Chapter 7 - Services in the Age of the Internet
The first impression of the Internet is that it would likely be bad news for sales. If people could go online to look up products for themselves, and if companies that had goods could provide the information directly to customers, this would seem to eliminate the need for salespeople, whose knowledge of products (or more aptly, their exclusive control over information about products) had secured their necessity as a middleman.
He does admit that, for commodity goods, the Internet has been devastating to traditional channels: he dredges up the hackneyed example of Amazon, which killed Borders and Waldenbooks, and has siphoned off a lot of business from Barnes and Noble. It has also toppled service industries, such that travel agencies. Few people go to a local travel agent anymore - they book their own trip online.
But the author maintains "there's still a need for salespeople" - as the basics have not changed. The Internet is no more a danger to the sales profession than was the telephone: they will still apply the same skills, but in a different format.
(EN: That does seem a bit blithe to me. Consider that the telephone didn't kill sales, but it largely killed the travelling salesman when consumers who previously had to get a salesman to place an order could phone in orders to a call center staffed largely by low-skilled and low-paid clerical workers who merely processed inbound orders.)
The author regards the Internet primarily as a product catalog where you can provide a lot of information about what your product can do for the customer - it has multimedia capabilities, a practically infinite capacity, and many features that enable customers to gather a lot of information.
But someone still has to provide and prepare that information for them to find and consume: a web site must speak to the customer's needs, spell out the benefits, deal with uncertainty and objections. The computer doesn't do any of this - a salesman does it, using a computer as the way he communicates to his customers.
The author also mentions that customers have an increasing number of options to get solutions to their needs, and will choose to give their business to the company that has some advantage over the others. He remarks that, for the Internet, it is generally price: a small company can do a large volume of business and saves a lot of overhead that a brick-and-mortar store must pay. But they often tend to be very generic and impersonal in the way in which they interact with customers.
The author then turns to the trend of "crowdsourcing" (EN: A fad that had run its course long before this book was written), suggesting it will be "a standard feature of many companies' business strategies." (EN: This is merely misuse of a term - what he describes next is "social listening" which is an entirely different thing, and is indeed something that has caught on and proven its value.)
Companies are being increasingly attentive to the comments made about their brands in social media, and are soliciting customers to provide feedback and suggestions online. This data is used as market research to inform internal decisions, such that what is done reflects the actual demands of actual customers, rather than an executive's notion of what customers might like.
At the same time, the author concedes that customer feedback can be "taken too far" when a company overreacts to a single negative comment. Customers tend to say that they would like things that they will not actually use, and are generally better at reacting to what they have seen than imagining whether something they have not seen might be of value.
The author then switches to the concept of customer ratings, stating that he pays close attention to ratings on Amazon and other sites when deciding to make a purchase for himself. (EN: Market research by AYTM suggests that only 24.6% of customers indicate reviews often impact their buying decisions, which is still conjecture, and the numbers are played up or down in various sources. Objectively, I think it's fair to say that a minority of users is influenced by reviews, but it is a significant enough number that they merit consideration.) He also suggests that, in theory, ratings and reviews are more significant to service marketing because there is not a physical artifact that can be shown or described.
There's another topic switch, to virtual communities. The author's take on them is that they are small groups of people who know one another, and the strength of the social connection gives greater influence - much like the opinion of someone you know very well carries more weight than that of a stranger. It's a double-edged sword because making a positive impression on an influential person has a strong positive effect on sales - but a negative impression has a negative effect as well.
Another drawback to the Internet, and one you cannot generally avoid, is that anything someone says about you or to you in a public forum is visible to your competitors, who can leverage the intelligence they gain to imitate your strengths and avoid your weaknesses, or at least position themselves as such.