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March 6, 2000

Business Relationships:
A Question Of Value
E-commerce works best as an enabler of the personal relationship between businesses and their customers

By Alan T. Biland

Alan T. Biland funny thing happened on the way to the eye doctor. For years, my optometrist had encouraged me to replace my yearly wear contact lenses with more expensive daily wear lenses, but I was too cheap to do so. I finally relented, split the difference, and went with monthly lenses.

But instead of receiving the customary lens prescription illegibly scribbled on a piece of paper, my optometrist gave me two boxes containing six lenses each, with the prescription neatly laser-printed on the end of each box. When I had only a couple of lenses left in each box, I began trying to make an appointment with my eye doctor to get more lenses. But between his schedule and mine, it was just not happening. Then I had an original thought: Why not try the Internet?

A quick search turned up 283 Web sites willing to sell me contact lenses. I shopped for the best price and picked out a set of lenses identical to the ones my eye doctor had sold me. A couple of days later, a deliveryman showed up at my door and handed me my new contact lenses.

One thing became clear (besides my vision) from this experience: Disintermediation is going to happen-and it will be selective. It will be the consumer who has a major say in the value proposition going forward.

In the early days of Internet commerce, some manufacturers were pretty smug. These companies thought they would have the power to determine how the channel is used, and to decide who would stay and who would be sent packing. They were wrong. The power of the Internet is that it provides the consumer with an unlimited view of-and access to-what's available. The promise of the Net to give consumers more choices is a reality. Manufacturers that recognize this fact and use the Net to enhance the value they already bring to the marketplace are the ones that will prosper. If you want to know who is going to survive, put yourself in your customers' shoes.

Many people are familiar with the white Snap-on Tools vans that call on vehicle manufacturers' dealerships and independent repair centers around the world. You might ask yourself, How will professional tool distributors be affected by the Internet? For the answer, look at it from the service technician's point of view.

The Snap-on dealer creates a tremendous amount of value through his or her weekly visits with technicians, shop owners, and other customers. The dealer is, in reality, one part retailer, one part automotive repair consultant, one part trainer, and one part banker-a value package that cannot be equaled by the Internet. Not only does the Snap-on dealer bring an entire store to the customer's workplace, but he or she is also there to warranty broken tools and help the customer with a range of solutions for specific problems. This is the best possible example of customer-relationship management-service and convenience.

But can the Internet enhance the Snap-on dealer's value proposition? Absolutely. By providing a "store without walls," the Internet will enhance the dealer relationship by allowing customers to contact Snap-on and order the company's entire range of products 24 hours a day, seven days a week. This is a real boon to customers who work a second or third shift, or who are not in an area covered by an existing dealer.

As Snap-on completes its transition to the new economy, we will continue to seek out ways to deliver value to our current and future customers. Web sites for our major industrial accounts already allow corporate purchasing agents to order Snap-on products around the clock. Later this year, in conjunction with the release of a revamped home page, consumers will be able to order our products directly from the Web. In addition, new procurement practices offer the potential for quicker cycle times and greater supply-chain efficiencies.

Working together, responsive manufacturers and customers determine what constitutes value. Electronic commerce functions best as an enabler of, not a replacement for, the personal relationship between maker and user. If our customers are any indication, the Snap-on dealer will be around to add value for a long time.

Alan T. Biland is VP and CIO of Snap-on Inc. in Kenosha, Wis., and can be reached at questions@snapon.com. He will be a featured speaker at the InformationWeek Spring 2000 Conference, which is being held March 5 to 8 at Amelia Island, Fla. For more information on the conference, point your browser to informationweek.com/events.

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