Friday
Big Brands Go Online for Customer Data
According to the Internet Advertising Bureau, online advertising is on pace for 14 percent growth this year. Big brands play a large part in that growth. Take a look a little deeper however, and you'll find that big brands also use this advertising to collect customer information based on their needs and interests.
In September 2003, telecom giant Sprint unveiled a three-year plan to align its resources based on customer needs and preferences. Its long-term vision is to become a customer-centric business and to reduce total operating expenses by 5 to 7 percent, totaling more than $1 billion in savings. As part of the plan Sprint is realigning internal operations to differentiate customers into groups based on purchase habits. The initiative "enables Sprint to improve and expand its customer service efforts, focused specifically on the unique demands of business and consumer customers," says Gary D. Forsee, Sprint chairman and CEO.
The company's Web site is a critical touchpoint in the initiative. David Dickey, director of marketing and communications, direct and new initiatives, says the company now groups its customers two ways: those who come to the Web site, and those who contact Sprint by e-mail. Dickey says Sprint next wants to understand value and behavior. "We want to look at these customers and test how the groups respond based on the information shown," he says.
Luxury carmaker Lexus also targets customers using behavioral methods. When customers visit Lexus.com, the company captures visitor information by asking them either to register, or by prompting them to contact a local dealer, who will collect their information. "It's a pull approach," says Arthur Chan, associate communications director at Team One Advertising for Lexus. "We don't push them." The site also offers a "design your own Lexus" feature and hosts an owner's lounge where users can build a personal homepage and access maintenance and individual car information. Lexus uses all this data to build customer portfolios.
Health and beauty retailer Reflect.com significantly improved its online system within the past year, enabling the company to measure "not just page views, but a person's path through the site, so we can understand what's working for customers and what's not," explains Matt Doyel, senior director of marketing. This also helps Reflect understand the needs of individuals who visit but are not yet buyers.
Doyel says the company will continue to take a closer look at customer information online. "We see a huge benefit in speaking with relevance to our customers," he says. "We've increased our scale from a year ago...and we're looking to increase it even more."
Customer registration is the most common way of capturing customers' personal information. But collecting information can be difficult, according to Paul Buta, COO and founder of direct-to-consumer marketing software firm Optas. "We're in an abysmal situation in not getting information from consumers that is reliable and truthful," Buta says. He suggests incentives, such as newsletters or discounts when customers register information. This practice will build value and enable companies to collect customer data over a customer's lifetime. "Those are the things that will drive long-term revenue and opportunity," he says.
At Lexus, for example, users enter the Web site and are asked to submit their zip codes. Then after being offered features such as "design your own Lexus," they are asked to fully register their information and visit the local dealer, which automatically pops up on the screen. The "design your own Lexus" feature deepens the level of involvement in the site, and is used as the incentive to get consumers to give more information.
Organizations need to consider the value exchange, says Peppers & Rogers Group Senior Consultant James Vila. "The customer's needs must be considered when designing an incentive," he says. "The better the carrot, the more likely the customer is to provide accurate information, especially if the delivery of that incentive depends on a clean address or e-mail response."
The capture of information is often the first stage of contact, the first opportunity an organization may have to demonstrate what it is like to be a customer with them, the first impression of the customer or brand experience. "For too many organizations that first impression is likely to be the last," Vila adds.
In September 2003, telecom giant Sprint unveiled a three-year plan to align its resources based on customer needs and preferences. Its long-term vision is to become a customer-centric business and to reduce total operating expenses by 5 to 7 percent, totaling more than $1 billion in savings. As part of the plan Sprint is realigning internal operations to differentiate customers into groups based on purchase habits. The initiative "enables Sprint to improve and expand its customer service efforts, focused specifically on the unique demands of business and consumer customers," says Gary D. Forsee, Sprint chairman and CEO.
The company's Web site is a critical touchpoint in the initiative. David Dickey, director of marketing and communications, direct and new initiatives, says the company now groups its customers two ways: those who come to the Web site, and those who contact Sprint by e-mail. Dickey says Sprint next wants to understand value and behavior. "We want to look at these customers and test how the groups respond based on the information shown," he says.
Luxury carmaker Lexus also targets customers using behavioral methods. When customers visit Lexus.com, the company captures visitor information by asking them either to register, or by prompting them to contact a local dealer, who will collect their information. "It's a pull approach," says Arthur Chan, associate communications director at Team One Advertising for Lexus. "We don't push them." The site also offers a "design your own Lexus" feature and hosts an owner's lounge where users can build a personal homepage and access maintenance and individual car information. Lexus uses all this data to build customer portfolios.
Health and beauty retailer Reflect.com significantly improved its online system within the past year, enabling the company to measure "not just page views, but a person's path through the site, so we can understand what's working for customers and what's not," explains Matt Doyel, senior director of marketing. This also helps Reflect understand the needs of individuals who visit but are not yet buyers.
Doyel says the company will continue to take a closer look at customer information online. "We see a huge benefit in speaking with relevance to our customers," he says. "We've increased our scale from a year ago...and we're looking to increase it even more."
Interactions are all about value
Customer registration is the most common way of capturing customers' personal information. But collecting information can be difficult, according to Paul Buta, COO and founder of direct-to-consumer marketing software firm Optas. "We're in an abysmal situation in not getting information from consumers that is reliable and truthful," Buta says. He suggests incentives, such as newsletters or discounts when customers register information. This practice will build value and enable companies to collect customer data over a customer's lifetime. "Those are the things that will drive long-term revenue and opportunity," he says.
At Lexus, for example, users enter the Web site and are asked to submit their zip codes. Then after being offered features such as "design your own Lexus," they are asked to fully register their information and visit the local dealer, which automatically pops up on the screen. The "design your own Lexus" feature deepens the level of involvement in the site, and is used as the incentive to get consumers to give more information.
Organizations need to consider the value exchange, says Peppers & Rogers Group Senior Consultant James Vila. "The customer's needs must be considered when designing an incentive," he says. "The better the carrot, the more likely the customer is to provide accurate information, especially if the delivery of that incentive depends on a clean address or e-mail response."
The capture of information is often the first stage of contact, the first opportunity an organization may have to demonstrate what it is like to be a customer with them, the first impression of the customer or brand experience. "For too many organizations that first impression is likely to be the last," Vila adds.
Wednesday
Developing Nations Begin to Embrace Internet Commerce
E-COMMERCE is starting to find a place in some of the world's emerging economies. Governments and businesses in a growing number of developing nations have begun building the infrastructure needed for online commerce, according to a report released Thursday by the United Nations Conference on Trade and Development, or Unctad.
"Governments are more and more aware that this can be a tremendous boon to their economy," said Angel Gonzalez-Sanz, an Unctad economist who spoke by phone from Geneva. "They're starting to recognize that policy choices matter; the attitude of the government, the business community. When you tackle issues like infrastructure and lack of awareness, results come."
Mr. Gonzalez-Sanz said that Thailand, for example, is starting to see results from a government strategy that began in 1996 and was updated in 2002. Under that plan, the nation has moved aggressively to improve computer and Internet literacy by, among many other things, selling $250 personal computers and $500 notebook computers to its citizens and wiring thousands of schools for the Internet in the last two years.
The government has also set up two national Internet switching points and created a plan to offer Internet services throughout the country.
The early results for online commerce are modest but promising. From 2000 to 2001, the latest period for which data is available, the share of Thailand's Web sites selling goods or services online doubled, to 12 percent. The proportion of Thailand's Internet users who live outside Bangkok, the capital, has steadily improved, reaching 50 percent last year.
Mr. Gonzalez-Sanz said that in Southeast Asia, among other regions, "companies have been feeling pressure from the market to get on the Internet." That is particularly true, he said, with companies that export goods to countries where a significant amount of business is conducted through the Internet, like the United States.
But, Mr. Gonzalez-Sanz said, not all developing countries have followed that path. "Some countries have still had trouble identifying the benefits" of online commerce development, he said. "In places where most of the economy is exporting agricultural commodities, or where you're less integrated in the global economy as a whole, you don't have that pressure."
Indeed, in countries like El Salvador, the development and use of online commerce has been haphazard.
Earlier this year, Everest S.A., a family-run business in San Salvador, sold a 69-kilogram lot (152 pounds) of coffee beans in an Internet auction from one of its five farms for a record price of $14.06 a pound.
According to Aida Batlle, who helps manage the farms, the family had no grand e-commerce plan. Rather, she had heard about a coffee competition, Cup of Excellence, held in El Salvador by a coffee industry trade group based in the United States. Ms. Batlle entered the competition, which included 335 of the country's roughly 23,000 farms, and in early May received first prize for beans from the family's Kilimanjaro farm.
Cup of Excellence then arranged an online auction featuring lots from the competition's finalists. Ms. Batlle sat in a hotel room in San Salvador with 31 other farmers, watching a big screen TV that displayed the auction's Web site, where price increases were updated every 90 seconds.
That was exciting, Ms. Batlle said, but an equally important part of the auction was that it put her company in direct contact with buyers. In the past, she said, local mills would buy the farms' beans and sell them to distributors. "We've now taken the middleman out, which is huge," she said.
Ms. Batlle said she had maintained a relationship with the Norwegian coffee distributor that bought her beans as well as a Japanese distributor that bid $3.20 a pound for coffee from another of the family's farms in a July auction. That change, she said, will help the farm lift average prices above the 30 cents a pound it received last year.
"Governments are more and more aware that this can be a tremendous boon to their economy," said Angel Gonzalez-Sanz, an Unctad economist who spoke by phone from Geneva. "They're starting to recognize that policy choices matter; the attitude of the government, the business community. When you tackle issues like infrastructure and lack of awareness, results come."
Mr. Gonzalez-Sanz said that Thailand, for example, is starting to see results from a government strategy that began in 1996 and was updated in 2002. Under that plan, the nation has moved aggressively to improve computer and Internet literacy by, among many other things, selling $250 personal computers and $500 notebook computers to its citizens and wiring thousands of schools for the Internet in the last two years.
The government has also set up two national Internet switching points and created a plan to offer Internet services throughout the country.
The early results for online commerce are modest but promising. From 2000 to 2001, the latest period for which data is available, the share of Thailand's Web sites selling goods or services online doubled, to 12 percent. The proportion of Thailand's Internet users who live outside Bangkok, the capital, has steadily improved, reaching 50 percent last year.
Mr. Gonzalez-Sanz said that in Southeast Asia, among other regions, "companies have been feeling pressure from the market to get on the Internet." That is particularly true, he said, with companies that export goods to countries where a significant amount of business is conducted through the Internet, like the United States.
But, Mr. Gonzalez-Sanz said, not all developing countries have followed that path. "Some countries have still had trouble identifying the benefits" of online commerce development, he said. "In places where most of the economy is exporting agricultural commodities, or where you're less integrated in the global economy as a whole, you don't have that pressure."
Indeed, in countries like El Salvador, the development and use of online commerce has been haphazard.
Earlier this year, Everest S.A., a family-run business in San Salvador, sold a 69-kilogram lot (152 pounds) of coffee beans in an Internet auction from one of its five farms for a record price of $14.06 a pound.
According to Aida Batlle, who helps manage the farms, the family had no grand e-commerce plan. Rather, she had heard about a coffee competition, Cup of Excellence, held in El Salvador by a coffee industry trade group based in the United States. Ms. Batlle entered the competition, which included 335 of the country's roughly 23,000 farms, and in early May received first prize for beans from the family's Kilimanjaro farm.
Cup of Excellence then arranged an online auction featuring lots from the competition's finalists. Ms. Batlle sat in a hotel room in San Salvador with 31 other farmers, watching a big screen TV that displayed the auction's Web site, where price increases were updated every 90 seconds.
That was exciting, Ms. Batlle said, but an equally important part of the auction was that it put her company in direct contact with buyers. In the past, she said, local mills would buy the farms' beans and sell them to distributors. "We've now taken the middleman out, which is huge," she said.
Ms. Batlle said she had maintained a relationship with the Norwegian coffee distributor that bought her beans as well as a Japanese distributor that bid $3.20 a pound for coffee from another of the family's farms in a July auction. That change, she said, will help the farm lift average prices above the 30 cents a pound it received last year.
