Can The Internet Bring Back The Village
BY ERIK LOUNSBURY, [email protected] CENTER CRM SOLUTIONS
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In Part I of this article, we examined the benefits and intimacy of the
old village market and also some of the shortcomings brought about by the
fact that it was limiting in its localness. We also traced briefly the
effects of urbanization brought about by the Industrial Revolution. Sure,
it led to greater choices and lower prices, but at a price of blandness
and loss of community. The members of our panel of experts (Al Baker,
director, Customer Interaction and CRM Solutions, Siemens Information and
Communication Networks, Inc.; Eli Borodow, CEO, [email protected], Inc.; Tom
Hennings, president and CEO, OrderFusion, Inc.; Beatriz Infante, president
and CEO, Aspect Communications; and Anthony Lye, president and CEO,
ePeople Inc.) were asked if they thought the Internet can be seen as
analogous to the old village market, how it is changing business and
social patterns, and also how it is causing companies to change their
In this installment, our panel of experts will look at personalization
and the creation of communities using the Internet, and they will also
have a chance to look slightly into the future at what new products and
services they see being developed in the next few years.
EL: In the past few years, the Internet has made possible the
creation of new levels of personalization in customer/business
interactions and led to new expectations of service from customers. How
will companies have to change to keep up with these new expectations?
Eli Borodow: A 'call' is just a request for service and it can
come in many forms: phone, fax, voice mail, e-mail, voice-over Web, chat
sessions or Web-callback requests. The challenge that companies have to
meet is how to deliver consistent service across all media -- and to be
responsive to customers who access the contact center through multiple
media. Customers are not sympathetic when a customer service agent can't
access details of the Web transactions or faxes that have been exchanged
-- nor can we expect them to be.
Beatriz Infante: Companies must have customer loyalty and
retention strategies in place for all channels of customer transactions,
including the Web:
- Efficient order fulfillment,
- Great product performance,
- Post-sale service and support,
- Superior service that generates trust, adds value and builds brand
- Know customers in 'bricks' environment just the way 'clicks' do.
Businesses can't expect to be successful clicks-and-mortars just
because they are successful bricks-and-mortars. They need to build online
brand loyalty. The only way is to build trust by providing personalized
services and information.
Keep in mind that to recoup the company's initial customer acquisition
cost customers must stay with the company for at least two to three years.
Al Baker: I'm a firm believer that businesses must now
completely rethink their business models to realign their operations with
a focus on customer relationships. This involves expanding the
responsibility for customer relationships beyond the contact center by
proliferating a relationship management philosophy, revamping processes
and implementing supporting technology throughout the enterprise.
Tom Hennings: Customers expect suppliers to keep their promises.
They always have. In the past, it's always been acceptable to get back to
the customer with an answer on pricing, availability, configuration,
product information, etc., within a few hours or even days. But the
response time of a browser is measured in seconds. Once a supplier goes
online with its products, customers will assume that the answer given
online is correct. Therefore, the online system is now making promises
that people used to make after thoughtful consideration. Unless suppliers
keep the promises their online systems are making, suppliers will lose
market share and brand loyalty overnight.
Anthony Lye: First and foremost, companies need to realize that
customers will not accept unavailable or inaccessible information. Such
things as past customer interactions, transaction histories and order
status should be at companies' fingertips and, ideally, made available
directly to the customer. Customers have come to realize and expect that
all pertinent information is available in connected information systems
because they see so many companies where that has proven true. If your
systems aren't up to modern standards, customers will not tolerate it.
More often than not, customer service revolves around access to
information, whether it's a simple issue status query or a complex problem
requiring extensive data gathering and research. Those companies that have
the most efficient customer/business information ex-change systems will be
EL: How can companies benefit from the creation of new
communities (e.g., worldwide suppliers, more competitive prices, etc.)?
Anthony Lye: Going back to the concept that the companies that
have the most efficient customer/business information exchange systems
will be the winners, a powerful, related concept is that any given company
doesn't need to produce or own all of the information related to the
business. In fact, a significant amount of value can be added by companies
that do a good job of aggregating the right set of knowledge and resources
from disparate sources. For a simple example, take order tracking and
observe how effective the links are to various shippers' package-tracking
pages. Used in the context of a customer's product order, the immediate
availability of shipping status is incredibly effective. New communities,
especially those that represent highly specialized resources and
information, should be viewed as components to be leveraged in the context
of a company's business.
Perhaps the most powerful community for any business is the one that
comprises that business's customers. Often this community is more
effective at providing customer service to themselves than the company is,
and frequently at little or no cost to the company other than
acknowledging and supporting the community itself. Additionally, by
fostering these communities, companies have a ready base of engaged
consumers who are usually anxious to provide their insights and
experiences to the company, not to mention being a highly qualified set of
prospective buyers for additional products and services.
Al Baker: In the Internet age, it's all about time savings and
information available for comparison shopping. For example, I can find
competitive information on goods and services on the Web in two hours that
would have taken me two weeks to find using other methods.
Eli Borodow: The customer is the ultimate winner in the
evolution towards virtual communities to the degree that technology is now
enabling companies to offer their customers the same kind of personalized
service that was once only available from smaller niche companies that
differentiated themselves based on the quality of their personalized
service. By creating the illusion of a virtual community, companies can
enter new market segments and pass on the cost-efficiencies associated
with larger merchant enterprises -- while at the same time providing the
customer with the same level of personal care that used to be the
exclusive domain of the smaller merchant. In essence, technology is
allowing customers to have their cake and eat it too -- while reducing
costs for everyone in the value chain.
Tom Hennings: The earliest companies to benefit from the
Internet will be those that produce true commodities. Since most
e-marketplaces and trading communities are only capable of allowing the
customer to compare price, commodities will rule in the short-term.
However, as more processes other than bid-ask are enabled by the Internet,
such as collaborative design engineering, sales-assisted configurations,
RFP/RFQ workflow and targeted product offerings, companies with much more
complex products will be able to take advantage of geographies or
customers their field sales force rarely reach. They will also free up
time for their human sales channels to focus on strategic selling.
- Increased operational efficiency (All links of the value chain are
stressed due to the exposure to end customers);
- Superior and personalized service equates to higher revenues;
- More control over value chain information;
- Highly disintermediated value chain.
A key point here is that price does not rule the Web -- trust does.
More trust, more customer retention and higher profits.
EL: What new services and technologies do you see developing
in the next few years?
Tom Hennings: The greatest area of technology development in the
Internet area will focus on brand, loyalty, customer service management
and the synchronization of human and electronic sales channels. In the
business-to-business world, this means enabling the field sales force and
call centers to become much more consultative, while relieving them of
easily automated tasks. Currently, most of human interaction in the
selling process revolves around four activities: product features, price,
availability and order status. All of these activities will be replaced by
technology solutions that will allow the sales force to take an active and
consultative role while forming solutions and designing contracts
specifically tailored to each customer.
Al Baker: Businesses will continue to align their operations to
make it easier for customers to do business with them. As such, more
applications will be required to run on both circuit-switched and IP-based
environments. Businesses will also increase their reliance on third-party
companies that have expertise in designing and integrating IP-based and
wireless communication solutions into their operations.
Anthony Lye: Better methods of communication and transportation
have always enabled more customization and specialization. The town's
general store has given way to cities full of specialty shops, reachable
by car or by phone, which cater to consumers' specific needs. Businesses
that supply a narrow niche can succeed if enough people can reach them to
provide a viable customer base. The Internet not only provides a new
generation of communication capabilities, it also acts as a vehicle when
information is the product.
Thus, in the next few years, we will continue to see customization and
specialization. Already, it's possible to find products and services that
were once too particular to survive in a strictly local market. Upcoming
services and technologies will be those that enable people to locate and
connect with people and resources that meet their very specific needs and
requests. The Internet allows someone to find the single individual who
can best understand their particular situation and address their
requirements, irrespective of their location anywhere in the world.
Similarly, we will see services and products that help consumers collect,
describe and communicate their particular interests and desires, whether
it's regarding a technical service they need performed or a hobby for
which they're seeking like-minded companions. We'll also see enabling
technologies such as products that remove language, cultural, legal and
economic barriers to facilitate worldwide interactions.
- Mobile commerce;
- Customer interaction based on intent and locality;
- Ubiquitous customer interaction through many mobile devices;
- Seamless, device-independent applications that can connect customers
on any device to any resource/information; and
- On-demand applications that are in-telligent and personalized to
customer wants and needs.
The same rules apply: know the customer. More trust, more customer
retention and higher profits.
Eli Borodow: I think that most of the core capabilities we will
see deployed in a big way are already here and that the advances we can
expect to see in the medium term relate more to architecture than to
capabilities. This is where the vacuum is as contact center technology
goes mainstream. Every contact center technology vendor has capabilities,
some more than others, but overall the feature sets are becoming
commoditized. The fact is that many vendors are saddled with outdated
architectures and, as a result, the focus on features has become an
overused technique to distract purchasers from the really big questions:
about stability, realistic up-time, future scalability and extensibility
-- and architectural inefficiencies that result in unnecessarily high
deployment costs and high costs of ownership. When vendors talk about
features and capabilities, customers should ask them whether their
platforms can scale down to a single box for smaller scale implementations
-- but also scale up to almost infinite levels in a self-healing network
architecture with mirrored hot-backup for mission-critical enterprise and
ASP deployments. In the next few years I think you're going to see more
and more customers asking these sorts of questions.
The importance of these sorts of architectural considerations will take
on even greater significance with the rise of application service
providers, which many analysts believe will create a 23- billion-dollar
industry over the next two years as a result of the compelling advantages
the ASP model offers to the smaller enterprise. Architectural
considerations and carrier-class reliability will become key determinants
of who will win and who will lose in the race to obtain subscribers -- and
will therefore refocus much of our industry's attention toward the
architectural needs of service providers.
For ASPs, the race is already on to obtain market share -- so what the
market really requires is technology that can be rapidly deployed with
little or no set-up costs and minimal associated configuration time -- no
more than a couple of hours for all relevant technologies, including IVR
and skills-based routing of interactions on every medium of communication,
including phone, fax, voice mail, e-mail, chat, voice over Web and
Web-callback. The alternative is to get bogged down in configuration
issues while competitors capture market share. As a result, improvements
in provisioning efficiency are inevitable as the ASP paradigm becomes
The next ASP-related area of architecture where you can expect to see
changes in the market is in the area of partitioned hosting. Platforms
that require a separate server for each ASP subscriber of contact center
services really don't offer the ASP any efficiencies of scale -- because
licenses can't be shared among a common pool of subscribers. Imagine if
dial-tone couldn't be shared among city residents and the issue becomes
more clear. If everyone in any given city picked up their telephone
receivers all at once, more than half wouldn't get dial-tone because it is
a shared resource. The cost of dedicated dial-tone would be astronomical.
The analogy applies very well to the contact center ASP -- which must
dynamically ration resources to achieve economies of scale. In addition,
in the one subscriber/one server model, one should also keep in mind that
the prospect of running a massive server farm will have little appeal to
any experienced service provider. What is required is a shared environment
that maintains the privacy of data and reports of each subscriber while
providing comprehensive contact center functionality on a common hardware
Of course, once you're in a shared environment, the next logical
question that ASPs will ask is: how big can that environment scale to?
This will be another hot-button issue.
Another issue related to scalability that will become a 'hot' issue --
no pun intended -- is the ability to add or remove resources from the
infrastructure without shutting down. ASP subscribers will not take kindly
to service interruptions every time the ASP hits a growth spurt or when
parts require service, so dynamic scalability and load balancing are areas
that will get an increasing amount of attention.
If an ASP is going to run all of its subscribers on a common
infrastructure, the next area of concern is obviously reliability and the
availability of 'hot-backup.' Hot-backup means that a process crash (or
the crash of a server hosting a process) can't result in dropped
interactions (calls or chats, other Web-interactions, etc.) and won't
result in lost data about interactions in progress. An ASP can't afford to
settle for primitive fail-over schemes that disconnect all calls and all
Web interactions in progress whenever any problem arises.
We believe that the market will force our entire industry to address
these issues in short order. Some companies will be forward thinking and
anticipate customer needs. Others will have to be dragged kicking and
screaming into the new reality. We believe that infinitely scalable
architectures with self-healing properties and hot-backup protection are
So can the Internet bring back the village market? Of course not. Nor
should we want to be limited by a lack of choices that was typical of
village markets. But perhaps the Internet can bring back the best aspects
of the village market: community and the building of relationships, of
becoming neighbors. As we have seen, the Internet can and should be used
to facilitate business, to improve both products and business processes,
to keep the line open for customer input. It is also a great opportunity
to explore, to find out more about the world in which we live, to help
reduce the unknown and overcome prejudices through knowledge. It can help
make the foreign local, remind us that we have more similarities than
differences, and that no matter what our differences, we are all in this
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