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... call centers, smart cards, etc. (Seybold & Marshak, 1998, p. 33) These are the means by which customers can conduct E-commerce transactions, and the processes supporting them should be designed with the customer in mind. Stated differently, businesses must design the processes customers will use to conduct E-commerce transactions from a customer prospective. In other words, your business processes must support the customers needs, not merely your business needs. Many of the technologies noted above can provide customers with the ability to initiate and complete transactions on their own. They should be allowed to do so.

When customers can complete most transactions using technology, middlemen (brokers, agents, retailers) should perform only functions that cannot be completed with technology. This implies that brokers, agents and retailers should only perform functions the customer really values but cannot do on his own. To employ technologies to their full capabilities, we should use them to identify where the holes in our processes are (i. e. which ones do not satisfy customers needs) and prompt change. To accomplish this, we must also develop a system that provides a method for storing and accessing customer information.

With the appropriate customer information and feedback data, we can continually refine our processes to satisfy customer needs. (Seybold & Marshak, 1998, p. 34 - 38) There are a number of ways to use technology to enable your company to be profitable. The following list is not all-inclusive, but it covers some important recommendations for enabling profitability through technology: 1. Always think beyond current technology and enable for E-commerce of the future. (Seybold & Marshak, 1998, p. 39) This is a philosophy driven by the rapid rate of technological change over the past decade. For example, the average amount of time for computer technology to double microprocessor speed has been eighteen months. (Siebel and House, 1999, p. 7) Although this rate of change may not last indefinitely, it does draw attention to the fact that the computer technology we are using today may be outdated in less than two years.

With this in mind, we must make our plans with an eye on the future. Building a strategy with todays technology in mind will cause us to fall behind our competitors and our customers expectations. 2. Integrate your website with your organizations back-end (existing) support systems. Stated in a different way, do not ignore the tools you already have at hand.

If you have existing databases and support systems, do not leave them as stand-alone systems. Instead, connect your website to these systems and use the available data. (Seybold & Marshak, 1998, p. 39) 3. As noted above under the design of customer-facing business processes, use and integrate other technologies such as Touch-Tone telephones, hand-held devices, kiosks, etc. (Seybold & Marshak, 1998, p. 39) Many business owners maintain a narrow view, and they do not look for resources beyond their website. To reap the full potential of E-commerce opportunities, consider all of the E-commerce options available, and integrate all of the technologies that can contribute to your profits. 4. Build bridges to consolidate customer information across all product lines and functional departments. (Seybold & Marshak, 1998, p. 40) Many businesses are organized into different functional departments or along different product lines, and these individual entities often maintain separate customer and product databases. While it is not an intended side effect, this often leads to fragmented or duplicate information on customers, rather than a cohesive, centralized customer database.

This could result in a product line department being aware of a customers preferences on marketing vehicles, but the marketing department having no idea about the customers preferences. Remembering that the customer should be our focus, it makes sense to build bridges among stove piped systems. The logical follow-on to this is to integrate information across all software applications. Taking both steps will effectively build a data warehouse that would facilitate an increased capability to address customers needs and wants. 5. When either migrating from an old data system or building a new one, ensure that you include the essential architectural building blocks in the system. At a minimum, the system must include the following elements: (a) customer profiles, (b) the organizations explicit and implicit rules for conducting business, (c) the organizations significant business events and (d) the appropriate business objects (e.

g. , customer, account, product, order, purchase, etc. ) for programmers to design the system. (Seybold & Marshak, 1998, p. 41 - 51) 6. In addition to adopting a philosophy of future thinking, noted above, be sure to stay abreast of the developing technologies that appear to be here for the long haul. They may become industry standards, and they should be evaluated for inclusion in your strategy. Some examples of hot technologies that appear to have continued future potential are smart cards, digital certificates, extensible mark-up language (XML), and JAVA programming language. (Seybold & Marshak, 1998, p. 44 - 46) In order to promote customer loyalty, it is important to assess the current situation and then make a plan for the future. This entails measuring customer loyalty, identifying the customers who provide the most profitability, targeting the customers who provide the most profitability, and ensuring our business model is customer-focused. (Seybold & Marshak, 1998, p. 52 - 62) There are five basic elements required to make a current assessment of customer loyalty: (a) the cost of acquiring new customers, (b) the cost of retaining customers, (c) the revenue generated by customers, (d) customer profitability and (e) the most prevalent reasons for customer defections. (Seybold & Marshak, 1998, p. 52 - 62) Of course, this requires some existing ability to produce the customer date necessary to compute these elements.

The accuracy and value of the assessment diminish commensurate with data limitations in this area. Companies using conventional, standard financial accounting systems may not be able to extract much customer data because these systems are designed for external reporting, not management use. (Seybold & Marshak, 1998, p. 57) Companies with limited capability in this area should seriously consider migrating to activity-based costing systems that can give them customer and activity data. The objectives of making the measurements identified above are to isolate the costs associated with acquiring and retaining customers, the revenues generated by customers, the customers who generate the most profit, the types of customers who dont come back, and their reasons for not coming back. This would provide a baseline from which to measure future changes in each area. Ideally, we would be able to break customers into revenue and profitability quartiles and identify the characteristics common to members of each quartile.

Armed with this information, we would use the characteristics of members in the highest profitability quartile to target marketing, and product and service efforts on the types of customers who will generate the most profit. If done properly, we would optimize profitability by placing emphasis on the customers who generate profit and by reducing emphasis on those who generate little profit. In essence, this would foster greater loyalty from existing, loyal customers and from new customers with typical loyalty characteristics. (Seybold & Marshak, 1998, p. 56 - 60) The final point regarding customer loyalty leads back to key rule of E-commerce. That is, all efforts should be focused on the customer. This concept of focusing on the customer is not new; Total Quality Management (TQM) business philosophy has espoused customer focus for years.

Still, many companies are product-centered. In a product-centered model, the customer is the anonymous target of marketing campaigns, and the financial systems are designed to evaluate product market share, product costs, and product contribution to profits. (Seybold & Marshak, 1998, p. 60) Unfortunately, product-centered models lack validity in E-commerce because revenue and profits come from customers, not products. (Seybold & Marshak, 1998, p. 61) In order to optimize profits in an E-commerce setting, a shift must be made to a customer-centered model. A customer-centered model focuses on the customer and provides an ability to identify individual customers, to catalogue their characteristics, preferences, and needs, and to develop or modify products and services to meet the customers expectations. In E-commerce, having the ability to meet customers expectations is essential. The conventional brick and mortar store scenario may allow a business to stick with a product-centered model; the effort a customer may have to exert to leave and shop elsewhere might compel her to make a transaction not completely to her liking. E-commerce, however, requires little effort.

With a couple of mouse clicks, the customer can easily shop someplace else on the globe! Typical stages of E-commerce development. Most organizations venturing into E-commerce for the first time cannot begin conducting e-business with a fully developed website. They normally start out with a limited capability and then grow into a model with greater capabilities. Seybold and Marshak (1998, p. 46 - 50) noted a general pattern where many companys progress through five stages of E-commerce development: 1. Supplying company and product information.

Most sites initially start out by simply providing marketing information, contact information, and company background information. This information is often referred to a brochure ware. While this type of site does little to bring customers back, it establishes a presence on the Internet and provides the business with expanded visibility. 2. Providing customer support and enabling interactions.

In order to entice customers to return to its site, a business must provide more than information to its customers. Therefore, the site must quickly expand to acquire a customer support capability. This is the most beneficial capability a business can acquire because it provides customers with the something they truly want. That is the ability to help themselves! 3. Supporting electronic transactions.

The next logical growth step is to enable customers to purchase goods and services over the Internet in a secure environment. If the website is properly designed, progressing to this capability should begin providing a significant return on investment. 4. Personalizing interaction with customers. Once the site has a transactional capability is acquired, the wise organization will begin collecting customer information (customer preference profiles, purchase profiles, etc. ) This information is then used by the business to personalize its interaction with the customer. The ability to personalize interaction becomes the glue that binds a customer to the business, and prompts the customer to return because of the personal attention he or she receives. In Internet parlance, this is when the site becomes sticky. 5.

Fostering community. Once the business establishes a level of trust and a one-on-one relationship with the customer, the business can use the site to foster community among its customers. Through the website, the business encourages customers to interact with each other through technologies such as chat rooms, customer on-line help forums, etc. Customers can offer each other tips and help, swap stories, etc.

This form of interaction is the ultimate level of sticky because the customers will return to the site to both conduct transactions and to interact with each other. Steps for establishing a small business website. Siebel and House (1999, p. 242 - 261) identify five basic steps that small business must take in order to complete the mechanics of establishing a viable website: 1. Find an Internet service provider (ISP). Finding an ISP is relatively easy; the telephone book is full to them.

Finding a good and reliable ISP requires more work. Ask for referrals before contacting potential ISP candidates. Once several candidates with reputations for service and reliability are found, eliminate candidates who do not provide sufficient bandwidth, system redundancy, security measures, and service (twenty-four hour per day, seven day per week service, also called 24 / 7 service, is a must). The key thing to remember is that failure to consistently maintain Internet service equates to a failure to maintain customers. 2. Register a domain name.

The businesses domain name must be registered in two places. The name must be registered with InterNIC (rs. internic. net / reg ), and it must be registered with a search engine (e. g. , Yahoo! ). Registration with both entities is imperative because they have a symbiotic relationship, and the website will not function without registering with both. 3.

Develop the website. It behooves a business to ensure that it contracts with a website developer who has proven expertise in technical website development and in E-commerce design and marketing. As with ISPs, there are countless website developers, but there are a limited numbers of developers who will have expertise in all areas necessary to design a successful E-commerce website. 4. Manage the website. This is a follow-on to website development.

The key point to remember is that theres more to having a website than simply establishing it on the Internet. Once the website is launched, it should be maintained and improved to meet customers likes and needs. Just as inconsistent Internet connectivity will drive customers away, failure to adapt the website and keep it fresh will cause customers to look elsewhere. 5. Measure the websites effectiveness. Measures of effectiveness are necessary to determine whether the benefits derived from the site justify the costs associated with establishing and maintaining the site. These measures of effectiveness should be conceptualized before website development begins, and a method for analyzing measures of effectiveness should be incorporated into the web development plan and in the website itself.

This will ensure the measures are in place to analyze return on investment when the site is established. Having identified the key elements for building a successful E-commerce model, the second part of this research project shall be addressed. As stated in the research design, the researchers sought out a local company that recently ventured into the E-commerce realm. Upon finding a company to study, the group documented the companys experiences to-date in order to evaluate whether the companys actions incorporated the key strategy elements identified above. The name of the company is Selling Power, and the approximate beginning date for its E-commerce adventure was 1998. The following narrative on Selling Powers E-commerce experience was compiled from personal interviews conducted between December 1 and December 29, 2000 with Ms.

Iii Chaney of Selling Power and Mr. Aaron Schindler of the Javier Romero Design Group (JRDG). Selling Power is a publishing company; it produces a magazine, numerous books, audio programs and other products for sales professionals. This private company has been in existence since 1980. The circulation for the magazine is approximately 200, 000 and includes an international subscriber database.

Currently, the company employs about 50 people who are located throughout the United States. Selling Powers original E-commerce goals were modest. In 1998, the company decided to incorporate a website into the companys business model to enable customers to access additional information about sales. The website consisted of several pages of information dealing with past articles from the magazine.

This approach did not prove successful because the information was difficult to retrieve, and it offered subscribers nothing in addition to the traditionally published products they already received. Selling Power hired several web-page developers to improve the website, and while each offered a new perspective, the website still was not an asset to the company. In September of 2000, the Selling Power decided to hire a web contractor with E-commerce experience to analyze the website and assess whether the website could eventually benefit the company or whether the company should focus on another E-commerce venue. Concurrently, the company was experiencing a decline in the number of paid subscriptions, as well as a decline in product sales.

These declines seemed to indicate that Selling Powers average consumers were losing interested in purchasing hard copy subscriptions. The contractor, Mr. Schindler, had some definitive ideas about the website and the focus that Selling Power should adopt for the future. He felt that the company would definitely benefit from improving the website, and he was subsequently hired to develop a long-term implementation plan.

The first step in the planning process was to establish the corporate goals. Mr. Schindler worked with the Selling Power leadership to develop the following nine goals for Selling Power: (a) empower the company to take advantage of the internet to expand its global reach within the sales industry, (b) increase revenues for the company, (c) increase sales training opportunities for subscribers of the magazine as well as other visitors to the website, (d) attract high volume website hits to increase exposure to the magazine and to the products of Selling Power, (e) provide resources for sales professionals, (f) provide a business-to-business (B 2 B) marketplace a directory for buyers and sellers within the sales industry, (g) provide on-line career channels for sales professionals, (h) attract and retain customers via the Internet and (i) reduce the costs of maintaining the website. The next step in the planning process was to conduct an on-line market overview for the sales industry.

Approximately 56 percent of all companies will sell their products over the Internet by the end of 2001, according to a survey of Chief Financial Officers, conducted by Duke University. (A. Schindler, personal communication, December 2000) Based on this and other projection data provided by the contractor, Selling Power was motivated to continue pursuit of the project. This motivation was prompted by their recognition that they would risk being left behind their competition by not participating and by the following advantages to participation. Two of the advantages of a website market are the relatively low costs and the opportunities for global reach. There is also the opportunity for new growth by using the Internet. In addition to selling products over the web, training sessions, conferences, seminars and research opportunities could also be added.

Most importantly, Selling Power could be accessible to an unlimited audience with a quality website. The company also had to identify its major competitors and analyze the Internet opportunities their competition was offering. The primary competitor is Sales and Marketing Magazine. While they maintain a website, their main focus appears to be informational rather than product sales. Selling Power viewed this as an advantageous situation because its primary competitor offered little more than brocureware.

Consequently, selling Power decided to offer sales professionals a different portal with more options. Selling Powers website implementation plan has been evolving in a continuous and ongoing process. At the outset, the contractor provided a basic website development plan to launch the improved website as quickly as possible. However, he is continuing his research to identify areas for improvement and features that could be added to the website. He conducted interviews with company personnel, observed customer service to gain an understanding the overall process of selling the companys products, held conferences with financial managers to determine available spending money for the project, and observed traffic on the current website. All of these actions have been part of the continuous processes to make the website perform at its optimal level.

The contractor also advised Selling Power that the following characteristics are necessary to make its website great: (a) must provide value for the consumer, (b) must be user friendly, (c) must be well organized, (d) must be sticky (the term sticky refers to making the customer want to return to the website), (e) must be professional, (f) must be global, (g) must be informational, (h) must be educational, (i) must be resourceful, (j) must be secure and (k) must be reliable. In adhering to the contractors recommendations, Selling Power has identified specific areas for improvement to its website. The current site offers the opportunity to purchase products on-line, but the credit card information is not secure. The user enters the credit card information and then it is transferred via email to the customer service department, allowing the opportunity for this information to be transferred into the wrong hands. Selling power recognizes that customers will be reluctant to provide credit card information to an un-secure website.

The company is working on establishing a relationship with its current credit card processing center so that all credit card orders can be approved on-line in a secure environment. There are also problems with the purchase of magazine subscriptions. There are two areas of concern. First, it appears that many sales people prefer to read information on-line, versus a hard copy of the magazine. Currently, the magazine provides access to the entire website archive, with minimal or no fee. The web contractor suggested that Selling Power provide access to some articles with no charge, but the issues that contain articles with special information, such as the Selling Power 500 (similar to the Forbes 500), should only provide enticing tidbits.

This will produce more revenue because people will be willing to purchase these articles on-line in order to have the information. The ability to actually purchase the magazine on-line is also an area that needs improvement. Currently, any visitor to the website can purchase a subscription to the magazine, with three trial issues, and then cancel with no payment. This falsely increases the amount of accounts receivable revenue because a majority of the subscribers cancel upon receiving the invoice.

The contractor suggested that Selling Power change its on-line payment process for subscriptions. Implementing a website with all of the envisioned capabilities at Selling Power is an ongoing process that will take approximately eighteen months to complete (the projected completion date is March 2002). The contractor has presented many ideas that might improve traffic and increase sales on the website. However, not all of the proposals will work for the company.

It will take time to introduce different ideas and monitor the response from the customers. To-date, Selling Power has had success in making the following improvements to its website: 1. The company has implemented the on-line credit card processing. The customer can no longer order a product without paying first. By eliminating the pay later feature, the number of subscriptions has been slightly reduced, but the value of receiving paid subscription orders is a positive step for the company. 2. Selling Power now offers product specials to increase sales.

Sales have greatly increased because of this option. It also encourages customers to return to the site on a regular basis to purchase products. This has definitely been a positive enhancement to the website. 3. Contests offering thought provoking challenges to people within the sales profession, with a chance to win money, seems to have increased traffic on the site. These visitors are not necessarily buying products but they are reading the information provided and it has the potential to attract subscribers in the future. Currently, Selling Power is working on enhancing the website by making navigation easier.

More color has been added to the site and more links have been added, but more work is still needed in this area. The company is also creating an on-line career channel as another enticement to attract visitors. This is a new area for Selling Power, and will take several months to develop. Overall, the corporate website for Selling Power has improved, and the results have been very positive.

Sales have increased from approximately $ 6, 500 per month to approximately $ 12, 000 per month. The traffic to the site grows every week. The company is receiving positive feedback from its customers. There will still be a period of trial and error, but the company realizes that, while not every proposal will benefit the company, the money invested in this contractor will be far less than the benefits it will receive.

Creating a corporate website definitely appears to have been the right decision for Selling Power. A Javier Romero Design Group Web Implementation Plan The Appendix contains an actual website implementation plan proposed by JRDG. The plan is extremely lengthy (160 pages) and detailed. It was also prepared specifically for an organization titled the Strategic Research Institute (SRI), a conference and information company.

The plan addresses Sri's needs, and it is not generic in nature. Still, the research team believed that it is a good example of an experienced web developers development proposal. The research team studied the JRDG plan to ascertain whether it incorporated the textbook steps cited above. The purpose of making this comparison was to determine whether real world website developers actually practice the methodology described in the researched text sources.

An exact procedural match was not anticipated, so the team searched for substantial similarities to, and significant differences from, the methodology cited above. Because of the SRI specific nature of the proposal, the reader is forced to interpret some of the material and make inferences regarding similarities and differences. Embedded in the plan (see Appendix) are proposed steps for incorporating the following characteristics into the SRI website: (a) value for the customer and SRI, (b) user friendliness, (c) ease of use, (d) site organization, (e) making the site sticky, (f) leadership, (g) professional appearance, (h) global capabilities, (i) value as an informational source, (j) value as an educational source, (k) resourcefulness, (l) E-commerce capabilities, (m) security and (n) reliability. The plan also proposes detailed methodology for incorporating the following capabilities: (a) the ability to access and retrieve company, product and service information, (b) customer support for conference and information management, (c) the ability to interact with customers, and (d) the ability to conduct transactions for products and services electronically. The plan does not appear to address methods (i. e.

data warehousing) for personalizing interaction with customers or for developing a community among customers. It is not clear whether the latter characteristics have been omitted intentionally or not. In comparing Selling Powers experience in with the textbook steps described above, the research team made the following findings: 1. Selling Power does not appear to have conducted any significant research before initiating its movement into the E-commerce arena. 2. Initially, the company did not develop a strategic plan for entering into the E-commerce arena. Only after experiencing initial failure did Selling Power seek professional help in developing its plan. 3.

Selling Power had little success with the first few contractors hired to help develop its E-commerce site. The research team assumes that these contractors had experience as website developers but little or no experience in E-commerce. 4. Based on the interview results provided during research, it appears that the strategic plan, developed by the contractor and Selling Power, did incorporate the majority of the steps and elements required for a successful venture into E-commerce. 5. Selling Powers plan appears to provide a competitive edge over its key competitor. 6. Although Selling Powers transition into E-commerce is still ongoing, initial indications are positive, and the website progress so far has yielded significant success. 7. Developing and executing a strategic plan for E-commerce appears to be the key factor in the E-commerce success that Selling Power is currently enjoying.

In comparing Jrdg's SRI proposal with textbook steps described above, the research team found that the steps and elements included in the proposal are substantially similar to the textbook solution. However, the plan does not appear to address methods for personalizing interaction with customers or methods for developing a community among customers. It is not clear why these two stages were omitted. Possibly, the strategic plan did not require either capability. This might be the case if Sri's customers are not enticed by personalized interaction or community activities (e. g. , corporate entities).

It might also be that SRI is not prepared to manage these capability levels. The research group encountered several limitations during the course of researching and writing this paper. Time, limited resources, and the necessity to rely on secondary data were the most significant of these limitations. This was to be an in-depth analysis on a subject of the groups choosing. But with only a few weeks to research, develop an approach, construct and write the paper, time became a major, limiting factor.

In order to develop a viable strategy and construct a more developed research paper, more time is need for the planning and research process. Two factors caused resources to become a limitation. First, E-commerce is still a relatively new business methodology. Thus, even secondary data is limited to those companies who were around at the onset and survived the initial E-commerce boom. The other limiting resource factor was the lack of reasonable facilities and vehicles for conducting research. The Simpson Library at Mary Washington College is an excellent resource library, but due the holidays and semester break, the facility was closed.

The Marine Corps Research Center and the Central Rappahannock Regional Library also had limited operating hours during December 2000 and January 2001. On-line resources were a great help, but unless one was a subscriber to most publications found, one could only obtain summary information at best. Due to lack of time, the group was forced to rely primarily on secondary information. In order to develop, validate, distribute, gather and analyze survey information, more than a few weeks are needed. Even simple interviews were difficult to arrange due to both holiday schedules and the need to de-conflict the calendars of both the interviewee and the interviewer. Hence, secondary data became our primary resource for data gathering.

Finally, we found that we could not depend on inter-library loan services to collect secondary data source documents. We attempted to retrieve texts that were not available in local libraries through inter-library loan, but the process is extremely slow. Although we requested products through inter-library loan at the beginning of the course, four weeks have passed, and the texts are still not available for review. In other words, none of the requested materials arrived before the project submission date.

Based on the knowledge acquired in researching E-commerce and in comparing real life experience and document data to textbook recommendations, the research team made the following conclusions: 1. The CEO should pursue an E-commerce initiative because the researchers expect its benefits will far outweigh its costs. This conclusion is based on E-commerce trends and Selling Powers experience. 2. The CEOs first step should be to initiate a pre-investment study to estimate assess the expected costs, benefits, etc. associated with establishing and maintaining an E-commerce presence. This conclusion is based on the limitations of this research project; its scope did not cover cost / benefit an


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