MD253/MK252Electronic Commerce

Feb. 8, 2006

Single & Multi-Channel firms

Issues Covered

• Single Channel Case Study– ING Direct

• Classifying Online Retail Efforts– Characteristics & reason for focus

• Efficiency Machines• Niche Players• Traffic Drivers• Triple Plays

• Success in a multi-channel environment– “Right Channeling” / “Re-Routing”– Success factors & technologies

Fire Bad Customers!If someone has a lot of demands we'll say "This is not the right thing for you. You need to go back to your community bank, which will gladly charge you for the service you want." Arkadi KulhmannCEO ING Direct USA

A ‘bad’ customers might• Call customer service too often• Ask for paper copies of statements• Demand special treatment b/c they have high account balances

Mitigating Risk in ‘Re-Routing’

• Understand channel economics– ‘true cost’ beyond raw margins: loyalty, frequency,

acquisition costs, freight, returns, service

• Incentives to guide customers to the right channel– “carrots & sticks”

• Provide a safety net• Communication program

– for internal & external constituencies

True Cross-Channel Design

Customer clicks “Save Application” from any application page

Banker in store retrieves all saved application data and can Complete the application.

Source: Watson, Latinbanking.com

Rightchanneling Messages & Results

Messaging & alerts