Monthly Archives: April 2015

Business Case

Why do customers participate voluntary?

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Nowadays, firms are willing to involve other people in their product development and product support activities instead of their own employees. It is obvious that companies will have benefit from this work. But why would customers help those businesses? In this article, we will first focus on the virtual customer environment research. Because of upcoming technologies is it possible that customers can help firms by giving their opinion. Customers are interfering with product ideas, product design, product testing and product support activities.

Research shows that when the quantity of product-related content will be high, the customer beliefs that the participation to this virtual customer environment will result in higher learning benefits, social integrative benefits, personal integrative benefits and hedonic benefits. The learning benefit has to do with the understanding and with the knowledge of products. The social integrative benefits are related to the participating customers and potential members. There will be created a relationship between those customers. The personal integrative benefits are defined by the status or reputation. The last element, hedonic benefits, is related to the interaction of the customer. The research also shows that the customer is more willing to participate when he/she finds that there is a stable member identity and that those members are highly active on this community.

Thus, the company must give the impression that the product-related content in this virtual community is very high. Therefore the customer is more willing to participate, because he or she thinks it will be rewarded with intangible benefits. There also must be visible that there are a lot of members and that those members are active users.

This research is applicable on online support forums. But a lot of companies can have advantage of this information. They can apply this on their own business idea, in combination with there website, already existing or make a new website. But also in stores can this be applied. When customers are more willing to participate when there are many more participants, you can easily give them access to the other opinions. Stores can have a real life competition or co-creation development. But they can also do this by filling in their recommendations in the store, for example on a survey. Companies can also ask the opinions of the customers in stores themselves. Imagine a clothing store, when the salesmen can directly ask what the customers likes and dislikes in store, he can send those feedback to the headquarter. But there can also be, for example a display in store, where the votes on several outfits or clothes are visible. This will lead to further co-creation of the customer and the company will have benefit as well as the customer!

Baron, R., Nambisan, S. (2009).Virtual Customer Environments: Testing a Model of Voluntary Participation in Value Co-creation Activities. The Journal of Product Innovation Management

Articles, Mini Cases

Dutch ‘Polderen’ as the Foundation of Co-Creation – Example of the Dutch Energy Agreement for Sustainable Growth

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What about co-creation being a Dutch invention? Already for decades, complicated issues in the Netherlands are being solved in a process in which politics, employers, and labor unions are collaboraitng. This process is in Dutch also known as ‘polderen’. Unfortunately, there is not proper translation for that, but there is a definition available: “‘polderen’ is to seek a compromise (particularly but not necessarily, within a political context) in order to come to an agreement”. Polderen is a typical Dutch concensusmodel. This ‘polder-model’ is deeply embedded in the Dutch society. The fact that this concensus-approach is so typical for the Netherlands, helped the fast integration of co-creation in that country. But what differentiates this ‘polderen 2.0’? Let us discuss this based on a typical Dutch example.

Polderen 2

The Dutch Energy Agreement for Sustainable Growth is a good example of co-creation in which the initiative wasn’t provided by the government, but by society. Recently, 40 organisations from economy, industry, labor unions, politics, and environmental parties signed an agreement about the use of energy in the Netherlands. Until then, there was a lot of dissatisfaction within society about the ongoing energy policy; it was not ambitious enough and was very often subject to change. With the guidance of the Sociaal Economische Raad (Social Economic Counsil; SER) and Nederland Krijgt Nieuwe Energie (New Energy for the Netherlands; NKNE) foundation there were active discussions and negotiations between all different parties.

Critics thought this again was the traditional ‘polderen’. However, there were some clear distinctions this time. First of all, there were many more parties involved in this process, second the initiative was not political, thirdly it was highly transparent, and finally the process was much more complex than previous ‘polder’ issues.

In the beginning of this blogpost I mentioned the term ‘Polderen 2.0’. This term seems to be correct. A ‘polder-model’ means that every stakeholder brings up his own concerns and try to get to the best outcome through intense negotiation. However, in co-creation there is an overall goal, exceeding all individual concerns. The collective group of parties, or the society has a certain concern for its own. ‘Polderen’ means that all parties agree on an outcome with which all indidvidual parties agree based on their own concerns and goals. In a co-creation process, all actors act not only based on their own perspective, concerns and needs, but also in favor of the collective interest.

In many parts of the creation of the Dutch Energy Agreement for Sustainable Growth, there really was co-creation instead of the traditional ‘polderen’. This example shows that co-creation can also exist in society, politics and industry. Co-creation goes far beyond the current digital landscape and is always based on several parties. The Dutch showed that co-creation can also be based on a consensus-based discussion, and can be used to achieve a higher goal. So thanks to the Dutch for creating ‘polderen 2.0’, also known as the foundation of co-creation.

Sources:
http://www.energieakkoord.nl
http://www.nederlandkrijgtnieuweenergie.nl
De Herontdekking van de Polder in De Groene Amsterdammer, 23/10/2013
http://en.bab.la/dictionary/dutch-english/polderen

Articles

Word-of-mouth: oral versus written

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Word-of-mouth has always been important. It has a crucial impact on customer behaviour. If someone recommends a certain product, it is more likely (more than 50%) that in the end this person purchases the product. Currently, it becomes even more interesting because the digital era makes it easier to communicate with each other. Nowadays there are more different channels you can use to spread the word easy and fast. Different channels of communication will influence the potential customer. But is there a difference between oral and written communication? Does the way of communicating affect a certain message? And could this be an opportunity for a company?

For me there is a difference in a way that written communication feels more anonymous. This is why I first thought that this would cause low-content and less interesting messages since people feel less responsible for their own messages. However, if I think a bit further I do think that in written communication someone feels also less social pressure to answer right away, which means that they have more time to think about their message. This could result in more refined, complex and interesting messages. At the same time written communication can feel more permanent (you cannot remove it easily) and the writer can be worried about the receivers’ expectations: e.g. my audience is expecting the world from me, now I have to live up to that by writing something really valuable. This is related to your online reputation.

Berger and Iyengar (2013) were curious and therefore did some research about the difference between oral and written communication and how this affects the content of the message. The results show that if there is more time to construct and refine a message (i.e. asynchrony), people will indeed talk about more interesting products and brands. Also a higher level of self-enhancement will support this effect. When there is enough time to construct and refine a message, people with a higher level of self-enhancement will take the opportunity to use this time to choose interesting products and brands to talk about.

Knowing the fact that asynchrony improves the interestingness of the message, written communication scores higher than oral communication. If someone asks you to tell something about a certain topic, you will feel the pressure to answer within a few seconds. You probably feel less confident about the topic and would tell more straightforward, less interesting and more accessible things. However, if someone asks you to write it down, the first thing that you probably think is: how shall I formulate this? What would be the most appropriate way? etc. There are immediately multiple things to think about before you are actually writing something down. You will give yourself more time to construct the message. This supports the research, which shows that in written communication interesting products and brand are mentioned more often.

But how could companies benefit from these findings? Companies want customers to talk about their interesting products and, as we have seen, written communication is an appropriate way to do so. At the same time there is an upcoming trend of digital communication: the impact of digital word-of-mouth is powerful because of reasons such as speed and its one-to-many nature. This means that companies should respond to this trend by investing in written communication platforms and a strategy for digital word-of-mouth.
People obviously prefer to talk about interesting brands. So in addition to supporting written communication platforms, companies should also give customers a reason to talk, evoke interest and surprise people by engaging, equipping and empowering customers. Like NikeSupport is doing with responding on conversations on websites (engage). These three E’s are important for building up a digital strategy and to make sure that customers are evaluating the brand as a more interesting one. Companies should take these insights into account to spread the positive word of mouth.


References:
Berger, J., & Iyengar, R. (2013). Communication channels and word of mouth: How the medium shapes the message. Journal of consumer research, 40(3), 567-579.

http://www.forbes.com/sites/kimberlywhitler/2014/07/17/why-word-of-mouth-marketing-is-the-most-important-social-media/

http://www.socialemailmarketing.eu/2010/05/wordofmouth-in-the-digital-age-introducing-wordofmouth-equity/

http://www.dotrising.com/2015/01/16/how-important-is-word-of-mouth-in-the-digital-age-infographic/

Mini Cases

From social media business to social business; introducing KLM’s Meet & Seat initiative

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The Dutch aviation giant KLM is well known for their interaction with customers on social media platforms. With swift and often humorous responses they – quite literally- manage to help customers along their journey. However, next to being activing on social media, KLM has been increasingly eager to change into a social business as a whole. The Meet & Seat initiative was the first step in doing so, allowing for collaboration and co-creation with its customers.

KLM’s Meet & Seat allows passengers to choose who they will be sitting next to. Passengers can view other passenger’s Facebook and/or LinkedIn profile details before departure. Meet & Seat can aid in finding interesting people who will be on the same KLM flight. This can be people who work in the same business as you, or people that go to the same event as you at your destination. Although not everything can be extracted from a Facebook or LinkedIn profile, it does empower passengers and gives them the opportunity to make their trip more enjoyable.

Meet & Seat is integrated in the standard booking process. To date, it is only available for those who travel alone, as it would be too complicated to move entire families and account for different interests. Using Meet & Seat involves three steps:

1. First, you will be given the option to link your Facebook or LinkedIn profile. You can select yourself what information you want to make public. In addition, you will be asked what languages you speak to ensure you can indeed communicate with your desired fellow passenger.

2. Next, you will be presented the occupancy map of the plane; here you can see which passengers have linked their social media profile to their booking. You can here check who they are with what purpose they are travelling.

3. You choose your seat. If you happen to find an interesting person it is optional to already establish contact via Facebook or LinkedIn.

klm

Initially, the Meet & Seat initiative raised some eyebrows with regard to privacy concerns. In the current era in which personal information is more valuable than ever, people questioned the motives of KLM for introducing Meet & Seat. To tackle this, KLM has stated on their website that profile details will not be used for other purposes than Meet & Great. In addition, KLM’s default option is that an individual does not take part in the Meet & Seat experience.

What do you think of KLM”s Meet & Seat? Would you be eager to try it, or would your perhaps use it to Seek & Avoid rather than to Meet & Seat? Or, alternatively, could this turn into a new dating platform? I am particularly interested if KLM upholds its promise not to use personal information for purposes other than Meet & Great. Lastly, it is interesting how KLM’s Meet & Seat initiative stacks up against other applications such as WorldMate. WorldMate is an existing mobile application that offers a Meet & Greet-like function together with itinerary assistance as well as hotel recommendations.

Borgman, H. (2013). Is this seat taken? Retrieved from https://2f2230d38a8e616d5a4c-4d06f61946ea322463c1f7bf12b26a1d.ssl.cf3.rackcdn.com/file_versions/29800/original/5fbc63f2dcf667a8155a29a3ab32dc3892332fcdce00b2fe69b988f2051d656f.pdf

https://www.klm.com/travel/gb_en/prepare_for_travel/on_board/your_seat_on_board/meet_and_seat.htm

https://www.worldmate.com/

Articles

How to sell, the things that sell, online?

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One year after Tim Berners-Lee invented the internet in 1990, the American National Science Foundation allowed commercial activity via the web. The first registered webshop, De Pizzahut (a Dutch Pizza deliver company), went online in 1993. Two years later, from 1995, an enormous boom in online stores started (e.g. founding year of Ebay and Amazon). Now, we are more than 20 years later, but still too many webshop-owners do not know how to sell their products successfully online. Retailers fail to put their customer central on this web, are impolite and awkward. In this blog, I will give practical tips to become a great online retailer: enabling you to sell, the things that sell, online!

Shop-owners are impolite and sometimes even offending their customers online. This is mainly due to ignorance. Retailers are often solely educated for selling products is physical stores. Selling products online is an entire different world. However, certain rules can still be applied:  “The customer is king”, be polite towards your visitors, offer help proactively and ensure personal contact to let the customer feel comfortable to buy. In 4 basic practical tips, I will help you to translate these general rules to online practices.

  1. Never say Welcome!
    People visit your website with a certain action in mind, which is most of the time getting information or buying/downloading a product. Since a visitor want to act as quick as possible, you need to make all the space of your front-page as useful ass possible. Main questions you have to answer on your first page: What is this website for? and Why should I visit this website and not any other?amazon
  2. Add a Call to Action button.
    Visitors want solely one thing, and preferably very quick. Therefore, you should identify the main activity on your website (e.g. make an appointment or buy a products). On your front-page, you should add a large button (that stands out) with a link to your main activity. For example, Amazon want visitors to sign in as soon as possible, hence the button.
  3. Write readable pages with the internet-style.
    Traditional writing styles do not work on the internet: they are impersonal, have a wrong structure for the internet and has to long sentences. Visitors want to see the most important information at first. It frustrates people to get through an introduction or a too polite welcome-word. Hence, use short sentences, bullet points (easy to read), clear page-titles, bold highlighted words and hyperlinks (people like to click). As guideline you can use the story-telling style. People remind things better when text is accessible and personal.
  4. Cut the deal with a trustworthy page
    Your entire website should lead to the action-page: a form to sign up, a product to buy or a piece of information. Make sure that this action-page seems trustworthy, since this is the page where you want your customer to e.g. buy your product. Hence, show personal information, clear sentences, customer-reviews, logo’s of your partners and everything else that could make your customer feel comfortable to make the transaction.

The tips I gave in this blog are just about the basics. If you want to know more about how to make your webshop more effective, I recommend you to read the following book: “Don’t make me think by Steve Krug.” Moreover, you could visit http://www.conversion-rate-experts.com for more information. The video below will also give you some more practical tips. If you want to track your progress, please ask your webmaster to install Google Analytics to monitor your improvement!

 

Articles

A different way to help the victims of the Nepal Earthquake

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Crowdsourcing is ‘the act of taking a challenge faced by a firm and, instead of asking internal research and development departments to solve the challenge, the firm broadcasts an open call to individuals with relevant expertise outside the firm to become involved in solving the challenge’(Howe, 2006). The recent Nepal earthquake has left ‘thousands in need of shelter in a country little able to cope’ (The Guardian, 2015). According to the Guardian, the region called Gorkha, was closest to the epicenter. Their source claimed that about fifty percent of the houses and schools in this region have collapsed.

The problem for emergency workers now is how to reach the victims of the earthquake.

‘The reason that it is important, is we don’t know what we don’t know’

– Kevin Bullock (director of product management at DigitalGlobe), to the Denver Post (Denver Post, 2015).

Due to the earthquake, some roads might be blocked. DigitalGlobe, a company that collects satellite data, has provided access to the satellite images (before and after the earthquake), in order to help emergency management and humanitarian workers (DigitalGlobe, 2015). Furthermore, DigitalGlobe has activated ‘Tomnod’. Tomnod is ‘a crowdsourcing platform that allows web-connected volunteers around the globe to help disaster response teams by mapping the damage from the earthquake’ (DigitalGlobe, 2015).

Tomnod has a few projects where you can contribute, for instance floodings in Chile, a missing catamaran crew and now the Nepal earthquake. Users are instructed to find damaged buildings, major destruction or damaged roads. After a short instruction, you can start exploring map tiles. Some of these are unfortunately cloudy, but other tiles clearly show land. Tomnod keeps track of ‘your campaign’, and gives you direct feedback: it shows you how many tiles you explored, how many tags you made and what your consensus score is (Tomnod.com, 2015). Tomnod collects the tags, and uses a special algorithm to identify interesting locations with maximum agreement of all taggers. According to Tomnod, it is true wisdom of the crowd!

You can use Tomnod without an account. However, Tomnod encourages users to create an account: it helps them improve how they determine overall team accuracy. Furthermore it makes it easier for Tomnod to inform you about new campaigns. On Facebook, Tomnod has over 61.000 likes. The amount of people contributing seems to be a lot higher: according to the Guardian (2014), about 2.3 million ordinary internet users used the Tomnod website to help find the missing Malaysian Airlines flight MH370 in 2014. However, the sad truth is that this campaign was not successful, as the plane was never found. The Guardian (2014) also warns that online crowdsourcing campaigns are sometimes unsuccessful, also referring to the thread on Reddit that hunted down the wrong people for the Boston Marathon attacks, resulting in the names of innocent people trending on Twitter.

Whether this Tomnod campaign will be successful, only time will tell. I do not see much harm in participating (as no humans are hunted down, but damage is marked on the maps). When disasters like this happen, many people feel the need to do something, and Tomnod facilitates us in contributing a little bit of time to help. If you want to contribute, please visit http://www.tomnod.com/

References

– Denver Post (2015), ‘DigitalGlobe launches map crowdsourcing to assist Nepal quake relief’, by Laura Keeney, last accessed 28-04-2015, http://www.denverpost.com/business/ci_27999415/digitalglobe-launches-map-crowdsourcing-assist-nepal-quake-relief

– DigitalGlobe (2015), ‘DigitalGlobe opens access to satellite data to support disaster response efforts in Nepal’, last accessed 28-04-2015, http://www.digitalglobeblog.com/2015/04/26/digitalglobe-opens-access-to-satellite-data-to-support-disaster-response-efforts-in-nepal/

– The Guardian (2015), ‘Nepal earthquake: thousands in need of shelter in a country little able to cope’ by Jason Burke, Kathamandu. 26th of April 2015, last accessed 28-04-2015 http://www.theguardian.com/world/2015/apr/26/nepal-earthquake-thousands-demand-shelter-in-country-little-able-to-cope

– The Guardian (2014), ‘Tomnod, the online search party looking for Malaysian Airlines flight MH370’, by Carmen Fishwick, last accessed 28-04-2015, http://www.theguardian.com/world/2014/mar/14/tomnod-online-search-malaysian-airlines-flight-mh370

– Howe, J. (2006) The rise of crowdsourcing. Wired Magazine 14(6). http://www.wired.com/wired/archive/14.06/crowds_pr.html

Tomnod.com (2015), last accessed 28-04-2015

Articles

The Grid: A revolutionizing way of creating websites

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Here is an interesting perspective: the internet itself is one of the largest, if not the largest, collection of consumer-created content. We all use the internet, and the majority of us participate in creating content for it as well, be it simply through updates on social media or actually creating websites or blogpost such as this one. If we follow that logic, then one could argue that the process of creating web content is a service that could be designed to optimally support co-creation. This is exactly the way the Grid looks at the internet as well. This start-up is building a new way to create websites and content, by focusing purely on the simple needs of the content creator.

So what exactly is the Grid? In its simplest form, the Grid allows website owners to only concern themselves with the content they want to put on their website, the Grid will take care of the rest. And for this ‘rest’ part, the Grid has designed an artificial intelligence system which will analyse the content you would like to place, and designs your website optimally according to both the new and already existing content. It for instance looks at colors in a picture you want to post and then changes the colors surrounding that picture on your website to match them. It will adapt to the purpose of your website as well, be it a blog, corporate landing page or a webshop. Basically, as a website owner you do not have to posses technical and design knowledge to be able create content. And this is important, since this allows more people to actually create content. As is also mentioned in the paper by Randall et al. (2005), when customizing goods (or a website in this case), some user might be able to deal with parameter-based interface, where you can adjust every detail but do need to posses some expertise to understand all the details, however not everybody is capable of this. For them, need-based interfaces are better, which might not offer all possibilities but are a lot more user friendly. The Grid is basically a needs-based interface for content creation.

Purpose_overview

The Grid’s A.I. system basically makes recommendations to improve your website, 24/7. However, while in normal recommendation system these recommendations are made as suggestions, the Grid’s A.I. skips this step and executes the recommendation right away. In order to do this, there has to be a certain level of trust between the user and the system. Due to the Grid continuously running A/B tests in order to find the design best suited for the visitors of that specific website, the Grid’s A.I. learns and builds that trust relationship.

Now what the Grid is doing is really interesting, as it’s a completely new way of looking at website creation. However, it also makes me wonder about the next step. Perhaps in time, it might be possible that every website customizes itself to a specific visitor. For instance, if your computer knows you have bad eyes, or like pictures, your websites will be displayed with larger headings or with more focus on images. In a sense, you would create a personalized internet. Food for thought for sure.

For more info on the Grid, check out this website.

Articles

The role of multidimensional social capital in crowdfunding: A comparative study in China and US

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With the rise of web 2.0 technologies, it empowers firms to outsource their business tasks to the individuals or crowd, who are capable to complete these tasks for them. On the other hand, the crowd can also invest some money to the business idea and project that initiated by entrepreneurs who do not have enough money. And this is crowdfunding (Zheng et al. 2014).

The word crowdfunding actually comes form crowdsourcing, which is defined as “the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call.’’ (Howe, 2006). Instead of collecting ideas or solutions, crowdsourcing can be used to collect monetary and financial resources (Howe, 2006). This type of crowdsourcing which crowd is an investor who invest the project, is called crowdfunding (Zheng et al. 2014).

According to Zheng et al. (2014), they only focus on one type of crowdfunding, which is called reward-based crowdfunding. the definition of this type of crowdfunding is “the crowdfunding involves an open call, essentially through the Internet, for the provision of financial resources either in the form of a donation or in exchange for some form of reward and/or voting rights in order to support initiatives for specific purposes’’ ( Schwienbacher, 2010). different from crowdfunding, social capital is a multidimensional concept. based on Nahapiet and Ghoshal (1998), the social capital has three basic dimensions: structural, relational and cognitive. To be more specific, the structural dimension is the structural characteristics, which are vital for the development of social capital. the relational dimension is the capital derived from the obligation, expectation of the social network. last but not least, the cognitive dimension suggests that shared language could actually help people gain the social capital in the organization.

In this article, Zheng et al. (2014) studied the moderating roles of culture on the social capital in two different countries and the relationship between the relational dimension and crowdfunding performance.

1. Structural dimension: social network ties

The fundamental proposition for the structural dimension is the network ties provide the access to resources, like knowledge and funds. Moreover, Mollick (2014) found that the personal network of an entrepreneur helps predict the success of crowdfunding. in this case, the degree of an entrepreneur’s social network ties is positively associated with crowdfunding performance.

2. Relational dimension: obligation

The relational dimension of social capital can be seemed as the strength or quality of the relationship, and this can be evaluated by trust, obligations and identification (Nahapiet & Ghoshal, 1998). On the perspective of crowdfunding, an entrepreneur may feel such an obligation in the crowdfunding initiative. In this case, the obligation to fund other entrepreneurs is positively associated with crowdfunding performance.

3. Cognitive dimension: shared meaning

Shared meaning plays an important role in the cognitive dimension of social capital (Nahapiet & Ghoshal, 1998). Based on Lehner (2012), the crowdfunding is a co-production process in which investors and entrepreneur are in the close relationship which are cooperative and active in the development of the crowdfunding project though word-of-month. In this case, shared meaning about a crowdfunding project is positively associated with crowdfunding performance.

Reference:

J. Howe, Crowdsourcing: A Definition, 2006

J. Nahapiet, S. Ghoshal, Social capital, intellectual capital, and the organizational advantage, Acad. Manage. Rev. 23 (2), 1998, pp. 242–266.

E.Mollick,The dynamics of crowdfunding: an exploratory study,J.Bus.Venturing 29 (1), 2014, pp. 1–16.

O.M. Lehner, A literature review and research agenda for crowdfunding of social ventures, Presented at the 2012 Research Colloquium on Social Entrepreneurship, University of Oxford, Skoll Center of SAID Business School, UK, 16–19 July, 2012

T. Lambert, A. Schwienbacher, An Empirical Analysis of Crowdfunding, 2010

Zheng, Haichao, et al. “The role of multidimensional social capital in crowdfunding: A comparative study in China and US.” Information & Management 51.4 (2014): 488-496.

Business Case

Crowdsourcing ad campaigns – the future of advertising?

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With massive amounts of information available online, consumers are increasingly better informed about companies and their offerings (1). These advances increase the bargaining power of consumers and show how focus has shifted from the company towards the consumer (2). The process of advertising and content creation is thus changing. Agency-created advertising is not expected to disappear, but nowadays the demand for continually-refreshed materials is growing rapidly. By crowdsourcing new content, brands can use passion and insights from consumers and provide authentic marketing communications (3). The number of platforms where companies can run open pitches for their advertising has rapidly grown and the European Commission (1) expects the volume to grow to €5.5 billion in 2015. An example is the social crowdsourcing platform Zooppa, which allows for brands and agencies to place advertising contests in order to generate advertising campaigns. It offers  ‘a cost-effective, strategic approach to engage consumers, build online word-of-mouth and gain customer insights’ (4). The company states that its main challenge is to open the minds of the industry towards these new ways of working and acquiring content, instead of building on an reusing one ‘hero’ tv ad (3). For each contest, a creative brief is provided. By submitting designs for video, print, concepts, audio or banner advertising, over 300,000 active members (5), both professionals and amateurs, compete for money and other prizes. zooppa how it works Users can vote and comment on submissions of others. This peer feedback plays an important role, since it can facilitate additional learning opportunities, but also provides social value and recognition to users (Franke, Keinz & Schreier, 6). By participating in Zooppa contests, users can grow their portfolio and have it seen by millions (7). The company does not pre-select contributors based on their qualifications or context specific as described by Geiger et al. (10). Contibutors only have to register and complete a personal profile (Facebook account or e-mail address). The quality of submissions can be controlled in various ways (8). Zooppa uses e.g. specific terms and conditions regarding ownership of submitted materials and peer evaluation of content. zooppa for companies For each competition both Jury awards (assigned by clients) and Community awards (based on community votes) are handed out. Providing several prizes (monetary prizes as well as awards) is described (8) as the best way to target asymmetrically skilled individuals (professionals as well as amateurs). This way, participation from weaker players increases, and competition and effort by strong players increases as well (Sisak, 9). Remuneration is probably a major reason for creatives contributing to Zooppa. But also intrinsic motivations such as glory and love (Zooppa displays ‘featured members’ on the homepage with a picture, the projects they contributed to and how much money they won) (8) can be reasons for contribution. A successful example is the sustainability campaign of Siemens. ‘By crowdsourcing video stories Siemens obtained hundreds of unique, authentic content pieces used across channels, all at less than the cost of producing one average TV commercial’ (3). An example of a smaller brand is Mike’s Hard Lemonade Company, which posted contests to obtain can designs and names for new flavors. The winning designs were voted for by consumers (11) and the company included the names of the winners on the cans (3) to build engagement. Concluding, the Zooppa platform sounds like an ideal way for companies to crowdsource their advertising campaigns. However, it remains unclear how many professionals vs amateurs submit ideas and whether the resulting winning ads are truly user-generated (as the company repeatedly states).

References
(1) Walter, E. (2012).
(2) European Commission (2014).
(3) AdLibbing (2014).
(4) Globe Newswire (2012).
(5) Zooppa (2015).
(6) Franke, Keinz & Schreier (2008). Complementing Mass Customization Tookits with User Communities: How Peer Input Improves Customer Self-Design. Journal of product innovation management.
(7) Zooppa (2015).
(8) Tsekouras, D. (2015). Session 3 Ideas & Designs. Customer Centric Digital Commerce.
(9) Sisak, D. (2008). Multiple-prize contests – the optimal allocation of prizes. Journal of Economic Surveys.
(10) Geiger, D., Seedorf, S., Schulze, T., Nickerson, R.C., Schader, M. (2011).  Managing the Crowd: Towards a Taxonomy of Crowdsourcing Processes. (2011). AMCIS 2011 Proceedings – All Submissions. Paper 430.
(11) PRNewswire (2014).

Business Case

A new era in market research?

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Technology has allowed us to stay in contact with each other 24 hours a day. At any point in time you can use email, Whatsapp and an endless amount of social media to get in touch with your friends and family. It takes almost no effort and it allows you to have a response within seconds. In the field of market research, the technology that allows fast communication is for a big part yet undiscovered. Something almost all of the market research tools (e.g. surveys, focus groups, telephone interviews, etc.) have in common is that it costs a lot of time, effort and money. One simple but very clever app might change the area of market research completely.

The app Upinion allows companies to do their market research completely differently compared to how they did it before. Upinion allows companies to ask real-time questions towards their customers using mobile technology. It works really simple: A company creates a specific marketing related question in the Upinion app. Then the question is send to all the relevant and targeted consumers which make use of the app. They fill in their answer and send it back, through the app, towards the company. All the results are then automatically collected and statistics and reports can be created within minutes after the company asked the question. It is also possible to set very detailed filters so that companies can specifically reach the people who belong to the research target group. So the market research turned from a multiple days or even multiple weeks process into a several minute process, all with the help of modern-day technology and this clever app! Intensive market research is not something just for the big companies with large marketing budgets, even small and local companies can easily receive interesting and useful information through this app.

So what’s in it for customers?
Customers get tired from traditional marketing research tools. “Can you please fill in this survey?”, “Can I ask you a few questions?”, consumers are asked these questions quite often in either supermarkets or through the telephone. In my experience, 9 out of 10 people do not want to answer these questions because it costs them valuable time and they do not get anything in return. With Upinion that seems to be completely different. Only people who installed the app receive questions, and by installing the app, people already give away that they are willing to contribute to market research. But the most interesting part of this app in my opinion is that people who provide answers, in return receive credits and vouchers which they can spend at the brands they just answered a question from. In this way, companies not only receive useful market data, but they can also increase their sales by attracting additional customers through these offers.

So both sides of the market have benefit from the Upinion app. Consumers can receive credits and nice discounts and companies receive fast and real-time data, and additionally they attract additional customers. I think this app is a form of real-time crowdsourcing in the field of marketing and it therefore elaborates on the trend of consumer value creation. I am really curious about how the app works so I will start using it right away, what about you?

Sources:
https://vimeo.com/85184656, Retrieved April 27, 2015
https://itunes.apple.com/nl/app/upinion/id691974292?mt=8, Retrieved April 27, 2015
https://upinion.com/nl, Retrieved April 27, 2015

Business Case

Too much power?

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How many times are you approached by peoples at the train station or at a restaurant with surveys asking on your opinion about the service and the company? Can you imagine that maybe in the future your answers to such surveys may influence the employees’ salary?

It’s so that HTM, the public transport company in The Hague region, has announced last week that they want to adapt their salary system such as that their customers (the travelers) could help on deciding the salary of the HTM employees. Their main idea is to empower the crowd in such an extent that the answers of the yearly “customer-satisfaction” survey (questions based on friendliness of employees, the vehicles, travel speeds etc.) will define the results: the quality of HTM’s customer service. This result will mean that for every 0.1 point increase on the customer satisfaction; will lead to a 0.2% salary increase. As for now the labor unions rejected HTM’s proposition, but they are open for negotiations.

As discussed during the lectures of customer centric and digital commerce, we can relate this kind of ideas to a huge amount of different reasoning. One of them could be the diversity trumps ability expressed on page 258 of (Majchrzak & Malhotra, 2013).  This means that a large diverse crowd of independent strangers may perform better on certain types of challenges than a small number of experts (Majchrzak & Malhotra, 2013). In addition, we can also relate it to the company goals which are for example, the relation to reduction in costs as mentioned by Fuchs & Schreier (2011).

Another nice practical example of where empowering might be going towards, is Incentro. Contrary to HTM who wants to empower their customers to some extent, gave Incentro their employees themselves the power to adapt their own wage.

This type of may be going to the direction of the name-your-own-price as expressed by Hinterhuber & Liozu, (2014). In this case I can name it: “Name-your-own-wage”.

Concluding, in the lecture about Crowdsourcing we discussed several risks and benefits for companies, employees and the customers when empowering the customer/ employees (the crowd). In addition to this last and to relate it to this post, I want to know from you, my readers: Do you think that organizations are giving the crowd too much power? Or do you think the crowd has the right to influence other decision than just the product design, aspects and applications? Would you fill in a survey on a different way when knowing that it may increase or decrease someone’s salary?

References:

Fuchs, C., & Schreier, M. (2011). Customer empowerment in new product development. Journal of Product Innovation Management, 28(1), 17-32.

Hinterhuber, A., & Liozu, S. M. (2014). Is innovation in pricing your next source of competitive advantage? Business Horizons, 57(3), 413-423.

Majchrzak, A., & Malhotra, A. (2013). Towards an information systems perspective and research agenda on crowdsourcing for innovation. Journal of Strategic Information Systems, 22(4), 257-268.

Tsekouras, D. (2015). “Lecture 3:  Ideas & Design”, Consumer-Centric Digital Commerce, Erasmus University Rotterdam, 01-04-2015.

http://www.sprout.nl/artikel/zo-bepalen-je-werknemers-hun-eigen-loon-semco-stijl

http://www.telegraaf.nl/binnenland/23934245/__HTM__reizigers_beslissen_mee_over_loon__.html

Articles

How to maximize your revenue?

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The availability of real-time data on customer characteristics has encouraged companies to personalize operational decisions for each arriving customer (Golrezaei, et al., 2014). For instance, Orbitz.com has found that Mac users spend on average $20 to $30 more per night on a hotel than Windows users . Therefore the online travel agency can show different and more expensive hotels to Mac users (Mattioli, 2012).

The key question in this paper is: Given the complexity of coordinating real-time, front-end, customer-facing decisions with the back-end supply chain constraints, what policies should companies use to take advantage of real-time data?

Once a customer arrives on the website, his or her customer type will be revealed. This can be based on computer type , zip code, gender or on any available information that is relevant for the company. Based on the customer’s type and the remaining inventory, the firm offers an assortment. An example of a website that shows different assortments based on customer type is Zalando. When I visited the website last week, I was automatically directed to the ladies department without logging in. Associated with each customer type is the probability of purchasing each product under each assortment. This means that the company calculates, for example, the probability that a 40 year old woman who lives in a high-income neighbourhood purchases a certain dress which is showed between other dresses under Assortment A but also the probability that she purchases the same dress that is showed between different dresses under Assortment B. The authors of this paper want to design an revenue-maximizing algorithm that determines the assortment to offer to each arriving customer, taking into account the customer type and current inventories.

In the paper, the authors propose a couple inventory-balancing algorithms. An inventory-balancing algorithm makes use of a discount factor that depends on the fraction of the product’s remaining inventory. This means that when the inventory of a product drops, the discount becomes higher which results in a lower discounted revenue. Upon the arrival of each customer, based on the customer’s type, the algorithm offers the assortment that maximizes the expected discounted revenue. By adjusting the revenue of each product according to its remaining inventory, the algorithms hedge against the uncertainty in the types of future customers by reducing the rate at which products with low inventory are offered. For example, a pair of red leather boots (low inventory) that normally would be showed at page 1 to a 40 year old woman who lives in mens-inner-real-leather-western-glossy-red-side-zip-high-heel-ankle-boots-made-in-koreaa high-income neighbourhood (in case of enough inventory) might now be showed on page 4, because it is likely that she is willing to buy another, more expensive, pair of shoes. When a 35 year old woman who lives in a low-income neighbourhood arrives at the website 5 minutes later, these red leather boots will actually be showed at page 1 because this maximizes the revenue.

These inventory-balancing algorithms work very well in cases with significant uncertainty in the market size, yielding 5%-11% more revenues than reoptimization methods. Reoptimization methods work extremely well and yield nearly optimal revenue because they can effectively ration the inventory to all customers. This means that inventory-balancing algorithms are more suitable for situations with a lot of uncertainty. Also, the inventory- balancing algorithms have a strong performance under both nonstationary and stationary demand processes. This implies that, even when there are sudden shocks in the customers’ arrival patterns, for example in case of seasonality, the algorithm maintains a strong performance guarantee. Another advantage is that this inventory-balancing algorithms are simple and flexible which makes it possible to combine them with reoptimization methods.

Golrezaei, N., Nazerzadeh, H. & Rusmevichientong, P. (2014) Real-Time Optimization of Personalized Assortments. Management Science. 60 (6), 1532-1551.

Mattioli, D. (2012) On Orbitz, Mac Users Steered to Pricier Hotels. Available: http://www.wsj.com/articles/SB10001424052702304458604577488822667325882. Last accessed 23-4-2015.

Articles

Auction: iPhone 6 sold for $12.58 to ‘mrcuddles’

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dealdash

In session 4, Dealdash has been brought up by Dimitrios and he explained briefly what this site is about. In hindsight: Dealdash is an auction site that sells stuff that is very appealing to bargain hunters. For example; you can win a brand new Macbook Pro for just an unbelievable price of $ 18.52 (RSP: $ 1299.00). How can Dealdash make this happen? In contrast to Ebay, a bidder on Dealdash can only increase the price with $0.01 per bid. After each incremental bid, the end time extends with 30 seconds. Basically, the price increments with $ 0.01 until there are no new bids within the bidding time. The winner is obligated to buy the product for the final price. Sounds great, right?

Now follows the tricky part:

All products start at a price of $0.01 and the price increases with one cent per bid. After each bid, a timer starts ranging from 30 seconds to a few minutes. If the timer expires without a new bid, then the last bidder gets the product. Usually the bidder pays a price which is much less than the original retail price.

So how does the owner of the site make money? The revenue model reveals that the site uses ‘bidding rights’ to let participants pay for each single bid. Yes, ‘bidding rights’. This involves an amount of $ 0.99 or more. Furthermore it is not possible to apply any skills or knowledge.

Institutional environment

Therefore, Dealdash’ Dutch alternatives (a.k.a. ‘centveilingen’) are considered illegal in the Netherlands. Two main factors are attributed to the reason why Dealdash is considered to be illegal: (i) you do not know who other participants are and (ii) it falls under gambling according to the Dutch law and penny auctions do not obtain such gambling license. Kansspelautoriteit monitors the gambling market in the Netherlands. They observe the market and penalize illegal activities.g5

PROS: The site owner makes a lot of money with the bidding rights. Furthermore, the winner gets a product for a bargain.

CONS: All other participants lose their investment. Because only the last participant gets the auctioned product and earns back his/her investment.

Instead of asking you to participate, I do NOT recommend to click on Dealdash or any other penny auctions at all.

Sources:

Business Case

The Inner Circle: An Exclusive Dating Community

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Nowadays, a lot of apps can be downloaded for free in the App Store or similar shops. Most of these apps try to get a large user base, so that they can sell data and the more users they have the more income they generate through advertisements. There are also a lot of dating apps available on the market. Tinder is a famous app that can be used by everybody looking for a date, and there are several variations for niche markets available. One of the dating apps that is expanding worldwide now is The Inner Circle. In contrast to most other apps, they do not try to get as much users as possible, as you can only become a member if you get an invitation from another member. And even if you have an invitation, your social media profiles will first get screened to check if you would fit in The Inner Circle community.

The Inner Circle members are mainly young, inspiring, and motivated professionals in the age of 25 to 40. The community is attractive for other people because through this app like-minded people can find each other for a serious relationship. In contrast to other dating apps members are pre-screened which gives a more reliable image to other users. It also takes away the effort for members to google other members. If a member meets someone new they know that the other person is most likely successful in life. In the Netherlands The Inner Circle even attracted a famous football player and actor.

Members of The Inner Circle can make use of an app and a website where they can chat with each other before they decide to meet in real life. Besides this, users also get access to exclusive parties organised by The Inner Circle to meet other members. Special games are organized during these parties so that the members get in touch more easily.

There are several plans to expand the app to other countries. The growth of members will not be very fast because of the invite-only policy. After a free week of trial, members have to pay for a Full Membership, and therefore the company is financially healthy. The app was founded in Amsterdam in December 2012 and is now active in London, Paris, Stockholm, Milan, and Barcelona, with 50.000 members so far. The Inner Circle wants to upgrade in these cities through growth hacking and further expand to Zurich, Berlin, Copenhagen, and New York in 2015. In the US there is already a similar app, called The League, which is also a dating app with an exclusive network.

The business model of The Inner Circle sounds like a paradox: they do not want everybody to become a member, however without members the app would not be able to exist. Exclusive networks exist in the real world, but so far it seems that they can also be successful and even profitable in the online world. Would you like to be part of this exclusive community?

References:

http://i.huffpost.com/gen/1437249/images/o-ONLINE-DATING-PROFILE-facebook

http://nederlandsmedianieuws.nl/interviews/Startups-David-Vermeulen-over-The-Inner-Circle.html

http://uk.businessinsider.com/inner-circle-dating-app-2015-3?r=US

http://www.theleague.com

https://www.theinnercircle.co

Business Case

Missing person?

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Saturday the 25th of April, a disastrous earthquake hit Nepal. Homes have collapsed, century-old heritage sites have been destroyed, phone communications are still down, but most importantly of all – nearly 2,500 people are reported to have died during the disaster and thousands are still missing. People with relatives living or travelling in the area struck, often have no way of directly contacting them due to the damaged communication infrastructure. In an attempt to provide information and to aid rescue efforts, Google once again enabled its Person Finder.

Schermafbeelding 2015-04-26 om 22.11.36

Google first launched the Person Finder after the 2010 earthquake in Haiti and has since opened the Person Finder in response to every other major calamity. The Person Finder is a missing persons database that allows people looking for their relatives and loved ones to search for their names by clicking on “I’m looking for someone”. The database relies on individuals who have information on someone’s status in the areas struck to add a record to the database by clicking on “I have information about someone”. The record contains the name, physical characteristics, and a description of the person as well as information on his or her current status and contact details. In addition to user-added information, the database uses People Finder Interchange Format (PFIF) to aggregate missing persons information from registries of other organizations in an attempt to centralize the information.

Schermafbeelding 2015-04-26 om 22.28.12Person Finder depends on its users to update and remove records when no longer relevant. Users can also report spam, offensive content, or incorrect information. Records added to the database have a limited expiration date – after a certain number of days (minimum of 30), they are removed from the database unless manually extended by a user. As such, Person Finder is a fully crowd-sourced platform as it relies on user’s input of information.

As of Sunday, a day after the earthquake, the database already contains 4700 records and is still growing.

References:

Person Finder: 2015 Nepal Earthquake (2015) Available at: http://google.org/personfinder/2015-nepal-earthquake

Articles

Smart customer, Smarter business

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Firms knowledge about its’ customers over the last years has skyrocketed. With the rise of the internet came revolutionary ways to differentiate customers. The use of different tracking mechanism allows for a company to track the customer. The combined information that is gathered can be converted into a customer profile. Nowadays it is essential for shops to determine groups within those profiles. Easy ones are age, gender and location, but as more data is analyzed more profiles can be distinguished. This blog post will focus on a few of these customer profiles that are a bit harder to determine than age or gender.

Strategic pricing is nothing new, segmentation between customers has been done for ages but it is time to bring it to the next level. Consumers are smarter than ever. Searching costs have dropped with increased ease of use of search engines. Reviews and technical information are for most product categories widely available, this relatively new development leads to improved product informedness; the consumer is better aware of what is in the market. Same goes for the price of products. Comparison sites make it much easier to quickly determine the average industry price, leading to a better price informedness; a customer that knows the value of the product. These factors together lead to a higher consumer informedness.

With all this information available to the consumer, it becomes more and more difficult to define the perfect pricing strategy for your products. Research at the Erasmus University Rotterdam in collaboration with the Singapore Management University suggest that there is no perfect pricing for a product group. First of all the research made a difference between two types consumers. A commodity Segment and a differentiated segment. The first consumer group has a strong preference for choosing the product that offer the best price. The second group is willing to pay more if that means that the product fits better to their needs.

The groups were analyzed using data that was collected through a series of stated choice experiments in two different contexts. Results were clear, one pricing strategy for a product just isn’t enough. A company needs to develop different pricing strategies depending on the kind of customer it is facing. The research found that different levels of informedness amplified different consumer segments. Consumers of the commodity segment, who highly valued price, where more influenced by a product offering high price informedness. Whereas the differentiated segments behavior was stronger amplified by an increase in product informedness. This means the firm needs to make sure the type of information available of the product matches with the type of customer that is interested in buying the product.

For the company this leads to a necessity to use advanced tracking tools to determine the kind of consumer it is facing, and adjusting not just the price, but all the information available about that product. This will have as a possible result that customers see a totally different price and description compared to their friend or family member, even though it is exactly the same product. And for you: As a consumer you will get product and price information that is ‘tailor made’ to fit to your preferences, which sounds nice but it could for example mean that you pay a much higher price because the company knows you are using an expensive laptop.

Sources:

– Li, T., Kauffman, R.J., van Heck, E., Vervest, P., and Dellaert, B. (2014). Consumer Informedness and Firm Information Strategy. Information Systems Research 25(2) 345-363. http://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=3194&context=sis_researc
– Tsekouras, D. (2015). ‘Consumer Centric Digital Commerce session 4’. Business Information Mangement. RSM Erasmus University.

Articles

Bro’s before Co’s?

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Everyone (at least we hope and assume…) is part of a certain community and there are infinite examples of communities that can be found in daily life. But how many brand communities can you think of? Are you a member of one yourself… or do you want to become one?

Lugnet, My Starbuck IDEA, ORACLE community, Being girl are only some examples of communities that are based upon a certain connection with a brand. A brand community can be defined as ”A brand community is a specialized, non‐geographically bound community, based on a structured set of social relations among admirers of a brand” (Muniz,JR & O’Guinn, 2001) Having an active and involved brand community can be seen as one of the greatest assets of a company, but only if it managed correctly.

HOG-Logo

An example of how it could benefit both the community and the brand is HOG: the Harley Owners Group. Their relationship goes beyond affection or a simple connection with a brand, because Harley Davidson is embedded in their routine, in their daily life and especially in their heart. However, due to the social interactions among individuals, people start to build up relationships with each other NEXT to having the affinity with the company and companies are afraid that the communities are becoming more focused on the social connections and events inside the communities than about  about sharing their passion of the brand.

One of the questions that could follow out of this information is: Are you loyal to the company or to a brand when you are a member of a brand community? Well, that’s the same question that Marzocchi et al. (2013) had when they started their research about the effect of identification with the company and/or with the community to build up loyalty in a brand community. Since the digitization and adoption of the Internet individuals could get more easily in contact with others to share their passion (or sometimes their envy) about companies and start up or join brand communities. Marzocchi et al. (2013) used an experiment in a setting where the sample which shows similarities to the population of the HOG; motorcyclist at the World Ducati Week and therefore the results of this research can have valuable information for HOG and Harley Davidson.

Marzocchi et al. (2013) tried to answer the research question: “how important in building loyalty in a brand community are identification with the brand owner and identification with the community, respectively? The authors try to provide a better and deeper understanding of the identification-loyalty dyad in a context, where there is a broader system of relationships.

tabel artikel

This research shows that there is evidence that consumer’s identification with a brand community has a positive relationship with two constructs: attitudinal and behavioral loyalty. Furthermore, it has a positive influence on the favourability and constructiveness of comments about the company. A higher identification with a brand will then lead to a longer time commitment (attitudinal) and more sales (behavioral) with as an extra even more positive (e-) WoM! The research found no evidence of a direct impact on resilience to negative information or propensity to comment. Another finding is that the strongest influence of cohesive communities is related to a stronger affective response and trust in the brand, but that effect is mainly indirect. Next to that, the research confirmed that having a positive relation with the brand is very relevant for the creation of the loyalty related constructs. Due to the nature of the sample for this research, this findings can only be generalized for products or services with a hedonic and emotional content, luckily this is the case for HOG.

A company like Harley Davidson, which community can be seen as a very specific and intimate should embrace their community and treat identification as an antecedent of brand trust and brand effort. By building up relationships with their community it is a way to increase brand equity for the company and should therefore be an important agenda topic for managers that are involved in the marketing section of a company. By getting in detail, the needs and wants of the company aswell as for the community, it should be possible to decide which investment portfolio is the most suitable for companies who already have or planning to invest in managing brand communities and are striving to increase brand equity.

References

*Marzocchi, G., Morandin, G., & Bergami, M. (2013). Brand communities: Loyal to the community or the brand? European Journal of Marketing, 47(1/2), 93-114.

*Muniz, A.M., & O’Guinn, T., C., (2001). Brand Community, Journal of Consumer Research, Vol. 27, No. 4 (March 2001), pp. 412-432

Business Case

Turn customers into brand advocates by using participation marketing!

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Consumer value creation is hot and happening! The successes that can be achieved when crowdsourcing production processes and relying on consumers to create value are plenty: Threadless’s users create and vote on clothing designs that eventually will be produced, Nike offers consumers to design their own pair of shoes, Lay’s challenged its consumers to come up with a new flavor, et cetera. One area in specific – marketing – is interesting when looking at how consumers could create value for a company.

“Participation marketing” or “engagement marketing” refers to a marketing strategy that encourages consumers to participate in the evolution of a brand. This marketing strategy treats consumers not solely as passive receivers of messages, but views them as actively involved producers and co-creators of marketing programs. Two big players are using it with success: Coca-Cola and Yoplait.

With the average person in the United States drinking the equivalent of 275 cans per year, there is no need for Coca-Cola to focus on increasing their immediate sales transactions and acquiring new customers. Coca-Cola is shifting towards creating a more long-term emotional connection with their customers. One successful example is their recent “Share a Coke” campaign, where they replaced their product logos with popular names. This invited consumers to start a big wave of referrals on social medium websites, which resulted, for instance, in a crazy 341,000 posts on Instagram with the hashtag #shareacoke. This is one of the ways Coca-Cola uses to build loyalty and engage customers.

Another example of participation marketing can be found at Yoplait. Yoplait’s annual “Save Lids to Save Lives” program donates 10 dollar cents to a breast cancer foundation for every pink foil yogurt lid that customers mail back to the company. Since 1997, around 35-50 million dollar has been donated by Yoplait and their parent company! This translates into hundreds of millions of customers mailing their yogurt lids to the company! When customers actively engage with the campaign in order to support the cause, they are more likely to purchase Yoplait’s products and encourage others to do it as well. Customers are becoming so-called brand advocates. This way, Yoplait is building brand loyalty whilst also increasing sales.

The lesson companies should take from these two examples is to shift their focus from viewing customers solely as receivers of marketing and buyers. They should engage with them to create value together. This way they will become lifelong loyal customers and brand advocates. Don’t think only big companies with enormous marketing budgets can pull this off: the ALS association created the “Ice Bucket Challenge”, which went extremely viral. This led to increased customer engagement and more donations.

What do you think? Do you know other great examples of companies that used participation marketing?

Articles, Business Case

Beginning era of Online Health Service

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There are so many business idea opportunities out there, but none of them is more challenging than online health consulting service. Health is a not just a matter of preference, everyone cares about it. For that reason, people are very selective and careful in selecting type of health services they can get. On the other hand, medical professionals are also in need of better tool to increase their capacity in delivering health services to more people, especially health consultancy.

In 2013, there were around 15000 medical apps (David Lee Scher MD, 2013) but only few of them were successful. Apple created a healthcare app called iDR 24/7 with the purpose of providing health consulting service at any time, however consulting with professional doctor (in USA) charges user some amount of money. Other examples are HealthTap and iTriage that are available in iOS and Android. Both of them allow you to reach high number of professional doctors and yet provide other advanced features such as daily health tips, smart symptom diagnosis, or even searching for nearest hospital. Likewise iDR 24/7, there is small fee for a doctor’s advice. Last example of famous health-related app is Urgent Care (Android and iOS) which is focused on delivering health services from professional medicals at any emergency moment.

The next question is: why so many health apps fail? In providing health advice and consultancy, good enough is never enough, patients always demand the best possible service when it comes to their health, whereas doctor only wants a tool that helps them simplifying all the health service delivery process such as prescribing medicine, setting up new arrangements and archiving the records of the patient. Beautiful design and sophisticated feature are merely additional as long as the basic functionality works. Thus, involving medical experts in the platform development itself is very important.

In the era of internet, people have access to medical information on internet even without seeing the professionals (doctors). However, for more complex situation, they still need assistance from the experts and thus the implementation of online health consultancy service will help. Not only doctors can provide more timely assistance, they can also reach people who cannot afford medical cost, especially for consultancy. Ball and Lillis (2000) predicted E-health services may educate normal people with basic medical information (general information, disease management, and clinical decision support), support the communication between doctors and patient, and increase administrative efficiency (e.g reduced paper used for medicine prescription, form, charts, etc).

In conclusion, doctors and patients are the main customers of this digital platform. Doctors benefit from the increased capacity in delivering consultancy services whereas customers will have more access to health advice service easily in timely manner. Through collaboration with medical professionals, developers (for website or mobile app) should be able to create a platform in which interaction between physicians and patients can be supported flexibly in lower cost. As health is particular concern of everybody, the advancement of internet technology will drive high demand for online health service in the next 5-10 years.

Ball, M. J., & Lillis, J. (2001). E-health: transforming the physician/patient relationship. International journal of medical informatics, 61(1), 1-10.

Belle, Mika (2013). No waiting rooms, no copay: 6 apps to get a doctor’s advice. Retrieved from: http://www.techhive.com/article/2038659/no-waiting-rooms-no-copay-6-apps-to-get-a-doctors-advice.html

David Lee Scheer, MD (2013). 5 Reasons why mobile health apps fail. Retrieved from : http://www.kevinmd.com/blog/2013/02/5-reasons-mobile-health-apps-fail.html

Articles

How Electronic Word of Mouth can be a critical success factor in e-business

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This blog is based on the following study: Yoo, C. W., Kim, Y. J., & Sanders, G. L. (2015). The impact of interactivity of electronic word of mouth systems and E-Quality on decision support in the context of the e-marketplace. Information & Management.

EWOM is defined as “any positive or negative statement made by potential, actual, or former customers about a product or company, which is made available to a multitude of people and institutions via the Internet (Hennig-Thurau & Walsch, 2003). One of the best examples of EWOM systems and indeed a prototypical EWOM system is the customer review system. Customers can post text-based comments, insert video reviews, and even respond to other customers’ opinions on the product or service in question through EWOM systems. The emergence of these EWOM systems has changed the way that businesses engage the customers as well as other businesses.

To investigate the impact of the interactivity of EWOM systems and E-quality of a website on decision support satisfaction, Olivers (1997) cognition-to-action loyalty framework is adopted as an overarching theory. Oliver argues that consumers build loyalty toward a brand cognitively first, then affectively, next conatively, and finally behaviourally. Adopting interactivity theory and E-quality is appropriate to represent the cognitive aspect of loyalty phases. When decision support reflects customer needs and preferences, customers feel satisfaction with this support. Hence, adopting this construct, decision support satisfaction is useful in describing the emotional phase of the loyalty framework. Finally, E-loyalty is employed to illustrate the conative phase of loyalty. Based on this theoretical framework the authors explore the relationships of interactivity of EWOM systems, E-quality, decision support satisfaction, and E-loyalty by proposing four research questions that can be found in the figure below.

1

The interactivity of EWOM systems and E-quality are the strong predictors of decision support satisfaction. Therefore, H1 and H3 are supported. The effect of the interactivity of EWOM systems on E-quality is significant, validating H2. Decision support satisfaction is found to influence E-loyalty, thus validating H4. See figure below.

2

These findings indicate that customer perceptions regarding the interactivity of EWOM systems are very influential on their evaluation of an entire website and their level of satisfaction with decision-making support. This study illustrates that EWOM systems and websites with E-quality help customers enhance their decision making process.

When the four aspects of EWOM system interactivity (reciprocity, responsiveness, nonverbal information and speed of response) are well managed, users are likely to experience decision support satisfaction with the e-commerce site. This result indicates that e-commerce sites should be encouraged to provide a better EWOM environment for reciprocity and advanced EWOM system functionality, which enables multiple channel communications as well as quick and proper responses to customer requests.

The authors believe that EWOM has become an important part of the online shopping experience. Understanding the phenomena is essential for the success of electronic commerce systems.

References:

Hennig-Thurau, T., & Walsch, G. (2003). Electronic word-of-mouth: motives for and consequences of reading customer articulations on the internet. Int. J. Electron. Commer. , 8, 51-74.

Oliver, R. (1997). Satisfaction: A behavorial Perspective on the consumer. In M. Sharpe, Satisfaction: A behavorial Perspective on the consumer. NY: Armonk.

Yoo, C. W., Kim, Y. J., & Sanders, G. L. (2015). The impact of interactivity of electronic word of mouth systems and E-Quality on decision support in the context of the e-marketplace. Information & Management.