To E or Not to E - That Isn't the Question!

Despite the economic dowturn, the Internet has changed consumers' "origin instinct" forever

By Laurie Windham

In light of the well-publicized dot-com financial debacles, many business executives are left ambivalent and confused about what they should do concerning e-business. In these chaotic times, keeping a sharp perspective on what customers want from their merchant or supplier relationships is critical.

Despite the gloomy economic conditions in the Internet industry, e-customers are alive and well and enjoying their power. According to my firm, Cognitiative Inc., in the 2000 holiday season, more than 90 percent of e-consumers were satisfied with their shopping experiences and 55 percent expected to shop online more in 2001. True enough, the opportunity to get rich quick in the dot-com game has screeched to a halt. But customers' attitudes, behaviors, and preferences are forever altered.

It's Not Just About E-Commerce

In the B2C world, the most critical thing to realize about the Internet is that it has changed how people perform their daily routines. People shifted where they begin many activities, with the Internet becoming a center of gravity for some of life's most common activities. This phenomenon is known as the "origin instinct" - a term I coined to define the subconscious drive that naturally directs our behavior to a starting place where we begin an ordinary task. The origin instinct develops through habitual behavior that consistently results in success. People learn what methods work for beginning a task and repeatedly use those methods until they become second nature and instinctive.

Consider this: Before the Internet, where did you begin to find out how to contact someone, learn the answer to an obscure question, check prices on something you're considering buying, obtain directions to a new destination, pay bills, or get a job?

Before the Internet, those activities involved a broad array of interfaces. You went to encyclopedias to get answers to obscure questions. You used the telephone book or directory assistance to find someone's phone number. You went to retail stores, catalogs, and ads in newspapers to find out price information. You used a street map to get directions. You read the classified ads for employment opportunities.

But the Internet changed all of that. The Web has become the place where millions of consumers instinctively begin their tasks, and that trend will continue gaining momentum. So, the Internet has shaped our origin instinct. That's a dramatic change, not only for consumers who migrated their routines to the Web, but also for the businesses that serve consumers in the old ways.

Customers Want It All

Another important lesson to learn - or at least relearn - from the dot-com parable is that consumers are not binary animals. They don't want to either shop online or shop offline, receive either all spam or none at all, or either buy something online or not. They want choices across all distribution brands, channels, and vehicles. And they want the experience to be consistent across all channels within any given brand.

You must realize that because customers demand multidimensional relationships, companies - your competitors - will respond. The reality is that offering e-relationships with customers is no longer a competitive differentiator: It's a minimum price of entry to play in many global industries. Companies that can't offer these choices will be eliminated from the consideration set.

The Internet Still Changes Everything

Managers who are once again anguishing over the proverbial "to E or not to E" issue are considering the wrong question. The right question is how to apply Internet technologies to continue meeting the ever-evolving demands of customers and to claim a role in fulfilling the new origin instinct. So if you're pressured by your senior managers to cut back, or eliminate, Internet technology investments because they interpret all the bad dot-com news as an indication that the Internet didn't change anything after all, push back hard - on behalf of your customers. ie

Laurie Windham [lwindham@cognitiative.com] is the CEO of Cognitiative Inc., a management consultancy. She is the author of two business strategy books, The Soul of the New Consumer: The Attitudes, Behaviors, and Preferences of E-Customers (Allworth Press, 2000) and Dead Ahead: The Web Dilemma and the New Rules of Business (Allworth Press, 1999).