Directions to the E-Commerce Highway
Woods, Bob, Chief Executive (U.S.)
Stephen Sprinkle, Deloitte Consulting's Global Director for Strategy, Innovation and Eminence, explains how leveraging customer relationships can help you fund your e-business ventures.
With commerce, the whole world is your market, yet you also have the ability to deal with each customer as a "unit of one." How does a company confront this dichotomy?
The unit-of-one concept is a bit of a misnomer, because in each business you will only customize certain aspects of the client interaction. Perhaps you will recognize past customers and make product recommendations based on their previous purchases. With other aspects, you are going to stress consistency, rather than customization, for savings in time or cost. One of the best things for a CEO to decide is which should be which.
Can newcomers increase market reach without wasting too much time, effort and money grasping in the dark of cyberspace?
You can start by creating mechanisms that allow your customers to get what they want through self service, if they're so inclined. Number two, you immediately go to e-procurement and electronic exchanges for procuring as much material as possible. Basically, what will happen is that self service will save you a lot of sales and customer-service cost, and e-procurement will drive out about 15 % of your direct material cost. Between those two, you've got enough money to invest in the products, services and customer segments you want to go after.
How do you enhance existing customer relationships and attract the "right" new customers?
You run your computers 24 hours a day, seven days a week. …