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Communicating With Customers

By Kamales Lardi-Nadarajan  |  Posted 03-03-2008 Print

This step-by-step approach helps companies make an informed decision on whether or not to establish a presence in virtual environments.


Communicating With Customers

In the last year, executives in many companies have had to decide whether to venture into virtual environments, either for business or marketing reasons. It's not an easy decision, as media reports of enterprises that have abandoned their virtual businesses have cast doubt on the value and potential of synthetic worlds, even though there have been consistent increases in the number of registered users.

Despite getting some negative press, synthetic worlds are starting to change the way companies communicate with their customer groups. Over time, online synthetic worlds will play an increasingly vital role in business-to-consumer relationships, building customer loyalty through time and commitment.

Within the next five years, synthetic worlds will dominate and drive brand building in major companies.

That will give a competitive edge to enterprises already established in these interactive environments. When deciding whether to enter the virtual environment, companies should take an experimental approach, focusing on long-term added value.

Unfortunately, many companies view new or emerging technologies as a way to cut costs, forgetting the added value of innovation and new market development. "New ideas don't drop from the sky, but are developed through an analytical experimental process," wrote Harvard Business School professor Stefan Thomke, an authority on the management of technology and product innovation, in a February 2001 Harvard Business Review article. "The process should not only identify several new ideas, but also help narrow the number of ideas and pursue the most viable option for experimentation."

Realizing the challenge executives face when assessing the potential benefits and risks of having a virtual presence, my colleagues and I developed an approach that takes a long-term strategic view of synthetic worlds as a new route to the emerging online consumer market. This three-phase approach encourages experimentation in the virtual environment.

Phase 1: Understanding the Current Environment The first phase is the most critical, as it ensures that a thorough assessment of the virtual environment is conducted. To initiate this process, a company must first determine the strategic objective of entering a virtual environment and decide whether this move is in alignment with the firm's overall strategic direction. For instance, if the enterprise has a specific focus on sustainable growth and innovation, entering the virtual environment to develop new products and marketing concepts might be a good move.

At this stage, companies need to develop a clear understanding of this technology's potential by keeping up to date on trends and predictions concerning synthetic worlds. In addition, they should assess their competitors' perspectives and reactions to synthetic worlds, while also identifying the customer group to be targeted in order to gauge its openness to and expectations of synthetic business environments.

The strategic objectives must be accompanied by measurable business outcomes--key indicators that would allow the company to measure and track the impact or outcome of the approach. These indicators would likely include the number of weekly customer visits to the virtual site, the number of media mentions and even the impact rating compared to other customer channels.

The subsequent step involves identifying all relevant possibilities for entering the virtual environment and potential operating models. Focus on describing the options from the perspective of the target audience, the user's experience and the functions provided, as well as alignment with the initial strategic objectives.

Then identify the related costs, resources, timeline and technology infrastructure required. This is an iterative process, which should be conducted continuously until a satisfactory assessment has been developed.

Throughout the duration of phase 1, the options and subsequent assessments need to be shared with key internal stakeholders. That's essential, as most executives shy away from venturing into unknown territory, particularly when it involves experimenting with new technology.

Once the initial assessments have been conducted, the most viable option should be selected for further design. The selected synthetic world entry option should be developed into a scenario, describing the customer experiences, as well as the functions, services and products to be offered.

A strategic approach such as this will establish a strong foundation for conversations with executives, because the risks and investments involved will have been thoroughly assessed. Then a collective decision on whether to continue with a pilot implementation can be made. As with the implementation of any new technology or media, it is critical to have the full support of key stakeholders to ensure success.


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