Ch6 Customer Support

Internet Marketing

Customer Supportand

Online Quality

Marketing ProcessesThat Can Be Digitized

Understand Markets

& Customer

s

Involve Customer

s in Design Process

Market & Sell

Products &

Services

Deliver Value

Through Distributi

onProvide

Customer Care

Manage Customer Informati

on

Topics

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

Providing Customer

CareThrough Online

Content

Online Quality•VVAs•Customer Support

Lower Costs•Online Publishing•Electronic Distribution•Virtual Problem Solving•Customer SupportJustifying Online Content

• Enhanced Margin• Expanded Sales

– Acquire new customers– Develop existing customer

base• Customer satisfaction

– Customer retention

Solving Problems Online

• 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

Provides Strong Justification for Investing in the Web

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

• 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

Figure 6.3

Cost Savings

Q: Where do these cost savings come from?

• 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

Customer ServiceMethod

Agent:CustomerRatio

Type ofInteraction

Type ofService

Sales Force 1:1 Real- time Assisted

Call Center 1:1 Real- time Assisted

Inexpensive Web-Based Communication

• Many of these methods do not require real-time intervention

• Customers are able to solve their own problems

Customer ServiceMethod

Agent:CustomerRatio

Type ofInteraction

Type ofService

E- mail 1:1 Messaging Assisted

E- mail with AI 1:many Messaging Self

Web: FAQ 1:many Messaging Self

Web: self 1:many Messaging Self

Web: chat 1:many Real- time Assisted

Web: phone 1:1 Real- time Assisted

Traditional and Web-Based Customer Support

Customer ServiceMethod

Agent:CustomerRatio

Type ofInteraction

Type ofService

Sales Force 1:1 Real- time Assisted

Call Center 1:1 Real- time Assisted

E- mail 1:1 Messaging Assisted

E- mail with AI 1:many Messaging Self

Web: FAQ 1:many Messaging Self

Web: self 1:many Messaging Self

Web: chat 1:many Real- time Assisted

Web: phone 1:1 Real- time Assisted

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

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.

Name of Publication - Date

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

VVAs Investor Relations Technical Support

Gathering SEC filingsPress releases

Stock informationAnalyst Reports

Product manualsProduct design documents

Help desk infoField engineersWarranty info

Organizing Chronological listingKeyword search

NewsProduct group

Product line listingSearchIndex

Selecting NewsSEC reports

CEO speeches

FAQsHigh hit rate requests

Frequent call center requests

Synthesizing Reporter pagesAnalyst pages

Getting started pagesSolution pages

Distributing Homepage linkInvestor channel

Key customers extranetKey suppliers extranet

Navigation bar linksSolution CDs

Mass media ads

Tab

le

6.3

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 Drivers

and Online MethodsTable 6.4

Sales Activity Satisfaction Drivers

and Online MethodsTable 6.5

After-Sales Activity Satisfaction Drivers and Online

MethodsTable 6.6

Culture Satisfaction Drivers and Online Methods

Table 6.7

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

• Traditional customer support technologies– customer-support

call centers– sales force help– dealers

• Steep curve due to increasing difficulty of providing higher quality levels

Cost Focus vs. Quality Focus

Figu

re 6

.10

The Cost-Quality Tradeoff for Traditional

Support

Breakeven Investment Analysis

• 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

Cost Focus vs. Quality Focus

Figure

6.1

1

Limited QualityPure Online Support

Breakeven Investment Analysis

• 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

Cost Focus vs. Quality Focus

Figu

re 6

.12

Creating a Hybrid High-Quality Support System

Breakeven Investment Analysis

• 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

A Dynamic Implementation Path

Figu

re 6

.13

Customer Lifetime Value Analysis

• 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

Closed Loop Web Enhancements

The ADR FrameworkAcquisitionSupported

DevelopmentSupported

RetentionSupported

Web Advertising E- mail accounts Free trials Amazon partners Edmund's QFN

Community andpersonalizationspending

I nformationcollection

Syndication expenses

Customer support Enhancement

spending Eff ectiveness

spending

• 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