April 03, 2001, 3:02 PM —
EVER WORRY THATcreating an e-commerce infrastructure is going to take too long and cost too much? Consider building on the e-commerce infrastructure that already exists under your nose. Just dig up your last phone bill and you'll see it. Just as mutts and corn seeds are made stronger by their crazy-quilt heritages, electronic devices show their strength in the number of different ways they are broken up and recombined with other gadgets. Radios and TVs started as furniture but have become ubiquitous, crammed into cars, microwaves, computers and portable stereos. Likewise, computers are leaping off desktops and into devices such as PDAs and mobile phones.
But phones are going to become more ubiquitous and much more important to the next wave of e-commerce growth than any of those other gadgets. Phones are a much better medium for human communication -- voice to voice in synchronous time. Make no mistake about why people want phones in their PDAs -- they make better, smarter phones than cell phones do.
"Phoneness" will be part of everything and come in every form imaginable -- from key chains with phones built into them to PDAs to Happy Meals that include free phones with which you can call your favorite Disney character.
Not interested in how Mickey's day went? The gadgets aren't nearly as important as the potential lurking within them. Customers like to be connected. The more often customers talk to you (willingly), the less likely they are to defect to a competitor. DiamondCluster found that when the number of these customer interactions rises from once or twice per month to between three and five times per month (on average), the defection rate of the cell phone customer drops from 13.9 percent to 7.8 percent. Financial services companies have found similar effects. The overall imperative is to get your customer talking to you and talking to you often. Multiple interactions will be beneficial to retention.
Phones will open an exponentially larger and more intensive time window for doing business when they combine computing power with the phone's ubiquity and "onness." Unlike the computer, the phone is always available, always running. The psychology of buying and selling is totally different when people have a device with them that is always live.
Infrastructure to Go
Consider too that the infrastructure for doing business on the phone is already well-established. No other industry has the capability to bill for so many different kinds of services right down to the individual level. The Internet doesn't come close. Yahoo, may know your e-mail address and some basic facts about you, but for every commercial transaction you have with Yahoo you need to break out your credit card. When you are on your phone, the company knows who you are, where you live, with whom you are talking (and soon, where you are). This is a much more powerful knowledge base.