Christoph M. JANSEN <email@example.com>
Eva-Maria WIEMANN <firstname.lastname@example.org>
Volker BACH <email@example.com>
University of St. Gallen
This paper outlines aspects and potentials of the emerging, however intransparent, field of IT-supported customer relationships. The authors have conducted a two-year research project that recently resulted in an Internet-based knowledge platform on electronic customer care. This platform is designed -- and already proven -- to help project managers and consultants in finding new and innovative solutions to improve or redesign the customer relationships of their companies or clients.
New information technologies like the Internet and most of the new marketing and sales tools promise innovative and efficient ways to reach and maintain customers. The question is if all of these promises turn into real value or not. Still, many companies do not recognize the potential of new information technologies. One reason for this situation is the dynamic and quick development of the information technology (IT) market. Another explanation is the lack of success stories and experiences in this area. In order to get a picture of benefits and customer value by using different technologies, one should first focus on the customer process after having identified the real customer problem. The following summary puts an emphasis on the potential and the power of the new information technologies in the customer relationship. The first chapters provide an overview of the developments and challenges in the customer relationship. The main part describes the research work of the Electronic Customer Care (ECC) project, which claims solutions in structuring the IT potentials and identifying the benefits of ECC solutions.
New information technologies will change the traditional way of marketing. Information technologies can support and develop new possibilities for the four main aspects in marketing: customer acquisition, customer retention, product/service innovation, and product/service care . The following examples provide an overview of these potentials. Customer acquisition becomes much more efficient if you get a lot of information about the customer himself, about his profile in general, and on his behavior and habits in specific situations. New products, like the merchant server software One-to-One from Broadvision, enable efficient customer profiling and help to build up individual products and tight customer contacts . If the user directly and actively offers his profile, a rule-based system can personalize the offer based on this information. This concept is called profile or rule-based matching. Profile or rule-based matching, and also the concept of observation-based matching, do not only redesign the efforts of acquiring new customers, but also help to strengthen customer retention and allow innovative new services and products. Observation-based matching is a system that doesn't get direct information from the customers but is learning through observation of customer behavior and through indirect questions. This can avoid disapproval by the customer.
The grocery store Peapod , located in Evanston, Illinois, offers its customers the opportunity to order their products online. Peapod is an intermediary that sources from about six to seven different suppliers. Customers need to buy a special software for $30, which allows them to get access to the product database of Peapod. The integrated customer profiling system enables Peapod to observe its customers and offer them individual products. After each purchase, the customers are asked to announce their satisfaction level and to make suggestions for improvements. This leads to a "learning relationship" between customer and supplier, which produces in the best case a win-win situation for both parties. Also, the "interaction record," a document in which the delivery service has to fill in customer information and customer preferences, helps to increase the actual customer retention level, which is already 80%.
Just as simple, but also an effective way of generating value to customer is "Yours Truly" , a gift shop that remembers its customers on special days such as birthdays or wedding anniversaries through a reminder via e-mail. This shows a very personalized relationship towards the customer and also increases the chances of cross- and up-selling potentials.
These small examples already show the power of information technology in the customer relationship. Information technologies change the laws of this relationship. In the information age customers want to get "everything, everywhere and whenever he/she wants it (non-stop)." Customers want to be in the center, they want the feeling of being the one and only customer in a very personalized customer-supplier-relationship (one-to-one). Above all, the customer problem has to be solved in one stop. This leads to a reduction of complex and time-intensive processes.
Figure 1. Radical customer centricity
This new customer model demands a rethinking of the customer relationship and a change into real customer-oriented company processes, which fulfill this customer centricity through total customer care. The efficient use of information technology within all the stages of the customer relationship is defined as Electronic Customer Care.
The power of the new information technologies and tools for a redesign of the customer process are big and open new markets and new business opportunities. In the project Electronic Customer Care (detailed information about the project is given in the second part of the paper) the following important trends in ECC have been identified:
The short abstracts below describe some of these trends in more detail.
Customer centricity is possible only if a company knows the customer needs that form the customer process. In supporting the customer process "vacation planning" for example, you have to focus on the main tasks the customer has to accomplish. This process starts with the selection of the destination and can end with a rebooking of the trip or with buying clothes for the trip. As you see in the following picture, you often have to bundle different offers from different suppliers to solve the customer problem.
Figure 2. Understanding the customer process
New information technologies such as the Internet, profiling databases, or cookie-based customizing are enabling a more personal and less time-intensive process for the customer who is ideally confronted with only one contact person (e.g., a virtual electronic travel agent) who provides the customer with a higher quality and quantity of information than the customer would get via the traditional way of planning vacations. Many travel agencies in Europe and in the United States, as well as completely new suppliers (e.g.. TISCover , TheTrip ), have started with travel platforms that offer various information and services around the customer process "vacation planning."
This small example explains the importance for any supplier from any industry to focus on customer needs and thereby try to take over and support as many tasks as possible (alone or in a business network).
Customer centricity is possible only if a company is able to integrate the ideal customer process or parts of the customer process into the supplier's internal processes. Besides the opportunity to reduce the gap between customer needs and real offers, a company that understands this process integration can also build up tremendous barriers of entrance for competitors. The 450 independent distributors of the Heineken brewery are allowed to access the Heineken supply-chain management interface via a Web browser to place orders and to be informed about the actual order status. The program of American Software USA gets the orders and passes these on to the responsible analyst at the Heineken brewery. Here new activities can be planned, thereby speeding up the delivery process and the forecasting process by using actual data and information.
New information technologies make individual customer feedback possible. Communication with the customer plays the essential and integrating role for personalization and individualization of the customer relationship. With the knowledge of customer needs and customer problems, a company can build up a personalized relationship and tailor individual products and services .
Individual information and services save time for the customer, increase the willingness to buy, and improve customer satisfaction and customer retention. Many new technologies like the Internet, cookies-based customizing, or digital certifications make personalized offers possible. The Online Shop of the clothing company Eddie Bauer  offers not only its products online, but also supports the buying process with a Virtual Dressing Room. The customer profile is saved by the company and can be used for the "reminder service," which is a special service to remind customers of important dates such as birthdays via e-mail. An individualization of the relationship very often demands a bundling of different suppliers in order to solve the customer problem. Besides the mentioned travel platforms that support the customer process "vacation planning," there are many other new models that bundle different suppliers or/and different services and products. Two examples for the customer need, "baby care," are the Internet sites BabyCenter  and Total Baby Care . Both platforms are online shops for baby articles such as diapers from Procter & Gamble, as well as knowledge sections for young couples, who need special information, help, or contacts concerning baby care.
These examples show that it is often necessary to offer more than only core products or services to customers to satisfy their needs and to increase customer retention. Customers demand individual problem solutions, which force companies to bundle different products and services and, if needed, to work together with other suppliers in a business network. Information technology not only enables product and service bundling, but also networking between the companies and the individualization of the customer relationship.
The new information technologies such as the Internet, Interactive Television, fax-on-demand, or Bulletin Board systems provide customers with the opportunity to call in for services and products from a company 24 hours a day, seven days a week. These new possibilities increase the flexibility of the customers, lead to a better service quality, and eliminate permanent service staff. It is also a big advantage for the companies to outsource certain standard tasks from the company towards the customer, such as product and price information, information about the delivery status, product availability, or even more complex processes like product configuration or product training. This so-called customer self-service or customer self-information also improves the qualification of customers, since they learn very intensively and get to know more about the products by themselves .
The trends "push information" and "information on specific demand" are technology-driven trends. Push information is information that is provided by a content broker or content provider via e-mail, fax, or a screen ticker. Push systems are used to disperse news and any kind of information, but also include automatic updates and installation of new software. Customers specify their profile of interest only once and save time by getting personalized information from the supplier in the future. This combination of broadcasting and personalization opens new dimensions in marketing. The range of use of push software solutions covers all areas of an organization. Besides specialized companies like the news service PointCast  or PictureTel , many other suppliers use this new technology. The Trilogy Development Group distributes new software to its customers via the push technology Castanet from Marimba Inc. . The concept of "Information on specific demand" goes even further and uses the interactive components of information technology to specify customer needs and generates more specified solutions.
How can one identify the potentials of information technology in the customer relationship and specify the right place for using one of these new concepts and tools?
To structure the customer process and to understand the needs of customers, the "Customer Buying Cycle" (CBC) is a good technique to characterize the customer process . This model helps to prove if information technology enables new solutions in the customer relationship with lower costs and higher benefits. It also simplifies the identification of new IT-enabled concepts and their integration with the traditional concepts of marketing. During the awareness stage, customers form their needs, which usually leads to an identification of the products/services they are evaluating in the second stage. At this stage they compare different suppliers/products/services before deciding which purchase they make. A very important phase for companies is the after sales stage, which proves customer satisfaction and retention. As you see in the following picture, the customer buying cycle helps to structure and identify the potential of the new concepts in the customer relationship.
Figure 3. Customer buying cycle
As explained above, Electronic Customer Care (ECC) is a rapidly emerging topic. However, most companies have not yet been able to implement customer-oriented solutions to establish long-term customer relationships. There are multiple reasons for this, but most of all, companies often do not recognize the potentials of new technologies. Most software manufacturers use a much-too technical and product-centric approach instead of demonstrating the potentials of their products. Therefore, especially small and medium enterprises (SME) have a strong need for high-quality information on these potentials. Case studies are best suited to support their decision-making process. But not only SMEs suffer from a lack of reliable information. There are many consulting companies that are not yet fully aware of the impact ECC may have on their or their customers' businesses.
The Institute for Information Management at the University of St. Gallen, Switzerland, started the project ECC about two years ago. The vision was to provide a knowledge platform with best-practice case studies on ECC. The first step therefore was the assessment of trends that will affect the customer relationship in the future. After the initial collection of case studies and the evaluation of software products, an Internet prototype was set up . With about 80 case studies, this prototype already supported the information-focused user but did not provide any interactive elements, such as discussion groups. The market response was positive, however there was a great potential for improvements the technical realization needed to be reworked as well as the structure of the cases and the query options.
During 1998, the primary goal was to further develop the prototype into a fully functional community of interest on ECC. This project phase was sponsored by the Swiss Foundation for Technology and Innovation (KTI) and was conducted in cooperation with four consulting companies as project partners. They contributed their ECC know-how and skills to build the ECC platform as it is now online .
Figure 4. Screenshot Electronic Customer Care platform
To announce the launch of the platform, a combination of online marketing (e.g., promotion at search engines, banner ads) and conventional marketing (e.g., press conference, newspaper articles, and ads) has been used.
To design a platform that supports the user, one has to start at the user's needs and derive the features of the platform from there. However, one will not be able to identify a clearly structured, detailed user process, which could simply be supported by an online platform. Therefore, the ECC project team had to rely on scenarios and weakly structured process-like workflows. The hypothetical user is a marketing manager or consultant who is trying to make sense of the various developments in the large field of electronically supported supplier-consumer relationships. The following picture shows the assumed flow of activities on a macro level.
Figure 5. Flow of activities
The content focus of the ECC platform is on the first pair of activities, while the remainder of the process is being supported by either the interactive elements of the platform or the project partners. However, in order not to loose the customer, the customer is welcome to provide information on his ECC solution that will be added to the case studies of the database. This should result in additional customer retention, because the once passive customer is now an active part of the community of interest.
The main result of the ECC project is the online platform that is accessible for free at www.ecc.ch since September 1998 . It is designed as an interactive knowledge platform. About 500 international case studies are contained to visualize the potentials of new technologies. Every case study is accessible through various query options and is being measured against the customer buying cycle. It also consists of a brief description of the ECC solution, a technical and organizational section, a discussion of the unique selling proposition of the case as well as a short analysis of the company's and the customer's benefits. The software components used are referenced with hyperlinks and explained in the separate tool section. The reciprocal connection exists as well: the tool descriptions that feature a list of reference cases, which can be accessed by a single mouse click. In addition to the case studies and technological information, the platform contains explanations on current ECC trends and a glossary to enable the marketing-focused user to understand technological descriptions and to provide the necessary marketing vocabulary to IT personnel.
Interaction, however, is crucial to establish a community of interest rather than just being a content provider. Users will not return to a platform on a regular basis just to gather "more of the same" -- mostly new case studies. But they will return to participate in discussions, ask questions, and interact with experts in their field of interest. E-mail as a means of contacting the ECC team is regarded as basic functionality, however it does not support real-time interaction and communication between users. The ECC platform therefore features a discussion group, which is technologically based on Web board  and a custom-developed chat room. To maintain a high level of discussion, both the discussion group and the chat room, are moderated. The chat room also provides the technological basis for preannounced expert talks, which are being held regularly. This combination of a high-quality information pool and communication channels make the ECC platform a real "knowledge environment."
Figure 6. Architecture of the ECC platform
The marketing director of a medium-sized retailer recognized that many competitors are investing increasing resources into the development of Internet-based IT solutions. However, due to the intransparent potential benefits, she is not able to commit the management to similar projects. In search of business cases to support her position, she accesses the ECC platform at www.ecc.ch. She searches the database for case studies of her competitors by choosing the industry query option. The approximately 30 hits cover a wide variety of potential Internet-based ECC solutions. She again narrows her focus and finally finds a few case studies of companies in about the same situation as her's. Surprisingly, all these companies use the Internet successfully to manage their after-sales communications, but not to advertise or sell products as a primary purpose. This information is extremely valuable to her. To further focus her understanding of potential ECC solutions, she checks other industries that are also setting up after-sales support platforms. Among them is the travel industry, which on one hand allows her to learn from even more best practices and on the other hand shows analogies that without the ECC database would not have been possible.
The direct references to the tool descriptions allow her to examine possible ECC solutions even further. With this knowledge of what is possible and what will most likely reveal profits, it is much easier for her to convince the board of directors to invest in this kind of future technology.
As Hagel/Armstrong  conclusively proved, Internet platforms have exponentially increasing economies of scale. So the main goal of a business model for the ECC platform is to generate as much traffic on the Web site as possible. Financing the site by imposing any costs of use, and therefore reducing the potential group of users, will result in a slower market penetration. That is the main reason why the contents of the ECC platform are free, however copyrighted.
To acquire the necessary financial resources, another model had to be found. The assessment of possible financing models finally revealed the option of partnering and sponsoring. The consulting partners that already participated in the development of the platform will continue to support its operations with manpower. Their main interest in the platform is, for obvious reasons, the demonstration of their ECC know-how. However, the maintenance and development of a knowledge platform does not only require human resources but also financial resources. These will be acquired from software manufacturers that are interested in positioning themselves among the case studies and tool evaluations of the ECC platform. They cannot influence the content of the database as the partners can, but are welcome to publish their reference case studies. The Institute for Information Management strives hard to maintain a high level of neutrality and quality. To be most credible, the platform would ideally be financed by a group of five or six competing sponsors.
Regarding the enormous dynamic of the IT market, it is hardly surprising that the authors anticipate dramatic changes in the way online platforms look and work. Information will be more easily accessible and the interactive element will become more important. There will be a time when knowledge platforms will not only be able to support a part of the user's needs, but will finally cover most of his needs.
To accommodate these developments, the ECC platform will have to change and improve its content and function.
Currently, most of the 500+ cases of the ECC platform consist of business-to-consumer case studies on how to generate additional customer value through the use of Internet technology. Because most forecasts predict an increasing importance of business-to-business relationships, the ECC platform will need to adapt to this trend as well. The focus for future case collections will therefore be intercompany sales relationships. These share some of the aspects of consumer-oriented case studies but reveal many new aspects, too. The structure of the database will need some upgrades as well to meet these new requirements. In addition to the business-to-business focus, the ECC platform will soon feature specials on specific subtopics of electronic customer care. Currently, sections on customer profiling and electronic banking are planned.
Interaction seems to be one of the key concepts for online platforms of the future. Even though these features are already important today, they will become even more relevant. As information becomes available more easily, not only will the content of a platform be its unique selling proposition, but its ability to build and maintain a community. Recent developments such as the takeover of Hotmail  by Microsoft put an emphasis on the importance of "possessing the users." The emerging market of portal Web sites such as the Netscape Netcenter  or the AltaVista Service Center  are one way that companies try to build their communities. Being the "owner" of a community means being in the core position to offer the users the company's products and services.
If the ECC platform should survive far into the future -- and it surely should -- it will need to try to be the single most important online platform on electronic customer care. That can be achieved only if it is accepted by most of the experts in this emerging field. The interactive features should support the user whenever the content of the platform is not enough to fulfill his needs.
The ECC platform of the future should therefore provide enhanced chat functionality, closed user groups, collaboration components, and even real-time multimedia conferencing systems, not to mention all the new communication technologies that will enter the market over the next few years.
The ECC platform's unique selling proposition is the integration of content and functionality in a way, that best supports the user's information needs. To be able to support user needs, the operator of an online platform has to know his users' processes. Regardless of the type of platform, radical customer centricity must be the starting point of platform design. But as customer needs are constantly changing, online platforms need to adapt to new and changed needs as well. Therefore, operating the ECC platform (or any other online platform) means to rethink the own position constantly. The platform needs continuous redesign and improvement in order to remain best-in-class.
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