Sunday, June 3, 2001

E-Commerce: Strong Customer Service #1 in Survey

Hundreds of websites were surveyed in ActivMedia Research's annual “Real Numbers Behind 'Net Profits 2001” E-Commerce study to uncover how businesses are truly gaining a competitive advantage long-term. Above all, the key strategies to attain profitability and a return-on-investment (ROI) among Web businesses online today are customer-driven--strengthening relationships (58%) and provide a high value for buyers (52%). ISP's and B2B websites are especially committed to building customer relationships (see chart below). An in-depth exploration of gaining a competitive advantage online is found in the "'Net Profits" Volume 2 study called "E-Survivors: Winning E-Commerce Strategies for 2001" being published this June.

B2C firms as a group have several customer related strategies. Overall, their goal is to increase customer satisfaction (46%), but many find offering a wide range of products online (45%) turn profits. Engaging in heavy site promotion (42%) in order to get the word out seem to be worth the investment to may B2C sites, but site agree that promotion along won't sustain a website long-term with a weak CRM strategy.

B2B online firms tend to focus more on offering low prices (37%). At the same time, these companies attempt to improve operational efficiencies (27%) so that they can maintain a profitable position while cutting prices and costs. One in three B2B firms (35%) also try to develop a unique market position. As a niche-marketer, these firms are better able to retain customers because customers perceive that they cannot obtain the same products and services elsewhere.

Online Content sites are dedicated to increasing customer satisfaction and loyalty (53%). These firms also spend heavily on site promotion (45%). They are very competitive and assert that increased market share is a key strategy (45%). Since Online Content sites generally have no physical product to sell (other than offline publishers), other means of raising revenues online are important through affiliations and partnerships (40%).

With increased competition and declining profitability, ISPs focus on developing strong customer relationships as their primary strategy (67%). Several also attempt to cut customer service costs (21%) although in the face of increasing customer service demands, this will be difficult and perhaps not achievable.