Lack of Online Focus Impacts Companies’ Bottom Line
A new report from Diamond Management & Technology Consultants, Ltd. confirms that businesses are failing to take full advantage of online assets and that organisational investment rarely matches online’s economic potential. The report, “The New Online: Modernise or Fall Behind,” describes how companies can achieve step-change business improvement by enabling significant cost reductions, distinctive propositions, and upgraded customer experiences. It also identifies barriers to optimal decision making and outlines recommendations as to how these might be overcome.
Reflecting on the current situation, Diamond observes that online investments are often disproportionately geared towards cosmetic Web site upgrades. “Look and feel” changes are not sufficient to capture the new opportunities. Deeper and more sophisticated operational and technology capabilities must be developed. Diamond’s experience in advising blue chip companies confirms that the required online transformation is achievable and can drive material business benefits.
The report’s conclusion is that online is more than another channel. Rather, it is central to the business—a company’s central nervous system—and should be treated as such. Amongst the opportunities available to innovative companies are the ability to transform the user experience, for example through rich, personalised and humanised interactions, and the ability to reach and truly engage a broad and dispersed target community.
Taking a cross-industry approach, Diamond demonstrates how:
- A financial institution has used an online community to achieve a 40 percent increase in new account openings;
- An online retailer saw sales increase by 38 percent from real-time targeted marketing; and
- An insurance company realised significant efficiencies from rolling out Web capabilities to its intermediary agents, including a reduction in customer information upload time from 30 minutes to 30 seconds.
Mehran Islam, a Diamond Principal and the report’s author, said, “Customer reference points have changed. Their expectations are being set by their best experiences online, regardless of industry sector. As a result, companies need to benchmark themselves against digital innovators, and not just against traditional competitors.”
The report illustrates an approach to overcoming a number of organisational hurdles that are currently hindering optimal investment in online capabilities. These stumbling blocks include complications from legacy technology, channel conflict and assigning end-to-end customer experience and online performance accountability.
Stephen Warrington, Managing Director of Diamond’s UK practice, said, “Organisations need to take a fresh look at online possibilities. Especially during a downturn, strategic online investments can help companies gain a competitive edge. Designing and executing the right online strategy can materially improve the customer experience, revenue and cost performance, delivering benefits such as improved sales, greater marketing ROI, lower acquisition and servicing costs, and improved speed to market.”
A complimentary copy of the complete report is available on request from NewOnline@diamondconsultants.com
Three Important Steps
Having helped a variety of companies create online environments where profitable customer relationships flourish, Diamond’s Customer Impact experts recommend taking these three steps towards modernising online capabilities.
1. Define a distinctive customer experience proposition—The role of online must be defined in the context of all other customer interaction channels. In most business-to-consumer situations, the goal will be to foster passionate, loyal and profitable customer relationships but to achieve that goal the customer experience must be differentiated from both traditional competitors and web-centric new entrants.
2. Identify the necessary operational and technology capabilities—Back-end infrastructure and operations requirements must be considered up front. Investments that add flexibility will deliver value beyond immediate returns, whether an insurer is using online to quickly customize products and services, a bank is creating a truly differentiated experience for its high-net-worth clients, or a consumer packaged goods supplier is promoting customer feedback about its new products through social media.
3. Create Energy and Momentum—Identify leaders in the organisation who are both online evangelists and business oriented. Enlist them to pilot new web propositions within a specific business unit to achieve early successes and secure broader buy-in for a comprehensive online overhaul.
“In every market and every industry, these steps are critical to ensure the highest return on online investments,” said Islam.
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