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Relationships

Relationships. The Electronic Commerce Imperative. Provocations. Relationships are everything, transactions are nothing. (?) No business in the website, only relationships, collaborations, and community. (?) Managerial challenge is not electronic commerce. It ’ s commerce. (!).

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Relationships

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  1. Relationships The Electronic Commerce Imperative

  2. Provocations • Relationships are everything, transactions are nothing. (?) • No business in the website, only relationships, collaborations, and community. (?) • Managerial challenge is not electronic commerce. It’s commerce. (!)

  3. The relationship imperative • Customer acquisition: building relationships beyond making transactions • Focus on the discretion of the customer • The price inducement matters first but looses attraction gradually. • The ultimate weapon: the design of trust

  4. The Internet business story • The first chapter • From the launch of Netscape and Amazon in 1995 to 1999 • The technology-based strategy focused on making transactions • The second chapter • After 1999 International Electronic commerce conference • Actually, the NASDAQ crash in the spring 2000 • From Ec to EC (to eC), repositioning the Internet effort on the business/commerce models

  5. Perfect customer relationship • Differentiate offerings • Generate the repeat business • Encourage self-management • Personalize and customize • Build collaboration and community

  6. Differentiate your offerings • Differentiate the price is vulnerable • Differentiate the product for a distinctive value to a particular customer/segment • Differentiation of offering bundled with differentiation of pricing scheme • Follow-up care after reach • Provide comparison shopping

  7. Generate high repeat business • High margins gained from already loyal buyers • Create stickiness • Online vendors’ weakness • Shipping and handling • High marketing effort • Higher discount but lower pays • Non-bricks-and-mortar advantage • High diffusion rate of information • Intimate behavior tracking and recording • Automatic fulfillment & end-to-end integrity

  8. Encourage self-management • Get customer attention • Save the massive SGA/overhead waste • 100:1 (traditional service mode vs. Internet self-service mode) • FAQs and email linkage for service help

  9. Customize and personalize • MyXXX: the Internet business neologism • Sticky nirvana—a bundle of free stuff chosen by customers • The discrimination scheme of self-selection • Markets of one—creating customer-unique compelling value • Truth revelation from customers—a source of segmentation & targeting

  10. Build collaboration and community • Social capital retained from web community • The only left locking factor after open standard • Co-relating • Co-opetition • Co-creation • Co-habitation • Co-profiting

  11. The management agenda • Making the customer-centric view of business rather then espoused relate to organizational incentives, process integration, and commitments to a new business • Collaborative competence is essential, not optional.

  12. Extending readings • Hagel III, John, and Arthur G. Armstrong (1997), Net Gain: Expanding Markets Through Virtual Communities, Harvard Business School Press. • Pine, B. Joseph, B. J., II Pine, and James H. Gilmore (1999), The Experience Economy, Harvard Business School Press.

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