In the early days of Internet business, signing up new customers, or getting them to make their first purchase, was the be all and end all of e-Business strategy.
It’s no wonder. The market rewarded revenue, not profitability. And bragging rights seemed to go to those companies that could claim the most visitors, registrants, or purchasers.
But Internet businesses soon learned what traditional marketers knew all along: it’s cheaper a lot cheaper, in fact to keep a customer than to find a new one. And as the growth of users inevitably flattened, customers became less disposable.
Out of this experience came the current focus on CRM, or customer relationship management. In the most general sense, CRM means growing and strengthening relationships with customers. Growing lasting relationships, along multiple points of contact, has come to be seen as the key to achieving sustainability.
But there is more to relationship management than CRM. When all is said and done, e-businesses compete to offer the most value to customers. Sure, serving the personalized needs of each customer is important (see: Creeping Personalization 101). But in the long run, if more and more value is to be passed on to the customer, it needs to be generated somewhere in increased efficiency, scale or innovation.
For that reason, online businesses need to develop relationship strategies that go beyond CRM. Just as e-businesses need to carefully plan how to build relationships with customers, there are other areas that require adequate planning and attention:
- Partner/Affiliate Relationship Management (PRM): On the Internet, you can’t go it alone. All the great Internet success stories have made key alliances that have strengthened their hand. Whether you need access to larger audiences, more buying clout, or better distribution channels, making alliances is often a necessity. PRM needs to be part of every business plan and every online growth strategy.
- Supplier Relationship Management (SRM): There has been a lot of hype about B2B. But most e-businesses are hybrids: B2B2C. They manage inventory on the back end and sell it to customers. To achieve cost savings that can attract customers, areas such as demand and production planning, inventory management, logistics and procurement need to be planned carefully.
- Enterprise Relationship Management (ERM): An e-business runs differently from a brick-and-mortar institution. In the new economy, the most valuable commodities are knowledge and talent. Web businesses need a coherent strategy to manage this knowledge and talent. If the relationships inside your company aren’t properly managed, the impact on your customers will be direct and immediate.
The old school adage that it’s all about relationships is truer than ever. Every business needs to build profitable, long-lasting relationships with customers. But web businesses can’t neglect the relationships that ultimately will allow them to deliver value.
Web businesses with long-term growth strategies all have plans to help them sustain a leading-edge product offering to their customers. Do you?