Back in 2005 the Argentinian businessman Martin Varsavsky came back from a business trip to Japan. When entering his house he found a letter on his doorstep. It was not a “welcome home” letter but a bill from his telecom provider for €5000 for the use of mobile internet during his business trip abroad. As you can all imagine, Martin was not particularly happy. Having an entrepreneurial mindset he decided to find a solution for the costly use of mobile internet and founded a new company in 2006 called Fon (Fon.oeioei.nl, 2014)! Continue reading Hello fellow Fonero, I’m going to use your Fon hotspot!
“How to increase conversion rates?” is one of the essential questions that e-commerce companies aim to answer by analyzing their consumer’s online behavior aiming to find what makes visitors convert into customers. Merchants can analyze click-through data, mouse activity or other website metrics, but what many often forget is the large impact that online customer reviews have on the actual purchase decisions of users. Continue reading How does linguistic style in online reviews impact conversion rates?
Have you ever been looking for new sneakers on several sneaker-websites and suddenly on the next visit on that website are the shoes you have been clicking on recommended for you? Or have you ever been looking for a new mobile phone and the next time you visit the website, exactly those mobile phones you have clicked on are showed on the front page of that website. Or even worse, exactly the shoes or mobile phones you have been looking for are shown in ads on several websites in banners for instance, on Facebook. What a coincidence! Continue reading When Does Retargeting Work?
Platform ecosystems offer an interesting setting for analyzing the dynamics of interorganizational collaboration, cocreation and competition. Extensive ecosystems have been an influential contributor to the success and ultimately the survival of IT platforms.
In the article ‘Cocreation of Value in a Platform Ecosystem’ Ceccagnoli et al. (2012) investigated small, complementary solution providers within the SAP enterprise software platform ecosystem. The research study analyzed 1,210 independent software vendors (ISVs) with a broad collection of different software offerings to examine whether participation in an ecosystem partnership increases business performance and how appropriability mechanisms (like patents) can shape this partnership.
Have you ever seen an online banner advertisement that suddenly attracted your attention? I’m pretty certain all of you did. Maybe you’ve even encountered it while scrolling through this blog. The header of this post may have unwillingly drawn your attention. You could have felt intruded and annoyed, since this obviously wasn’t what you were looking for. But will this feeling remain unchanged, when you know all articles on this Customer Value Creation blog are personalized and tailored to your preferences? Continue reading Advertising in customized online environments
In today’s business environment, information and innovation are key to success. Companies are constantly trying to improve their offerings and business model by increasing their knowledge about customers, competitors, products, services and new technologies. To achieve this open innovation practises are increasingly used, but a major part of the knowledge in companies is generated by individuals who do research to generate new ideas and capture opportunities. This required know-how can be sourced from within the company or from external sources. Nowadays, individuals performing R&D functions are encouraged to seek for knowledge outside the boundaries of the firm. This requires more openness to external sources. However, according Salter et al. (2015) an individual’s openness to external sources of knowledge is curvilinear related to the ability of that individual to develop new and useful ideas for the organization (e.g. ideation performance).
There are number of ways how to induce innovation in the different fields. One of the interesting methods for generating new innovative ideas and approaches is crow contesting. Crowd contesting is an open contest that allows anyone to participate with his/her idea. To guarantee the outcome quality, a strict contest requirements and schedules has to be followed by every participating individual or team. To motivate participants for joining and actively devoting their effort, different types of incentives are used, such as monetary rewards, public recognition, and sponsorship funding offers. Furthermore, often times a passion in the particular field of contest is the main driver for participants. Crow contest is an efficient way of leveraging a power of competition to generate new ideas and approaches based on the theme of the contest.
In order for a company to get new customers or keep their current customers loyal to their company they to contribute to the satisfaction of the customer with their products and services. By enabling customers to customize their products, customers will come up with final products close to their preferences, which satisfies them.
Companies can offer multiple customization possibilities. These possibilities differ in sequence of customization (Levav et al., 2010) as well as the product customization format. Hildebrand, Häubl and Herrmann (2014) argue that customizing via starting solutions is a more beneficial format for both the company and the customer in comparison with customization via defaults or option framing.
Elon Musk, the man behind Tesla Motors and SpaceX has brought the idea of a new transportation system to the public in 2013. He named it: Hyperloop. The Hyperloop compared to the current modes of transport is potentially much cleaner and faster than cars, trains or plains. It is most valuable for travel times between cities that are too far to drive and too close to fly. The idea is to shoot capsules with people or goods through vacuumed tubes at speeds of around 760 mph (1220km/h).
Over the past years, customization has been a widely used strategy in the Fast Moving Consumer Goods sector. With many products, consumers are empowered to customize their own products online. For example, Ray Ban allows people to combine glasses and frames based on personal taste. Besides that, numerous brands give customers the opportunity to choose colors and models for the perfect combination. But: besides the clothing- and shoe industry, customization is popular in the food and beverages sector.
The strategy of customization and co-creation is not new. However, more and more variations and innovative campaigns are launched every year. Since I am fascinated by the creative forms of customization that exist nowadays and I am interested in the relationship with brand loyalty, I would like to elaborate on this subject.
If there is one thing a Dutch cannot live without in his everyday life, it is his bike. And Dutch bikes are an attraction themselves. Some people have painted theirs in the national color(s), decorated it with flowers and others even mounted a basket on it to carry their groceries. Imagine you have put your time and effort into beautifying your bike and you are very proud of the horn that you successfully installed to make sure that everyone knows who’s bugling behind them. In your opinion, this is the best bike ever.
And then one day your friend tells you: “Man, your bike is falling apart. If you’re lucky, you might sell it for 20€ or something.”
Reducing shopping cart abandonment and increasing purchase conversion rates.
A paper by Amy Wenxuan Ding, Shibo Li, and Patrali Chatterjee (2015).
Online retailers are plagued by two common problems, low conversion and high shopping cart abandonment rates. Key to improving both, is an increased understanding of a website user’s intent. When the user’s intent is known, a website can offer content that is optimized for that particular user. In doing so the website will serve that individual user, and thus all users, better. Users that are served better lead to improved conversion and shopping cart abandonment rates. However, user intent isn’t known by a website a priori thus making the generation of intent-based webpages impossible.
When buying products online, there is always a certain level of uncertainty for consumers because they cannot try out products or check the quality. This uncertainty influences their purchasing decisions. In order to accommodate consumers with their purchasing decisions e-commerce vendors provide different methods for consumers to gauge the quality of the product. This can be done by the following online product recommendation (OPR) methods: IT-enabled provider recommendations (PR) and consumer reviews (CR). The existence of OPR is important in order to provide shopping assistance and help buyers and sellers reduce information overload. Currently it is estimated that about 43% of e-commerce vendors offer PR and CR.
Crowdsourcing of microwork is, according to Gartner in July 2015, still an hype that is “on the rise”. This means that the first signs of a possible successful hype arises and that success stories in the media attracts people their interest. Although crowdsourcing is a term that was introduced in 2006 (Merriam Webster, 2016) research about this subject has increased in last years. An important research in crowdsourcing was done by Afuah and Tucci (2012) which argued that under certain circumstances crowdsourcing is a better option than internal sourcing or contracting.
The phenomenon of consumer value co-creation is currently one of the newest holy grails for firms. Entire books, classes and a lot of literature pay attention to it and many of the ‘new business promises’ employ this particular mechanism (Walker Smith, 2016). Examples are well-known business models such as Uber, Tinder, Airbnb etc. The focus of this phenomenon first rested on co-creation of the actual goods or services, but has recently shifted towards co-creation of value, experience or relationships (Vargo & Lush, 2004). As a result, marketing has switched towards the service-dominant logic, where the importance of service provisions are fundamental to economic exchanges (Vargo & Lush, 2004). The good or service itself is no longer the main value to consumers, but the perceived experiences enabled by this good or service is (Woodruff & Flint, 2006). This gives firms more opportunities to get close to their customers and earn their loyalty. Thus, at first instance value co-creation sounds like a clear road to success…
Academic research. Some hate it and some love it. Even though you might hate it, you can’t deny that there’s no way around it; especially during your college years. What some of us might fail to see though, is, the practical relevance of some of these researches. Moreover, how do some of these somewhat boring articles change the way the consumers perceive things and influence long existing business models?
From the moment a household is connected to the electricity grid consumption data [in the form of energy use] is continuously being produced. For decades energy providers like E.ON had no means of capturing this data on an individual level, let alone in real-time. Frankly, E.ON could not offer its customers an optimal service without deeper insights into their consumption behavior. E.ON first needed a mechanism that would allow for a better understanding of their customer, alongside a value-proposition that would incentivize their customers to participate. The co-creation solution: Smart-Meters. These meters are technology that allow for the collection of energy use in real-time. Let us examine the building blocks of how this value is co-created.
An increasing number of companies are offering personalized products to their consumers. When you visit the website of Amazon, they will provide you with personalized recommendations. The same applies to Spotify with recommended music or Groupon with personalized discount offers. This done through behavior-based personalization, which provides companies with the ability to offer personalized products to their customers based on their purchase history. The reason why so many companies adopt behavior-based personalization is due to the fact that the purchase history of a consumer reflects their tastes. As a result, companies are able to serve consumer needs better by personalizing the product offerings based on the past choices of the customer.
Crowdsourcing information systems aims at delivering informational products and services by harnessing a large group of online users. Individuals motivated intrinsically (e.g., enjoyment) or extrinsically (e.g., reward) can contribute to the system through picking among a variety of open tasks on crowdsourcing platforms. As the huge amount of tasks posted ever day, matching individual with an appropriate task that meet up individual’s personal preference and skill is crucial to the success. However, in reality, the ever-increasing amount of opportunities engaging individuals on crowdsourcing platforms lead to an information overload situation. Therefore, how to assist contributors in finding a suitable task in line with self-identification principle has attracted scholars and practitioners’ attentions. Geiger and Schader (2014) review and analyze the current state of personalized task recommendation in crowdsourcing context which shed a light on designing the relevant mechanisms on crowdsourcing platforms.
“Design your own …” is a probably a sentence everyone is familiar with these days. Even for the most basic products, you will be able to find a company that will deliver a fully tailored product to exactly fulfill your needs. Customers are getting more and more demanding and expect companies to comply with their increasing needs. However, customer’s preferences vary wide, which leads to that firms offer an enormous amount of different options when customers want to design their own products. Different solutions have been created to deal with this aspect of user fatigue, as the process of customization takes so much time as the decision making process gets to complex, which lead to not purchasing a product at all.