e-commerce strategies

E-Commerce Strategies

1. What are the strategies for customer acquisition?

2. What are the strategies for customer retention strategies?

3. What are the supporting technologies and effective measures for e-commerce strategies?

4. What are the nine principles of growing your e-business (Schwartz’s webnomics)?

Customer acquisition strategies (Browsers à Shoppers)

à Market entry strategies

à Branding strategies

à Advertising strategies

Consumer behavior model (Figure 7.4) – explain what, where, when, how much and why consumers buy

Factors

Web-based strategies

Background/demographic factors (Tables 7.1, 7.2, and 7.3)

Culture, social, psychological factors à needs, drives, motivations, expectations, lifestyles, etc.

– Banner-ads

– URL on physical material

– Discussion in news groups

– Opt-in e-mailing

– Downloadable demo

– Online reviews

– Video presentation

– Product photos

– Textual descriptions

Web site capabilities

– Domain names

– Search engine optimization (Table 8.2)

– Design features (Table 8.8)

Click stream behavior (Table 7.4)

Browsing, Researching, Exploring à target consumers according to their needs (Figure 7.7 & Table 7.5)

– Segmenting

– Collaborative filtering

Intervening/market stimuli factors

– Branding

– Advertising

Market entry strategies (Figure 7.17)

1. First mover

2. Fast follower

3. Alliances

4. Brand extender

Branding strategies (Figure 7.11)

1. Permission marketing: opt-in

2. Leveraging/consolidating

3. Affiliating

4. Viral marketing: existing customer's word of mouth

Online marketing methods

1. Advertising

– banner & media ads

– search engine inclusion & placement

* Submit your URL to search engines

e.g., http://www.google.com/addurl.html

* Use of <META> tag

– sponsorships

– affiliate relationships

2. Direct e-mail marketing

3. Online catalogs

4. Public relations

Web advertising strategies

1. Passive pull: target open, unidentified potential customers worldwide, e.g., Yahoo

2. Active push: obtain mailing list through a third-party, e.g., DoubleClick

3. Associated ad display/just in time: displayed according to who the customer is and his/her needs, e.g., Amazon

4. Commodity ad: consumers read the ads in exchange for rewards e.g., MyPoints

CUSTOMER RETENTION STRATEGIES (Shoppers à Repeated customers)

à Customer relationship management strategies

à Pricing strategies

Consumer purchasing model (Figures 7.3 & 8.6): how buyers make the actual decision to purchase

Phases	Web-based strategies
Need recognition	– Banner-ads – URL on physical material – Discussion in news groups – Opt-in e-mailing – Downloadable demo – Online reviews – Video presentation – Product photos – Textual descriptions
Information search	– Search engines – Web directories – Links to external sources – Question/answer sessions
Alternative evaluation	– FAQs, reviews, etc. – Samples & trial – Cross comparisons – Links to existing customers – Provision of evaluative models
Purchase and delivery	– Online order entry – Negotiation – Electronic payment systems – Logistics providers and order tracking
After purchase evaluation	– Customer support via e-mail and news group – E-mail communication and response – Resource libraries – Online re-sale/renewal

à Customer relationship management strategies: detailed information about a customer's behavior, preferences, needs, and buying patterns are used to set prices, negotiate terms, tailor promotions, add product features, and customize its relationship with that customer

1. One-to-one marketing/Personalization

2. Customization

3. Transactive content

4. Customer service

à Pricing strategies

1. Free

2. Versioning

3. Bundling

4. Dynamic pricing

Measuring and supporting e-commerce strategies

Strategy

Effectiveness Measure (Table 8.3)

Supporting technologies

Customer acquisition

– Impressions (CPM: cost per mil, or thousand, impressions)

– Click-through rate (CTR)

– Hits

– Page views

– Stickiness

– Unique visitors

– Reach

– Acquisition rate

– Abandonment rate

– Conversion rate

– Primary market research

· Survey (Table 7.8)

· Interview

· Focus group

· Online customer tracking

– Secondary market research

· Jupiter Media Metrix

· Forrester Research

Customer retention

– Recency

– Attrition rate

– Retention rate/Loyalty

– Web transaction logs (Table 7.7)

– Cookies (Figure 7.13)

– Web bugs

Schwartz's webonomics*: 9 principles for growing your business on the WWW

1. Quantity of people visiting your site is less important than the quality of their experience

2. Marketers shouldn't be on the Web for exposure, but for results

3. Consumers must be compensated for disclosing data about themselves

4. Consumers will shop online only for information-rich products

5. Self-service provides for the highest level of customer comfort

6. Value-based currencies enable you to create your own monetary system

7. Trusted brand names matter even more on the Web

8. Even the smallest business can compete in the Web's global marketplace

9. Agility rules: Web sites must continually adapt to the market.

* Schwartz, Evan, I., Webonomics, Broadway Books, 1997

Webonomics: the study of the production, distribution, and consumption of goods, services, and ideas over the World Wide Web

Principles	Considerations
Quality of experience	– Provide values – Create an online community – Use the Web is an interactive medium
Results	– Information – Pull vs push – Targeted audience
Consumer privacy	– Provide tangible benefits in exchange for vital consumer information – Opt-in – Opt-out
Buying on-line	– Facts, news, knowledge, wisdom, and advice – Broader selection, superior product expertise, below-retail price
Self-serve	– Increased comfort, control, and convenience – Human service for special support and assistance
Value-based currency	– Reward loyal customers with points that can be redeemed for real goods and services – Relationship and trust building
Branding	– Being the first to introduce a product or service – Evoke a certain sensibility, core competency, or comfort factor – Establish an affinity with customers
Entrepreneurship	– Borderless marketplace – Human creativity, intelligence, skills matter more
Agility	– Short-lived competitive advantage – Proactive in deploying new technologies before competitors do – Let customers be your judge – Keep close tap on what customers want – Prioritize new features, improvements, and services – Develop a strategy on how best to capitalize on "disruptive technologies"