Fast Talk: The State of the Customer Economy

Steve Elterich: We've made some progress. Take a look at the financial-services industry. People can decide how they want to do business with us -- through phone reps, a branch, or the Web. Today, 89% of our customers choose to do their trades through the Web. There's a reason for that: They can get services and capabilities that they were never able to get before, things that we couldn't deliver without the Web. That tells me that we're making progress, but the potential is still much larger.

Patricia Seybold: One of the biggest gaps is the product-line centricity of our organizations and the gaps between functional areas: distribution, fulfillment, and inventory management. We have to reorganize -- or disorganize -- our companies around the end-to-end customer experience. This doesn't just need to happen within one company. It should happen all the way through the value chain. And when you start to think about taking the system apart and putting it back together again across those boundaries -- well, that's when it really gets exciting, right?

Angel Martinez: There's an interesting dilemma that pops up in the business that we're in and also in the business of fashion. The shopping experience isn't simply an intellectual exercise designed to fulfill whatever shopping jones you have at the moment. People like to shop. Now, if I had my entire catalog of products on the Web for anyone to buy at any time, people would go right to what they've always worn, order a new one, end of story. But part of how my industry works is that people walk into a store and try on multiple pairs of shoes. Then, at the last minute, they get inspired to buy something that they never expected to buy. Often, the Web causes people to think about brands and product lines along very narrow terms of service, product, and assortment, rather than considering the emotional aspect of shopping.

Kelly Mahoney: It's absolutely true that customers want to shop how they want to shop. At Staples, one of our mottoes is 1+1=5. That means that if you have more than 1,200 retail stores, a catalog business, kiosks, and a Web site, then when you migrate a customer from shopping through a single channel to shopping through two channels, that person will actually spend two-and-a-half times as much as a single-channel shopper would spend. When he shops three channels or more, he spends four-and-a-half times as much. At Staples, we've gone from being a zero-dollar company to being an $11 billion company by being very customer focused. We add incremental value and explanations for why customers should migrate to different channels. For instance, a shopper who goes into one of our retail stores can buy 7,000 products, but if those products are out of stock, they can go to a kiosk, place an order for the item, and have it delivered the next day. Ultimately, no matter what channel you're talking about or working through, the challenge for the company is to focus on its customers' specific individual needs.

Jeet Singh: For some of the companies that we work with, the issue isn't the customer relationship, it's the customer life cycle. Honda might wonder if a customer will move to an Acura next. A financial-services company might decide to acquire an insurance company, because its customers will need that service next. And for some companies, the customer issue has only recently begun to migrate from end-to-end integration to a new kind of adjacency. It used to be that a company would say that if it builds toasters, the next product to increase its market would be ovens. But if you're customer-centric today, an adjacent product may not be something that you build. If you're General Motors, and you offer your customers OnStar, maybe your next move is to partner with Fidelity to offer online stock quotes.

Which Is It: Techno-solution or Techno-screw up?

Alan Webber: One of the key premises of the past few years was, The Web changes everything. When it came to the customer relationship, technology was supposed to be the tool to revolutionize how companies identified, reached, marketed to, and sold to their customers. We were going to see a two-way conversation replace a one-way monologue. Customers were going to cocreate products. The promise was enormous. Has it happened? Has technology lived up to that promise?

George F. Colony: It is very difficult to build experience into the Web. Remember, the Web is made up of grad-school software that Tim Berners-Lee and Marc Andreessen whipped up in their university laboratories. The main reason that the dotcoms died was because the technology sucked.