1 e-service on-line banking on-line publishing on-line advertising changing face of service
Post on 22-Dec-2015
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E-Service
• On-line Banking
• On-line Publishing
• On-line Advertising
• Changing Face of Service
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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
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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
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Traditional banks Cyber banks
Players - Citigroup, Inc - Wells Fargo - Bank of America
- Net.Bank - Security First Network Bank - Telebank
Goals - Embrace e-commerce - Increase user reach - Lower costs - Integrate various services - Provide better services
- Take advantage of new opportunity
- Become new leaders in the banking and financial industry
Strengths - - - -
- - - -
Traditional Banks vs. Cyber banks
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Value Creation Efficiency Effectiveness Strategic
Time Single interface for all banking transactions.
Real-time account information.
24X7 Customer service.
Distance Small banks can reach wide range of customers.
Mobile customers with search engines.
Get customers before creating a physical presence.
Relationship One-stop shop for customer financial needs.
Micro marketing with web technologies.
Lock-in with functionality and content.
Interaction Use customer feedback to alter offerings.
Flexible user interface.
Knowledge sharing in on-line community
Product Automate user services using software agents.
On-line decision support services.
Use extranets to become the financial hub.
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Financial Supply Chain
Services
Gateway
Access
Customers Consumers Small Business
Large Business
Online services Dial-up Broadband Wireless
Bank or non-bank company?
Stock trade Insurance Accounting / Tax
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E-Service
• On-line Banking
• On-line Publishing
• On-line Advertising
• Changing Face of Service
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On-Line Publishing
Critical Success Factors
Compelling content
– Unique, timely info
– Programming
– Packaging
– Services
Challenges
– Charge customer
– Advertising revenue
– Intellectual property protection
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Drivers of on-line publishing
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Digital Copyright Protection
Control Web Server Access
Control Document Access
Control Use of the Work
Electronic Contracts
Copyright Infringement
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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
I-Mode ContentsE-mail with a cartoon
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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
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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 non-
subscribers $60/yr.
• Dot-com quest for money is to charge for content, but
how to change customer’s “mind-set”?
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E-Service
• On-line Banking
• On-line Publishing
• On-line Advertising
• Changing Face of Service
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Why On-line Advertising?
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Traditional Advertising
• Seller decides on message
• Broadcast
• Seller to buyer
• Static
• Mostly one way
Web Advertising
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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
Superstitial Ad Variable size, rich media ad
Buttons, business card size Fixed, non-interfering
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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
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Conversion / Attrition/
Abandonment / Retention
Unique Users / Reach
CPM
Impressions / Hits / Visits / Page Views
Stickiness / Recency
On-line Advertising
Effectiveness Measurement
Clickthrough / Acquisition Rate
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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)
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E-Service
• On-line Banking
• On-line Publishing
• On-line Advertising
• Changing Face of Service
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The Service Process Matrix
Service Shop Professional Service
Service Factory Mass Service
Low Labor Intensity High
High
Interaction & Customization
Low
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Attractor’s Grid
Service Center The Club
Utility Mass Entertainment
Low Interaction High
High
Customization
Low
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24Strategies for Attractors
Sustainable Attractiveness
Ease of Imitation Examples• Easy Corporate brochure• Some efforts Software utilities
Search engine
• Costly SponsorshipRare resources
• Impossible Archive (exclusive features)Brand / corporate image
Stakeholders Broad
Specialized
Customized
Influence Filter Target Refractor Web Site
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Unique Properties
of Services
Heterogeneity: One size does not
fit all
Simultaneity: Errors visible to
customers
Perishability: No inventory
Intangibility: No physical
product
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• Provide evidence (email confirmation)
• Tangibilize the intangible (quality content, update)
• Sampling in the cyberspace (digital products)
• Multiplying memories (customer testimonials)
• Customization (personal information)
• Customer as a part-time employee (ordering, tracking)
• Innovation through customer participation (new product)
• Service industrialization (more info, search capability)
• Reducing customer errors (alert customer)
Managing
Intangibility
Managing
Simultaneity
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• Service standardization on the web (consistency)
• Electronic eavesdropping (listen to customers!)
• Service quality (on-line feedback)
• Managing supply (integrated channels)
• Directing demand (airline example)
Managing
Heterogeneity
Managing
Perishability
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Key Points
• Service migration to on-line media is real!
• Revenue models are barriers
• Different velocities in different services