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How to Enfranchise Customers in the E-commerce Era

Putting customers back in the equation

How to Enfranchise Customers in the E-commerce Era The internet has dramatically advanced the ways business can deliver products and services, and meet customer needs. However, while e-business has succeeded at leveraging technology to enhance business productivity, it has done little to enfranchise customers. Countless web sites that aim to provide a seamless shopping experience simply are not designed for the needs of the user. Customers needing support often have to abandon their shopping carts to get their questions answered. Many end up turning to the phone to get the information they need, or they just give up. Most e-businesses lack the human touch.

Customer needs will continue to change as technology plays a greater role in our lives. To be successful in the future, businesses will have to add the customer viewpoint into the equation, and seek to satisfy unmet customer needs. Rather than concentrating on e-business, companies will need to reorganize as c-businesses, orienting their operations around customer need sets across all channels and touch points, from the perspective of all products and services, and for each customer group, whether on the consumer level, small businesses, or large enterprises.

Six Drivers of Change in eCommerce

Let’s examine these emerging customer need sets, the drivers of change, and how certain businesses are prospering in the new c-business age.

  1. Information overload. The Web has unleashed a plethora of information. The result of this easy access to information is that people are seeking knowledge in context. Presenting data in the context of the customer’s needs transforms it and makes it far more valuable. The financial services company USAA doesn’t inundate its clients with sales pitches and junk mail. It takes a highly targeted marketing approach based on major events in them customers’ lives. When you’re about to buy a house, have a baby, or send a child off to college, USAA will contact you with information about products and services tailored for these needs.
  2. Six Drivers of Change in eCommerce More choices. Today, there is a wider variety of goods and services than ever before. This surfeit of choices is leading people to demand more personalized service and customized goods. Look at cars. Henry Ford told his customers they could get a Model T “in any color you want, as long as it’s black.” The computer industry long took the same approach-only this time with beige. Apple changed the landscape with its iMac, providing consumers with true choice. But Mac enthusiasts still have a hard time getting options they want built right into their systems. Dell, on the other hand, customizes virtually every PC it sells to its customers’ specifications. As advances in technology and manufacturing make it easier for firms to tailor their offerings, customers will increasingly expect personalized service.
  3. Automation. It has become possible for businesses to automate nearly every aspect of the customer interaction. This increase in automation leaves most of us with a yen for the human touch. But for corporations to deliver quality, human scale service, customers will need to make concessions in terms of privacy. Smart e-businesses will prove to their customers that these sacrifices will be worth it. Already, enterprises with good “corporate memory” are succeeding. Consider FedEx, which provides a reassuring presence by putting kiosks in the offices of their best customers. FedEx also provides real value through its Web site by letting customers track deliveries.
  4. 'Ecommerce Evolved' by Tanner Larsson (ISBN 1534619348) Pervasiveness. The pervasiveness of information and services is another driver of change. Having the capability to get whatever you want, whenever you want it is driving a need for control and integration. For example, we can get email on wireless handhelds, and order groceries online. However, is anybody helping people remember what’s supposed to be on their grocery shopping list? Webvan has made inroads in this area, but they still must overcome entrenched shopping habits. As these platforms develop, they provide resources essential for national growth and reduce the market inefficiencies that slow the pace of development.
  5. New pricing models. A heightened awareness of value is the direct result of new pricing models and pressures. Customers don’t necessarily look for the best prices, but they do look for value. In the airline industry declines in service and fluid pricing models have made it difficult for people to determine what is and what isn’t a good deal. Companies that can clearly define their value proposition are having more success in meeting customer expectations and needs.
  6. New entrants in the marketplace. New entrants can now establish themselves in the marketplace with relative ease. Barriers to entry are so much lower now that business can expand into new sectors virtually overnight. For customers, this leads to increased choices, but it also raises questions of trust. Customers look for clues that they can rely on their provider, which is why companies need to build trust through their online and offline presences.

Determine How You Can Deliver Better Attention, Choice, and Value in E-commerce

E-business may have radically changed the ways companies and people buy goods and services, but the essential elements of the buyer/seller equation are timeless. Customers want personal attention, they want choice, and they want good value. Solving the marketer’s dilemma will not be easy.

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FedEx’s ZapMail Service: Failure to Foresee

Innovation is Not Without Risk

How Federal Express's Zapmail System Works

One of the defining characteristics of great leaders is their knack for seeing into the future.

Innovation is not without risk. There are plenty examples of failures at companies. However, on the other side of the coin, if you’re too cautious and too late—all you have is a dinosaur business. Navigating that fine line between risk and innovation is very important.

FedEx's Zapmail System Case in Point: ZapMail Service was a system that used fax machines at FedEx offices to transmit documents for clients in different cities. After being introduced in 1983, when FedEx was known as Federal Express, the service was soon eclipsed by the rise of fax machines priced cheaply enough that most offices could purchase their own. In addition, ZapMail was based on satellite technology, which needed the space shuttle to work effectively. However, the space shuttle blew up, dealing a body blow to FedEx’s plans. FedEx folded ZapMail in 1986, taking a costly write-off.

No Innovation Without Experimentation

Commenting about FedEx’s ability to integrating new acquisitions into its fold after its purchase of Paul Orfalea’s Kinko’s franchise, journalist Michael Copeland commented in the Autumn-2006 issue of Booz & Company’s Strategy & Leadership magazine:

As with other acquisitions, Fred Smith saw something in Flying Tigers and American Freightways that others didn’t because his point of focus lay far beyond theirs. Mr. Smith doesn’t always get it right when he looks into the future. His expensive and ultimately failed experiment in ZapMail, a dedicated fax network that couldn’t compete in the early 1980s with the new, inexpensive consumer fax machines, is proof. “A guy like Fred Smith doesn’t build a company like FedEx without taking some risks and making some mistakes,” says Mr. Hatfield, the Morgan Keegan analyst, “but clearly the successes far outweigh the failures.”

Federal Express's Zapmail System There can be no innovation without experimentation, and there can be no experimentation without the risk failure. In addition, taking risk goes against the grain of many companies’ cultures. In the corporate world, there are powerful incentives for people to play it safe. However, leaders must work particularly hard to offset these forces and give their teams the consent to fail and the assurance to make their case and go out on a limb. Leaders must not only promote experimentation, but also encourage people to terminate faster on projects that are not working without fear of reprisal. That is to repeat the cliche “fail, but fail as fast as possible” and take the lessons learned to the next experiment.

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Advice to Entrepreneurs: Fedex’s Fred Smith on Having a Sustainable Business Proposition

In America, we venerate entrepreneurs: we celebrate their assertiveness and esteem the ability of entrepreneurs to take risks and aim for anything they want—an ability that most of us do not possess or cannot exercise. Here is advice from Fred Smith on having a sustainable business proposition. Fred Smith is the founder, chairman, and CEO of FedEx, the global courier delivery and logistics company.

  • Fred Smith, founder, chairman, and CEO of FedEx What to look for in the right people: first of all, you have to have technical expertise in what you’re doing. The second thing you have to do is have somebody who can be very objective. At the end of the day, if you can’t be objective about things, particularly the facts as they have been presented to you, that includes objectivity about one’s own strengths and weaknesses, it’s impossible to be an effective manager at any substantial level.
  • Make sure you have a viable and sustainable business proposition. Make sure you’re fulfilling some need that has been unmet and make sure its differentiated from everything else out there and that it is the sensible.

'World Changers: 25 Entrepreneurs Who Changed Business as We Knew It' by John A. Byrne (ISBN 1591844509) Source: “World Changers: 25 Entrepreneurs Who Changed Business as We Knew It” by John A. Byrne. John A. Byrne is the former executive editor of BusinessWeek, former editor-in-chief of Fast Company, and former associate editor at Forbes, and co-author with Jack Welch of Jack: Straight from the Gut In “World Changers,” John Byrne presents potent advice on entrepreneurism and fascinating insights into what it takes to succeed as entrepreneurs from successful business luminaries such as Apple’s Steve Jobs to HARPO’s Oprah, from India’s Ratan Tata to Brazil’s Eike Batista. John Byrne argues that the greatest common denominators amongst great world changers are the centrality of purpose in their organizations, their willingness to seek advice through mentorship and peer counseling, and the ability to maintain focus and direction over long periods.

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FedEx Understands Branding

As the cliche goes, you never get a second chance to make a first impression. Of the many companies that take this branding mantra to the extreme are FedEx.

FedEx Understands Branding

Ten years ago, FedEx recognized that that with every package it delivers, every truck it drives, every plane it flies, every document it handles, every person that delivers packages and services, represents a point of interaction with a customer. Every point of interaction is an opportunity to make a brand impression.

Brand equity is about trust, reliability, ingenuity, quality, and the “right image.” In the early 2000s, FedEx undertook a major branding makeover initiative. It changed the company’s name from FDX Corp to FedEx. Its original name, Federal Express, was too long. FedEx realized that this long name does not convey the speed and efficiency of FedEx. After all, they reasoned, people are too busy to say Federal Express. And, with this FedEx become a noun, as in, “Just FedEx it.” FedEx earned a place in everyday language.

FedEx branding makeover initiative

Never before had FedEx taken such a systematic approach to its equipment and operations. FedEx was not looking for a merely cosmetic makeover. It started a wide-ranging overhaul of its brand image by restructuring, rethinking, and redesigning everything that interacts with its customers — from its customer centers to its drop boxes to the bags carried by its couriers to the trucks that carried its parcels, and to the planes that flew its packages. Ground shipping became “FedEx Home Delivery,” the global logistics division “FedEx Global Logistics,” and its division for time-critical shipments became “FedEx Custom Critical.”

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