as receivers of marketing communications and has bestowed upon them greater control over the information search and acquisition process. This, in turn, has
made customers active participants in the marketing process. In fact, the Internet is affording customers such a degree of empowerment that organizations that wish to conduct business online must redefine the ways in which they approach customers. The notion of “friction-free markets” is in the here and now. The initial impacts of this friction-free marketplace are increased customer power and choice and reduced prices on goods and services.
Companies wishing to tap into this new market must redefine the ways in which they approach the customer and communicate their value propositions online.
Web-savvy companies have realized that to effectively be a player in the online
marketplace, they must consider the following courses of action when devising their online marketing strategies:
- ensuring that Web strategies are linked back to the overall business strategy and goals;
- listening to customers’ demands and preferences for online capabilities that provide value-added products/services via the Internet;
- establishing effective feedback and self-service systems to support customers the way they prefer to be serviced;
- making certain that adequate support for and ownership of Internet initiatives are clearly defined and understood throughout the organization;
- maintaining the technology infrastructure that is capable of providing sufficient performance and scalability requirements while addressing business needs; and
- fundamentally understanding the unique characteristics, challenges, and capabilities that the Internet introduces into an organization’s core business strategy— particularly the impact it can have on a company’s ability to transform itself from a marketing- or sales-driven organization into a customer-focused relationship management organization.
Drawing input from Nuforia and secondary research literature, the study
team identified three key areas for research. These areas guided the design of the data collection instruments and were the base from which key findings have been developed. A brief description of the three areas is provided below.
Supporting the Customer-Focused Marketing Model
- Defining a model for the contemporary e-business consumer (prosumer)
- Ensuring success via linkages to all customer-focused business functions
- Maximizing use of online resources by eliminating security and confidentiality concerns
- Substantiating effectiveness of online initiatives for self-service, marketing, and sales efforts
- Measuring the effectiveness of online initiatives to support the customer-focused marketing model and justifying costs of maintaining/using that technology
Establishing Customer-Focused E-Business Capabilities
- Linking the e-business marketing model across the marketing and sales functions to leverage Web customer information and support ongoing use of customer data
- Providing personalized information access to internal and external customers
(using both “push” and “pull” technologies)
- Enabling one-to-one marketing capabilities
- Promoting profile-driven cross-selling focused on target audiences
- Establishing customer self-service systems that build loyalty and minimize
- Recognizing and adapting adequate security provisions to support e-business
Providing Low-Cost-of-Ownership Technology Solutions
- Understanding total cost of ownership (TCO) as a key source of competitive
- Enabling interoperability between old and new technologies to deliver costeffective solutions valued by customers
- Understanding how functionality and performance options impact online technology investment costs
REPORT STRUCTURE AND KEY FINDINGS OVERVIEW
The purpose of this study was to uncover how successful online companies have managed to leverage the core strengths the Internet yields for business and how they have coordinated the internal processes necessary to support successful online marketing and sales programs. The data collected via detailed questionnaire responses as well as through on-site and telephone interviews revealed a series of recurring themes in how organizations are managing their online marketing and sales processes. These themes run parallel to the study’s findings, which have been arranged according to the three
sections of the study scope: supporting the customer-focused marketing model, establishing customer-focused e-business capabilities, and providing low-cost-ofownership technology solutions. The first theme that surfaced was that organizations must have a clear understanding of the role the Internet will play in their business operations. This means identifying a plan for going to market online and precisely envisioning the strategic implications that the Internet may have on the company’s marketing model— and oftentimes business model. Other themes within the first section relate to how best-practice organizations are doing the following:
- leveraging the Internet to gather real-time customer data,
- acting on that information to provide customers the services/products they find most valuable, and
- evangelizing the capabilities of the Internet to internal and external customers.
The second section of the report addresses the e-business capabilities that successful organizations must have in place to jump to the next level of conducting business online—that is, moving from a simple transaction-oriented online company to a relationship management organization. Themes covered in this section impart that companies that are successful at moving into the area of customer relationship management are capable of establishing strong online relationships, building trust, satisfying individual customer needs, and building customer loyalty. Issues that bestpractice partners have been especially successful at addressing include:
- working hard to create a sense of community online,
- realizing customer acquisition costs savings through personalization and
- focusing on strong online branding,
- maintaining trustworthy privacy practices, and
- leveraging relationship marketing capabilities via the Internet to create strong bonds with customers.
The third section of the report addresses the technology implications the Internet brings to the table when businesses are intent on providing the most effective, dynamic, and reliable online experience for customers. Core technology aspects of the Internet such as Web platforms, architectures, software applications, bandwidth, and access speeds are constantly undergoing change. Successful online companies have come to “expect the unexpected” when it comes to preparing for these changes. Nevertheless, the findings reveal that best-practice organizations share common considerations when evaluating the best approach to matching Web technologies and design with their business strategies. Best-practice approaches for effectively using Web technologies
to support online marketing and sales goals include the following:
- providing adequate scalability and reliability into site design to allow for capacity planning and failover;
- taking a standards-based approach to open architecture development;
- identifying and leveraging “buy” versus “build” strategies for application development;
- establishing long-term, strategic vendor relationships;
- ensuring a well-defined middleware strategy; and
- thoughtfully considering future technology strategies.
APQC’s consortium benchmarking methodology was developed in 1993 and serves as one of the premier methods for successful benchmarking in the world. It is a powerful tool for identifying best and innovative practices and for facilitating the actual transfer of these practices.
The data collection tools used to gather information include:
- Preliminary Questionnaire: quantitative questions, designed to collect objective and quantitative data (completed by partners only);
- Detailed Questionnaire: quantitative questions, designed to collect objective and quantitative data (completed by sponsors and partners); and
- Site Visit Discussion Guide: qualitative questions, designed to collect qualitative information about targeted aspects of an organization’s online marketing and sales processes (completed by site visit/telephone interview hosts).
Five of the seven partners hosted half-day site visits, allowing sponsors to meet with key personnel and share insights into their Internet marketing and sales strategies and practices. A group of consortium members attended each site visit to participate in the discussions and talk face to face with the partner companies’ online practitioners. Both partner companies and sponsors responded to the Detailed Questionnaire, and all partner organizations completed a preliminary (screening) survey. Only five partner companies were asked to respond to the Site Visit Discussion Guide in its entirety. One additional partner company agreed to participate in a telephone interview to
provide insight into innovative practices specific to the organization and to address targeted questions taken from the Site Visit Discussion Guide.
Recommendations from Nuforia as well as primary and secondary research conducted were used to help select innovative companies for the study.
Consortium members, the staff, and the subject matter experts also identified
potential participants based on their firsthand experiences and research.
A listing of the sponsor organizations in this study, as well as the best-practice (“partner”) organizations that were benchmarked for their innovation and advancement in using the Internet for sales and marketing.
- Executive Summary
A bird’s-eye view of the study, presenting the key findings discovered and the methodology used throughout the course of the study. The findings are explored in detail in following sections.
- Key Findings
An in-depth look at the 14 key findings of this study. The findings are supported by quantitative data and qualitative examples of practices employed by the partner organizations.
- Partner Organization Profiles
Background information on the partner organizations, as well as highlights of their use of the Internet for sales and marketing.