1. Charles Schwab Homework solutions

2. Customer Interface

3. Types of User Interface An interface can be a desktop computer, palm pilot, cell phone, or other device The interface need not be Internet- connected. Example: FirstDirect The key is that standard face-to-face interaction is replaced by technology- enabled interface.

4. The 7Cs of the Customer Interface Context Site’s layout and design, look and feel Form/Aesthetic vs. Function Commerce Site’s capabilities to enable commercial transactions Connection Degree site is linked to other sites Communication The ways sites enable site-to- user communication or two-way communication Customization Site’s ability to self-tailor to different users or to allow users to personalize the site Community The ways sites enable user-to- user communication Content Digital subject matter Text, pictures, sound and video including product, service, and info offerings

6. Functional Dominant — Brint.com

7. Aesthetic Example — KMGI.com (interactive web production)

8. Integrated Approach Example — Patagonia.com

9. The 7Cs of the Customer Interface Context Site’s layout and design, look and feel Form/Aesthetic vs. Function Commerce Site’s capabilities to enable commercial transactions Connection Degree site is linked to other sites Communication The ways sites enable site-to- user communication or two-way communication Customization Site’s ability to self-tailor to different users or to allow users to personalize the site Community The ways sites enable user-to- user communication Content Digital subject matter Text, pictures, sound and video including product, service, and info offerings

10. Content Five content archetypes: 1. Superstore – one stop with wide range of categories and lots of choices 2. Category killer- one category and lots of choices 3. Specialty – one or more categories but few exclusive choices The first three are known as OFFERING-DOMINANT 4. Information dominant – archives of information and search tools 5. Market dominant – create a market where buyers and sellers meet

11. A Framework to Understand Offering-Dominating Archetypes Superstore Category Killer Specialty Store NUMBER OF PRODUCT CATEGORIES Multiple Single Narrow Broad DEPTH OF PRODUCT LINE

12. Superstore Example — Amazon.com

13. Category Killer Example

14. Specialty Store Example — Frontgate.com

15. Information Dominant — Business 2.0 (www.business2.com)

16. Market Dominant Example — PlasticsNet.com

17. The 7Cs of the Customer Interface Context Site’s layout and design, look and feel Form/Aesthetic vs. Function Commerce Site’s capabilities to enable commercial transactions Connection Degree site is linked to other sites Communication The ways sites enable site-to- user communication or two-way communication Customization Site’s ability to self-tailor to different users or to allow users to personalize the site Community The ways sites enable user-to- user communication Content Digital subject matter Text, pictures, sound and video including product, service, and info offerings

18. Communities Rayport and Jaworski Community – feeling of membership, sense of involvement, shared interests Community archetypes: 1. Bazaar –many sub-areas; no meaningful interaction 2. Theme park – Interests grouped, multiple communities, interaction but no strong bonds 3. Club – lots of interaction; focused on one area 4. Shrine – focus, minimal interaction, high enthusiasm 5. Theatre – Interaction is part of content 6. Café – Primary focus is on conversation btwn members

19. Value of Online Communities Hagel and Armstrong Communities of transaction –buy, sell, deliver info e.g. Virtual Vineyards Communities of Interest –Special topics, high degree of interpersonal communication, e.g. GardenWeb, Motley Fool Communities of fantasy –Red Dragon Inn, ESPNet Communities of relationship –life experiences, cancer forum, divorce

20. Communities — Elements, Types, and Benefits Elements of Community Types of Communities Member Outcomes: Participation and Benefits Cohesion Effectiveness Help Relationships Language Self-regulation Just Friends Friends in Need Enthusiasts Players Traders Need Fulfillment Inclusion Mutual Influence Shared Emotional Experiences Degree of Participation

21. Bazaar Example — Games.Yahoo.com

22. Theme Park Example — VoxCap.com

23. Club Example — Gillette Women’s Cancer

24. Shrine Example — The Unofficial Dawson’s Creek Web Site

25. Theater Example — iFilm.com

26. Cafe Example — Bolt.com

27. The 7Cs of the Customer Interface Context Site’s layout and design, look and feel Form/Aesthetic vs. Function Commerce Site’s capabilities to enable commercial transactions Connection Degree site is linked to other sites Communication The ways sites enable site-to- user communication or two-way communication Customization Site’s ability to self-tailor to different users or to allow users to personalize the site Community The ways sites enable user-to- user communication Content Digital subject matter Text, pictures, sound and video including product, service, and info offerings

28. Customization archetypes Personalization by user – Enables the user to modify site content and context Tailoring-by-site – Enables the site to reconfigure itself based on past behavior by the user – Collaborative filtering or rule- based

29. Personalization by User Example — mylook.com

30. Tailoring by Site Example

31. The 7Cs of the Customer Interface Context Site’s layout and design, look and feel Form/Aesthetic vs. Function Commerce Site’s capabilities to enable commercial transactions Connection Degree site is linked to other sites Communication The ways sites enable site-to- user communication or two-way communication Customization Site’s ability to self-tailor to different users or to allow users to personalize the site Community The ways sites enable user-to- user communication Content Digital subject matter Text, pictures, sound and video including product, service, and info offerings

32. Communication archetypes 1-to-many, nonresponding – newsletter or event announcement. 1-to-many, responding – site messages are invitations to submit responses, answer a survey 1-1, nonresponding – personalized message 1-1, responding – personalized message w/ request for reply 1-many, live – chat, seminar, conference 1-1, live -- chat

33. One-to-Many, Non-Responding Example — theStandard.com

34. One-to-Many, Responding User Example — BizRate.com

35. One-to-Many, Live Interaction Example — Accrue 2000 Web Seminar

36. One-to-One, Non-Responding User Example

37. One-to-One, Responding User

38. One-to-One, Live Interaction— LivePerson.com

39. The 7Cs of the Customer Interface Context Site’s layout and design, look and feel Form/Aesthetic vs. Function Commerce Site’s capabilities to enable commercial transactions Connection Degree site is linked to other sites Communication The ways sites enable site-to- user communication or two-way communication Customization Site’s ability to self-tailor to different users or to allow users to personalize the site Community The ways sites enable user-to- user communication Content Digital subject matter Text, pictures, sound and video including product, service, and info offerings

40. Connection Archetypes Destination – site-generated content; very few links to other sites Hub – combination of site-generated content and selective links to experts or related sites. Portal – almost entirely links to large numbers of sites. Little or no original site-generated content Affiliate programs – can click on links or banners to affiliated sites; often remaining in the page’s “environment” Outsourced content – The content is generated by 3 rd party, but integrated within web site Meta software – utility and plug-in software to assist users. E.g., free shopping agent.

41. Destination Example

42. Hub Example — DrKoop.com

43. Portal Example — Yahoo.com

44. Affiliate Program Example — Onhealth.com and Proflowers.com

45. Outsourced Content Example — Real.com

46. Consumer Attraction to the Internet 24-7 availability Access from anywhere No travel Time savings Privacy Easy comparison shopping Lower prices More informed decisions Greater selection No annoying salespeople Source: Mastercard Survey

47. Two Dimensions of Search Should one expect lower margins on the Internet? Two dimensions to search Differentiation and Consumer Segments Bakos (Management Science, 1997) points out two factors that affect the degree to which the quality search effect outweighs price search effect: 1. The degree of differentiation in the product category, and the associated degree of importance consumers place on finding the product with the best fit to their preferences. 2. The number of sellers.

48. Wine Online: Lynch and Ariely A total of 100 wines were available for selection in two stores, with each store selling 60 wines, 20 of which common to both stores, and 40 unique to each store. Conditions varying on: Search costs for price information Search costs for quality information Search costs for comparing across two competing electronic wine stores High Price Usability. Price information was displayed next to each wine in the list of each store, with a tool allowing for sorting by price. High Quality Usability – Wines were described in terms of complexity, acidity, body, and sweetness or dryness. Differentiating comments by the store. Sorting by type. High Store Comparability. The screen was split in half, with each store on one half of the screen.

49. Wine Online: Five Results For differentiated products like wine, lowering the costs of search for quality information reduced price sensitivity, thereby increasing profit margins. However, price sensitivity for wines common to both stores increased when cross-store comparison was made easy. Cross-store comparison had no effect on price sensitivity for wines unique to a particular store. Making information environments more transparent by lowering all the search costs resulted in consumers liking the shopping experience more and two month later more easily recalling their preferred wines. When store comparison was made easy, market share of wines unique to the stores increased. The conclusion is simple: There are strong incentives for retailers to provide customers with electronic shopping and its search benefits, but at the same time they must differentiate their products to maintain high profit margins.

50. How do buyers behave differently online? Greater perceived risk The buyer must rely on seller’s description of the product The buyer must rely on seller for timely delivery The buyer must rely on the seller to truthfully represent himself Privacy and security issues Attention deficit –Customers are overwhelmed with information –Need for suggestion, customization Search is often automated –bots are frequently used to find the product that best meets some criteria – sometimes the product with the lowest price Lack of social cues and a sparseness of communication

51. Some research findings on online consumer behavior Online customers more loyal Less price sensitive than commonly believed – depth of information and web interactivity lower price sensitivity Brand names are more valuable when products have few search attributes (e.g. clothing)

52. So what can be done? Trust –Access to other customers’ experiences, live interaction, or both. –Independent intermediaries (paypal) and infomediaries –Offer more information and allow easy search and comparison, as only the web can offer –Share your inventory levels –Intelligent agents and live representatives for assistance –work risk to your advantage – high perceived risk means increased loyalty –Personalization / individualization –Communication –Communities

53. So what can be done? Attention Deficit The answer is personalization and customization. –Customize suggestions, menus –Customize billing –Show them their history

54. Stages of Customer Experience Functionality –Usability, ease of navigation, speed, reliability, security, platform independence Intimacy –Customization, communication, consistency, trustworthiness Evangelism –Community, marketing effort –Two dimensions: Time (x) and reactions (y)– general, personal, other-regarding

55. Seven Steps of Creating Positive Customer Experience 1. Detailed description of target customer 2. What scenarios would bring customers to your web site? 3. Integrate offline experience 4. The Three Steps  web site 5. Distribution of customers on hierarchy 6. Reward brand loyalty – freedom to evolve and to confront, preferred access, economic incentives and reward programs 7. Monitor and Adjust