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Internet Marketing

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

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  1. Internet Marketing Customer Support and Online Quality

  2. 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

  3. Topics • Solving problems online • Lower costs • Online quality • Justifying online enhancements • Co-production

  4. 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

  5. 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

  6. Solving Problems Online • Benefits are strongest for companies that are first to innovate • Increased market share • Improved customer satisfaction • Improved customer acquisition and retention

  7. 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

  8. 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

  9. 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

  10. Traditional Customer Service Methods Are Expensive • Sales calls and call centers • Require expensive, assisted, real-time interactions • Are labor intensive

  11. Inexpensive Web-Based Communication • Many of these methods do not require real-time intervention • Customers are able to solve their own problems

  12. Traditional and Web-Based Customer Support

  13. 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

  14. So What? Success on the Web is Becoming More & More About Customer Care Provide Customer Care Through Online Content

  15. 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.

  16. Customer Care Q: How do you create a Nordstrom-like experience on the Internet?

  17. 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

  18. Virtual Value Activities and Customer Support Solutions Figure 6.6

  19. Virtual Value Activities and Customer Support Solutions Figure 6.8

  20. Table 6.3

  21. 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

  22. Drivers of Customer Satisfaction Figure 6.9

  23. Product Design Satisfaction Driversand Online Methods Table 6.4

  24. Sales Activity Satisfaction Driversand Online Methods Table 6.5

  25. After-Sales Activity Satisfaction Drivers and Online Methods Table 6.6

  26. Culture Satisfaction Drivers and Online Methods Table 6.7

  27. 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

  28. 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

  29. 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

  30. 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

  31. 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

  32. 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

  33. 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

  34. 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

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