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Customer Care After-Sale Services

Agenda. IntroductionA Framework for E-Commerce ServicesIssues

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Customer Care After-Sale Services

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    1. 1 Customer Care & After-Sale Services Arnold Chao, Ph.D., MBA Partner, e-finity group inc., Canada a.chao@e-finitygroup.com

    3. 3 Introduction

    4. Scope

    5. Objectives To review the business issues & opportunities related to customer care & after sales services in relation to e-commerce To discuss corresponding business strategies being implemented to address the issues

    6. 6 A Framework for E-Commerce Services

    7. A Framework for E-Commerce Services E-commerce Provider – Customer/Consumer Contact Acquisition Conversion Sales Retention Deletion Activation Customer Care After Sales Services/Support

    8. A Framework for E-Commerce Services E-commerce Provider – Customer/Consumer Contact Visitors Acquisition Potential Customer Conversion New Customer Sales Customers Retention Customers-Profitable Deletion Customers-Unprofitable Activation Customers-Inactive Customer Care Customers After Sales Services/Support Customers-Profitable

    9. A Framework for E-Commerce Services Customer Life Cycle Matrix

    10. 10 Issues & Opportunities

    11. Issues & Opportunities Customer Care & After Sales Services are becoming increasing more important as: Sales growth and number of customers continue to increase exponentially but limits will be reached. Increasing competition for market share No. of active US web shoppers expected to peak at about 161 million by 2010. E-commerce providers have to pay increased attention to customer retention.

    12. Issues & Opportunities A Recent Survey CEO showed top priorities for B2C: Acquiring new customers - 53 % Increasing customer loyalty and retention - 49% Increasing revenue from current customers - 49% Increasing customer service capabilities - 39%.

    13. Issues & Opportunities Economic Issues from Providers’ Perspective

    14. Issues & Opportunities From Customers’ Perspective Meet/exceed needs/wants Receive an pleasant experience From Providers’ Perspective Increase repeat sales Increase cross sales Increase sales/customer Increase overall profitability

    15. 15 After Sale Services Strategies

    16. After Sales Services Strategies What do customers want/need? After sale services Confirmation/Payment Tracking delivery (Fedex, UPS, Dell, …) Return/refund Repair/Recall Product information Sales vs Marketing Technical support How to meet those wants/needs?

    17. After Sales Services Strategies What one retailer does? Trigger event 1: Customer first registers on site (but does not buy). Trigger event 2: Customer first purchases online. Trigger event 3: Customer does not purchase for an extended period

    18. After Sales Services Strategies Trigger event 1: Customer first registers on site (but does not buy). 2 days after registration e-mail sent offering phone assistance and Ł5 discount off first purchase to encourage trial.

    19. After Sales Services Strategies Trigger event 2: Customer first purchases online. Immediate order confirmation 5 days after purchase e-mail sent with link to online customer satisfaction survey asking about quality of service from driver and picker (e.g. item quality and substitutions). Two-weeks after first purchase - Direct mail offering tips on how to use service and Ł5 discount on next purchases intended to encourage re-use of online services. Generic monthly e-newsletter with online exclusive offers encouraging cross-selling Bi-weekly alert with personalised offers for customer. After 2 months - Ł5 discount for next shop Quarterly mailing of coupons encouraging repeat sales and cross-sales

    20. After Sales Services Strategies Trigger event 3: Customer does not purchase for an extended period Dormancy detected – Reactivation e-mail with survey of how the customer is finding the service (to identify any problems) and a Ł5 incentive. A further discount incentive is used in order to encourage continued usage to shop after the first shop after a break.

    21. 21 Customer Care Strategies

    22. Customer Wants/Needs Basic Security Privacy Relevant information A Pleasant Experience Personalized/customized services (profile, purchase/behavior pattern, unique requirements …) Navigational help capability Effective site and general search capability FAQ Non-intrusive cross selling

    23. Customer Wants/Needs (cont’d) Additional Services E-mail support Telephone support Product tracking Feedback Sales/promotions Innovative New Services Discussion board Social networking Live chat evoked when a shopper abandoned a cart

    24. Customer Wants/Needs (cont’d) A Single Interface to: Account management Marketing & Sales management Sales Customer support Technical Assistance

    25. Channel Integration Technical Implications Tightly coupled relationships based on inter-connections Integration between e-commerce and back-office support systems (Closer integration of CRM, ERP, SCM)

    26. Market Segmentation Differentiation by: Profitability Demographic profile (sex, age, income level, profession, …) Behavior and Geographic profile Customer life-cycle (new visitor, returning, frequent visitors, 1st time purchasers, regular purchasers, dormant purchasers, …) Mode of arrival (direct, search engine, affiliation, social networks, …) Behavior (immediate leave, random wandering, time/steps-to-reach target, …) Journey (depending on choices, profile, …) Purchases (categories, price, frequency, …) Feedback

    27. Market Segmentation Co-relation of the above Click-through rate on a message Conversion rate to quote Customize service based on balance among Cost of service Profile of wants/needs Profitability Customer profile and purchase history Real-time adjustments

    28. Customer Care – Dell Computer Background One of the most successful e-commerce company – 1st company to reach $1 Billion in online sales Source of profit B2C 15% B2B 85% (servers, storage products, network switches & services) No middlemen 4 days of inventory & factory direct shipment Offering customers choice & control (order tracking) Challenges Saturated market of online buyers Not able to reach non-internet buyers Increasing competition

    29. Critical Success Factors Provide Customer with control - order tracking Customized services B2C channel B2B channel/Premium Interface/Value added services Integrated front and back end (SCM) for faster delivery, elimination of middlemen and minimizing inventory Product strategies Customized product hardware & software Service options Additional product lines for cross selling (storage, printers, TV,…)

    30. Customer Care – Dell Computer

    31. Customer Care – Amazon.com Background One of the most successful e-commerce company Critical Success Factors Know its customer Culture of metrics (knows and analyses every move, click, and twitch of the mouse) “Not what do we know but what can we do about them” More choices & information (look inside, service inside) Trust Value added services (wish list, wedding registry, baby registry) Challenges Competition traditional Competition non-traditional

    32. Customer Care – Amazon.com

    33. Customer Care – Amazon.com Personalized interface based on history New releases Top sellers Merchandizing Recommendations Information displayed based on preferences and not on intuition With focus on cross-selling Affiliate Programs brings additional values

    34. Customer Care - Nikon Customized Customer Care - Nikon Background Manufacturer of high end and professional quality cameras, lenses, and other optical products (Revenue - $5.9 billion) Sales through specialized dealers Issues/Opportunities Trend towards digital cameras with different customer base Increasing competition in features and pricing and rate of change, and decreasing customer loyalty

    35. Customer Care - Nikon Customized Customer Care - Nikon Customer Services strategies Emphasis on consistency and speed of response E-mail response to customer questions has gone from 80 to 20 to 5 hours.

    36. 36 Summary

    37. Critical Success Factors Think like customers & Understand customers’ value system Ease of use Choice Control Trust & security Optimize over the total value chain Partnerships Market place Affiliates

    38. Critical Success Factors Presenting & maintaining a single view to customer Personalization/Customizing for high value customers Joint developments with the most valuable customers Monitoring customer satisfaction Greater integration/interconnection: B2C - CRM Other internal systems (e.g. Account, Inventory Control) SCM - B2B

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