Carter says IBM works with customers to create and manage structures for measuring the effectiveness of an Internet channel, based on its own experience building its IBM.com channel, through which it sells billions annually. "When we launched the Web site in 1993, we established three key metrics to measure effectiveness — cost savings, shorter timeframes to market, and improved customer service and loyalty," she explains.
Big Blue continues to measure the effectiveness of the strategy. "For example, we recently learned through research we conducted with J.C. Penney that if a retailer only has a bricks-and- mortar presence, the average customer would spend about $100 a year," says Carter. "But if the same retailer had a multiple-channel presence — retail, etail, and catalog — the customer spends nine times as much."
However, that doesn't mean every brick-and-click business will have the same experience, as Mikasa learned through its earlier etail experience. The previous B2C site wasn't integrated into the company's ERP system, it lacked a search function, and its product menu was more snack than dinner. The site also didn't convey the company's high-end image. "Mikasa is all about elegance," says Carter. "We wanted to capture that in the look and feel of the site so that customers could not discern the difference between an online experience and shopping at one of their stores."
Mikasa measures revenues, customer loyalty, and cost-cutting monthly. While its initial etail effort flopped, it does provide a useful benchmark. For example, the company can compare how quickly customers can search for a particular item on its new site compared with how long it took to find an item on its old site, which lacked a search engine. "If your online catalog is not easy to search, you decrease customer loyalty to the site," explains Carter. "The number one reason people leave a Web site is poor navigation."
Erik Redmond, Mikasa's Internet project manager, notes another customer benefit. "A customer who is in one or our 165 stores may want to purchase a particular pattern that the store may not have," he explains. "Since each of our stores now has Web access, they can scan the digital catalog for the item and, if they prefer, buy it then and there."
Costs are much more easily measured because, as an ASP, Web Emporium charges a monthly fee to host the system. "We liked the idea of having a company whose core competency is hosting a Web site do that for us," says Rubin. "The strategy also provides certainty in terms of cost."
Expenses have been further pared through productivity improvements. "Mikasa used to 'sneakernet' orders in the past — basically take them by hand," says Carter. "By having the computer do everything, they save on their processing costs, order costs, and people costs. They're also saving money by having all 20,000 products online now, relieving them of the need to print and distribute catalogs."
Mikasa measures monthly revenues from the site, broken down into several categories. For example, it scrutinizes the number of items bought per pattern and whether or not the item is part of a gift registry. It also measures the number of buyers who are registered members. Mikasa then compares the results with similar metrics from its store purchases, looking for the patterns that spell success. — RB
KPMG Consulting
Ed Courtney knows a little something about information overload. As a managing director at Big Five consultancy KPMG Consulting (www.kpmgconsulting.com), Courtney knows that project managers often receive as many as 250 emails a day. As bad as that sounds, consider that the email system at KPMG holds only 200 emails per account, forcing the managers to delete dozens of emails just to be sure they see everything that's coming in.
Email isn't sexy, but it remains the killer app for office productivity. Technology research firm Gartner estimates that email messages account for 75 percent of the knowledge exchanged within and between companies. For firms in a host of services, from consulting to insurance to law to advertising, email is often the primary means by which project data is accumulated, shared, and stored.
"At any given time I have about a dozen projects going on, and I'm getting emails from managers and other employees who are on four or five of these projects, but not the same ones," says Courtney. "Because we're project focused here, and everyone is working on multiple activities, and they're all mobile and they all use email for updates, I'm swamped with emails that I have to read."
Last year, the top brass at the Tysons Corner, Virginia—based consultancy decided that something had to change. KPMG set out to not only manage its email better, but to turn that better management into a competitive advantage. Today, the 18-month effort has boosted productivity by 15 percent, and the company believes that ultimately a 40 percent boost is possible.
Combining software from Intraspect Software (www.intraspect.com) with its own knowledge management technology, KPMG now enables its employees to process their mail far more quickly than before. So quickly, in fact, that the firm says it has been able to pare consulting fees and thus win additional business. More business and lower fixed costs will drop directly to the company's bottom line, Courtney says.
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