Interactions: The Foundation of Business Relationships

Executive Summary
Business relationships have always been based on interactions. Until now most of these interactions have been through conventional means, such as the telephone. But now more and more of your business interactions are over the Internet, and this trend will continue for the foreseeable future. Are you ready to handle this change? This paper introduces a new category of products and services that help you manage your business interactions over multiple channels on the Internet and other points of contact.

The Changing Nature of Business Interactions
All business relationships, indeed all relationships, are initiated, developed and enhanced through a series of interactions. We make our prospective customers and partners aware of our products and services, we answer their inquiries, we ask them questions to qualify their interests, we exchange information to seal the relationship, we fulfill our obligations, we provide them service and support during the course of the relationship, and we continuously work on ways to enhance the relationship. We undertake these interactions every day, and the way we undertake them is an integral part of the way we conduct our business. In fact, they are so commonplace we don't even think twice about them.
But we should, because the landscape has changed. Think about it. It used to be that most interactions were through a limited number of ways, such as face-to-face, letters and later the telephone. And most of the interactions were with the same people—the account executive and the service representative—so it was easy to maintain continuity of both style and context in interactions. It was also a more relaxed environment-an interaction could span days, if not weeks. The methods of managing these interactions matched the nature of the interactions. So we had account executives maintaining notes in personal journals, service departments with a paper file for each customer, and so on.
Now look at the landscape today. We interact in so many different ways, on different communications channels. Not only do we have face-to-face, letters and telephones, we now have email, Web-forms, and live chat over the Web. As the Internet becomes increasingly more pervasive, more and more of our interactions will be over the Internet, rather than through traditional media. A recent study estimates that email interactions will increase by 111% between 1999 and 2002.
This is not the only change in the landscape. Organizations today deal with a larger customer base with fewer customer-facing employees. It is the exception rather than the norm to find account executives and service representatives working with the same people in the customer's organization over the lifecycle of the relationship. There are a number of reasons for this: new tools have made customer-facing personnel more productive; competitive pressures mean margins are lower and companies have to handle more interactions with fewer resources; and customer interactions are now around the clock, rather than during normal business hours.
The last reason above is related to the third big change in business interactions: the expectation of immediacy. The concept of time isn't what it used to be. People want and expect fast if not immediate responses to their inquiries, and will readily go to a competitor if they don't get quick attention. This is part of the reason that many customers are perfectly willing to help themselves if you make what they want readily available and easily accessible. So much so that the study cited earlier also projects that Web self-service will increase from 37% of interactions in 1999 to 87% in 2002.
And finally, while good business have always understood the importance of good relations with customers, studies in the past few years have quantified the benefits of long-term relationships with satisfied and loyal customers. Examples abound:

• A shift in retention of as little as 5 percentage points seems to account for more than a 20 percent improvement in productivity, which in certain industries can increase profit by 50 to 100 percent.
• If consumers do not receive email responses within their targeted timeframe, 64% are somewhat or very unlikely to continue doing business with that merchant.
• Nearly 40% of customers never get a response to their e-contact, and poor handling of econtacts creates 30-48% lower customer loyalty.