Leaders of the pack

Leaders of the pack

If there's one trait all great Web ventures share, it's this: They make it easy, pleasant, even downright enjoyable for customers to do business with them.

Sounds painfully obvious, doesn't it? But, like common sense, it's not all that common. As Patricia Seybold notes in Customers.Com: How to Create a Profitable Business Strategy for the Internet and Beyond (Random House , 1998), too many online businesses still squander too much time and money on everything but providing the ultimate experience for their current and potential customers.

In choosing the third annual CIO Web Business 50/50 winners from hundreds of self-nominated contenders, our in-house judging team saw dozens of commercial Web sites that, frankly, still don't get it. They're clunky. They're cluttered.

They're confusing. They don't add value. Sometimes they just don't work (as in the case of the retail site that wouldn't take one judge's money). And many provide little evidence of caring much about whether visitors quickly find what they want-or whether they return.

In contrast, our 50/50 Internet winners have the formula down. Like the winning extranets (see "On the Inside, Looking Out"), the Internet winners know they'll thrive only by building strong customer relationships. They've realised that, even on the Web, you can't live by brand alone. After all, that priceless trademark doesn't amount to much if the site can't live up to its reputation.

As in the past, this year's 50/50 winners' circle serves as a microcosm of Web business culture, a snapshot of business life online. There are big names and relative unknowns, successful ventures and struggling ones, brick-and-mortar brand names and virtual businesses, proven concepts and a few promising experiments.

But they all share several key traits:

They Stand Out

In many industries, with most of the major players online, it's becoming increasingly irrelevant who got there first. What matters is who's in front right now. These days, that's likely to be whoever best meets customer expectations, regardless of brand name or the date of their online debut. Think about it: Why would anybody waste time on a slow, sloppy or ineffective site with a better alternative just a click or two away? For instance, REI offers a comprehensive yet easy-to-use online catalog that inspires customers to keep coming back, while a close competitor's site balked at searching for something as basic as tent poles. Ditto for OfficeMax and Office Depot , which provided quick and painless online ordering, while two other office-supply also-rans made it unnecessarily difficult to find and order products. Finally, judges opted against honoring any of the half-dozen job-searching sites, deciding that none turned in an outstanding performance or stood out significantly from each other.

They Look Great

Or at least good. They know that Web users have progressively lower tolerance levels for ugly design, useless content, gratuitous animation or clunky navigation. (By now, even novice Web designers should know enough not to use those annoying "Under Construction" signs for unfinished portions of their sites.) At the same time, they understand that pretty faces can't cover up or substitute for emptiness inside. The best sites balance usability and style. 's simple yet gorgeous site, for instance, walks users through ordering custom-framed prints at discount prices, right from its home page. Click here to search for an image, here to browse. Then click, click, click to mat, frame and order.

Others, such as The Obsessive-Compulsive Foundation's site or or, won't win any beauty contests. But they give their customers exactly what they want-medical information or up-to-date interest-rate data or supplies for school music classes-and they do it well. Chances are their customers find those services far more valuable than a bold, trendsetting design.

They Add Value

Internet value, that is. Too many Web ventures fail to play to the Web's strengths. In contrast, Web Business 50/50 winners go far beyond just throwing their existing companies online. They extend them or transform them or invent entirely new businesses tailored to the Web environment, designed to take advantage of what the Web can do. For example, provides side-by-side comparisons of current interest rates for loans, mortgages and credit cards, alerting users by e-mail when information changes. E-filing lets lawyers file certain court forms and documents electronically rather than in person. And's online questionnaire helps customers navigate an ocean of information about cellular telephones, narrowing their choices to the best product and plan. And often that turns out to be big business, either in revenues or in savings. Online broker says it's generated nearly $1 billion in online loan volume, retailer camera raked in $16 million in online revenues in 1998 and expects to triple that figure this year, and hardware manufacturer Cisco Systems makes nearly $23 million per day from orders received over the Web. And by delivering its products and services online, Eastman Kodak saves about $12 million a year on postage, printing and paper costs.

They Evolve

They realise their work is never done. They keep raising the bar. They realise the best Web sites are, when you get right down to it, always under construction. They listen to their users, and they make changes accordingly.

That's why so many of this year's 50/50 winners-fully 20 per cent of this year's field-appear on the honor roll for a second or even third consecutive year. (For the record, many other past winners didn't make the cut this year.

Memo from us to them: Yes, you were great in 1997 or 1998, but what have you done lately?) King of the hill among our repeat winners, of course, is Cisco, which scored not only in both 1997 and 1998 but picked up honors on the intranet/extranet side all three years as well. Cisco Connection Online now handles 73 per cent of all incoming orders (up from 41 per cent a year ago). And, Cisco says, the Web site has improved its order-accuracy rate from 65 per cent to at least 98 per cent-a win-win result for both the company and its customers.

Another business that just keeps getting better is, the self-service Web print shop that is single-handedly revolutionizing the printing industry.

Since its 1997 win, iPrint has morphed from a small-business supplier to a big-time partner with companies like 3M, OfficeMax, Sir Speedy and the Excite search engine. Serving as the middleman between online buyers and sellers, i-Escrow upped its own standards since last year to respond to e-mail within 24 hours rather than in days. The Thomas Publishing's already impressive industrial products directory, Thomas Register of American Manufacturers, is another 1998 50/50 winner that added e-commerce capability. And DigitalThink , which offers Web-based training on technology and other topics, has upgraded in the past year with a bevy of new features, including self-registration, tools for tracking employees' progress in their studies, a free try-before-you-buy course and courses for credit through the online University of Phoenix.

As always, the 50/50 winners' circle includes some of the business world's biggest or best-known brands: Coldwell Banker, Kodak, Federal Express, Sprint, Visa International, The Wall Street Journal Interactive Edition and United Parcel Service of America, among others. Not surprisingly, those companies also boast some of the Web's biggest corporate budgets: UPS, which handles more than 750,000 package-tracking inquiries daily, spends $1 billion annually on technology But deep corporate pockets aren't the only qualification for creating terrific Web businesses or building customer loyalty. Some of this year's most aesthetically pleasing entries came from nonprofit organisations. Among them is Elderhostel's site, where clean design and large print make it easier for the organisation's target over-55 audience to find and register for courses.

Massachusetts residents will find it tough to believe, but one of the best customer-service sites is the long-reviled Commonwealth of Massachusetts Registry of Motor Vehicles. The Registry listened to its customers complaining about losing too many hours standing in line to handle simple tasks and then designed a Web site to handle transactions that really shouldn't require a personal visit, such as renewing a registration or paying a ticket.

Finally, as befits a true cross-section of the Web's population, this year's 50/50 finalists included at least one casualty: Thomson & Thomson's namestake.

This nifty tool let users research trademarks and domain names, offering basic information free and charging for more detailed reports. Namestake distinguished itself from competitors by providing data not just for exact matches but for close matches as well, such as sites with slight variations in spelling or punctuation. The site also searched banner ads and offered visitors free advice on topics such as what to do if another company had already snagged their top-choice domain name. Users swarmed to namestake, analysts praised it, several customers credited it with helping them protect their online brands.

The problem? Ironically, namestake worked too well. Thomson & Thomson had hoped the site would complement the company's main Web business, Saegis, a similar but far more sophisticated subscription service aimed at intellectual-property lawyers willing to pay well for such valuable information. Instead, namestake appeared to be pulling traffic away from Saegis. As a result, Thomson & Thomson shut down namestake earlier this year. Because Saegis was the original model for namestake, 50/50 judges opted to honor Saegis instead.

In a way, namestake's disappearance sounds an important cautionary note in a symphony of success stories. In the uncharted waters of Web business, a seemingly unsinkable venture may run smack into an iceberg that even a sharp-eyed lookout didn't spot. Meanwhile, dozens of other ventures continue to thrive; you'll find those stories and their lessons in the following pages.

Tim Horgan, CIO at CIO Communications was part of the team that evaluated sites for the 50/50 Awards. Look for an exclusive interview with him in the August issue of CIO magazine Australia.

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More about 3M AustraliaCiscoColdwell BankerDigitalThinkEastman KodakE-LoanEvolveFederal Expressi-EscrowKodakOffice DepotOfficeMaxPhoenixRandom HouseSeyboldSIRSprintUnited Parcel ServiceVisaVisa InternationalWall Street

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