MARKETING THROUGH NEW TECHNOLOGY

A TALK GIVEN TO THE SALES AND MARKETING EXECUTIVES OF VANCOUVER
SEPTEMBER 18, 1980

Lord Acton made the comment about seventy years ago that, “We are all Socialists now.” I expect that today he would have changed that to say we are all salesmen now.

Today we are selling all the time. This is true whether we are professional sales and marketing people or even non-marketing executives endeavouring to sell our ideas farther up the line. The process is all the same. What we are trying to do is constantly improve our ‘close’ rate ― this is the only aim of salesmanship. The process is simple; you assess the customer’s real desires, i.e. make the sale easy; you tailor your pitch; you close before the customer changes his or her mind.

When you look at much of the current media marketing, either there is not much opportunity to really analyze the customer’s desire, or there is no chance to close the sale once the pitch has been made. There are attempts to do this, e.g. with coupons or other devices to allow the client to make an instant decision, but the return rates indicate that the success ratio is not as high as one would like. They still require the client writing out an address, possibly finding a stamp, addressing an envelope, and certainly require him or her walking to the post box.

Think of how much more effective advertising would be if:

• The client could select on a TV set just the ads he wanted to see. In this case there is no problem in assessing the client’s real desires. He or she is already partly presold.

• The potential customer views only advertising relevant to his or her interests. The pitch is effectively already tailored.

• The client can buy the moment he sees what he actually wants to purchase. The ‘close’ immediately follows the pitch, much as is done in face-to-face selling which is so effective.

It can be done. The process is called “teleshopping”.

TELESHOPPING

I was asked to talk about Marketing Through the Media and Marketing the Media. Teleshopping is an example of the former. Consider first the more traditional method of in-the-home marketing. Mail order catalogues or flyers are printed. These are proving to be increasingly expensive. They are very un-selective in terms of the audience, although, of course, attempts are made to send catalogues only to those who have ordered before, or to distribute flyers only in districts likely to buy the product. They are hand delivered, and with postal disruptions this will become even more difficult in the future. They make use of a scarce national resource, i.e. paper. They become out of date quite rapidly, particularly in the area of pricing.

It is not uncommon to have large catalogues going to the printers months in advance of mailing. In inflationary times, prices can be out of date before the catalogue is in the hands of the consumer.

Catalogues are also far too easily thrown out. We all remember the supposed use of the old Eaton’s catalogues in rural communities!

In some forms of direct mail no credit check is immediately available. This leads to requirements for prepayment, COD, or the use of an established credit card. These may be further deterrents to a sale.

It is not easy to have associated sales, i.e. there is no on-the-spot salesman to remind people if they bought a camera they should also be looking at a slide projector or whatever. The location of related items in the catalogue, of course helps.

Finally, it is very hard to create new demand by coupling the static picture of the item with a dynamic demonstration of how the item could be used.

Teleshopping corrects many, if not all, of these shortcomings. What it presents is an electronic catalogue with the possibility of immediate interaction by the customer.

I am sure the general approach is well known to you. In its simplest form still frames would be projected in the TV set at specified times so the client could watch when shoes are being advertised by various companies. In this primitive form of teleshopping, the response could even be given by telephone when a particular item is desired.

This, in fact, is only marginally better than a catalogue but at least has the opportunity of comparative shopping and being up-to-date. A more sophisticated method, which would require two-way cable, would enable a customer to indicate on a key pad attached to his set the item number, quantity, etc. for a desired item. If the key pad were replaced by an alpha-numeric terminal, the client could also key in specific instructions, e.g. deliver Thursday or leave on the back porch.

In either of the first two examples, automatic credit checking could be arranged and, in the latter case, automatic debitting of the account would be quite straight forward, (like the T.D.’s new “Green Machine”).

A further sophistication would be to allow the client to use his terminal to select from a menu of possible sales categories the one in which he or she may be interested. Then, selectively, only those frames are shown to the client. This allows the potential customer to shop at his or her leisure. And this meets another of my early criteria for allowing the customer to essentially sell himself.

All the above are quite feasible with today’s technology. With sufficient channel capacity, however, and the advent of much more sophisticated storage devices, the use of full film clips might be considered. For example, if a client were interested in a hand saw, he could request not just a still picture but a presentation looking like a regular ad from each of various companies, and then make the selection of the best price and model available. These pitches would be short demonstrations of how the saw meets the client’s needs.

With this kind of video rather than the still frame approach, associated sales could be promoted, e.g. the client could get a demonstration of how the purchase of a mitre box would make his saw much more useful.

This latter form of in-the-home shopping will likely still be some time away because this requires much greater bandwidth into each individual home as well as the trunks of the system. It is relatively easy to have, say, ten thousand frames of teleshopping information circulating on one channel and the client can pick off the ones of interest. A full video pitch, unfortunately, requires a full video channel during the time that it is transmitted.

To date, I have promoted this process as though it were the answer to everything. There are still some problems to be solved. Those of you who have tried to use a tree structure to access information from a Prestel or Telidon-like system would quickly realise that this can be a frustration. It is somewhat akin to using the Yellow Pages when you do not know exactly under which category your item is listed. In fact, Prestel in the United Kingdom, which has had a couple of years advance experience over Telidon, uses a directory, i.e. a printed catalogue, allowing you to go directly to particular items rather than examining broad categories and gradually narrowing down the area of interest.

Another concern people have is protection against mis-use. Naturally, a password or account number would have to be supplied for direct ordering, thus discouraging the children from playing with the device. Most terminals will also have a key which can lock the device out of use.

Finally, the ultimate system would include a home printer. There are already a number of thermal or electronic printers available that could do the job. It would certainly be handy to get a printed confirmation of your order, or your theatre ticket, or your restaurant reservations, or whatever. The alternative would be to have the confirmation mailed to you or your theatre ticket picked up at the box office at performance time.

THE ELECTRONIC RETAILER

This whole approach of teleshopping really allows the retailer to provide electronic shelf space for all kinds of marketing possibilities. Consider just some of the following:

Want Ad Replacement

Think of the waste of paper and space if you have a relatively unique product to sell and are trying to match this with a buyer. If you could input your ad electronically and have a computer search for a match, the process would be much more efficient. (To a limited degree, cable companies already do this through the medium of swap meets, although no computer is involved here.)

Real Estate

If such selling would be effective for miscellaneous items, it would certainly be effective for real estate. We have already proposed to the CRTC a real estate channel. At the moment this is also somewhat primitive as it requires the agent to call the office and ask for the display of homes in a certain area and a certain price range. However, it is a great step forward as full colour pictures are available and the information is constantly up-to-date. The client can obviously review many homes sitting in the agent’s office without the wasted time of driving around the city. You can imagine how much more effective this can be if one could have a video tape tour of a house without ever leaving the real estate office, or possibly without ever leaving one’s home.

Travel

Without going into details, you could quickly see the advantages of selling travel this way. A travelogue could be shown, followed immediately by the various competitive packages to that particular location. The client could make instant reservations.

Menu Selection

There would be no reason why we could not sophisticate the current comparative shopping packages by letting the client choose a menu and then have the computer come up with where to buy the various components of the meal at the lowest total cost.

Stock Market

At the present time all we do is provide the stock market listings. Needless to say, a client from his or her home could easily order shares by a terminal, allowing quick reaction to short trends.

Tele-bidding

The same approach could be used for an auction. Clients, from the comfort of their home, could watch items being offered and make competitive bids by terminal.

Lotteries

Instant lotteries could be used in association with the sales along the Reader’s Digest line, but with immediate client interaction.

These are only a few ideas just to get you thinking about the possibilities. Clearly, tele-polls could be conducted and are already. Marketers could get instant reaction to planned new products. Interactive surveys on the effectiveness of advertising could be taken.

We should not forget the use of audio. In addition to the video presentation, one could have a pre-recorded audio side band to add the human touch.

Finally, there are advanced concepts, such as the tele-mag approach. People have often asked what we would do with a hundred or more channels. The answer is to narrow-cast to select audiences both programming material and advertising that would appeal to their particular interests. The concept is much like that of a magazine. Special channels could be established for boating, bridge, gardening, or whatever other interests people may have. They would subscribe to the channel, but the channel would also be supported by tailored advertising. Such advertising would be very effective because it would only be viewed by those who are obviously interested in buying new brass fittings for their boat, for example.

MARKETING THE MEDIA

I have not left much time for the discussion of marketing the media itself. This is just as big a topic.

Consider for example how the cable capability can become a service in itself. We are already developing in-the-home security services, where the cable is an integral part of providing medical, fire and police burglary protection services. Home monitoring services are already becoming part of this approach to using the cable as its own product.

I could go on and talk about the advantages of electronic mail, interactive in-the-home computer operations, and similar services, but I will leave some of this for discussion. I believe it is more important to look at the reality of all the “gee wiz” items we have been discussing.

WHERE ARE WE NOW?

Technically, all of the above is possible. In fact, it is closer than any time since the early 70’s when I and others first started talking about these possibilities. The hold-up so far has been the regulatory environment more than anything else.

I am optimistic, however, that with the recent decision to allow CCL and Premier to merge, the CRTC was effectively saying that they accepted the concept that cable would and could be used for many of these new services. There is still no guarantee that we will be allowed to proceed, but we made as part of our pitch to them a commitment to spend millions of dollars over the next few years in research and development, much of it in the Vancouver area, and included a commitment to experiment with many of the concepts I have been outlining.

We are therefore committed to give this a try. This leads me to my conclusion.

There is no point in my simply outlining to you all the myriad possibilities. You, as the Sales and Marketing Executives, are the ones who are going to have to make the system work. We will be essentially only the retailers of the kinds of things you want to have done. The main advantage of a meeting such as this is that it will now allow us to get into a meaningful discussion of what you really view as the future potential for this fascinating new electronic media.