As businesses worldwide increasingly focus on e-commerce as a vehicle for driving new revenue streams, most e-commerce sites still struggle to leverage the growing wealth of customer data to which they have access. This failure to integrate customer relationship management (CRM) activities with online visitor behavior is wasting a significant opportunity.
During the recent economic downturn of 2008-09, the Web was the only sales channel that grew, while brick-and-mortar businesses contracted significantly. The Web is now such a powerful, commanding route to market that in some pre-Internet sectors, more than 90 percent of business is now done online. E-commerce sales totalled US$38.7 billion in Q1 2010, a 14 percent increase from Q1 2009, according to the U.S. Census Bureau.
One of the best examples of this growth in e-commerce is the airline industry, which was once dominated by call center activity. Today, JetBlue now handles more than 80 percent of its reservation transactions online. Similarly, Southwest Airlines reported that online bookings reached 81 percent in 2009, compared to approximately 78 percent in 2008.
Yet, while Internet businesses have made great progress in catching up with more traditional sales outlets in terms of the breadth and sophistication of their product offerings and how they are presented online, they have failed to integrate their CRM activities, which limits their impact as they try to personalize promotional offers.
The King of the Jungle
Amazon.com continues to be the gold standard for best practices in personalization. The site has an unparalleled ability to recognize and deftly exploit consumers’ online browsing and buying habits, but it also has the advantage that its route to market is one-dimensional, being 100 percent Web-based.
Certainly, steps are being taken to mimic Amazon’s highly successful interactions with returning customers (“You were interested in XYZ, so you may enjoy ABC,” etc.) — but most companies are not going far enough, allowing customers to slip through the cracks.
For instance, an insurance business may not realize that the person making a call center inquiry about auto insurance was just browsing life insurance offers on the Web the day before calling.
In addition, disjointed marketing and sales practices can lead to frustrated and disgruntled customers when they are forced to rehash the same details whenever they switch between channels. This scenario is one that causes many customers to abandon their inquiries and take their business elsewhere.
Follow the Leader
For most online businesses, however, the website is just one of several channels. As hard as some have worked to blend their operations and business data across their brick-and-mortar, call center and Web operations, many gaps still exist.
Consider financial services as an example. A bank, which might use its CRM system and propensity modeling to address gaps in a customer’s portfolio of products, may suggest a new account upgrade, an improved insurance policy, or a more favorable home equity line through the customer’s local branch or a direct mail offer.
But what if that same bank knew that a customer had visited its mortgage calculator facility when last visiting its website? This would present an ideal opportunity to make a timely, customized offer. Even more compelling would be to have the offer serve as the primary landing page content presented the next time the customer goes online to transfer money or pay a bill.
The financial services industry and the retail and travel sectors have led the way in seizing the opportunity to redefine optimal business models through a truly integrated multichannel sales and customer services strategy. The ability to adapt online content for customers and prospects based on their known preferences is a powerful way to build and strengthen relationships, particularly if dovetailed with offline activities.
Personalizing With Purpose
The potential impact of personalized marketing over the Web is undisputedly enormous. E-business owners have about seven seconds to capture the attention of an online visitor and engage their interest. If this opportunity is lost, the customer will move to a competitor. If that experience provides more relevant, personalized content and a pertinent offer, the customer may never come back — despite previous loyalty to the brand.
Not only is the Web responsible for the strongest growth in recent sales — it has also been responsible for making customers more fickle than ever. This presents a risk (of losing customers easily), but also a significant opportunity (of impressing them by doing something different and special, thereby luring them away from the competition).
It is imperative that companies integrate customer data across all channels. Understanding what customers have been doing across channels can make every interaction an extension of what they may have begun elsewhere — creating a more personal, relevant and rewarding experience for both the customer and the business.
While the majority of organizations appreciate the value of personalization (Forrester Research notes that organizations have wanted to personalize their Web marketing for the past 15 years), only a small minority have actually followed through.
The building blocks exist to get e-businesses started — organizations can model what customers do as they navigate a site’s Web pages, and they can segment this data so it can be used for tailored promotions both on the Web, during a current or future session, or across other channels. Nirvana is a fully integrated CRM solution that feeds into specific online offers.
By waiting to see what the competition does first, companies risk losing the advantage — and customers. Use the personalization capabilities available today to move swiftly, offer a killer deal, and potentially gain a lifelong customer.
Mark Simpson is founder and president of Maxymiser.