1 E-Service On-line Banking On-line Publishing On-line Advertising Changing Face of Service.
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Transcript of 1 E-Service On-line Banking On-line Publishing On-line Advertising Changing Face of Service.
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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 - - - -
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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
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