Dotcoms don't deliver goods

New Economy firms will lose out to former bricks-and-mortar companies on the internet because they ignore basic business principles such as making sure customer orders are fulfilled.

"Sensitivity to the issue of customer fulfilment is low in dotcoms. I don't know if that's because it's boring, and doesn't have anything to do with the exciting stuff on the internet," said Robin Tye, ebusiness management consulting leader at PricewaterhouseCoopers (PwC).

In a PwC survey of 415 companies, online offshoots of bricks-and-mortar companies rated first-class fulfilment as the second most important factor for success of an online business, after marketing.

In contrast, pure-play dotcoms and other internet firms rate marketing as the most important factor, followed by an attractive website. For dotcoms, fulfilment of customer orders came eighth, way behind all other options.

This short-sightedness by dotcoms will mean that bricks-and-mortar companies will overtake their startup rivals in the long term, according to PWC.

The market share, business skills and financial muscle of incumbent players will outweigh that of startups.

"Twelve months ago, everyone was petrified that dotcoms would steal the market. Now, it's not the case," said Tye.

Last week Ezesurf, which was launched in September 1999 to be the UK's first unmetered access ISP, went out of business, with managing director Matt Bryson claiming that poor customer service had been a problem.

"We realise that our customer services were never that brilliant, but regret that staff got away with a lot more from their manager than they should have," he said in an open letter posted on the company's website before it was taken down.

"In fact, several of them would quite literally sit and play games and not take your calls.

"We thought we had overcome this after the debacle at Christmas, where it was a revelation to many dotcoms that they had to deliver the goods to keep customers happy," he confirmed.

"But how do you build a brand if its not through customer service? And you can't just outsource this because it's just so core to the business."

First published in Computing