A Web presence can substantially reduce business costs but savings
should not be chased at the expense of customer relationships,
explains Julia Vowler
As the department given the task of keeping costs at a minimum, it
will not have escaped the IT manager's notice that the cost of
doing business over the Web is substantially cheaper than nearly
all other channels.
Compared with the cost of staffing a call centre, posting
catalogues, or supporting a high-street retail outlet, hosting a
Web site costs peanuts. Even better, it's the customers that have
to do all the clicking, and they even pay for the telephone
call.
But, warns Richard Boocock, director of management information
services at industrial gas company Air Products, which is
enthusiastic about exploiting the Internet as a channel to its
business customers, the real value in e-business is definitely not
in focusing on cutting operational costs.
"In the last few years we've been investing very heavily in
e-business," says Boocock. "One of the great opportunities [it
presents] is that it can substantially reduce transaction
costs."
But he argues that this is not the end of the story. "Air
Products' e-business strategy is all about meeting customer needs
and adding value for them not cutting costs," he says.
"There's a lot more to customer relationships than cutting the
cost of transactions from £2 to 25 pence.
"The overall value chain and customer relationship is more
valuable than the transaction process," Boocock adds.
Not only will there always be customers who do not want to use
the Web as a channel, preferring more traditional routes, such as
paper and the telephone, but those channels can bring in more than
just an order, argues Boocock.
"You can get a lot of value out of a five-minute telephone
conversation with a customer," he explains, from feedback to future
orders.
A good Web presence should seek to emulate that opportunity for
deeper customer relations.
"You can get that kind of value out of a Web site so long as
it's constructed with relationship building in mind; and you can
motivate people to complete the customer information gathering
process."
Moreover, argues Boocock, the corporate resources saved by
executing over the Web can then be invested in further, deeper
customer relationship management.
"The Web channel can cut the cost of transactions and give staff
more time to look after the customer relationship, look for
opportunities to improve it and discover joint benefits for both,"
Boocock says.
Never forget, he says, "the overall relationship still has to be
managed by humans".