The Five Value States of E-Marketing

Transcription

1 Decision Framework, A. Sarner Research Note 14 November 2003 The Five Value States of E-Marketing E-marketing must support a multichannel strategy and also, if warranted, a collaborative partner strategy. As you continue to develop a Web presence, it should evolve in the context of the e-marketing development value framework. Core Topic Customer Relationship Management: Business Strategies, Technologies and Applications for Marketing Key Issue How will marketing communications evolve to craft optimal dialogues with consumers? Effective e-marketing will come from establishing a trusted, free flow of communication that both the and the company find valuable. However, for many companies, the view of e- marketing must move from the idea of static e-brochures and pop-up ads to a highly interactive two-way communication tool between company and. To do this, companies must build on interactions through all channels, including the Web. As a company continues to develop its Web site, it should view e-marketing as the online piece of its ongoing multichannel relationship strategy. There are five value states for e-marketing: "brochureware," transactions, online relationships, multichannel marketing and multicompany marketing. Successful e-marketing that is, a valuable online exchange of information between the company and the will reach fruition at State 3, or online relationships. State 4 will see e-marketing playing a full role in supporting a multichannel strategy, as well as indirect relationship opportunities. Companies that seek to extend that relationship to partners' s will emerge at State 5, the multicompany relationship. The five value states are outlined in Figure 1. Gartner Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.

2 Figure 1 1st: None The Five Value States of E-Marketing 3rd: Function/ 2nd: Initial Channel Productivity Effectiveness 4th: Intraenterprise Integration 5th: Value- Enabled Network Vision Brochureware Transactions Online Relationship Multichannel Multicompany Strategy Web presence with basic features for marketing, information, brochures, FAQ, etc. Stand-alone site as unintegrated business silo with additional features, ability to purchase Using the e-channel to establish/ improve relationship, two-way communication Integration with multichannel CRM strategy, provides with choice of channel Marketingtos customktg. mix, mers, optimized outsourced mktg., demand creation in the value network Technology Web publishing E-commerce, clickstream analysis, order confirmation, limited personalization, outbound , ad servers Campaign management, analytics, online dialogue, loyalty schemes, marketing Channel optimization, multichannel database, optimization, loyalty mgmt. and clienteling Real-time e-marketing, collaborative e-marketing, demand chain e-commerce, device mktg., PRM, info. sharing Type B 2003 Type B 2007 Type A 2003 Type A 2007 CRM = relationship management FAQ =frequently asked question PRM = partner relationship management Technology Adoption Types Type A organizations compete at the cutting edge of innovation and use IT as a weapon. They tend to be the rarest group. They weigh the risk of the early use of technology against the benefits of competitive advantage. Type B organizations compete neither on price nor on innovation, but on full service and overall value. They represent the largest group and use IT to improve their productivity, product quality and service. The Type B organization typically waits for a technology to become mainstream before considering implementation. Source: Gartner Research (November 2003) First Value State: Brochureware This type of site establishes a static Web marketing presence with no transactions. Although the Web presence can contribute to building brand awareness, there is generally no interactivity or opportunity to start developing relationships. Companies that plan to have a Web presence should view this state as a means to promote use of other channels, such as by posting research or information-type material, company phone numbers, and physical addresses in highly visible places. Value: This provides a relatively low-cost Web presence. Companies can use a Web page as an information-rich Rolodex or Yellow Pages for prospects. Although this might be suited to a service-type business, such as a law firm, where there is no expectation to engage in transactions, other industries, such as 14 November

3 retail, evoke transaction-type expectations. This could be the ideal value state for certain small businesses. Second Value State: Transactions The second value state gives the the ability to transact over the Web. Typical functionality at this state is e-commerce, in the form of a catalog and order management tool. E-marketing at this state is less about relationships and more about the promotion of the products in a catalog. Many companies have also integrated to support order confirmations. Although many companies are attempting marketing at this state, these efforts are mostly mass pushes, with little to no personalization, because information about the is not well-known or distributed throughout the company. At this state, sites are mostly a stand-alone effort a separate department with its own profit and loss and with little integration with the rest of the business, such as the service or sales department, or with other channels, like the physical store. Technology characteristics in this state include clickstream analysis to gather intersession learning for future product positioning. Most companies will find themselves at this state of e-marketing, where marketing intelligence is limited to data gathered over the Web. Value: Customers can buy something over the Web. At this state, companies can view a transaction site as an incubation center, where measurement and testing for preferences can be developed and refined. The company will have the ability to collect rich transactional data that can be used to build ongoing relationships online and offline. Third Value State: Online Relationships The third value state of e-marketing is to develop a Web presence aimed at building relationships to benefit the enterprise and the. Data from past transactions, Web analytics, a user-controlled profile, and segmentation and personalization techniques are all used to align the value proposition of the company with s. In this state, e- marketing, such as marketing and campaign management, is more a direct result of what different s are doing or have asked for, implicitly or explicitly, rather than something thought up and pushed out by the marketing or e- commerce team. Trust and communication are established because, as the s are sharing more information, they are getting something in return targeted offerings. Value: The value of this state is relevancy. Customers are often willing to share information about their needs if they expect to get 14 November

4 what they are looking for. E-marketing at this level delivers and even anticipates what is valuable to s, and it can respond accordingly. If the second state is about the ability to transact online, this state is about why a would transact online. A level of trust has been established from past interactions, and the feels that future transactions will prove satisfactory. This is the beginning of loyalty (see "Management Update: Use Six Building Blocks and CRM to Achieve Customer Loyalty"). Fourth Value State: Multichannel Marketing This type of site aims to leverage e-marketing throughout the enterprise. Whereas the third value state seeks to develop a communication flow online, the fourth value state will seek to carry the dialogue to other channels. For instance, a comes to the Web site, shows a propensity for a type of service but doesn't transact online. The next time that is in the call center, the agent can pick up that stage in the 's buying process and continue without starting over again. Functionality at this state includes channel optimization or the ability to understand what the "best" dialogue will be at a particular channel at a particular time, based in part on previous channel interactions. In addition, depending on the type of company and business model, there may be elements of "handing off" pieces of the buying process with relevant partners (for example, a manufacturer handing off leads to a retailer). However, for the most part, activity is limited to within the company. Value: This state provides a companywide relationship. Lots of activity will not occur on the Web. With this state comes the understanding that certain channels are most appropriate in different conversation stages (such as a buying process) and that e-marketing will capitalize on appropriate pieces of the process, but not necessarily all. E-marketing efforts will seek to market online as well as pass off relevant data to support a multichannel buying process. Customers will expect a consistent experience across all channels. Fifth Value State: Multicompany Marketing This type of site seeks to optimize relationships through all channels, as well as e-marketing collaboration with partners and suppliers. Extending the idea of State 4 of leveraging e- marketing throughout the company, State 5 will extend beyond one company and help support buying from a partner. This can take different collaborative forms, such as the partner using the company's e-marketing capability but managing the business process itself, or an enterprise running e-marketing 14 November

5 campaigns and dialogue on behalf of the partner and passing on leads to the partner. This collaborative relationship is only possible with trust and the agreement of the demand chain partners. Value: State 5 provides relationship extension: E-marketing will be transformed into a communication tool that many companies can share to communicate with their extended networks, including distributors, resellers and end s. Data collected and shared from effective communication will be used not only to align a company with needs and to increase efficiency. It will also enable companies, partners and suppliers to align, predict and plan for future products and services that meet s' expectations. Bottom Line: A company can develop incremental value from investment in e-marketing capabilities, ranging from a basic brochureware Web presence to transactional and relationshiporiented capabilities that ultimately form an integral part of the enterprise's multichannel strategy. 14 November