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Customer relationships go digital

Companies already adept at creating and nurturing close customer relationships will reap the benefits opened by the web

By George S. Day . 01 March 2003

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Who’s afraid of the Internet? Not companies, it seems, according to a new survey. But closer analysis suggests optimism may well be misplaced and expected benefits a mirage. The reality is that companies already adept at creating and nurturing close customer relationships will reap the benefits opened by the web.


Opinions on the impact of digital technologies on customer relationships have swung from anxiety about the threat of frictionless commerce to enthusiasm over the prospects for cutting customer service costs and tightening connections with customers.


As recently as 2000 the prevailing view was that when customers could use the Internet to expand their search for alternatives, learn more about them faster and easily compare prices that margins would shrink and loyalty would be increasingly transient.


Persuasive evidence that these fears have subsided comes from our March 2001 survey of 352 senior managers on the impact of the Internet on their ability to manage customer relationships.


We found that 30 per cent saw the Internet as a major opportunity whereas only one per cent saw it as a major threat. A further 52 per cent saw the Internet as a minor opportunity and only 13 per cent said it was neither a threat nor opportunity.


Overall the Internet was judged to offer opportunities to reduce customer service costs while tightening customer relationships by encouraging dialogue, linking more parts of customer contact and enabling the personalisation of communications.


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