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APEC OVOP Training Workshop on e-Commerce 20-24 August 2007, Chinese Taipei Customer Care & After-Sale Services Arnold Chao, Ph.D., MBA Partner, e-finity group inc., Canada a.chao@e-finitygroup.com Agenda Introduction A Framework for E-Commerce Services Issues & Opportunities

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customer care after sale services

APEC OVOP Training Workshop on e-Commerce20-24 August 2007, Chinese Taipei

Customer Care & After-Sale Services

Arnold Chao, Ph.D., MBA

Partner, e-finity group inc., Canada

a.chao@e-finitygroup.com

1

agenda
Agenda
  • Introduction
  • A Framework for E-Commerce Services
  • Issues & Opportunities
  • After Sales Services Strategies
  • Customer Care Strategies
  • Cases
  • Summary
introduction

Introduction

  • Scope
  • Objectives

3

scope
Scope

Supplier

Intermediary

Customer/Consumer

Focus

objectives
Objectives
  • To review the business issues & opportunities related to customer care & after sales services in relation to e-commerce
  • To discuss corresponding business strategies being implemented to address the issues
a framework for e commerce services7
A Framework for E-Commerce Services
  • E-commerce Provider – Customer/Consumer
    • Contact
    • Acquisition
    • Conversion
    • Sales
    • Retention
    • Deletion
    • Activation
    • Customer Care
    • After Sales Services/Support
a framework for e commerce services8
A Framework for E-Commerce Services

E-commerce Provider – Customer/Consumer

  • Contact Visitors
  • Acquisition Potential Customer
  • Conversion New Customer
  • Sales Customers
  • Retention Customers-Profitable
  • Deletion Customers-Unprofitable
  • Activation Customers-Inactive
  • Customer Care Customers
  • After Sales Services/Support Customers-Profitable
a framework for e commerce services9
A Framework for E-Commerce Services

Customer Life Cycle Matrix

issues opportunities11
Issues & Opportunities
  • Customer Care & After Sales Services are becoming increasing more important as:
    • Sales growth and number of customers continue to increase exponentially but limits will be reached.
    • Increasing competition for market share
    • No. of active US web shoppers expected to peak at about 161 million by 2010.
  • E-commerce providers have to pay increased attention to customer retention.
issues opportunities12
Issues & Opportunities
  • A Recent Survey CEO showed top priorities for B2C:
    • Acquiring new customers - 53 %
    • Increasing customer loyalty and retention - 49%
    • Increasing revenue from current customers - 49%
    • Increasing customer service capabilities - 39%.
issues opportunities13

Hi

Cost

Cost of Acquisition

Cost of Retention

Lo

Lo

Hi

Service Level

Issues & Opportunities
  • Economic Issues from Providers’ Perspective
issues opportunities14
Issues & Opportunities
  • From Customers’ Perspective
    • Meet/exceed needs/wants
    • Receive an pleasant experience
  • From Providers’ Perspective
    • Increase repeat sales
    • Increase cross sales
    • Increase sales/customer
    • Increase overall profitability
after sales services strategies
After Sales Services Strategies

What do customers want/need?

  • After sale services
    • Confirmation/Payment
    • Tracking delivery (Fedex, UPS, Dell, …)
    • Return/refund
    • Repair/Recall
    • Product information
    • Sales vs Marketing
    • Technical support

How to meet those wants/needs?

after sales services strategies17
After Sales Services Strategies
  • What one retailer does?
    • Trigger event 1: Customer first registers on site (but does not buy).
    • Trigger event 2: Customer first purchases online.
    • Trigger event 3: Customer does not purchase for an extended period
after sales services strategies18
After Sales Services Strategies
  • Trigger event 1: Customer first registers on site (but does not buy).
    • 2 days after registration e-mail sent offering phone assistance and £5 discount off first purchase to encourage trial.
after sales services strategies19
After Sales Services Strategies
  • Trigger event 2: Customer first purchases online.
    • Immediate order confirmation
    • 5 days after purchase e-mail sent with link to online customer satisfaction survey asking about quality of service from driver and picker (e.g. item quality and substitutions).
    • Two-weeks after first purchase - Direct mail offering tips on how to use service and £5 discount on next purchases intended to encourage re-use of online services.
    • Generic monthly e-newsletter with online exclusive offers encouraging cross-selling
    • Bi-weekly alert with personalised offers for customer.
    • After 2 months - £5 discount for next shop
    • Quarterly mailing of coupons encouraging repeat sales and cross-sales
after sales services strategies20
After Sales Services Strategies
  • Trigger event 3: Customer does not purchase for an extended period
    • Dormancy detected – Reactivation e-mail with survey of how the customer is finding the service (to identify any problems) and a £5 incentive.
    • A further discount incentive is used in order to encourage continued usage to shop after the first shop after a break.
customer wants needs
Customer Wants/Needs
  • Basic
    • Security
    • Privacy
    • Relevant information
  • A Pleasant Experience
    • Personalized/customized services (profile, purchase/behavior pattern, unique requirements …)
    • Navigational help capability
    • Effective site and general search capability
    • FAQ
    • Non-intrusive cross selling
customer wants needs cont d
Customer Wants/Needs (cont’d)
  • Additional Services
    • E-mail support
    • Telephone support
    • Product tracking
    • Feedback
    • Sales/promotions
  • Innovative New Services
    • Discussion board
    • Social networking
    • Live chat evoked when a shopper abandoned a cart
customer wants needs cont d24
Customer Wants/Needs (cont’d)
  • A Single Interface to:
    • Account management
    • Marketing & Sales management
    • Sales
    • Customer support
    • Technical Assistance
channel integration
Channel Integration
  • Technical Implications
    • Tightly coupled relationships based on inter-connections
    • Integration between e-commerce and back-office support systems (Closer integration of CRM, ERP, SCM)
market segmentation
Market Segmentation
  • Differentiation by:
    • Profitability
    • Demographic profile (sex, age, income level, profession, …)
    • Behavior and Geographic profile
    • Customer life-cycle (new visitor, returning, frequent visitors, 1st time purchasers, regular purchasers, dormant purchasers, …)
    • Mode of arrival (direct, search engine, affiliation, social networks, …)
    • Behavior (immediate leave, random wandering, time/steps-to-reach target, …)
    • Journey (depending on choices, profile, …)
    • Purchases (categories, price, frequency, …)
    • Feedback
market segmentation27
Market Segmentation
  • Co-relation of the above
    • Click-through rate on a message
    • Conversion rate to quote
  • Customize service based on balance among
    • Cost of service
    • Profile of wants/needs
    • Profitability
    • Customer profile and purchase history
  • Real-time adjustments
customer care dell computer
Customer Care – Dell Computer
  • Background
    • One of the most successful e-commerce company – 1st company to reach $1 Billion in online sales
    • Source of profit
      • B2C 15%
      • B2B 85% (servers, storage products, network switches & services)
      • No middlemen
      • 4 days of inventory & factory direct shipment
      • Offering customers choice & control (order tracking)
    • Challenges
      • Saturated market of online buyers
      • Not able to reach non-internet buyers
      • Increasing competition
slide29

Customer Care – Dell Computer

  • Critical Success Factors
    • Provide Customer with control - order tracking
    • Customized services
      • B2C channel
      • B2B channel/Premium Interface/Value added services
      • Integrated front and back end (SCM) for faster delivery, elimination of middlemen and minimizing inventory
    • Product strategies
      • Customized product hardware & software
      • Service options
      • Additional product lines for cross selling (storage, printers, TV,…)
customer care amazon com
Customer Care – Amazon.com
  • Background
    • One of the most successful e-commerce company
    • Critical Success Factors
      • Know its customer
      • Culture of metrics (knows and analyses every move, click, and twitch of the mouse)

“Not what do we know but what can we do about them”

      • More choices & information (look inside, service inside)
      • Trust
      • Value added services (wish list, wedding registry, baby registry)
    • Challenges
      • Competition traditional
      • Competition non-traditional
customer care amazon com33
Customer Care – Amazon.com
  • Personalized interface based on history
    • New releases
    • Top sellers
    • Merchandizing
    • Recommendations
    • Information displayed based on preferences and not on intuition
    • With focus on cross-selling
  • Affiliate Programs brings additional values
customer care nikon
Customer Care - Nikon
  • Customized Customer Care - Nikon
    • Background
      • Manufacturer of high end and professional quality cameras, lenses, and other optical products (Revenue - $5.9 billion)
      • Sales through specialized dealers
    • Issues/Opportunities
      • Trend towards digital cameras with different customer base
      • Increasing competition in features and pricing and rate of change, and decreasing customer loyalty
customer care nikon35
Customer Care - Nikon
  • Customized Customer Care - Nikon
    • Customer Services strategies
      • Emphasis on consistency and speed of response
      • E-mail response to customer questions has gone from 80 to 20 to 5 hours.
critical success factors
Critical Success Factors
  • Think like customers & Understand customers’ value system
    • Ease of use
    • Choice
    • Control
    • Trust & security
  • Optimize over the total value chain
    • Partnerships
    • Market place
    • Affiliates
critical success factors38
Critical Success Factors
  • Presenting & maintaining a single view to customer
  • Personalization/Customizing for high value customers
  • Joint developments with the most valuable customers
  • Monitoring customer satisfaction
  • Greater integration/interconnection:
    • B2C - CRM
    • Other internal systems (e.g. Account, Inventory Control)
    • SCM - B2B