Despite the meteoric growth of the Internet-driven enterprise, many of the accompanying online strategies have not evolved to keep pace with the technology. In 1850, the Montgomery Ward mail order catalog introduced direct marketing, sparking a marketing and sales revolution. Despite our sophisticated progress since then, too many Web storefronts offer nothing more than electronic versions of the 150-year-old catalog.

Marketing as Usual

Customers today are deluged with generic e-mail messages, banner ads and endless forms of Internet advertising for products and services that may or may not hold any relevance for them. Most of the messages that are broadcast have nothing to do with us. They're often worse than noise. They're interruptions – a break in the conversation.

According to Forrester Research, "Despite the cries that online ads don't work, spending for Internet advertising will continue to grow at a furious pace." Forrester suggests that spending will "explode" from $2.8 billion in 1999 to $33 billion by 2004. Since the onset of the Internet, many have viewed the medium as a natural media extension to TV; and the revenues poured into Web advertising are huge. However, the advent of customer relationship management (CRM) has convinced most companies that push marketing simply won't work on the Internet. The question then becomes: Who are your customers, and how can you personalize customer service across multiple channels designed for high-volume contact?

Overcoming the E-Penchant to Over-Promise and Under-Deliver

One of the core promises for e-business is that the online experience will be simpler, faster, cheaper. The result of all this positioning is that customer expectations run on a continual upswing, with most expecting a tangible service advantage when conducting business over the Internet. When customer expectations are not met, virutal customers quickly choose to take their business elsewhere. A recent Resource Marketing study reports, "Of the 45 sites tested, only 60 percent bothered to respond to customer e-mails; fewer than 10 sites offered clear guarantees to refund unsatisfied customers; only one-third of online retailers would accept returns at their brick-and-mortar outlets; and only 30 percent offered real-time inventory confirmations." Today's networked markets are collaborative and, therefore, smart. Consider Metcalfe's Law: (Bob Metcalfe: inventor of the Ethernet and founder of 3Com), " ... connections multiply value exponentially. In fact, as the network gets larger, it gets smarter." Despite this knowledge, there is a proliferation of static, non-intuitive site designs – leaving customers clicking out to shop elsewhere within 10 seconds of arrival. Unless your back office is tightly integrated with your e-business storefront, poor fulfillment and lack of service create situations where dissatisfied customers can and will swiftly (and widely) spread word of their unhappiness with the customer service – as well as the products and services.

Enterprise Fragmentation

Considerable customer service troubles emerge when an e-business site is operated without integration to the broader enterprise. This applies to pure online ventures as much as traditional enterprises seeking to reinvent their business model by establishing and managing an online operation with no integration. Without the systems in place to manage the transactions, the degree of isolation can extend well beyond trying to return merchandise, regardless of the purchase channel. It's possible to find a book on sale at barnesandnoble.com for 50 percent off, while on sale in their brick-and-mortar outlets for only 20 percent off.

As the past two holiday seasons have proven, without seamless integration customers are left confused, frustrated and turned off. Employees and customers are left in a quandary, trying to figure out where things fell apart.

Despite fast- evolving e-business models, many companies continue to run dual platform operations that lead to customer confusion and ultimately negate any potential for customer loyalty. This is often compounded by disparate enterprise commerce and relationship management strategies that don't "play well" together.

The opportunity to integrate the enterprise for competitive advantage is huge as the disconnected deployment model is today's norm. A recent META Group survey found that only 16 percent of companies surveyed reported integration of the Internet and e-commerce into their CRM strategies. This led the META Group to conclude that the future for relationship management must evolve as an ecosystem supporting all customer touchpoints, including those in the back office. The potential remains – a massive opportunity for those who set up the requisite infrastructure to create a transparent information ecosystem that uses the Internet as a platform for on-demand reconfigurable intelligence.

The Internet changes everything. It grew silently in the cracks of traditional commerce and is fast emerging as the world's largest marketplace. It's going to change relationships in ways we've yet to imagine because the Internet is not just another marketing channel, advertising medium or way to speed up transactions. It's effectively emerging as the foundation of an entirely new Internet-centric order. Having a real understanding of how radical the change will be marks the difference between growth and prosperity or rapid obsolescence.

E-business isn't limited to simply moving commerce onto the Internet. In today's world, it's about creating game-changing ideas and using technology to break away from industry convention and drive exponential growth opportunities.

To prosper in this new environment, organizations must look beyond the conventional concept of the "customer." This means integrating the enterprise to extend relationship management principles and technologies to a broader and equally critical audience that includes employees, investors, business-to-business partners and the media.

The Business Potential of Customers

It sounds basic: you have to know your customers, don't you? Yet, in reality, most enterprises aren't set up to provide robust and flexible customer information. Forrester Research cites that 38 percent of companies will invest heavily in CRM tools and systems by 2001. Collecting, segmenting and applying customer data to manage and enhance relationships continues to represent a growing area for gaining competitive advantage.

Integrated enterprise relationship management (iERM) is a new methodology that extends existing CRM tools to provide a more panoramic view of the customer and helps organizations intelligently target, understand and communicate to a diverse and ever-refined set of customers.

iERM gives you the added flexibility to pull these strategies across your enterprise and address all customer types. The term customer has broader connotations than "people who buy products/services." As it applies to iERM, customers include the full spectrum of constituents that impact the success of today's organizations. They include:

  • Customers – Customers are those who buy your products and services. Your best customers always have the potential to leave, your marginal customers have the potential to buy more and non-buyers have the potential to buy from you.
  • Employees – Employees are also customers. They "buy" a job, paying with their time and knowledge. In today's economy, work cultures are resting more and more on the tenets of freedom, self-direction, purpose and contribution through work, not to mention wealth creation by work. Couple this new mantra with today's pressing need for skilled talent and organizations are facing a costly exercise in time, money and productivity to replace valued contributors if they don't adequately manage these important relationships. In the hyperlinked organization, employees have easy access to one another in a rich variety of ways. The Web has left every wired person in your organization expecting direct communication, and the technology is there to support it. With iERM you're able to identify, segment, incent and reward employees based on any number of criteria to communicate, understand, improve retention, develop loyalty programs, offer distributed training, develop knowledge bases, and so on. The potential of applying iERM to human resources mandates is one of the most exciting areas of iERM.
  • Investors – In today's investment world, risk, contribution and reward are the basis of the wealth entitlement imperative. Stocks are flipped to underwriters who flip the stock to individual buyers who flip the stock to other individual buyers – and everyone's looking for the big, quick financial payoff. Even the blue-chip behemoths are chasing the quarter, exploring ways to best manage and extend the value of their investment base. Today's investment community is far more diverse than ever before. The speed at which today's business must manage these relationships for value and retention can be greatly enhanced using iERM.
  • Resellers and Business Partners – Third-party sales channel partners and distributors play a vital role in helping companies deliver products and services to customers. The importance of sales channel partners is increasing. One study shows that the indirect channel now accounts for more than 50 percent of sales in the high- tech industry alone. iERM infrastructure and principles are designed to optimize these relationships, maximize revenue and reduce overall selling costs.
  • Media – In today's marketplace, where hype blows up in your face and spin is increasingly transparent, the real work of media relations is more important than ever. For many organizations, the media represents a make- it or break-it stakeholder. They provide both the outlets for, and consumers of, the information you provide. Targeted, relevant information can be an organization's best friend. But what customer group are you targeting? Is broadcast the best way to reach the groups most important to your business? iERM technologies and strategies can be applied to help identify and segment your audience as well as facilitate timely and tailored message dissemination.

Return on Relationship

iERM is grounded in disciplined data management, making the data available to segment groups by defined criteria and mapping the value they bring to your organization. We view this exercise as calculating the total return on relationship (ROR) over the life of an individual's or company's interaction with the principal organization.

Most organizations have a tremendous amount of information deep within their line-of-business repositories. In fact, according to a META Group study, by 2002/2003 most information-centric organizations will maintain an internal balance sheet to specifically account for the value of their information assets. This however, won't be possible without the tight management of those assets through an integrated hub-and- spoke data warehouse architecture.

Integrated communications and the disciplined use of information derived from those transactions ultimately help organizations deliver everything from precision pricing and customized offerings to retention programs and on-demand knowledge, stakeholder incentive programs and employee skills enhancement.

The Face of Things to Come

The philosophy behind emerging methodologies such as iERM is basic. A company has many constituencies that extend beyond the traditional definition of a customer. Increasingly, companies juggle relationships internally with employees and externally with partners, investors and news sources. In their own way, each of these audiences is a customer – and all of these customers will view a solid relationship as the foundation for transacting business.

Despite the jargon of "managing" relationships, companies need to stop viewing customers as a homogenous group that fit a pattern – no matter how customizable or personalized that pattern seems – and focus on maximizing a return on relationship.

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