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ELC 200 Day 13 ELECTRONIC COMMERCE From Vision to Fulfillment Third Edition Elias M. Awad © 2007 Prentice-Hall, Inc 6-1 Agenda • Questions? • Assignment 4 is being corrected – Will be done by COB Wednesday • Assignment 5 posted – Due Oct 23 @ 11:05 AM • Finish Discussion on Web Site Evaluation and Usability Testing • Begin discussion on Internet Marketing © 2007 Prentice-Hall, Inc 6-2 Web Site Evaluation and Usability Testing ELECTRONIC COMMERCE From Vision to Fulfillment Third Edition Elias M. Awad © 2007 Prentice-Hall, Inc 6-3 Components of Personalization © 2007 Prentice-Hall, Inc 6-4 Steps to Operationalize Personalization • Customer interaction • Data collection and integration • Business intelligence • Customer interaction personalization © 2007 Prentice-Hall, Inc 6-5 Inference-based Personalization • A technique that tracks a Web user’s behavior, identifies other people with similar behavior, and uses those people to recommend products • Amazon.com © 2007 Prentice-Hall, Inc 6-6 Getting Personal • Personalization vs. Customization – Personalization is a strategy, a marketing tool, and an art; visitor-oriented rather than productoriented – Personalization tries to treat all customers as unique – Customization focuses on direct user control – Personalization is driven by artificial software that tries to serve up individualized pages to the user based on a model of that user’s needs (past habits, preferences, and so on). © 2007 Prentice-Hall, Inc 6-7 Approaches to Web Personalization • Cookies are bits of code or a text file that sits in a user’s Internet browser memory and identifies that person to a Web site when they return • Collaborative filtering software keeps track of users’ movements across the Web to interpret their interests • Check-box personalization, users choose specific interests on a checklist so the site can display the requested information • Rule-based personalization divides users into segments based on business rules that generate certain types of information from a user’s profile • Neural networks use statistical probability algorithms to deliver personalization based on movements such as a visitor’s actions © 2007 Prentice-Hall, Inc 6-8 Do You Want a Cookie? • A cookie is an HTTP header with a text-only string placed in the browser’s memory • The string contains the domain, path, how long it is valid, and the value of a variable that the Web site sets • The original purpose of cookies was to save user’s time • Limitations or cause for concern – Cookies utilize space on a client’s hard drive for a Web site’s purposes without permission – They threaten our privacy as Internet users(?) • Cookies can be deleted or rejected at will © 2007 Prentice-Hall, Inc 6-9 Popular Myths About Cookies • Cookies clog the hard disk • Cookies can put a virus on my computer • Cookies give companies access to my personal file • Disabling cookies in my browser will prevent any Web sites from gathering information about me © 2007 Prentice-Hall, Inc 6-10 Web Site Usability • Usability refers to a set of independent quality attributes – – – – Performance Satisfaction Ease of navigation Learnability • It means an application that allows the user to perform the expected tasks more efficiently – The integral attributes of a system that affect user performance and productivity • http://www.useit.com/ © 2007 Prentice-Hall, Inc 6-11 Effective Web Site Design • The goal of effective Web site design is to give users a good experience – Switching costs on the Internet are low – Churning is the basic measure of visitor dissatisfaction with a site © 2007 Prentice-Hall, Inc 6-12 Components of Personalization © 2007 Prentice-Hall, Inc 6-13 Components of Personalization –(Cont’d) © 2007 Prentice-Hall, Inc 6-14 Reliability • The core of reliability is availability – System availability – Network availability – Application availability • Ensure Web site reliability and usability – – – – – – Provide system backup Install a disk-mirroring feature Ensure that the system hardware is fault-tolerant Be sure applications are self-contained Be sure there is adequate hard disk space Buy everything from a single vendor © 2007 Prentice-Hall, Inc 6-15 User Testing • Determine testing sample • Decide what to look for during the test • Look for trends in the way the site is succeeding or failing to reach others • Any bugs should be relayed and assigned to developer who can fix them • Use Web testing tools – Load and performance test tools – Java test tools – Web site management tools and log analysis tools © 2007 Prentice-Hall, Inc 6-16 Site Performance Issues • Images and color – Readability testing – Images: GIFs versus JPEGs • Caches • How many links? • The role of the Web server © 2007 Prentice-Hall, Inc 6-17 Managing Content and Site Traffic • Content management • Web traffic management • The Web site administrator – – – – Database server Application server(s) Web server(s) Special-purpose servers for encryption and security checks – Internet bandwidth – Internet performance status © 2007 Prentice-Hall, Inc 6-18 Chapter Summary • • • • • • • • • • Web site evaluation Appropriate site design Criteria for evaluating Web sites Approaches to Web personalization Cookies A Web site should be as inviting and easy to navigate as possible User testing Web content management Traffic management Web site management © 2007 Prentice-Hall, Inc 6-19 Internet Marketing ELECTRONIC COMMERCE From Vision to Fulfillment Third Edition Elias M. Awad © 2007 Prentice-Hall, Inc 6-20 The focus of this chapter is on several learning objectives • The many offerings of online shopping • Various ways to do Internet marketing • The steps to take in launching a marketing campaign • How to attract and track customers on the Internet • The importance of customer service • The basics of CRM and how it contributes to adding value to e-commerce © 2007 Prentice-Hall, Inc 6-21 The Pros of Online Shopping • Choice • Vast selection • Quick comparison © 2007 Prentice-Hall, Inc 6-22 The Cons of Online Shopping • Certain buying decisions require information that can best be found in traditional brick-and-mortar stores. – Buying personal items like perfume, footwear – Products that require in-store help • How does this thing work?? – Product delivery problems • Lumber, masonry, large furniture © 2007 Prentice-Hall, Inc 6-23 Justifying an Internet Business 1. Establish presence 2. Serve customers 3. Heighten public awareness 4. Share time-sensitive information 5. Sell goods 6. Answer important questions © 2007 Prentice-Hall, Inc 6-24 Justifying an Internet Business (Cont’d) 7. Market at the international level 8. Serve the local market 9. Market specialized products 10.Reach the youth market © 2007 Prentice-Hall, Inc 6-25 Internet Marketing Techniques • Banner ads is advertising with links to a merchant’s Web site • Pull marketing is passive Internet marketing, where the user takes the initiative requesting specific information from the Web site • In Push technology the Web site “pushes” the information at the customer, irrespective of his or her interest • Registering with search engines and directories – Search Engine Optimization © 2007 Prentice-Hall, Inc 6-26 Range of Internet Marketing Techniques and Applications © 2007 Prentice-Hall, Inc 6-27 Aggressive Internet Marketing • Aggressive marketing is a marketing technique where the Web site seeks out potential customers; push technology • Spamming is sending out millions of e-mails to recipients who never asked for them – Invasion of privacy – Costing corporations millions each year to fight unwanted messages © 2007 Prentice-Hall, Inc 6-28 Pop-up Advertising • An advertisement that “pops up” in a new browser window regardless of the user’s wish to open such a new window – Among the most common forms of online marketing – Push marketing – “Kick-through” advertising • Don’t even have to click – “Mouse trapping” • Getting “stuck” in a web page or series of web pages • Among the most controversial forms of online marketing • A major source of revenue for ISP • Ethical implications to pop-up ads? • Pop under – http://www.travelocity.com/ © 2007 Prentice-Hall, Inc 6-29 Permission Marketing • Marketers ask permission before they send advertisements to prospective customers, requiring that people first “opt in” rather than “opt out” after the ads have been sent © 2007 Prentice-Hall, Inc 6-30 The E-cycle of Internet Marketing • The Business Plan is a written document that identifies a merchant’s business goals and how to achieve them. The content of a business plan includes: 1. 2. 3. 4. 5. 6. 7. 8. Mission Product Competition Target audience Marketing Sales plan Operation Technology © 2007 Prentice-Hall, Inc 6-31 The E-cycle of Internet Marketing (Cont’d) © 2007 Prentice-Hall, Inc 6-32 The E-cycle of Internet Marketing (Cont’d) • The Product – Viability – Quality – Reliability – Dependability – Integrity • Pricing • Place © 2007 Prentice-Hall, Inc 6-33 The E-cycle of Internet Marketing (Cont’d) • Promotion of a product gets the attention of prospective customers – Banners are the most popular type of Internet ads – Create interest in the product(s) displayed • Attention • Interest • Desire • Action – Build a desire for action © 2007 Prentice-Hall, Inc 6-34 New Format Brand Ads • Skyscrapers • Bulky boxes • Buttons and “Big Impressions” • Pop-up Ads • E-mail • http://www.iab.net/standards/adunits.asp © 2007 Prentice-Hall, Inc 6-35 Personalization - the fifth “P” – A technique that combines product and promotion for customers to receive information customized to their needs • Technically detailed descriptions are presented to the level of the user’s knowledge • Product presentations are customized to suit the user’s interests • The user’s expectations are met regarding the amount of relevant information © 2007 Prentice-Hall, Inc 6-36 Important Personalization Rules • Prevent resistance to personalization – Users don’t like Forms – Take your time • Consider any source of information • State preferences of users through forms or similar procedures • Focus on privacy in every way possible • Make an effort to learn from every move © 2007 Prentice-Hall, Inc 6-37 Important Personalization Rules (Cont’d) • Jump-start a personalization relationship by posing the user a set of questions. – Answers to question benefit user • Sell the goodness of personalization. • Make life easier for users to tell you what they want and what they hate. • Make sure there is no delay in a personalization environment. © 2007 Prentice-Hall, Inc 6-38 Marketing Implications • Power shift has occurred from the merchant to the consumer • Consumer can access any information on virtually any topic • Common-sense rules: – Content: Don’t bore your customers with unnecessary content. – Dynamic and attractive sites – Brands: Web site should be most important brand – Get to the point: Conciseness, clarity, and ease of navigation – Promotion – Online events – Free giveaways 6-39 – Consistency © 2007 Prentice-Hall, Inc How to Market Presence • Promoting your site on your site • Promoting your site on the web – Search engine is a program that uses a logic search to find sites based on a combination of keywords – Directory is an organized listing with specific categories such as yellow and white pages in a telephone directory • http://www.dmoz.org/ – Spider is a program that explores the Web, collects keyword information, and stores it on a huge database • Promoting your site on the Internet – Use email to contact registered customers – Advertise through news groups and mailing lists – Use mobile marketing and wireless “yellow” pages © 2007 Prentice-Hall, Inc 6-40 Guidelines for Attracting Customers to your Site • Keep the site content current so visitors continue to return for news • Offer free information or products • Implement a cross-selling strategy • Ensure easy and quick navigation • Introduce event marketing • Enlist affiliates • Try out viral marketing as a tool for getting noticed © 2007 Prentice-Hall, Inc 6-41 Trends in Internet Use • Useful to help predict buying behavior • The online population is younger, more educated, and wealthier than the overall U.S. population. • Most online consumers are white. • More than 40 percent reported spending more than 20 hours per week browsing on the Web from home. • Most regular use for the Internet is for work and at work. • The Internet is used regularly at home to read news and for entertainment. © 2007 Prentice-Hall, Inc 6-42 Personalization • First step in personalization is identification • Ways to add personalization to a Web site – keywords – collaborative filtering – rule-based personalization © 2007 Prentice-Hall, Inc 6-43 Tracking Customers • Gathering Web Data to Track Customers • Log files are files on the Web server that keep track of domain types, time of access, keywords used, and search engines used – ex080306log.txt • Forms • Cookies • Clickstream data analysis of Web site visitors’ clicks, which leave footprints representing their behavior – Pinpoint a host of customer behaviors – http://perleybrook.umfk.maine.edu/SourceCode/w4code6 /where.html © 2007 Prentice-Hall, Inc 6-44 Common Clickstream Data • Where a visitor first landed on the site • How a visitor got to the site • Number and sequence of pages viewed • Number and cost of each product purchased • Length of time the visitor stayed on each page and on the entire site • Total cost of each visit • Point on the site where the visitor clicked away © 2007 Prentice-Hall, Inc 6-45 The Business Case for E-Intelligence • Integrates e-business operations into the traditional business environment • Helps business users make informed decisions based on accurate and consistent e-business information • Assists e-business applications in profiling and segmenting e-business customers to personalize the actual Web pages displayed • Extends the business intelligence environment outside of the corporate firewall to trading partners • Extends the business intelligence environment outside of the corporate firewall to key corporate clients • Links together e-business applications with business intelligence and collaborate processing applications © 2007 Prentice-Hall, Inc 6-46 Customer Service • Automation removes the human contact between buyer and merchant • “Don’t annoy the customer” • Botched logistics can spell disaster – Order taking is the easy part – Fulfillment is where the merchant promotes or destroys customer satisfaction © 2007 Prentice-Hall, Inc 6-47 Main Goals of CRM • Better customer service and customer revenues • More efficient call center • Faster closing of deals by sales staff • More effective cross selling of products • Simplified market and sales processes • Discovering new customers and personalizing relationships to improve profitability and customer satisfaction © 2007 Prentice-Hall, Inc 6-48 Overall Goal of CRM • Identify what truly matters for the customer – First, notice what customers are doing – Second, remember what customers have done over time – Third, learn from what is remembered – Fourth, act on what has been learned © 2007 Prentice-Hall, Inc 6-49 Interrelated Elements of Customer Satisfaction © 2007 Prentice-Hall, Inc 6-50 Developing and Understanding Relationship with Customers © 2007 Prentice-Hall, Inc 6-51 CRM-integrating Critical Processing © 2007 Prentice-Hall, Inc 6-52 Managing Implications • An important implication for management is return on investment • The future of the Internet and e-commerce lies in customer tracking and personalization • Internet marketing allows firms to communicate with customers around the clock • Companies should reconsider their approach to customer support • E-commerce without e-service can be suicidal for a business • Successful Internet marketing means high-level executive involvement © 2007 Prentice-Hall, Inc 6-53 Chapter Summary • Marketing is the process of planning and implementing the conception, pricing, advertising, and distribution of goods and services to meet the demands of the market • Three factors make online shopping attractive: – quick sorting through choices – vast selection of products – quick comparison of products • Online shopping has some drawbacks © 2007 Prentice-Hall, Inc 6-54 Chapter Summary (Cont’d) • Internet provides a continuum of marketing techniques • Internet marketing is made up of an e-cycle that begins with planning followed by the four P’s • One marketing implication behind the power shift from merchant to consumer is a unique marketing strategy that follows rules that make sense • To promote a site on the Web, it must be available to search engines and directories © 2007 Prentice-Hall, Inc 6-55 Chapter Summary (Cont’d) • Attracting customers to a site involves: – keeping site content current – offering free information or products – implementing cross-selling strategies to assist visitors in making a final decision – quick and easy navigation – Introducing event marketing – Enlisting affiliates © 2007 Prentice-Hall, Inc 6-56 Chapter Summary (Cont’d) • The first step in personalization is customer identification • Successful Internet marketing means: – High-level executive involvement – Thinking about a new way of selling and delivering merchandise – Finding what it takes to implement the company’s e-business vision © 2007 Prentice-Hall, Inc 6-57