Why Does Your Customer Buy from You? The Value Proposition Design
JOINT BUY VALUE PROPOSITION TEST (BASED ON CUSTOMER INTERVIEW)
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Transcript of JOINT BUY VALUE PROPOSITION TEST (BASED ON CUSTOMER INTERVIEW)
JOINT BUY
VALUE PROPOSITION TEST
(BASED ON CUSTOMER INTERVIEW)
SURVEY METHOD
Buyer Survey
SellerSurvey
FakeDeal
4 F2F Interviews
17 online surveys 8 online surveys
SteveFeiberg
1 Email Interview
30 Requests for price quotation
Age group 20~30s
Amazon/EbaySmall-size
Sellers
Amazon/EbayElectronics
Sellers
VALUE PROPOSITION
VP Hypothesis for Buyer Side VP Hypothesis for Seller Side
1. Discount on products 1. Selling products in bulk
2. Power to choose product for group deal *NEW*
2. Low transaction fees
3. Buyer community feedback on products and sellers *NEW*
3. Marketing for their brand name *NEW*
New Hypotheses from F2F Customer Interview and Mentoring
1) In F2F interviews, buyers said that Groupon’s offers were too limited in terms of product selection and that there is no buyer community.
2) In meeting with our mentor, George, we realized that sellers can also gain valuable marketing when selling products to large groups of buyers.
VALUE FOR BUYERS #1DISCOUNT ON PRODUCTS
Buyer Survey
• 75% people are attracted by cheaper price
• 60% people are willing to form a group
• 80% people shared discounts with other people
Fake E-Mail
• 5~10% discount offer in size of
30,50,100 in digital camera, laptop
• 8% transaction fee in that category in Amazon
Conclusion
1) Buyers are definitely interested in getting a cheaper price on products. Most buyers are willing to form groups to get a discount and will even share information about a discount to other people.
2) But considering the fake-email responses, the discount rates are not as big as we expected. That might be due to the fact that most of the sellers surveyed were electronics sellers or the fact that the quantities that we proposed were not big enough to get more discount.
Somewhat
confirmed
VALUE FOR BUYERS #2POWER TO CHOOSE PRODUCT FOR GROUP DEAL Buyer Survey
• 57% said they want to choose which products are group discounted and 40% said kind of
• 55% said that product selection attracts them to an e-commerce site
Conclusion
The majority of people prefer to choose which product they want to buy for a group deal. Most people regard product selection as a major reason for using an e-commerce site.
Confirmed
VALUE FOR BUYERS #3BUYER COMMUNITY
Buyer Survey
• 25% said large buyer community attracts them to an e-commerce site
Conclusion
Some buyers value having a large buyer community on an e-commerce site. It is possible that the other buyers do not realize the importance of buyer product reviews on sites like Amazon.com The co-creation of value on Amazon.com was cited in the business model book as one critical factor in Amazon’s success.
Not
Confirmed
VALUE FOR SELLERS #1SELLING PRODUCTS IN BULK
Seller Survey
• More than 17 out of 30 sellers answered that they are willing to sell in bulk
• Only 33% are willing to offer discounts proportional to group size.
Conclusion
3 Sellers are willing to offer group discounts. But some sellers are not willing to offer significant discounts. This is probably because the sellers surveyed are mostly small sellers.
Somewhat
confirmed
VALUE FOR SELLERS #2LOWER TRANSACTION FEES
Seller Survey
• 56% said they pay 10-20% transaction fees, 22% said they pay 5-10% fees
• 78% said transaction fees they pay are too much
• Amazon transaction fees are 15% for music, books, software, videos, wireless phones, office products, watches but only 8% for electronics
Conclusion
1) Most sellers agree that their transaction fees are too high. But the transaction fees for selling electronic products on Amazon is 8% which is lower than we expected.
2) However, the transaction fees are still 15% for many other product categories on Amazon. Perhaps we should target sellers of other categories other than electronics.
Confirmed
VALUE FOR SELLERS #3MARKETING FOR THEIR BRAND NAME
Seller Survey
• Most of sellers on Amazon have their own website
• 44% market their items by using Amazon
Conclusion
1) Some sellers use the e-commerce site where they sell their products as their marketing channel. This means that when sellers use our website, that can already be a significant source of marketing for their business.
Confirmed
SUMMARYVP Hypothesis for Buyer Side Result
1. Discount on products Somewhat confirmed.1
2. Power to choose product for group deal *NEW*
Confirmed.
3. Buyer community feedback on products and sellers *NEW*
Not confirmed.2
1 Need to consider changing category of products to offer and larger buying groups.
2 Need to ask more detailed questions about this to investigate further and carefully design our customer community feature.
VP Hypothesis for Seller Side Result
1. Selling products in bulk Somewhat confirmed.3
2. Low transaction fees Confirmed.
3. Marketing for their brand name *NEW*
Confirmed.
3 Need to ask larger sellers more questions about their cost structure.