The Web Is the Most Common Way to Sell

By Allan Alter  |  Posted 10-31-2006

The Web Is the Most Common Way to Sell

The "e" in "e-commerce" now stands for "everyday." The Internet, once a novelty, then an important customer service and sales tool, has now emerged as the most popular sales channel. But are companies getting all the benefits they could? That's the question we are asking in our new Customer Strategies survey, on which we will be reporting throughout November. This week's report has two parts: In our first finding, we report that companies are still focused on growth, and are making customer acquisition their first priority. In finding 2, we examine how the Internet compares with other sales channels. It turns out that at least four other channels are more profitable than company Web sites, B2B exchanges, online auction sites and retailers. We also found that few companies are getting the bulk of their new customers from the Web. Can companies do a much better job of selling on the Web? In the following weeks, we'll be broadening our inquiry, looking at IT strategies for marketing, sales and customer service.

For more data and analysis, see CIO Insight's Research Center blog at go.cioinsight.com/researchcentral

Next page: The hunt is on for new customers; most companies continue to favor growth over cost-cutting.

The hunt is on

for new customers; most companies continue to favor growth over cost-cutting.">

Finding 1. The hunt is on for new customers; most companies continue to favor growth over cost-cutting.
In general, companies are placing greater emphasis on acquiring new customers rather than on ways to achieve revenue growth or increase profits. That's especially true for B2C companies. But for companies that serve other businesses, doing more business with current clients is also an important goal. To earn repeat business, these firms need to know their customers well and provide first-rate customer service. This helps explains why B2B companies—and especially companies that are both B2B and B2C—place a higher priority on engaging and analyzing customers.



Next page: Nine out of 10 companies sell on the Web, but only half say the Internet is among their most profitable channels.

Nine out of 10

companies sell on the Web, but only half say the Internet is among their most profitable channels.">
Finding 2. Nine out of 10 companies sell on the Web, but only half say the Internet is among their most profitable channels.
E-commerce is everyday business now, but it's not about to make your sales force and telemarketers obsolete. Field sales, retail stores, telephone sales and distributors are all more profitable channels, despite the additional labor costs. The Web is most adept at reaching niche markets—the so-called "long tail"—and most profitable when a company's Web site attracts new customers. Still, old and new customers prefer other ways of doing business, and the best way to use technology may be to help salespeople instead of replacing them. However, it's worth noting that the Internet is most successful at companies that serve both consumers and businesses. For example, the complexity of financial-services companies seems to make the Internet an effective alternative to traditional channels. Also noteworthy: Few companies have found a way to take advantage of Web 2.0 technologies to turn a profit.



Research Guide:

  • Finding 1: The hunt is on for new customers; most companies continue to favor growth over cost-cutting.
  • Finding 2: Nine out of 10 companies sell on the Web, but only half say the Internet is among their most profitable channels.

    Upcoming results from the Customer Strategies survey:

  • Nov. 8: The ability to collect customer data still outstrips the ability to put the data to work.
  • Nov. 15: Sales and marketing technologies are often not deployed, and frequently fall short when they are.
  • Nov. 22: Customer service products linger despite IT support.

    Read our previous surveys on customer strategies and related topics:

  • July 2005 Customer Strategies Survey: Can You Profit As Customers Get Smarter?
  • October 2005 Business Intelligence Survey: Business Intelligence is Valuable, But Falls Short of its Potential
  • August 2004 CRM Survey: Will Old Problems Sink New Users?
  • September 2003 E-Business Survey: Is E-Business Finally Starting to Deliver?