2001

Businesses are failing to maximize the value of their e-business channel - latest survey findings from PA Consulting Group - 10 July 2001

New research - Capturing Customer Value in e-business - launched today by PA Consulting Group, reveals that, in critical areas, companies are clearly failing to realize the expected benefits of e-business.

According to PA's survey, those businesses with a clear e-business strategy, and supporting integrated channel strategy, are more successful in driving out benefits for themselves and their customers. But from the customer perspective, companies are simply failing to use e-business to deliver the kind of experience and relationship that will build customer loyalty.

Ian Murray, senior member of PA's management group and CRM expert, comments:

'The challenge for businesses competing in today's new economy is how to maximize customer value and profitability by retaining customers in an environment where customer demands and choice continue to increase. The results of our survey confirm that businesses are failing to derive full benefit from their e-business channels, with few able to deliver compelling customer propositions and experiences that will encourage loyalty, retention and profitability. The results should make worrying reading for business leaders.'

Key findings of the survey are:

• In critical areas, companies are clearly failing to realize the expected benefits of e-business - all respondents were able to articulate the specific business drivers that had caused them to embark on their e-business initiatives. However, when asked how successful they had been in achieving the anticipated benefits, the responses were quite disturbing, with the majority of companies dissatisfied with their achievements to date. This was particularly so in those areas that have a direct impact on profitability, for example, cost reduction, 24 x 7 contact with customers, acquisition of new customers and reaction to competitor action.
  
• Those businesses with a clear e-business strategy, and supporting integrated channel strategy, are more successful in driving out benefits for themselves and their customers - whilst almost all respondents had a multiple mix of channels to customers, few were able to combine all channels seamlessly and to treat them as an integrated whole. For example, only 5% of companies were able to share customer information across all points of contact with the customer and just 12% said that a customer who had accessed/requested services over the Web would have that fact recognized the next time they contacted the call center
  
• From the customer perspective, companies are simply failing to deliver the kind of experience and relationship that will build customer loyalty - few businesses are using insight on customers to tailor a Web experience of specific relevance to an individual customer. Only 15% use customer preferences to personalize the Web experience and 13% are able to tailor the products and services offered on the Web according to customer profile information
  
  Furthermore, companies are generally failing to provide an adequate level of back-up service for on-line business. Just 12% are able to provide integrated help via a call center following interaction over the Internet and only 13% are able to provide access for call center agents to data supplied by the customer over the Web site.
  

Achieving sustainable success in maximizing customer value
PA believes that there are four critical components for achieving sustainable success in maximizing customer value from e-business. First, companies need a clear relationship strategy, which supports the business' overall strategic needs and defines e-business' role in building profitable relationships. Second, they must design the on-line customer experience through the customer's eyes. Third, they should develop a robust channel blueprint. Finally, they need to underpin all this with a clear case for change and a robust change management process, focused on the stage delivery of benefits to ensure initiatives are prioritized within the overall aims of the strategy.

Mr Murray concludes:

'The time has come for businesses to look at how they are making use of their on-line channel and whether they are delivering real value to customers. Done well, e-business can be a real differentiator and a powerful competitive weapon; done badly, it will act as an open doorway for defecting customers.

'For those companies that are successful in building loyal relationships through the online channels, the rewards can be significant. It offers business the opportunity to become market drivers in the new economy rather than being simply market-driven, and enables both customer and shareholder value to be captured and maximized. The stakes could not be higher.'

Ends

Copies of the report Capturing Customer Value in e-business are available by emailing ccv@paconsulting.com For more information, please contact:

Polly Ferguson PA Consulting Group 123 Buckingham Palace Road London SW1W 9SR United Kingdom Tel: +44 20 7333 5653 Fax: +44 20 7312 4612 E-mail: polly.ferguson@paconsulting.com

Notes to editors
PA Consulting Group is a leading management, systems and technology consulting firm, with a unique combination of these capabilities. Established almost 60 years ago, and operating worldwide from over 40 offices in more than 20 countries, PA draws on the knowledge and experience of some 3,700 people, whose skills span the initial generation of ideas and insights all the way through to detailed implementation.

PA builds strategies for the creation and capture of shareholder and customer value, and helps clients accelerate business growth through innovation and the application of technology. PA works with clients to improve performance, mobilize human resources and deliver change effectively, including managing major projects, and designing and implementing enterprise-wide systems and full e-business solutions.

PA focuses on creating benefits for clients rather than merely proposing them, and this focus is supported by an outstanding implementation track record in every major industry and for governments around the world. PA also develops leading-edge technology both for its clients and within its own portfolio of venture companies in areas ranging from software to wireless technology to life sciences.

PA distinguishes itself from its competitors through the range and quality of its people, the depth of its industry insight, its development and use of technology, and also its independence and culture of respect, collaboration and flexibility in working with clients.

We are proud that our clients say 'PA makes it happen'.

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