Chapter 5 Customer/Consumer- Focused E-Commerce
Copyright © 2003, Addison-Wesley Attracting customers Unique product or service Low price Convenience Customer services Free stuff One good hook, by itself, is not enough
Copyright © 2003, Addison-Wesley Figure 5.1 Some sites offer free services. Note buttons to left of Yahoo!
Copyright © 2003, Addison-Wesley Back to Business Basics Brand name still counts Amazon vs. Barnes & Noble, and Borders Bricks-and-clicks strategy vs. WalMart Brand name Implies stability, connotes reputation Reduces perceived risk of fraud Minimizes returns hassle Bricks-and clicks business partners
Copyright © 2003, Addison-Wesley Figure 5.2 Maytag on the Sears website. Note: This page was accessed through Sears.com
Copyright © 2003, Addison-Wesley Finding/Attracting Potential Customers Advertising Banner ads Targeted Untargeted Risk – spam, reverse denial of service attacks Search engine Target – be in top 20 following search Metatags
Copyright © 2003, Addison-Wesley Figure 5.4 The metatag entries for a textbook’s Web page.
Copyright © 2003, Addison-Wesley Creating Repeat Customers Window shoppers generate zero revenue may help/hurt reputation Good Web site necessary, not sufficient Good Web site must offer customer value Personalized catalog Customer relationship management
Copyright © 2003, Addison-Wesley Figure 5.5 A personalized Web page. No, this customer was not recently married. CRM software does not always work as advertised.
Copyright © 2003, Addison-Wesley Customer Relationship Management (CRM) Customer acquisition/retention tool Sales and marketing support Data collected at all contact points Stored in data warehouse Data analysis and data mining Ultimate objective is lock-in (sustained repeat customer) Customer has (in)vested interest not to change
Copyright © 2003, Addison-Wesley Sustainable Competitive Advantage B2C front-end easy to copy Efficiency gains easier to protect Value chain integration Supply chain integration Customization Tailored products; personalized services One-to-one relationship marketing CRM Risk – privacy intrusion
Copyright © 2003, Addison-Wesley B2C Revenue Sources Selling digital/information products Software, music, images, electronic games Immune from diminishing returns Low distribution cost Danger – protecting intellectual property Selling physical products Intense price competition Cost-control, customization, lock-in are key to profitability
Copyright © 2003, Addison-Wesley Selling services Revenue models Contractual price Low volume transactions, high dollar value Negotiated off-line, executed on-line Commodity/product price High volume transactions, low dollar value Fees
Copyright © 2003, Addison-Wesley Selling services Revenue models: Fees Per transaction – E-Trade Percentage fee – eBay, Expedia (Dis)Intermediation fee EC Referral/brokerage fee – Realtor.com (Dis)Aggregation fee – American Express ONE EB “Shipping and handling” fee – FTD Administrative overhead/recharge fee
Copyright © 2003, Addison-Wesley Figure 5.8 A local florist’s Web site.
Copyright © 2003, Addison-Wesley Usage Charges and Subscription Fees Evolving model may resemble TV Free, over-the-air channels Fee for basic cable/sat service Additional fee for premium services Per-event fee for pay-per-view
Copyright © 2003, Addison-Wesley Payment Services Credit cards Visa, MasterCard, American Express Escrow services (PayPal) Internet bill presentment and payment Service provider aggregation model Customer aggregation model E-cash and digital cash (not yet popular!) Pay for micro-transactions (intermediation “tax”)
Copyright © 2003, Addison-Wesley Figure 5.13 The Visa network.
Copyright © 2003, Addison-Wesley Information Services Objective Provide enough value to capture visitors Higher advertising and referral fees More usage fees Search engines – Google Portals – AOL, MSN, Yahoo Bots, such as shopping bots – Orbitz (questionable future?)
Copyright © 2003, Addison-Wesley Not-for-Profit/Community Web Sites Virtual communities Single focus Information, support, interaction Health support groups Government-to-consumer (G2C) sites Information Services