February 22, 2003

The advent of the internet as an indomitable force pervading almost every conceivable aspect of human endeavour is now a universally celebrated truth. The internet’s unbridled potential to recognise, revive, redefine, reinvent and indeed even in some cases to foster a renaissance is already legendary and almost boundless. Online retailing, e-commerce, e-mail, online chat rooms, online equity trading, cyber communities, online shopping malls, cyber games and e-learning are but a few of the multifarious developments that personify and evince the perennially evolving and dynamic character of the internet.

As a medium the internet constantly endeavours to transcend national boundaries and makes more realizable the much-cherished prospect of a borderless world.

Innate to the internet’s constitution is an insatiable appetite for accommodating endless creativity designed to improve the lot of the customer.

From a business perspective, be it business-to-consumer (B2C) or business-to-business (B2B), progressing to that much exalted zenith of being recognised by customers as a premier online brand is quite a challenging proposition. Note the subtle distinction between the physical and Internet worlds. Not all the global brands, which occupied premier status in the pre-internet world or still do for that matter in the physical precinct, can purport that their current online brand perception is synonymous with their much accustomed traditional economy stalwart brand standing. This is evidenced by the recurrence of dire web traffic profiles for some of the elite global brands, which simply have not been able to attune themselves to the finer subtleties of the internet as they have hitherto been hampered by the absence of a viable customer driven e-business strategy.

Smaller players have emerged, in no way enervated by the superiority that pure bricks-and-mortar players had taken for granted. The peculiarities of the new economy have enabled these new entrants to go beyond the pale so to speak, at least from a traditional economy perspective, and give weight to that oft-quoted saying that gems are kept in small boxes. Some of these gems have gone on to exhibit the most unprecedented growth trajectories.

A recent commentary on how companies can develop high online brand equity is provided by Al Ries and Laura Ries in their stimulating book The 11 Immutable Laws of Internet Branding, published in 2000. As the title suggests, the authors propose eleven laws designed to propel enterprises to significant online brand recognition. While the emphasis dwells on larger enterprises, some of the logic presented is also relevant to new entrants and smaller players. For instance, the Law of Time demonstrates that prime mover advantage in terms of time to market alone is not sufficient to build high recognition in the eyes of the customer.

On the contrary, it is the brand, which races first to mind that appears to hold the sway. The Law of Globalism, for instance, raises the prospect of a borderless world catalysed by the breakneck dynamics of the Internet. The Law of Interactivity, on the other hand, pushes the case for more interactive websites.

Pertinently, whatever laws are applied and whatever business models are espoused, to succeed within the ever-changing arena of the new economy and cultivate strong brand perception organizations need to configure themselves to deliver optimum customer experience.

As Frederick F. Reichheld and Phil Schefter argue in their excellent article, “E-Loyalty: Your Secret Weapon on the Web,” which was featured in the Harvard Business Review in July-Aug 2000, given the high acquisition costs attributable to capturing online customers, customer retention has assumed a supremely paramount stature.

Reichheld and Schefter suggest that the ability of an enterprise to retain as many profitable existing customers as possible and generate as many similar new customers through crystallising their trust (e-trust) is crucial to engendering sustainable e-loyalty.

Online security, amongst other factors, is integral to establishing trust. High-trust-based relationships need to be fostered with these customers that can be deepened continually through constantly delivering superior customer experience. Only then can e-loyalty manifest itself as a sustainable tangible reality.

Superior customer experience is a deeply embedded organisational conviction, which feeds the modus operandi permeating the winners of the online age. Dotcom luminaries, such as and have received plaudits for achieving this formidable capability.

The companies wielding effective e-business strategies have attracted new customers through developing a reputation for profoundly differentiable customer experience, which continues unabated to lend to the uniqueness of their customer value proposition. The effect is manifestly percipient: increasing degrees of e-loyalty, which in turn multiply exponentially precipitating even greater levels of e-loyalty.

The lesson is self-evident: e-loyalty is predicated on a foundation of e-trust constructed through paying unfailing meticulous attention to delivering a superior customer experience.

Strategically, the web provides companies with a mine of customer information, which can be analysed and drawn on, to conceive more personalized services (hence e-personalization) and truly cater for a market of one concept. Companies must not be unmindful of the stupendous potential that a database replete with electronic relationships presents: if intelligently tapped companies can expedite their quest for enhancing customer experience and migrating to a higher plane of customer recognition.

As Professor Sandra Vandermerwe points out in the management touchstone, Customer Capitalism: The New Business Model of Increasing Returns in New Market Spaces (1999), those companies steering the helm of the new economy are spurred on by an obsessive compulsion to originate consistently with a view to delivering superior customer value.

To deliver a truly integrated customer experience it is incumbent on proactive new economy companies, as the book suggests, to operate in the enterprise space, building relationships with other companies that permit the core enterprise to promise and deliver superior levels of customer experience. An excursion into the enterprise space only becomes possible once a company realizes that it alone may not be able to deliver the full experience demanded by the customer.

While price is often perceived as the key influence in terms of dictating online purchasing preference, the internet in no way precludes enterprises from striving to deliver superior customer experience, which (invariably) in the final scheme of things is the tour de force that strikes home that vital difference. Pellucidly, as can be inferred from the work of Reichheld and Schefter, it is not merely outernet or physical marketplace business that is driven by the much extolled virtues of perceptibly differentiable customer experience. Outstanding customer experience should be the heart, mind and soul of both the internet and outernet worlds!

This is particularly relevant to vanguard clicks-and-mortar companies, which as Reichheld and Schefter remind us have this incredibly good knack for melding their traditional and Internet activites, with the overarching aim of delivering “a seamless, quality experience” (see page 113 of the July-August 2000 edition of the Harvard Business Review). The authors discuss illustrative case examples, such as, amongst others, Dell and Home Depot, to corroborate this essential notion.

Patricia Seybold, CEO of the much lauded Patricia Seybold Group, suggests that it would be more apt to refer to the internet economy as the customer economy: “Call it the Customer Economy. The really profound difference in this new economy isn’t the technology. It’s the fact that, for the first time in the history of modern business, companies can cost- effectively build and sustain relationships with each customer.” (The quote was drawn from the Patricia Seybold Group website on January 10, 2001.)

Suffice to say, the ushering in of the Internet Age has reinforced the seminal position of customer experience in the context of the dynamic new economy business equation. This applies equally to both pure web and clicks-and-mortar players. Superior customer experience, which is perceived by the customer as value adding, is the key component of a successful business model. Organizational endeavour should be pivoted on consistently finding new ways of lending more value to the customer experience. Only then can companies strive to nurture the high-trust relationships that are intrinsic to building their competitive edge in the customer economy. Critically, perpetuating superior customer experience represents the cardinal imperative for companies endeavouring to operate in the vanguard of the new economy!

The writer is a strategy consultant based in the UK

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