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How To Guide
Getting Close To Customers: Leapfrogging With eCRM
The Internet As The New European Currency
European manufacturers have been slower to adopt many
key enterprise technologies, such as the installation
of an enterprise resource planning (ERP) system, for
effectively managing millions of customer interactions.
Without an ERP system to track the status of a customer's
order from the factory to the customer's door, a manufacturer
cannot tell a customer some of the most important things
he or she wants to hear these days: Where is my order
and when do I get it?
Unresponsiveness to customers' concerns, if not rectified,
will threaten the sustainability of many Irish manufacturers.
The continuing integration and expansion of the European
market and the arrival of the Euro are both opportunities
and threats. Certainly, those forces have put European
manufacturers on more of an equal footing with their
competitors based elsewhere, particularly in the United
States. An even bigger factor pushing European industrial
companies to get much better at managing customer relationships
is the Internet .
The global communications network eliminates much of
the age-old geographic and information advantage that
many manufacturers have had over their customers. Customers
of everything from cars and appliances to computers
and books can now get information on pricing, product
features and other buying criteria from a broad array
of sellers without leaving their home or office, and
they can often complete the transaction electronically.
Unlike many services (such as hair cuts and hotel services),
most manufacturing products can be transferred across
borders and are easily comparable across geographies
in terms of price, quality, quantity, delivery, and
so forth.
There is an enormous growth in the number of online
transactions both worldwide and in Ireland. However
the Internet is also extensively used as a shopping
tool. For example, while few second hand car buyers
purchase online, many are making growing use of sites
such as www.autofinder.ie
or www.cbg.ie
to arm themselves with better pricing information, so
as to strengthen their negotiating position vis-à-vis
dealers and private sellers.
As consumers become more familiar with the Net, as bandwidth
increases and access cost falls, Internet usage will
continue to soar. Even if consumers do not buy online,
the information they gain on the Internet can still
affect prices. Companies must understand that, not unlike
the impact of imports on competition, it takes only
a small percentage of total sales to go through Internet
channels to seriously affect value propositions, prices,
and profits. Think, for example, of the speed with which
Irish lending institutions cut their interest margins
when Bank of Scotland captured a small share of the
Irish house loans market a few years ago.
Increasing price pressure, is a particularly serious
problem for many Irish companies given that they have
experienced far greater increases in labour, rent, insurance
and professional services costs than their overseas
rivals.
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