Lesson 3 the internet complements other channels

Two opposing forces have been contending to shape how companies view the impact of the internet on their distribution channels. On one side the net was welcomed as another way to reach existing customers, a new way to find new customers and a solution to the vexing question of how to synchronize proliferating channels. In opposition was the fear that the internet would encourage disintermediation and incite more channel conflict.

With experience the fear factor has somewhat abated. While only seven percent of our sample viewed the internet as a serious threat because of increasing channel conflicts, another 33 percent saw a minor threat. However it is more than an additional channel. When used creatively it enhances all the other channels: call center employees with net-based CRM systems deliver better service, bricks-and-mortar stores using new location-based services are found by more customers, and sales people equipped with mobile devices have more information and tools available during their sales calls.

Companies have so embraced the internet that is has become the most widely used channel. While 97 percent have direct sales forces, and 56 percent use direct mail to reach their markets, we found that already 85 percent are using web-site access and/or email. This rate of adoption is a testament to the adhesive powers of the internet.

Most companies use a variety of channels, depending on the type of market. Firms in B2B markets used an average of 4.7 channels, while B2C firms used 4.2 channels out of nine possible ways to reach markets. Those that served both consumer and business markets used an average of 5.5 channels to serve more diverse customer segments.

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