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The Real Impact of the Internet Is Not What You Think It IsAuthor

Too many companies start down an e-commerce path and that is all they can see. They do not quite understand that to really engage in e-commerce means potential changes to business processes.

So, what is the secret? The answer is very simple and involves an application of an old principle: KISS: Keep It Simple, Stupid. The answer is focus on the customer. Make every interaction point with the customer focus on the customer. Easy to say, what does it mean? To put it simply, it means redesigning core business processes around the new model of e-business and that means focus all activities from start to finish, internal and external, on the customer.

You can have the world's best on-line catalogue with the best possible interaction and ease of use. That isn't enough. You have to deliver content that has value to the customer. Customers buy from your site because you have what they want and you make the process easy. They return to your site for two fundamental reasons:

  • Your site met their expectations for fulfillment.
  • Relevant content, information that has value and meaning to the customer that is easy to find and use.

Simon Phipps, says e-commerce without e-business is emergency. E-commerce is what you do, e-business is who you are. E-commerce is everything that occurs on the transaction side that results in the order. E-business is everything else. To some e-commerce and e-business are about using only Internet technologies to transform the way key business process are performed. That definition is not sufficient. E-commerce and e-business comprise a set of interactions with customers that we will call e-interactions. E-interactions are not limited to shopping over the Internet. It means doing business electronically - all aspects of business - including advertising, customer support, distribution, inventory management, manufacturing, marketing, fulfillment, post-sales support, product lifecycle, relationship management, and more.

When a company talks about e-business it should mean an application of technology to streamline business interactions and processes. This is not limited to interactions over the Internet. It includes advanced phone systems that use caller ID to personalize contact and make it easier for both the caller and the customer representative. E-interactions means that you provide data in any form the customer wants to use including hand-held digital appliances. If your business uses kiosks, then recognize the customer when they log in or try to gain access. It doesn't stop there: smart cards, voice recognition and response systems and more emerging technologies will change customer interaction as the technologies gain critical mass.

Every customer point of contact provides glimpses for the customer into the way your company does business. The customer doesn't really care about technology. As far as the customer is concerned, technology fills a single purpose. Technology is nothing more than a tool that people use to do what they have always done only faster and more conveniently. We have created a name for the group of technologies used at the interaction points, which are visible to the customer: Customer Visible Technologies (CVT).

CVT have to be supported by integrated databases that are available everywhere there is customer contact -- on the Internet, in call centers, for distributors, etc. To make this possible it means the behind-the-scenes-support systems cannot be limited by walls. It means systems seamlessly talk to each other across boundaries (company, geographic, etc.).

Technology allows customers to communicate their needs, wants, requirements, desires, dreams, wishes, goals, specifications, etc. They expect that the supplier is listening at the customer's whim. It also means that any information about the customer is instantly available every(any)where. In other words, the information you have stored about a customer must be available any time and any place that customer interacts with your company. It has to be up-to-date, current, dynamic, and secure.

A Burglar Alarm Is not Enough

Security is paramount for e-interactions. The single most critical assumption for customers, either businesses or consumers is that their transactions are at least as safe in this environment as they are in more traditional settings. The technologies must be open so that all business processes can be integrated at the same time you carefully protect any information you have collected. To have credibility with customers, the technology must have 24-hour, 365-day reliability with appropriate security protections for both business and customer information.

Both the e-customer and the potential e-customer want to know that their private (personal) information will be kept that way. It isn't enough to protect their financial information. You have to protect all information they've given you explicitly and the information you've collected about them implicitly based upon their individual behaviors. You have to guard their information as carefully and jealously as you protect your own private and confidential data.

Security is broader than merely protecting customer data. Security also means that you take the time to plan for the inevitable attack. Some low-life will try to gain access to sensitive information. They could go after (deliberately or accidentally) transaction contents, payment information, customer identity, transferred data, etc. It is also possible that the attack will take a different form (for example, denial of service). The key, you have to plan for it!

You have to take steps to assure that you can identify and log attacks. It means you have taken the steps necessary to meet target availability for your site (with proper access controls, controlled and monitored ability to change data, adequate backup and more). It means you've identified the potential threats, considered the risks and taken appropriate steps to minimize their impact.

The cardinal rule regarding security can be summed up as follows: Security is not a preventative. It is a delay tactic. The purpose for security is to keep "them" out long enough so that by the time they get in, the information you are trying to protect is no longer sensitive.

The cardinal rule regarding privacy is just as simple -- don't assume!

  • Protect your customers' information according to their desires
  • Use opt-in versus opt-out lists.
  • Get their explicit permission to collect private information every time you make the attempt.
  • Compensate people for providing information.

Tried and true still works

There are two old business axioms that apply.

  1. Nothing happens without a sale. To make a sale you need customers, to make lots of sales you need customers that continually do business with you. To make your business grow, really grow, you need to understand and increase the lifetime value of a customer. Lifetime value of a customer is the amount of business (in dollars) a specific individual customer will do with your company over the lifetime association of that customer with your company.
  2. It is easier to get new business from existing customers than it is to find new customers.

The critical buzzword is relationship management in various forms. The combination of e-commerce with e-business is all about building and sustaining business relationships with customers, electronically. To do that successfully you must realize that the instant you start down this path, you are giving your customers unprecedented access to every aspect of your business as it affects them. We’re not talking about profit and loss, but information about their order(s) and any interactions with your company.

Customers want answers to questions they have never asked you before, and don’t necessarily know that they should ask. They expect that you will anticipate their need and provide the answers without being asked to do so. Customers start with this collection:

  • Is it in stock?
  • When will it ship? Why didn't you tell me it shipped?
  • What is the waybill number? I want to track it myself.
  • What's in it?
  • Is it safe to use if I (we) have this (pre-existing) condition?
  • What does it look like? What are my options?
  • How does it work?
  • And more!

Any e-commerce initiative has to be able to answer these questions. It also has to be able to identify and adapt to new questions as customers gain experience and sophistication. If your company is able to answer customer questions, quickly, seamlessly and painlessly you will have customers that feel good about doing business with you. You will have customers that refer other customers.

Every business creates a way of tracking large/good customers. They invent names for the programs including Frequent Flyer, Frequent Buyer, Preferred Customer, and others. They track the habits of these customers. What good e-commerce allows you to do is attract more business from the better customers and automatically identify new additions to this good customer list.

You might ask, "Why can't my sales, marketing, distributor representatives do this?" The answer is, because they have a lot of other things to do that make them money. Tell me how someone is compensated, I'll tell you how they make decisions. Automate the process! And in the process you make the customer feel special.

Customers who feel special are repeat customers. Customers who feel special try more products or services. Customers who feel special cheerfully refer other customers. When you make customers feel special they develop trust in you and the relationship you are building. Trust is another aspect of loyalty and repeat business.

How Do You Define Success?

Anybody that doubts the impact the Word Wide Web has had on business over the last couple of years either has their head in the sand or lives on a remote unconnected island. The e-customer won't tolerate, "We'll get back to you about that." The e-customer wants the information they need to make a decision at your site. The e-customer wants to know about their order; and they want that information, now. The e-customer wants (make that demands) fulfillment!

The e-customer can usually buy a similar product from another company. By now you already understand that you cannot (should not) try to compete on the basis of price, or the size of your catalog. Between shopping bots and business-to-business exchange sites, it won't take long for them to find another supplier. You have to deliver value to the customer. Since that is the mantra that just about every company uses, (value to the customer), even that is no longer sufficient. Instead you have to deliver superior value to the customer. One contributing factor is to use your Information Technology infrastructure. It must be able to deliver up-to-the-second information about the customer on a demand basis wherever and whenever the customer interacts with your company in real time.

Do You Get the Point?

This article is about reinventing companies, not from a business perspective, but from a customer perspective. It doesn't make any difference if you are in the consumer to business (C2B) sector or in the business to business (B2B) sector. Your company still has customers! Customers have expectations that you must meet. Basically, those expectations are independent of the market sector. This is the only time in history that the products of the current technology are used to effect the age itself. Change happens faster, now, than at any other time. So, this is an article about change and how to manage the resulting complexity.

The biggest change for many will be a change from dealing with technology to dealing with people. The Internet is a networking technology that has revolutionized communication. People hold conversations over the Internet. Some conversations are with other people, some conversations are with companies. What the Internet does is allow every business to go back to the days, 100 years ago, when every shop keeper, every business, knew the name and preferences of its customers. The thing that draws people to the Internet has nothing to do with technology or ease of use or buying stuff. The thing that attracts people to the Internet is intangible; the Internet is all about communication - instant communication. The Internet has revolutionized communication, at its simplest level. Your company ignores that time-based communications fundamental paradigm shift at its peril.

To help you make sense and understand not only where we are but also where we're going, we will divide the rest of this article into the following parts.

  1. The factors that makeup a successful e-venture.
  2. The organizational issues necessary to put it together.
  3. Picking technology to get to where you want to go.
  4. A roadmap for continued change.

Factors that makeup a successful e-venture

This section covers the factors that contribute to success it starts with the following critical questions:

  • Who are your customers?
  • What business are you in?
  • What business do your customers think you are in?
  • Are you sure about the answers to the previous 3 questions?
  • How do you know?

These questions form the basis for the critical areas you will need to address if you are serious about your e-commerce / e-business initiative.

  1. Make sure you target the right customers. Make sure you know the answer to that question. Listen to your customers! Learn to learn about your customers not from a focus group but in real-time.
  2. You need to simplify business processes that affect the customer. Make them very efficient from a customer's point of view. Do everything possible to own as much of their eyeball time as possible. You competition isn't another company in your industry. In fact, you have multiple competitors and the most important of them, from the e-customer's perspective, is time. You have to make it possible for your customers to get whatever information they want or need, quickly, easily, efficiently, and seamlessly. You are competing for the time of your customer. This means it is critical that everything you do clearly respects the value of your customer's time.
  3. It is not enough to just give lip service to the idea of focus on the customer. You have to actually do it. Everything the company does should focus on the customer. Every customer contact point should make the customer feel special. It isn't enough to make it easy for the customer to do business with you. You have to make it easy for your people to do business with the customer!
  4. Automate as many customer processes as possible. Make it easy for customers to help themselves. Don't have order takers who could make mistakes. Let customers easily enter their own orders. Let them see availability, shipping and order status. Don't automatically put something on back-order. Ask. Automate everything possible. Management should focus on exceptions, things that can't be automated. If it (whatever it is) makes things easier for you and not the customer then it must play second fiddle to making things easier for the customer. Automate, but not at the expense of the customer. Make it EASY for the customer and then make it still easier!! This is not an event, it is an ongoing process. You have to continuously make it easier for the customer.
  5. Deliver fast, individualized, and personalized service. Make every customer feel special. Identify them, differentiate them, recognize and respond to them as unique individuals.
  6. Build a sense of community that makes customers feel welcome and drives them to return and tell others about their positive experience. Remember, you are not competing for money. You are competing for their time!
  7. Wrap services around products. With over almost two new Web sites opening every second (over 7000 per hour) you have to do something to differentiate your site from every other Web site. You do that by making service the value add. What services? Go back to the fundamental questions: What business do your customers think you are in? Provide services that make sense to your customer base. What do they do with your product after they buy it? What do they do before they buy it? Are there other ways they could use your product that they have not considered. Build a sense of community, automate customer processes, and actually listen to your customers. What a concept!
  8. Have a clear privacy/security policy available. Make sure that customers can control who has access to their data. Guard that privacy on behalf of your customers. Make sure your privacy policy is obviously available at each of the previous 7 touch points. Security and privacy apply to more than e-interactions; they should apply to every interaction, employee, and situation.

There is one critical point about this list: It is not a menu of choices; implement them all.

One more critical point, if you answered the three questions at the start of this section quickly or glibly, I would suggest you better go back and revisit them again. If you have not talked (not merely surveyed or gotten feedback from customer care. I mean really engaged in some meaningful discussions) with surfers, not just customers, then you have missed the point!

David Moskowitz

Date:

January 13, 2007

Bio:

The author is an engineer with the consulting firm, Productivity Solutions. He is a published author, a radio host, and a speaker at the Colorado Software Summit. He has consulted and lectured extensively

Photograph of the author

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