Think your Internet company can exist solely in cyberspace? LifeServ CEO Rob Reynolds is betting on real-world features.
From the Front Lines
To succeed, a Web-based company must use real people and real tools
Presumptuous as it may sound, my tiny $6-million company might be able to offer Amazon.com and eBay a few pointers. Recently, each of those Web-based giants made a major deal to add a brick-and-mortar presence to its business. At LifeServ Corp., we've always believed that a successful Web-based company can't exist solely in cyberspace. It needs a terra firma foothold.
The Internet hasn't changed the fundamental rules of business: You have to go where the people are, tell them who you are, and get them to come to you. At most, maybe 40% of the population has access to the Internet right now. And those people, of course, aren't on-line all the time. Since consumers spend most of their time off-line, we figure we need to find them off-line.
Of course, even if all the people in the world did spend their lives in cyberspace, it would still be smart business to have three-dimensional, real-life business operations. Amazon.com and eBay realize that, which is why Amazon.com forged its alliance with auction legend Sotheby's and eBay acquired San Francisco-based auction house Butterfield & Butterfield.
To the outside observer, my business certainly must look like an Internet company. LifeServ provides consumers with organizational tools and information that help them plan major life events, such as getting married, having a baby, sending kids to college, and buying a home. To do that we provide them with a CD-ROM that contains not only our event-planning software but tools for building a personalized, password-protected Web site that will run on our server and how-to video content on such subjects as changing a baby's diaper or choosing a china pattern. Customers use their sites to keep their friends and family informed (the software allows them to send E-mail with an embedded hyperlink) and to exchange messages with other brides, mothers, home buyers, and so on. They also can pose questions in real time to our customer-service staff and get information from our network of providers.
Our revenues come from advertising partnerships with those providers -- such Fortune 500 companies as Mead Johnson, Ford, Prudential, and AT&T. For example, Lincoln Mercury is sponsoring our car-purchasing content, which will be integrated with marketing messages from Lincoln Mercury. We also sell some products and services direct, such as wedding cameras, cake knives, and garter belts.
My original partner and I first had the idea for the company in 1991, before the Internet took off. Maybe that was good for us, because we were forced to think of real-world ways to get people to use our software. Now those real-world strategies just seem smart. We knew that we wanted to provide the software free, so when the Internet came along, it offered us an excellent distribution channel. But the Internet isn't the be-all and end-all. It's just another tool -- albeit a great one -- that allows us to do business better.
There are three areas of our business where we've decided that a real-world presence is crucial:
CUSTOMER SERVICE. Most people think of the Internet as an opportunity to automate. You just throw a Web site up and customers can find the answers to their own questions. Well, maybe in some Buck Rogers world years from now we'll have the artificial intelligence to make that work. But even if you could automate the whole process, customers would still want the human touch. We found that out when we started up on the Web, in 1997. No matter how much information we put on our sites, we still received a gazillion customer queries, often questions that were ostensibly answered on the sites. We also intuitively figured that our customers -- at the time, brides and mothers-to-be -- were going to want a personalized relationship.
When one of our customers calls or E-mails us with a question, we either respond ourselves or refer the questioner to one of our partners or to other Web sites. For instance, say a mother is concerned about feeding her newborn. If she needs more information than we have, we can direct her to the nutritionists and doctors at one of our partners, like Mead Johnson.
In the long run, the success of every business hinges on how well it does customer service. An automated help function often provides useful information, but by definition it's generic. People don't get the personal solutions they need. Our members -- and, I would argue, most consumers -- benefit from having someone to whom they can pose a follow-up question or someone who will walk them through a process. The Internet doesn't eliminate the need for customer service; it allows you to give better customer service. In the process the Internet actually creates the need for more human resources.