COMP2113: Introduction to E-business Richard Henson University of Worcester March 2008.

COMP2113: Introduction COMP2113: Introduction to E-businessto E-business

Richard HensonRichard Henson

University of WorcesterUniversity of Worcester

MarchMarch 20082008

Week 5: E-MarketingWeek 5: E-Marketing Objectives:Objectives:

Define marketing & e-marketingDefine marketing & e-marketing Compare and contrast different aspects e-Compare and contrast different aspects e-

marketing with traditional marketing use of mass marketing with traditional marketing use of mass media (TV, press, etc.)media (TV, press, etc.)

Explain how the role of the customer has been Explain how the role of the customer has been changed by e-commercechanged by e-commerce

Explain crucial role of search engines in attracting Explain crucial role of search engines in attracting customerscustomers

Apply the basic principles of designing a website Apply the basic principles of designing a website that will attract and retain customersthat will attract and retain customers

E-Commerce Marketing E-Commerce Marketing

Marketing is about:Marketing is about: identifying, anticipating and satisfying customer identifying, anticipating and satisfying customer

needs and setting out to do so profitably!needs and setting out to do so profitably!

E-commerce marketing is about using the E-commerce marketing is about using the World Wide Web for achieving the above World Wide Web for achieving the above ends.ends. different way to get the message acrossdifferent way to get the message across new business challengenew business challenge

Marketing plans now need to include a Marketing plans now need to include a consideration of the E-Commerce channelconsideration of the E-Commerce channel

E-Commerce E-Commerce Marketing IssuesMarketing Issues

What is happening out in the commercial What is happening out in the commercial world? world? typically: site-centric models (product-driven)…typically: site-centric models (product-driven)… shifting to user-centric models (consumer-driven)shifting to user-centric models (consumer-driven)

Huge growth of “customisation”Huge growth of “customisation” one to one serviceone to one service driven by effective use of web(site) technologiesdriven by effective use of web(site) technologies

Businesses being forced to continual review Businesses being forced to continual review their different ways of giving service to the their different ways of giving service to the customercustomer

Egg: an exampleEgg: an example

Launched by Prudential in October Launched by Prudential in October 19981998

£7bn worth of deposits in first year of £7bn worth of deposits in first year of businessbusiness

Soon expanded into a range of financial Soon expanded into a range of financial services (banking, credit, insurance)services (banking, credit, insurance)

Egg’s strategyEgg’s strategy

E-commerce supports two generic E-commerce supports two generic business strategies:business strategies:

Lowest delivered costLowest delivered costHighest perceived qualityHighest perceived quality

Egg’s strategy (cont’d)Egg’s strategy (cont’d)

Lowest delivered costLowest delivered cost No branch networkNo branch network Customers input transactionsCustomers input transactions

Highest perceived qualityHighest perceived quality ‘‘personalised’ service personalised’ service Rapid responseRapid response Customer Relationship Management systemsCustomer Relationship Management systems

All enabled via the All enabled via the electronicelectronic (e-) business (e-) business modelmodel

What’s different about the What’s different about the e-Marketing channel?e-Marketing channel?

Customer controls the relationshipCustomer controls the relationshipchooses to visit the web site…chooses to visit the web site…more formally known as a “pull medium” more formally known as a “pull medium”

(customer pulls the information to him/her)(customer pulls the information to him/her) Opposite of “push medium”Opposite of “push medium”

more conventional mediums such as the more conventional mediums such as the press or TV advertisingpress or TV advertising

products “pushed” onto customerproducts “pushed” onto customer

Advantages of the Advantages of the e-marketing channele-marketing channel

Customer has free choice to visit the site (or Customer has free choice to visit the site (or NOT!):NOT!): may look at one page or many…may look at one page or many…

» could be impressed and make it their home/favourite pagecould be impressed and make it their home/favourite page» may never visit again!may never visit again!

Business merely provide the information…Business merely provide the information… customer decides whether or notcustomer decides whether or not

» to pull that informationto pull that information» to then read itto then read it

To use e-marketing successfully, the business To use e-marketing successfully, the business has to get their website right…has to get their website right…

Effective use of the e-Effective use of the e-Marketing ChannelMarketing Channel

Very many websites been developed to sell Very many websites been developed to sell productsproducts some very successfulsome very successful many abject failures…many abject failures…

On-line trading websites now been around for On-line trading websites now been around for more than 10 years – well established more than 10 years – well established guidelines for successguidelines for success freely available on the world wide web…freely available on the world wide web…

» e.g. e.g. http://e-marketing-tips.distinctia.com/analyzing-design.hthttp://e-marketing-tips.distinctia.com/analyzing-design.htmlml

Effective e-MarketingEffective e-Marketing

Many businesses still not following these Many businesses still not following these guidelines…guidelines…

WHY NOT?WHY NOT?» Discuss (10 mins) in groups…Discuss (10 mins) in groups…

The Recent Growth of The Recent Growth of e-Marketinge-Marketing

Huge growth area in recent years…Huge growth area in recent years…Now attracts large conferencesNow attracts large conferencese.g. “Technologies for Marketing” Earl’s e.g. “Technologies for Marketing” Earl’s

Court, two days…Court, two days… Focus on all aspects of using marketing Focus on all aspects of using marketing

technologies to fulfil the marketing technologies to fulfil the marketing functionfunction

New Opportunities available New Opportunities available through e-Marketingthrough e-Marketing

Products can easily be marketed to Products can easily be marketed to countries beyond the UK…countries beyond the UK…

Not a light enterprise…Not a light enterprise… need to be sensitive to other cultures!need to be sensitive to other cultures! need to get advice on the local culture(s) before need to get advice on the local culture(s) before

creating the website aimed at that culturecreating the website aimed at that culture Famous advice (from whom?)Famous advice (from whom?)

““When in Rome do as the Romans do.”When in Rome do as the Romans do.” Particularly, what are the local ways:Particularly, what are the local ways:

to present productsto present products of doing business of doing business

Selling via website to Selling via website to other culturesother cultures

Need to communicate and engage with Need to communicate and engage with the locals:the locals:Some will speak EnglishSome will speak EnglishMany (most?) will notMany (most?) will notconsider a translation into a local languageconsider a translation into a local language

» but has to be accurate!!! but has to be accurate!!!

Find out something of the local buying Find out something of the local buying habitshabits

What NOT to sell What NOT to sell to other culturesto other cultures

Don’t waste your time selling what the Don’t waste your time selling what the locals already have in abundance locals already have in abundance coals to Newcastle!coals to Newcastle!‘‘fridges to Iceland!!fridges to Iceland!!sand to the Arabian Gulf!!!sand to the Arabian Gulf!!!

Or what they make better at home:Or what they make better at home:cheese to the French (eg recent “The cheese to the French (eg recent “The

Apprentice”)Apprentice”)

Taxation Issues Taxation Issues and other culturesand other cultures

For trading outside the EU, need to consider For trading outside the EU, need to consider tax implications:tax implications: here in the UKhere in the UK also in your target marketalso in your target market

Otherwise, the business may find that:Otherwise, the business may find that: the customer has cancelled his/her credit card the customer has cancelled his/her credit card

transactiontransaction Their goods are impounded on some foreign shore Their goods are impounded on some foreign shore

with a clearance bill attachedwith a clearance bill attached» and made out to them…and made out to them…

The Law and Selling The Law and Selling to other Culturesto other Cultures

The seller is responsible for keeping to the The seller is responsible for keeping to the law:law: where the customer resides…where the customer resides… AND where the business is basedAND where the business is based

the Internet may makes the selling and the Internet may makes the selling and representation of products easier… representation of products easier… But nothing changes in terms of the need for you But nothing changes in terms of the need for you

to trade legally according to the laws of both to trade legally according to the laws of both origination and destination countriesorigination and destination countries

Ignorance is never a defence in the eyes of Ignorance is never a defence in the eyes of the law !!!the law !!!

Designing the websiteDesigning the websitefor customers for customers

As with all marketing materials…As with all marketing materials… design is VERY importantdesign is VERY important

» used by the customer to assess the quality of product used by the customer to assess the quality of product AND business itselfAND business itself

Think and behave like a “local” customer Think and behave like a “local” customer design pages accordingly…design pages accordingly… may mean different sites for different marketsmay mean different sites for different markets

Designing the websiteDesigning the websitefor customersfor customers

Customer perception of “quality” will come Customer perception of “quality” will come from all aspects of interactingfrom all aspects of interacting web page fonts & colour schemeweb page fonts & colour scheme

» ““corporate feel”corporate feel”

ease of selecting productsease of selecting products security of their personal and financial datasecurity of their personal and financial data assurances about;assurances about;

» delivering the product?delivering the product?» the goods performing as advertisedthe goods performing as advertised» dealing with complaint/problemsdealing with complaint/problems

Site design Site design

Use ALL principles learned in Use ALL principles learned in COMP1141:COMP1141:http://www.worc.ac.uk/departs/bm_it/viv/chttp://www.worc.ac.uk/departs/bm_it/viv/c

omp1141/resources/activities.htmomp1141/resources/activities.htm

Choose the URL (site locator on the Choose the URL (site locator on the www) CAREFULLY:www) CAREFULLY:““guessable” URL will get more hitsguessable” URL will get more hitsURL based on a/the brand name will URL based on a/the brand name will

probably get more hitsprobably get more hits

Bad design featuresBad design features

ScrollingScrolling Poor navigation between pagesPoor navigation between pages Large graphic filesLarge graphic files One page onlyOne page only Irrelevant or boring information only Irrelevant or boring information only

of interest within the organisationof interest within the organisation No telephone number or email No telephone number or email

addressaddress

Good design featuresGood design features

Plenty of opportunity for interactionPlenty of opportunity for interaction Multimedia/soundMultimedia/sound Support “streaming” so sound/video can Support “streaming” so sound/video can

be appreciated in real time rather than be appreciated in real time rather than having to wait for the whole thing to having to wait for the whole thing to downloaddownload

(eventually!) smell – via hardware (eventually!) smell – via hardware device attached to the user’s computerdevice attached to the user’s computer

Other good features of a Other good features of a well-managed sitewell-managed site

After sales service info!After sales service info! Customer Relationship Management (CRM)Customer Relationship Management (CRM) Use of email for customer reaction/feedbackUse of email for customer reaction/feedback Response to emailsResponse to emails

manage it and action it!manage it and action it! Otherwise, goodwill will sufferOtherwise, goodwill will suffer

Have an infrastructure to support enquiries - Have an infrastructure to support enquiries - look after customer relationslook after customer relations

Refer to telephone help-line and call centre to Refer to telephone help-line and call centre to deal with high volume after sales servicedeal with high volume after sales service

““Adding Value” Adding Value” via the websitevia the website

In the early days, the rate of hits (visits) to the In the early days, the rate of hits (visits) to the website WAS the value of the “virtual” (i.e no website WAS the value of the “virtual” (i.e no physical shop) company (!)physical shop) company (!) formula based on hugely optimistic hits-sales ratioformula based on hugely optimistic hits-sales ratio Caused stock market BOOM… and BUST!Caused stock market BOOM… and BUST!

Formula revised downwards, but same Formula revised downwards, but same principle applies…principle applies…

» e.g. every tenth visitor will be a customer…e.g. every tenth visitor will be a customer…» Website value to the business is a function of it’s “hit Website value to the business is a function of it’s “hit

rate”rate”

Getting a good “hit rate” Getting a good “hit rate” for the Websitefor the Website

The business won’t get ANY benefits from The business won’t get ANY benefits from increase in sales if there are no visitorsincrease in sales if there are no visitors however excellent the site may behowever excellent the site may be

MANY, MANY ways to maximise the number MANY, MANY ways to maximise the number of visitors to a site…of visitors to a site…

Suggestions? Group Activity…Suggestions? Group Activity…

What are Search Engines?What are Search Engines?

Computer systems designed for locating Computer systems designed for locating information on the webinformation on the web

Accessible, free of charge, through theAccessible, free of charge, through theInternetInternet

Consist of:Consist of: a database of keywords, URLs, and websitesa database of keywords, URLs, and websites a program which allows Internet users to search a program which allows Internet users to search

through its indexes, normally using keywords, in through its indexes, normally using keywords, in order to find sites of interestorder to find sites of interest

special web-browsing programs known as ‘spiders special web-browsing programs known as ‘spiders ’or ‘robots ’’or ‘robots ’

How do Search Engines How do Search Engines work?work?

Gather keywords through “spidering” around Gather keywords through “spidering” around websiteswebsites

The spiders:The spiders: crawl round the net looking out for keywords in crawl round the net looking out for keywords in

web pagesweb pages retrieve keywordsretrieve keywords take keywords back to the search engine database take keywords back to the search engine database

A program automatically adds the lists of A program automatically adds the lists of keywords to the databasekeywords to the database

All the information in the database is All the information in the database is continually available, via indexes, to userscontinually available, via indexes, to users

Why are Search Engines Why are Search Engines crucial to Marketing?crucial to Marketing?

FREE!FREE! all of the search engines provide a free service to all of the search engines provide a free service to

both shopper and merchantboth shopper and merchant Make their money through advertising…Make their money through advertising…

based on their own HUGE volumes of trafficbased on their own HUGE volumes of traffic Harnesses the most powerful and most Harnesses the most powerful and most

frequently used technology on the webfrequently used technology on the web But use needs to be monitored:But use needs to be monitored:

the site should be re-submitted on a regular basisthe site should be re-submitted on a regular basis the content, especially the searchable ‘tags ’, the content, especially the searchable ‘tags ’,

should be kept ‘fresh ’should be kept ‘fresh ’ (i.e. representative)(i.e. representative)

Search Engine TipsSearch Engine Tips Search engine searching is based on page Search engine searching is based on page

content as well as the URLcontent as well as the URL Essential to choose the keywords carefullyEssential to choose the keywords carefully Use keywords in:Use keywords in:

title tags & “metatags” (page description and title tags & “metatags” (page description and keywords) - kept up to date!keywords) - kept up to date!

first paragraph of page contentfirst paragraph of page content

Search engines should be monitored to see if Search engines should be monitored to see if the site is no longer featuredthe site is no longer featured if so, resubmit…if so, resubmit…

Effective Use of Effective Use of Search Engines (1)Search Engines (1)

Search engines like Google categorise Search engines like Google categorise pages based on (amongst other things):pages based on (amongst other things):hit ratehit ratenumber of external links on sitenumber of external links on site

The Objective should always be:The Objective should always be:to use appropriate techniques to cause the to use appropriate techniques to cause the

search engine display your site in its “top search engine display your site in its “top ten”ten”

Practical Exercise Practical Exercise (on your own – 10 min)(on your own – 10 min)

Think about the website you started to Think about the website you started to develop last weekdevelop last week

Write down six keywords to represent Write down six keywords to represent your siteyour site

Now include a short paragraph for the Now include a short paragraph for the home page that includes as many of home page that includes as many of those keywords as possible, as often as those keywords as possible, as often as you can…you can…

Effective Use of Effective Use of Search Engines (2)Search Engines (2)

Once an e-commerce site does achieve the Once an e-commerce site does achieve the dizzy heights of a “top ten” placing with the dizzy heights of a “top ten” placing with the search engines for appropriate keywords…search engines for appropriate keywords… you’re in the big time!you’re in the big time! short-term, a lot of traffic can be expected to the short-term, a lot of traffic can be expected to the

site site HOWEVER…HOWEVER…

The real challenge is to KEEP IT THERE…The real challenge is to KEEP IT THERE… The rest of this lecture looks at strategies for doing The rest of this lecture looks at strategies for doing

just that…just that…

Direct AdvertisingDirect Advertising

Put the URL everywhere you can…Put the URL everywhere you can… TV, radio (expensive)TV, radio (expensive) newspapers, magazinesnewspapers, magazines email messagesemail messages paper correspondencepaper correspondence business cardsbusiness cards side of the vanside of the van in a field adjacent to a motorwayin a field adjacent to a motorway

Email AdvertisingEmail Advertising

Business needs to capture an email address Business needs to capture an email address before can send mail advertising its websitebefore can send mail advertising its website

Need to have a means of capturing and Need to have a means of capturing and storing email addresses on the websitestoring email addresses on the website

Blocks of email address actually sold based Blocks of email address actually sold based on perceived interests of (potential) on perceived interests of (potential) customers customers on-line customers can be targeted with products, on-line customers can be targeted with products,

based on clicking behaviourbased on clicking behaviour

Stickiness!Stickiness!

This is about using techniques to This is about using techniques to keep users:keep users: looking round the sitelooking round the site returning to it returning to it once they have discovered it once they have discovered it

DDifferent problem to getting them tifferent problem to getting them to the siteo the site in in the first placethe first place

The concept of “stickiness” drivesThe concept of “stickiness” drives web site web site development commerciallydevelopment commercially every site owner wants to get plenty of hitsevery site owner wants to get plenty of hits but also plenty of repeat hits…but also plenty of repeat hits…

Stickiness Stickiness TTipsips

Site must have pSite must have plenty of contentlenty of contentmust be the right must be the right sort of sort of contentcontent for the type for the type

of visitors expected…of visitors expected… CContentontent must also be: must also be:

eeasy to find (navigation!) asy to find (navigation!) uup to date p to date

CContinuous change and improvementontinuous change and improvement are therefore required…are therefore required…

Stickiness Stickiness TipsTips

Offer additional servicesOffer additional services:: free emailfree email calendaring servicecalendaring service

Thinking behind this:Thinking behind this: can cause considerable can cause considerable inconvenience inconvenience if if email email

address address is changed is changed or calendar or calendar entries have to be entries have to be re-keyre-keyeded

therefore “therefore “gets the user hookedgets the user hooked””» unlikely that unlikely that their Internet behaviour their Internet behaviour will changwill change…e…» Would be too much hassle!Would be too much hassle!

Looking after visitors: Looking after visitors: reward them!reward them!

Just by visiting your site and registering Just by visiting your site and registering the prospective customer can get the prospective customer can get “points” (or e.g. air miles)“points” (or e.g. air miles)My pointsMy pointsNectar pointsNectar points

The personal details may then be used The personal details may then be used for marketing purposes for marketing purposes

Buying products from the site might Buying products from the site might bring them more points…bring them more points…

Looking after visitors: Looking after visitors: publicising discountspublicising discounts

Award discounts to customers ordering Award discounts to customers ordering onlineonline

Let it be known that such discounts are Let it be known that such discounts are only available from the websiteonly available from the website

Examples:Examples:Go - discount for booking tickets onlineGo - discount for booking tickets onlineTrain ticketsTrain tickets - online discount provider of - online discount provider of

train ticketstrain tickets

Other Promotional IdeasOther Promotional Ideas Develop trade links with other sites with Develop trade links with other sites with

related interests/collaborationrelated interests/collaboration Regional/trade/interest group - spine or Regional/trade/interest group - spine or

“feeding chain” approach“feeding chain” approach Newsgroups - take care however as they are Newsgroups - take care however as they are

not meant for promotionnot meant for promotion Use “portals”Use “portals”

enriches value by providing an information enriches value by providing an information serviceservice

Hot links (agreed and mutual)Hot links (agreed and mutual) switch to the site from another site/vice versaswitch to the site from another site/vice versa

Gathering Marketing Gathering Marketing information on customers information on customers

Using the web to gather valuable market Using the web to gather valuable market information:information: overtly e.g. “Mypoints” collects customer overtly e.g. “Mypoints” collects customer

information by insisting that a form is filled ininformation by insisting that a form is filled in AnonymouslyAnonymously

» e.g. using cookiese.g. using cookies» e.g. analysing web server log filese.g. analysing web server log files

MUST (privacy issue) look after customer MUST (privacy issue) look after customer datadata

““Cookies”Cookies”

Files that sit on your computer and tell web Files that sit on your computer and tell web sites:sites: your personal “clicking” preferencesyour personal “clicking” preferences e.g. how many times you have visited a particular sitee.g. how many times you have visited a particular site

Controversial – write data onto the user’s hard Controversial – write data onto the user’s hard drive, probably “on the sly”drive, probably “on the sly”

Each participating website will store its own Each participating website will store its own cookie, with its own security arrangementscookie, with its own security arrangements

Cookies take up very little disk space (e.g. 256 Cookies take up very little disk space (e.g. 256 bytes)bytes)

““Cookies”Cookies”

Potentially a privacy issue:Potentially a privacy issue:should be helpful to the consumer and add should be helpful to the consumer and add

valuevalueshould not be intrusiveshould not be intrusiveShould not be accessible to anyone else!Should not be accessible to anyone else!

Cookies can be “switched off” (i.e. Cookies can be “switched off” (i.e. filtered out/deleted) as a browser filtered out/deleted) as a browser preference!preference!

Analysing web server log filesAnalysing web server log files Most types of web server support this. Examples:Most types of web server support this. Examples:

Microsoft IISMicrosoft IIS ApacheApache LotusDominoLotusDomino OracleOracle NetwareNetware

Gatherable information :Gatherable information : Who has been using your site?Who has been using your site? Which parts of the sites were visited mostWhich parts of the sites were visited most

Can be done manuallyCan be done manually Best to use specialist packages Best to use specialist packages

e.g. Log Analyzer v5.0 from e.g. Log Analyzer v5.0 from WebTrendsWebTrends cost £300 cost £300

Customer led advertisingCustomer led advertising

Possible to track a customer’s web habits so Possible to track a customer’s web habits so adverts can be appropriately targetedadverts can be appropriately targeted e.g. e.g. DoubleclickDoubleclick.com.com

Portals could link to e.g.Portals could link to e.g. local purchasing consortialocal purchasing consortia rswwwrswww.com .com (RS components online engineering (RS components online engineering

catalogue)catalogue) Software available to learn about users' buying Software available to learn about users' buying

habits and consequently direct aimhabits and consequently direct aim Aim news feeds and advice content at Aim news feeds and advice content at

users/potential customers to maintain their users/potential customers to maintain their loyaltyloyalty

Technologies for Technologies for Improving Hit RateImproving Hit Rate

Many specialised applications:Many specialised applications: Some very simpleSome very simple

» counterscounters» meta name generatorsmeta name generators» date/time/special effects, etc. (client end)date/time/special effects, etc. (client end)» links to code located on other sides (e.g weather links to code located on other sides (e.g weather

forecast)forecast) Others more sophisticated: two categories:Others more sophisticated: two categories:

» watch/record visitor behaviourwatch/record visitor behaviour Example: ASP SheriffExample: ASP Sheriff

» provide more features for the siteprovide more features for the site Any number of possibilitiesAny number of possibilities

The Low-Tech Business:The Low-Tech Business:Getting someone else Getting someone else

to do it for you…to do it for you… Fine, but web design and e-Marketing Fine, but web design and e-Marketing

are two different thingsare two different things Suggestion:Suggestion:

web designer to create the siteweb designer to create the siteE-Marketeer to use appropriate methods E-Marketeer to use appropriate methods

from the above and work with the designer from the above and work with the designer to enhance the site so it will always appear to enhance the site so it will always appear in the search engine top ten…in the search engine top ten…

Cost of e-MarketingCost of e-Marketing Needs to be seen in terms of Return on Needs to be seen in terms of Return on

Investment (ROI)? or payback?Investment (ROI)? or payback? many SMEs report they have had little benefit from many SMEs report they have had little benefit from

their investment in getting a web presencetheir investment in getting a web presence ROI therefore zero!!!ROI therefore zero!!!

Usually this is because:Usually this is because: they have not promoted (or been advised to they have not promoted (or been advised to

promote) their site sufficiently/effectivelypromote) their site sufficiently/effectively not aware that the initial and ongoing cost of not aware that the initial and ongoing cost of

appropriately marketing a site may exceed the cost appropriately marketing a site may exceed the cost of developing/maintaining the site!of developing/maintaining the site!

Invest a little and get nothing back – or invest Invest a little and get nothing back – or invest several thousands, and get a big response…several thousands, and get a big response…

Next weekNext week

Specific features of an e-commerce web Specific features of an e-commerce web sitesite