part two: chapter ten creating commitment

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Internet Marketing & e-CommerceWard HansonKirthi Kalyanam

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Part Two: Chapter TenCreating Commitment

“No company should ever take for granted ( 認…理所當然 ) the idea that managing customers for loyalty is the same as managing them for profits.”

Reinartz and Kumar, The Mismanagement of Customer Loyalty

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Online Community and Loyalty

• Focused social gathering places

• Multi-directional communication

• Community value > individual value

© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation

Online Community and Loyalty

• Focused social gathering places

• Multi-directional communication

• Community value > individual value

Results?

© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation

Online Community and Loyalty

• (what) Focused social gathering places

• Multi-directional communication

• Community value > individual value

Results? (why online community)

• Online community activities can build good will (信譽 )and lead to word-of-mouth support, donations or purchases

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Online Community and Loyalty

At the Stanford Alumni Association, alumni who

receive e-newsletter @Stanford lead annual giving.

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Online Community: Types and Functions

密切關係

大型入口網站

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Challenges to Creating Community

• Gaining attention and building traffic

• Losing member focus as community grows or changes

• If members disengage, content creation lags (落後 ) and retention drops

• Firms accustomed to controlling the message reluctant to let go

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Signs of a Healthy Online Community

• Content Attractiveness: More content = more value = more members

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Signs of a Healthy Online Community

• Content Attractiveness: More content = more value = more members

• Member Profiles: Opportunity for individual outreach by sponsors

© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation

Signs of a Healthy Online Community

• Content Attractiveness: More content = more value = more members

• Member Profiles: Opportunity for individual outreach by sponsors

• Member Loyalty: Commitment fosters participation, creates audience

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☆ Signs of a Healthy Online Community

• Content Attractiveness: More content = more value = more members

• Member Profiles: Opportunity for individual outreach by sponsors

• Member Loyalty: Commitment fosters participation, creates audience

• Transaction Offerings: Selling linked to interest area attracts other vendors

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Community Tools

• Communication Rings– Email most important community tool– Instant Messaging and SMS (Short

Messages)– Growth of simulations, online gaming tools

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Community Tools

• Communication Rings– Email most important community tool– Instant Messaging and SMS– Growth of simulations, online gaming tools

• Content Trees– Discussion groups, web sites bring

organization and focus to handle flow of information

即時訊息與簡訊

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True Community?

• Optimistic view – Online communities offer new ways of relating, and give companies new ways to build and retain loyal customers

• Pessimistic view – Online tools have stifled (使窒息、抑止 ) true community building and depleted (使減少 ) face-to-face interaction

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True Community?

Male Female

Email 23.50 27.53

Internet browsing 22.10 15.18

Instant messaging 3.31 4.14

Newsgroup/Message boards 3.01 2.20

Chat rooms 2.13 1.65

Creating/Maintaining web sites 2.26 1.47

Social networking 0.53 1.13

Total Internet/Email time 56.84 53.29

Online time, minutes per day from six-hour time sliceSOURCE: Niie, Simpser, Stepanikova and Zheng, ‘Ten Yearks After the Birth of the Internet,’ December 2004

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☆ Member Produced Content

• Less expensive member content results in extensive content areas, often attractive to advertisers

• Member content reflects current interests and issue

• Quality varies, but often very creative

• Access-controlled communities lend credibility to online recommendations

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Member Produced Content

• Other distinguishing features : – Contributions are skewed toward frequent

contributors, which can be promoted– Broad participation can expand and

enhance nature of online discussions

© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation

Member Produced Content

• Other distinguishing features : – Contributions are skewed toward frequent

contributors, which can be promoted– Broad participation can expand and

enhance nature of online discussions

• Potential problems:– Lack of control can result in off-color,

offensive messages– Partial control can create legal exposure

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☆ Community and Customer Insight

• Content attractiveness– Access frequency, content diversity, contributor

edits, emailed articles

• Member Loyalty– Access frequency, access duration, referrals,

church or opt-out rates

• Member Profiles– Database completeness, user update frequency,

email bounces

• Transaction Offerings– Sales revenue, active vendors, customer LTV

(Life Time Value)

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Community and Customer Insight

• Interaction Measures such as email campaigns offer direct measures of community strength

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Community and Customer Insight

• Interaction Measures such as email campaigns offer direct measures of community strength

• Netnography(網路人種學 ) moves traditional social group study of ethnography(人種學 )online – Self-interested helpers– Multiple-motive consumers– Consumer advocates– True altruists(利他主義 )

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Community and Customer Insight

Using email and homepages to identify communities of interest

SOURCE: Culotta, Bekkerman, McCallum, ‘Extracting Social Networks and Contact Information from Email and the Web,’ American Association of Artificial Intelligence, 2004, p.2

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Creating Consumer Dialogue

• Understanding the customer base– Analyzing customer loyalty, profitability– Loyalty programs build commitment– Extending loyalty with switching costs

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Creating Consumer Dialogue

• Understanding the customer base– Analyzing customer loyalty, profitability– Loyalty programs build commitment– Extending loyalty with switching costs

• Building customer dialogue– Email outreach to possible defectors 背叛者– Follow up with high value customers– Tipping points and trigger moments

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Creating Consumer Dialogue

Categories of Switching Costs

SOURCE: Adapted from Burnham, Freis and Mahajan, “Consumer Switching Costs: A Typology, Antecedents, and Consequences,’ Journal of the Academy of Marketing Sciences 31, no. 2 (2003): 109-126

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Creating Consumer Dialogue

Customer state and appropriate contact questions