Tech marketers
pave way for better service
July 17, 2000
BY MICHAEL KRAUSS
Internet marketers can make mistakes.
Consider the
Barnes & Noble online phenomenon—or the lack of integration
between place and space that occurred when the book retailer’s
bn.com Web business first rose to challenge Jeff Bezos and Amazon.com.
You could order a book online from bn.com, but you couldn’t
return it to a bricks-and-mortar store. You could ask a clerk
to help you find a book in the store, but they wouldn’t
let you touch their computer if you wanted to search or shop when
you were in it.
Hey, offline
marketers aren’t perfect either. Last year, The Wall Street
Journal reported on a St. Louis shopping mall thatbanned the Internet
from the premises. Now, there’s some real smart marketing.
As the Internet
evolves and the established companies strike back, the best marketers
are taking advantage of physical place and virtual space to forge
a seamless, continuous experience for their customers. Gateway
and Charles Schwab are two examples.
Michael Dell’s
online sales capability and impressive balance sheet (with meager
inventory levels) are legendary. But the mixture of online sales
and the physical Gateway Country stores could give Gateway a long-term
advantage over Dell. Do you save the box your computer was shipped
in up in theattic? I do, but I don’t like putting my computer
back in the box and driving off to FedEx and sending it to some
impersonal service center in Timbuktu. I like the confidence of
being able to drop off a broken machine on my way home from work.
I also like the personal service and friendliness of the tech
rep at my local Gateway store.
While eTrade
does a nice job of acquiring online brokerage customers, Charles
Schwab will have the upper hand because it blends the ability
to trade online with the opportunity to converse at a physical
location. Maybe that’s why Schwab far outstrips eTrade in
terms of customer assets undermanagement (over $700 billion for
Schwab; less than $100 billion for eTrade, according to company
press releases issued earlier this year).
My guess is
the customers who leave their assets with the broker are the more
loyal customers and the ones who are the most profitable to the
house. While eTrade can earn discount brokerage commissions, Schwab
can earn these plus an array of other income by managing the customer’s
assets.
Still, we
should respect the technology marketers. They’ve set a new,
much higher service performance bar that all organizations—virtual
or physical, soft goods and hard goods—must live up to.
Look at FedEx: Its system can tell you when your package will
be picked up, where it is in the system, when it will be (or already
was) delivered, and all for a reasonable price. So why can’t
the makers of multimillion dollar machine tools tell within a
range of a few months when their products will be delivered? Why
can’t the general contractor tell when your home improvements
will be completed? Online marketers have established performance
levels and set consumer expectation levels to which all businesses
must aspire. On the flip side, we love shopping at Nordstrom’s
because of the quality of the service and the opportunity tofeel
and touch the goods. These consumer realities aren’t going
away.
While online
marketers may not be able to equal the service quality of the
physical store, Lance Rosenzweig, CEO of Los Angeles-based PeopleSupport,
is helping pave the way for them. PeopleSupport offers online
marketers the ability to provide real-time e-mail, online chat
and voice-over IP support so that you won’t abandon your
online shopping cart because you had a service request that the
site couldn’t address. This is pretty important: According
to Los Angeles-based bizrate.com, 37% of online shoppers request
customer service. That’s why Rosenzweigstarted PeopleSupport.
“I was
on a site that sold books, buying a present for my dad. After
going through the whole shopping process, I realized I entered
the wrong ‘ship to’ address. There was no way to change
it. There was no way to communicate with the site other than e-mail.
“I sent
an e-mail just two minutes after clicking submit. Oops, I put
in the wrong address. Please change it. I received an e-mail back
within about a day, saying the order had already been processed.
When I got the book at my house, I realized there needed to be
a better way to provide customers with immediate online service.”
Here are five
tips that may help you understand how the clicks-and-mortar trend
affects you:
- Understand
your customers’ needs. Don’t be an online
or offline snob. Understand your buyer’s needs and use
tools from both the physical and virtual realms to meet them.
- Leverage
your brand. Yahoo! and eBay have launched magazines.
Recognize that your brand can be leveraged for success both
online and offline regardless of your origins.
- Provide
a continuous customer experience. Make sure that your
buyers can blend their online and offline experiences.
- Design
for the future. Make your space part of your place;
make your place part of your space.
- Use
the information you have. Identify your information
assets online and offline. Pool them and use them.
Most importantly,
don’t limit your marketing tools to the virtual or the physical.
An online bank shouldn’t look like a physical bank, and
a physical bank should not look like a Web site. Marketers should
use the optimal mix of online and offline capabilities to serve
customers and create shareholder value.
Jack Welch,
CEO of Fairfield, Conn.-based General Electric Co., has instituted
a reverse mentoring program for his top 600 executives, requiring
each of his top executives to seek out and meet with an Internet
mentor (often someone half his or her age) to coach and guide
them on ways to capitalize on the new technology across GE. Doubtless
other major Old Economy companies will follow suit; surely, new
Internet billionaires can learn from the bricks-and-clicks phenomenon
as well.
My guess is
it won’t be long before Jeff Bezos and Amazon.com establish
a physical presence in your neighborhood.
Michael Krauss is a partner with Diamond Technology Partners in
Chicago.
He can be reached at news@ama.org.
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