the holy Grail of E-commerce

Surely you’ve heard people say things such as “The World Wide Web is as important to mankind as the discovery of the New World!” Or maybe they’ve tempered their ebullience a bit, to something like “E-commerce heralds the end of business as we know it!” or “Our Web initiatives promise us unlimited success!”

And after listening to such fanaticism about the Internet, we may be tempted to isolate our Website in a special area of the company walled off from most employees. We sacrifice our best people and greatest resources to this golden god. And in its lofty position, we expect it to perform the Miracle of Profitability.

It is only after casting our eyes upward and waiting for our Website to take off that it occurs to us that maybe it doesn’t belong up there in the first place. Maybe we should think of the site as just another access channel, another cog in the customer experience — the same way we think about our phone centers and retail outlets. Indeed, if we are not afraid to integrate our Website, feed it, and work with it, it may indeed reach its promised potential.

A successful company doesn’t think of its Website as a special entity. Rather, the site is a tool of its users — employees, vendors, and customers. It is a part of a business strategy that is uniquely yours, a strategy that must be understood and acted upon by everyone in the company.

In short, your Website should work for you; you shouldn’t be sacrificing your business at the altar of your site. How can you be sure that you’re approaching your Web operations in a realistic — and ultimately profitable — manner? By examining and exploding the seven myths of online profits.

Myth #1: The Web has unlimited potential, so companies shouldn’t limit their goals and expectations.

It’s true that your Website can accomplish much. By marketing online you can attract new customers, retain existing buyers, educate customers, allow shoppers to “serve” themselves, reduce calls to your contact center, expand your business internationally, and build your brand.

All of these are such worthy goals that you might try to accomplish them all at once. But that would be a mistake. “Best practice” companies identify and concentrate on just a few things they want their Websites to do.

Our company, Response Design Corp., found several examples of how successful companies targeted their Web investments in a study we conducted with the American Productivity & Quality Center, “Call Centers and the Internet, Enhancing Customer Contact.” For instance, the CEO of one company stated that the Website should drive revenue growth and reduce cost. So executives and managers reacted by making it easier for customers to shop and track orders online.

The founder of another successful company said, “Our goal is not just to provide customer satisfaction over the Web, but to wow our customers.” Management teams in this company reacted by investing in streaming technology, chat, and the development of robust user communities.

In each of these cases, dollars followed the vision, metrics of success followed the dollars, and the Websites were profitable.

Danger comes when there is no clear guidance from the top and everyone’s idea of the role of the Website is different. We know of a company in which phone center management believed the reason for its site was to cut down on calls into the contact center. At the same time, the marketing department believed the reason for the site was to collect customer information. As a result, the two departments worked at cross-purposes. When Web shoppers called the contact center for customer support, the phone agents did not make verifying customer information collected from the site a priority. They did not understand that accurate customer information was key to the marketing department’s activities. On the other hand, the marketing department introduced Web incentive programs that were complicated enough to drive calls to the contact center.

Myth #2: A Website should be so comprehensive that it eliminates the need to staff a call center or offer any other offline support.

The Internet will never stand alone in providing complete customer satisfaction. We recently conducted a survey for a company to determine how satisfied its customers were with Web and phone support. We were surprised to find many of the comments and complaints were not about the Web and phone support at all — they were about shipping and delivery: “Your products are poorly packaged!” “My package was left out in the sun all day!” “Shipping is too expensive!”

Why were they telling us all this? Didn’t they know that we were surveying them in regard to Web and phone support and that an entirely different company does packing and shipping? Actually, no, they did not know that.

A customer views a company based on his entire experience — from the first contact through the lifetime of the product. So you must view the company the same way, stepping inside the customer’s shoes and walking through all the steps the customer does: “What does she do if she has trouble with this Web page?” “What if he doesn’t want to keep his purchase?” Only then can you can develop processes in a financially responsible way.

Myth #3: Once customers see a Website, they will be so captivated that they will return time and time again, ensuring profitability.

Customers going about their daily activities are likely to forget about even the most wonderful site. That is why you have to keep them engaged. Here are three strategies:

  • Focus on customer education. Every time your customer receives an e-mail from you, is it along the lines of “we have a sale on this” or “we have a clearance on that”? That’s pretty predictable. So sometimes you should tell customers something interesting about the products you sell and subjects related to them. If you sell cold-weather clothes, how about giving ski reports? Or if you sell warm-weather clothes, try introducing them to an exciting island travel destination they may never have heard of. Customers are beginning to expect to be educated.
  • Remember customers’ birthdays. E-mail customers out of the blue to wish them a happy birthday. Remind them about family members’ birthdays. Remind them what they gave Aunt Martha from your Website last year.
  • Give customers their own pages on your site. Can you help customers accomplish something — plan their weddings online, perhaps, or inventory their wardrobe? Is there a special place you can give them on your site that they will revisit to do a job they have to do anyway?

The more personal your strategies, the better. You should be developing the appropriate amount of intimacy with your most valued customers — the ones who make your company profitable.

Myth #4: The Internet by its nature makes doing business easy for customers, so there’s little we need to do to enhance the Web experience.

Our customer survey work has demonstrated that “ease of doing business” is a key contributor to satisfaction. But it doesn’t happen by accident. Companies that rate high in this area:

  • use focus groups to determine what their customers want from the site.
  • use employees to test the site before its launch.
  • use outside expertise to identify holes in the site.
  • use surveys to constantly ask their customers about their Web experience — “What did that feel like?” and “How did you experience that?”
  • measure and manage the level of service in a standardized way. Customers should expect the same level of treatment whether they reach you through the Web, the telephone, e-mail, or fax.

Myth #5: There’s no need to pay for customer information, since data gathered from customers about their online buying habits, likes, and dislikes are free.

If he hasn’t already, your customer is going to get wise to the idea that his information is valuable. He will get stingy with it, and he is right to do so. When he does begin to ration his information, are you going to be first in line to receive it? In the future your access to customer information will depend on two things:

  • your willingness to pay. Your payment doesn’t have to be cold hard cash. It can be goods and other considerations. For instance, you could reward customers who volunteer personal information with perks such as early notification of sales or special “valued customer” gifts with purchase.
  • your good name. So act ethically at all times. In the future, customers will not give information to companies that they do not trust.

Myth #6: Website support and maintenance should always be outsourced.

This is one of those myths that contains an element of truth — for some companies, anyway. Building and maintaining a Website inhouse is the right decision for some companies. Outsourcing the building and maintainance is right for others. And for still other companies, a combination of inhouse and outsourced services and resources is the way to go.

When making the decision, you need to determine whether supporting the Website is one of your company’s core competencies. Do you have the necessary know-how, technology infrastructure, and the ability to forecast? Furthermore, are you prepared to upgrade your technology regularly? (The ever-changing Web will demand it.) And does your sales volume even justify or require outside support? The answers to all these questions will affect your decision.

If you opt to outsource certain services, however, don’t assume that outside experts have all the answers. The fact is, outsiders will never understand your business as you do, and they will always rely on you for guidance on company specifics.

Another hint: Work in partnership with the outsource provider to ensure that there is a cultural match between the two companies. If, for example, you decide to outsource your chat, collaboration, and e-mail functions, your customers should not notice the difference if they reach the outsource provider instead of you.

Myth #7: The success of a Website can be measured using the same metrics as in an offline business.

Say a customer goes to your Website, has a couple of questions, and calls your contact center. A telephone agent spends time answering the customer’s questions. Because special discounts are offered only on the Web, though, the customer goes back online and completes her order there.

If you are measuring sales per agent, your figures would tell you that although your call volume went up, your agent conversion went down. But the measure of how the agent affected the sale would be lost. You might even make some disastrous decisions based on bad information — such as taking the agent entirely out of the loop, which would cause the customer not to order at all!

Instead of measuring revenue per product or revenue per agent, start measuring revenue per customer. And to do that, you will have to start understanding the customer’s behavior — what he buys and why. Not only will this improve your profitability, it will give you a way to measure your success.

As you can see by looking beyond the myths, the Internet really does have the potential to provide unlimited future success. The key, though, is to successfully harness the Internet’s power and make it work for you. The Miracle of Profitability can still happen if you look to yourselves instead of to the Internet to make it so.

Dr. Kathryn Jackson is a cofounder/associate of Response Design Corp. (RDC) (, an Ocean City, NJ-based company providing educational consulting, seminars, and knowledge-based products.

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