Modern businesses have to look more and more at ways of reaching a wider potential market in order to gain or even retain overall market share. The internet and, more specifically, e-commerce have completely changed the way in which consumers shop. Customers can come from anywhere in the world and are able to purchase items instantly and directly through the use of sophisticated information technology systems.

With the correct planning and implementation of this shift towards offering an e-commerce based business, any business can potentially increase its market share, dramatically. Despite the potential benefits, careful planning is needed to ensure that issues such as customer relations and security are considered and managed effectively, if the full benefits are to be enjoyed.

• Customer Relations

Managing customer relations is arguably one of the most important tasks in any business. Without customers, the business simply does not exist and offering a good experience is central to ensuring that customers are retained, in the long run. When managing an entirely off-line business, customer relations are typically conducted on a local, face to face basis.

Offering a personal service and efficiency in terms of handling sales and deliveries as well as after sales service is relatively easy when customers all come from a small geographical area. When a company decides to establish a web presence and trade on a national and international level, the demands of customer relations management change altogether. Consideration of how this is likely to change and how to manage such change is vital for the e-commerce project to be successful.

The art of customer relation management changes considerably once the business has a web presence that allows customers to buy products online. Direct face to face contact is lost and the opportunity to use non-verbal communication methods such as body language is all but eliminated. Bearing this in mind, it is important to see how an organisation must plan well in advance if it is not to miss the opportunities that arise from online selling.

There is no denying that careful consideration has to be given to how the current customer relations can be managed and how the personal touch can be retained. However, gaining a web presence and enabling customers, both current and new, to browse stock and order at a time that is convenient to them opens up a wealth of opportunity to increase market share. One of the main challenges facing Paisley Patterns is to ensure that the maximum benefit is gained from this huge shift in selling techniques.

Setting up a web presence and enabling customers to browse online dramatically increases the potential market share. Customers can be reached twenty four hours a day, seven days a week, which allows the company to compete with larger, previously untouchable competitors. Costs can be reduced as the processing of sales can still be managed from one physical location, despite the increased market. Data relating to customers can also be collated far more easily, making the marketing function a real beneficiary of this shift.

Paisley Patterns does need to be aware that there is substantially less interaction between the sales force and the customer. As this has been the main distribution channel previously, it will be important to make sure that the information given by the sales team currently is somehow captured within the online sales process. This is particularly important where the sale requires bespoke or personalised advice. Ensuring that direct contact remains easy and efficient will be vital to Paisley Patterns, as it embarks on this new era.

Designing the online ‘shop front’ will be one of the most crucial tasks faced by the company, during this early stage. Crucially, all the relevant information must be readily accessible without being overbearing. Most people visiting a web site will be prepared to make up to three ‘clicks’ to find the information they are looking for; therefore, all information should be available within this level of accessibility.

Customer relations remain paramount for Paisley Patterns. As such, considerable effort should be made to ensure that the existing level of customer care is maintained or even improved. The volume of sales and the geographical location of customers will change with an online store; therefore, maintaining the ability to receive direct advice from the sales team or customer service team should be a priority.

Currently, most sales are made by the mobile sales force. As they have built up a rapport with their customers, the ‘per order’ value is likely to be quite high with plenty of value- added products and services included. By selling online, there is a danger that not all sales will be maximised and this is an issue that should be addressed in the design phase, with the assistance of the sales team.

What common issues do they come up against which either assist or negate their efforts to add value to an order? Deal with these issues throughout the online purchasing process by offering answers to common objections and suggesting options for adding suitable extra products or services.

Without the direct sales contact, there is of course a danger that sales will either not happen or will not be maximised. Every effort should therefore be made to ensure that this does not occur.

Customer Relations Management (or CRM) is the broad term given to the way that companies manage all aspects of their customer relationships. Until now, this has been a very traditional process within Paisley Patterns, relying heavily on personal relationships between the sales force and the customers. There is an obvious and immediate threat that removing this contact will mean that some of the current customer base may be lost.

Ensuring that direct contact remains as easy as possible will be important for future profitability. For example, Paisley Patterns could have an online ‘web chat’ facility, where customers and potential customers are encouraged to enter into direct discussions with staff members. There should be clear information on how customers can contact individuals, ideally with a free phone number that is staffed, if not 24 hours a day, at least for extended hours.

Customer relations spans much further than merely keeping customers sufficiently satisfied that they decide to buy from a website. With online technology, Paisley Patterns is in the position that it can gain information regarding its customer base and the way that potential customers shop. Trends can be recorded and established to generate more sales, in the future. For example, are there certain products that are always regularly purchased together? If so, could these options be bundled together during the sales process to encourage further sales of this nature? Keeping a regular track of customer behaviour in terms of what products they look at and consider before making their final purchasing decision is vital.

Once an item has been purchased, the information relating to the customer can be stored (subject to the legal requirements) and used for targeted marketing. This information should also be used for market research and for follow-up customer relations management such as an email a week after delivery to ascertain satisfaction and if necessary to deal with any problems.

By establishing a web presence, Paisley Patterns will go from offering local services to local people to a potentially international business with clients from all areas across the globe. Being aware of this shift in potential customer base will be crucial to the way in which customer relations are managed. Culture and economic expectations vary throughout the world. Moreover, whilst it is likely that most customers will still come from the United Kingdom (due to potentially uneconomical delivery costs and the chosen domain name), being aware of the scope of the website is important. For example, most customers in the US will be happy, or even expect to be addressed by their first name in communications; Asian customers will almost always prefer the formality of having their full name used.

Paisley Patterns will need to ensure that it understands the cultures and knows the various countries that it is selling to and how this should impact on the types and tone of communication with the customer.

As many of the new customers will not be from the immediate local area, the issue of shipping in a reliable, cost effective and efficient manner will be paramount. The decision as to whether shipping and to what extent it will be outsourced will be based largely on cost and where the deliveries need to reach. As Paisley Patterns is now potentially providing goods internationally, it will almost certainly be the case that the delivery process will have to be outsourced to local distribution centres.

Managing this process effectively is important if customer expectations are going to be met fully. Sourcing local delivery partners should be done in advance of offering customers delivery to these areas. Failure to deliver once goods have been ordered will be a costly customer services error. Make sure that every item is clearly identifiable; this will prove particularly important where a customer has ordered several items and one or more are out of stock.

Communication is key when it comes to fulfilling deliveries. The system needs to be clear, transparent and easy to follow. A good customer service approach is to ensure that regular emails are sent updating the customer on the status of their order: has it been processed, despatched? Any system for delivery that is in place must keep the company itself fully informed, so that personnel are on top of the status of a delivery if there are any queries, but also to pre-empt any foreseeable problems.

Where possible, the order should be personalised with a letter or insert as this will help to build future customer relations. Similarly, consideration should be given to making after delivery contact to ensure that all has been delivered as per instructions and in accordance with expectations.

Managing customer relationship after the sale has occurred will also become potentially more difficult with a wider customer base. Returns policies and procedures need to be clearly identified and managed. There is, if course, the basic need to ensure that all legal requirements are complied with, but most companies would prefer to go above and beyond this obligation in order to ensure that customer satisfaction is maintained.

For many companies this will involve a ‘no quibble’ returns policy provided the product is unused. Paisley Patterns must consider the viability of this type of policy and how it will be operated. As there are likely to be local distribution centres servicing all customer regions, it would be sensible to ensure that a returns process is agreed upon with the various centres involved. Above all, communication will be vital and staff should be readily accessible both online and over the phone to deal with any after sales issues.

• Security and Network Issues

Aside from the softer, customer relations based issues involved in generating a web presence and allowing customers to order online, there are also considerable technical, practical and legal issues that need to be dealt with and accounted for. Becoming a web-based company raises several networking and security issues. Not only could a third party gather information that is protected or personal, but there is also a danger that the infrastructure itself could at some point collapse causing potential losses of customers as well as a bad reputation.

Managing these security risks and site structure is new territory for a company such as Paisley Patterns and, as such, it has chosen to use the services of a third party provider, initially, with a view to moving the function in house in the future.

Any website or online presence needs to be hosted in some way. In this case, Paisley Patterns has opted to have the website hosted by a third party but will look to bring this in house at a later date. Anyone who is hosting a website will need a server. If this is done in house, it will mean that a server has to be purchased and installed; if it is done through a third party, then their server can be used. This, of course, reduces the outlay and the maintenance costs but, nevertheless, does relinquish a degree of control.

Even when it is decided, as is in this instance, that the hosting will be done by a third party internet service provider (ISP), there are still several additional choices that have to be made. Most ISPs will offer a cost effective solution for new website owners which involves having space on a shared server. The server itself is located and maintained by the ISP in its own offices.

Although this is the most cost effective way of hosting, it can increase the risks as the server is shared with other websites and stability will depend on the usage of these sites as well as that of Paisley Patterns. As an alternative, Paisley Patterns could consider having their own dedicated server with the ISP, but this will be considerably more costly and is generally only appropriate for websites needing a high level of security.

It is anticipated that in time Paisley Patterns will bring the hosting facility in house. This is not a decision to be taken lightly. The initial outlay on server and surrounding infrastructure will be substantial; however, the greatest outlay is likely to be the staffing to ensure that the server is suitably maintained.

By bringing the hosting element of the website in house, Paisley Patterns will, of course, gain considerably more control in terms of security, but this will also place the burden of managing risks (both security and stability wise) on an internal team. The additional costs involved in having to staff the in house hosting service may prove prohibitive and Paisley Patterns should conduct a full financial analysis before settling on this course of action.

If Paisley Patterns continues with the plan to host its own website, there will be several technical and legal issues that need to be addressed. Security is a major issue for any website. Security covers all issues from ensuring that the website remains virus free to allowing customers to input their payment details securely.

Any business that aims to use its website as an important part of its day to day business will need to ensure that it is stable and secure. Customers, in general, will only take the time to look at a website once; if it is down or otherwise not working, they will be highly unlikely to return for a second look.

Ongoing maintenance will also become a task that has to be completed in house. This will include regularly updating the website to be able to deal with new security threats as well as ensuring that the information on the site is accurate. Site analysis software is available to assist with this task, although it will still be necessary to have a dedicated member of staff to manage and deal with the software. Typically, this type of software will be able to provide the sales team with valuable information such as which products visitors are most interested in and how many visitors actually go on to make a purchase.

In order to facilitate this type of resource in house, Paisley Patterns will have to invest in the server itself as well as ensuring that it has a suitable operating system and compatible software (typically this will be Microsoft Windows Server 2003 or 2007 for the server, or possibly Unix or Linux, with Apache or Microsoft Internet Info Services (IIS) for the web hosting software).

Databases will also need to be managed. This requires specific knowledge which will more than likely have to be bought in, if there is no one presently available within the company to manage such an operation. It may also be necessary to upgrade the internet infrastructure physically. All of these factors will be costly but will allow Paisley Patterns to take full control of its e-commerce business.

As Paisley Patterns intends to allow customers to purchase products online, it will be important that a system for dealing with CNP (card not present) payments is established. Offering an online payment facility is clearly beneficial for customer relations and is a facility that many customers have come to expect; it is also a great way of improving cash flow, but there are risks involved of which Paisley Patterns must be aware and attempt to minimise.

In order for the payments to be processed, Paisley Patterns will be required to obtain an internet merchant account with a bank that will process the payments in and credit them to the relevant account. Alternatively, Paisley Patterns could look to use a payment service provider who will provide the website with an online ‘till’ and will charge a monthly fee for its services.

The major credit cards, Mastercard and Visa, also have their own additional security which they offer customers and are, therefore, generally the method of payment favoured by the consumer. Given the predicted substantial increase in trade by offering online purchasing options, it would seem that establishing a merchant account (possibly with the current bank supplier) would be the most sensible and cost effective approach.

Trading online does raise other legal issues which Paisley Patterns will need to deal with. Entering into the arena of e-commerce requires Paisley Patterns to comply with a wide range of regulations that are specifically aimed at businesses selling services over the internet. The main body of legislation that regulates this area is the E-Commerce Regulations 2002.

As part of the regulations, it is necessary for a company to provide certain information to customers if they are selling online. These typically include contact details such as the geographical address of the business and telephone numbers, details of any professional bodies of which Paisley Patterns is a member or affiliated to and the VAT registration number.

More recently, the Companies Act 2006 has made it a requirement that all businesses (where applicable) make their business name, company number and registered address available on their websites. Commonly, all of this information will be displayed in the ‘About us’ or ‘Legal’ page to ensure ongoing compliance.

Care should also be taken to ensure that the contract is clearly formed; this is commonly achieved through a tick box whereby the customer has to accept the terms and conditions of trade in order to complete the purchase.

Another set of regulations with which Paisley Patterns will have to comply is the Distance Selling Regulations 2000. These regulations set out the way in which customers need to be dealt with when they are not physically present at the point of sale. Crucially, these regulations allow a cooling off period of seven working days for the consumer; they also stipulate that delivery should be within thirty days, unless it is otherwise agreed. Systems need to be put in place to ensure that these regulations are complied with at all times and that appropriate records are kept.

As customers will be entering their own personal data through the website and this will be stored in an electronic form, it will be necessary for Paisley Patterns to comply with the Data Protection Act 1998. Although this Act is extensive, in broad terms, it makes it necessary for a company to treat all personal data that it receives in a lawful and fair way. This means that the data must be accurate, must be held for no longer than is actually necessary and that every reasonable effort is made to ensure that the data is kept securely with the appropriate IT security in place.

Individuals who have information stored by Paisley Patterns are entitled to ask for a copy of everything that is held on them. Whilst Paisley Patterns can charge a fair amount for the production of this information, they are obliged in law to provide the information promptly. When collecting the relevant personal information, Paisley Patterns must ensure that the user is made aware of why the information is being collected and what it may be used for.

This is particularly important when it comes to using the information collected to target individuals for marketing purposes. As a general rule, information gleaned from customers cannot be passed on to another organisation without the express permission of the customer. Regular and careful monitoring of the way that data is collected and stored should be conducted in order to ensure that these requirements are complied with.

It has been noted that Paisley Patterns has secured the domain name paisleypatterns.co.uk. Whilst this is clearly a good first step, this does not automatically mean that they have a global right to use this domain name. Paisley Patterns needs to ensure that it retains the first rights when it comes to the renewal of the domain name in order to ensure that no other business can get hold of the name in the future. Paisley Patterns also needs to be aware that whilst it has the domain name registered, this does not automatically mean that it has the trade mark for the name.

Until recently, Paisley Patterns has been operating in a local area which presumably has no conflicting business with the same name. By gaining a web presence, there may be other businesses with a similar name that have a trademark upon which they are now, with the new market share, encroaching. A thorough investigation of registered trademarks should be conducted and consideration of the possibility of registering Paisley Patterns itself, if it is not already taken, to secure against other entrants to the market.

Conclusion and Summary

Gaining an online presence makes clear business sense. By allowing Paisley Patterns to trade online, there is a much wider potential market and the returns can be considerably higher. However, before embarking on this course of action, a great deal of thought needs to be put in to how the customer relationship will be managed. This is particularly important given the current reliance on a local, mobile sales force. Maintaining this level of one-to-one care will be one of the greatest challenges facing the company, as it expands.

As well as the customer relations element, there are also the technical, security and legal issues that need to be dealt with. Paisley Patterns is planning, eventually, to manage the hosting facility in house. This is not a decision to be undertaken lightly as there will be considerable set up and maintenance costs involved, both for the infrastructure and the increased staff levels that will be needed. Care should also be taken to ensure that necessary data back-up is completed regularly and that all legal requirements are complied with.

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