• Introduction
• Features of a virtual corporate culture
• Tools to build a virtual corporate culture
• Discussion statements
• References

"It's really the experience on the site that defines the brand"

Jerry Gramaglia, chief marketing officer E*Trade , Business Week, November 15 1999, p.52

Introduction

New market opportunities are available to virtually active companies, challenged by the absence of physical shops, staff and storage space. The Internet facilitates companies making deals with each other (business-to-business, B2B) and reaching customers directly (business-to-consumer, B2C). What are the needs of the virtual customers, and which tools can be used by the web company to enhance the customer relations?

This is the second of a series of two articles on corporate web culture. Click here to read the employee perspective first.

Features of a virtual corporate culture

• Domain name

Before a web company can build a corporate culture, its core activity should be identified. If a company is specialised in selling shoes in Italy, a characteristic name could be shoes.it or shoeshop.it. The name should be easy to remember and cover the brand.

• Corporate image

The easiest way to promote a corporate website is to make it an extension of corporate activities and mail the news to the customers. An e-marketing expert may develop a new corporate image, e.g. the presentation of the staff, the product, hyperlinks and suitable banners. Through advertisements on the Internet, so called webvertising, the customer can quickly visit the corporate website. The company is just one mouseclick away.

• E-loyalty

In a web company, it is not only important to attrack online customers, but also to retain these customers. How can a web company earn the trust and loyalty of their customers? Nick Usborne of ClickZ Network is sceptical: "I know I can depend on my best friends. But I wouldnt expect any loyalty from a website." According to Reichheld and Schefter (2000) the costs of acquiring online customers are much higher than in traditional business. On the long run, profits may accelerate faster. Loyal web customers tend to consolidate their purchases with one primary supplier, as part of their daily routine, and more frequently they will refer new customers to a supplier, so called referrals.

To gain loyal customers, the web company should first gain the trust of the customer. The majority of online customers are seeking convenience in stead of the lowest price. Customers want to do business with a site that makes their lives easier. They are willing to pay more for that convenience. There is a minority of customers, the so called butterflies, who flit from site to site seeking promotional discounts.

Loyalty and trust of a customer is built on a durable relationship of the customer and the company. The success of this relationship depends on the corporate culture and capability of the company. The corporate statement `Trust me isnt very effective. The company has to show over a longer period of time a trustworthy culture.

• Case Ebay

Ebay is e-commerce leader and earning the economic benefits of referrals from loyal customers. More than half its customers are referrals. Surprisingly, referred customers tend to use the people who referred them for advice, rather than calling eBays help-desk. Loyal customers not only take over the function of acquisition, also they form a natural help-desk, for free! One of the tools to build trust in the financial transaction process is that Ebay will hold money in electronic escrow until the customer is satisfied with the product received. The hidden power of Ebay is bringing small-town traditional rules of trust to the challenging global market place of strangers.

Tools to build a virtual corporate culture

The virtual corporate culture influences the online behaviour of customers. Companies are more and more aware that their corporate image accelerates new business opportunities. Rost van Tonningen argues: "Sponsoring is important to relate a brand to images, and thats why IBM is sponsoring Olympic Games, to establish a more dynamic profile."

Dayal, S. e.o. (2000) describe how to build a digital brand, and take care about the consumers online experiences. The web company should identify promises appealing to customers, e.g. make customers feel like winners, and offer the promise of achievement. E*trade, for example, promises to help consumers manage their finances successfully. Furthermore, games and other activities may offer the promise of fun and adventure. Virtual clubs or communities offer the promise of belonging. Chat rooms or rating tools appeal to the promise of belonging. The travel site of AMR/American Airlines offers potential travellers chat rooms to meet people interested in the same destination. Finally, design features such as one-click ordering shopping offer the promise of convenience.

Usborne (1999) offers tools to build a trustworthy corporate web culture to customers, e.g. write a privacy policy that customers can believe in. Formulate it simple. Avoid a lengthy legal statement primarily protecting the company and not its customers. Customers have a pretty good nose for this and will withdraw from the site. Another tool is to make the `unsubscribe option highly visible. Finally, never break your own promise in the use of personal customer data.

To build a successful web company, the following customer oriented tools (Dayal e.o.,) are supportive:

• Purchase-process streamlining tools eliminate real world constraints such as the need to walk into a store. Amazons one-click ordering system, for example, eases transactions by enabling the customer to purchase an item online.

• Self-service tools include software for tracking orders, preparing statements, and changing addresses on-line.

• Do-it-yourself product design tools allow consumers to customise products and services, either with the help of configuration options or from scratch. Dell Computer, for example, lets customers design their own systems on-line by choosing from a range of options; customers of Music.com and Listen.com can download the music of various artists onto a single compact disc.

• Personalisation and collaborative tools include software that creates personalised interfaces between the company and customers.

• Exchange tools promise something to the customer, and collect valuable marketing data for the web company, e.g. Mutsubishis site offers advice which car matches with the customer needs in return for filling in a questionnaire on automotive preferences. The relationship is based on exchange.

• Dynamic-pricing tools allow prices suitable to particular individual circumstances, thus no fixed prices, e.g. eBays and uBids auctions and Pricelines offer to "name your own price." Though, this may also have a negative impact to the customer, e.g. in the case of Amazon.com where the second buy is more expensive than the first one.

Discussion statements

• Web company leaders face the task to create an attractive corporate culture to their customers, through their corporate website.

• Online tools enable web companies to build trustworthy relationships with their customers.

• Top priority to real companies is to make their trusted brands web enabled.

• Top priority to web companies is to create the same level of customer loyalty compared to the real world.

• The virtual customer should have the opportunity to adapt the corporate web culture of the supplier.

• In the virtual market place the issues of trust and loyalty are becoming more and more important.

At the end of the set of two articles, the major findings from both the employees and the customers perspective are summarised in the figure below.

References

Dayal, S. e.o. (2000)

Building Digital Brands,

The MckinseyQuarterly , no.2, pp. 42-51

Hoffman,D. and T. Novak (2000)

How to Acquire Customers on the Web?

Harvard Business Review , May-June, pp. 179-187

Reichheld, F. and P. Schefter (2000)

E-Loyalty, Your Secret Weapon on the Web,

Harvard Business Review , July-August, pp. 105-113

Rost van Tonningen, B. (2000)

Online allure grows for traditional companies,

http://management.hbp.net , Marketing Section, May.

Usborne, N. (2000)

Oops, I Cant Be Trusted,

ClickZ: Permission Marketing , August 28

Dr. Sylvia of Bunt-Kokhuis are commissioner at Compu'Train and instructculture and leadership to the free university in Amsterdam. For more Article, click here