Virtual Markets Are Transforming Business

Just as the ATM changed the competitive dynamics of the banking industry, the emergence of the (so far) ultimate screen-to-face interactive medium—the Internet-represented an opportunity for radical reengineering and productivity gains across the full breadth of the economy. Today, it is the Internet that is the key technology enabling and propelling the explosive growth of the marketspace.

The Internet allows millions of customers to interact with a firm at any hour, from any place, via millions of distributed digital interfaces, on devices such as the PC. At any given moment, for example, thousands of people from around the world are simul­taneously logged in to Amazon.com, buying CDs, selling food processors, browsing books, comparing prices, applying for credit cards, downloading music, registering for wedding gifts, sending electronic greeting cards. Much like the back-office reengineering revolution of the 1980s, the Internet represents a front-office reengineering revolution. It allows—in fact, it mandates— a ground-up rethinking of how companies interact with and create experiences for their customers. What drives this rethinking is clear from the success of automated-interface businesses, from banking with ATMs to bidding on auctions at eBay. It's no longer frontline service workers who have a monopoly on management of customer relationships in the service sector—it's machines that are increasingly doing the managing.

The widespread deployment of technol­ogy makes deep insight into customer ex­perience possible, and necessary. Literally and figuratively, screen-to-face interactions augment the value of service, making it possible for companies to deliver service at lower cost and at higher quality. In a sector that has long been characterised by dis-economies of scale, machine-mediated interactions make scale economies possible. Given the importance of the service sector in the world's economies—it represents more than 80% of gross domestic product output in the United States, for example— this is a revolution of real magnitude and scope. Moreover, customer relationship management via machine gives businesses around the world a competitive weapon at a time in economic history when service is more crucial than ever.

With the accelerating commoditisation of products and brands, it is not supply, but customer demand, that is the scarcest and most valuable resource. As we continue to move toward a service-centеred economy, firms are increasingly dependent on the quality of their customer relationships. Even for product-based businesses, service, more and more, is the key differentiator. Such iconic brands as IBM and Xerox that once made their money selling boxes (main­frame computers and copying machines) now sell those boxes at a loss; they rely almost exclusively on follow-on service, maintenance plans, financing, and even consulting services for their margins (indeed, the lion's share of IBM revenue is derived from services). Even Microsoft, famous for its ruthless pursuit of profit, has launched its game console, the Xbox, with a business plan for our times. Analysts esti­mate that every Xbox sold will cost Micro­soft nearly $200 in negative margin, but that Microsoft will make up the difference— and ultimately reach profitability on the platform—by selling games, upgrades, and networking services.

That's why personalisation has become such a hot concept; it's the ultimate frontier in the delivery of human-mediated or technology-mediated services. And, once again, technology can help marketers defy commoditisation by enabling deeper and richer relationships with customers than ever before. For example, technology known as collaborative filtering allows online retailers to predict the products and services their customers may want to buy, based on their previous choices and on the preferences of other like-minded con­sumers. Or take Ritz-Carlton: the upscale hotelier can elevate its renowned personal service to new heights through its online customer database. A consumer who has stayed only at the Ritz in San Francisco, for example, can walk into its Washington DC property to find that her credit-card and frequent-flier numbers, preference for non-smoking rooms, and desire for an extra chocolate on her pillow have preceded her. Can other high-end hotel chains afford not to follow suit? Clearly, companies that fail to exploit the power of marketspace tech­nology to make them more customer-centric are forfeiting a key competitive advantage.

The advent of the marketspace has already had a significant impact on business— particularly on the way that companies interact with their customers. However, that does not mean (as was famously proclaimed about the Web not long ago) ttiat the marketspace exists independently of the fundamental laws of economics. In the end, the marketspace is not about new rules for a new economy, nor even about the Internet or the Web; it is about using the tools of digital technology to achieve a fundamental goal that is as old as the marketplace itself: the creation and nurturing of profitable customer relationships.

In the marketspace, just like the market­place, the name of the game is providing value to customers; if anything, the market-space makes the age-old business axiom 'serve the customer' even more paramount. Technology must be used to create cus­tomer interfaces that deliver higher levels of customer-perceived value (relative to com­petitive offerings), thus driving rising levels of satisfaction and loyalty. The challenge for managers is to understand the full spectrum of interfaces available to them— both screen-to-face (online) and face-to-face (offline)—as well as how to manipulate those interfaces to optimise the customer's experience.

Technology, in other words, is simply another, albeit immensely powerful, busi­ness tool. Successful managers will seek out new and creative ways to integrate it into their firm's overall strategy to build and manage strong, loyal customer relation­ships in a high impact yet cost-effective manner.

Дата добавления: 2015-07-10