Focus Is Widening Outside Products
The key is not just the Web , it’s the enterprise.
While the ability to interact and dialogue with customers on the Web is still in its infancy, formulating the right back-end integration strategy for E-business solutions is the key to successful customer relationship management.
No one in business today can afford to ignore the explosive growth of E-business. Fueled by the Internet, E-business has reached the “critical mass” of overwhelming acceptance by both business and consumers within a much shorter time frame than other life-changing technologies such as the telephone, television and even the PC itself.
In 1997, E-business transactions totaled over $1 billion. According to Forrester Research, that number is expected to reach $1.3 trillion by 2003, with business-to-business E-business outpacing business-to-consumer by a factor of 10, to represent 9 percent of all U.S. business trade.
IDC, another research firm, predicts 510 million people on the planet will be online by the same year.
E-business is opening the door to unprecedented opportunities for building sales and increasing revenue streams by expanding geographic scope, reducing operating costs, improving procurement, productivity and supply chain efficiency.
However, many articles in the business press imply that implementing a Web site is the “silver bullet” that can propel a company into new-found prosperity and success. This is not true , E-business is a lot more complex than that.
– The Changing
To be successful at E-business and customer relationship management, companies have to rethink, at the most basic level, how they do business, how they bring products to market, and how they serve their customers. Their business model has to evolve from production-centric to customer-centric.
As products become more like commodities and pricing differences become more slight, the great differentiator today is delivering customer value. Perceived value is what leads to increased loyalty, sales and retention rates.
A recent IBM ad notes: “It costs six times more to acquire a new customer than to keep an existing one.”
We know how to get new customers. The question is: How do you keep existing customers coming back, year after year? The answer is by giving them what they want.
Whether business-to-business or business-to-consumer, most manufacturing and service companies today rank improved customer service among their top three priorities. However, in order to know what customers want and what they value most, companies have to find ways to get closer to them. Occasional focus groups, quarterly meetings, customer surveys and direct mailings simply won’t suffice.
Rushing to implement a Web site is not the solution either. Too may organizations take a “Build it and they will come” attitude. This is a common mistake that may do more harm than good to your customer relationships.
According to Gartner Group, more than 55 percent of organizations pursuing the allure of the Internet miss the mark dramatically. Their Web pages are static and nonfunctional and have limited online business capability, giving first-time visitors no reason to return.
What customer-centric companies need is a well-planned, integrated E-business strategy that takes into account both customer needs and corporate business objectives. Only by combining the two can companies reach their objectives of more satisfied customers, increased sales and new revenue streams. These are the goals of customer relationship management in the electronic age.
– Customer Relations
In The Electronic Age
Customer relationship management is hardly a new concept. Good businesses have been practicing it for centuries , remembering customers’ names and family information, monitoring buying patterns and preferences, and promoting new business using this information.
The difference today is electronic technology which has increased both the speed and the volume of information exponentially. However, customers are still customers and the key word in CRM is “relationship.”
The media we use to reach and serve customers today may include a brick-and-mortar enterprise as well as various kinds of electronic interaction, such as E-mail, Web site FAQs, self-help applications, remote help centers for sales and after-sale support, and inbound and outbound call centers for telemarketing, technical support and service. More than ever, this abundance of choices puts customers clearly in control.
Customers today want “24-7” accessibility to your products, removal of geographic boundaries, easy ordering, timely delivery and responsive service. If you don’t deliver, they are just a mouse-click away from your competition.
Yet, in research conducted by Internet and E-business analyst Jupiter Communications, up to 42 percent of top-ranked Web sites took longer than five days to respond to a customer inquiry, did not accept E-mail, or never responded at all. Something is wrong with this picture.
– CRM Becomes
CRM is fast becoming a market imperative. As E-business grows, so does the sense of urgency , especially in industries where established businesses are waking up to find their market share being eroded by dot.com upstarts. CEOs are losing sleep wondering whether there’s a drugstore.com or Amazon.com lurking in their market space.
Correctly gauging the potential of the electronic marketplace, a number of “early adopters” devised E-business and customer relationship strategies that were tightly linked to their core businesses. To grow their customer base and serve existing customers better, they implemented more than just a glamorous Web presence.
Networking industry giant Cisco Systems, for example, began its business-to-business Web initiative in 1994 by introducing customers to the idea of online technical support. As inquiries mounted, the company introduced the FAQ site to address common problems and questions. Now 79 percent of Cisco’s tech support is handled via the Internet and customers can also configure their networking products and make purchases online.
Caldwell, a CPA, is a business and technology solutions partner in the Orange County office of BDO Seidman, LLP, an accounting and consulting organization.