eRetail Association Newsletter -
November 1st 2000
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Welcome to the November e-newsletter from the International eRetail Association & eRetailNews.In this month's newsletter, we examine the subject of Customer Relationship Management, which ties in with this month's member's report (2000-10 CRM and Customer Centric Architecture: How to win customers and retain them). I'll finish up with a summary of some of the changes happening at eRetailNews. As always, I hope you find the contents both stimulating and enjoyable reading. ERETAILNEWS 2000-10 REPORTThe 2000-10 report looks at what is behind the recent attention to Customer Relations Management (CRM) and discusses the need for a Customer Centric Architecture. (http://www.eretailnews.com/secure/reports.asp#2000-10) 2000-10: Customer Centric Architecture (CCA):
---------------------------------------------------------------- CRM, CCA & ERETAIL BUSINESS OBJECTIVES ----------------------------------------------------------------In the 2000-10 eRetailNews Report on Customer Relationship Management, we describe a business model built around a Customer Centric Architecture (CCA). This model advocates the importance within eRetail of an information architecture that is customer focused and not product focused. Many Customer Relationship Management (CRM) applications on the market are designed to support components of the Customer Centric Architecture. In supporting the CCA business cycle, CRM components focus on one or more of the key components in the cycle:
The process of attracting, nurturing and retaining customers is remarkably similar to the natural cycle we go through in our personal relationships; attracting a partner, courting/wedding, and staying together. Attracting customers focuses on bringing new customers into the business. Nurturing requires us to develop our relationship with the customer so that they continue to do business with us and increase their business over time. Retaining customers is vital since the cost of acquiring a new customer is roughly ten times the cost of retaining an existing one. Attracting Customers To attract customers eRetailers must satisfy a particular need or collection of needs better than alternative providers. "Better" will depend upon each customer's values, expectations and personal experience. Typically, customers will purchase your product or service because it clearly demonstrates an ability to satisfy their needs in one or more of the following ways:
Note: customer service affects many of the attributes of product and service delivery listed above. For example, providing outstanding customer service may make it easier and faster for a customer to satisfy their needs by using your company. In contrast, some customers are willing to accept sub-standard service in exchange for low price, but if they can get the same price from a competitor offering better service, all other things being equal, the competitor will attract the customer. Attracting customers involves communicating your message to potential customers in such a way that they perceive your company can satisfy one or more of their needs better than their existing supplier. This includes making potential customers aware of needs they previously had not recognized. Finally, if they have no alternative, a customer may buy from you regardless of how poor your service is. (Customer service is typically poor in monopolies because there is no competitive reason to invest in it, other than to deter competitors from entering the market). One of the reasons why the Internet has spurred so much attention on customer service is because, for many companies, service is their biggest differentiator in a highly competitive marketplace. Nurturing Customers Nurturing is the process of helping customers to get more value from their relationship with you while remaining focused on their needs. Read the rest of this report online: Nurturing Customers Down-selling can be effective Retaining Customers http://www.eretailnews.com/features/0011crm.htm -------------------------------------------------------------------- VALUE CUSTOMER'S TIME --------------------------------------------------------------------In today's fast moving economy and fast paced lifestyle, time is one of the most precious things we have. We are all learning to cherish our time increasingly with each passing day. If saving time makes customers happy, then wasting their time is guaranteed to make them unhappy. Wasting a customer's time is bad customer service, yet we see examples of how companies waste their customers' time every day: When calling a customer care line, a caller is asked to call another number. This is a common scenario when several companies are merged under one brand name. The customer does not care that the company is running two different systems. That is the company's problem and not the customers. The solution is to empower all customer contact staff to take ownership of the problem on behalf of the customer and act decisively to seek quick resolution to the satisfaction of the customer. Read more examples of how companies fail to value their customer's time online at http://www.eretailnews.com/features/0011valuecusttime.htm. I conclude this short piece with a suggestion for becoming more focused on the value of customer time. -------------------------------------------------------------------- ONLINE OPTIONS FOR THE SMALL RETAILER --------------------------------------------------------------------Reading all the information on the eRetailNews website and other coverage of the online retail world, it is easy for small retailers to become disheartened. It seems the cost of getting a retail store online these days is running into the millions of dollars! Well, the good news is there are ways of getting an online store going without breaking the bank (or robbing one!). In this short report, I'll give you a quick tour of online retailing on a shoestring budget. Before we start, I want to emphasize that a high quality, high volume retailing site can only developed with the use of advanced technology and some serious engineering and design talent (hence the big bucks!). So why should a small retailer consider developing an online store on a shoestring budget? Just because a fancy brick and mortar store can cost millions of dollars to open, it doesn't mean there isn't room for small entrepreneurs to open up their own stores on a more restricted budget. It follows that, even though the biggest online stores do cost millions to build and maintain, smaller online stores can be built for far less money and be a highly useful and lucrative addition to any small retail business. While many of our clients and readers are large online retailers, we also want to be help smaller retailers get online without driving them into bankruptcy! So what are the options? http://www.eretailnews.com/features/0010smallretailer.htm -------------------------------------------------------------------- TOP TEN GOLDEN RULES OF ENTERPRISE TECHNOLOGY SELECTION --------------------------------------------------------------------
You can review comments on each of these rules online at http://www.eretailnews.com/features/0011rules.htm -------------------------------------------------------------------- THE MICRO COMMUNITY --------------------------------------------------------------------The Micro Community; why a focus on profitable customers might be shortsighted. There is already a great deal written about the importance of the customer in today's online world. But what of the customer's micro community? Every individual has his or her own micro community; a closely-knit circle of family, friends and key influencers. An eRetailer cannot overlook this aspect of a customer's relationship with the business. In the drive to identify and focus on those twenty percent of customers that generate eighty percent of profit for a business, we are in danger of ignoring how micro communities influence shopping behavior. For example, a customer that spends an insignificant amount in your store may be highly influential in the lives and shopping habits of half a dozen other shoppers, some of who could be your most profitable customers. In another example, you might persuade a competitor's customer to buy from you occasionally, but you are not aware of the full potential of this customer. You incorrectly assume this customer is less valuable to you than others in your portfolio, making this a self-fulfilling prophecy by providing sub-optimum customer service. The aim of focused service levels is to increase the retention rate of the most valuable customers. This works best provided it is not done at the expense of your other customers. Unless you are willing to send some of your customers directly to your competitors, you cannot afford to give any customer a level of service that is below their expectations or that does not satisfy their needs. Before making judgments about a customer's worth to the business, it is important to try to get a picture of their micro community. To do this requires the ability to cross-match customers based upon telephone numbers, zip codes, street addresses, names and other personal information, taking into account variations in spelling and keyboard errors. By pooling the information from an entire micro-community, it may be possible to get a more complete picture of a shopper's net worth to the company, including some of the other people influenced by this shopper. -------------------------------------------------------------------- TECHNOLOGY ENABLED RE-ENGINEERING (TERE) --------------------------------------------------------------------Re-engineering a company's business processes is always a complex and difficult task. Many consultants advocate the need to re-engineer business processes before selecting and implementing appropriate technology to support these new processes. We look at an alternative approach at http://www.eretailnews.com/research/0011tere.htm -------------------------------------------------------------------- ERETAILNEWS CHANGES --------------------------------------------------------------------We have now formalized much of our research activities under eRetail Research (www.eretailresearch.com). As a result, we are about to announce to new services:
A confidential research service producing a detailed report on specific Internet retailers on behalf of clients. http://www.eretailscorecard.com
A website design service specifically for small independent retailers. http://www.eretailplus.com
We have now implemented our own affiliate marketing program in conjunction with Commission Junction. This allows affiliated companies to generate additional revenue by referring new members from their own websites. http://www.eretailnews.com/affiliate/overview.htm -------------------------------------------------------------- CONFERENCE DISCOUNTS --------------------------------------------------------------Check out the latest conferences with discounts for eRetail Association members: http://www.eretailassociation.org/conference
Coming Soon: Feb. 26th - Mar 1st, San Francisco, eTail2001 Save 25% (details not yet online)
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Nigel Fenwick ------------------------COPYRIGHT NOTICE----------------------Copyright: 2000 eRetailNews, Inc. This newsletter may not be reproduced completely or in part without permission from eRetailNews. The entire unedited newsletter may be forwarded via email to personal contacts only; NOTE use of this newsletter as part of a broadcast mail service or SPAM is expressly forbidden. To publish excerpts on a website, please use this HTML version and include a link back to the full text at <http://www.eretailnews.com/newsletters/001101newsletter.htm> "The WOW Factor!", "eRetail Association", "eRetailNews", and "International eRetail Association" are servicemarks or trademarks of eRetailNews, Inc or BizBrick Corporation.--------------------------- TO REMOVE ------------------------ To remove your name from the recipient list for this newsletter use this link.
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