Share products you love


Imagine it’s July 2017 and you’re a freshly graduated BIM student. Together with a friend you decide to start your own company and sell your own products. You have some great ideas and great plans! Everything is elaborated in your business plan and you are ready to enter the market. But how are you going to reach your customer? Making use of social media would make sense, since almost 10 million people in the Netherlands visited Facebook (marketingfacts, 2017). How can you use these social media platforms in the most effective way? This is where Sellify comes along!

Sellify. What is it?
The name Sellify comes from sell, satisfy and amplify. “These words stand exactly where our products stand for.”, says CEO and co-founder Lennert Pieters. Sellify is the first crowdselling platform in the Netherlands, what makes Sellify very unique, but what is it exactly?

“With Sellify you can help entrepreneurs reach more customers by sharing the products that you love on your social media. Simply share a product with your friends in order to offer them an exclusive discount and, in addition, you will make a commission on each sale! It’s a win-win situation. You can choose for yourself which of the offered products you like and want to share.” (sellify.com).

As a “influencer” you support other products by sharing them on your social media.

What is it?

Their mission is to make e-commerce accessible and reachable for everyone by offering a full service of distribution, delivery and payment within 60 seconds. “No cure, no pay”, is what they say.  At first place, the platform was initiated for consumers, small entrepreneurs and retailers, but more and more organizations made use of the platform. That is one of the reasons they switched their business model to only B2B.

Take a look at this video to get a better impression of their platform. How does Sellify work?

How does it work?
You and your friend decide to make use of Sellify. What now?

Sellify places your products online and makes sure of a tremendous reach by making use of influencers in their own network. They ask them to share your product on different social media channels, like Facebook. These social influencers exactly know who their friends and followers are, so they also know whether they will like to buy your product or not. When an influencer decides to share your product on her Facebook-profile, their friends and followers can buy your product with a 10% discount. As a bonus, the influencer gets 10% of the selling price of your product.

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Sellify makes use of a cost-per-sale model where the entrepreneur only pays if he or she has sold something. With each sell, Sellify holds on to a minimum of 25% on the selling price, but this money is divided over the seller, influencer and Sellify. Eventually, Sellify will get 5% of the selling price.

So Sellify made a great unique platform, but what now?
Sellify makes use of the social media platform Facebook and Twitter. For the future, they want to add more social media channels, such as Instagram and LinkedIn. Another subject they want to address is to reach a higher conversion by creating a better fit between products and social-media influencers. To reach this goal, Sellify asks the influencers a couple of questions about their interests and are expanding their influencers database.

What do you think?
Many studies showed that when a product gets recommended by a friend or social influencers, the effect of buying this product is much greater than when a company itself tries to promote this product. Customers believe their friends more than the message told by a company. This is one of the reasons why this idea might work. But on the other hand, there are already so many ways on social media to get the customers more involvement and more engaged. There is already so many promoted and shared content on Facebook.. Will this idea be differentiated enough to make a difference? What do you think? Do you think this new business idea might pull it of?

Sources
http://www.marketingfacts.nl/berichten/social-media-cijfers-anno-2017
https://innovation-awards.nl/concept/professional-e-commerce-as-a-service-for-everyone/
https://startupdates.nl/startupbootcamp-alumni-moneylink-gaat-voortaan-leven-als-sellify/
https://www.sellify.com/en/faq
https://www.sellify.com/en

To Keep Or Not To Keep: Effects of Online Customer Reviews on Product Returns


By Madeleine van Spaendonck (365543ms)

In the US, the current average return rate for products bought online is approximately around 30% of purchases (The Economist, 2013). Most returns take place due to customers’ negative post-purchase product evaluation rather than product defects. One factor that is found to have an impact on this is the role of Online Consumer Reviews.

This is what Minnema et al. (2016) investigated in their study “To Keep or Not to Keep: Effects of Online Customer Reviews on Product Returns”. It uses a multi-year (2011-2013) dataset from a European online retailer that offers both electronics and furniture products. The paper examines the impact of three OCR characteristics (valence, volume and variance) on return decisions (figure 1). The researchers evaluate the net effect of OCRs, looking at its influence on both purchase and return decisions.

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Theory

The hypotheses examined are based on the ‘expectation disconfirmation mechanism’. Post-purchase satisfaction results from the combination of customer expectations formed at the purchase-moment, product performance, and the difference between them. Negative expectation disconfirmation therefore decreases satisfaction, leading to a higher return probability. Therefore, higher expectation levels should lead to higher purchase and return probabilities, while higher expectation uncertainty should lower these.

Main results

Figure 2 presents a summary of the results of the study.

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A particularly counterintuitive insight is that overly positive review valence (whereby the current OCR valence is higher than the long-term product average) leads to not only more sales but also a higher return probability. A potential reason for this is that OCRs induce the customer to form product expectations at the moment of purchase, leading to higher purchase probability. However, high expectations due to overly positive reviews may not be met. This leads to negative expectation confirmation, which then leads to higher return probability. Review volume and variance mostly affect purchase decisions, having little to no effect on product returns.

Strengths, Weaknesses and Suggested Improvements

While the majority of scholarly work in this field focuses on OCRs effects on product sales, this paper also addresses the lack of understanding of its effects on product returns. Taking into account both aspects is vital, because the prediction of OCR effects on retailer performance may be overly optimistic or pessimistic if only its effects on sales are considered. The study also shows that OCR effects advance beyond the moment of purchase and have the power to affect the decision to return a product. However, the model did not incorporate other information sources available at the purchase-moment that affect return-likelihood, such as product descriptions and pictures provided by the retailer. A comparative analysis could be used to evaluate whether reviews or retailer-provided information have the strongest impact on returns.

Managerial Implications

The study highlights the importance of considering product returns when evaluating OCR effects, as overly positive reviews may have negative consequences for retailers’ financial performance. Overly positive reviews, leading to more product returns, result in large reverse logistics costs. To reduce negative expectation disconfirmation, retailers should provide information and tools (besides OCRs) that allow consumers to set the right expectations and see if the product really meets their needs.

Sources:

Minnema, A., Bijmolt, T.H.A., Gensler, S., Wiesel, T. (2016). “To Keep or Not to Keep: Effects of Online Customer Reviews on Product Returns.” Journal of Retailing, 92(3), pp. 253–267.

The Economist. (2013). Return to Santa. December 21, (latest accessed March 8, 2017), http://www.economist.com/news/business/21591874-e- commerce-firms-have-hard-core-costly-impossible-please-customers- return-santa

Source for cover photo:

Ministry Ideaz, (2016), How do I return a product I no longer want? [ONLINE]. Available at: http://support.ministryideaz.com/customer/portal/articles/1022650-how-do-i-return-a-product-i-no-longer-want- [Accessed 8 March 2017].

Culture, Conformity and Emotional Suppression in Online Reviews


Paper: “Culture, Conformity and Emotional Suppression in Online Reviews” by Hong et al., 2016

“While Americans say, “the squeaky wheel gets the grease,” the Japanese say, “the nail that stands out gets pounded down.”

In other words, in the States, people who complain the loudest get the most attention while in Japan, people are discouraged to express personal opinions loudly especially if they don’t fit the community expectations. This phenomenon illustrates the differences between individualist (American) and collectivist (Japanese) cultures as defined by Hofstede (2001) and House et al. (2004). But this post is not entirely about cultural differences – it is about their influence on online reviews. Continue reading Culture, Conformity and Emotional Suppression in Online Reviews

Why users contribute knowledge to online communities: An empirical study of an online social Q&A community


Knowledge & the Internet

Ever since the inception of the Internet, the volume of knowledge has exceptionally increased, especially since it improve-knowledge-managementfacilitates crowdsourcing knowledge. Websites such as Wikipedia and Quora help individuals provide other individuals with information and answers to lingering questions. Quality control is also crowd controlled, where different kinds of voting systems enable fellow users to assess the provided answers and filtering out low-quality ones. Online Q&A communities are special social networks focused specifically on information sharing. They are a special place since there is usually no monetary incentive to motivate people to contribute. This paper focusses on these online communities and tries to explain the motivation behind the contributors.

Related Theory

There are 3 theories that are related to this study and on which the hypotheses are built, they are social cognitive theory, social capital & social exchange theory. The Social cognitive theory claims that that people’s thinking and actions are influenced by watching others through social interactions (Anderson, Winett, & Wojcik, 2007). The theory has been used to analyze how content is generated by users and how this content affects future contributions. Social capital is a known concept describing the value derived from interpersonal relationships and is built over time. It includes trust, respect & friendship among other things (M.M., 2005). The social exchange theory highlights intrinsic rewards from social interactions, similar to economic exchange theory it claims that individuals will behave in a certain way to acquire rewards from an interaction (Liu & Chen, 2005).

What is measured and how?

Based on the previously mentioned theories/concepts 4 aspects were identified that are possible drivers of knowledge contribution in online Q&A communities.

Identity Communication

Identity communication refers to an identityindividual’s efforts to express and present his/her identity. It explains who a person is and how he/she is different from others. It includes the concept of self-presentation information; the transfer of personal information about one’s personality, experience etc. so others understand their social identity (Tajfel & Turner, 1979). In the study, it is measured as a number of items that a user discloses about himself with a maximum of 11 (maximum of items available on the website).

H1: Individuals who disclose more self-presentation information will contribute more knowledge to online social Q&A communities.

Peer Recognition

The more knowledge becomes available the more attention is divided between different sources of information. The same goes for the information in online Q&A communities. Peer recognition is the positive feedback users receive on their behavior and is measured by the number of usefulness votes on a post.

H2: Individuals who receive more positive feedback will contribute more knowledge to online social Q&A communities.

Group-size Effects

Since most intrinsic rewards are based on transactions with others, as explained before, the presence of others and the number of possible recipients are important. A larger following means a wider reach and thus more social rewards (Nahapiet & Ghoshal, 1998). A member’s following is measures by the member’s so-called ‘followers’.

H3: Individuals with a larger group size will contribute more knowledge to online social Q&A communities.

Social Learning

Social learning is a type of learning that comes from observation of others. In online communities content feeds provide constant updates of other individuals actions, providing continuous learning opportunities (Anderson, Winett, & Wojcik, 2007). Social learning is measured by the number of topics, questions and members a participant is subscribed to, the more they are subscribed to the more learning opportunities a member has.

H4: Individuals with more social learning opportunities will contribute more knowledge to online social Q&A communities

Results

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The researchers have analyzed 1.762 data points from 306 members of a popular online Chinese Q&A community. These data points include all knowledge contribution behavior from March 15 to June 22, 2014. After processing the data H1, H2 & H4 are supported and H3 is rejected.

Why is this important?

The internet is a great tool to share knowledge, people from all over the world can distribute information to others. This can help people with a more difficult start in life acquire knowledge to help them further. Understanding why people contribute to online knowledge sharing can help increase knowledge that is available online.

References

Anderson, E., Winett, R., & Wojcik, J. (2007). Self-regulation, self-efficacy, outcome expectations, and social support: Social cognitive theory and nutrition behavior. Annals Of Behavioral Medicine34(3), 304-312. http://dx.doi.org/10.1007/bf02874555

Anderson, E., Winett, R., & Wojcik, J. (2007). Self-regulation, self-efficacy, outcome expectations, and social support: Social cognitive theory and nutrition behavior. Annals Of Behavioral Medicine34(3), 304-312. http://dx.doi.org/10.1007/bf02874555

Jin, J., Li, Y., Zhong, X., & Zhai, L. (2015). Why users contribute knowledge to online communities: An empirical study of an online social Q&A community. Information & Management52(7), 840-849. http://dx.doi.org/10.1016/j.im.2015.07.005

Liu, C. & Chen, S. (2005). Determinants of knowledge sharing of e-learners. International Journal Of Innovation And Learning2(4), 434. http://dx.doi.org/10.1504/ijil.2005.006665

M.M., W. (2005). Why should I share? Examining social capital and knowledge contribution in electronic networks of practice. MIS Quarterly: Management Information Systems29(1), 35-57.

Nahapiet, J. & Ghoshal, S. (1998). Social Capital, Intellectual Capital, and the Organizational Advantage. The Academy Of Management Review23(2), 242. http://dx.doi.org/10.2307/259373

What’s your recommended size?


Shopping online is more convenient, however it becomes tricky when shopping for clothes as we’re not able to try the clothes on. Hence, we purchase items in the size we think fits us best. This, unfortunately, may not always work in our favour. Often, we receive an item that doesn’t fit us well. We then either return it, store it at the back of our closets hoping one day it will fit, or give it to a friend. Essentially, a waste of time and money.

ASOS, a large online fashion retailer, just launched a new recommendation tool that helps solve this problem for their shoppers.

What is it?

The new tool provides customers with a personalized recommendation of a size it thinks will fit them best. It suggests a size based on customers’ past purchases and returns. Here’s how it works (Cherrington 2017):

  1. A recommended size instantly appears when the customer views an item.1
  2. Clicking the link shows the customer what the recommendation is based on.2
  3. Customers also have the option to provide input to improve recommendation accuracy by: (1) selecting which past purchases didn’t fit, (2) adding height, weight, age, and desired fit type (very tight to very loose), (3) selecting tummy shape, hip shape and bra size.

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If a customer is new, they can add in their height and weight and discover which size similar customers purchased and did not return.

ASOS has received a backlash for introducing this new tool. Some women have taken to Twitter to vent their frustrations that the tool is insulting and inaccurate. (Cherrington 2017)

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Others have responded more positively to the new tool, as customers no longer have to guess which size would fit and it saves the time and effort that would have been spent on returns and exchanges. It not only provides a personalized recommendation to customers, but it also includes the input of customers to produce better results, making customers feel like they are part of the creation process.

ASOS’ business model is to provide their customers with engaging content and experiences, great fashion at a great price and excellent service through an “effortless online and mobile shopping experience”. (ASOS 2017) More than just a fashion retailer, ASOS prides itself as a technology company – constantly innovating to improve service and customer experience. This new recommendation tool is a strong reflection of their business model and values.

Efficiency Criteria

The joint profitability criteria is met as this recommendation tool improves the joint value for both ASOS and its customers. While some customers are currently unhappy with this new tool, once ASOS improves the system to deliver more accurate recommendations, customers are likely to appreciate the tool more. It saves them from spending money on clothes that don’t fit and will increase customer satisfaction.

The investment cost of this new recommendation tool is low as the company only needs to improve the recommendation system based on feedback. The company also benefits from the increased customer satisfaction and sales from customers that previously abandoned their shopping cart due to size concerns.

The feasibility of the required allocations is also met. The polity and judiciary dimensions of the institutional environment do not relate directly, however the social norms dimension is met as ASOS has a strong reputable brand,  thus creating trust with customers.

References

ASOS 2017, ASOS Story, ASOS Plc, viewed 9 March 2017, <https://www.asosplc.com/asos-story&gt;.

Cherrington, R 2017, ‘ASOS Is Guessing What Size Its Customers Are, And They’re Not Happy About It’, The Huffington Post, 24 January, viewed 9 March 2017, <http://www.huffingtonpost.co.uk/entry/asos-size-recommendation_uk_58871c69e4b02085409924c3&gt;.

 

 

 

How Brand’s User Base Visibility in Social Media Platforms Effect Consumer’s Brand Evaluation


Social media is a widely used channel for companies to connect with consumers. Approximately 83% of Fortune 500 companies have used some form of social media by 2011 (Naylor et al., 2012), which have increased even more by now. Many consumers use these social media platforms to get deeper knowledge about a brand and who affiliates with it. This is useful because consumers reaction to a brand may be affected if they know who other users are (Bearden, Netemeyer, and Teel, 1989; Berger and Heath, 2007). Via these platforms, consumers have the possibility to see other people who affiliated with the brand. This passive exposure to a brand’s supporters is identified as ‘mere virtual presence’ (MVP). This research tries to answer what the effect are of the different types of MVP on brand evaluation and purchase intentions, as there is still little know about the subject.

Consumers find more affinity with a certain brand if they see that similar others support the brand (Berger and Heath, 2007; Escales and Bettman, 2003). Because of this, it is expected that individuals who deal with similar MVP with the brand’s user base will experience high levels of inferred commonality. Therefore, they positively evaluate the brand. On the contrary, if the consumer experience a dissimilar MVP, they will evaluate the brand downwards. Another research suggests that when there is no information available about others, consumers anchor on the self and assume that those others are like them (Naylor, Lamberton, and Norton, 2011). Thus, probably a more safe decision is not displaying pictures of others at all, which is called ambiguous MVP. This ambiguous MVP results in that consumers will project their own characteristics on the brand’s user base, hence higher affinity with the brand. However, a brand’s user base cannot be completely similar to a consumer and is more heterogeneous. Therefore, the last form of MVP this research investigate is that consumers evaluate a brand more positively if they are confronted with a small proportion of similar individuals in a large heterogeneous group.

Findings from this study have the following implications for positive brand evaluations: (1) If the brand’s user base is homogeneous and similar to the target audience, reveal their identity. (2) Second, if the brand’s user base is heterogeneous, but includes users who are similar to the target audience, also reveal their identity. (3) However, maintain ambiguous MVP if the brand’s user base is dissimilar from the target audience. This will result in that consumers evaluate the brand the same as in the similar MVP context. (4) Lastly, results indicate that when brands are jointly evaluated with other brands similar MVP yields better performance than ambiguous MVP. This positive brand evaluation consequently results in higher purchase intentions.

This study contributes to the literature how firms can best manage their social networks in meeting strategic objectives and enhance their brand evaluation. Moreover, this research help to guide brand managers when it is useful to reveal the identity of their online supporters or to remain an ambiguous MVP. Thus, managers are informed which social media platform they should choose because some control over specific fan base is necessary (similar consumers in heterogeneous population). These results are furthermore most useful for new brands to establish a larger supporter’s base. And to manipulate MVP and find similar consumers, firms can target consumers based on demographics. For example, Facebook displays advertisements mostly to certain demographic groups, thus emerging tracking and targeting tools can be used to do this.  Because of this tracking marketers know where their new supporters came from so that they can adjust their MVP and target consumers that fit this demographic profile. This will help brand managers to decide whether to display the brand’s user base or remain ambiguous.

MVP

Bearden, W.O., Netemeyer, R.G. and Teel, J.E. (1989) ‘Measurement of Consumer Susceptibility to Interpersonal Influence’, Journal of Consumer Research, 15: pp. 473-481.

Berger, J. and Heath, C. (2007) ‘Where Consumers Diverge from Others: Identity Signalling and Product Domains’, Journal of Personality and Social Psychology, 95: pp. 593-607.

Escales, J.E. and Bettman, J.R. (2003) ‘You Are What They Eat: The Influence of Reference Groups on Consumers’ Connection to Brands’, Journal of Consumer Psychology, 13, 3: pp. 339-348.

Naylor, R.W., Lamberton, C.P. and Norton, D.A. (2011) ‘Seeing Ourselves in Others: Reviewer Ambiguity, Egocentric Anchoring, and Persuasion’, Journal of Marketing Research, 48, 6: pp. 617-631.

Naylor, R.W. Lamberton, C.P. and Norton, D.A. (2012) ‘Beyond the “Like” Button: The Impact of Mere Virtual Presence on Brand Evaluations and Purchase Intentions in Social Media Settings’, Journal of Marketing, 76, 11: pp. 105-120.

 

Arcbazar, designing through a contest


Always wanted to change your house, your garden or just want to switch your interior up, but you did not know how? Arcbazar is the answer. It is the number 1 crowdsourcing marketplace for architectural, interior and landscape design projects and let you crowdsource your projects to over 10.000 architectural, interior and landscape designers from around the world.

Arcbazar was founded in December 1010 by Imdat As, Ana Batista and Halit Ciftci, after realizing that all too often clients could not find an easy and affordable way to find competitive architectural design services, while at the same time, designers had a hard time to connect to clients and use their design talent. Their website arcbazar.com is the first website that holds online competitions for small to medium scale design projects. Their aim is to help their peers, young designers and architects find exciting design opportunities from design conscious individuals.

Afbeeldingsresultaat voor arcbazar

Starting your project

At Arcbazar, any client can start a design competition. Here you can fill in your title and your project type and Arcbazar will already come up with a list of deliverables that designers should come up with. You can alter this if you need any specific document or if you want less deliverables.  After this basic information, you are asked to describe your project. Arcbazar even helps you with some questions that can be answered in order for the project information to be more complete. Here the project can be described, but also your goals, challenges and specific requests to the designers.  You set the deadline, fill in an award and launch your project. If you’re still in doubt about the project, you have 24 hours of free cancelation.

How should you reward the designers?

The minimum award of your project is given by Arcbazar to make sure the awards are fair to the designers. However, this minimum amount is nog the ‘perfect’ award, Arcbazar also suggests an ideal award for your design competition, but you are free to choose your own. This award also should be payed up front, to make sure the designers get rewarded for their effort. One of the new things of this contest is that more than one designer will win a price. The 1st prize winner you select will get 60% of your award, the 2nd prize winner 30% and the 3rd prize winner 10% of your award money. If you feel bad for other designers which idea you also liked very much, you can give them an extra bonus. If there are no submissions at your deadline, the competition is void and you will get your money back.

Interaction between clients and designers

You can keep in contact with the designers through a wall where designers can ask you questions about your project. All questions/answers in the wall are public, so every designer gets the same amount of information. If you want to inform the designers even more during the project, you can also post any text/images on your project wall. Designers who signed-up for your project will automatically get notified.

How to select your winner?

It is hard to select a winner of your competition. Therefore Arcbazar created a public voting feature, which you can select after the deadline. Users of Arcbazar can then vote and evaluate your project designs and give you valuable feedback on your submissions.

What’s in it for the designers?

Of course the money you can win is a big motivation for designers to participate. However Arcbazar also has a point system. To motivate the designers, designers can get points when voting for other projects, signing up to a project, submitting an idea to a project and when winning prizes. To motivate them to actually submit an idea after they signed up for a project, they can also get a deduction of points when not submitting to a project they signed up for. There is a top 50 designer page on the website linking to their profiles, so the more points you get, the more exposure you get.

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Designers can even earn money by using affiliate company products in their design. At the end of each year, Arcbazar will share 10% of all product sales proceeds with all designers proportionally.

Making an internet celebrity-the economy behind it


For most of us, Instagram is not only a way to share and post filtered photos of important subjects of our life like Sushi ate for dinner, friends’ cute cats and dogs as well as selfies, but also a procrastination tool to enjoy the eye candies from internet celebrities, i.e. posted pictures, meanwhile some are making real cash out of their influential photos. In case you are curious on how to make money like an internet celebrity, hope the following tutorial can help and it all comes down to a combination of product placement, endorsement and followers who gradually become consumers as well, since they are the target market of the internet celebrities they follow.

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Law 1: Instagram Endorsement

According to Forbes Magazine, Kylie Jenner who ranks the second on 2016’s Top-Earning’s Reality Stars list, earned $18million in 2016 (Robehmed, 2016). Among which, nearly 20% of the income came from endorsements on social media for promoting other brands’ products. She shilled for at least eight different brands through her Instagram page. It is said to have your product shown on her Instagram, each picture charges at least $300,000 (Lester, 2016), due to the fact that these internet celebrities have considerable audience to broadcast to and easily gather at least one million “likes” on Instagram. The actual advertising effect is also surprising. The year before a noteless make-up brand (Nip Fab) reached out to Kylie Jenner with a hefty bonus. Now that brand is gaining its popularity with a boost from her Instagram endorsement, the market value of the company has reached $100 million (Lankston,2015).

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Another example is from Selene Gomez who sits on 110 million followers on Instagram. Last year she broke a record of asking $500,000 for an endorsing photo from Coca-Cola. The picture is such a huge success that harvest of 6.5 million “likes” on Instagram immediately, which became the most “liked” Instagram in history.Screen Shot 2017-03-10 at 17.55.06

Law 2: Dress with product placement

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Kendall Jenner, sister of Kylie Jenner, who also attracts almost 76 million followers on Instagram, was spotted wearing a certain brand clothes for a long time when appearing in front of paparazzi or casually shot off pictures with the brand’s clothes on and posted on Instagram. While she was paid to by this newly set-up, yet no-fame Australian brand. Most importantly, sales revenue of the brand rocketed thanks to her implied efforts. Consequently, by partnering with Instagram influencers that have thousands or even millions of followers, brands can reach loads of consumers with a single post. Nowadays, many marketing agencies have turned to devote to pairing Instagram accounts that have sizable followers with companies looking for advertising or exposure aiming for certain target market.

Law 3: Establish own brand

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Seeing their promotion of other products sales went so well, Jenner sisters rushed to develop their own clothing line, but this brand is quite controversial. Followers who bought complained that regardless of style, the material or cutting are inferior, nevertheless the retailer prices are not cheap.

The economy behind it

Concerns are often raised whether buying products that recommended by internet celebrities is trustworthy or not as products that internet celebrities promoting are not supervised by any regulation as long as they are complied with law. Moreover, they do not have clear responsibilities for consumers who made purchases as a result of their product placement post. Nevertheless, these influencers still make certain impacts on their followers to help either brand build their business or discover their own selling opportunities.

Given the fact that internet star’s every move comes with commercial incentives driven by huge business interests, it is up to followers to identify contexts and contents on Instagram at the moment. Interestingly, followers are willing to invest their time and attention in the absence of interaction with the influencers, as Bateman et. al (2011) discovered that continuance community commitment (i.e. followers have adopted the habit to check on their following influencers’ posts) and affective community commitment (i.e. followers find intangible rewards as browsing pictures are enjoyable) were the form of commitment that have stronger impact on participants’ reply-posting behavior except that normative community commitment in the context of Instagram does not make every participant obligated to post pictures. Therefore the last piece of advise to become Instagram celebrity is to keep followers come back for more and new content of pictures and to sum up, as the internet celebrities mentioned above, they have leaned to what their audience is asking for and show them what they want, and they will become loyal.

eyylq

Reference:

Bateman, P. J., Gray, P. H., & Butler, B. S. (2011). The Impact of Community Commitment on Participation in Online Communities. Information Systems Research, 22(4), 841-854.

Instagram.com

Robehmed, N. (2016). Kylie Jenner’s Earnings: $18 Million In 2016.Available: https://www.forbes.com/sites/natalierobehmed/2016/11/16/kylie-jenners-earnings-18-million-in-2016/#581c6646303a. Last accessed 8th March 2017.

Lester, T. (2016). T The industry that has erupted within the modeling industry. Available: http://www.crfashionbook.com/book/it-pays-to-be-social/. Last accessed 8th March 2017.

Lankston, C. (2015). ‘Using Kylie in a campaign was risky, but it paid off’: Beauty guru reveals how celebrity fans like Kylie Jenner and Elle Macpherson helped her to build a $100 MILLION brand. Available: http://www.dailymail.co.uk/femail/article-3284503/It-s-secret-ingredients-Skincare-expert-loved-likes-Kylie-Jenner-Elle-Macpherson-reveals-secrets-100-MILLION-beauty-business.html. Last accessed 8th March 2017.

Morrison, L. (2015). How Do Instagram Stars Make Money? Here’s What Goes On Behind All The Valencia. Available: https://www.bustle.com/articles/127110-how-do-instagram-stars-make-money-heres-what-goes-on-behind-all-the-valencia. Last accessed 8th March 2017.

Kérastase Hair Coach: the smart hairbrush


When it comes to hair, it not a secret that especially women spend big time. In U.K women for example spend around £350 per year on hair salons- excluding other hair treatments and hair products(www.independent.co.uk). Healthy shiny hair is the dream of every woman and they will try every product and treatment to achieve it. It appears Kerastase heard all these wishes, and recently introduced the Kérastase Hair Coach Powered by Withings.

How it works

The smart hairbrush incorporates numerous fancy technologies that analyze and monitor the hair’s health. The first step is the assessment of the hair condition. The hairbrush is able to provide a hair quality score. Essentially, the hairbrush is equipped with a microphone and conductivity sensors that make all the evaluation. On the one hand the embedded tiny microphone detects the sound of the brush tines working through the hair. Then these auditory data are transmitted to a mobile app, where frizziness, dryness, split ends and breakage is detected with the help of a smart algorithm. On the other hand, the conductivity sensors recognize whether hair is wet or dry (because sound waves of wet hair imitate the sound of smooth and less damaged hair). Then combined with the data accumulated by the microphone the app is able to offer a more accurate reading.

The second step is the estimation of  the brushing quality. With the help of elegant tools (accelerometer, a gyroscope, and 3 axis load cells) the brush detects your brushing patterns. Basically, it evaluates the force & rhytme when combing the hair, analyzes the gestures and counts the strokes. The info is once again sent to the application that in turn make specific recommendation. In particular, the app is able to provide insight on how to avoid damaging hair, how to improve brushing habits and how brush use impacts the quality of hair.

The final step is for users to receive personalized advices and product recommendations. The app even takes into account external factors (humidity, temperature, UV and wind) before combining it with the rest of the accumulated data. Hence, thorough insight and more accurate personal consulation is given to the consumers. Based on the users’ hair profile the app then proceeds to recommend the appropriate Kerastase products and routines.

Value co-creation

Users brush their way into co-creating value by providing the necessary data for the smart algorithm to make the diagnosis and to subsequently provide personalized recommendations. User’s brushing habits, hair quality and geo location data (for external factors such as weather) are gathered and drive the whole process. Successful diagnosis leads to better customized advice and more accurate product recommendations.

Kerastase benefits by potentially increasing its products sales and by better targeting consumers. The first source of profit is the hairbrush itself. Subsequently through the hairbrush and the app the company can satisfy the needs of its customers by offering personalized advice and recommending the right hair products to the right consumer (instead of depending on hairdresser to recommend and promote its products).

Efficiency criteria

Even though it is a smart brush, users will still use it the same way they would use any other brush. Hence it is an easy to use product and no extra amount of effort is required. The hairbrush however is pricy (at $200), which means that users should spend a respectful amount of money to acquire it. Nevertheless, on the long run users could potentially save money and time.Improving their hair’s health means less visits to hair salons and less expenses on hairdressers, hair treatments and on wrong products.

For the company the hairbrush might be a new source of income, provided that users embrace it and are willing to actually spend $200 on a hairbrush. If indeed users are lured to try it the company can subsequently drive further its hair products’ sales and its revenue. The generated revenue will then have to cover the R&D costs, which should be quite high since it is an innovative technological product. Last but not least, by exploiting the collected data the company can increase its insight and use them for future developments.

Overall, time will tell if users indeed will be impressed by this innovative technology, invest on it and engage with it. Compared to conventional brushes the Kerastase smart hairbrush is without a doubt substantially more expensive. However, consumers and predominantly women already spend around $80 for other styling tools (e.g. hair straighteners), hence compared to them the hairbrush does not seem that expensive. There are two key factors that would determine its success. Firstly, whether the company will succeed in convincing the consumers to spend more on the short run and save more on the long run. Secondly, it has to ensure that users will actually buy the products that the app recommends (users could easily turn to another brand to e.g.  buy a shampoo for damaged hair). Since Kerastase hair products fall in the luxurious category and are thus pricy, the app could perhaps include more economical products as well. These products should however belong to L’Oréal which is Kerastase’s parent company(something that might lead to product cannibalism however it could also increase the sales of the L’Oréal company products over those of its competitors).

References

http://www.independent.co.uk/life-style/fashion/news/the-staggering-average-lifetime-spend-on-cosmetics-and-grooming-revealed-9709654.html

http://www.kerastase-usa.com/connected-brush

https://www.withings.com/us/en/products/hair-coach

The Insurance Industry Is Taking Advantage of the Sharing Economy


The so-called ‘sharing economy’ has benefited numerous consumers through the value it has added to their lives. Companies such as Uber, Airbnb and Lyft, to name just a few, have taken advantage of the digital technologies humans have developed over the years. However, consumers are not the only benefactors of the sharing economy, the insurance industry has developed products and services specifically catered to its unique characteristics, most notably in the ride-sharing sector, where insurance providers have taken advantage of liability concerns occurring in such ‘sharing’ activities (Traum, Vol. 14:511).

One of the first products developed, the “Metronome”, came from a collaboration between Uber and MetroMile. The device tracks the vehicle of a Transport Network Company (TNC) driver, and is embedded in the Uber application (Traum, Vol. 14:511). It only turns on and activates the required insurance plan when drivers are engaged in TNC services. When the driver is not carrying a passenger, or hasn’t accepted a ride, any liabilities arising from an accident are covered by his own insurance. This product considers both the professional and personal roles of Uber drivers. In a similar fashion, a new plan from Farmers Insurance, on offer since May 2015, supplements a TNC driver’s personal plan with a premium of eight percent (Traum, Vol. 14:511). Many insurances providers have begun to offer similar services to the ride-sharing industry.

Furthermore, the use of such digital technologies has expanded to mainstream customers’ insurance plans. Some companies have developed a chip to be installed on the vehicle during production. Similarly to the Metronome, this device tracks if a vehicle is in use and offers full coverage, to the extent of the customer’s plan, in the case of an incident. However, when the vehicle is parked and the engine is off, the insurance company provides a more limited plan. This enables insurance firms to offer their customer with a more suited, and personalised service.

In the case of Airbnb and other home-sharing services, the lack of legislative development with regards to the coverages of issues common to such activities (Traum, Vol. 14:511). However, insurance providers are aware of the risks that may arise but have yet to adapt and respond to liability issues specific to the home-sharing industry. Together with national governments and sharing economy companies, insurance providers have to strive towards addressing consumer needs; such as protection issues. Furthermore, innovations in this industry can be translated to insurance plans for the mainstream customer, taking the advantage of newly available digital technologies.

Traum, Vol. 14:511. Sharing Risk in the Sharing Economy: Insurance Regulation in the Age of Uber. Cardozo Pub. Law, Policy & Ethics J.

Cheers to a more sustainable world


As one of the world’s largest brewers, Carlsberg wanted to create a greener beer. The bottles of the Danish brewer have already a green color for decades, but the ‘Cheers to Green Ideas’ competition was launched to improve the environmental impact of beer. The company has incorporated an open innovation model and asked consumers and companies from all over the world to submit ideas about greening the beer. Using the wisdom of the crowd, Carlsberg wanted to have a positive effect on the environment through drinking beer.

 

“We believe that business has a leading role to play in developing concepts such as the circular economy or closed-loop practices to drive positive change.” – Cees ‘t Hart, CEO, Carlsberg Group

 

Carlsberg is aware of their position in today’s world, and therefore know that they can contribute to a more sustainable environment. To achieve this, they created an open innovation model. They opened op for external ideas and collaborations. For instance for the ‘Cheers to Green Ideas’ competition, with the collaboration with Sustainia, a think tank that wants to create a more sustainable future. Together, Carlsberg and Sustainia wanted to build on the world of tomorrow through launching a sustainability competition in 2015.

 

The challenge

In 2015, Carlsberg announced the ‘Cheers to Green Ideas’ competition. During a three-week period, consumers, firms, and entrepreneurs from all over the world had the possibility to submit their ideas about making the Carlsberg’s beer more sustainable. The competition highlighted three key challenges to consider: how to package beer in an eco-friendly way, how to increase recycling, and how to use less water and energy during production. In total, six finalists were selected out of the 162 submitted ideas by a Carlsberg jury. Two awards were to handed out to the best ideas: Cheers to Green Ideas Award, mainly intended for companies and entrepreneurs, and the JC Jacobsen Special Award, intended for consumers.

 

Carlsberg-will-soon-serve-beers-in-cardboard-bottles-1

 

From closed to open

This competition shows that Carlsberg has an open innovation model. They are open to collaborating with other companies and organizations, and the input of consumers. Even though many companies benefit from the transition from closed to open, this often does not go without resistance, and therefore does not happen overnight. The process often faces organizational, social, and psychological barriers.

 

It’s a change process

Opening up an organization requires change, demanding for a different mindset. While changing, firms can face various barriers. Organizational barriers can be encountered with all activities that have to do with implementing co-creation (complex governance, operations, intellectual property etc.). Also, there can be psychological and social barriers, which can occur in a team or among employees (inertia, fear of the unknown, not invented hear syndrome etc.).

 

organizational-change

 

Get ready for co-creation

Managing the process from closed to open well can result in a profitable business, but where should firms pay attention to? Using the following steps can help to overcome the aforementioned barriers.

Start with why: explain why change is need

Shrink the change: divide the change into small steps

Go for direct result: generate quick wins along the process

Cut the leash: give autonomy and show value for individuals

Do it together: create a feeling of unity and shared identity through team building to create trust and encourage people

Discover the feeling: show other successful cases to let people experience it to make them more at ease

Set the scene: provide a place by literally creating a co-creation environment apart from the daily business, inside or outside the company walls

Make it happen: incorporate the change in every activity and decision to make it a natural behavior

Get the board in: make sure higher management support the change and let them show their support with a rewarding system

 

Following these steps can helps firms to overcome barriers from going to an open business model and have successful co-creation competitions just as Carlsberg.

 

References

Carlsberg, 2015: https://carlsberggroup.com/news-archive/carlsberg-launches-cheers-to-green-ideas-crowd-sourcing-campaign-and-awards-the-best-sustainable-beer-solutions/

Carlsberg, 2016: https://carlsberggroup.com/sustainability/sustainability-at-carlsberg/

GlobeNewswire, 2015: https://globenewswire.com/news-release/2015/11/26/790517/0/en/Finalists-revealed-in-Carlsberg-s-Cheers-to-Green-Ideas-Award.html

Fronteer, 2011: http://fronteer.amsterdam/media/uploads/2016/10/161012-FRONTEER-WHITEPAPER-2.pdf

Sustainia, 2015: http://www.sustainia.me/carlsberg/#solutions

Sutainia, 2017: http://www.sustainia.me/about-sustainia/

Sustainable brand, 2015: http://www.sustainablebrands.com/news_and_views/collaboration/ hannah_furlong/carlsberg_saying_cheers_crowdsourced_solutions_sustainab

Network Effects in online consumer-to-consumer platforms


This paper focusses on the evolution and growth of online C2C platforms, where other papers mainly focus on the auction system. To examine the evolution and growth, the paper investigates the cross network effects, which means they look at the effect of more sellers on the growth of consumers and the effect of more customers on the growth of sellers. They use data of Taobao, which is the world’s largest online customer-to-customer platform. Taobao is Chinese-based and part of the Alibaba Group. The platform started in 2003 and by December 2012 they had over 7.1 million sellers and 435 million consumers. The transactions made in 2012 totaled 95 bilion dollars.

Taobao started in 2003 with different rules and conditions. After a few months they changed to free pricing and other measures to encourage growth of sellers and buyers. The research uses all the available data that Taobao saved from 2003-2012. This consists of data like what people buy, what product category and what is searched for. The findings imply that the earlier mentioned enhancements accelerate the growth. Moreover, they found that the impact of the seller installed base is much larger on the buyer growth, than the buyer installed base is on the seller growth. Which means that buyers probably inform each other about the amount of sellers and products on a platform, while this happens less with sellers.

If managers know what effects are occurring in their seller and buyer base, they can allocate resources more efficiently. The author discusses three factors that managers can focus at. First, during the introduction stage of the platform, buyers and sellers should be incentivised. For example, through referral bonusses like Uber does. This has a large and long-lasting impact on the growth. Second, the product variety has both a direct and an indirect effect. The direct effect is that new buyers will register. Because of this, more new sellers will sign up to the platform, this is the indirect effect. Third, is the effect of buyer quality. This will attract more sellers, which in turn attracts more buyers. So, the main task for managers is to attract more sellers and buyers with a high quality.

The main strength of the paper is that it uses data from Taobao. The platform does not charge any commissions on the subscription of buyers or sellers, or on the transactions. Instead, it earns money through promotional options for sellers. This means the buyers and sellers can sell and buy for free and this effect is not interfered by any commissions of the platform. Besides this, Alibaba Group gave creditcard payments a more reliable image by launching Alipay, which means there are no barriers for buyers. Moreover, Taobao has a big market share so a lot of data is available.

 

Reference:

Junhong, C. & Manchanda, P. (2016) Quantifying Cross and Direct Network Effects in Online consumer-to-Consumer Platforms. Marketing Science, 35(6): 870-893.

The Effectiveness of Branded Mobile Phone Apps


E-commerce is evolving in a tremendous pace. A few years ago, marketing strategies of companies towards e-commerce were based on e-mail or place advertisements online. The last one, online advertisement, is nowadays still a popular marketing-instrument. But what’s changed in the strategy last few years? Almost everyone is having and using it every minute of the day: a smartphone. But, what is so special regarding mobile telephone marketing? It is the effectiveness of branded mobile phone apps.

According to Hutton and Rodnick (2009) an important reason for the popularity of branded apps as a marketing device is their high level of user engagement and the positive impact this presumably has on attitudes toward the sponsoring brand. In contrast to aforementioned ways of marketing, the branded apps are welcomed as “useful,” which suggests that they may be one of the most powerful forms of advertising yet developed. There has been solely research done towards the potential of customized text messages, however hardly research has been done regarding the personal nature of the mobile phone. This study examines how to optimize the promising marketing potential of apps.

An online survey is conducted as pre-test measure. Subsequently, an experiment is conducted, which measures psychophysiological factors,  in order to investigate the effectiveness of branded mobile phone apps. A strength of this study, after the different methods used in this research, is the elimination of self-selection effects. Each participant was asked to interact with all eight test apps during the experiment to eliminate these effects.

This study confirms the positive persuasive impact, increasing interest in the brand and also the brand’s product category through the use of branded mobile phone apps. Branded apps have a large effect on the favourability of brand attitude, but only a small effect on purchase intention. However, there is a difference towards effectiveness among the branded apps. Research emphasized the importance of a creative execution style, which improved the effectiveness. Moreover, applications that used an informational style were more effective at shifting purchase intention, compared to apps that used an experiential style. There is also a difference towards gender. In male participants there is a difference between the psychophysiological measures biometric measure, heart rate, suggestive of the informational style focusing attention internally and thereby encouraging the generation of personal connections with the brand. Within the female participants there is hardly difference.

This study emphasized the increasingly importance of branded mobile phone applications. It is an indication towards the marketing department to focus more and more on mobile phones, and less on physical marketing or e-mail. More specifically, branded apps offer the unique benefits of mobile marketing communications, following consumers wherever they go, and able to be updated with the latest localized information and deals. One thing is for sure, marketing strategies have to focus more on branded mobile phone apps.

References

Hutton, G. & Rodnick, S. (2009) Smartphone opens up new opportunities for smart marketing. Admap, vol. 44(11), pp. 22-44

DayMate: for structure in our daily lives


Do you recognize these situations where you have a lot to do, or just simple have some tasks you keep on procrastinating? Your App Store probably offers a lot of these ‘to do’ applications. DayMate is a new arrival in this ‘to do’ industry but offers more than the mainstream ‘to do’ applications. DayMate aims to provide structure in your daily life, which especially comes in handy for people whom have difficulties with remembering chores or are chaotic-minded. The Dutch application DayMate is the follow-up of the already known application Assist Help. Assist Help was developed by Annemiek Modderman, whom son is suffering from ADHD. People suffering from ADHD face difficulties with applying structure in their daily lifes which leads to malfunctioning of their wellbeing. AssistHelp was already a great success for these people, however, DayMate is optimized for special use by using a clear standard setting and look&feel.

How does it work?

You simply add a task, by naming it and choosing an icon that comes with it. The icon appears in the center of the screen when the task is ‘active’ at the moment. There is a standard setting of 18 icons such as a washing machine (for doing the laundry), a trash bin, a Euro-sign and so on. The user specifies the begin and end time of the task and specifies on which days this certain task occurs. DayMate is especially designed for recurring tasks, in order to make your daily life more structured. That is also the reason why the user cannot set a specific date, because it should reoccur on specific days, which makes DayMate not an application for reminding certain activities.

Any weaknesses or strengths?

In the weekplanning, the user can see the coming tasks for that specific week, however DayMate only allows you to see the planned tasks per day, and does not provide a whole overview. Which is in my concern a pitfall of the application. A strength however, is the special support extension of the application. Users can assign a supervisor, whom keeps up to date with your planned tasks and can see your progress by using a certain ‘sensitivity measure’ which is basically a chosen smiley by the user of his/her mood.

So all together..

DayMate’s charm is especially its charisma and simplicity. DayMate can be a useful application for anyone who wants to bring some structure in his/her life, because you will be reminded with simple icons and notifications to perform a set of operations. For people with autism spectrum syndrome DayMate ensures greater clarity, especially with the tasks feature and setting apart of a supervisor. The clear design without too many bells and whistles, makes sure you do not get distracted.

References:

http://www.daymate.nl

http://www.iculture.nl/apps/review-daymate-structuur-activiteiten/

 http://www.autisme.nl/autisme-nieuws/oktober-2016/nieuwe-nederlandse-app-daymate-geeft-rust-in-je-dag.aspx

SamenInGeld, a crowdfunding platform for mortgages.


SamenInGeld is a Dutch platform built specifically with the goal to crowdfund buildings and homes using actual mortgages. As with most crowdfunding platforms, the focal group of projects are those that cannot find funding at the traditional places like banks and other traditional mortgage lending businesses. Among the projects funded on this SamenInGeld are entrepreneurs that cannot get a mortgage through a bank due to inconsistent income and small time project owners that want to buy and renovate a building so they can use the building as a source of income through rent payments.

The advantage of this platform is that they managed to secure a AFM license which is legally required to officially offer mortgages in The Netherlands.

Business Model

SamenInGeld charges 0.5% of the total investment when the projects start and 0.25% every year the project is active to the money borrower. This is their primary source of income to support the platform. This means that for an investment of €100.000, they will receive €500 + €250 for 14 years = €4000.

The platform charges no fees to investors over their received interest, except for a small fee of €0.25 for every withdrawal from their account. This won’t make the platform owners rich though, since money lent cannot be withdrawn for 5-15 years.

 

To manage the risk of their investors, SamenInGeld allow loan seekers to split up the investment in different layers of risk and return. Some investors seeking higher profits might choose to take a higher potential reward by investing in a phase that will be paid later in the event of payment failure by the loan takers.

 

Legal requirements

Your author for this blog post is not in the slightest an expert on AFM regulation regarding private investment in mortgages, but I will do my best to use the sources available to assess the legal requirements of the platform and whether they conform to regulations.

Among the requirements to be met is the investor test. Companies operating under an AFM license that want to receive investments from private crowdfunders for investments higher than €500 need to test their potential investors on some their knowledge on the “risks of the project, crowdfunding in general and the specific platform” (https://www.afm.nl/nl-nl/professionals/doelgroepen/crowdfundingplatformen/toezicht/vereisten)

SamenInGeld matches this requirement. The funny thing is that the AFM makes the platform responsible for the review of the test and keep the requirements of passing rather vague. There are other requirements listed by the AFM like an €80.000 cap of total investment and a warning for investors to spread their risk. SamenInGeld meets those and other requirements by listing them clearly.

Conclusion

The running costs for the platform are quite low, and the business model allows for a steady flow of income for a long period of time (5-15 years). SamenInGeld smartly does not charge the investors a lot for investing in the platform, making the investment interesting for potential investors. The platform adequately counters legal repercussions by following the AFM guidelines.

 

Sources

https://www.afm.nl/nl-nl/professionals/onderwerpen/crowdfunding-overig

https://www.sameningeld.nl/wp-content/uploads/2016/09/Investeerderstoets_SamenInGeld.pdf

https://investeren.sameningeld.nl/page/how-it-works

https://www.afm.nl/nl-nl/professionals/doelgroepen/crowdfundingplatformen/toezicht/vereisten

The Role of Customer Engagement Behavior in Value Co-Creation: A Service System Perspective


The study
Because engaging customers and developing co-creating customer communities can enhance business performance and customer value there has been a considerable increase in interest in these subjects as of lately. Due to co-creation of firms and consumers the boundary that separates firms from consumers becomes more and more blurry (Grönroos & Voima, 2013). Consumers increasingly participate in content creation, product development, support each other in product use, and promote products, services, or brands to other customers. These actions fall under the concept of customer engagement that aggregates the ways in which customers can influence firms (Doorn et al., 2010). However, academics and practitioners lack understanding on how customer engagement contributes to value co-creation. By using a case study approach on a public transport service system involving consumers, communities, businesses, and governmental organizations, Jaakkola and Alexander (2014) try to improve this understanding. The main strength of this paper is that, Jaakkola and Alexander (2014) are (one of) the first who conceptualize the role of customer engagement behavior (CEB) in value co-creation.

Results
This study shows that CEB affects value co-creation by customers’ diverse resource contributions toward the firm and other stakeholders. More specifically, CEB affects other stakeholders’ perceptions, preferences, expectations, or actions toward the firm. Therefore, CEB affects value processes between the customer and firm, and indirectly value co-creation between the firm and other stakeholders. Resources in this case are not only of informational nature but may also be for example physical labor, skills, and relationships. Besides the aforementioned, the study finds numerous other effects. Firstly, customers’ sense of ownership of the firm’s offering and empowerment in the service system are key drivers of CEB and this is supported by the firm’s provision of access and willingness to cede some control to the community. Secondly, engagement behaviors are motivated by the customers’ need to extend and improve the firms offering, either for personal or collective purposes. Thirdly, other stakeholders may provide engaged customers with recognition, legitimacy, and/or resources which further encourages these behaviors. Fourthly, the drivers, manifestations, and outcomes of CEB are iterative and cyclical, as the positive outcomes for each party further motivate them to engage in or support CEB. Lastly, customer satisfaction, trust, and commitment are drivers and outcomes of CEB, and customers’ motivation to engage relates to their expectation of value outcomes.

Managerial implications
Jaakkola and Alexander (2014) suggest that organizations can improve and differentiate their offering by incorporating the broad range of resources that customers and other stakeholders are willing to invest through codeveloping or augmenting behaviors. This means firms should consider how communities of customers can be involved within the firm and explore the potential to engage diverse stakeholders and their networks of relationships around a common cause, enabling greater customization and augmentation of the firm’s offering. More specifically, when customers feel empowered with passion and establish a sense of ownership of the offering, they are more willing to contribute for the benefit of the firm. Furthermore, through influencing and mobilizing behaviors, engaged customers impact other stakeholders’ willingness to engage with the focal firm and thereby offer a valuable channel to new customer and stakeholder relationships. Lastly, firms can encourage CEB by being open, accessible, and adaptive to customers’ resource contributions, but it requires that firms to some extent cede control over the offering to the engaged customers and other stakeholders.

This sound great, but be critical
Because this study focuses on a public service system, i.e. a railway station that has somewhat of a monopoly status, the generalizability of the findings is somewhat limited. Therefore, the findings may be most applicable to other public sector contexts where resources are limited and common causes can be more easily fostered within communities. However, I feel the findings are robust enough to apply to multiple others communities of stakeholders connected by an interest in a certain offering.

References

 Jaakkola, E., & Alexander, M. (2014). The role of customer engagement behavior in value co-creation: a service system perspective. Journal of Service Research, 17(3), 247-261.

Grönroos, C., & Voima, P. (2013). Critical service logic: making sense of value creation and co-creation. Journal of the academy of marketing science, 41(2), 133-150.

Van Doorn, J., Lemon, K. N., Mittal, V., Nass, S., Pick, D., Pirner, P., & Verhoef, P. C. (2010). Customer engagement behavior: Theoretical foundations and research directions. Journal of Service Research, 13(3), 253-266.

 

 

You cover me, I cover you


 

Eventually, every individual is obliged to join an insurance company to cover yourself for the costs of for example damage or injury. Problems of such insurances are, amongst others, the high premiums, even though you might not even need insurance that year and bureaucracy. Wouldn’t it be great if you were able to set the price, rules, premiums and claims yourself together with a group of people?

Teambrella
Teambrella is a platform that is designed for peer-to-peer insurance service and backed with Bitcoin. Users have exclusive control over all the aspects of insurance to make it fair and transparent and to cope with the inefficiency of current insurance services (Kastelein, 2016). Users are able to form or join teams of different sizes online to cover each other and in which each peer is both a provider and consumer. The teammates decide how risky each person is and pay according to that.

Schermafbeelding 2017-03-10 om 17.45.08

The framework includes a decision-making layer, which consists of a server for communication and voting, and a payment layer, which is based on Bitcoin technology. The voting process exists to make sure all users have mutual control over the insurance, including new members, risk evaluation, rules and processing of payments. It is also possible to appoint proxies to vote on your behalf, but you have the casting vote. When you pay more for other teammates’ claims, your vote weight grows. Bitcoin is used as a mean of providing coverage and payment of reimbursements in order to ease the burden of payments. Each premium payment is a partly reimbursement of a claim and these payments are enforced by distributed wallets that prevent spending that is not sanctioned by the other peers. After voting, the servers automatically prepare a set of transactions from these distributed wallets of the providers to the submitted claim of the user (Kastelein, 2016).

Schermafbeelding 2017-03-10 om 11.59.36.png

Efficiency Criteria
The utility for the consumers is the fact that it is easy to use and access is available anyplace and anytime. It is free to sign up and consumers have full control over getting certain claims funded. Besides that the investments are very low. Consumers are able to get insurance at low costs and keep all the invested money when no claims are submitted. Additionally, the providers are able to vote which claim to back, so they perceive all the incurred costs as fair and they only pay for trusted members. In this way, users will be willing to switch to Teambrella, because it maximizes the joint profitability.

Teambrella is feasible and takes care of several institutional arrangements. The platform is fair, because it enforces the Golden Rule of ‘treat others the way you want to be treated’ and it aligns every teammate’s interest. Besides that, the platform is transparent. You see where the money goes and every decision in the team is made by discussion and voting, so every user has control. Furthermore, the platform is affordable, because no middlemen are present (teambrella.com, 2017). Also, the platform takes care of several concerns about security, privacy, fraud, failure, hacks, scams and bitcoin volatility. Finally, the founders calculated several coefficients and ratio’s, which make the platform solid (Paperno et al., 2016).

Also the institutional environment is taken care of. No contracts, obligations or policies are present. Teambrella is no business of insurance, so does not need a license. Furthermore, Teambrella resolves conflicts through its own tool; the alignment of interests and standards of treatment.

Schermafbeelding 2017-03-10 om 17.45.16.png

Teambrella makes non-transparent insurance companies unnecessary and opens up a completely new field of trustworthy and demanded peer-to-peer markets.

References
Kastelein, R. (2016) ‘Teambrella – A Peer to Peer Insurance System Using Bitcoin. Retrieved from: http://www.the-blockchain.com/2016/05/09/white-paper-teambrella-peer%C2%AD-to%C2%AD-peer-insurance-system-using-bitcoin/, 10th of March 2017.

Paperno, A., Kravchuk, V., Porubaev, E. (2016), WhitePaper: Teambrella: A Peer-to-Peer Insurance System.

 https://teambrella.com, 8th of March 2017.

 

Online Price Search: Impact of Price Comparison Sites on Offline Price Evaluations


Nowadays, consumers are using the internet as a source of information on products and prices before purchasing a product offline. Price comparison sites (PCS) provide and compare numerous retailers on the most detailed level. These sites can possibly influence price evaluations by consumers in the offline setting. When all this information is available to consumers, it gets extremely important for retailers to ensure consumers buy their products since it is relatively easy to find the better option quickly. Therefore, retailers need to revolve their business models around the consumers, in order to stay ahead of the competition and prevent to lose clients due to the internet.

Literature suggests that consumers may prefer higher priced, well-known retailers which have the impression of being able to fulfill non-contractible benefits such as delivery time (Smith and Brynjolfsson, 2001). Moreover, price comparison sites usually show ratings for retailers to signal quality. Commonly, when there is consensus in user feedback, this can reduce consumer suspicion and thereby increase purchase intentions (Benedicktus et al. 2010). However, it is unclear whether this also applies to the ratings provided by PCS.

This paper investigates how offline price evaluations are affected by price comparison sites by conducting three different studies, of which study 1 will be discussed extensively and study 2 shortly. In the first study, it is investigated if consumers’ price evaluations are affected by reference prices on price comparison sites as well as the retailer ratings. The authors also consider price validity and retailer quality inferences as mediating factors. Price validity means how genuine and obtainable a certain price is in the market. To test these questions, consumers were shown the search results from a price comparison website regarding heart rate monitors. Information included a list of multiple retailers, their prices for the heart rate monitor and the corresponding retailer ratings. Next, participants had to rate the attractiveness of another offer price for the same product and their opinion on price validity and retailer quality. Besides, participants were informed that ratings are composed from customer reviews and that ratings thus reflect customer experiences. The findings suggest that consumer’s subsequent price evaluations are particularly influenced by retailer ratings from price comparison sites. There is a mediation effect from price validity, but that is not the case for retailer quality perceptions. Study 2 finds that consumers are able to gather important information from the PCS search results and can assess distribution characteristics (price level and frequency), which shows that the use of these PCS prices as reference prices is relatively complex.

post
Figure 1: retailer rating effect on price attractveniss

The study thus finds that consumers use PCS prices as reference prices when they evaluate prices in stores. Retailers that have favorable ratings on PCS serve as a measure in price evaluation for highly rated offline retailers. Offline retailers should consider the prices that occur frequently on PCS searches when setting in-store prices, since these prices highly influence offline price evaluations.

 

Benedicktus, Ray, Michael Brady, Peter Darke and Clay Voorhees (2010), “Conveying Trustworthiness to Online Consumers: Reactions to Brand, Consensus, Physical Presence, and Suspicio,” Journal of Retailing, 85 (4), 310–23.

Bodur, H. O., Klein, N. M., & Arora, N. (2015). Online price search: impact of price comparison sites on offline price evaluations. Journal of Retailing, 91(1), 125-139.

Smith, Michael and Erik Brynjolfsson (2001), “Consumer Decision-Making at an Internet Shopbot: Brand Still Matters,” Journal of Industrial Economics, 49 (December), 541.

 

 

 

 

 

Comparably: a mobile-first solution to bring transparency and equity in the workplace


We are all familiar with the struggles that can come with finding a new job. First, you have to choose a position and company, among the many alternatives out there in the marketplace. Once you made a selection, the long exhaustive selection procedures will take place. At the end, hopefully some of the companies you selected are willing to hire you. However, how do you really know what the best company to work for is? From the outside, a job may look perfect, but many factors, such as work culture and compensation, will only become apparent once you actually start working there. Luckily, Comparably offers the perfect solution to until recently still non-transparent market.

Comparably
Comparably was founded in March 2016 by Jason Nazar, Yadid Ramot, Mike Sheridan & George Ishii. The founders were aiming at disrupting some of the many technological HR and job search tools by anticipating to the increasing demand in transparency in both culture and compensation within the working environment. Their online platform allows employees to anonymously report their salary, experience level, company location, company size and other aspects. In return, the platform automatically displays where the employee ranks compared to their peers with the same experience level and job position (Comparably, 2016).

Competition
Clearly, there are several other major players in the market that offer online HR and job search tools. The biggest competitors of Comparably are LinkedIn and Glassdoor, but Comparably is aiming at cracking the market for business intelligence dominated by Glassdoor and breaking the chain that LinkedIn has wrapped around the job-hunting process for HR professionals (TechCrunch, 2016). While LinkedIn is focusing on ongoing relationships with employees across their careers, Comparably offers a dashboard for (primarily already employed) would-be job seekers looking for a change. And Glassdoor offers analytics for employers, but what gives Comparably a competitive advantage is that the platform offers the ability to sort employees by gender, location, race and time spent at the company. In addition, Comparably beats competition by providing insights on areas where your company could improve (Comparably, 2012).

Business Model Evaluation
The workplace culture review platform serves as social enterprise which survival depends on the added value for both ends of the platform. The two-sided network delivers joint profitability by allowing employees on one side to publicly rate their companies and see how much their peers are getting paid and on the other side, offering companies a variety of HR related tools. For employees and job-seekers, Comparably offers the advantage of having detailed rankings of a company’s culture (including very sensitive topics as discrimination and harassment). For employers, the platform is assisting with recruiting a better workforce and providing opportunities to see how their company culture is ranked and how this can be improved.

Although Comparably only employs 12 people, the platform supports over 1500 companies, including AirBNB, Twitter, Uber, Paypal and Netflix. Each company owns its own corporate profile page and maintains it as a manner to communicate with potential job-seekers. For now, the tool is free to use for employers and Comparably’s business model is dependent on investors. However, the company has plans to change this in the future (Nazar, 2016).

Regarding the institutional environment, the platform is subject to threat of misrepresenting information of companies and fraudulent activity (e.g. automated methods for ranking, phishing). From employees’ perspective, there might be the fear of privacy issues, since the information they provide to the platform is highly sensitive. To ensure correct and true information, the platform requires each participant to sign the Terms of Service (including terms & conditions regarding acceptable use of the platform). In addition, to guarantee privacy, the company adopts a ‘Privacy Policy’ which can be found on the website and application.

Future prospects
Considerably is an innovative company which raised over $12M in financing and is extensively covered in press by e.g. TechCrunch, LA Times and Fortune Magazine. The company was launched in March 2016 with a compensation data tool and 2 months later already added candidate matching, job postings and a company review feature. With their latest addition, their culture analytics dashboard, Comparably captures a huge competitive advantage and has the ability to defeat competition. / blow competition away.

References
Carson, B. (2016). The 27 best startups that launched this year. From: http://www.businessinsider.com/top-27-startups-launched-in-2016-2016-12?international=true&r=US&IR=T#nucleus-is-reinventing-the-intercom-19 [Accessed 7 March 2017].

Carson, S. J., Devinney, T. M., Dowling, G. R., & John, G. (1999). Understanding Institutional Designs Within Marketing Value Systems. Journal of Marketing, 115-130.

Comparably (2016). Find Your Ideal Company & Compensation. From: https://www.comparably.com [Accessed: 7 March 2017].

Crunchbase (2017). Comparably. From: https://www.crunchbase.com/organization/comparably#/entity [Accessed: 7 March 2017].

Dickey, M.R., (2016). Comparably’s new tool lets companies see how their culture stacks up against the competition’s. From: https://techcrunch.com/2016/12/15/comparably-culture-analytics/ [Accessed 8 March 2017].

Shieber, J. (2017). Challenging job search and HR giants, Comparably raises $7.25M. From: https://techcrunch.com/2017/01/31/challenging-job-search-and-hr-giants-comparably-raises-7-25m/ [Accessed: 8 March 2017].

Tsekouras, D. (2017). ‘Lecture 1: Introduction to Value Co-creation. Customer-centric Digital Commerce, Rotterdam School of Management [Accessed: 7 March 2017].

 

Seniors go Klupping: An innovative solution to reduce perceived loneliness of an aging population.


Can you imagine that one of your grandparents uses Tinder? Probably a lot of people do not even want to think of the idea, nevertheless a Dutch startup does! Addressing a very relevant issue in most developed countries, a continuously aging population, Klup tries to solve a corresponding and increasing phenomenon: the feeling of loneliness.

How does it work?

At first it sounds like a controversial concept, but as soon as the intension becomes clear people understand the idea. Basically the app works similar to the well-known dating-app Tinder: a profile is based on a picture and an indication of what people are looking for. Users, called ‘Kluppers’, can determine a location-range in which they are looking for others. If another Klupper is found, the user can like this person’s profile and in case of mutual interest, the users have a match and are able to start chatting. But from this point forward, any similarity stops since Klup only focuses on connecting people for friendships, not love-affairs. In addition, users are also able to directly invite people in the vicinity for a self-organized event.

The target group of the app are seniors of 55+ that want to be active but do not have someone to share an experience with. Since the app is freely available, the founders hope to earn money in the near future by even providing premium-accounts and advertising-opportunities for companies that are content related. Because seniors are becoming more modern, applications should focus more on this group and give them the opportunity to use a smartphone.

Social relevance

Unfortunately, for a lot of elderly people it is not so easy to call a friend if they long for companionship. More shocking is the number of a whopping 1.2 million seniors that admit to feel lonely (TNS NIPO, 2012). They do not necessarily miss a loved-one, but just someone to share things with. A factor that negatively influences this issue is the digitalization of contemporary life and the segregation of elderly. Nevertheless, a study by Mallenius, et al., (2007) indicates that elderly people are interested in using mobile phones and services, but they need to deliver real value for them. This relevant value is expressed in form of a more social, active, and independent life. A keyword for them should not be age, but functionality instead. The Klup app therefore links these two phenomena.

Future perspective

Despite elderly are often neglected in product development, they are the only growing age group in most developed countries (Mallenius et al,. 2007). Therefore Klup focuses itself on the “new generation of seniors” (Wolters, 2016), since this group is used to work with mobile devices, but also on informal caregivers such as family and home-care organizations to organize social activities with their clients.

Although the platform is still relatively small, it had its first big success in Rotterdam, and is now rapidly expanding across the country. Mainly because seniors are becoming increasingly aware of the benefits of modern technologies, and are successful in the adoption of touch-based user interfaces, regardless physical or cognitive weaknesses (Häikiö, et al,. 2007). In addition, the app is widely promoted on national television and via public organizations. Therefore Klup is currently busy with the modernization and extension of a new platform which will be released around April 2017. Society throws heaps of praise on this relatively new idea, and for the skeptics of mobile device-usage, this app combines the best of both worlds: an online environment facilitating offline contact.

References

Häikiö, J., Wallin, A., Isomursu, M., Ailisto, H., Matinmikko, T., & Huomo, T. (2007). Touch-based user interface for elderly users. MobileHCI ’07 (pp. 289-296). Singapore: ACM. Mallenius, S., Matti, R., & Tuunainen, V. K. (2007). Factors affecting the adoption and use of mobile devices and services by elderly people – results from a pilot study. Sixth Annual Global Mobility Roundtable, (pp. 82-94). Los Angeles .                                                                                                                                      Snel, N., & Plantinga, S. (2012). Eenzaamheid in Nederland Coalitie Erbij. Utrecht: TNS NIPO. Wolters, M. (2016, september 27). ‘Tinder’ voor senioren blijkt hit in Rotterdam. (D. v. Vliet, Interviewer)             http://www.ad.nl/rotterdam/tinder-voor-senioren-is-groot-succes-in-rotterdam~acc64449/                                               https://www.hetkanwel.net/2016/12/16/klup-app-senioren/