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ROI: Mad to Measure

Calculating the return on E-business investments isn't easy, but that doesn't stop companies from trying.

And yet new business is very much on the minds of executives at Overland Park, Kansas—based Yellow, who know that faster cycle times improve the company’s capture rate: Make a customer happy on one route or shipment, and you’re almost certain to win additional business.

The company launched the portal at the start of last year, intent on providing customers with a single Web site that can satisfy a range of needs, including calculating rates, arranging pickups, tracking shipping status, filling out bills of lading, and communicating with customer service personnel on a range of problems and general queries. The company surveyed its customers beforehand and found them ready and eager to embrace Web interaction. A close look at the sites operated by UPS, FedEx, and others helped Yellow understand what features made the most sense.

Moving customer interaction to the Web has huge implications for the company, because it permits Yellow to offer an expanded range of services far more cheaply than if customers were to rely on phone contact with customer service reps. In fact, Yellow says that the portal has saved it $20 million in this regard. For many companies that might prompt cries of “Case closed!” on the ROI front, but Yellow doesn’t stop there. Its calculation also involves the increase in customer capture rate, which correlates to a rise in sales. While the company won’t release actual numbers, recent surveys found that customers doing business with Yellow via MyYellow.com are 23 percent more likely to do repeat business than customers who interact in more traditional ways.

Time is money, of course, and as with all of Yellow’s technology projects, the portal has to deliver its minimum return in three years. “There’s so much change in the technology area that if you can’t get that payback, it probably won’t get a good return,” says Barger. Speed is also at the heart of most of the enhancements that have been made over the past 18 months. An application called Exact Express, for example, allows corporate personnel to give potential customers all pickup and delivery schedules and price options while on the phone or online with them. Sales made via this system were up 40 percent last year and 23 percent in the first quarter.

Yellow initially rolled the portal out to about 4,300 customers. Today it’s used by more than 10 times that many, and receives 18,000 hits per day. Fully half of the company’s customers use it, and about 60 percent of the firm’s revenue flows through it. —Hilary Rosenberg

Delta Air Lines

We need to justify things based on hard economic value,” says Vince Chirico, general manager of ebusiness for Delta Air Lines (www.delta.com). That no-nonsense approach would seem to be bad news for wireless applications, which at this stage seem more like a nice-to-have than a business necessity.

But for high-flying, hard-charging business travelers who spend much of their time rushing through airports with a cell phone in one hand and a carry-on bag in the other, wireless access to travel data has become more desirable than an aisle seat. Delta was quick to spot this need, and since last year the Atlanta-based company has been offering wireless Internet services that give customers quick access to a wide array of flight information; the airline intends to build on that foundation by adding several interactive features.


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