The next phase of e-commerce: Take it
E-commerce will have to get friendlier in the near
future. How will IT help?
When the Web became popular in the mid-1990s, many
companies rushed to obtain an Internet presence. Many of these early Web
sites consisted of little more than a collection of static Web pages,
mostly containing marketing literature and product descriptions. To order
any of the advertised products, you still had to pick up the phone and
call your order in.
It didn't take some businesses long, however, to see
that they could easily sell products directly from their site. And, as we
all know, a new business model—electronic commerce—was born.
Today, it seems everyone wants on board. But e-commerce
is still so new that it has caught many IT organizations and their core
businesses unaware; many are still scrambling to help the core business
make e-commerce work profitably—if at all.
Whether you're a scrambler or one of the early adopters
now involved in refining your e-commerce platform, the time to think about
the future is now. Chances are your company is anticipating this. You
should be, too.
It's one thing to allow a
customer to purchase products on the Web, but how can you help your
company create personal interactions with customers? I believe the goal of
the next generation Web sites will be to create the kind of sales
interactions on the Web that customers now experience face-to-face.
The first step toward deriving extra value from your
Web site is to understand the customer. It's usually expensive to
advertise and create brand awareness to attract new customers to your
company, and significantly less so to obtain repeat business from existing
customers. Too many companies focus on customer satisfaction or acquiring
new customers, rather than on fostering customer loyalty and retaining
existing, profitable customers.
The key elements to creating customer loyalty in either
a traditional or e-commerce business include knowing and anticipating the
individual's needs, treating the customer as an individual, adding value
to the relationship the customer has with your company, and having the
right products and product attributes available at the right location and
at the right price.
Consider the economics of customer loyalty. For
example, a grocery shopper spending $100 per week may not appear
significant to a large grocery store. However, over a decade he or she
will probably spend more than $50,000. A loyal customer provides several
benefits to your company, including reduced marketing costs, lower
transaction costs, reduced customer turnover expenses, increased product
purchases, increased cross-selling success, willingness to pay premium
prices, and positive word-of-mouth. These benefits all directly affect the
So how can you build this valuable customer loyalty
when the only interaction your company has with the customer is through a
Let the Internet work for you
You can leverage
the power of the Internet to build customer loyalty in four primary
Enables you to determine your
customer's buying needs, develop purchasing alternatives, and propose the
optional solution online. Through effective e-sales, you can enable guided
selling and cross-selling and improve personalization. This can help you
target particular products and services to individual customers. This
method also benefits customers, by allowing them to more quickly and
easily find and purchase the products and services of most interest to
Enables you to provide your
customers with the knowledge they need to solve their own customer service
questions. Rather than being forced to wait until the customer service
department opens in the morning, or after a holiday, customers are able to
get answers to their questions at a time convenient to them. For example,
a customer could query the status of an order to see if and when the order
was shipped. Customers can also check their account balance anytime they
like, day or night.
Enables immediate problem solving,
by interactively and intelligently guiding customers and employees to the
answers to their questions. This involves creating tools that let
customers help themselves. You can create and execute a knowledge/value
delivery platform online, such as Compaq's ActiveAnswers site or
Microsoft's extensive MSDN Online and TechNet sites. You also may want to
consider letting customers know how they can get in touch with real people
at your company.
Enables business decision
makers to measure and monitor the effectiveness of their loyalty-based
management. Of the four primary areas discussed here, e-measurement is the
only one that is likely to occur completely behind the scenes, out of
sight of the customer.
It's unlikely that new developments to your Web site
will include all of these areas. You may want to consider each area
independently and gradually enhance your company's virtual storefront. By
considering each of these areas now, you can begin to create personal
interactions with customers, just as if they had walked into a store and
talked with a sales representative in person.