The e-business customer is always right

Toronto — Internet companies that focused solely on making money got lost in the dot-com wreckage.

Those that survived had client needs as their top priority, according to the executive vice president of e-business of Emfisys, the financial and information systems division of the Bank of Montreal (BMO).

Speaking at the 12th annual Executive Symposium on e-Commerce and Corporate Portals Tuesday, Marnie J. Kinsley said adhering to the needs of customers helped pave the way to e-commerce success in the past and is part of a three-pronged strategy that will continue to do so in the future.

“There were companies out there that just wanted to make a buck,” said Kinsley, whose division supplies IT services and transaction-processing capabilities within and outside BMO. “If you understand the market, and you understand what the customer is willing to pay for, then you create a revenue stream.”

This customer-first lesson is one the Bank of Montreal learned the hard way. In October 1996, amid a flurry of hype that included a co-opted Bob Dylan anthem, BMO launched mbanx as a stand-alone virtual bank. But through experience BMO learned Canadians were not overly enthusiastic about that approach to banking.

“It took us 18 months to realize that Canadians, in terms of banking, are multi-channel,” Kinsley said. “They want to know there’s a branch, there’s the phone, there’s the Internet. So we merged mbanx back into BMO.”

“(We failed at first) because we were focused on money and not our clients.”

When asked for examples of dot-com companies that died because they refused to see the importance of catering to the customer over the bottom line, Kinsley said they’ve all faded, both in reality and in memory. However, she cited Oracle Corp. as an example of a company that succeeded because of the attention it paid to its clients. It helped, Kinsley said, that Oracle was one of its own customers.

However, market research is imperative for success, Kinsley said, adding that a few executives of a company liking a product does not necessarily mean the general public will appreciate it as well.

“You have to make sure that when you do product development, you focus on the customer,” she said.

And when companies forge partnerships, they should be sure to choose partners that are focused on the customer as well, Kinsley added. Though Kinsley called partnerships a de facto business model, she said it pays to pick the right ones.

A partnership with Toronto-based 7-24 Solutions Inc., for example, has allowed BMO to forge relationships with 7-24’s other partners, including financial institutions Wells Fargo and Bank of America Corp. An online bill-payment partnership with Canada Post Corp. gives BMO access to Canada Post’s overwhelming market share in the mail business.

“This situation gets us into the mail boxes of all Canadians, hopefully,” Kinsley said. “If you partner right, you can benefit from immediate new revenue streams.”

But success is still very much dependent on what a company offers, according to Kinsley. Trying to be the one-stop Internet shop is not a solid business model, she said. “You need to have a narrow focus.”

The Bank of Montreal is currently focusing on the areas of lending, wireless, payments and exchanges. Last week, it announced a partnership with CertaPay Inc. of Toronto that will allow customers to send and receive money via email by the fall.

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Jim Love, Chief Content Officer, IT World Canada

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