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| Info
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E-Business & Customer
Relationships |
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The information economy
is breeding a new type of savvy customer: educated, demanding and
sceptical, with zero tolerance for wasted time or unfulfilled
promises.
Developing a Web presence to attract this new breed
is only a starting point. Retaining online customers in an
environment where they can defect to a competitor at the click of
mouse is the central challenge in turning a Web presence into
e-business. Many online ventures fail because short-sighted
companies focus on technology issues instead of on the central tenet
of their business: satisfying their customers.
Integration
is the nebulously-defined remedy for achieving success in the
digital economy. But what, precisely, needs to be integrated with
what? What are the key ingredients of successful online customer
satisfaction and retention? What strategies work?
Speed,
control and convenience are the overriding principles dominating
customer behaviour in the digital economy. This can be attributed to
a rise in consumer activism, greater mobility coupled with a
lessening of community/family ties, and economic upheavals resulting
from globalization. The shift in consumer behaviour is owed to
dramatic advances in information and communications technology,
culminating in the creation of the Internet.
The new breed
of online customer is techno-savvy and probably well versed in the
possibilities of technology. Knowledgeable customers are demanding
customers. They want to know why they have to give their personal
information over and over again whenever they apply for a credit
card or insurance. They want one phone number for everything instead
of a work number, home number, cellphone number and cottage number.
They don't want to waste time dealing with some bored service rep
who can't locate their record when they check the status of a
package. The new breed of customer knows very well there is no good
reason for these inefficiencies.
Putting the Customer
First
A customer-centric business produces customer
satisfaction, not products. In an increasingly commodified market
where switching costs are low and customer expectations are high,
satisfying customers will be critical to a business' survival. It is
the degree of customer satisfaction that is of paramount importance.
Industry estimates tell us that it costs three to seven
times more to get a new customer than to retain an old one. For many
large companies, 95 percent of their profits come from long-term
customers. The implications of this are profound for organizations
struggling to establish their e-businesses.
Organizing for
E-business
The Internet is ideally suited for reaching out to
customers and providing them with responsive and personalized
services. Its capacity to carry a mixture of audio, video, graphics
and data and its interactivity make it an excellent medium for
delivering superior customer service efficiently.
The Net
cuts horizontally across functional silos like sales, marketing and
IT. It challenges traditional organizational structures. Senior
management commitment to Web initiatives is absolutely critical to
their success.
Different businesses adopt different
organizational strategies to suit their Internet objectives, either
spinning off separate business units or assembling cross-functional
committees.
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Technology: Link and
Unify
Organizational issues are not the only integration
challenges that affect businesses. A complex array of technology and
process integration issues needs to be considered, from front to
back-end. The new customer-centered approach requires extensive
reorganization of traditional IT processes, which were originally
designed piece by piece around product lines or application
management convenience rather than customer convenience.
Businesses risk poor customer service due to the grab bag of
independent and uncoordinated applications they use to support their
customers. Sales, marketing and customer service groups frequently
have separate systems that slow information sharing among these
groups, resulting in incomplete and inconsistent information about
customers. There are often several separate applications and
customer service groups dealing with different communications
channels, such as face-to-face, phone/IVR, e-mail and Web-based
interactions. A sales order received over the Internet may have to
interact with a Web commerce application, an inventory management,
warehousing and shipping applications, and an accounting system -
all systems that don't automatically communicate with one another.
Horror stories abound about firms having to hire legions of
temporary workers to rekey data from a Web-based ordering system.
Business reputations are damaged when Web orders for discontinued
products are accepted, or Web customers receive multiple shipments
of the same order because a single order line was out-of-stock and
the system could not handle exception conditions.
The
concept of an integrated call centre, or net commerce centre, which
services both online and offline customers, is still in its infancy
but is growing in importance as e-business develops.
Future
trends will include expanding integration efforts to include data
warehousing projects. Once online integration processes have
matured, a logical extension will be to further incorporate these
processes with data mining and decision support systems. Having a
body of accurate data on customer patterns and historical trends
will enable organizations to hone their sales strategies by devising
programs to attract new customers through target marketing and take
pre-emptive measures to retain "at-risk"
customers.
Maturing Back-ends
Creating front-end
interfaces with customers for order placement on the Web is now
relatively easy. However, the integration challenge for maturing
e-businesses will lie in linking these with back-end processes.
Over the next few years, businesses will have to invest in
redesigning back-end order-fulfillment systems and processes -
especially for companies selling physical goods. As more and more
businesses sell products over the Web, speedy and efficient order
fulfillment coupled with customer care processes will become a
significant differentiator for successful organizations.
By
selling globally over the Web, many companies may not realize they
will become de facto exporters, failing to consider that their
back-end systems are often not equipped to handle international
orders and that they are exposing themselves to the risk of
violating export compliance regulation.
And the human
element is often overlooked.
Organizations lacking the core
competencies to handle certain e-commerce functions may decide to
outsource them. As logistics management is often the most complex
and problematic piece, businesses often outsource this critical
component. It is here that e-commerce integration issues reach their
zenith.
Back to the Customer
A frequent motivator
for many organizations entering the e-business fray is cost
efficiency.
In the past, business processes and technology
have been structured to serve organizational convenience, rather
than serving customers. As global commodification accelerates,
businesses that cling to this outdated model will not survive in the
long run. The new breed of customer can and will ignore them. With
the click of mouse, they can conduct business with someone else
who's organized to satisfy them. |
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