A new survey shows that companies are flocking to the web to promote their brands, but turf wars and strategy conflicts are slowing their progress.
While many companies expect their web sites to help them achieve goals such as lower transaction costs, greater customer retention, higher levels of brand differentiation and more successful product launches, it's not all plain sailing. Many are facing major problems that are retarding their efforts to achieve these goals. A new report from The Conference Board, Branding on Site: Customer Relationships in the Digital Marketplace, looks at what these problems are, how leading companies are coping with them, and what results they are achieving.
Turf battles
Executives in many companies are involved in turf battles over the company web site. Who should be in charge of it? Should it be the technology department, the marketing department or the business units? According to the author of the report, Kathryn Troy, "A common lament is that 'Everyone is in charge and no one is in charge'." In most companies, the IT, marketing and communications departments share the responsibility for managing the e-business.
What should it promote?
What should the web site promote? The master brand or product brands? Some companies actually have hundreds of sites. About 75% of companies promote the master brand � probably the corporate name � to support product brands.
Who is responsible?
Branding is also usually a shared endeavour. Senior management, with the marketing or branding departments, are usually responsible for brand strategy. The marketing, branding and often the communications departments are responsible for strategy execution. And the communications and IT departments are responsible for creative or technical support.
Why move to the web?
The main reasons that companies give for moving existing brands to the web are:
· To give customers an extra channel to reach the company
· To retain existing customers
· To build brand awareness in the e-channel
· To attract new customers
· To expand into new markets
Those companies that created new brands for the internet did it:
· To enhance customer acquisition and retention
· To actively promote their firms' products and services
Companies have also used web sites internally, so that employees can use the e-channel to communicate.
What measures?
While four in ten companies claim to be highly successful in meeting their current brand supporting goals, only 15% say that they have been highly successful in achieving a "total customer experience".
Companies use different measures of the web site's success. Some look at savings on transaction costs, new customer acquisition, customer satisfaction and customer loyalty. Others look at brand awareness. The B2B companies tended to favour indicators like customer retention and brand differentiation.
What the winners focused on
The companies that reported the highest levels of success in realising their online brand strategy focused on outcomes like:
· Lower transaction costs
· Improved depth on content
· Speedier downloading time
· More customer visits
· Greater customer retention
· Higher levels of brand differentiation
· Successful launches of new products
The report is one of a series from The Conference Board's Performance Excellence and Operations Management Research that focuses on helping companies apply new methods and technologies to basic business processes.
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