• Describe ways to use customer services for improving site performance.
• Identify types of research used to gather information on customers and potential customers.
• Identify CRM strategies.
• Explain the Internet security process.

• Chapter 7, E-Marketing, Strauss and Frost
• pp. 381 - 385, E-Marketing, Strauss and Frost
• Customer Relationship Management

The Amazon.com Web site represents an interesting entrepreneurial story. Jeff Bezos was employed in a computer systems job in 1994 when he came across the statistic that worldwide Web usage was growing at 2,300 percent a year. Because of this high growth rate, he began investigating potential business opportunities for the Internet. His approach was to evaluate different business ideas against the Internet’s strong points to determine the business best suited for the Internet. The result of this analysis was the book business.

So, in July 1995, Amazon.com was introduced as a book retailer. The company’s mission was to use the Internet to transform book buying into the fastest, easiest, and most enjoyable shopping experience available. Since Amazon.com did not have an inventory of books in a retail location, it could offer customers an enormous selection of books over its Web site. Customers could also shop and place orders 24 hours a day and seven days a week. The shopping experience was easy and fun, and various services were added to create value. For example, customers could post reviews of books read on the Amazon.com Web site, and those thinking about purchasing a specific book could read these reviews. This was the beginning, and growth has been phenomenal.

Amazon.com now offers many different products and services, including music CDs, videos, electronic products and software, toys and games, and home improvement products. It also offers an auction e-mail subscription service where customers automatically receive information about new products in categories of interest, a scheduler/address book, and a comparison shopping tool; further, it provides customers instant personalized product recommendations the moment they log on.

International sites are being developed with local content, such as Amazon.co.uk for the United Kingdom and Amazon.de for Germany. The company stands behind all of its services with the Amazon.com Safe Shopping Guarantee and the Amazon.com Auctions Guarantee. 

One of the major reasons for the success of Amazon.com is its rapidly growing number of satisfied and loyal customers. The customer base has grown from around 3.3 million in June 1998 to nearly 16 million today.

(Source: April 2002, www.hoovers.com)

As you examined the Amazon model in lesson 2, most of you noticed and noted that Amazon is focused on the customer.  Developing customer relationships is a critically important element to success in e-commerce and Internet marketing. 

Customer Relations

Go to the Customer relationship site and read it, then answer the following questions:

1.  Long-term buyer-seller relationships are based on what two principles?

2.  Explain how trust-based collaboration between buyers and sellers is built with these building blocks: site security; merchant legitimacy; fulfillment; tone; departmental coordination; and customer control.
 

Read Chapter 7, pages 281-318 in your text E-Marketing by Strauss and Frost and then answer the following questions:

3.  What strategies are appropriate at each of the three levels (Exhibit 7-2) of relationship marketing?

4.  How can each of the three steps in the CRM process be accomplished?

5.  Explain how data mining and profiling, collaborative filtering, and outgoing e-mail help firms to customize offerings?

6. How do cookies, real-time profiling, and individualized Web portals help firms customize offerings?
 

One of the biggest obstacles in customer relationship management is the Web's inability to provide the "personal touch."  Many of you have stated this fact already in your assignments.  However, there is a movement in the way some companies are handling online service questions.  Many online companies are going to LIVE online help!  Does it work?  You bet it does.  Live help takes full advantage of the Web's interactive nature.  Not only does it help with customer service, but it also adds direct, personal selling into the promotional mix, an element that Web sites have lacked since their inception.

Visit the iomagic Web site.  First, peruse the products they have to sell, then select one that you have a question about (or can make one up).  Once you have done so, click on the live help and ask them your question.  Please stay with it until you get your answer.

7.  What product did you select, and what question did you ask?

8.  REALLY stop and think about it.  If you were in the market for this product, would the live help have influenced your decision to buy or not buy?  How?  Would it/could it provide you with the "after the sale service" you demand? How?
 

Finally, safety and security is still a BIG customer service issue on the Web.  However, it is only a big issue because so many people don't understand how it works.  In reality, it is much safer to provide your credit card number to a Web merchant using a secured system than it is to pass your credit card to the waitress at Olive Garden who takes it to the back room for processing.  Personally, the only credit card fraud I've ever encountered was at a gas station where I had purchased gas and passed my card to the clerk.

You may be a bit to young to remember the inception of ATM machines, but for the first few years they were in existence, the same fears were abundant.  People were afraid to put their card in such a machine, fearing that it would do something horrible to their money.  Time has assuaged that fear, and now ATMs are a convenient tool that millions of people utilize.  Once Web merchants can help us to ease our security concerns, online transactions will continue to grow.

Read about Transaction Security on pages 381-385.

9.  How likely will the following happen?

• Credit card number stolen from the user's computer?
• Credit card number stolen in transit?
• Credit card number stolen at the merchant's site?