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Customers.com: How to Create a Profitable Business Strategy for the Internet and Beyond

Customers.com: How to Create a Profitable Business Strategy for the Internet and Beyond

by Patricia B. Seybold, R. T. Marshak

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Patricia Seybold has advised major companies not only on the technical requirements for a successful electronic commerce strategy, but also on the management, marketing, sales, and customer support systems necessary to create an infrastructure that seamlessly blends a company's e-commerce initiative with overall business.

It all starts with customers. For


Patricia Seybold has advised major companies not only on the technical requirements for a successful electronic commerce strategy, but also on the management, marketing, sales, and customer support systems necessary to create an infrastructure that seamlessly blends a company's e-commerce initiative with overall business.

It all starts with customers. For the past several years, Seybold has been working with electronic commerce pioneers who have made life easier for their customers by figuring out what they want and designing their Internet strategy accordingly. Seybold's guide is packed with insights on how both Fortune 500 giants and smaller companies have created e-commerce initiatives that place them well ahead of their competitors.

With additional in-depth examples from American Airlines, Amazon.com, Babson College, Bell Atlantic, Dell Computer, PhotoDisc, General Motors, and Cisco Systems, Customers.com is an exceptionally rich source of ideas and information; the one audiobook you need to stay in business in the rapidly changing era of electronic commerce.

Editorial Reviews

Seybold, a respected Internet consultant, shares her thoughts on what it takes to build a successful online business focused on intimately knowing a customer's wants and needs. While many of her 16 case studies describe larger companies, her powerful strategies offer important insights for small-business owners.
Katherine Mieszkowski
Customers.com by Patricia B. Seybold, stands all the excitement about Internet commerce on its head. . . Packed with real-world war stories that explain how to learn more about customers, how to build customer loyalty, and how to save money, Customers.com is likely to develop its own strong customer base.
--Fast Company Magazine.
Publishers Weekly - Publisher's Weekly
Aiming her debut at both executives and the technologists who carry out their dictums, consultant Seybold consolidates a wealth of information on how to link businesses to the Internet and other electronic tools. Her "five steps to success" in electronic commerce -- "Make it easy for customers to do business with you" and "Redesign your customer-facing business processes from the end customer's point of view," to name two -- are confirmed by a compilation of 16 case studies illustrating "eight critical success factors," including knowing the target market, giving customers room to browse and making service more personalized. Tales from the Webbing of American Airlines, National Semiconductor, Hertz, Amazon.com and Bell Atlantic, among others, make the book's basic messages seem inescapable, though at a cost of much built-in redundancy, as they crop up in a myriad of contexts. Going beyond screen-based issues, Seybold shows how billing for electronic commerce or the integration of third-party business can tip the scales toward on-line profitability. The final "handbook" outlines general prescriptions for planning and implementation. While much of the detail about particular Web sites will be outdated before long, of more lasting value are the lessons regarding insightful marketing, innovations and just good business sense -- regardless of medium.

Product Details

Crown Publishing Group
Publication date:
Product dimensions:
6.26(w) x 9.37(h) x 1.08(d)

Read an Excerpt

Chapter One

How to Create a Profitable
Electronic Business Strategy

I'm shopping for a new bank. My current bank is one of the world's leading financial institutions. But it just doesn't serve my needs anymore When I move my personal accounts, if I'm satisfied, I may move my company's accounts, too. The banking services I want aren't hard to find in today's electronic marketplace, although the bank that offers them may not be based in Boston, where I live. But that won't matter to me as long as I can get the features I need and the kind of relationship I'm seeking. Global competition is a reality today.

    I want a bank that will let me interact with it seamlessly by telephone, by ATM, from my handheld PalmPilot, and over the Internet. I want to be able to get cash anywhere in the world at any time of day. I want to see all my account information consolidated in a single electronic up-to-the-minute statement. I want to be able to look at my bills electronically, question a line item if necessary, and authorize and schedule their payments. Then I want the resulting expenses organized according to categories I specify, totaled by month, and compared against my original budget. I'd like to be able to see the current value of all my investments. And I want to be able to easily transfer money among my accounts, my investments, and any other banks or investment firms with which I may have dealings.

    Of course, I need to be able to perform these transactions any time of the day or night from anywhere in the world, securely, via the Internet, by using a Touch-Tone phone or from a wireless handheld device. I'd like my bank to offer me other financial services--car insurance, homeowner's insurance, mortgage, investments, loans, and lines of credit--at competitive rates so that I can have the convenience of one-stop shopping for most of my financial needs. I expect personal service from the people I interact with. I want them to know who I am, what accounts I have, and what problems I've had in the past. When I'm dealing with the bank electronically, I expect fast, secure, accurate, and highly personal service--no hassles, just an enjoyable relationship. When I find this bank, I'll be a very loyal customer because I will have invested a lot of my time in setting up automated bill payments, deposits, and transfers, and entering my investment portfolio. The bank, in turn, will have learned a great deal about me as a customer. As long as they don't violate that trust or make it hard for me to do business with them, I'm likely to be theirs for life.

    Does this picture sound seductive? Of course it does. Perhaps you already have a bank that does all this (please let me know which one it is!). Or you may have cobbled together a reasonable facsimile, using a financial management software package such as Intuit's Quicken, along with an online connection to your bank, and one or more investment sites to track your portfolio. If you don't have a bank that offers this kind of electronically enabled one-stop shopping, then, like me, you're probably looking. As business and consumer customers, we're all interested in improving our quality of life. We gravitate toward the companies that make it easy for us to do business with them twenty-four hours a day, anywhere in the world.

    What if one or more of your competitors figures out how to beat the pants off you by doing business electronically with your customers? What would happen to your business? Would you survive? Would you be able to catch up? Could you learn how to develop a counterattack fast enough to win those customers back? Could you implement such a strategy quickly enough to keep other customers from defecting? Frankly, I doubt it. As you'll see from the next few chapters, creating and implementing a profitable electronic commerce strategy takes focus, time, and resources.

    Maybe you're not worried about losing your customers. After all, your customers don't shop on the Internet. They buy your products or services in stores, through catalogs, or over the phone. They interact with your salespeople face-to-face. Or they purchase through your distribution channels. What do you have to fear from competitors' electronic business initiatives? Perhaps you think they aren't relevant to your market.

    Think again.

    You see, today's electronic commerce isn't limited to shopping over the Internet. It's also not confined to supply-chain transactions between large trading partners. Electronic commerce (also known as electronic business) is doing business electronically--all the aspects of doing business. It embodies the entire business process--from advertising and marketing, through to sales, ordering, manufacturing, distribution, customer service, after-sales support, and replenishment of inventory--managing the entire customer and product life cycles.

    When we engage in electronic business, we're applying today's electronic technologies to streamline our business interactions. Those technologies include the Internet, but they also include advanced telephone systems, handheld digital appliances, interactive TVs, self-service kiosks, smart cards, and a whole host of emerging technologies. All of these customer-facing technologies are supported, behind the scenes, by integrated customer databases, call centers, streamlined workflows, and secure transactional systems. They require systems to talk to one another seamlessly, reliably, and securely across company boundaries, geographic boundaries, and time zones.

    Sounds complicated, doesn't it? How do you get it right? The real secret of success in electronic commerce today revolves around customers. A successful strategy involves building and sustaining business relationships with customers electronically.

Reaping the Benefits from
Electronic Commerce

To whet your appetite, here are a few concrete examples you'll be reading about shortly:

* Dell's on-line customers buy $6 million worth of products each day. These products provide a 30 percent higher profit margin than those purchased by its non-self-service customers.

* The Wall Street Journal has targeted a new market segment and has retained 85 percent of those new customers while growing its original customer base.

* Cisco Systems has saved over $550 million per year in customer service for the last three years and now does 62 percent of its $5-billion-per-year business over the Internet.

* National Semiconductor provides extremely targeted current information to one third of its potential global market without spending a dime on direct mail or advertising, since over 500,000 design engineers come back to its Web site every month.

* American Airlines reaches 1.7 million interested prospects each week through electronic mail, again without spending any advertising or telemarketing dollars.

* Wells Fargo has halved its cost per transaction, enjoys higher average balances per customer, and has reduced customer defections by 50 percent for on-line customers.

* The National Science Foundation automatically disburses $2 billion per year in grant monies electronically, reducing mountains of paperwork.

* Tripod built a vibrant, on-line community of more than 1 million members that was so valuable to advertisers that the company was purchased in early 1998 for $58 million--$1 million per employee!

    Sounds good? It should. How can your company begin to reap some of these benefits? Here's the winning strategy I've gleaned from more than forty companies that have already implemented successful electronic commerce strategies. It's a five-step process. And, in the next five chapters, I'll explain each of the steps in more detail. They are:

1. Make it easy for customers to do business with you.

2. Focus on the end customer for your products and services.

3. Redesign your customer-facing business processes from the end customer's point of view.

4. Wire your company for profit: design a comprehensive, evolving electronic business architecture.

5. Foster customer loyalty--the key to profitability in electronic commerce.

Step 1:

Make It Easy for Customers
to Do Business with You

I canceled my subscription to The New York Times this year. It's not that I don't enjoy reading the paper; I do! And my husband is addicted to the crossword puzzle in the Sunday magazine section! But I got tired of hassling with the company over my subscription. The Times tried to make it easier for customers to do business with it, but it didn't succeed. For example, it only used to take calls between 9 A.M. and 5 P.M. Eastern Standard Time, which was a real drag. I don't deal with things like newspaper subscriptions during my working day! Finally, last year, it launched a new twenty-four-hour automated system for handling subscription starts and stops. I was delighted! I had become accustomed to the convenience of using a telephone-based system to suspend my Boston Globe delivery every time I went out of town. I was expecting, since The New York Times had acquired The Boston Globe, that I could use the same convenient system. Well, it acted the same. I could call the toll-free number, enter my phone number or my account number (whoever has the account number handy?), and punch in the date I wanted to suspend delivery and the date I wanted it to resume. So far so good. Just like the Globe.

    What went wrong? Everything! Obviously the systems behind the automated phone service weren't well integrated. I happened to return to my home in Boston unexpectedly about two weeks after I had suspended delivery. What did I find? Two weeks' worth of New York Times piled up outside my door! Not only were they a soggy mess, but their presence provided an obvious message to would-be burglars! I called to complain. This time I talked to a person (after calling within the required nine-to-five time window). She looked up my account, said that they had no record of the delivery suspension, but that she would take care of it. I decided I wouldn't entrust my transactions to the Times' automated phone system again!

    But that wasn't the end. Soon I began receiving bills for summer delivery of The New York Times to my home in Boston. First, I called a neighbor to check to be sure the papers weren't still being delivered. Then, after receiving reassurance on that score, I called the Times to complain again. This time I was told that their system clearly showed my delivery as suspended and that I should just ignore the bill. But the bills kept coming! And soon the collection notices began to arrive. I kept calling the Times and receiving the same answer: "Your delivery is suspended; we don't show you owing us any money; just ignore the bills." Well, this is pretty hard to do when the bill collector's notices keep arriving in the mail and making you feel like a deadbeat. So what did I do? I don't have the time or energy for this kind of annoyance. I paid the bill for the amount they claimed I owed (the two weeks of unwanted delivery of soggy newspapers that never got adjusted correctly out of their system), plus another period of delivery that mysteriously started on July 7 and ended on August 1 (which I had never asked for and which didn't actually occur!). Then I canceled my subscription. From now on, when I want the Times, I go to the store and buy one.

    We've all had experiences like this one, where computer systems get in the way of our ability to do a simple business transaction and ruin our relationship with a company we used to enjoy doing business with. As technology becomes more and more ubiquitous, we need to ensure that it doesn't act as a barrier between our companies and the customers we're trying to serve and build relationships with.

Harness Technology to Streamline
Customer Interactions

Now that the Internet is upon us and the World Wide Web has captivated the hearts and minds of marketeers around the world, it's high time to reflect on what this fundamental shift in the business landscape means for your organization. Global networks are not new, but they're now pervasive. Electronic commerce is not new, but it's now become mandatory for organizations of every size and type to conduct business electronically. Integrated voice response systems and call centers aren't new, but they're now playing a much more fundamental role in the electronic delivery of service to customers twenty-four hours a day. Handheld electronic gadgets aren't new, but they're becoming more and more powerful and pervasive. You can continue to let your business use these technologies in a piecemeal fashion. Or you can think more strategically and reap the benefits that all the players profiled in these pages now enjoy.

    So why not take a comprehensive look at how you can focus all of your information technology investments behind a single, winning strategy: make it easy for your customers to do business with you! This simple phrase packs an incredible amount of power. With this mantra, you can cut through organizational inertia, bureaucratic bungling, departmental fiefdoms, and line-of-business barriers. With this focus, you can rationalize your information technology investments and avoid duplication of effort. With this objective, you can marshal your employees, your suppliers, and your distribution partners into a seamless virtual organization with a shared vision and purpose: making it easy for your customers!

    Most companies have been investing heavily in the use of information technology since the 1950s. Both the pace and the size of those investments continue to increase and show no sign of abating. However, in the past companies have been able to invest in a scattershot way: they've used technology to improve manufacturing, streamline accounting, coordinate and communicate with employees and partners, and improve product development and marketing. Today, you no longer have a choice in how you spend your Information Technology (IT) dollar. Instead of investing in new human resources, manufacturing, or financial systems, you need to be investing at least 50 percent of your IT dollars in making it easy for customers to do business with you.

    I had lunch with a friend the other day. He's the CIO of one of the largest states in America. After we talked about all the initiatives he had under way--data center consolidation, Year 2000 conversion, major new applications under development--I asked, "If you could focus on anything you wanted to, how would you be spending your time?" He answered right away. "I'd spend fifty percent of my time doing what it takes to make it easier for companies to do business with this state." He absolutely understands the urgency of his situation. If businesses find it difficult to do business in his state, they'll set up shop elsewhere.

    How will you know where to start? First, try doing business with your own company. I have. It's embarrassing. As a customer, you experience all the frustrations that your customers experience. And you'll notice that these frustrations aren't confined to customer service. A lot of them have to do with simple things. How do I find the right phone number to call? How do I find out what products and services you have? How do I get the right prices for my situation? How do I negotiate the terms and conditions? How do I place an order? What happens when I do? How do I know you can give me what I want when I want it? How much do your people know about me and my dealings with your organization? How do I question a bill? How do I know if payment has been received? How do I tell you what new products and features I'd like you to offer? How do I tell you how you could make my life easier? What happens when I do? The list goes on and on. And the back-end systems and business processes that are affected reach across your entire company. We're talking about streamlining product information, ordering, transactions, fulfillment, delivery, inventory management, accounting, taxation, and so on. And we're talking about doing this across departments, product lines, and distribution channels, all with a single focus: making it easy for the end customer to do business with you.

    Start with the Basics

As you embark on your electronic business voyage, don't ignore the customer fundamentals:

* Don't waste our time!
* Remember who we are!
* Make it easy for us to order and procure service!
* Make sure your service delights us!
* Customize your products and service for me!

    Don't Waste Our Time!

What's the biggest time waster in your life today? If you're like me, it's probably dealing with organizations that don't value your time or your patronage.

    I live in Massachusetts. I used to dread having to renew my car registration each year. I had to drive to the Registry of Motor Vehicles, find a metered parking place, wait in several lines, be subjected to near abuse by rude clerks, and, if lucky, leave with my renewed registration and the new stickers for my license plates before the time on my parking meter had run out.

    Today, renewing my registration is a piece of cake. I receive the renewal notice in the mail, get onto the Internet, fill in a form, supply my credit card number, and get a $5 discount to boot! Within a day I receive an e-mail with a confirmation number. In about a week, the new registration form arrives with the stickers for my license plates.

    Here's another example. I often enjoy going out to the movies on Saturday night. But many of the theaters that play the movies I want to see are quite small, and Saturday is a popular time. There's nothing I hate more than waiting in line for a movie and then discovering that it's sold out at the last minute, when it's too late to make other plans. So I call 333-FILM. I can select the movie, find the nearest theater, and book my tickets, all in a couple of minutes. That way when I arrive at the theater, my tickets are waiting for me. The surcharge is more than balanced by my time savings. The movie theaters that offer this feature are the ones that get my patronage.

    What are some other examples of time-saving features I'd like to be able to use that today's technologies enable? When I know I'm going on a business trip, I'd like to just enter the dates and locations in my electronic calendar and have the calendar automatically send the request to my travel reservation system. I'd expect an electronic agent to look up my personal profile and the business rules that I've entered (for example, "If it's a cross-country flight, and I have the frequent-flyer miles available, then upgrade the class of service"), and within minutes, I should get back an e-mail with some proposed itinerary choices and seating assignments. I could check off the flights I want, ask or answer questions, and e-mail back my selection. If it's a complicated trip, I'd want to press a button and get my agent on the phone. He or she would be looking at the same itinerary and choices I have in front of me, we'd discuss the other options, I'd decide, and I'd be off the phone. My flights would be booked and the reservation details and confirmations entered into my company's electronic calendar, which I could then synchronize with my handheld PalmPilot.

    If my plans change, I'd like to be able to reschedule the flights, hotels, cars, and so on, by simply moving the trip on my electronic calendar and having all the reservations rebooked. If I need to cancel it, I should be able to do so by deleting the entry from my calendar and confirming that that is what I want to do. Of course, I expect all the travel expenses to flow automatically into my company's expense-reporting form, so that I can add incidentals and submit the expenses for reimbursement. What I've just described exists today, or is very close.

    Remember Who We Are

Like you, I get lots of solicitations, both in the mail and by phone. Of course, the phone calls are the most annoying. But the ones that really make me mad are the ones from the companies I'm already doing business with. Fortune magazine called me the other day asking if I wanted to subscribe. When I said I'd been a subscriber for more than thirteen years, the operator said, "Thank you, we're sorry to bother you." American Express routinely sends me offers to join its exalted ranks. I've been a loyal American Express "member" for more than twenty years. I fail to understand why companies that have otherwise excellent customer databases do not manage to merge these databases with the outside lists they purchase when they're soliciting new business.

    My local phone company has no idea who I am. Yet I have four phone lines coming into my home in Boston and four lines coming into my home in Boothbay, Maine, as well as a cellular account. I called once to ask if the phone company could consolidate my phone bills for me. The customer service rep said no. It frustrates me that my phone company doesn't have a complete picture of all the dealings I have with it. I'm sure I'm missing opportunities to save money, to avail myself of other services, and just to be treated as the special customer that I am, not to mention the annoyance of receiving nine separate phone bills each month.

    It's not just affluent customers who deserve to be remembered and recognized, either. In a number of states and countries, social services recipients now have their benefits disbursed to them electronically. They use a standard bank ATM card to access these funds. But there are many other services they may be eligible for. They should be able to use the same bank card or smart card to securely access information about all the programs for which they may be eligible, to apply for those programs (job training, child care, medical benefits, housing assistance, transportation services, employment opportunities, and so on), to check on the status of those applications and programs, and to update their own family profile information. The fact that these services are being offered by different agencies and service providers shouldn't require the person to run around to all those different offices or to have to make a myriad of phone calls, each time repeating much of the same information about his or her current situation. Everything he or she needs should be right at his or her fingertips, consolidated.

    My father is in his eighties. He's concerned about the fact that his medical records are kept in a file folder at home and that each different specialist or doctor he visits has only a partial picture of the whole. He'd like to have his entire medical history stored on a smart card that could be accessed by any physician he consults. Any recommendations, prescriptions, or procedures a physician authorizes would be entered as updates to my father's personal electronic medical records. This electronically stored medical information could then be accessed by his insurance providers so they'd be able not only to pay the bills but also to assess the efficacy of the treatments.

    What about privacy issues? Who has access to this rich individual or family profile information? It's very clear to me (and to my father) that the customer always "owns" his or her profile. He or she controls it, keeps it up to date, and decides who can access that information. Most of us will trade convenience, accuracy, and personalized service for anonymity as long as we know that none of our personal profile information will be accessible to anyone we haven't authorized to see it. Will there be occasional mishaps and privacy scares? You bet! That's part of the shakedown period for learning to live with these new technologies. But I for one am willing to take the risk. I believe that the security technologies available today are strong enough to protect my personal information.

    Make It Easy for Us to Order and Procure Service

In 1997, I signed up for AT&T's 500 number "follow me" service so that my customers, friends, and family wouldn't have to keep track of my whereabouts and my various phone numbers (home, office, vacation, cell phone, and so on).

    The first problem occurred when I signed up using AT&T's friendly Web site. I supplied all the information it requested. I even got to select my own 500 phone number. And I was told my order had been placed. But nothing happened.

    After waiting two months for the promised welcome packet to arrive in the mail, I finally looked up the customer service number and called to find out what had happened. They had no record of the Web transaction. So I had to repeat the entire transaction over the phone.

    When they finally sent me my "welcome kit," my "personal" 500 number was in my husband's name, not mine! I was really annoyed that I had to call back and set the record straight. (I knew why they were having the problem. The bill for my home phone service is in my husband's name.) It took about fifteen minutes of consultation before the customer service representative was able to ascertain that it would indeed be possible to issue me a personal 500 number in my own name, linked to that account.

    The rest of the relationship has been just as rocky. The voice mail feature didn't work. I didn't understand how to set up PIN numbers. Each of these transactions required several frustrated phone calls on my part. Am I using this service today? No.

    By contrast, I recently ordered three laptop computers from Dell. I knew which model I wanted. I had the specs I needed. I was able to select the configurations and options I wanted for each one. And within a few minutes I had filled in the order form on the Web. The only stumbling block was when I came to the payment field. I wasn't going to pay by credit card. My company was going to send a check. There was no explanation of how to handle that situation. So I called the number on the screen, and my sales rep explained what I needed to enter in the field: "Prepaid." He said he could complete the order for me, but I'd get a discount if I continued the process over the Web. So I turned back to the screen, entered "Prepaid," and hit the "Order" button.

    Within half an hour, I received an e-mail confirming my order. Then, an hour later, the same phone rep called with the address I needed to send the check to and the confirmation order number. He told me that it would take ten days from the time I sent the check until I received my laptops: five days for the check to arrive and be processed, five days for Dell to manufacture and ship my computers. Five days later, the computers arrived at my office--five days sooner than I had expected them. I was delighted!

    As a customer, I expect to be able to get all the information I need to place an order from your Web site. I want to be able to answer my own questions, get accurate pricing information, know whether the product I want is in stock and exactly how long it will take to get delivered. I want to be able to find out whether it will work with other products I already have. If I or my company already has an account with you, I expect you to have all my payment information on file and to ask me simply to verify it. If I am dealing with you for the first time, I want to be able to complete the entire transaction from start to finish without picking up a phone, if I choose to do so. If I do want to talk with someone, I expect them to have all my information in front of them, including everything I've just filled in at the Web site and what products I was looking at.

    Yet many organizations seem to have a hard time understanding and acting on this fairly simple set of customer requirements. They're taken by surprise when customers who used to require a lot of hand-holding now want to make their own purchases and transactions. Charles Schwab was the first investment firm to recognize and capitalize on this trend. It took two years for Merrill Lynch, PaineWebber, and Prudential Securities to begin to offer on-line trading services to their customers. These full-service firms hadn't wanted to compete with the discount brokers. Yet their customers demanded the ability to access their own information and to do their own trades. Today's customers want to be in control; they'll ask for help when they need it.

    Make Sure Your Service Delights Us

All of us have war stories about terrible experiences with merchants, car dealerships, government bureaucracies, or travel providers. I won't bore you with mine.

    By contrast, my experiences with the Hertz #1 Club Gold have amazed and delighted me. The van takes me right to my car. I see my name in gold lights (and who doesn't enjoy seeing one's own name in lights?) above the car. The trunk is open, the keys are in the car. The map is already there. All I have to do is drive out the gate and let the guard check my driver's license. Even when I arrived eighteen hours late to pick up my car (because of flight snafus), my car was there waiting for me!

    Ordering from Amazon.com is also a pleasant, reassuring experience. I can browse by topic or author, read reviews, pick the books I want, and order them using the credit card number Amazon already has on file for me. I can double-check my past orders to make sure I didn't already send that book to Uncle Harry. And, when I place my order, the entire process is extremely reassuring. Within a few minutes I receive an e-mail further acknowledging my order. And over the next few days, I receive e-mails each time the different books I ordered are shipped out.

    When I unpacked a box of books from Amazon.com last summer, I found a handwritten Post-it note on one of them. It said, "We know you ordered the softcover version of this book, but it's out of stock, so we sent you the hardcover copy for the same price." That little handwritten note cemented my love affair with Amazon.com.

    Good service is proactive service. It's not sitting passively by assuming everything is fine. United Parcel Service discovered this when Federal Express began tracking all the packages it shipped by air and using that status information as a selling point with customers. At the time, UPS's management was not impressed. After all, the company had a 99 percent delivery success rate. They worried only about exceptions--the packages they weren't able to deliver. Customers knew the service was reliable. But once FedEx threw down the gauntlet of tracking every air shipment and making that information available to customers, the entire industry changed. Now it became a requirement for shippers and recipients to know exactly where their packages were at any moment in time and to be able to act on that information (reroute packages, speed up delivery, and so forth). UPS has caught up and actually surpassed Federal Express in its use of package-tracking technology. In 1997, UPS shipped just over 3 billion packages. Every package was tracked at least four times in its journey. When the package was received and signed for, the digital signature was stored electronically along with the date and time. And, as with Federal Express, you can look up the status of your packages on UPS's Web site. Both companies now work aggressively with their customers to encourage them to provide shipping notification to their end customers ("Your order was shipped on 12/23/97; it will be received before 5 pm on 12/24/97"). Reliable service isn't good enough. Today's customers want to know the status of what you're doing for them.

    Customize Your Products and Service for Me

Most of the products I buy for my family or my business aren't fully customizable. When I ordered my laptops from Dell Computer, for example, I wanted to order one machine without a CD-ROM drive, since I already had one I could use. So I sent off an e-mail to Dell asking if this model could be configured without a CD-ROM drive. "No, all of our laptop configurations include the CD-ROM drive. Dell Online." This was the terse reply I received. So much for custom-configured computers! (On the other hand, I understand the logic behind that decision. Most products are available only in certain preconfigured packages. This helps keep costs down.)

    I even understood why the return e-mail they sent back was so impersonal in nature. Other Web businesspeople have complained to me about the escalating costs of customer service when customers get chummy with the customer service reps who have answered their e-mail inquiries. The customer often replied thanking the rep and asking questions about the local weather or the local sports team. This would spawn a volley of nonessential e-mails that the customer service rep would have a hard time cutting off.

    Nevertheless, I would have preferred a more personal response from Dell rather than one that seemed to have been sent by some electronic agent, which responds to all requests with the identical impersonal message. And I would like to have been given the choice to receive the standard model in five days or a custom-configured model in thirty days, perhaps even at extra cost.

    Today I have a personalized newspaper that's continuously updated twenty-four hours a day (from The Wall Street Journal Interactive) and I receive lots of alerts and notices in my e-mail letting me know about new products or news items that I've asked to be notified about. For example, Hewlett-Packard's SmartFriend sends me a note anytime something in which I've expressed an interest is posted on HP's Web site. I get e-mail from Amazon.com every time a new book in my field is listed. And I get a mailing about discount airfares from American Airlines each week. Do I feel overwhelmed? No--these are all alerts I've asked for. I know what they are, and I can turn them off at any time. I like the personal service these companies are offering. It helps cement my relationship with them.

Can You Afford Not to Make It Easy for
Your Customers?

So why am I telling you all these mundane details about my dealings with different organizations? I want you to think about your life. Think about the organizations and people you deal with in your different roles as a consumer, parent, taxpayer, businessperson, purchaser, or influencer of buying decisions. When do you enjoy these interactions? When do you find them a hassle?

    If you're like me, you enjoy dealing with organizations that respect your time, treat you as a valued customer, cater to your individual needs, and reassure you at the same time they're fulfilling their promises. When they can't fulfill, they make it up to you with panache. You continue to feel good about your relationship with them.

    Now turn the tables around. How well does your organization do? How much do you know about the actual experiences of the end consumers of your products or services? You may be assuming that customers are satisfied and being well taken care of by your employees or the people who actually sell and distribute your products. You may feel that the customer satisfaction surveys you send out are giving you a good handle on customers' experiences. You may have so many customers that you feel it's impossible ever to get to know their individual needs and tastes. You're probably wrong on all counts. Today's e-business technologies make it cost-effective and easy for customers to interact with you directly, tell you more about themselves, and get better service. However, before you decide to invest in all the behind-the-scenes work you'll need to do to provide this seamless service to your customers, let's take a look at who your customers are.

What People are Saying About This

James Barksdale
In the Net economy, business issues and technology issues go hand in hand. Patricia Seybold's insightful book shows how companies can use technology to streamline business processes and keep customers coming back for more.
Bill Joy
This is the book for creating a serious Web strategy! I'm going to give copies to all my friends who are extending their business to the Internet.

Meet the Author

Patricia B. Seybold is the founder and CEO of the Boston-based Patricia Seybold Group, a worldwide business and technology consulting firm. Its clients include Ameritech, Arthur Andersen, Clorox, Hewlett Packard, the International Monetary Fund, Microsoft, State Street Bank, and Warburg Pincus.

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