Customer Proposition

Having identified your target customers, this could be one or more segments, you are looking to build up a proposition(s) that either suits one or more of the groups. If you look at your segments and their characteristics, from a market point of view, there are likely to be a number to a few that over lap. Where this occurs you can start to group some of the segments.

If you already have an ecommerce site then this stage of the segmentation can be slightly easier than just from a retail channel. Internet sites provide such a wealth of information that are key in delivering targeted products and services. If you are just using Google Analytics to track customers it can be a bit trickier.

Look to build a proposition that suits each of your segments this will include the product and the promotional structure offered to the groups. With an eCommerce site this will be the products offered in a particular category and the cross sells that are offered along side a particular product. Today's sites should allow the site to be tuned to individual customer requirements -including the home page, order of products on the category page and the recommendations to customers on the product page.

Building The Customer Proposition Through Segmentation

In order for a business to generate new revenue opportunities or to encourage our customers to spend more with us, we need to examine who our customers are. If you haven't done a segmenation exercise in your business it can be quite challenging, especially when the segments seem to blend into one.

I recently completed one for my business, in the end I chose to break down the market by size of business, as I am working in a B2B environment. It took a while to find some useful market data, but a good trawl across the internet can usually uncover some interesting stats. The UK government typically has statistics on major industries, otherwise look in trade press and other internet sites to find what you are looking for. Esentially you are looking for a supported analysis of your markets. (Here we seen a good example of how businesses make use of IT in day to day business. The internet can be an excellent source of marketing data and if you cannot find public domain information it can be a great way to source a supplier. )

Segmenting customers is vital in all businesse, but provides great opportunities for those with an eCommerce channel. Having identified customer segments you can attribute sales and enquiries to the various groups to build a picture of their value. This then allows you to focus your resources on the most valuable groups.

How To Deliver On Long Term Objectives

There are two sides to the financial objectives and they are split into two points each.

On the one side we need to improve our business productivity, this can be achieved by improving our cost base and increasing the utilisation of our assets. Essentially the reduction of costs will lead to an increase in profitability.

At the other end of the profitability axis we try to increase our revenue by expanding our opportunities and enhancing customer value. We can increase our profitability by delivering new avenues of revenue or by getting our existing customers to buy more.

At this stage it probably seems like there is an insubstantial link to IT or eBusiness but as we move down through the layers you will start to see how eBusiness entwines its way through our business.

Supporting Our Financial Objectives

Some time ago Kaplan and Norton developed an interesting tool for measuring business success that wasn’t just focused on the financial targets. It could be argued - well what else is important, but that tends to be very short sighted. An example would be - why don’t we cut back on marketing spend. The accountants argue that this is just a cost anyway.

If we cut back on marketing it does indeed boost profits as the money that was being spent on monitoring and communicating with our customers can now be used elsewhere. However there is a longer term cost. We are reducing our understanding of the market and potentially eroding the relationships we have built up over a sustained period of marketing activity. The future result is, we find our customers no longer want our products and services as the market has moved on. The loyalty and relationships are no longer being maintained with regular communications.

So what do we do? Next we will start to look at how other activities can support our financial objectives.

e-Business

The internet doesn't have to be about selling products online, e-business activities should form part of your overall business information strategy. Which should be aligned with and support your main business strategy. It is vital that the choices you make for your business are not just based on the latest trends and offerings from hi-tech companies.

We can use a simple model to build up a picture of your business strategy. I have recently become familiar with Kaplan and Norton's strategy maps. Now before you start running for the hills please hold on as the next few additions to the blog will build up a simple picture of how it works and the benefits it can start to bring to your business.

Welcome to Talk e-Business

This blog aims to demystify the world of e-Business, an element of business that is becoming increasingly important for all companies. The cost of owning a website has decreased dramatically, however just having an online presence is no longer sufficient. The market is becoming increasingly crowded and it is therefore vital to have an online strategy that will deliver return on investment, increase customer confidence and improve loyalty.

Using some well known frameworks we will start to breakdown new ideas, technologies and trends to examine what value they can deliver for your business.

Please feel free to comment and offer suggested areas for analysis, I look forward to hearing

from you.

Michael Bates