L
Learning
i Obj
Objectives
ti
In this chapter, you will learn about:
• Revenue models
• How some companies move from one revenue
model to another to achieve success
• Revenue strategy issues that companies face when
selling
lli on the
th W
Web
b
• Creating
g an effective business p
presence on the Web
• Web site usability
• Communicating effectively with customers on the
Web
E-Business
E
Business
Eighth
g
Edition
Chapter 3
Selling on the Web: Revenue Models
and
dB
Building
ildi a W
Web
bP
Presence
E-Business, Eighth Edition
R
Revenue
M
Models
d l
W b Catalog
Web
C t l Revenue
R
Models
M d l
• Web business revenue generating models
–
–
–
–
–
• Adapted from traditional catalog-based model
Web catalog
Digital content
Advertising-supported
g pp
Advertising-subscription mixed
Fee-based
– Seller established brand image
g
– Sold through printed information
• Mailed to prospective buyers
• Web sites expand traditional model
– Replace
R l
or supplement
l
t print
i t catalogs
t l
– Offer flexibility
• Can work for both sale types
– Business
Business-to-consumer
to consumer (B2C)
– Business-to-business (B2B)
• Order through Web site or telephone
• Payment though Web site, telephone, or mail
• Can work with one Web site,
site separate sites
sites, or
separate pages
E-Business, Eighth Edition
2
• Creates additional sales outlet
3
E-Business, Eighth Edition
4
E-Business, Eighth Edition
6
W b Catalog
Web
C t l Revenue
R
Models
M d l ((cont’d.)
t’d )
• Computers and consumer electronics
– Apple,
pp , Dell,, Gateway,
y, Hewlett-Packard,, IBM,, Sun
Microsystems
• Sell full range
g of p
products
– Dell
• Allows product configuration; creates value
– Crutchfield and The Sharper Image
• Successful
S ccessf l mail order e
expansion
pansion incl
includes
des Web sites
– Best Buy, Circuit City, J&R Music World, Radio Shack
• Successful retail store presence expansion
• Sell same products
E-Business, Eighth Edition
5
W b Catalog
Web
C t l Revenue
R
Models
M d l ((cont’d.)
t’d )
• Books, music, and videos
– Most visible electronic commerce examples
– Amazon.com Web-only retailer
• Originally sold only books
– Barnes & Noble, Blackwell’s, Books-A-Million,
Powell’s Books
• Well-established physical book stores
– CDnow Web-only online music store
– Tower Records, Sam Goody retail stores
• Created Web sites to compete with CDnow
– CD Universe copied CDnow approach
E-Business, Eighth Edition
7
E-Business, Eighth Edition
8
W b Catalog
Web
C t l Revenue
R
Models
M d l ((cont’d.)
t’d )
W b Catalog
Web
C t l Revenue
R
Models
M d l ((cont’d.)
t’d )
• Luxury goods
• Clothing retailers
– Clientele reluctant to buy
y through
g Web
– Vera Wang and Versace
– Adapt
p catalog
g sales model to Web
– Display clothing photos
• Web sites provide information
• Shopper purchases at physical store
• Heavy use of graphics and animation
• Prices,
Prices sizes,
sizes colors,
colors tailoring details
– Customers examine clothing online
• Place orders through Web site
– Evian
– Lands’ End online Web shopping assistance
• Uses
U
flflash
h animation
i ti
• Lands’ End Live (1999)
– Tiffany & Co
– Text chat and call-back features
– Lands’ End personal shopper agent (more recent)
• Graphics and animation require broadband connection
• Learns p
preferences and makes suggestions
gg
E-Business, Eighth Edition
9
E-Business, Eighth Edition
10
W b Catalog
Web
C t l Revenue
R
Models
M d l ((cont’d.)
t’d )
W b Catalog
Web
C t l Revenue
R
Models
M d l ((cont’d.)
t’d )
• Clothing retailers (cont’d.)
• Flowers and gifts (gift retailers)
– 1-800-Flowers
– My
y Virtual Model ((customers tryy clothes))
• Online extension to successful telephone business
• Competes with online-only florists
• Graphic image built from customer measurements
– Lands
Lands’ End
– Godiva
• Two shoppers using different computers
• Simultaneously browse Web site together
• Offers business gift plans
– Hickory Farms and Mrs. Fields Cookies
– Online overstocks stores
• Offer familiar name brands on Web
• Reaches
R
h more people
l th
than physical
h i l store
t
– Harry and David
– Problem with varying computer monitor color settings
• Send fabric swatch on request
• Offer generous return policies
E-Business, Eighth Edition
11
• Original Web site for informational purposes
• Promoted catalog business
• Added online ordering feature
E-Business, Eighth Edition
12
W b Catalog
Web
C t l Revenue
R
Models
M d l ((cont’d.)
t’d )
• General discounters (completely new businesses)
• Highly efficient distribution mechanism
– Buy.Com
– Firms own written information or information rights
g
• Borrowed Wal-Mart and discount club sales model
•
•
•
•
– Many sites sold advertising (originally)
• Subsidized extremely low prices
• Most sites now out of business
– Rely on volume purchasing strategy (now)
• Keeps prices low
LexisNexis: variety of information services
Lexis com: traditional research product
Lexis.com:
ProQuest: sells published documents’ digital copies
Dow Jones newspaper publisher subscriptions
– Digitized newspaper
newspaper, magazine
magazine, and journal content
– Fiercely competitive (thin margins: little profits)
– Traditional discount retailers
• Association for Computer Machinery: digital library
• Sellers
S ll
off adult
d lt digital
di it l content
t t
• Costco, Kmart, Target, Wal-Mart
• Slow
Sl
tto iintroduce
t d
electronic
l t i commerce W
Web
b sites
it
E-Business, Eighth Edition
Di it l C
Digital
Content
t tR
Revenue M
Models
d l
– Pioneered online credit card payment processing
13
Advertising-Supported
g
pp
Revenue
Models
E-Business, Eighth Edition
14
Advertising-Supported
g
pp
Revenue
Models (cont’d.)
• Successful sites attract specific groups
• United States network television
– About.com, HowStuffWorks, Drudge Report
– Provides free p
programming
g
g and advertising
g
messages
• Web portals
• Supports
pp
network operations
p
sufficiently
y
– Yahoo!
• Site visitor views problem (measuring and charging)
– Stickiness
• Keeping visitors at site and attracting repeat visitors
• Exposed
E
d tto more advertising
d ti i iin sticky
ti k site
it
• First Web directory
• Search engine
g
results p
presented on separate
p
p
page
g
• Search term triggered advertising
– Main p
portal sites ((AOL,, Excite,, Google,
g , MSN))
– Smaller general-interest sites (refdesk.com)
• Obtaining large advertiser problem
• More difficulty
y attracting
g advertisers
• C-NET (offers items to a specialized group)
– Demographic information
• Characteristics set used to g
group
p visitors
E-Business, Eighth Edition
15
Advertising-Supported
g
pp
Revenue
Models (cont’d.)
16
Advertising-Supported
g
pp
Revenue
Models (cont’d.)
• Newspaper publishers
• Targeted classified advertising sites
– Publish p
print content on Web
– Internet Public Library Online Newspapers page
– More successful at g
generating
g adverting
g revenue
– Web site profit potential
• Links to worldwide newspaper sites
• Specialize in classified advertising
– Newspaper’s Web presence
– Web employment advertising (CareerBuilder.com)
• Provides greater exposure and advertising audience
• Print edition sales loss (difficult to measure)
• Operating
O
ti costs
t nott covered
d by
b advertising
d ti i revenue
E-Business, Eighth Edition
E-Business, Eighth Edition
• Web directory and search engine advertising approach
• Topics of interest; short articles (increases stickiness)
• Monster.com
M
t
17
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18
Advertising-Supported
g
pp
Revenue
Models (cont’d.)
• Targeted classified advertising sites (cont’d.)
– Used vehicle sites
• AutoTrader.com, CycleTrader.com, BoatTrader.com
• Accepts paid advertising and charge listing fee
• Seller ad options: Web site only, print version inclusion
– Dedicated following product sites (VetteFinders)
• Caters to small audiences
– Product
P d t sites
it useful
f l tto buyer
b
after
ft use
• Musicians Buy-Line, ComicLink.com, The Golf
Cl
Classifieds
ifi d
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19
Advertising-Subscription
g
p
Mixed
Revenue Models
20
Advertising-Subscription
g
p
Mixed
Revenue Models (cont’d.)
• The Washington Post , Los Angeles Times
• Subscribers
– Pay fee and accept advertising
– Typically less advertising
– Mixed revenue model variation
• No subscription fee charges
• Current stories free
• Pay for archived articles
• Compared to advertising-supported sites
• Web sites offer different degrees of success
– The New York Times (today)
(
y)
• Business Week
• Bulk of revenue derived from advertising
– Mixed revenue model variation
– The Wall Street Journal ((mixed model))
• Free content at online site
• Requires paid subscription to print magazine
• Archived article additional charge (over five years old)
• Subscription revenue weighted more heavily
– Print edition and online editions
• Different model versions
E-Business, Eighth Edition
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21
Advertising-Subscription
g
p
Mixed
Revenue Models (cont’d.)
E-Business, Eighth Edition
22
F f T
Fee-for-Transaction
ti Revenue
R
Models
M d l
• ESPN
– Leverages
g brand name from cable television business
– Sells advertising, offers free information
– Collects Insider subscriber revenue
• Service fee based on transaction number or size
• Web site offers visitor personal service
– Formerly, human agents provided service
• Value chain
• Consumers Union (ConsumerReports.org)
– Disintermediation
– Subscriptions and charitable donations
– Not-for-profit organization
– Reintermediation
• Intermediary (human agent) removed
• No advertising
• New intermediary (fee-for-transaction Web site)
introduced
– Free information
• Attracts subscribers and fulfills mission
E-Business, Eighth Edition
23
E-Business, Eighth Edition
24
Fee-for-Transaction Revenue Models
(cont’d.)
• Travel agents
– Receive fee for initiating
g transaction
– Replaced by computers
• Online travel agents
– Saber system (Travelocity)
– Expedia, Hotels.com, Hotel Discount Reservations
• All profitable
– Orbitz
• Five major
j U.S. airlines consortium
• Generates advertising revenue
E-Business, Eighth Edition
25
Fee-for-Transaction Revenue Models
(cont’d.)
26
Fee-for-Transaction Revenue Models
(cont’d.)
• Automobile sales
• Travel agents (cont’d.)
– Web site removes salesperson negotiation
– Traditional travel agents
g
being
g squeezed
q
out
• Reduces costs
• Provides buyers information service
• Reduced or eliminated fees
– Smaller travel agents specializing (cruises,
(cruises hotels)
– Reintermediation strategy
– CarsDirect.com model
• Customers select specific car, site determines price
and
d fifinds
d llocall d
dealer
l
• Travel agents focus on groups
– Cruise Web sites
– Autoweb.com and Autobytel model
• S
Site locates local dealers, car sells at small premium
over dealer’s nominal cost
• VacationsToGo.com, Cruise Specialists
– Group travel Web sites
– Car salesperson disintermediated
– Web site: new intermediary (reintermediation)
• WaveHunters.com, WannaSurf
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E-Business, Eighth Edition
27
Fee-for-Transaction Revenue Models
(cont’d.)
E-Business, Eighth Edition
28
Fee-for-Transaction Revenue Models
(cont’d.)
• Stockbrokers
• Insurance brokers
– Charge
g customers trade execution commission
– Web-based brokerage firms (E*TRADE and Datek)
– Quotesmith
• Internet policy price quotes direct to public (1996)
• Independent insurance agents disintermediated
• Offer investment advice,
advice fast trade execution
• Creates competition
– Insurance policy information, comparisons, sales sites
• InsWeb
InsWeb, Answer Financial,
Financial Insurance.com,
Insurance com
YouDecide.com
– Discount brokers and full
full-line
line brokers
• Web sites opened for stock trading and information
• Transaction
T
ti costt reductions
d ti
(like
(lik online
li auto
t b
buying)
i )
• Stockbrokers disintermediated
– Progressive Web site
• Provides quotes for competitors’ products too
– Major
M j iinsurance company W
Web
b sites
it
• Offer information or policies for sale
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30
Fee-for-Transaction Revenue Models
(cont’d.)
• Event tickets
– Event p
promoters use Web
• Ticketmaster, Tickets.com, TicketWeb
• Sell original tickets
• Customers reside anywhere worldwide
– Secondary market tickets
•
•
•
•
E-Business, Eighth Edition
31
StubHub, TicketsNow
Operate as brokers
Connect ticket owners with buyers
R d
Reduce
ttransaction
ti costs
t
E-Business, Eighth Edition
32
E-Business, Eighth Edition
34
Fee-for-Transaction Revenue Models
(cont’d.)
• Real estate and mortgage loan brokers
– Web sites p
provide all traditional broker services
• Coldwell Banker, Prudential
– National Association of Realtors Web site
• Realtor.com
– IndyMac Bank Home Lending
• Offers online credit review, decision in minutes, printing
approval letter
– Successful Web mortgage brokers
• Ditech
Di h and
dE
E-LOAN
LOAN
E-Business, Eighth Edition
33
Fee-for-Transaction Revenue Models
(cont’d.)
Fee-for-Transaction Revenue Models
(cont’d.)
• Online banking and financial services
• Online music
– No p
physical
y
p
product
– Amazon MP3,, Apple’s
pp
iTunes,, eMusic,, Microsoft’s
MSN Music, Napster, Rhapsody, Yahoo!,
Walmart.com Music Downloads
– Sell single songs (tracks) and albums
– Sales revenue source
• Easy to offer on Web
– Web financial transactions concerns
• Trust and reliability of financial institution
– Solutions
• Fee-for-transaction model
• Some sites offer subscription plans
• Use existing bank’s identification and reputation
(Citibank Online)
• Start online bank not affiliated with existing bank (First
Internet Bank of Indiana)
• Use different name (Bank One used Wingspan)
E-Business, Eighth Edition
35
E-Business, Eighth Edition
36
Fee-for-Transaction Revenue Models
(cont’d.)
O li Vid
Online
Video
• Online music (cont’d.)
• Copying control
– Problems
•
•
•
•
•
– Use DRM software
Digital products easily copied
Stores promote own music file format
Buyers required to download and install software
Software limits number of audio file copies
Software does not prevent illegal copying
• Three issues hampering sales
– Large file size
• Reduced by higher Internet connection speeds
– Fear
F
off online
li sales
l iimpairing
i i other
th sales
l ttypes
• Potential serial release pattern impact
– Solution
– Inability to play on variety of devices
• Adopting one standard file format
• No
N copying
i restrictions
t i ti
• DRM-free MP3 format (Amazon)
E-Business, Eighth Edition
• DRM not platform compatible
37
E-Business, Eighth Edition
38
Fee-for-Service Revenue Models
(cont’d.)
F f S i R
Fee-for-Service
Revenue M
Models
d l
• Companies offer Web service
• Professional services
– Fee based on service value
– Limited Web use
• Not broker service
• Not based on transactions-processed number or size
• State laws prohibit extension of practice
• Patients may set appointments
• Online games
– Major concern
– Sales revenue source
• Patient privacy
• Advertising (older concept)
• Pay-to-play premium games
• Subscriptions
– Significant barrier
• Patient
P ti t diagnosis
di
i diffi
difficult
lt without
ith t physical
h i l examination
i ti
– Frequent player
y demographics
g
• 40% over age 35
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39
E-Business, Eighth Edition
40
Subscription
p
to Advertising-Supported
g
pp
Model
R
Revenue
M
Models
d l iin T
Transition
iti
• Slate magazine (e-zine)
• Need to change revenue model
– Upscale news and current events
– When Web users’ needs change
g
• Success expectations were high
• Conditions after 2000
– Experienced
p
writers and editors
– Acclaim for incisive reporting and excellent writing
– Funding became scarce
• Unprofitable growth phase
• Initial revenue source
– Change
Ch
model
d l or go outt off b
business
i
– Annual subscription
• Did not cover operating costs
• Now an advertising-supported site
– Part of MSN portal
• Increases stickiness
E-Business, Eighth Edition
41
E-Business, Eighth Edition
42
Advertising-Supported
g
pp
to Advertisingg
Subscription Mixed Model
Advertising-Supported
g
pp
to Fee-forServices Model
• Salon.com
• Xdrive Technologies
– Acclaim for innovative content
– Free disk storage
g
• Initial revenue source
• Initial revenue source (1999)
– Advertising-supported
g pp
site
– Needed additional money to continue operations
– Advertising-supported
Advertising supported
• Pages contained advertising
• Targeted
T
t d e-mailil advertising
d ti i
• Did not cover operating costs
• Investors did not provide
p
• Now offers optional subscription version
– Annual fee for Salon premium
• Now subscription-supported service
• Free of advertising
• Downloadable content
• Additional content
E-Business, Eighth Edition
– Monthly
y fee dropping
pp g
• Other similar companies (IBackup and Kela)
43
E-Business, Eighth Edition
Advertising-Supported
g
pp
to Subscription
p
Model
M lti l T
Multiple
Transitions
iti
• Encyclopedia Britannica
• Northern Light
– Initial Web offerings
– Search engine
g
((includes own database))
• Britannica Internet Guide
• Encyclopedia Britannica Online
• Results include Web site links and abstracts
• Initial revenue source
• Initial revenue source
– Combination (advertising-supported and fee-based)
– Paid subscription
p
site
• Individual
I di id l article
ti l paymentt
• Search results page advertising
• Low subscription sales
– Converted to free advertiser-supported
pp
site
– Did not cover operating costs
• Sold educational and scientific products
• Now subscription
p
model
• Returned
etu ed to mixed
ed model
ode
– Annual, large clients
E-Business, Eighth Edition
44
– Subscription plan and free content
45
E-Business, Eighth Edition
46
R
Revenue
St
Strategy
t
Issues
I
• Implementations issues
– Channel conflict and cannibalization
– Strategic alliances and channel distribution
management
– Mobile commerce
E-Business, Eighth Edition
47
E-Business, Eighth Edition
48
Strategic
g Alliances and Channel
Distribution Management
Ch
Channel
l Conflict
C fli t and
dC
Cannibalization
ib li ti
• Channel conflict (cannibalization)
• Strategic alliance
– Company Web site sales activities interfere with
existing
i ti sales
l outlets
tl t
– Two or more companies join forces
• Undertake activity over long time period
• Retail distribution partner issues
– Levis: stopped selling products on company Web site
• Site now p
provides p
product information
• Yodlee
– Maytag: incorporated online partners into Web site
– Relationship with portal site clients
• Site now provides product information
• Amazon.com
A
– Eddie Bauer
– Joined with Target, Borders, CDnow, ToyRUs
• Online purchases
p rchases ret
returnable
rnable at retail stores
• Required compensation and bonus plans adjustments
to support Web site
E-Business, Eighth Edition
• Handleman Company
– Manages music inventories (Walmart, KMart)
49
M bil C
Mobile
Commerce
E-Business, Eighth Edition
50
C ti an Eff
Creating
Effective
ti Web
W b Presence
P
• F
Few companies
i successful
f l generating
ti significant
i ifi
t
revenues
• Organization’s presence
– Public image conveyed to stakeholders
– Usually not important
– NTT’s DoCoMo I-Mode service (Japan cell phone)
• Send short messages, play games, obtain weather
forecasts
• Until growth reaches significant size
– Stakeholders
– AvantGo (United States)
• Customers, suppliers, employees, stockholders,
neighbors, general public
• Offers channels of information as PDA downloads
• Mobile commerce: $400 billion by 2012
• Effective Web presence
– Requires larger memory, easier-to-use interfaces,
higher screen resolutions
– Critical
• E-mail, telephone, Web access, entertainment services
convergence
E-Business, Eighth Edition
– Joining Web sites with channel distribution
management firms
51
• Even for smallest and newest Web operating firms
E-Business, Eighth Edition
52
Identifying
y g Web Presence Goals
(cont’d.)
Id tif i W
Identifying
Web
bP
Presence G
Goals
l
• Business physical space
• Making Web presence consistent with brand image
– Focus on very specific objectives
– Different firms establish different Web p
presence g
goals
– Coca Cola pages
• N
Nott iimage d
driven
i
• Must satisfy many business needs
• Fails
F il to convey good
d presence
• Usually include trusted corporate image (Coke bottle)
• Traditional position as a trusted classic
• Web business site intentionally creates distinctive
presence
• Good Web site design
– Pepsi pages
• Usually filled with hyperlinks to activities and productrelated promotions
• Upstart product favored by younger generation
– Provides effective image-creation features
– Provides effective image
image-enhancing
enhancing features
• Serves as sales brochure, product showroom, financial
report employment ad
report,
ad, customer contact point
E-Business, Eighth Edition
53
E-Business, Eighth Edition
54
Achieving
g Web Presence Goals
(cont’d.)
A hi i W
Achieving
Web
bP
Presence G
Goals
l
• Effective site creates attractive presence
• Profit-driven organizations
– Meets business or organization
g
objectives
j
– Toyota
y
• Objectives
• Good example of effective Web presence
• Presence consistent with corporate goal
–
–
–
–
Attract visitors to the Web site
Make site interesting
C
Convince
i
visitors
i i
to ffollow
ll
site’s
i ’ lilinks
k
Create impression consistent with organization’s
desired image
– Build trusting relationship with visitors
– Reinforce positive image
– Encourage visitors to return
– Quaker Oats older Web site
• Offered little sense of corporate presence
– Quaker Oats current Web site
• Much
M hb
better
tt
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55
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56
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57
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58
Achieving
g Web Presence Goals
(cont’d.)
• Not-for-profit organizations
– Web p
presence effort g
goals
• Image-enhancement capability
• Provide information dissemination
– Successful site key elements
• Integrate information dissemination with fund
fund-raising
raising
• Provide two-way contact channel
– American
A
i
Ci
Civilil Lib
Liberties
ti U
Union
i (ACLU)
• Serves many different constituencies
– Political party Web sites
E-Business, Eighth Edition
59
E-Business, Eighth Edition
60
W b Site
Web
Sit U
Usability
bilit
• Current Web presences
– Few businesses accomplish
p
all g
goals
– Most fail to provide visitors sufficient interactive
contact opportunities
– Improve Web presence
•
•
•
•
E-Business, Eighth Edition
61
H
How
th
the W
Web
b IIs Diff
Differentt
Make site accessible to more people
Make site easier to use
Make site enco
encourage
rage visitors’
isitors’ tr
trust
st
Develop feelings of loyalty toward organization
E-Business, Eighth Edition
62
M ti th
Meeting
the N
Needs
d off W
Web
b Sit
Site Vi
Visitors
it
• Simple mid-1990s Web sites
• Successful Web businesses:
– Conveyed
y basic businesses information
– No market research conducted
– Realize every
y visitor is a p
potential customer (p
(partner))
• Crafting Web presence is an important concern
• Web objectives achievement failure
– Know visitor characteristic variations
– Not understanding Web presence-building media
• Visitor at site for a reason
• Web objective achievement success
– Sites create organization’s
g
p
presence
– Sites contain standard information set
• History
History, objectives,
objectives mission,
mission product information
information,
financial information, two-way meaningful
communication
E-Business, Eighth Edition
63
E-Business, Eighth Edition
64
Meeting
g the Needs of Web Site Visitors
(cont’d.)
Meeting
g the Needs of Web Site Visitors
(cont’d.)
• Web site visitor motivations
• Making Web sites accessible
–
–
–
–
–
–
–
Learning
g about company
p yp
products or services
Buying products or services
Obtaining warranty,
warranty service,
service repair policy information
Obtaining general company information
Obt i i fi
Obtaining
financial
i l iinformation
f
ti
Identifying people
Obtaining contact information
– Build interface flexibility
y
•
•
•
•
•
Optional to use frames
Offer text
text-only
only version
Option to select smaller graphic images
Option to specify streaming media connection type
Option to choose among information attributes
– Controversial Web site design
• Animated graphics software use
• Some
S
tasks
t k lend
l d th
themselves
l
tto animated
i t dW
Web
b pages
• Visitors have:
– Various needs, experience, expectations, technology
E-Business, Eighth Edition
65
E-Business, Eighth Edition
66
Meeting
g the Needs of Web Site Visitors
(cont’d.)
• Making Web sites accessible (cont’d.)
– Offer multiple
p information formats
– Web site constructions goals
•
•
•
•
•
E-Business, Eighth Edition
67
T t and
Trust
d Loyalty
L
lt
Offer easily accessible organization facts
Allow different visitor experiences
Provide meaningful,
meaningful two
two-way
way communication link
Sustain visitor attention and encourage return visits
Offer easily
easil accessible information abo
aboutt prod
products,
cts
services, and their use
E-Business, Eighth Edition
68
R ti El
Rating
Electronic
t i C
Commerce W
Web
b Sit
Sites
• Creates relationship value
• Good service leads to seller trust
• Review electronic commerce Web sites
– Delivery, order handling, help selecting product, aftersale support
– Usability,
y, customer service,, other factors
– Gomez.com
• No longer publishes most scorecards
– BizRate.com
• Satisfactory service builds customer loyalty
• Customer
C
service in electronic commerce sites
• Comparison shopping service
• Links to low price and good service ratings sites
– Problem
• Lack integration between call centers and Web sites
• Poor e-mail responsiveness
p
– Unlikely to recover money spent to attract customers
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Rating
g Electronic Commerce Web Site
(cont’d.)
• Usability testing
70
Rating
g Electronic Commerce Web Site
(cont’d.)
• Customer-centric Web site design
– Helps
p meet Web site g
goals
– Avoids Web site frustration
– Important
p
p
part of successful electronic business
operation
– Focus on meeting all site visitors
visitors’ needs
– Putting customer at center of all site designs
• Customers leave site without buying anything
– Simple site usability changes
• Include telephone contact information
• Staff a call center
– Learn
L
about
b
visitor
i i needs
d b
by conducting
d i ffocus groups
– Usability testing cost
• Follow guidelines and recommendations
• Make visitors’ Web experiences more efficient,
effective memorable
effective,
– Usability
• Important
I
t t element
l
t off creating
ti effective
ff ti Web
W b presence
• Low compared to Web site design costs
E-Business, Eighth Edition
E-Business, Eighth Edition
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E-Business, Eighth Edition
72
C
Connecting
ti with
ith C
Customers
t
C
Connecting
ti with
ith C
Customers
t
((cont’d.)
t’d )
• Important element of a corporate Web presence
• Identify and reach out to customers
• Nature of Web communication
– Personal contact (prospecting)
(p
p
g)
• Employees individually search for, qualify, contact
potential customers
p
– Mass media
• Deliver messages by broadcasting
– Addressable media
• Advertising efforts directed to known addressee
– Internet medium
• Occupies
O
i centrall space iin medium
di
choice
h i continuum
i
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73
E-Business, Eighth Edition
74
Summary
• Six main approaches to generate Web revenue
– Models work differently
– Different business types use different models
– Learn more about customers, business environment
• Change models
• Channel conflict and cannibalization challenges
g
– Form strategic alliances with other companies
– Contract with channel distribution managers
• B2C mobile commerce not widely successful
• Create effective Web presence to deliver value
• Must understand Web communication
E-Business, Eighth Edition
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E-Business, Eighth Edition
76