Service Marketing (e-commerce)- Group 7.docx

Strategies used by the E-commerce Sector

Submitted by: Saaniya Nihalani – 329 Anmol Motwani- 326 Pranali Dhumal- 310 Megha Bang- 107 Rupen Chawla – 308 Aditi Sawant - 336 Shivani Joshi – 125

Branding Strategies Branding strategies are a long term plan that help identify the kind of image you want to create for your customers. E-commerce as a service follows a few branding strategies to ensure they stand out from their competitors. The following are used by many players of this industry: 1. Brand Elements- One of the most common strategy used is the focus on brand elements, which are, name, logo, symbol, etc. It is crucial to have brand elements that are easy to remember, understand and are catchy. It should reflect the objective of your service. Example: Amazon. In their logo there is an arrow from A to Z, which shows they sell everything from A to Z. Big Basket- you can fit all your requirements in one big basket when you shop from this store. 2. Brand Positioning- Every brand positions itself in a unique way so as to create a niche for itself. All the players sell the same things, but what makes them different needs to be communicated to the audience. Example: Low pricing- Walmart, Affordable furniture- IKEA, One-stop shop for all the grocery needs- Nature’s Basket, Availability of foreign productsShopper’s Stop. 3. Customisation, also known as Personalisation – All the players of this service define their customers well and focus on their needs. They need to speak to the market in a way that resonates with them. Example: Amazon provides recommendations based on your past purchase. They are ensuring to add a personal touch to your experience by curating personalised content for you. They segment their markets well so as to understand their needs which will help them serve their customers better. 4. Communicate through content – They say, Content is king and that is the best way to attract the attention of your customers. It creates an experience for them. Example: Nykaa has beauty blogs, expert advices on their websites. They are basically trying to help the people who are new make-up users, by creating related content for them. Another exampleNature’s Basket has recipe videos and blogs which try to push out the products they sell by linking them to new recipes that customers can try out with their products.

5. Storytelling- It is important to tell the story of your brand as customers want to get to know you and your journey. It should be said in a way that builds trust with the prospective customers and gives them a glimpse of what your service is and how it has evolved over the years. It is a good strategy to build an emotional connection with the audience. For example: International cosmetics brands like Huda Beauty, Kylie Cosmetics took to social media to say the story of their brand and how they started this journey. They would be interactive and would update their consumers about the latest and upcoming products. This way, they managed to create engagement with the audience.

6. Better serve your customersIt is extremely important to consider who the business is built for and keeping in consideration the wants and the needs of the customer. This will dictate the actions of the company and set a path of success with the target audience. Too often, many E commerce brands forget their audiences and focus on the service only, potentially missing out on valuable information that will increase sales. This can be remedied The company needs time to reflect on the past purchases of the customer for trends and reflect on the experiences that the customer has with the brand. The company needs to figure the following aspects to better the experience of the customer:    

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Best customers Customers at risk Viewed by didn’t purchase (both the customer who viewed and the items they didn’t purchase) Repeat purchase rate by 30, 60, 90 and 180 days (i.e. 11% of your new customers from December purchased again in 60 days. 3.39% of your new customers from January 2017 purchased again in 30 days, and so on) Best full-price customers Low AOV customers Customer Lifetime Value by 30, 90 and 180 days Customer lifetime value by product purchase by day 1, 30, 90 and 180 Best products for repeat purchase

Example: Amazon using analytics to better assist the customers.

7. Share Your StoryThere are numerous businesses online. Why would a customer choose your brand? This is a serious question and every single new customers on an ecommerce site asks oneself. The customers want to know the brand better just like the brand wants to know its consumers. So let the customers know:  Call out why you started the business  Who you are  What you care about  What you stand for  Why you stand for it  Anything else that matters The answers should all feed into your online branding strategy and help you position your business as different. Example Kylie Jenner expressed why and how she came up with Kylie cosmetics and what inspired her to build an international brand that has made her the youngest billionaire in the world. 8. Champion ChangeWhat does your company stand for? Every brand is built around a certain set of ideals. Convey these to the world. Customers should understand your brand promise – and why it matters. Build a following of faithful fans dedicated your cause. People will join in the fight when they find a vision which matches their own and will associate your company with the efforts of hope. Be sure to champion this change not just on your About Us page, but absolutely everywhere. This is part of your brand. Example Paytm took advantage of Demonetisation and aggressively marketed itself which helped Paytm increase its customer base.

9. Extreme ExpectationsNever over-promise on your company. People absolutely hate disappointment. You do not want your ecommerce branding to be associated with false promises. Creating an untenable situation where you promise more than you can always deliver will alienate your audience and destroy the trust you worked so ardently to attain. This is most noticeable in return and shipping policies. Here, be honest and forthright about your capabilities. You might not be able to do Amazon-like speed, but honesty will take you much further than a negative review. Remember, your return and shipping policies don’t need to be fancy. They just need to be clear and honest. 10. Define your market, and focus exclusively on them This is possibly the most powerful of all pieces of branding. By tailoring your solution, messaging and marketing to your customer, you instantly eliminate the hassle and heartache of pleasing all. This means, again, that you need to define your market and then speak to that market in a way that resonates with them. Develop your brand persona and understand who they are — and are not. Not everyone is your target market, and not everyone needs to like your messaging. It is important only that it resonates with your target audience. Example: Nykaa targets women aggressively across all social medias. 11. Reflect, refine and get adviceWork to refine your ideal customer and place yourself in their shoes. What challenges do you, the customer, face? Use that questions to figure out how you can build trust and truly add value to their lives. With a narrow view of your target market, this becomes infinitely easier and more successful. In an indirect way, refining your brand can be the single most impactful action you can take to improve your conversion rate. Example: Nykaa introduced Shade cards so as to help their customers select the cosmetics better and reduce the returns and increase the conversion rate.

E-Service Quality In recent years, there has been a growing trend for aspects of services to be delivered through non-traditional mechanisms, without any human interaction (Long and Mellon, 2004). A shift towards the semi-automation of various aspects of service provision has been facilitated through the rapid advances in information technologies, especially the growth of on-line environments. The Internet is increasingly seen as an alternative means of processing business transactions, and creating self-service opportunities. The introduction of selfservice ticket purchases has revolutionised the passengers’ experiences of service delivery in the airline industry. Low cost airlines, e.g. Easy Jet and Ryan Air conducted the majority of their ticket sales on-line. As technology has led to significant changes in the way people are doing businesses, and the methods by which business processes are transacted, e-service quality has become an increasingly important and rich area of research. Conceptualisation of E-Service Offering In a physical business setting, it is arguably easier to identify and to differentiate the type of services received by customers than in a virtual environment where the types of services encounters are less visible. Furthermore, the variances in the types of service add another layer of complexity. For example, an on-line transaction to buy a ticket (e.g. train, airline, bus, cinema etc.,) is clearly dealing with a means to access services consumption. Whereas, purchasing physical goods on-line e.g. books, clothes, computers etc, via the Internet is a different form of consumption which is less clearly defined in service offer. Therefore, the spectrum of service offer which span the product / service continuum is as relevant on-line as it is offline. Grönroos et al., (2000) assert that there are similarities between the service characteristics of on-line offerings and those found in traditional physical service business environments. The consumption of services is called ‘process consumption’, and Grönroos (1998) contends that, in general, the main characteristic of services is their process nature, which is equally applicable in on-line and offline contexts. Furthermore, Grönroos (1998) suggests that, in order to understand the variation in types of service quality experience by deconstructed the service experience should be: service as processes and the actual elements of the service experience (i.e. ‘outcome consumption’). Consequently, the perceived quality and value of a service are determined by the existence of the service as well as the way the service process itself is perceived by customers (Grönroos et al, 2000).

Thus, Grönroos (2001) identifies the whole e-service quality experience by the customers as ‘process consumption’ and the way the e-service processes is perceived by customers becomes part of the service (i.e. the e-service as a processes and the e-service offered is an interactive processes). Therefore, the consumption of physical products resultant from the e-commerce activities can be described as ‘outcome consumption’. Definition of E-Service Quality Various definitions of e-service quality have been presented in the existing literature. On the one hand, Zeithaml (2002) define e-service quality as ‘the extent to which a web site facilitates efficient and effective shopping, purchasing, and delivery of product or services’. On the other hand, Santos (2003) defined e-commerce service quality as ‘the consumers’ overall evaluation and judgement of the excellence and quality of e-services offerings in the virtual marketplace’. In the context of this study, both definitions are relevant. The earlier definition by Zeithaml, (2002) is appropriate in addressing the whole issue of the service quality provided by an organisation. The later definition is applicable when addressing the customer perception of e-service quality offered by an organisation, which will be addressed later in this study as supplementary findings. An emergent issue in the area of e-service quality research is that many studies have developed measures based on customers’ experience of the physical world, rather than ones that have been explicitly tailored to the virtual world of ecommerce. Thus, the majority of the definitions of service quality also typically have a strong customer orientation, and are biased to traditional service environments, rather than the increasingly important virtual environment. However, it is important that the managers’ perceptions of their own service quality management practices, is potentially as important as the views of their customers. Moreover, whilst the physical world may be an important point of departure for the study of e-service quality, as the Internet is a very different type of environment, it is important that studies are tailored accordingly. The following subsections 3.4 and 3.5 present the literature which offers these two perspectives of the e-service quality evaluations, i.e. customers’ perspective and organisational / management perspective respectively. For providing best service Quality, ecommerce service provider should have following capabilities:  multichannel strategy  live chat

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Proactive Customer Service automated online order fulfilment brand selling via storytelling engagement with mobile customers 24-hour phone support Use customer service software Measure customer satisfaction Provide billing history

Service Quality Dimensions After extensive research, Zeithaml, Parasuraman and Berry found five dimensions customers use when evaluating service quality. They named their survey instrument SERVQUAL. In other words, if providers get these dimensions right, customers will hand over the keys to their loyalty. Because they’ll have received service excellence. According to what’s important to them. The five SERVQUAL dimensions are: 

TANGIBLES-Appearance of physical facilities, equipment, personnel, and communication materials

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RELIABILITY-Ability to perform the promised service dependably and accurately

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RESPONSIVENESS-Willingness to help customers and provide prompt service

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ASSURANCE-Knowledge and courtesy of employees and their ability to convey trust and confidence

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EMPATHY-Caring, individualized attention the firm provides its customers

As per the Ecommerce industry if we take into consideration the dimensions of Service quality, following will be the mapping.

1. Tangibles: When it comes to Ecommerce website, the way the website page are developed of Myntra, Flipkart, Amazon, etc. is quite appealing and easy for a layman to understand and navigate across the website. It is well structured and the different categories like men’s ware, women’s ware, Kids wear, home appliances, etc. are neatly differentiated and arranged. 2. Reliability: It talks about how these ecommerce websites who claim to provide services are fulfilling their promises and providing proper technical support as well. So, the 24 by 7 customer support provided by most of these ecommerce websites, the Shipping duration promised by Amazon prime i.e. delivery on the same day or in half day. 3. Responsiveness: Customers rate the service provider based on whether they are willing to solve customer’s grievances or not and also based on their quick responses to customer’s questions and concerns. If we see in the current time, ecommerce websites like Amazon, Nykaa, etc. have a good pro- Active customer support system wherein they give quick responses if any customer have any grievance or any kind of feedback. 4. Assurance: It’s very important that people should be assured and satisfied after making digital transactions. Most of them don’t do digital transactions because they have doubt on the security of their passwords and data. And hence, it becomes very crucial for e-commerce website to provide 100% assurance that by doing transactions on their website they won’t face any data theft. So, websites like Flipkart, Myntra and others provide secure payment gateways for smooth and theft free transfers. Also, they have

Return policies which give confidence to customers about the website and the quality of products that they are selling. 5. Empathy: To make a sale it is very important to understand one’s customer and then pitch accordingly. So by giving appropriate offers and discounts and also retargeting those using behavioral targeting helps to make a sale. Also, by using good CRM software’s these big giants try to learn about their customers and their requirements. Also, story-telling has helped brands like Nykaa to make a mark among their relevant target group.

Tangibles

• Well designed & structured website • Easy navigation • Visually appealing website

Reliability

• 24 by 7 customer service • Shipping duration

Responsibility

• Pro Active customer Support • Timely Refunds

Assurance

• 100% original quality • Return policy • Secure Payment gateways

Empathy

• Understanding preference and then retargeting • Good customer service software • Offers and discounts

Gap Model of Service Quality The Gap Model is a framework which can help us to understand customer satisfaction. The model was first proposed by A. Parasuraman, Valarie Zeithaml, and Leonard L. Berry in 1985. The gap shows customer satisfaction largely as a function of perception. If customer perceives that the service meets their expectations then they will be satisfied and vice- versa.

1. Knowledge gap: The knowledge gap is the difference between the customer’s expectations of the service and the company’s provision of that service. In E-commerce Industry: The knowledge gap is due to lack of personal touch and comprehension by customers. Too many options confuse the customer. Solution:

• AI implementation (using data insights) • Inclusion of more frontline staff

2. Standards gap: The policy gap is the difference between management’s understanding of the customer needs and the translation of that understanding into service delivery policies and standards. In E-commerce Industry: The wrong service quality standards are due to Inherent issues in the medium that causes the delay in delivery of services and after sales service. Solution: • Setting base performance standards • Monitoring them at each level of service 3. Delivery gap: The delivery gap is the difference between service delivery policies and standards and the actual delivery of the service. In E-commerce Industry: This service performance gap no return policy and delivery of unauthentic material Solution: • Call center training of staff at the lowest level for timely and efficient redressal of issues • Reward system for prompt and viable solution delivery to customers 4. Internal communications gap: The communication gap is the gap between what gets promised to customers through advertising and what gets delivered. In E-commerce Industry: The situation of communication gap is due to presence of many touchpoints and lack of accountability.

Solution: • Timely updates from frontline staff • Top management should be clear and realistic to customers 5. Perceptions gap: The customer gap is the difference between customer expectations and customer perceptions. This gap occurs because customers do not always understand what the service has done for them or they misinterpret the service quality. In E-commerce Industry: The difference between customer perception and expectation occurs due to high expectation, due to competition from high number of customers, and low delivery. Solution: • Avoiding unrealistic communication • Providing proof for each service level 6. Interpretation gap: Pretest communications to make sure message is clear and unambiguous. In E-commerce Industry: The situation of interpretation gap is due to presence of many touchpoints and non-acceptability of certain service or product categories by consumers. Solution: • Testing customer response and perception before new or dynamic service is introduced 7. Service gap: Close gaps 1 to 6 to meet customer expectations consistently

CRM Strategies used by E-commerce websites: Running a business means finding new customers and convincing them to buy from you repeatedly. But creating a loyal customer base is not a simple task. The following techniques will make it easier. eCommerce is a crowded part of online business with huge competition, so creating ads can be an expensive proposition that doesn’t guarantee you’ll make many new customers. Acquiring new customers is important, but you also need to retain your current ones. They are familiar with your online store, products, and services so it’s easier for them to stay with your brand. How do you keep customers? The first thing you need to do is to attract visitors to your website and convert them into customers. There is a process that includes nurturing, engaging and retaining customers to make your business grow. As an ecommerce business owner, you should definitely analyze how many of your visitors become actual customers – it’s all about working on your marketing funnel and moving users from the awareness stage into brand advocacy. The following strategies are used to maintain a good relationship with the customers and increase retention rate: 1. Provide guest checkout Providing a guest checkout is better for your conversion rate, but how can you track customer’s account if they don’t have one? The answer is to give them the option to create an account after their first purchase. To convince them, connect the request e.g. with a discount code. The checkout process also matters. The simpler it is for customers, the more chances they’ll quickly come back to buy something on your website. When customers buy items for the first time, they need to fill in the required form fields such as email address or credit card details. But you can offer them a oneclick payment for every future purchase (e.g. Amazon allows that) – simply use the payment gateway with “remember me” option. You can also optimize the “thank you” page that customers see after purchasing an item on your website. On the page, you can place an incentive to sign up for a newsletter or to connect with your brand on social media. 2. Offer loyalty programs

The magic formula is to make your customers feel special and it works in every kind of business. Consider implementing a loyalty program, which is used by many brands for re-engaging the best customers. The scenario is always the same: customers get a reward in return for activity, so it motivates them to buy more on your website. A report shows that 66% of consumers change the amount they spend to maximize points. The more they spend, the more points they earn, it’s as easy as that. There is a wide range of online automated apps that make it easy for you to set up a loyalty program. But you can do more. Surprise and delight your best customers by sending them a small gift, offer an outstanding package, or prepare a special and personalized offer. Everyone loves surprises and receiving something for free. You can use this tactic to show your customers how much you care about them. Impressed customers will share it on their social media profiles so your small gesture can make a huge impact.

3. Try cross sales Keep in mind that an existing customer will often wait for sales before making their next purchase at your online store. Instead of always offering discounted products, you can use cross-sells. Cross-selling involves inviting customers to buy related items. For example, when someone buys pants, you can show them an offer with associated items such as a belt, shirt, or jacket. One of the most effective ways to accomplish this is by giving your customers a bonus (e.g. a discount code) that their friends can use. After the friend uses the discount, the existing customer will also get the bonus. 4. Send emails This is a smart method to encourage customers to buy from you again. Reaching out by email grows the chances of turning one-time sales into repeated sales. Email is still one of the most converting channels, especially for ecommerce. Customers should be made aware of new arrivals, sale items, and you can also send them coupon codes which are only available to newsletter subscribers. When you offer a promotion to current customers, it shows them that they are special to you. It’s a simple way to increase loyalty and your credibility. If they see your content regularly, customers might be reminded of items they need that can be found at your online store. Keep customers informed about the status of their order. User experience is also very important. Send customers an email or text message every time an order’s status changes (e.g. when the payment is processed, a product is sent etc.). Moreover, track customer’s behavior and make suggestions (e.g. a discount for

the next purchase). For example, if your customer bought an oven, they might return for a cookie sheet, cookbooks or other related products. Remember to send a targeted follow-up email after a customer’s first purchase. The best time to re-engage them is when they are just getting to know your brand. Keep customers interested in your company and show that you care about them. Don’t forget about visitors that abandon their shopping carts. Send them an email to recover potential lost sales. Don’t wait too long either. The right time to send that follow-up is within an hour of visitors abandoning the cart. 5. Use content marketing and social media Customer retention should also be connected with content marketing. When you create good quality content that educates your audience, you increase customer loyalty. Create buyer personas to provide personalized content and make your customers feel like you speak directly to each of them. Don’t try to treat all customers the same, they need to feel special. Social media is another channel you should use to build relationships with your customers. People are more likely to follow your brand on social channels for a reason, so it’s up to you to decide how you’ll use it to grow your loyal customer base. Present your products or services, notify followers about promotions, special offers or discounts. Don’t be a pushy salesperson. You want to focus on building the relationship, not just about selling. Monitor customer’s activity on social media and when you see negative comments try to resolve customer’s problems. 6. Track customer’s behavior You can analyze customer’s buying habits to see how often they buy goods at your online store. If they make a purchase once a month, send them a promotional email every two weeks to make them willing to buy more. You can also check customer’s activity, such as favorites, most frequented pages, etc. to better personalize products. On their next visit, they could see what they probably wanted to buy. Offering a personal experience for each shopper encourages them to stay on your website longer and come back in the future. It’s also a good idea to find out what items are the most popular on your website and what page has the highest clicks. You can make sure these items are more visible on your website. 7. Provide outstanding customer support

Valuable customer support with fast responses is essential. It’s a good idea to install a live chat on your website to answer customer’s questions in real-time. You also want to make it possible to contact you by email or phone. There are many people who would rather write you an email than give you a call. Offering multiple ways to contact you makes it easier for customers to find the answers they seek. A happy and satisfied customer is more likely to return. Customers often end their relationship with a brand due to poor customer service. So it’s important to provide the best customer service possible, especially when they don’t have the greatest experience with your products. 8. Consider a subscription business model The subscription business model is another way to maintain customers. Online buyers are lazy consumers and they often look for the most convenient and quickest way to buy products. If you sell products that people could buy regularly (e.g. cosmetics, coffee, or flowers), think about offering subscriptions. Subscriptions help you retain customers and make it easy to predict your revenue. It’s a win-win scenario for both you and your customers. It’s easy to set up recurring payments on your website, especially when you choose the proper payment gateway for your ecommerce website. 9. Show you care Listen to your customers, answer their needs, and exceed their expectations. Stand out from the competition by sending handwritten thank you notes, offering same-day delivery or giving away samples of your products. It will cost you money (as well as time and effort), but it is the best way to increase your conversion and drive sales. To keep your customers, give them the best shopping experience. Do your best to ship the product on time and without any damage. If it’s possible, consider free shipping – it’s a customer magnet. You are probably wondering if offering discounts, special offers and more to keep a customer is profitable. 70% of companies claim it’s cheaper to retain a customer than acquire one. The more times a customer purchases from you, the stronger your relationship becomes. This also includes the quality of your products and services. If the first purchasing process was positive for customers and they like your product’s quality, they are more willing to buy from you again. Maintaining happy and loyal customers increases the customer lifetime value, which means more for your business than separate purchases made by one-time customers. The number of customers is important, but focusing on customer retention can bring you better results.

BENEFITS OF CRM Strategies for Service Marketing 1. Behavioural analysis and associated marketing Understanding the total purchasing patterns and associated behaviours of your customers is critically important in helping to develop new marketing models and sales propositions to deliver to them. For example, knowing that one person is purchasing both your fashion and sports footwear might suggest that they would be receptive to targeted marketing relating to other types of sports equipment. 2. Decision support Making decisions related to the total credit limit of customers purchasing from you is not always easy. Credit scoring can be a powerful tool to help but it may be less than totally effective in situations where you do not have a single consolidated customer view. For example, failing to identify a new applicant for credit as being someone you have previously had difficulties recovering debt from, simply because they had changed address, might restrict your ability to make an informed decision. The integrated single customer view is often a fundamental prerequisite of automated decision support systems of a type frequently associated with internet commerce. 3. Customer service integration Contacting a customer or sending them a sales proposition can prove to be extremely embarrassing in situations where you have simply misunderstood the totality of your engagement with them. So, responding incompetently and incompletely to customer enquiries simply because you are not able to see the totality of their transactions with your organisation can be easily avoided. Remember that reputation damage can arise in situations where your sales staff are asking customers to explain to them just how they, the customer, are dealing with your organisation at the present time! 4. Customer relationship identification

Whilst an individual has a legal right to a degree of privacy, nevertheless, it might be exceptionally important to understand that somebody you are dealing with has some form of professional or personal relationship with another of your customers. For example, being able to identify that a customer has two young children resident at the same address might be important both in terms of marketing potential but also to avoid major embarrassment, such as sending inappropriate sales propositions to under-aged children. 5. De-duplication and customer profitability In the days of an ever-higher degree of environmental awareness, no company wishes to be sending out identical information and sales propositions multiple times to the same individual. Not only is this an environmental issue but also one relating to perceptions of professional competence. However, multiple customer entries for the same individual can easily arise due to legacy systems or departmental silos all having their own customer databases. De-duplication and CRM should eliminate this. More importantly, being able to consolidate all your sales and costs by customer, should help immensely with the sometimes thorny subject of customer and customer segment profitability analysis. 6. Data cleansing and customer intelligence benefits Unfortunately, the media regularly covers stories concerning organisations trying to communicate with customers they should have known were longdeceased or continually addressing communications to a married couple that have been long-divorced. This is usually a characteristic of duplicated customer entries on different systems but occasionally also due to updated information in one system not being correctly populated into another. This must be addressed and that should eliminate negative publicity and occasionally customer distress. 7. Legislative compliance Although this should not be read as qualified legal advice, the data protection act (DPA) requires that people storing information about individuals ensure that it is accurate and up-to-date.

A failure to do so may leave you liable to prosecution, particularly in circumstances where you have used incorrect data as the basis for flawed decision-making or related reputational damage. 8. Improved customer retention Acquiring new customers is useful but not if you lose them almost as quickly as you gain them. Understanding your customers in detail and avoiding service errors of the type outlined at various points above, should help you improve your overall customer service experience for them. It also allows you to engage in proactive customer servicing activities that might include things such as birthday greetings and so on. 9. Shareholder, stakeholder, media, auditor and accounting credibility All of the above professional bodies may, in certain circumstances, expect you to be able to deliver an accurate segmented view of your customer base. CRM allows you to do this quickly and efficiently and it will make a much more powerful impact than the traditional non-CRM approach involving people trying to merge spreadsheets extracted from a multiplicity of different sources. 10. New proposition development Of course, maximising your share of wallet percentage with your existing customers is important but equally developing sales propositions to attract new customers is critical. Understanding what is or is not working with your existing customer base may be critical in product / service development activities and CRM should be an important part of the product development and new target marketing lifecycle.