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 has begun charging
• Online magazine Salon.com to charge $30/yr for premium
content only
• RealOne service of RealNetworks has a million subscribers
of news, sports and entertainment video for $9.95/month
• KeepMedia to charge $4.95 for 140 archived magazines*
• Dot-com quest for money is to charge for content, but how to
change customer’s “mind-set”?
* WSJ July 21, 2003
13
Promise of Online Content Marketplaces
• Authors offer content, and may also set the price
• RedPaper.com requires a $3 buying account, and
collects 5.25% on each transaction
• 50¢ for each installment of “My Big Fat Single Life” by
Liz Hassel
• Lulu.com features full length books at a higher price,
keeps 20% of royalty set by authors
• Vehicles for accessing public documents easily?
• Critical success factors?
Source: WSJ, “Web Sites Offer Unsung Writers Chance to Sing,” Sept. 8, 2003
14
E-Service
• On-line Banking
• On-line Publishing
• On-line Advertising
• Changing Face of Service
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, annoying?
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%)
• $3.2 B in 1st half of ’03, $6.6 B for ’03, 10% of TV ad
• Animation, broadband, search placement may fuel growth!
• Engage customers!, exploit interactivity and measurability!
• Software filters (webwasher.com, internet.junkbuster.com)
Source: WSJ 8/25/03, p.B1
20
Problems of “Spyware”
• Spyware quietly installs itself on your computer, often
when you download free staff. It tracks your web surfing,
and shows pop-up ads based on your interests.
• Gator.com claims it has its software running on 35 million
computers. It seeks permission from the user, however
subtly, and does not usually identifies her.
• Its effective, but is it ethical? Some advertisers love it,
others are objecting to these tactics.
Source: WSJ, “New Battleground in Web Privacy War,” Aug. 27, 2003
21
E-Service
• On-line Banking
• On-line Publishing
• On-line Advertising
• Changing Face of Service
22
The Service Process Matrix
High
Service Shop
Professional
Service
Interaction &
Customization
Low
Service Factory
Low
Mass Service
Labor Intensity
High
23
Attractor’s Grid
High
Service Center
The
Club
Customization
Utility
Low
Low
Mass
Entertainment
Interaction
High
24
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
25
Heterogeneity:
One size does not
fit all
Intangibility:
No physical
product
Unique
Properties
of Services
Simultaneity:
Errors visible to
customers
Perishability:
No inventory
26
• 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)
27
• 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
28
Key Points
• Service migration to on-line media is real!
• Revenue models are barriers
• Different velocities in different services
29