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Relationship Marketing

Written by: Andy Marken

Article Overview: …When the Dust Settles, Will You Be Standing?

Relationship Marketing

If you believe the noise, everyone who abandoned brick and mortar stores for the marvelous click and order dotcoms have returned to their roots trying to straddle both sides. To help firms ride the media and IPO frenzy, public relations people did such an excellent job of hyping the speed, ease and beauty of on-line shopping we oversold how good it was going to be.

We found one New York Times articles regarding the holiday online sales boon and customer complaints of particular interest. The most telling quote in the article came from a lawyer regarding his experience. “Much as I enjoyed avoiding surly clerks and pushy shoppers, I felt unexpectedly empty after purchasing gifts…Ordering online was faster, but it felt like work.”

Billion Dollar Change

Thanks in no small part to the government’s ability to misplace a few billion research dollars in long-term technology, ARPA (Advanced Research Projects Agency) funded the development of the replacement for the telegraph and telephone…the Internet. While some view the Internet as an evolution rather than a revolution, the fact is that it is rapidly – and disruptively – changing the way individuals and organizations communicate.

Point and click outlets have painted a clearly rosy picture for the customer – business or consumer – than their brick and mortar or catalog brethren. E-tailers have overlooked or ignored the fact that items can be wrong, damaged, late or lost forever.

Technologists, economists and futurists estimate that 90+% of today’s dotcoms won’t exist in 2 years. Some industry analysts say that only one out of 50 such firms will survive their two-year anniversary. The fallout is inevitable because the rush for gold (VC gold) in Silicon Valley and in other silicon areas of the country was too irresistible to B school graduates and non-graduates alike. With venture capital firms throwing $11 billion at anyone calling themselves a business-to-consumer (B2C) dotcom, the fever was easy to understand.

Follow the Money

Only more sage people and organizations recognized that the consumer wasn’t where the money was going to be but rather it was the business-to-business (B2B) effort that would reap the long-term growth and long-term profits. While consumer sites spent themselves into oblivion prior to the holidays and at the Super Bowl, business sites which received only $3 billion in investments in 1999 watched sales go from zero a couple of years ago to more than $114 billion today.

By 2003 Deloit Consulting estimates B2B will be six times larger than the B2C market and that by the end of 2001 91 percent of U.S. businesses will do their purchases on the Internet.

The reasons for businesses to make the switch are easy to understand since they can measure the results on the bottomline. According to Boston Consulting, B2B will boost productivity 9 percent in the next five years and Goldman Sachs says B2B can slash processing cost more than 20 percent. GE turned in record earnings for shareholders in 1999 and reported that their B2B initiative had cut purchasing costs to $1 compared to $50-$200 per transaction.

B2C organizations can’t show the consumer that type of benefit, especially when he or she encounters big delivery and service/support problems.

We have been busy branding, positioning and promoting our virtual locations. We have been so busy telling the world how great our companies are and how we’re going to change the business and commerce we’ve forgotten the most important factor…the customer.

Companies have to think beyond the transaction and focus on the entire customer experience.

Somewhere along the line we lost sight of the fact that customers tell you who and what you are. Branding is the real-time amalgamation of customer value delivered & customer satisfaction achieved. In today’s Internet environment brand is invented & reinvented minute by minute.

Shifting Focus

Perhaps its time for consultants – including public relations – to help management shift their eyes from the very lucrative and tempting IPO market to the customer who makes the Internet and Web the global phenomenon it is today.

While consumer-oriented dotcoms lose money by the trainloads to prove their click-and-order enterprises are the wave of the future, corporate mangers and governmental agencies are struggling to determine how they can control, manage and make money in the new environment. Companies that believe one-to-one relationships can be computerized invest heavily in new hardware and software systems to automate the customer relations process. Local, state and national governments struggle to determine how they can tax the new economy to support themselves today and in the future.

Rather than working hard to pile up clippings by the pound, PR people would best serve their organizations by helping management focus on the area that counts most – enriched service. Certainly it sounds basic. But somewhere along the line we have sped right by the basics.

Check Your Experience

It’s time for you to get your hands dirty and find out exactly what type of experience the customer has with the organization. If you encounter a problem at any point in your interaction with the company and you’re familiar with the organization, multiply that problem by 1,000 – 10,000. Remember the customer will be less tolerant and a satisfactory transaction is only a click away.

Once you’ve done everything possible to attract customers to the website, part of your job will be to help make certain they come back again and again. Amazon.com lost more than $370 million in 1999 and they will probably lose $350 million this year. We admit we can’t follow the logic of a company that loses money is also considered to be wildly successful but it is easily to see that their customer satisfaction is quite high. According to the company’s reports over 70 percent of their sales late last year were from repeat customers. This makes it easier to attract new customers.

Whether your organization is brick and mortar or click and order, the challenges for public relations and company management will be the same. The customer is still the person who tells you what you are and how successful you are.

Over the next five years the glow of excitement will disappear from ecommerce and ebusinesses. Part, if not all, of the customer experience will be gained from the Internet and Web. How well you help produce a quality experience between the company and the customer will help determine if yours is one of the firms standing or was one that was assigned to a shallow grave.

Suddenly, customer relations takes on a whole new perspective for management and a new degree of urgency in helping the company succeed.

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