Field research Evolution and revolution of Web sites. Richard T. Watson copyright 2003

Transcription

1 Field research Evolution and revolution of Web sites Richard T. Watson copyright 2003

2 Service systems High Firm performance variation Low Tracking Reporting performance deviations Transaction processing Reliable, consisent execution Knowledge management Sharing employee expertise Expert system Matching needs to services Low Customer uncertainty 2 High

3 Genesis High Service shop Professional service Interaction and customization Low Low Service factory Labor intensity Mass service High 3

4 Genesis Customer satisfaction with airlines, banks stores, hotels, personal computers and phone service has decreased eight percent since 1994 The number of customer complaints has increased to 3 million from 1.3 million in

5 The new model High Service center The club Customization Low Low Utility Interaction 5 Mass entertainment High

6 Framing the study The Web site is a bi-directional information transfer platform A platform for service delivery Net-based customer service system A network-based computerized information system that delivers service to a customer either directly (e.g., via a browser, PDA, or cell phone) or indirectly (e.g., via a service representative or agent accessing the system) 6

7 Framing the study Evaluating Web site functionality to maximize ROI How is interaction value created? 7

8 Three phases Study three Web sites to customer service leaders to build a taxonomy of customer needs that can be met online Refine and validate taxonomy with 30 customer service leaders in 10 industries Semi-structured in-depth interviews in selected firms 8

9 Sites MONY Bank of Montreal Hotel chain Car rental chain UPS Staples Digitos Sun Canada 9

10 Conceptual foundations Customer value An overall assessment of the utility of a product based on perceptions of what is received and what is given The Internet creates value as a customer service channel 10

11 Interaction value NCSS Interaction Value = NCSS Usefulness + Experience Quality Cost of NCSS Use 11

12 Interaction value Value varies by customer Skills Needs The greater the net value the greater the use Revisit Repurchase 12

13 Firm s goal ROI = NCSS interaction value NCSS investment * over all customers 13

14 Taxonomy Supports structured investigation Guide Web site interaction value creation Two researchers examined functions on each page of three Web sites for three industries 291 functions identified Classified according to customer need met 14

15 Taxonomy Another researcher analyzed three additional Web sites from same industries One of the original coders also independently analyzed these sites Inter-rater reliability by customer problem in the range of

16 Taxonomy General Information Knowledge of company Knowledge of service Company contact knowledge Specific Information Service specific knowledge Firm performance variation Consultation and Advice Customer knowledge uncertainty Need for personalized interaction Order-Taking Initiate service with company Transacting Billing and Payment Transacting Hospitality Information convenience Site navigation Customer confidence Caretaking and Safekeeping Record Keeping Handling exceptions Need for personalized interaction Procedural efficiency increase 16

17 Qualitative data analysis Transcribed interviews were analyzed Within-case Cross-case 17

18 Evolution model Based on stages of growth models Movement from one stage to another is stable and predictable As firms learn and customers adjust their needs Web site funcationalities change 18

19 Maximize ROI goal You need to create a combined cost takeout and revenue-generating strategy for Web development. The Web site is the least expensive way to get reservations from a customer. [There is] tremendous opportunity to develop a new channel that is much more cost effective than any other channel we have today. 19

20 Competitive rationality & dominant design Providing transaction and account information quickly turned from [being] a competitive edge to an absolute business killer if you do not provide it. And sure enough, everyone else came along Our most popular feature, the screen that provides all available car types, has since been copied by a couple competitors 20

21 Changing customer expectations Customer problems have gotten more sophisticated. They used to be coming to us for information only, now they are demanding advice to help with configurations. Customers now expect you to have a Web site [through which] they are able to connect to a live person. 21

22 Stages of growth The first wave is information-based, static information. The second wave brings transactions to the Web this is Web enablement where you empower customers to do what they do today over the Web. The third phase is by far the most powerful the Web site is used as a flexible platform to totally change the way you operate. 22

23 Evolution and revolution High Evolution Revolution Crisis of personalization Growth through relationship Tailored services NCSS interaction value Crisis of dilution Crisis of convergence Growth through focus Growth through differentiation Supplementary services Basic services Crisis of value Growth through value creation Imitation Low Growth through experimentation Garbage can Young Age of Web site 23 Mature

24 Growth through experimentation We were the same as any other enterprise where it started with brochureware. Content ranged from the chairman's bio to product descriptions, annual reports, and shareholder relationship information. I think that the initial focus of the site was more document publishing to allow our guests the ability to see information about our programs and our properties. [ ] The initial focus was similar to other companies where we were just basically publishing documents that we had in the form of glossy brochures. [Employees were] quite happy to take what they had in their filing cabinets and publish it [on the Web] 24

25 Crisis of value A steering committee reviews development proposals. We look at how much it is going to cost us, what s the capability we will be able to build, how long it will take, what is the payback. If we do 60% of roughly 20,000 calls a month over the Web, think of the savings - people, telephone systems, and technology. When you take 60% of that away, it s a huge savings. 25

26 Growth through value creation On-line transactions are common for peripheral items such as cables, monitors, and software; more complex transactions are generally not handled over the Internet. 26

27 Crisis of dilution [This functionality] is not something you do because somebody else is doing it this has helped us focus on the important priorities. Our customers are happy with the tools we offer but they want more tools, mortgage calculators, retirement planning tools tools to help them manage their money. 27

28 Growth through focus The majority of things customers are doing are every day transactions such as transfers and bill payments. The majority of business [that] customers do with us every day is check their balance because they know they have a lot of payments going back and forth and they want to see how they are doing. The number one functionality is tracking. Our company gets about 21 million hits a day of which 3.5 million are tracking. 28

29 Crisis of convergence We need to make sure we provide a broad portfolio of Web services to satisfy varying customer needs. [We need to] segment our customers in order to provide them with differentiated service [in an effort to] generate revenue and control cost. The next step is to proactively notify customers when there is an exception. So when a package isn t going to be delivered at a specific time, we need to better inform them as opposed to expecting them to identify the exception through our tracking feature. 29

30 Growth through differentiation An emerging system will allow us to reach our customers in a more personalized fashion;. that is not happening today to any extent, but it will allow us to develop a much stronger and closer relationship to our customers. 30

31 Crisis of personalization With personalization leaders out there like Amazon.com, customers are now expecting us to know what kind of services they want and to customize their Web experience based on their own individual needs. 31

32 Growth through relationships I think this can go too far. We capture so much data about each customer - should we place it all on a screen? I mean, where do you stop? 32

33 Conclusion Multiple perspectives Web sites and personal interviews Multiple informants within organizations Multiple coders Multiple researchers Multiple literatures 33

34 Conclusion Outcome is a theory of how Web sites evolve over time Can be used to predict the stages a Web site will progress through as a firm develops its site 34