Transcript Lecture 2 - Andrew.cmu.edu

© Prof. Karen Clay
Broadvision
• Who are the customers?
– Firms
• Firms’ customers
• Firms’ customers
– Offer information
• Directly by completing form
• Indirectly through clickstream
– Value added through mass customization
• Barriers: trust and privacy
© Prof. Karen Clay
Broadvision
• Mass customization
– Offering customers incentives to reveal
information
– Helps firm learn about who its customers are
• Offering the most value added
– Broadvision
– Collaborative filtering
© Prof. Karen Clay
Broadvision
• Getting the customer to transact
– Personalized discounts
– How does this work in the work of shopping
bots
• Going from one transaction to many
– Delivering value added
– Switching costs
• Search costs
• Information
© Prof. Karen Clay
Broadvision
• Who are Broadvision’s customers?
– Global 1000
– Case
• Kodak, Banco Santander
– Web site
• American Airlines
• Cell Mania
• Walmart
© Prof. Karen Clay
Broadvision
• How does Broadvision attract customers?
– International sales force
– Web site
• Demonstration of personalization
• Case studies
• How does Broadvision offer value added?
– Who are their competitors?
• Discussion in the case
• No discussion in SEC documents
© Prof. Karen Clay
Broadvision
• Where does Broadvision go from here?
© Prof. Karen Clay
One to One Marketing
• Turning a one time customer into a repeat
customer
– Much cheaper to retain customers than to
attract new ones
– Implication: narrow base of loyal customers can
be more profitable than a wide base of
occasional customers
© Prof. Karen Clay
Permission Marketing
• Is one step up the chain from 1:1
– Starts at first contact, rather than first sale
• Offering value added, getting customer to try
• Games, raffles, and promotions
– All about incentives
• Offer the potential customer something in exchange
for his attention
• Use the opportunity to teach him about your product
• Increase the level of permission
© Prof. Karen Clay
Permission Marketing
• How does Amazon use permission
marketing?
– What are the incentives for the customer?
– How does Amazon teach you about the
product?
– How does it increase the level of permission?
• Godin and the future of Amazon
– Where does he see Amazon’s future?
© Prof. Karen Clay
Permission Marketing
• What are some other effective examples of
permission marketing?
© Prof. Karen Clay
Permission Marketing
• Repeated interaction
– Maintain contact with customers and potential
customers
– Increase the level of permission, customers give
you more information
• Learn more about who your customers are
– Get customers to tell you what they want
• Much more efficient than guessing at value added
© Prof. Karen Clay
Customers.com
• Who are the customers
– Focus is on the right (high value) customers
• Godin talked about firing low profit customers
– In many transactions, not obvious who
customer is
• Person who pays is often not customer
• Who makes decision to purchase
– Consumer, could be children or other family members
– Business, is often user
© Prof. Karen Clay
Customers.com
• Find out what customers want
– Sounds simple, but …
• American Airlines
– Customers, frequent fliers
– Information about flights, frequent flier miles,
reservations, movies, baggage
– Arrange travel for entire trip
• Buy tickets, book hotels and rental cars
© Prof. Karen Clay
Customers.com
• American Airlines
– Email
• E-savers
• Confirmation on every transaction
• Hertz
– Not wait in line, fill in information each time
– Led to Hertz Gold
• Store information
• Show id and get keys
© Prof. Karen Clay
Customers.com
• iPrint
– Design own business cards, letterhead, other
print products
– Lets customers help themselves
• Boeing
– Easily purchase spare parts
– Access to information about parts, prices, and
availability
© Prof. Karen Clay
Customers.com
• Let customers help themselves and each
other
– Build community
• Tends to increase switching costs
• Allows company to get feedback directly from
consumers
• Offer customers value added and they will
become repeat customers
© Prof. Karen Clay