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A senior executive from one of the major accounting firms commented after the Enron disaster that the issue of separating their consulting division from the accounting division was one of appearances, nothing more. He said that his clients should have the right to hire the world's best consulting firm and the world's best auditing firm, and he opposed any law, or company policy, that prevented this.

His comments were not likely to go well with the millions of Americans who lost funds, one way or another, in the Enron collapse. Or the business magazines now calling for a reform of America's auditing system before investors take their money to Timbuktu.

The public is beginning to associate Internet related companies with a kind of frontier lawlessness. In case after case, Internet related startups saw themselves as immune from conventional economics, and immune from the any law regarding how they conducted business.

Unfortunately, there is a real danger that the public's distrust of Internet companies will carry over to all businesses trying to market on the Internet. Over the next ten years, the major growth in Internet commerce will be in the small to mid-sized business to consumer marketing. How robust this growth will be will depend heavily on how much the general public is willing to trust the companies behind Internet commerce.

Up until now, most of the effort directed at e-commerce consumer assurance has been directed at making consumers trust the reliability of the transaction system, and not the company behind it. Increasingly, consumers are trusting e-commerce transaction technology, but are losing trust in e-commerce companies.

When a customer walks into a store, particularly a small one they haven't been to before, they usually notice a number of licenses & trade organization plaques mounted on the walls in the process of evaluating the place. The licenses are mandatory by law, but the trade organization membership plaques are there voluntarily, primarily to reassure customers.

Storeowners have long taken into account the need for customer assurance, and established an informal protocol for reassuring new and old customers that they are part of the community, and playing by the rules. The documents they want to show off are usually placed near the most sacred place in the store, the cash register.

Internet advertisers need to start applying this technique to their Websites. To a limited degree this is happening already with the privacy issue, but it needs to go s lot further.

To start with, why not just try to apply the usual store protocol to the Website? It would be easy to do. Trade organizations could provide their members with small gif images of their logos for placement on homepages, and artwork representing state and local licenses would be easy to make and use.

Some businesses are doing this already, to varying degrees, but it's not really a common practice. Under the banner of pre-emptive damage control, perhaps it should be.

Small to mid-sized businesses will be facing an uphill fight for credibility on the Internet over the next few years, especially as they try to expand their customer base into new markets. A Website design philosophy that stressed the company's local ties might go a long way to assuring customers they were safe to do business with.

In a way, one of the best qualities of the Internet is also its worst. Websites being equal, on the Internet customers can't tell the giants from the dwarves, or the wolves from the sheep. In a more optimistic world, new visitors to a company Website might just assume a good Website meant the company was OK. In the future we face, this may be too much to expect.

It will take some time to see just how strong and deep the public's backlash against the Enron disaster will be, but it doesn't look good. The public saw the tech stock crash as essentially a result of bad business decisions. Enron is being seen as the result of serious misconduct, with potentially serious political repercussions. The public may eventually demand legislation to require greater disclosure of a variety of information about companies. It's certainly not unreasonable to think companies may someday be required to post certain information on their Websites they aren't require to post now.

Taken to extreme, we can see a stockbroker's site featuring a tag like "No major SEC convictions for the last 239 days!" An auditing firm might have the tag, "No bankruptcies in the top 10 for 384 days!" And Microsoft, "Hacker free for 6 hours 4 minutes!"

With some luck, things won't go this far. Just to be on the safe side though, it might be worthwhile to consider some pre-emptive tactics, now, while we still have the credibility.

In a cynical world, an honest business can make its honesty a selling point, but only as long as they can get anyone to believe it. A major task of the advertising industry over the next decade will be to convince the public that it's safe to trust businesses. After Enron, it's not going to be easy.

Copyright 1994 - 2010 by Glen Emerson Morris All Rights Reserved

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