Identifying the consequences of the internet

This study began with a content analysis of 90 articles and 12 books[1] on the internet; paying particular attention to forecasts and expectations about how the internet would influence the ability of firms to manage their customer relationships. For our purposes CRM was defined as a cross-functional process for achieving a continuing dialogue with customers, across all their points of contact and access with the business, with personalized treatment of the most valuable customers, to increase customer retention and the effectiveness of marketing initiatives. This definition recognizes that the ability to have a dialogue with customers is an essential ingredient of all CRM initiatives. The intent is to integrate information from diverse sources such as direct sales, telesales, websites, customer service, resellers and channel partners, to arrive at a coherent picture of the customer and to be able to better serve that customer[2].

The internet could be either a threat or opportunity, depending on whether it disrupted or facilitated: the process of understanding customers, engaging in a dialogue with them, and improving the service offering; the balance of information and bargaining power between buyers and sellers; or the ability of present and prospective competitors to improve their position and increase the rate of defection. We coded over 25 ostensibly different consequences of the internet.

Our preliminary list of hypothesized consequences of the internet was refined in five stages. First, we interviewed senior managers in 12 large companies including GE Capital, Dow Chemical, and Verizon Information Services, to learn how they were using the internet and how they viewed its disruptive potential. Second, we conducted three separate pretests with 90 representative managers to identify ambiguities, and eliminate overlaps in the items. This latter step was facilitated by an orthogonal factor analysis to identify consequences that were highly correlated. In such cases we combined and rewrote the items. The final set of 15 items is shown in Table I, along with a comparison of the results for the B2B sample and a smaller group of B2C companies. We used a five-point scale, anchored at one end with "major

threat," and the other end with "major opportunity," with the middle point being "no impact."

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