulletin board participants, who
themselves often choose to interact with Toyota, to request information about the
cars or to make suggestions directly. Otherwise, owners solve each other's
problems. commiserate over common obstacles, and share their sense of joy in
Toyota ownership with willing listeners.

The goal for Toyota is to try to grow their share of each customer's busi-

ness _ to get trade-ins sooner, to get a greater "share of garage," to sell a
bigger and better car next time to a customer who already has a relationship with
the company through their own experience and now through the experience of others
as well.

The next step for Toyota is to find a way for prospects to be able to ask
questions of owners, without being contaminated by competitors' comments and
queries. Present satisfied owners provide a credible and often enthusiastic sales
pitch that carries far greater weight than the salesperson in a dealer showroom
or the model brochure.





Commercial Bulletin Boards (Online Services)

The four largest online services (CompuServe, America Online, Prodigy, and
Delphi) have approximately 4,000,000 members between them. They have
consumer-oriented interfaces, and support sound and graphics. They handle tens of
thousands of callers simultaneously and provide unlimited free technical support.

This combination of user-friendliness and technological prowess makes a
commercial online service an attractive alternative to a private BBS for many
companies.

How Commercial Services Work

Online services began as musclebound BBS systems. They use larger computers and
support far more modems, but the philosophy behind them is the same. Every major
online service provides support for:

˘    Forums for posting messages

˘    Conferences (often called "chat")

˘    E-mail

˘    File storage and transfer (often called "libraries")

These services also allow you to send e-mail to other services or to the
Internet. Instead of reaching the 50 or 100 people who might be on a private BBS,
a member of America Online can reach more than 20,000,000 people via e-mail.

Each online service has a distinct editorial bent and philosophy. On Prodigy,
you'll have lots of online opportunities to entice users to your forum. On
America Online and CompuServe, you'll have to do more offline promotion to
attract users, but these services offer better tools and a more sophisticated
interface.

You have less control over who uses your forum on a commercial service than you
do on a BBS. Being online is like having a store in a shopping mall. Running a
BBS is more like building your own store on a rural highway.





Deciding Whether to Use a Commercial Bulletin Board

Ask yourself the following questions:

1.    Do we deal with a large customer base?

NBC, Microsoft, and DC Comics all benefit from using America Online (AOL). While
a small widget company would be happy to have 100 or so users logging onto its
BBS, NBC needs tens of thousands of responses to justify the expense.

2.    Do we need sophisticated sound and graphics?

Some companies want to demonstrate their products in real time. The commercial
services are quickly developing more sophisticated ways to deliver this data.

3.    Do we have a technical support problem?

Novice users aren't comfortable with BBS systems. The leading commercial services
have invested millions of dollars in teaching their users how to use their
services. If you foresee a technical nightmare, it may be better to let them deal
with the hassles.

4.    Do we need to reach people we don't already have a relationship with?

A BBS is ideal for a company that wants to interact with current customers. If
you want to attract new customers, a commercial service can bring hundreds of
thousands of prospects to your electronic door. It may also offer ways to promote
yourself online. Car companies, in particular, have had great success promoting
themselves online.



The biggest downsides of using a commercial service? You lose control of the
interface and the services offered. You lose confidentiality and ownership of
your user base. Finally, customers must pay to use an online service ($5 to $8 an
hour). This fee can be a significant barrier for individual consumers.

Commercial Online Success Stories

Toyota's service on Prodigy is available to owners of Toyotas only, who must
provide a valid factory number from the dashboard of their car. Toyota collects
information about users' likes and dislikes, and runs an online fan club.
Customers can even make an electronic reservation to tour the company's plant in
Kentucky.

Toyota hopes that, once a user discovers that other people like their Toyotas as
much as she likes hers, it will increase her loyalty and generate positive word
of mouth.

NBC broke records when it unveiled its service on America Online, which offers
publicity stills of popular shows, news releases, scheduling information, and
more. Within a week, more than 4,000 people had taken the time to download the
Seinfeld cast photo onto their computers.

NBC quickly turned television _ traditionally a one-way medium _ into an
interactive one. Writers and executives can eavesdrop on and participate in
discussions about NBC shows, and viewers can get information they couldn't find
before the service was introduced.

PC Flowers is one of the largest FTD florists in the world, yet it never deals
with a customer by phone. Through its forum on Prodigy, the company takes orders
for flowers, enters them into the FTD computer, and bills the user's credit card.
This simple business has captured the imagination of Prodigy users. PC Flowers
has blossomed into a company with sales of more than $10 million a year.

Quark produces a popular desktop publishing software package, Quark Xpress.
Unfortunately, the company has long had a reputation for providing cranky,
difficult-to-reach technical support. But its forum on CompuServe is changing
that situation.The forum gives users a place to vent their frustrations and share
information. It also allows the company's president to interact directly with
users. When Quark tried to implement a controversial new pricing strategy, the
outcry from CompuServe forum visitors was so great that the president came online
to explain his reasoning. After further complaints, the company changed its
pricing strategy. Without the opportunity to get direct input from users through
a commercial service, Quark could have crippled its relationship with many
customers.

The Illinois Bureau of Tourism runs a forum on Prodigy that gives users access to
information about the state and allows them to post questions to a travel
counselor. This personal attention has resulted in a measurable increase in the
number of Prodigy members considering a trip to Illinois. While this small
universe of people isn't going to make a dent in Illinois's economy, the
questions Prodigy members ask help the bureau refine its marketing strategy.

Setting Up a Bulletin Board with a Commercial Service

As the online services become more popular, their available "real estate" is
dwindling. Most services will be delighted to help you set up a forum online, but
only if you can prove that you have a wide universe of potential users.

The online services collect the fees users pay to participate in your forum, and
pay you a very small royalty. While this royalty is certainly larger than the
nonexistent income you'll generate by running your own BBS, don't be fooled into
believing that your online forum will eventually become a profit center. Very few
companies have made money through the online fees they've generated.

The online services provide the technical tools to establish your forum online.
You'll be required to provide one or more individuals who will act as system
operators, or sysops. These people will run the board, post the information, and
answer questions.

When you're considering a service, it's vital to find out how much promotion
you'll receive. The impact of a mention on the opening screen of a service (where
every member will see it) cannot be understated. One mention on the Prodigy
highlights screen can result in 10,000 people trying a new service.

To set up an online forum, contact one of the commercial services listed in the
Resources section near the end of this chapter.

52 Ways to Use BBSs and Commercial Online Services

1.     Distribute price lists

This is an ideal way to use a BBS if you have many products with many price
options. Consumers can educate themselves quickly and make price-based purchasing
decisions in the privacy of their own homes. You can also offer customers
discounts, such as two-for-one deals.



2.     Contact the sales force en masse

A company with a traveling sales force, or salespeople scattered through many
branch offices, can communicate changes in product, price, or policy with a
single mailing.

3.     Encourage customers to ask questions about technical details

A VCR manufacturer can finally tell its customers how to get rid of the blinking
"12:00" on their machines.

4.     Open a suggestion box to improve your products

This not only provides you with a steady source of good ideas, it also shows your
customers that you are open to input _ even critical input. Prompt customers by
asking specific questions. "We have just added a new line of French wines to our
list. What did you think of them?"

5.     Send samples of a new record album to loyal fans

Some commercial bulletin boards now let subscribers download snippets of songs.
The hard rock band Aerosmith recently distributed some of its material this way.

6.     Facilitate communication between your marketers, engineers, and
salespeople

Set up weekly conferences to connect disparate branches of your company. Make
sure to send the transcript to everyone involved so that they can take action on
suggestions. Use the meetings to brainstorm.

7.     Develop an automated pricing model that salespeople can use on sales calls

Using a laptop, a salesman can log onto your BBS and enter the specs for his
client. The BBS will instantly respond with the latest pricing.

8.     Distribute a short multimedia presentation to interested customers

A multimedia presentation, complete with pictures of appetizing dishes, a video
of an aerobics class, and a clip of soothing music, can do more to sell your
health spa than the most costly color brochure. Best of all, you can distribute
it for next to nothing.

9.     Post and update real estate prices and descriptions

Given the fast pace of change in any area's real estate market, a company can
stand out from the crowd by giving its agents access to the very latest
information on new properties. Alternatively, this can be a way to sell your own
house. You could even start a bulletin board for people trying to sell their own
homes, and charge them a fee to post their ads.

10.     Post job openings in your fast-growing company

Sometimes your customers make the best employees. Nintendo hires expert players
to staff its support line. Posting jobs also indicates that your company is going
places, and communicates stability and strength.

11.     Establish an electronic industry association in which competitors can
exchange information and ideas

Some commercial online services have forums devoted to specific products. See if
your industry gravitates to one service in particular. Professionals and artists,
many of whom work independently or at home, find these services particularly
useful. Members of the Romance Writers of America recently launched an online RWA
chapter on CompuServe.

12.     Offer a contest or sweepstakes to customers online

This is also a way to prospect for new e-mail addresses. Perhaps the prize can be
free access to your service, if you charge a fee. Use the contest to promote new
products.

13.     Start a fan club for your product or service

If you are in a field where brand-name recognition is crucial, a fan club can be
a source of testimonials. "The XYZ camera company has 30,000 customers who like
us so much, they joined the club." Such a club can also become a springboard for
a loyalty marketing program.

14.     Provide access for the media

If your company has a wide range of position papers, product information, and
news, you can allow the media to browse through your BBS to search for the
information they need.

15.     Allow international customers to access technical notes after your
regular office hours

Make sure you keep your BBS running after hours, and that you have a menu option
for languages other than English.

16.     Answer technical questions via private e-mail

E-mail from the president of the company will impress a frustrated customer and
build goodwill. E-mail is also the ideal way to send complicated information
quickly. Someone working on a new computer program can refer to your message
repeatedly without having to call your 800 number over and over.

17.     Provide a dating service to customers of your bar

BBSs offer anonymity, but you can also allow daters to upload scanned images of
themselves. In the 1980s, bars that put phones on their tables were trendy for a
while. Perhaps the new trend will be computer terminals.



18.     Provide updated commodity pricing to farmers who shop at your feed store

Farmers' fortunes rise and fall on the price offered for their crops and
livestock. Make it easy for them to keep up to date on the latest prices, and
you've provided a service they'll really appreciate. Once you've secured their
goodwill, build on it by offering discounts on your products.

19.     Provide instant portfolio valuations to your stock brokerage customers

An industry that is going through a merger or other event might witness dramatic
stock price changes every hour. Clients with hefty investments will need to know
how they're doing so they can pick the optimum moment to sell or buy.

20.     Post rumors and news in an open forum for stock traders

Trading on inside information is forbidden, but once the information is posted on
your BBS, it becomes a full-fledged rumor. This is an effective way for a broker
to stay close with frequent traders.

21.     Access your best customers' inventory situation so you can suggest
reorders and restocking

As well as giving customers access to your BBS, encourage them to give you access
to theirs. An auto parts manufacturer can gain new insights from the BBS of a car
company.

22.     Answer consumers' medical questions as a way of promoting your hospital

By posting the answers to the most frequently asked questions, the doctors in
your hospital can establish themselves as experts to a wide audience.

23.     Sponsor public conferences on controversial issues of interest to your
customers

A magazine or bookstore could host an electronic discussion on censorship or
freedom of information. A gun shop could invite comments on new gun-control
proposals.

24.     Sponsor an electronic symposium for doctors and scientists

Many family physicians would love to attend more symposia, but they can't get
away from their practices. If you sell pharmaceuticals or other products of
interest to doctors, make it easy for these family physicians to keep up on the
latest issues by running an online discussion. You can even upload detailed
research papers.

25.     Publish full-color pictures of your products to help customers make
purchasing decisions

A clothing company can show exactly what its products look like and how the
colors work together. Reproduction of the image depends to a great deal on the
resolution of the customer's computer screen, but at the very least patterns
should be obvious.

26.     Provide software upgrades to customers who have already purchased an
earlier version

A large number of software companies already do this, especially to fix bugs. The
library of the CompuServe forum run by Microprose Software even includes software
that allows people who play its games to cheat.

27.     Publish recall or product problem information to customers

When there is a product problem, your BBS can be part of your communication
strategy to reach your customers. By including the recall in the opening screen,
you can save some customers connect-time fees and long-distance charges.

28.     Provide a job-search service that allows customers to post rÇsumÇs

If you run an employment agency, you can make life easier for both the employees
you represent and companies seeking new staff. Post your clients' rÇsumÇs on your
BBS, where recruiters can scan them at their leisure.

29.     Allow loyal book customers to retrieve excerpts, reviews, and book covers

Advance publicity is an important part of the book business. Post teasers of the
latest works in the libraries. Set up special forums on your BBS devoted to
particular books or authors. Perhaps invite the author herself online for a
"chat" session with fans.

30.     Provide information on where to purchase your products in a customer's
area

A large company with a wide but weak distribution system will have to direct
customers to particular stores. A specialty magazine may only be available in two
locations in a medium-sized city. Help your customers find you.

31.     Allow customers to send e-mail and hold conferences with the executives
of your company

Include "office times" notices on your BBS explaining which executives will be
online when, and which products they manage. Customers who absolutely love _ or
despise _ those products will be the first to call.

32.     Provide prices on supplies, seasonal services, and animal health
information to pet owners

Pet owners can interact with each other, and with your company, through your BBS.

33.     Communicate with your clients on product specifications and production
runs

When speed is important and you want information to be in writing, using a BBS
can be an ideal solution. Unlike with faxes, you can keep a digital record of
everything that transpires.

34.     Post rates for various lengths of stays at your hotel, and provide
information about what to do in the area

By providing travel information, you can give incoming tourists exposure to your
hotel at the earliest planning stages of their trip. When it's time to make a
reservation, they'll think of you first. A Boston-only BBS, for example, is the
natural place to start planning a trip.

35.     Allow mail-order customers to sign on and check on the status of their
order

Deal with customers' curiosity without taxing your support staff. Allow callers
to monitor the status of back orders or get shipping information.

36.     Post information about a photography studio

Allow potential customers to call into a photography studio's bulletin board to
check rates, find out about package deals, and view an online portfolio of
uploaded photos. By putting your portfolio online, you can provide a wide
selection of photos of all types, including portraiture, commercial, and boudoir.

37.     Post pictures, supply lists, and instructions for craft projects

A hobby store could provide such a service for its customers. By uploading a
"Model Airplane of the Week," you encourage customers to call in more often,
exposing them to more of your promotional materials.

38.     Allow car mechanics to look up specifications of parts in stock at your
auto supply store

If you include photos, mechanics can make sure they are ordering the right parts.
If it increases sales, consider giving the mechanic a computer just to run the
service.

39.     Allow customers to call in and confirm or change appointment times

A doctor providing this service allows patients to call in and cancel
appointments without the embarrassment of dealing with a human assistant. In the
end, such a service saves everybody time.

40.     Help customers to troubleshoot and fix common office equipment problems

A company selling fax machines can include files in its library that address
unusual or rare problems. You probably don't have room in your manual to explain
how to get chocolate cake out of a home fax machine. But one of your customers
may have had to solve this very problem. Post his solution, and the next customer
who faces this dilemma will be amazed at the extent of your customer service.

41.     Have patrons send in reference questions to the local public library

This service allows librarians the chance to better set their priorities when
answering questions. And if questions are posted in an open forum, other library
patrons might provide their own answers, suggest obscure reference books, and
argue about nuances of various replies.

42.     Notify preferred customers of special offers and sales in your store

Set up a forum called "Frequent Flyers" for passengers who are part of your
program. Other passengers who visit this section can see the advantages that
accrue to more loyal customers.

43.     Notify customers of new magazine or comic book edition arrivals

Collectors and magazine junkies want to be the first on their block to have the
latest arrivals. By posting the daily inventory of what's in stock, you can alert
your best customers as to when to come in.

44.     Allow customers to call their favorite restaurant in advance to find out
what the nightly specials are and how long they'll have to wait for a table

Use this opportunity to promote wines, desserts, and appetizers. In a restaurant
that depends on high traffic, such as a deli, an online menu can also reduce
ordering time.

45.     Allow bank customers to call in and check on account information,
interest rates, and investment services offered

Remind customers of the full range of your services with a comprehensive menu.
Use evocative titles such as "Lower Interest Mortgages," "Special Plans for
Students," "Effective Retirement Planning," and so forth.

46.     Alert sporting-goods store customers to upcoming events in the area

Don't forget to post local sports scores. If you sponsor a team, run an online
fan club. Encourage customers to make "reservations" online for lessons or
personal fittings. You can also use your BBS to communicate skiing and surfing
conditions, as well as basic weather information.

47.     Maintain a list of frequently asked tax-related questions

An accountant can provide a free resource for posting tax questions and finding
answers. He can also use the BBS to allow clients to upload their accounting
files.

48.     Allow customers to access their billing statements 24 hours a day

Allow them to flag errors, change their address, or request more information.
Prompt waiting customers to explore the libraries for information on your other
services.

49.     Provide information about upcoming movies

A movie theater can offer coming attractions, seat reservations, and viewer
reviews on its BBS.

50.     "Eavesdrop" on customer discussions about your product

Do most forum members hate your pizza chain's tomato sauce? Does every second
message about your jeans remark on the fabulous fit? Dell Computer has two
full-time employees who do nothing but eavesdrop on conversations about the
company.

51.     Raise your newsletter's profile by offering advice

Judith Broadhurst publishes a newsletter for freelance journalists called
Freelance Success. She's also an active member of the Journalism Forum on
CompuServe, where she frequently participates in discussions about rates and
markets. In the process, she sometimes refers to articles from her newsletter.

52.     Increase customer loyalty by providing useful services

Create a BBS with e-mail capability and allow all your current customers
unlimited free access. Changing providers means that they'll lose their e-mail
account as well.

BBS Resources

Aquila

4438 E. New York St., Suite 281

Aurora IL 60504

[phone]

Illinois's largest bulletin board system offers a wide range of news,
information, files, chat areas, and entertainment features. You can use the
Aquila BBS to learn how bulletin board services work. In addition to offering
free trial subscriptions, this bulletin board service provides technical support
to subscribers.



BBS Software Manufacturers and Consultants

Galacticomm

4101 SW 47th Avenue, Suite 101

Ft. Lauderdale FL 33314

[phone]

Galacticomm develops and markets data/fax communications software and hardware.
Its primary product is a software package called Major BBS, which helps users set
up their own bulletin boards. The company offers free, unlimited technical
support. Galacticomm software is available in seven foreign-language versions.



GW Associates

P.O. Box 6606

Holliston MA 01746

[phone]

This company promotes and supports information management systems for
telecommunications. GW maintains commercial BBS systems, installs networks and
software, and provides local, on-site support for your bulletin board. The
company also provides software to enhance bulletin board systems, such as file
searching, games, and file management software.



Mustang Software, Inc.

P.O. Box 2264

Bakersfield CA 93303

[phone]

This software company markets the Wildcat! BBS software used to start up and
maintain a bulletin board service. Wildcat! offers graphics, mouse support, and
tools for creating menus. You can also use it to offer fax, newsgroup, and e-mail
features through your bulletin board. Mustang also offers a full line of other
networking software for various applications and bulletin board systems.



Online Management Services

791 Del Ganado Road

San Rafael CA 94903

[phone]

This national provider of online services specializes in start-up consultations,
setup, management, and support of online systems. OMS works with both commercial
and private online services and provides corporate training for using online
services for marketing and management purposes.



Commercial Online Services

America Online

8619 Westwood Center Drive

Vienna VA 22182-2285

[phone]

[e-mail]

America Online provides access to some features of the Internet and an extensive
online service of bulletin boards and other features.



CompuServe

5000 Arlington Center Boulevard

P.O. Box 20212

Columbus OH 43220

[phone]

[e-mail]

CompuServe offers extensive features and bulletin boards as well as access to
e-mail. Its marketing brochure outlines the company's rates and services for
businesses, and provides complete demographics about the system's users.



Prodigy

445 Hamilton Ave.

White Plains NY 10601

[phone]

Prodigy provides commercial online service access and bulletin board features.
Several businesses already use its bulletin board system for advertising,
marketing, and promotional activities. Prodigy offers variable rate structures
and can track users who access your information.



Publications

Boardwatch magazine

8500 W. Bowles Ave., Suite 210

Littleton CO 80123

[phone]

This monthly magazine covers issues related to using and maintaining a bulletin
board of your own. It regularly features articles about businesses that are using
bulletin boards, and devotes space every month to each of the commercial online
services. The magazine also contains extensive listings of available bulletin
boards and the services they offer. The noncomputer commentary is often juvenile
and tiresome, but the scope of the magazine is unmatched.

BBS Glossary

Baud rate: the measure of how quickly computers can send and receive messages.
Baud is usually discussed in terms of bits per second (bps), with the common
measurements being 300, 1200, 2400, 4800, and 9600 bps.

Bulletin Board Service (BBS): a service that lets people use a phone and a modem
(see below) to get access to information and services stored on a remote
computer. Users can also leave messages, questions, and files on the BBS for
other users. Often used to describe small services, while large ones are
described as online services.

Chat (or conference): an area of a bulletin board service that allows two or more
people online at the same time to have a real-time discussion. Participants can
immediately reply to comments by typing in their responses, which other users
will also see immediately.

Communications software: a program that, when used along with a computer and a
modem, gives you access to bulletin boards, commercial services, and the
Internet.

Electronic mail (e-mail): a system of sending messages between any two computers
that are linked through a network or bulletin board. E-mail is similar to regular
mail, only instant and free.

Files: Text, numbers, pictures, sounds, or programs. Files can be stored on a
bulletin board for other users to retrieve, which makes them an ideal way for
businesses to distribute items such as software upgrades to customers.

Modem: a device inside or connected to your computer that converts data
transmitted over telephone lines into files your computer can read. It allows
computers and other electronic devices to talk to each other.

Online: the general term for communications between computers or between people
who are using computers. You are online when your modem is sending and receiving
information for you.

Real time: instant interaction between computer and user, or between user and
user. Most BBS transactions don't occur in real time, but chat and conferences
do.

Sysop: the system operator of a bulletin board. The sysop is the person who runs
the bulletin board, handles the technical details, and is responsible for the
content or direction of the board. In some cases the sysop is also able to
control who gets access to the bulletin board.

User interface: the environment users see when they use a bulletin board.
Interfaces can be anything from a command line asking the user to type in
commands to screens with sophisticated graphics that let users with a mouse click
on items of interest.



THE INTERNET

At last count, 22 million people were hooked

up to the Internet. Given the huge number

of newspaper and magazine articles

written about the Information

Superhighway, you'd have to believe that

at least a million of these users are

journalists. The rest are pretty evenly

divided among students, professors, businesspeople, and ordinary consumers.

Imagine reaching a hundred thousand

interested prospects in less than an hour _

at almost no cost. Or placing your entire

catalog and inventory online so that any

interested consumer could browse through

it _ for free. The Internet is a vast,

unregulated territory, an ideal site

for businesses willing and able to

experiment on uncharted ground.

What Is the Internet?

While many articles make the Internet (often called the Net) sound like a
complicated place, the theory behind it is quite simple. Imagine the network in
your home office. You probably have a single computer hooked up to a printer. The
network in a small office might consist of three or four computers, each hooked
together to a printer. A larger network could consist of 100 or 200 PCs connected
to each other and a big mainframe computer.

The Net links all of these networks to each other. This network of networks has
no location. No one owns it and no one is in charge. You'd think this power
vacuum would lead to anarchy, but most Net users have a self-policing attitude
that keeps the Net functioning remarkably well. On the technical side, a series
of rules (called protocols) determines how computers on the Net exchange
information.

The Internet can connect you to virtually every university in the world, as well
as many government computers (including supercomputers like the one at Lawrence
Livermore Labs). You have access to CIA files, discussion groups on AIDS
research, even the Coke machine at Carnegie Mellon University.

Features of the Internet

You can do two types of things on the Net. First, you can send electronic mail.
This is a fast, easy, inexpensive way to communicate with millions of people.
It's also one of the easiest Internet features for the new user to master. Almost
all of the commercial online services (see the Bulletin Boards chapter) allow you
to send e-mail to all other Internet or online addresses. E-mail is the perfect
way to send information and brief messages to people you know.

The second feature of the Net revolves around real-time interaction with other
computers. While e-mail works in a way similar to regular mail (address it, send
it, and it will be delivered to its destination), real-time communications are
interactive and immediate. As soon as you type in a message, someone else can see
it and reply while you watch. This capacity makes your interactions more powerful
_ you can answer questions instantly or engage in a spirited debate with several
people at a time _ but it also puts a huge load on the system. You need a fast
modem, and the computer you're accessing has to be idle enough to deal with your
requests. Four of the Internet features that use this technology are Gopher,
World Wide Web, Mosaic, and FTP/Telnet. This chapter discusses all four.

E-Mail

E-mail provides quick, nearly free communication with large numbers of people.
Everyone on the Net has a unique e-mail address. For example, Oscar winner Holly
Hunter is at [e-mail]. The first word is the person's user name. After
the @ sign is the address of the computer system she's using (see "domain,"
below). Finally, the three letters after the period indicate whether the account
is primarily for commercial (COM), educational (EDU), or military (MIL) use.
General accounts end in NET. (My e-mail address is [e-mail]. Feel free to
drop me a note once you get online.)

A note on domains: in the previous example, you saw that my domain name is SGP
(it stands for Seth Godin Productions). These custom domain names are a little
like vanity license plates _ they're easy to remember and imply some sort of
authority on the part of the owner. Catchy and relevant domain names make it easy
for your customers and users to remember your e-mail address.

Available domain names are controlled by a group called the NIC. To find out if
the domain name you'd like is available, you can Telnet to INTERNIC.NET (if you
have access to Telnet services) and type WHOIS DOMAIN.COM where DOMAIN is the
word you'd like to use as your domain name. If it is available, have your service
provider reserve it for you. You get it forever and the cost is virtually
nothing. If you don't have access to Telnet, you can send e-mail to
[e-mail] and ask for help in finding out if the domain name of your
dreams is available.

E-mail offers many benefits:

˘    Low cost.

Actually, there is virtually no cost once the system is in place. You may pay
monthly charges to get access, but the money you save on fax and file transfers
by using the Internet instead will more than make up for these fees. According to
a recent analysis in The Internet Business Report, a full-blown corporate
Internet set-up with a very fast line, dedicated computers, and full security,
along with similar setups in 500 branch offices worldwide, is still cheaper than
using Federal Express and fax.

˘    Extremely fast delivery

Most e-mail arrives at its destination (around the corner or around the world) in
seconds. The worst delay you can expect is 10 hours.

˘ Permanent records

You can save and print messages, providing a permanent record of a discussion for
future reference. You can save paper and time by e-mailing contracts back and
forth during negotiations.

˘    Flexibility

It's not unusual to send a two- or three-word e-mail message. e-mail provides the
considered thoughtfulness of mailed correspondence with the quickness and
informality of a phone call.

˘    Elimination of barriers

An executive can open his door to e-mail without fear of being overwhelmed.
Because e-mail is so easy to forward, an executive can easily read messages to
see what's happening in the company, then forward the messages to the appropriate
people for follow-up. Executives with public e-mail addresses include Bill Gates,
Barry Diller, Ted Waitt (at Gateway 2000), and Bill Clinton.

˘    Ease of communication

Replying to an electronic letter is simple and fast. Conversations last far
longer than they might using traditional means.

˘    Ease of replication

Because e-mail is digital, you can replicate a message as many times as you'd
like. A company with 1,000 customers could alert all of them to a price change in
less than one minute at a total cost of perhaps a dollar.

Auto Reply and Mailing Lists

An auto-reply mailbox is a very simple program that lets you send a pre-written
document to anyone who sends mail to a given address. For example, anyone wanting
a list of stores carrying your latest product can send mail to your address and
receive two pages of listings within an hour. You can offer as many auto-reply
mailboxes as you like, offering literally hundreds of different documents to
interested people.

It's also easy and straightforward to create a mailing list of names. Once you've
compiled the list, you can send a document to the list server, which will
automatically send it to every name on the list. There are mailing lists of every
shape and kind on the Net, from those for fans of the Grateful Dead to a list
that lets locksmiths exchange secrets. In these public mailing lists, a letter
sent to the list goes to the entire group. You can use the same technology in a
private list to reach your customers or prospects interested in new product
announcements.

This is a remarkably powerful technique. For example, if 100,000 Net users send
you e-mail because they liked your last movie, you could instantly send a letter
to each and every one of them to announce your next film. The mail will get there
in moments, and it will cost you nothing. This combination of breadth and focus
has never before been achieved in any sort of marketing.



The Two Burning Questions About E-Mail

First, how do you get someone's e-mail address? You can't send e-mail to someone
until you know her address, but the Net has no central address directory or phone
book. There are a handful of search services, such as WHOIS, but none of these
are comprehensive or guaranteed to provide the information you want in a logical
format.

There are two solutions. For limited audiences, the best way to get someone's
address is to phone her and ask for it _ silly as this sounds. Companies who want
to contact existing customers online should make sure all employees dealing with
customers routinely ask for e-mail addresses.

This approach obviously isn't practical if you want to build a prospect list. In
that case, the only solution is to give people a reason to write to you. If you
offer a benefit and publicize your e-mail address, you can expect to receive a
lot of mail.

TV Guide sponsored a sweepstakes and gave an e-mail address that readers could
use to register. It received more than 250,000 responses in two weeks. While many
were duplicates, the magazine now owns at least 200,000 unduplicated e-mail
addresses of TV Guide readers.

Joe Boxer sells men's boxer shorts in fanciful prints. The company publicized its
e-mail address ([e-mail]) via billboards and magazine ads. Since then,
it has received about 300 letters a day through the Internet. Eighty percent of
those messages are requests for catalogs and product information.

The second question is more challenging: Once you get someone's

e-mail address, what can you do with it? Many marketers would like to use e-mail
just like traditional mail _ to send unsolicited junk mail to as many locations
as possible. After all, they reason, e-mail is so much cheaper than real mail
that even if a promotion has a low response rate, they won't waste much money.

CAREFUL! This approach will cause you untold trouble. As we mentioned earlier, a
self-policing culture has grown up around the Net. The 22 million people online
will not sit idly by while a marketer uses the Net to distribute junk mail.

Net users will always respond to unsolicited junk mail _ by "flaming" the sender
(a flame is an angry, offensive, or derisive message designed to provoke the
recipient). Really angry users will spend many, many hours making a junk mail
distributor's life miserable.

A small publisher of books decided to promote a new geography book by sending
unsolicited letters via the Internet. As a test, he sent 2,000 letters. Each
letter was a definite soft sell, offering a free sample as well as some
interesting trivia from the book.

Within eight hours, the publisher had received 30 flames criticizing the mailing.
A warning went out on the geography discussion groups, urging people to boycott
the book. A group of users threatened to contact bookstores around the country to
urge them to join the boycott.

Clearly, junk mail is not a concept whose time has come to the Internet. It may
never be acceptable. That's why marketers need to start looking now for smarter
and more efficient ways to get attention for their products.

The secret of selling via e-mail on the Net is to send only solicited junk mail.
By providing users with information or entertainment, you can begin a
relationship with them. Once you've created a dialogue, you can describe your
products and services in great detail.



Michael Strangelove on

Internet Advertising as a

ParAdigm Shift

From the essay, "The Theory of Internet Advertising," which originally appeared
in the book How to Advertise on the Internet. Written by Michael Strangelove
([e-mail]), publisher of The Internet Business Journal.



The advertising industry is on the verge of being shattered into a thousand
fragments due to the knowledge explosion and the proliferation of new
technologies. There are no more grand theories that hold sway over the entire
industry. There are no more central premises, techniques, or laws that can be
relied upon for commercial success. All the familiar categories of Madison Avenue
have been shattered by the postmodern marketplace.

Into the midst of this chaos the Internet has arisen with 30 million members in
almost one hundred countries. Doubling in size every year, the Internet has
dropped out of the sky like a bomb and exploded onto the scene of popular
culture. The mass media has not shown such a prolonged and intense fascination
with a new technology since the introduction of the personal computer over a
decade ago.

The first thing the business community desperately needs to know about the Net is
not how to use it, but how to comprehend it. What, indeed, is the Internet? Any
effective advertising and marketing will be built on the basis of a correct
understanding of the Net.

The Internet is a technology, a culture, and a tool. The Internet is a
distributed and open systems technology. Distributed means that it has no central
location and open refers to the fact that the operating codes are not proprietary
or secret. Everyone can contribute to the design and development of the overall
system.

Now there is a very precise relationship between the Internet's core technology
and its core cultural characteristics. As global technology that is distributed
and open the Net is not subject to central control or monopolistic ownership.
This is the first technology of its kind to achieve global scope in human
history. This is significant because culture interiorizes the technologies of
society and any radically new technology, such as the Internet, will have an
equally radical effect on culture.

It is one of the great historical ironies that the Internet arose out of a Dr.
Strangelovean plan to create a communications system that could survive a nuclear
holocaust. What was to have been a communications system for the surviving elite
of a military-industrial complex has mutated into a subversive neo-democratic
(more precisely, anarchistic) cyberculture. The unique technological character of
the Internet has endowed it with a fundamentally subversive nature. It is not
subject to privatization, centralization, or control and therefore stands in
direct opposition to the historical dynamics of capitalism and commercialization.


So we see that the character of Internet technology is the source of its primary
cultural dynamics. This open and distributed system has spawned a consensual
community with no central forms of government or bureaucracy. Businesses that
want to advertise through this technology and culture will have to be prepared to
adapt to the unique character of cyberspace. In many cases, business and
government will also have to be prepared to be affected by this culture.

Companies that integrate Internet-based communication into their structure run
the risk, for better or worse, of being influenced by the dynamics of
nonhierarchical communication. Networked electronic communication has in many
cases had a dramatic effect on the power structures and communication patterns
within organizations. Depending on the willingness of an organization to accept
these changes such effects can be less than welcome.

The technological structure of the Internet serves as the genetic code for its
cultural character. This open and distributed technology has created, quite by
accident, an entirely new form of human behavior _ mass participation in
bi-directional, uncensored mass communication. Mass communication, while itself a
relatively new phenomenon, has always involved controlled broadcasts to passive
audiences. The mass audience has never had any significant input or control over
the content of mass communication.

With the Internet these characteristics of mass communication have forever
changed. On the Net we find massive numbers of people broadcasting information to
massive numbers of people. Whereas the introduction of the Gutenberg Press made
mass communication possible for the very, very few who would ever own a printing
press, the Internet has turned every owner of a $1000 computer, a modem, and a
telephone line into a publisher, a radio station, and soon enough, a TV studio.
This is the second Gutenberg revolution. This is the new economy of information.

The main social and economic process we are witnessing in cyberspace is the
democratization of mass communication. To adapt and survive the Information Age,
the business community must recognize this paradigm shift and the nature of the
new form of human behavior it generates. Not only is it bi-directional, with
audience and content provider (broadcaster) acting as one, but it is uncensored.

On the Net you have the freedom to say anything you want, within the very large
confines of libel laws, self-censorship, and quite liberal community norms. The
only insurmountable restriction on freedom of speech in cyberspace is that
conversation must remain within the prescribed topic of any given online
conference. You can say anything you want, but you must say it in the designated
forum for your subject. These mitigating forces do not lessen the significance of
the Internet as the first forum for uncensored mass communication, and its role
as the final preserve of freedom of speech.

Throughout history, mass communication has always been tightly controlled by
members of the ruling elite. In antiquity, crowds were always perceived as a
threat by the ruling elite, and quickly (and usually violently) disbanded. In
modernity, all forms of mass communication have been subject to either direct
government ownership; indirect control, manipulation, and censorship through
regulatory bodies such as the CRTC and the FCC; and further indirect control as
the result of the mass media's corporate sponsorship. Even shortly after the
invention of the Gutenberg press, the Tudor kings began to institutionalize
censorship and control over early mass printing.

On the Internet today you can legally access information that is banned in many
countries including Canada and the US. Whether it is the Terrorist Handbook,
information subject to court-ordered publication bans, censored articles, or
details on growing or making illegal drugs, you will find it on the Net. And no
one can stop you from accessing it, retrieving, and reading it.

On the Internet today you can retrieve information that is daily impounded by
your country's official censors and border guards. With less than $1,000 in
hardware and software you can start an Internet-based radio station that would
not be subjected to the regulations of the FCC. Because the new paradigm of
cyberspace shatters all the old categories of our antiquated and decaying
institutions, the Internet defies traditional bureaucratic structures and
hierarchical power relationships.

Power, advertising, and the Internet are all inescapably related. Traditional
advertising is not merely a matter of paying to disseminate a message. There is
an often overlooked matter of what messages advertising serves to exclude from
media. Advertising is a multi-billion-dollar industry that underwrites all major
forms of mass communication. This endows advertising with substantial power in
society. Without question, the financial dependency created by the relationship
between advertising and mass media has had the function of controlling the
overall content of the media it has supported.

The ad industry continues to deny that it influences content, and most editors
and publishers naturally deny editorial interference from sponsors. Listening to
the industry constantly deny this incestuous relationship is reminiscent of
listening to tobacco industry executives repeatedly trying to convince a
congressional hearing that cigarettes are not harmful. Yet the past 30 years of
communication studies have produced a small mountain of evidence which
demonstrates that the mass media is constantly subject to the influence and bias
of its primary commercial sponsors. The myth of the lack of bias and influence
has been necessary to gain trust and maintain the appearance of legitimacy.

It is here that we see how the nature of the Internet and the nature of
advertising (as it is traditionally practiced) are at odds with each other. The
Internet liberates the audience from the control of corporate and state content
providers. In cyberspace, the most basic relationship between programming,
content, and advertising is absent. Thus far, the Internet is the first form of
mass communication to arise without the sponsorship of advertisers. In cyberspace
content is uncontrolled and reigns supreme. The challenge facing the business
community is to adapt to this new medium and the emerging paradigm.

Advertising will continue to exist in cyberspace, but it will lack the ability to
exercise control over content which it has grown accustomed to in other
environments. Most of the present difficulties being faced by advertisers on the
Internet can be attributed to the industries' painfully slow realization that it
is the virtual community, and not the business world or the state, that has the
final say over content in a bi-directional, uncensored environment.

But the news is not all bad for traditional businesses. As a tool, the Internet
does present unparalleled opportunities for effective advertising.

The Internet provides the delivery of an audience for vertical marketing of
highly customized products to microcommunities in a cost-efficient manner not
previously available to the manufacturer, retailer, or service provider. One of
the effects of the integration of the Internet into the business community will
be the rapid growth of low-volume products efficiently marketed to small global
consumer groups.

Take the narrow casting feature of the magazine industry which is characterized
by its ability to deliver an affinity group, and fragment it to the point of
infinity, and you have a metaphor for the future of the Internet: the
cost-effective delivery of niche markets to the business community.

The Internet is the single most significant new tool for business, particularly
for small to medium enterprises. What makes the Internet such a powerful tool for
the world of the entrepreneur and small business is that it provides the
entrepreneur with the ability to communicate with a global audience that already
numbers in the tens of millions.

Prior to the integration of the Internet into the cosmology of the collective
consciousness, most small businesses only had access to local markets.
Advertising costs of mass media functioned to clearly delimit the possible growth
of most local businesses. Now on the Internet every business, no matter how
small, is a multinational business in a global marketplace.

The Internet's historically unique ability to facilitate inexpensive global
communication is destined to have a widespread impact on the shape of
international markets, national and international economies. Take the elitist
nature of the past thirty years of multinational corporate economics and extend
it to every small business, and you have the democratization of the global
marketplace through cyberspace. This is the meaning of Internet as an advertising
medium.

No company has yet mastered the Internet as an advertising and marketing tool.
Expect this to change as today's paradigm begins to shift into the digital, wired
Information Age.







Using Interactivity: E-Mail

OS/2 is an operating system that competes with Windows. It has spawned a wide
range of add-on products, as well as a host of technical questions. A small
mail-order company in Georgia decided to specialize in OS/2 products. Rather than
spending a nickel on advertising, the head of marketing for the company decided
to spend most of his time on the Internet.

He offers free advice to people online. He suggests solutions and alternatives to
frustrated users. Guess who gets their business? This low-key approach has given
the fledgling company double-digit sales increases every year.

Joe Boxer is another example. The company is compiling a humorous book about
boxer shorts, and has invited people to send in funny stories by e-mail. By
making underwear fun, the company has attracted exactly the audience that will
also be interested in buying its quirky products.

The Boston Globe is also trying to use the Net effectively to build its business.
It publicizes its Net addresses in many of the paper's columns and features.

To anyone who sent the paper an e-mail note in the last few months, the paper
recently sent the following message, also by e-mail:



Date: Wed, Jul 27, 1994 5:53 PM EST

From: [e-mail]

Subj: Message from The Boston Globe

To: [e-mail]



Posted on: America Online (using the Internet)



Hi.

I'm Dave Kagan, and I work in electronic publishing for The Boston Globe (I'm one
of the guys trying to figure out how to get The Boston Globe on the information
highway_)Because you're on America Online, and you sent The Globe e-mail at some
point over the past few months, I wanted to let you know that we've taken another
step toward getting online: The Globe's archive is now searchable on America
Online, using the keyword "newspaper library." Using this archive you can search
back issues of the Globe (1980_1994) for information on the Boston area, people,
places, companies or whatever else you might be interested in. The fee for the
service, in addition to AOL's normal fees, is 10 cents a minute ($6/hr.) weekends
and weekday nights (6p.m. to 6a.m., EST), and 80 cents a minute ($48/hr.)
weekdays (6a.m. to 6p.m.).

To use the service, call up keyword "newspaper library," enter the library, then
select Boston Globe. You'll be prompted first for the year or years you wish to
search, then for a word or words.

I hope this is something you will find useful_. it's an experiment for us, so let
us know what you think. I can be reached days at [phone].

Take care.

Sincerely, Dave Kagan

Electronic Publishing

The Boston Globe

[e-mail]



P.S. In light of recent controversy over advertising on the Internet, we debated
whether to send out this message. In the end we felt the service was so useful
that Globe readers would want to know about it. If you'd rather not receive such
notices (very) occasionally from The Globe in the future, please let us know.
Thanks.



Note the steps the writer took to avoid being flamed. First, he only sent
messages to people who had already used e-mail to contact the Globe (and he
reminded them of that relationship early on). Second, the letter is far more
informative than hard-sell. Third, he provides a direct phone number, hoping to
nip flames before they get out of hand. Last, and most important, he gives
recipients a chance to get off the Globe's list. It's pretty hard to criticize
this letter to other Net citizens.

A car dealer in Silicon Valley gives his e-mail address to car shoppers. A
potential customer can send him an e-mail message, and he'll send her price
estimates, lists of options and in-stock models, a dealer's rebate coupon, and
other information to convince her to buy from him. This low-cost service shows
prospects that the dealer is committed to offering good service in innovative
ways.

A sports memorabilia dealer acquires an autographed Mickey Mantle bat. He could
contact his 100 best customers via e-mail and offer them a chance to bid on the
bat. By conducting an auction electronically, he can dramatically increase the
number of people involved and guarantee that he'll receive the best price.



Interview With Mary J. Cronin

Mary J. Cronin, Ph.D., is a professor of management at Boston College and author
of Doing Business on the Internet: How the Electronic Highway Is Transforming
American Companies (Van Nostrand Reinhold, 1994).



Q:    What advantages will the Internet give small businesses?

A:    The Internet offers small business an unprecedented opportunity to compete
at the same level as much larger companies. Connecting to the Internet
immediately provides a small business owner with access to information resources,
software and navigational tools, technical expertise, and business contacts.
Because the Internet is a global network with connections in over 100 countries,
it opens up an international market for every company _ customers in Japan and
Great Britain, Brazil and Singapore can find out about what a small business in
the United States has to offer them. So companies don't have to be limited by
geographic location or lack of branch offices _ they can have a presence online
that reaches millions of people around the world, even if their "headquarters" is
a home office with one workstation.

        Closer to home, small businesses can also benefit from using the Internet
to access their own vendors and suppliers online. Most companies find they get
faster response time and better service when they use e-mail to contact customer
support desks. Substituting e-mail over the Internet for more costly phone and
fax communication will save money and project the image of a well-connected,
technically advanced company. And the more the Internet grows, the more valuable
all these advantages become.

        One of the greatest attractions of the Internet for small business is
that despite its global dimension and dynamic growth, it is truly an environment
where knowhow, creativity, and innovation can count just as much as capital
investment and size. Entrepreneurs with ideas for network-based new business have
found the Internet offers real opportunity for success.

Q:    How can businesses use the Internet more effectively?

A:    Using the Internet effectively requires two things: familiarity with the
network's capabilities and liabilities and a strategic business plan for adding
value to a particular company. Some businesses make the effort to investigate the
Internet and its resources, but they underestimate the importance of matching
network capabilities to their company's needs and competitive opportunities.
Start with the business plan _ an in-depth assessment that spells out your
company's most important objectives and identifies just how the Internet
connection can expand market share or provide a new distribution channel or other
capability for your company. Then you will have a framework for implementing the
Internet applications that are going to move your business toward those
objectives.

        Companies can also increase their effectiveness by finding out what
services are available from Internet access providers, from Internet service
bureaus, trainers, and consultants. Internet support services are a burgeoning
and very competitive sector, and small businesses don't have to reinvent the
wheel in designing an application. Often it's worth the investment in
professional assistance up front to get off on the right foot with your
connections and your online image.

        Finally, businesses have to make sure that their Internet message is
reaching the right people. While it's true that products and interest groups as
diverse as antique collectors and beer drinkers, wool-spinners and zoologists are
all connected to the Internet, it won't help your business to send them all the
same message _ especially if it doesn't relate to any of them directly. Remember
that the Internet is actually thousands of separate markets and user groups; get
to know its culture, norms of communications, and many different segments before
you attempt to design a network-based marketing plan.

Q:    How will the commercial Internet change the way consumers are reached by
industry?

A:    Because the Internet allows users to interact with each other and with
companies in a global "electronic village," the norms for reaching consumers are
definitely changing. Customers online expect to give direct feedback and have
their suggestions taken seriously. They want a response, and they want to see
some evidence that their ideas matter. This is a lot more powerful than the
traditional relationship of consumers to broadcast or print advertising, but it
requires business to respond at a much higher level. Companies that can make this
adjustment are the ones that will be successful in the networked environment.
There is no substitute for the convenience of browsing, ordering, and getting
support for products right at your workstation. Once a consumer adapts to this
mode of doing business, they want to get more information and buying
opportunities online.

Q:    What are the most effective ways that businesses can work to overcome the
anti-commercial attitude of the Internet?

        Businesses should avoid using the Internet to broadcast limited-content
advertising _ it will generate an adverse reaction and defeat their purpose for
participating in the network. The key is to think about being a participant in a
dialogue, not "using" the Internet but gaining and adding value through joining a
global community, finding out more about the electronic marketplace and what
customers really want. That may sound idealistic, but in fact it reflects proven
principles of marketing and selling _ and it works!

        Companies should continuously look for ways to add value to their
products and their interactions with Internet users. One way is to design
Internet servers that do encourage customer interaction and offer useful content
beyond simple sales information.

Q:    How do you think the Internet itself will change as the result of increased
commercial usage?

A:    The Internet has been extremely adaptable to a tremendous diversity of
applications over the years, and I believe this will continue. There is room for
education and research, community information, hobbies, literature, chat,
entertainment, and just plain fun on the Internet, along with commercial
applications. I do think that the new tools developed to support business and
marketing will continue to open up the network to more nontechnical users; these
new users will need support as well as low-cost navigational tools. I see a lot
of new business opportunities developing around serving the information and
support needs of the expanded Internet community.

Q:    What advice would you give to a small business owner investigating the
possibility of using the Net for marketing and sales?

A:    Most of what I have already mentioned. First, analyze your market _
existing and potential _ to determine if the Internet is a good match for your
product and your customers. Make a realistic business plan. Then explore what
other companies, especially those with comparable products or services, are
already doing on the Internet. Take advantage of the expertise available over the
network _ check discussion groups and FAQs (Frequently Asked Questions) in
relevant areas for a description of the resources and the issues around creating
an in-house information server directly connected to the Internet vs. renting
space in an existing "Internet storefront"; decide if you have the resources to
do it yourself or if it will be better to at least start with a service bureau to
handle all the details. Include in your planning time to talk to providers of
direct Internet connections and "Internet storefronts" to find out specifically
how they would serve your business needs. Compare the costs and the level of
services provided _ get references from existing customers, and check on the
transaction level that the connection they offer can handle effectively. For
sales, find out if encryption and privacy services are available _ for example,
how effectively can the provider support taking credit cards or purchase orders
online?

        This may sound like a lot of work up front, but it will help ensure that
your relationship with the Internet gets off to a good start and continues to be
positive and profitable for everyone.





Using Interactivity: Mosaic

Most nonstudent Net users are only able to use e-mail. More sophisticated
interaction with other computers requires phone lines and modems that aren't
widely available.

As public use of the Net increases, though, far more sophisticated connections
will become available, and more Net users will be able to use applications such
as Mosaic to find their way around the Net.

Currently used by about 250,000 people, Mosaic provides a graphic interface not
unlike the screen presented by a Macintosh or CD-ROM application. It combines
graphics, photos, and text into a multimedia magazine format.

Mosaic will allow the user to jump from article to article at will by following a
trail of relationships between documents. The people who make the information
available in the first place _ universities, libraries, and other information
providers _ will create the trails to facilitate access.

Mosaic supports hypertext, a system which lets people use a word in one article
to find another article on a totally different, but related, topic. Users can
access the related information by simply selecting (clicking or highlighting) the
item on their screen. These hypertext links will provide a whole new way of
accessing information, giving the reader far more power. Users will be able to
make links to documents or files on almost any of the computers offering
information through the World Wide Web (we'll talk more about this later).

While it's too early for most companies to use Mosaic as a marketing mechanism, a
firm can use it to establish itself on the cutting edge.

The Country Fare restaurant in Palo Alto, California, uses Mosaic to keep in
touch with its high-tech clientele. It has a Mosaic site that lets users look at
its menu and find out about weekly specials. The site provides information about
the restaurant's cookbook and lets users browse through some of the recipes. It
even provides a picture of the restaurant and a road map. Overkill for a
restaurant? Sure. But the site has increased business, and taught the management
valuable skills that will pay off once the entire Silicon Valley is wired with
high-speed Internet access.

O'Reilly and Associates, one of the leading publishers of Internet books, has put
its money where its mouth is by creating a monthly Mosaic-based electronic
magazine called the Global Network Navigator. Available free to anyone who
subscribes, it offers articles about the Net and free updates to existing
O'Reilly books. The magazine is designed to be supported by advertising _ each
page of the Global Network Navigator includes a small ad. The reader can get more
information about the ad by clicking on it.

Building a Mosaic application from scratch is neither simple nor easy. You should
probably contact one of the organizations offering turnkey systems or Mosaic
advertising.

Using Interactivity: Gopher

Finding information on the Net used to be nearly impossible until a simple-to-use
application called Gopher came along. A Gopher server is an organized database of
the information contained on a given machine. For example, the first level of a
Gopher server for information about government agencies might have choices like
this:

˘    CIA

˘    FBI

˘    NASA

˘    LIBRARY OF CONGRESS

The user selects CIA and then sees this:

˘    COUNTRY ANALYSIS

˘    PRESS RELEASES

˘    SATELLITE IMAGES

After he chooses SATELLITE IMAGES, the choices are:

˘    ALASKA

˘    NEPAL

˘    PERU

etc.



If he selects PERU, for instance, the user will see a message saying that there
is an image available, which he can download to his computer.

It's fairly easy to create a Gopher server to organize all of the documents and
files that your company makes available to the public.

Almost all EDU computers support Gopher applications. So do many MIL and GOV
sites. As a result, millions of users have access to your Gopher menus. Now that
America Online supports Gopher, an additional one million users have fast and
easy Gopher access.

As just one example of the potential for marketing with Gopher, a leading New
York publisher intends to make excerpts of its 3,000 backlist titles available
via a Gopher server. The user will be able to choose the topic or the author
she's interested in, find relevant titles, then easily read or download
descriptions of the book and the author and an excerpt from the book.

Gopher is an ideal tool for organizing large amounts of product information. If
your company intends to offer more than a few dozen technical documents, catalog
descriptions, or graphics files, you can give your prospects easy access with
Gopher.

Using Interactivity: WAIS

While a Gopher server allows users to search by the indexes you create, a WAIS
(Wide Area Information Server) permits users to do searches on all the text in a
document as well.

For example, suppose Nabisco wanted to make a number of technical documents
available. It could put a special report titled "Oreos" in a Gopher server. But
if a researcher was looking for information on creme filling, and didn't realize
that Oreos are creme-filled cookies, he

wouldn't think to check that listing. A WAIS server, on the other hand, creates
speedy indexes to every word in the document, making searches a snap. It would
alert the researcher that the text of the report on Oreos contains the words
"creme filling."

WAIS is in far less general use than Gopher, but experts expect that to change as
the technology evolves.

Using Interactivity: FTP/Telnet

Telnet is a fancy way to describe the access of one computer by users at another.
You can allow users to log onto your computer, access your files, and run
real-time programs.

For example, a roofing shingle company could offer a program that would compute
the number of shingles a contractor needs to cover a given size roof. Using
Telnet, the contractor could log on to the Net, then go into the roofing company
computer and run the program. He would see the results as they're computed.

Telnet is tricky to describe. The commands can be arcane and time-consuming to
learn if you aren't going to use it regularly. It is most useful to people who
need access to information or services on a regular basis _ for example, your
salespeople could access your mainframe while they are on sales calls to run
price estimating programs for their clients.

Users who simply want to retrieve a file from you can use FTP (file transfer
protocol) to download a file from your computer to theirs. This protocol lets you
make graphics, software, and large text files available to anyone, while giving
you more control over what users do on your computer than you have if they're
using Telnet. However, FTP requires some technical knowledge, so Gopher is
probably a better way to make your information available.

Using Interactivity: World Wide Web

The discussion of Mosaic above touched on the World Wide Web, or WWW. Mosaic is
one way of viewing the series of documents and links that are part of the World
Wide Web. The Web evolved as a result of hypertext, the technology that lets
users select a word or graphic and jump to another document that relates to the
original word or graphic.

One of the first businesses to use the Web technology was Grant's Florist. For a
small fee, this Michigan florist had a company create a WWW site for his
information. He features information about his services and prices of the
flowers. A user can even click on the name of an arrangement to see a picture of
it before ordering. Another click on the words "Press here to order" calls up an
order form. Anyone in the world with access to the Internet can place an order
with this system from his own computer, without ever leaving his desk.

A graduate student at MIT, Henry Houh, maintains a WWW page that lists the
companies providing services on the Web. By clicking on the name of the company,
users are automatically linked to that commercial site so that they browse
through its online information. Thousands of people access this Web equivalent of
the Yellow Pages every day. At the moment, more than 200 companies are listed
there.

Using the Web is similar to using Gopher, except that the Web is much more
flexible and graphical. The Web also provides access to many other features, such
as Telnet, FTP, and newsgroups (see glossary). More hypertext documents have been
created and added to the Web as the system has become more popular.

Mosaic is one of the more popular ways to access information that is linked
together on the Web, but there are many others. Contact a service provider for
more specific details on accessing the Web from your computer.

Getting Internet Access

If you're new to the Net, try starting with America Online (AOL). It's
inexpensive, easy to use, and comes with unlimited technical support. My book
Point and Click Internet (Peachpit, 1994) contains a diskette and step-by-step
instructions on how to use the Net.

Once you've explored via AOL, you'll probably want to expand your company's
access. A number of service providers offer access to the Net, for users ranging
from individuals to major corporations. The Resources section at the end of this
chapter lists a few of the many Internet service providers. More extensive
listings are available in books such as The Internet White Pages (IDG, 1994). To
get a complete listing, send e-mail to [e-mail] or to
[e-mail].

The number of small consulting companies that help businesses use the Internet is
growing. Some of these firms are listed in the Resources section, but many are
local. You can track them down in the Yellow Pages, or by talking to staff at
your local computer store.

52 Ways to Use the Internet

1.     Send updated price and product information to your current customers

A software company can post not only price lists and product specifications, but
huge documents such as technical manuals. It can even post updated versions of
software.

2.     Create a newsgroup

Start your own newsgroup where fans of your company's products can exchange
information.

3.     Offer free technical support via e-mail

Not only software companies can take advantage of this opportunity to offer
technical support. Any company that makes a complex product _ stereos,
videocameras, cars, geiger counters _ can increase customer satisfaction this
way.

4.     Provide additional information automatically

Kellogg's could save time and money via offering diet or exercise tips by
auto-response e-mail. A magazine could send supplementary information on articles
in the current issue to subscribers.

5.     Send reminders to regular customers

A florist could e-mail reminders three weeks before holidays, birthdays, and
anniversaries. Car companies could remind their customers to bring their cars in
for servicing. A veterinarian could warn customers that it's time for their cats
to get their annual rabies shots.

6.     Create a newsletter

Share stories about your company and its employees with your customers. Show how
you created a new product. Talk about the company's customer service philosophy.
Write an article about one of your researchers who recently won an industry
award. Strengthen your relationship with your customers by making them feel part
of the family.

7.     Generate fan mail and testimonials

Offer customers a chance for fame (if not fortune) by giving them a chance to
tell you what they like about your products. This action will generate positive
feelings and word-of-mouth recommendations.

8.     Offer an electronic suggestion box

Print your e-mail address on every product you ship. Include it on your
letterhead and business cards. Let customers know where to find you and that
you're ready to listen to their praise_and complaints.

9.     Manage by walking around

De-isolate the executives in your company. Publish their e-mail addresses far and
wide. The vice president of a car manufacturer who drives one of the company's
top-of-the-line luxury sedans will suddenly find out, in vivid detail, what it's
like to jump-start one of the company's subcompacts on a January night.

10.     Announce new products

Many customers are delighted to hear of the latest products. Give those on your
e-mail list first shot at the new stuff. This tactic is especially useful for
record companies, publishers, and other firms whose customers pride themselves on
being on top of the latest trends.

11.     Offer technical information

Using an auto-replay mailbox (or a series of them), you can provide enhanced
information. For example, your catalog may carry one paragraph on the new spark
plugs you're introducing. But if you mention the address ([e-mail] or
whatever) where people could write for more information, you can give really keen
prospects enough detail to cement a sale.

12.     Customer surveys

You can reach more customers than you ever dreamed possible when you had to pay
postage to mail out every survey. If you make a hugely popular mass-market
product _ Coca-Cola, say, or Nike shoes _ you can get feedback almost instantly
from thousands of users. Using this information, you'll be able to develop new
products and improve your advertising more quickly.

13.     Offer your service directly

Law firms spend a huge amount of time deciphering client requests, reentering
data, and processing paper. e-mail can make it easy for the client to do most of
this work. Many customers will be glad to do so if they know it will save them
money they would otherwise pay in lawyers' fees.

14.     Distribute news releases

If you've read a mass-market magazine or big city paper lately, you already know
that the media love the Net. You can distribute news releases and publicity
materials more quickly and inexpensively by e-mail than by regular mail. And many
journalists prefer to receive information this way.

15.     Target your best prospects

It's difficult to reach many executives by traditional means. e-mail can
sometimes cut through the clutter of letters, memos, and reports on an
executive's desk and get you a meeting or a chance to make a presentation. Just
be sure that your e-mail is short, personal, and to the point.

16.     Send financial information to stockholders

Create a mailing list that automatically sends financial information to
stockholders. Investors who get frequent updates on your company's status are
more likely to feel confident in their investment.

17.     Alert customers to recalls or upgrades

Car companies spend thousands of dollars to inform their customers about product
recalls. Not only do they have to mail printed notices, they usually send out
news releases to make sure customers who have moved since buying the car still
hear about the recall. A mailing list can give the company further assurance that
all its customers know about the safety problem.

18.     Start a fan club

Do you promote an author, rock band, or actor? Start a fan club for your client
to let fans trade information and ideas. You can post notices of the client's
upcoming book, album, or movie, complete with interesting bits of trivia fans
can't find anywhere else.

19.     Do market research for a book

If you're contemplating writing about Jane Austen, you could subscribe to the
Austen-L mailing list at McGill University and ask other subscribers if such a
book would interest them, or if they think the market is already overcrowded with
good biographies.

20.     Let customers share information

A company that makes videocameras could start a newsgroup where its customers
could share tips on shooting in dark or rainy conditions, capturing children and
pets on video, or making batteries last longer.

21.     Create an automail server to send your annual report to anyone who
requests it

Stockholders aren't the only people who are interested in your annual report,
although they're often the only ones who receive it. Journalists can use it for
background information. Job applicants will want to read up on your company's
history before their job interview.

22.     Create a Gopher server to allow users to download pictures of your resort


In effect, you can distribute a full-color brochure to thousands of potential
guests for next to nothing. For the price of a tiny classified ad in an upscale
travel magazine, you can attract well-heeled travelers and give them a vivid
picture of your resort.

23.     Create an automail server to answer frequently asked questions about your
company's services

How many times a day does your receptionist answer questions about your company's
hours, fees, and policies? Save her time and your prospects' time by making this
sort of information available on the Net.

24.     Offer free real estate information

A realtor can offer free information on schools, landmarks, businesses, and
property values in various neighborhoods using Mosaic. Users can point and click
to find out detailed information on the items that interest them most.

25.     Offer travel advice

Travel agents can offer advice in the travel newsgroups about how to get the
lowest ticket prices and hotel rates. By positioning themselves as experts on
bargains, they'll attract new cost-conscious customers.



26.     Contribute to newsgroups for pet lovers

Pet store suppliers can visit the appropriate newsgroups and become useful
contributors to the discussion. If asked, they could supply prices and
descriptions of available products.

27.     Offer sneak previews of upcoming movie scripts by Gopher server

Pique movie fans' interest in upcoming films by making excerpts from particularly
dramatic scenes available by Gopher server. Like a movie trailer does, you'll
create a desire to see more.

28.     Post all your product brochures in a Gopher server menu

A sporting goods manufacturer can build on the loyalty of his existing clients by
posting all his product brochures in a Gopher server menu. The manufacturer may
not know that one of the best customers of its fishing gear catalog is also an
avid skier. By giving customers easy access to all your brochures, you'll
increase your share of each customer's discretionary spending.

29.     Provide car rental information

Provide a complete rate structure, descriptions of cars, and availability
information for your rental car agency. You can even let users with a credit card
reserve a vehicle.

30.     Supply banking and financial information

Make information on your bank's services, hours, locations, interest rates,
mortgage products, and investment services available through a Gopher server or
WWW link.

31.     Answer bicycling questions

Bicycle store owners can participate in the bicycling groups online and answer
questions about new products and equipment. A tour company that organizes bicycle
trips can give advice about packing for a long tour. Clothing manufacturers can
discuss which types of shorts are best for marathons.

32.     Offer safety and security information

A security company could provide an online Gopher menu with information about
safety and security issues, broken down into subject areas such as
"Burglarproofing Your Home," "Preventing Car Theft," and "Safety Tips for Female
Travelers."

33.     Maintain a Telnet site for salespeople

Hospital suppliers can maintain a Telnet site so that salespeople can call in and
run inventory programs to assist clients with purchasing decisions.

34.     Promote a university

Schools can maintain a Mosaic site that features pictures of the campus,
information on tuition fees, articles from the campus newspaper, profiles of
famous graduates, information on available dormitory space, and detailed course
catalogs.

35.     Provide basic insurance information

Insurance companies could create a Gopher or WWW site which discusses insurance
terms and policies to help the consumer make decisions about the type of coverage
she needs.

36.     Keep in touch with preferred investors

An investment company can contact its preferred investors via e-mail about
up-and-coming investment opportunities and free seminars.

37.     Keep up students' language skills

Foreign language schools use the Internet to correspond with former students so
that they can maintain their foreign language skills. Such a service could help a
school stand out from the competition. A school BBS could also help former
students keep in touch with each other, fostering good feelings about the
institution. There are even bilingual newsgroups.

38.     Provide information on seminars

Seminar bureaus could provide detailed information about conferences they have
done, and excerpts from speeches made by people they have booked. They could also
upload photos and biographies of all their featured speakers.

39.     Offer home-repair advice

Hardware stores can become regular participants in home-repair groups and offer
information and advice about home maintenance tasks and tools.

40.     Make the Internet an extension of your newspaper

Newspapers can make additional information on high-profile stories available
through a Mosaic site. The paper can also upload ad rates, deadline schedules,
and more information about advertisers.

41.     Provide home health care information

Home health care services can create a Gopher menu that gives users access to the
latest research about Alzheimer's or cerebral palsy, tips for caring for the
patient at home, and information on programs that provide respite for caregivers.

42.     Offer painting tips

Retail house painting firms can offer FTP or Telnet sites that provide homeowners
with tips on painting and information on the types of products available. They
can also include a program that will help customers calculate how much paint they
will need for a particular job.

43.     Post menus

A group of restaurants offering home delivery could create a Gopher menu with
information about each restaurant: menus, price lists, photos of popular dishes,
and the phone number to call for delivery.

44.     Critique rÇsumÇs

A rÇsumÇ-writing service could offer a one-time free critique of a user's
electronic rÇsumÇ via e-mail. Later, it could contact the user to provide advice
about its full range of services.

45.     Provide information about your church

Churches could maintain Telnet sites that would allow current and prospective
members to download texts of sermons, get schedules of services and Sunday School
classes, and learn more about the church's charity work.

46.     Keep in touch with fitness club members

A recreation facility could contact members by e-mail to notify them of changes
in the center's hours, to promote new classes, or to remind them to renew their
memberships. The center could even set up a BBS where members could exchange
health and fitness tips.

47.     Provide antique information

A large antique shop could establish a Mosaic site that gives customers tips on
restoring old furniture and evaluating jewelry, information on upcoming antique
shows, and information about items the store has recently acquired.

48.     Offer moving advice

Storage and moving companies could offer a program via Telnet that would allow
users to calculate how much space, how many boxes, and how much packing material
they will need for an upcoming move.

49.     Prepare tax returns

A tax-preparation center could allow clients to retrieve a form via Gopher and
e-mail it back, along with their financial information. The company could then
prepare the return for filing.

50.     Keep in touch with alumni

A large university could keep in touch with graduates all over the world via
e-mail. It could even set up a newsgroup where alumni could exchange news,
gossip, and family photos.

51.     Publish pet care information

Veterinary offices can make general health and feeding information available
through a Gopher menu. Users could choose specific information on any type of
pet, even somewhat exotic creatures such as ferrets and tarantulas. They'll
appreciate the access to hard-to-find information.

52.     Let users select groceries

Grocery stores can let shoppers Telnet in from home to access a program that lets
them select items to be delivered or prepared for pickup.

Internet Resources

Service Providers

Alternet

3110 Fairview Park Drive, Suite 570

Falls Church VA 22041

[phone]

[e-mail]

Alternet provides a full range of network connections and services. It has also
published a guide called How to Select an Internet Service Provider that outlines
the questions you need to ask to decide what level of service you need and to
select a service provider.



ANS

2901 Hubbard Road

Ann Arbor MI 48105

[phone]

ANS is a nonprofit organization that provides a wide range of network connections
to the Internet. It also provides some hardware, such as routers and connection
programs.



Sprintlink

13221 Woodland Park Road

Herndon VA 22071

[phone]

Sprintlink provides network connection services and dial-up accounts to
businesses and individuals. It serves both American and international markets.
Sprintlink can provide both ISDN and T1 lines to customers in areas where the
regional phone service supports one or both.







Consultants

Internet Consulting Corporation

[phone]

407 W. 14th St., #4

New York, NY 10014

[e-mail]

Through seminars and consulting, Internet Consulting Corporation shows companies
how to use the Internet to market its products. It can provide an introduction to
the Internet, business strategies, and case studies of businesses that are
already online. Full-time consulting and management services are also available.



Modern Media

J. Walter Thompson

500 Woodward Avenue

Detroit MI 48226-3428

[phone]

This advertising and marketing firm has an online division, Modern Media, that
helps clients use online services for marketing, advertising, and information
distribution. Many of their clients work closely with bulletin board services
provided by commercial online services such as America Online and Prodigy.



Publications

Internet Business Journal

208 Somerset Street East, Suite A

Ottawa, Ontario

Canada K1N 6V2

This monthly newsletter follows the development of commercial interests on the
Net. IBJ frequently addresses such issues as advertising and marketing on the
Internet. In every issue, it profiles businesses operating on the Internet and
provides information accessing their services.

Administration

Internic

Internic Information Services

General Atomics

P.O. Box 85608

San Diego CA 92186-9784

[phone]

[e-mail]

The Internic is the central resource on the Internet for administrative matters.
Internic provides a wide range of services ranging from domain name assignment to
directory services and technical support.

Commercial Online Services

America Online

8619 Westwood Center Drive

Vienna VA 22182-2285

[phone]

[e-mail]

America Online provides access to some features of the Internet and an extensive
online service of bulletin boards and other features.



CompuServe

5000 Arlington Center Boulevard

P.O. Box 20212

Columbus OH 43220

[e-mail]

CompuServe offers extensive features and bulletin boards as well as access to
e-mail. Its marketing brochure outlines the company's rates and services for
businesses, and provides complete demographics about the system's users.

Internet Glossary

Electronic mail (e-mail): a system of sending messages between any two computers
that are linked through a network or bulletin board. E-mail is similar to regular
mail, only instant and free.

Encryption: a method of encoding messages so that only the intended recipient can
read them. On the Internet, encryption is used to keep e-mail messages private.
Businesses that sell products on the Internet use encryption to protect
customers' credit card numbers when customers order products online. A fairly
good encryption system for credit card numbers has recently been invented, but
better ones are in development.

Flaming: verbal warfare on the Net used to enforce netiquette (see below) and
ensure that breaches of netiquette don't happen again.

Gopher: a menu-driven way to make files available to users on the Internet.
Gopher lets you create multiple layers of directories to organize your
information logically, making it easier for your customers to find the
information they seek. You can design your own Gopher menu to reflect the
services your company offers.

Internet: a worldwide network of computers, used by universities, the military,
business, and consumers. You access the Internet, and all the services described
in this chapter, through a service provider.

Mailing list: a group of people who send and receive mail to each other on a
particular topic. Mailing lists are a cross between e-mail and newsgroups. To
join a mailing list, you usually send a message to someone asking to subscribe.
These subscriptions are free.

Modem: a device inside or outside your computer that converts data transmitted
over telephone lines into files your computer can read. It allows computers and
other electronic devices to talk to each other.

Mosaic: a graphical interface for World Wide Web (see below). It allows users to
look at documents created with hypertext and select items in them (words or
pictures) that have more information linked to them.

Netiquette: the generally accepted rules of behavior on the Internet. Violations
of netiquette (such as sending bulk unsolicited e-mail) are dealt with by harsh
methods such as flaming (see above).

Network: a group of computers and/or electronic devices that are connected to
each other so that they can communicate and exchange information. A PC cabled to
a printer is a small network. The Internet is the biggest network in the world.

Newsgroups: public places on the Internet where people can post messages and
reply to messages about a particular topic. They are similar to bulletin boards.
Newsgroups may be very specific, such as rec.pets.dogs.golden.retrievers, or very
broad, such as soc.politics.

Service provider: the person or organization that provides you with a hookup to
the Internet and a means to access it. Service providers can be universities,
small independent businesses, or online services, such as America Online or
CompuServe.

UNIX: an operating system that is widely used by many of the groups that make up
the Internet. Difficult enough that it should be avoided by the layperson.

World Wide Web (WWW): a service that organizes information on the Net by linking
words, phrases, and pictures from one document to related files using a format
called hypertext. WWW is one of the newest services to develop on the Internet.
It is similar to Gopher in many ways, but it is more flexible and can be better
organized.