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Internet Marketing Customer Support and Online Quality Involve Customers in Design Process Market & Sell Products & Services Understand Markets & Customers Deliver Value Through Distribution Manage Customer Information Provide Customer Care Marketing Processes That Can Be Digitized
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Internet Marketing Customer Support and Online Quality
Involve Customers in Design Process Market & Sell Products & Services Understand Markets & Customers Deliver Value Through Distribution Manage Customer Information Provide Customer Care Marketing ProcessesThat Can Be Digitized
Topics • Solving problems online • Lower costs • Online quality • Justifying online enhancements • Co-production
Providing Customer Care Through Online Content Lower Costs Online Quality • Online Publishing • Electronic Distribution • Virtual Problem Solving • Customer Support • VVAs • Customer Support • Justifying Online Content • Enhanced Margin • Expanded Sales • Acquire new customers • Develop existing customer base • Customer satisfaction • Customer retention
Solving Problems Online Provides Strong Justification for Investing in the Web • Lower customer support costs • Improved online value for customers • Companies and consumers benefit • Lower costs improve profit margins • Savings can be passed through to consumers Figure 6.3
Solving Problems Online • Benefits are strongest for companies that are first to innovate • Increased market share • Improved customer satisfaction • Improved customer acquisition and retention
Lower Costs Figure 6.3 • Cost savings from using the Internet to support customers are more measurable and controllable that many other customer support investments • These savings can be quite large
Q: Where do these cost savings come from? Cost Savings • Online publishing saves the cost of printing and shipping manuals • Software updates can be downloaded, saving the cost of burning and shipping CDs • Virtual problem solving • Inexpensive communication
Virtual Problem Solving • Online solutions • Many companies practice call avoidance, making people log on instead • Difficult / impossible to find a phone # on the site • Stored answers • FAQ • E-mail auto-responders • Customers help each other • Bulletin boards
Traditional Customer Service Methods Are Expensive • Sales calls and call centers • Require expensive, assisted, real-time interactions • Are labor intensive
Inexpensive Web-Based Communication • Many of these methods do not require real-time intervention • Customers are able to solve their own problems
Web-Based Customer Support • Merging e-mail, artificial intelligence, and smart routing shows promise • First: the system tries to find a stored answer • Second: the system tries to find the best customer service rep to handle the request • Third: the response becomes a part of the database • Over time, the database becomes richer and more inquiries can be handled automatically by the system
So What? Success on the Web is Becoming More & More About Customer Care Provide Customer Care Through Online Content
Headline Name of Publication - Date Insert excerpts from a current article out of the business press (e.g. Wall Street Journal, Wired News, Business 2.0, or Fast Company) that talks about the importance of online customer support. I usually take excerpts out of the lead paragraph, and highlight keywords. There have been a number of articles talking about increased investments in online customer support.
Customer Care Q: How do you create a Nordstrom-like experience on the Internet?
Online Quality Enhancements • Virtual value activities can improve quality • Companies have multiple constituencies • It’s possible to use the VVAs to design Web content that supports multiple customers and needs • Table 6.3 • Figure 6.6 • Figure 6.8
Virtual Value Activities and Customer Support Solutions Figure 6.6
Virtual Value Activities and Customer Support Solutions Figure 6.8
Online Quality Enhancements • Effective use of the Web can increase customer satisfaction • Product design: online discussions provide early feedback that provide valuable insight and suggestions • Sales: consumers have access to online product information and dealer locations • After-sales support: self-help problem solving, technical support & user groups • Company culture: Web content communicates and reinforces corporate culture
Drivers of Customer Satisfaction Figure 6.9
Product Design Satisfaction Driversand Online Methods Table 6.4
Sales Activity Satisfaction Driversand Online Methods Table 6.5
After-Sales Activity Satisfaction Drivers and Online Methods Table 6.6
Justifying Online Enhancements • Two possible methods for justifying a firm’s investment in an online presence • Breakeven investment analysis • Customer-centered method, looking at customer acquisition, development and retention rates • Let’s take a closer look
Breakeven Investment Analysis Cost Focus vs. Quality Focus • Traditional customer support technologies • customer-support call centers • sales force help • dealers • Steep curve due to increasing difficulty of providing higher quality levels Figure 6.10 The Cost-Quality Tradeoff for Traditional Support
Breakeven Investment Analysis Cost Focus vs. Quality Focus • Exceptional service not yet attainable using online only • Online content is low cost for basic levels of support • Costs rise rapidly at higher levels • Pure online support attractive for cost-oriented firms Figure 6.11 Limited Quality Pure Online Support
Breakeven Investment Analysis Cost Focus vs. Quality Focus • Hybrid systems combine online content and technical help from staff • Online material handles routine inquiries • Customer-support staff focuses on difficult issues • Staff also provide support to customers without access to online materials • Quality-oriented firms use Figure 6.12 Creating a Hybrid High-Quality Support System
Breakeven Investment Analysis A Dynamic Implementation Path • Cost savings from migrating to an online support model free up funds to enhance customer support over the long run • Managers often opt to achieve hard savings first • Then use those savings to improve quality Figure 6.13
Customer Lifetime Value Analysis Closed Loop Web Enhancements • Web marketing as direct marketing • The Internet’s digital nature make it possible to capture, store & manipulate huge amounts of data on individuals • Three activities related to marketing at the individual level • Customer acquisition • Customer development • Customer retention
The ADR Framework • Acquisition: the cost of bringing in new customers • Development: costs incurred expanding the share-of-customer that firms receive from existing customers • Retention: costs to keep the business and loyalty of current customers
Co-Production • A new view of the company and its customers as co-producers emerges when the Web is used in sophisticated ways to provide customer support • The customer is no longer a passive recipient of a product and some support material • Rather the customer is a partner • Closer links between companies and their customers provide opportunities for personalization and new product development