CIO

Web Business 50 Awards - Profiles in Customer Service

Developing a successful intranet was Ford's first move on the road to e-commerce. When Ford's former CIO Jim Yost took the first steps toward creating a new intranet called My-ford.com, he had the full support and encouragement of former CEO Jacques Nasser. That support was crucial in shaping the company's internal website. Today, the site supports more than 175,000 employees who visit more than 500,000 times a day for anything from checking their benefits to getting the latest competitive information or signing up for company-run training classes. "The portal would not have happened without senior management support," says Martin Davis, program manager for what Ford calls its ePortal project.

Ford's intranet began as a way to give employees a personalised online environment and grew into an enterprisewide strategy to replace disparate desktop applications with standardised Web programs and access. The company has come a long way since it first provided an intranet to employees in 1996. "That was really just access to a search engine," Davis says.

The IT department started to revamp the site in 1999 when Nasser embarked on a business-to-employee initiative designed to bring every Ford staffer into the digital age. Nasser emphasised the importance of integrating Web capabilities into each of the company's business units in meetings and in Let's Chat, his weekly e-mail to every Ford employee. He also added e-commerce-related positions to all departments. Davis says Nasser wanted to create a corporate culture that embraced e-commerce.

"He didn't want to just spawn millions of websites, he wanted to have a rational approach to e-business," says Bipin Patel, director of management systems at Ford.

With Nasser's encouragement, Yost created the ePortal plan, which aimed to cut costs and increase efficiency by putting learning and collaboration tools online, and giving employees desktop access to HR and job-related information. Considering the large scope of the project -- the new intranet needed to reach almost 200,000 people at 950 locations worldwide -- funding and resources to support a network of that scale were imperative. Nasser made sure Yost had all the funding he needed, a move that entailed a big leap of faith, Davis says, because any return on the cost of the project was extremely difficult to measure in terms of tangible dollar savings.

"With a project like this, it's easy to demonstrate savings through an increase in efficiency, but it's very hard to translate that to ROI," he says. "They had the vision to see how the intranet would benefit the company."

The result was the May 2001 launch of Myford.com. The site gives Ford staff access to personal information, links to benefits and HR forms, demographics, salary history and general company news. In addition, each business unit posts employee-specific job information. For example, a project manager in the engineering division can access engineering project information through his view of the intranet page.

"We wanted to help people increase their business acumen by being able to read about company performance and what's new with the business, because that will help them make more informed decisions," Davis says.

Before the intranet launched, employees got information through time-consuming, paper-based manual processes, Davis says. Now, Ford employees can personalise their view of the intranet homepage by selecting what they want to see on the page and prioritising the links they use most. Sensitive information can be shielded. Managers can view financial data on company performance, while other employees can access only general performance information.

The portal has saved Ford millions of dollars and thousands of man-hours by putting applications and documents at employee's fingertips, Davis says. Future plans call for deploying Microsoft Net-Meeting and eRoom applications. Under current CIO Marv Adams, Patel and Davis are looking at creating business unit-specific portals within the central infrastructure.

For Ford, the intranet is not just a tool for employees to manage their benefits efficiently, it's a foundation for the company to become a digital business. In order for Ford to run a successful e-business with customers, suppliers and partners, its employees first had to be adept at using e-business technologies themselves, Davis says. "You're not properly doing e-business unless you're doing it inside the company as well," he says. "It starts on the inside."

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Low fares and comprehensive services help Southwest.com soar over the competition. Thirty years ago, Southwest Airlines put itself on the map with low fares, direct flights be-tween three Texas cities and attractive attendants. Today, the company still offers below-the-belt prices and has expanded its direct service to 58 cities in 30 states. During the past 28 years, Southwest has remained profitable in the face of oil crises, wars and recessions. And while many major airlines scaled back their schedules following the Sept. 11 terrorist attacks, Southwest continued at full operation. The fourth-largest carrier in the United States, Southwest attributes its success to its low fares and customer service focus.

Of course, Southwest couldn't offer such low fares and dependable service without efficient internal operations. For instance, the company keeps its maintenance costs in check by exclusively flying Boeing 737s. It further reduces operational costs by primarily serving less congested satellite airports, which helps the company make better use of its pilots and planes because at those airports, aircraft spend less time waiting at the gate and more time in the air. Those tactics help the airline keep ticket prices down.

Now Southwest is exploiting the Internet to further its low-cost, happy-customer mission. The company launched Southwest.com on March 17, 1995, and began selling tickets online the following year. While it costs the airline US$10 to book a ticket through a brick-and-mortar travel agent, booking a ticket on the website costs just $1. Southwest.com saved the company $1 million in ticket booking and distribution costs last year alone.

Passenger revenues generated through the website soared from 8 percent in 1998 to 19 percent in 1999. Last year, Southwest.com generated 31 percent of the company's passenger revenues -- or $1.7 billion. Not bad considering Southwest initially invested $5 million to launch the site and spends $21 million a year to maintain it.

Now compare Southwest's online results with Delta, the third-largest carrier behind United and American. Last year, online sales accounted for just 9 percent of Delta's passenger revenues. In a recent survey of travel sites by Internet research firm Jupiter Media Metrix, Southwest.com ranked ahead of American's, Delta's and United's websites. Southwest.com is clearly the most successful airline site on the Web.

"They've done a lot of business, and their marketing campaign is absolutely brilliant," says Alan Alper, an analyst with Waltham, Mass.-based Gomez, a company that evaluates websites.

Since the company first started selling tickets online in 1996, Southwest has launched a variety of campaigns to motivate people to buy tickets via the site. For example, the airline sends a weekly electronic newsletter to 3.3 million subscribers that includes special offers available exclusively through Southwest.com. These incentives will be even more crucial to the airlines' survival in this tough economy and as Americans think twice about flying. While other airlines suspended Internet-only deals after the Sept. 11 attacks, Southwest continued to offer them.

Of course, no incentive would drive customers to the site if it weren't easy to use. Booking a ticket on Southwest.com is a straightforward process. Customers first enter their origin and destination cities, date of travel and number of passengers, select their flights and fares, confirm or change the resulting itinerary, enter their credit card information, and receive their confirmation. Unlike most travel sites, customers don't have to log in or register with Southwest.com to purchase tickets.

"We have no roadblocks. We're not tracking you to see your purchasing habits. It hasn't been a need of ours. We just want to provide convenience and ease of use so you can get where you want to go at a low fare," says Melanie Stillings, marketing automation manager for Southwest.com.

To that end, Stillings and her team have added all the tools travelers need to plan a trip. Since December 2000, Southwest.com has provided rental car reservations through Galileo, a computer reservation system. As of last March, customers could book hotel rooms on the site. Last June, it began posting flight status information. "We are making ourselves a one-stop travel shop," says Stillings.

Adding car and hotel reservation capabilities to the site just months before the company pulled out of Travelocity.com, which also offered those features yet generated less than 1 percent of Southwest's ticket sales, was somewhat prophetic. It also prepared Southwest for its decision not to partner with American, Continental, Delta, Northwest and United last June when those airlines formed Orbitz, another one-stop online travel shop. It wouldn't make sense for Southwest to sell tickets on its own site without also providing a way for customers to reserve hotel rooms and rental cars, while other online agents from which the company was trying to divorce itself attracted customers by offering the whole travel kit and caboodle.

Southwest doesn't partner with other travel sites because it can't control the service a Southwest customer gets from the online agent nor can it guarantee the ease of buying a ticket online. "If we make it harder to purchase online than we do using the phone, then we're going to lose the battle of low cost," Stillings says.

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The American Cancer Society provides answers and support to anyone in need. Sandra Smiling was looking for information on the Web, but her concerns weren't as mundane as finding a cheap flight or getting a great deal on Elvis memorabilia. The 51-year-old Brooklyn, N.Y., native was a breast cancer patient. "I was looking for someone who was facing the same dilemma," she says. "I needed answers."

Smiling found what she needed at Cancer.org, the website of American Cancer Society (ACS). Now, after undergoing a bilateral radical mastectomy, she visits the site two or three times a day. She finds practical information, such as whether to take Femara or Tamoxifen after her surgery, and emotional support from fellow survivors who opted for the same type of breast reconstruction. "This site uplifted my spirits and induced a spiritual healing within me," she says.

Smiling is one of more than 330,000 visitors to Cancer.org every month. However, the legion of satisfied "customers" (as ACS executives call them) still wasn't enough to please the organisation's leaders. They believed the site needed big improvements -- $7 million worth, in fact. In August, the ACS launched a new website.

"Customer expectations continually evolve, and you have to meet those expectations," says James Miller, director of Internet strategy. "If you're really good, you go beyond them, and your customers say, 'Wow, that's something I didn't even know that I needed.'" For Terry Music, strategic business manager for information delivery and Miller's boss, the changes to the website became personal. After moving from Tampa, Fla., to Atlanta to take the position at ACS headquarters, she was diagnosed with breast cancer in July 1999.

Music spent the next 14 months going through treatment. She considered herself lucky to have moved to Atlanta because she had access to top oncologists at Emory University, as well as close contact with the chief medical director and surgeon at ACS. "Within the organisation, we always talk about how we can help people turn information into knowledge, and that's what they were doing for me," says Music. "I knew that the ACS as a whole could play that role for others, and I began to strive to make it easier for our customers to get information in a way that makes the most sense for them."

For the relaunch of Cancer.org, Music and Miller worked with Sapient, which had clinical psychologists and cultural anthropologists spend time with cancer patients at various stages to develop an "experiential model." That model outlined medical issues and personal questions like, "Why am I tired all the time?" and "Will chemo hurt?" that arise during the stages of cancer. Miller then rebuilt the Cancer.org site around that model. "That's how we went from a good but rather static experience to the dynamic site we have today," explains Miller. He worked with an 18-person team and 85 Sapient staffers to consolidate and reorganise the content, build the online communities and provide new tools to help users with every foreseeable situation.

Visitors to Cancer.org select the type of user they are -- such as a brain cancer patient, ACS supporter, cancer survivor or healthy person seeking to prevent cancer. The website is then personalised for that user. The site for brain cancer patients, for instance, points them to specific discussion groups, tools like the Cancer Profiler to help them decide on treatment and information on the Relay for Life (an annual event that celebrates survivorship). ACS supporters are directed to local volunteer opportunities, a donation form and online philanthropist communities.

The new site also incorporates local information. "We knew from the questions we got to our call center that people first want to know things like, 'Where can I find a support group in my community?' or 'How can I get a ride to my cancer treatment?'" says Music. Now the 3,400 ACS offices provide that type of local information directly on the site.

Reorganising content and enhancing features isn't a new philosophy for ACS. Since it first went online in 1995, the site has been in a nearly constant state of evolution. Seven years ago, Cancer.org was your garden-variety homepage. "It was ugly," Miller remembers, "but the ACS saw that the Internet was an important new channel and knew they had to have something up."

Then in 1999, driven by competition such as Oncology.com, Cancersource.com and Lifespire.com, Miller and Music began the multimillion-dollar redesign for 2001. "One of the first things I saw at the peak of the Internet bubble was that we were at a competitive disadvantage with all of what we called the Cancer.coms popping up," Miller says. "We thought, Wait a minute. We're better than them. So we started to focus on who we were, who our customers were and how we could best serve them."

Even during those two years of planning, Miller and Music made changes to the site. In October 2000, they did a refresh, which reorganised the 8,000 pages of content, giving the site a consistent visual design, navigation and framework. The constant improvements are necessary because ACS is no different from any other business trying to survive online. "We never think about it from a nonprofit point of view," Music says. "We make business decisions."

Music's advice for other Web businesses is simple. "Think about the customer," she says. "Meet the customer when they arrive, and make their experience the best it can be." Then make it even better.

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Providing personalised webpages for its salespeople has given Mary Kay's business a makeover. Call Michelle McGrath on any weekday afternoon, and you'll hear her 5-year-old boy and 3-year-old twin girls playing in the background. Check in at 9 p.m., however, and McGrath will be online -- in the quiet of her suburban Boston home -- filling orders for lipstick and foundation, and e-mailing fellow beauty consultants and customers.

Mary Kay, known for its pink Cadillacs and old-fashioned face-to-face salesmanship, was thinking about women like McGrath when the company set out to create online tools and personalised webpages for its sales reps four years ago. The Dallas-based cosmetics company takes pride in pampering its 800,000 beauty consultants -- awarding high performers with sales incentives and prizes, including the famed pink Cadillacs.

Instead of selling its products directly from its website, Mary Kay decided to help its sales force set up sites and manage home businesses online. The idea was that the beauty consultants would be more productive if they could contact customers and send their orders to company headquarters whenever they wanted. Mary Kay's approach also helped avoid the channel conflicts experienced by many other direct sellers as they developed Web initiatives that sometimes bypassed the sales force.

"The Internet has freed up my time and allowed me to keep in touch with my customers," says McGrath, who has 500 customers on her e-mail address list. "My service is better and my business has tripled in three years. What's most important is that my customers can reach me anytime."

Unlike many other direct sellers that have stumbled with Web initiatives, in some cases angering sales forces, Mary Kay has found a way to foster its primary asset -- an enthusiastic sales force -- while gaining e-commerce efficiencies. Customers can't buy directly from Mary Kay's sleekly designed website as they can at Avon.com. Instead, they're directed to the personalised site of a nearby consultant, where they can order products online or call for over-the-phone advice.

Mary Kay has spent close to $15 million during the past five years to get its sales force online and to host personalised webpages for any interested beauty consultants in the United States. So far, roughly 24 percent -- or about 120,000 -- of the company's U.S. consultants have their own site. Mary Kay is also hosting sites in Canada and the United Kingdom, and Kregg Jodie, senior vice president and CIO, expects the program to expand to other countries soon.

The effort is clearly paying off. Internet ordering now accounts for 70 percent of Mary Kay's revenue and is helping the company save money. Where each order from a beauty consultant used to cost more than $3 to process, electronic orders now cost the company less than $1, saving Mary Kay "well into the millions" during the past five years, according to Jodie.

"Supporting the beauty consultant is the core of our business," says Jodie, who joined Mary Kay eight years ago and was appointed CIO in 1997. "The key to our success was developing technology that reinforces our business model."

Alan Alper, an e-business analyst at Gomez in Waltham, Mass., adds, "Mary Kay is a great example of how to manage channel conflict -- don't allow it to occur."

Mary Kay's efforts to wed Internet technology with its old-fashioned image are easy to see at company headquarters. The outside of the building is granite and glass with cascading fountains. Inside, the pink-carpeted office of founder Mary Kay Ash -- who suffered a stroke five years ago -- remains essentially untouched since the day she left. Columns designed to look like lipstick tubes adorn the cafeteria. Despite these timeless touches, Jodie encountered little resistance from corporate officials or from far-flung beauty consultants when he helped introduce an application six years ago to help top sellers deliver reports and manage their business electronically. That application was initially connected to CompuServe but was later replaced with Internet protocols that gave consultants access through any ISP. Personal websites were first launched in 1997. "We were ahead of the Internet curve because it fit our model so well," Jodie says.

Six years later, beauty consultants use the Web to order products for their customers, message colleagues, file reports and register for Mary Kay events. Jodie's team focused on simplicity when designing Internet applications, avoiding the need for extensive training and encouraging quick adoption. The tactic appears to have worked. Of the 500,000 beauty consultants in the United States, 380,000 have visited the internal website to place orders and get information about the company.

Mary Kay's Web presence also draws a younger audience, both in recruiting new beauty consultants and attracting customers from a generation that might equate Mary Kay products with their mothers. For McGrath, the company's Web efforts prove the company values technology. "I can't imagine doing my business without the Internet," McGrath says. "I wouldn't be keeping up with my customers. I have to be where they are."

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There's a critical common thread that runs through the four Web businesses profiled here -- a strong customer-centric focus. While an airline, a makeup company, a car company and a nonprofit organization have inherently different business models, the websites for Southwest Airlines Co., Ford Motor Co. employees, American Cancer Society Inc. and Mary Kay Inc. succeed because they recognize and deliver what their customers need.

Whether adding comprehensive travel services, giving intranet access to users worldwide, building Web content around users' experience or providing sales agents with individual webpages, these Web Business 50 winners each developed their sites with a clear customer focus.