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Former AOL CEO Steve Case, now chairman of the newly minted Internet superpower AOL Time Warner, had some intriguing words about his new company’s goals recently for Fortune magazine (Feb. 7, 2000), which, intriguingly, will be one of his properties. Case defined e-commerce’s new terms of success this way: “The battle is shifting…. It’s going to be more and more about customer relationships, more than who’s got the pipe or who’s got the content.”
In essence, Case envisions AOL Time Warner as a customer relationship company — not a content company, media company, or Internet access provider, all of which it has called itself in previous incarnations. In this vision, AOL Time Warner will carefully nurture its more than 100 million relationships across scores of brands — enrapturing subscribers in what the company calls a “superstore of interactivity” behind its proprietary firewall — and then harvest those relationships for sale to third-party partners. (The human crops in The Matrix come unpleasantly to mind.) If it can execute this vision, which is highly debatable, AOL Time Warner will live up to its self-image as the first truly “21st century” business.
Relationship Counseling
The execution challenge facing AOL Time Warner is a macrocosm — that is, an example on a grand scale — of that facing not only brick-and-mortar companies taking up e-business 101, but also inexperienced dotcoms awakening to the primacy of traditional customer relationships over technology (and their value as “insurance” against endemic fulfillment problems). The tasks of consolidating inbound customer information, analyzing online and offline customer behavior along the appropriate dimensions, and then reorienting your front-office and back-end processes around the results are arduous. Indeed, executing closed-loop, cross-channel, customer lifecycle management is the essence of what it means to be an intelligent organization. AOL Time Warner’s business model makes this concept all too clear.
Last July, we reported on the emergence of two software companies, Epiphany Inc. and Broadbase Software Inc. (then Broadbase Information Systems), that have positioned themselves as providers of off-the-shelf solutions for these challenges and piled up serious business-to-consumer clients in the process. Since then, the companies — both of which already sport analytic engines — have been busily closing the loop with more robust campaign-management capabilities; Broadbase staging somewhat of a coup with its acquisition of Rubric Inc. (See “Mutually Assured Competition,” News & Analysis, Feb. 9, 2000.)
But consumers won’t be the only targets. Broadbase Software’s (as the new company is called) VP of marketing, Hal Steger, believes closed-loop relationship management is equally important for business-to-business companies. For example, according to Steger, the growing influence of price-pressuring B2B exchanges will force suppliers to pump resources into anticipating customer needs for higher-margin goods and services.
Time’s Up
On another but related subject, you may recall that in a recent column (“What’s Fair is Fair,” Editor’s Page, Feb. 9, 2000) I suggested that private industry, should it fail in its efforts to achieve proper consensus about the application of fair information practices, would be letting an important opportunity for effective self-regulation slip away. Apparently, that slippage is already well under way: Published reports from CMPNet’s TechWeb indicate that Congress may take up a consumer-privacy protection agenda in 2000, and other sources tell me that legislation may be on the books as soon as springtime (if it isn’t already).
Furthermore, Chase Manhattan Bank recently agreed in an important court settlement to limit the ways it shares personally identifying customer information with third parties, and the plaintiff involved — New York attorney general Eliot Spitzer — favors the adoption of new “opt-in” regulations governing online and offline data sharing practices in his state. These developments indicate that the grace period for self-regulation has probably expired.
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