Transcript e-Service
E-Service • On-line Banking • On-line Publishing • On-line Advertising • Changing Face of Service 1 Trends in Retail Banking Cost reduction thru mergers Non-bank competition from stock market Consumer wants convenience and confidentiality Regulations keep changing Technology requires high sunk costs 2 Evolution of Distribution Channel Chain • Physical branches have high cost structure • ATM – Did it save money or give competitive advantage? Branch ATM Phone Center PC Banking Internet WWW Reduced cost per interaction • Phone Center – Limited functions and no visual interface • PC Banking – proprietary client software • Web – flexibility for banks and consumers 3 Traditional Banks vs. Cyber banks Traditional banks Players - Citigroup, Inc - Wells Fargo - Bank of America Goals - Strengths - Cyber banks - Net.Bank - Security First Network Bank - Telebank Embrace e-commerce - Take advantage of new Increase user reach opportunity Lower costs - Become new leaders in the Integrate various services banking and financial industry Provide better services - 4 Value Creation Efficiency Time Single interface for all banking transactions. Distance Small banks can reach wide range of customers. Effectiveness Strategic Real-time account information. Mobile customers with search engines. 24X7 Customer service. Get customers before creating a physical presence. Relationship One-stop shop for Micro marketing Lock-in with customer financial with web functionality and needs. technologies. content. Flexible user Knowledge Interaction Use customer feedback to alter interface. sharing in onofferings. line community On-line decision Use extranets to Product Automate user services using support services. become the software agents. financial hub. 5 Financial Supply Chain Services Stock trade Gateway Access Customers Insurance Accounting / Tax Bank or non-bank company? Online services Consumers Dial-up Broadband Small Business Wireless Large Business 6 E-Service • On-line Banking • On-line Publishing • On-line Advertising • Changing Face of Service 7 On-Line Publishing Critical Success Factors Compelling content Challenges – Charge customer – Unique, timely info – Advertising revenue – Programming – Packaging – Intellectual property protection – Services 8 Drivers of on-line publishing • • • • 9 Control Use of the Work Control Web Server Access Electronic Contracts Digital Copyright Protection Control Document Access Copyright Infringement 10 NTT DoCoMo’s I-Mode Wireless Service – DoCoMo is a cell phone company with >55 million subscribers – Launched in Feb99, I-Mode has >15 million subscribers who exchange 60 million emails, access the net 12 times daily – 80% subscribers pay for additional content services E-mail with a cartoon I-Mode Contents 11 Business Model – Content provider codes content for I-mode and can be on menu – Content can be free or for a fee (no more than $3/month) – User fee = Monthly charge, Transmission fee, Contents fee – DoCoMo receives Monthly charge and Transmission fee – DoCoMo gets 9% of Contents fee for billing / collection service 12 No More Free Content? • WSJ (574,000 subscribers pay $29 to $59) • Consumer Reports (550,000 subscribers pay $19-49) • 555-1212.com allows 30 free queries before charging • Online magazine Salon.com to charge $30/yr for premium content only • Rochester Post-Bulletin, Minn. to charge nonsubscribers $60/yr. • Dot-com quest for money is to charge for content, but how to change customer’s “mind-set”? 13 E-Service • On-line Banking • On-line Publishing • On-line Advertising • Changing Face of Service 14 Why On-line Advertising? • • • • • 15 Traditional Advertising Web Advertising • Seller decides on message • • Broadcast • • Seller to buyer • • Static • • Mostly one way • 16 Web Ads Description Remarks Banners, rectangular strip Online staple, but limited effect Skyscraper, tall and skinny Hard-to-miss, hard-to-read Bulky box, big rectangle Hard-to-ignore Pop-under ads Intrusive, lively? Interstitial Ad Full page message between current & destination pages Variable size, rich media ad Superstitial Ad Buttons, business card size Fixed, non-interfering 17 More Online Ads Description Remarks E-mail newsletters Cheap, effective, clutter Sponsorship Control, but credibility? Banner swap Reduces costs Banner exchange An intermediary is needed Search engine inclusion Pay for inclusion / placement Affiliates On-line affiliate presence Catalogs Custom / dynamic catalogs 18 Impressions / Hits / Visits / Page Views Conversion / Attrition/ Abandonment / Retention Clickthrough / Acquisition Rate On-line Advertising Effectiveness Measurement Stickiness / Recency Unique Users / Reach CPM 19 On-line Advertising Challenges • Banner ads less effective than expected (0.1-0.5%) • $6 B for ’01, 25% down, 10% of TV ad • Need to exploit interactivity! • Engage customers! • Software filters (webwasher.com, internet.junkbuster.com) 20 E-Service • On-line Banking • On-line Publishing • On-line Advertising • Changing Face of Service 21 The Service Process Matrix High Service Shop Professional Service Interaction & Customization Low Service Factory Low Mass Service Labor Intensity High 22 Attractor’s Grid High Service Center The Club Customization Utility Low Low Mass Entertainment Interaction High 23 Sustainable Attractiveness Ease of Imitation • Easy • Some efforts Examples Corporate brochure Software utilities Search engine • Costly Sponsorship Rare resources • Impossible Archive (exclusive features) Brand / corporate image Stakeholders Broad Specialized Customized Influence Filter Target Refractor Web Site Strategies for Attractors 24 Heterogeneity: One size does not fit all Intangibility: No physical product Unique Properties of Services Simultaneity: Errors visible to customers Perishability: No inventory 25 • Provide evidence (email confirmation) • Tangibilize the intangible (quality content, update) • Sampling in the cyberspace (digital products) Managing Intangibility • Multiplying memories (customer testimonials) • Customization (personal information) • Customer as a part-time employee (ordering, tracking) • Innovation through customer participation (new product) Managing Simultaneity • Service industrialization (more info, search capability) • Reducing customer errors (alert customer) 26 • Service standardization on the web (consistency) • Electronic eavesdropping (listen to customers!) Managing Heterogeneity • Service quality (on-line feedback) • Managing supply (integrated channels) Managing • Directing demand (airline example) Perishability 27 Key Points • Service migration to on-line media is real! • Revenue models are barriers • Different velocities in different services 28