Fifth Rule of E-business

E-commerce is enabling companies to listen to their customers and become either the cheapest, the most familiar or the best.

In recent years, value innovation across all service dimensions – speed, convenience, personalization and price – has accelerated due to technological innovations such as the Web and e-commerce. Companies provide value innovation by providing either the cheapest, the most familiar or the best-quality product.

The companies are providing lower prices by reducing their inventory and distribution costs. For example, Wal Mart has brought a revolution in American retailing with its discount superstore format.

With the most familiar, customers know what they are getting. McDonald’s is a great example of a familiar brand. McDonald’s is a great example of a familiar brand. Often visitors to foreign countries seek local McDonald’s just because they know what to expect.

Being the best involves reinventing service processes and raising relationships with customers and suppliers to unprecedented levels of intimacy. The most obvious example of the best in exceptional service is American Express, exemplified in their Return Protection Plan. This customer benefit refunds card members for items purchased with an Amex card within 90 days from the date of purchase, if the store won’t accept returns.