E-Commerce Commission Press Kit

and maintaining customer relationships. Electronic catalogs present far more information andoptions than their paper counterparts. Direct marketing online can shorten repurchase cycles andincrease the ability to sell additional items.Some recent business examples suggest the potential of the Internet as an efficient sales tool.Boeing’s spare parts business debuted its PART Page on the Internet in November 1996, allowingits airline customers around the world to check parts availability and pricing, order parts, andtrack the status of their orders. Less than a year later, about 50 percent of Boeing’s customersuse the Internet for 9 percent of all parts orders and a much larger percentage of customer serviceinquiries. The Boeing spare parts business processes about 20 percent more shipments per monthin 1997 than it did in 1996 with the same number of data entry people. And, because customerscan satisfy many service requests online, as many as 600 phone calls to customer servicerepresentatives are avoided each day.Cisco builds virtually all its products (routers, switches and other network interconnect devices)to order, so there are very few off-the-shelf products. Before the company established an Internetsales capability, ordering a product could be complicated. Generally, an engineer at the customersite knew what type of product was needed and how it should be configured. The engineercommunicated this information to his procurement department who then created the purchaseorder and sent it to Cisco via fax, phone or e-mail. A Cisco customer service administratorentered the order into Cisco’s system. If the order went through “clean”, it would be booked andproduction scheduled within 24 hours. Nearly one out of four orders didn’t get a “clean” bill ofhealth, however. Instead, when Cisco’s system tried to validate the order, it discovered an errorin how the product was configured. The “dirty” order would be rejected, the customer contactedand the procurement cycle would begin again.In July 1996, Cisco rolled out its Web-based ordering and configuring system. Today, that sameengineer can sit down at a PC, configure the product online, know immediately if there are anyerrors, and route the order to the procurement department. Because the customer’s pricingstructure is already programmed into the Cisco site, the authorized purchaser can complete theorder with a few keystrokes. And, rather than calling Cisco to find out the status of the order,invoice or account information, a customer with the proper authorization can access theinformation directly on the Web site. With the online pricing and configuration tools, about 98percent of the orders go through the system the first time, saving time both at Cisco and thecustomer’s site. Lead times have dropped two to three days, and customers’ productivity hasincreased an average of 20 percent per order.NEW SALES OPPORTUNITIESThe Internet operates around the clock and around the world. As a result, businesses on the Webcan reach new markets they could not reach effectively with an in-person sales force oradvertising campaigns.20