Income Models & Web Presence

Topic 3: Income Models and Creating a Web Presence

• This topic covers various income models for online sales, establishing an effective commercial web presence, and connecting with customers.

Revenue Models for Sales

• Web catalog model is based on the income model of catalog mail order
• Web catalog model has been around for over 100 years
• Web catalog model allows seller to establish a brand image and transmit quality at a low cost
• The catalog model uses images to sell through printed catalogs sent by mail to future buyers.
• This model has been successful for clothing, computers, electronics, appliances, and gifts.
• The catalog company replaces printed catalog distribution by a website
• Customers use the website or phone to make requests
• Customers benefit from having flexibility using the platform.
• In the early years, customers got information and bought things over the phone
• Managing the first websites was difficult
• People were afraid to send credit card information over the internet

Early Adopters of Web Catalogs

• Computer manufacturers like Dell and Gateway
• Luxury goods sellers Vera Wang and Versace
• Clothing retailers like Eddie Bauer
• Flowers and gifts services liek 1-800-Flowers
• General discount stores like Wall-Mart and Buy.com

Selling Information or Other Digital Content

• Firms sell information with intellectual properties or intelectual rights
• The Internet is a mechanism for information sales
• Example companies include LexisNexis, Proquest, and EBSCO International Services
• Others are ACM Digital Library and Britannica.com

Advertising-Supported Model

• Broadcasters provide free programming with advertising messages
• Advertising revenue is sufficient for network operations, program creation, and purchasing.
• There are 2 issues involved with the model
• There is no accord on how to charge for/measure site visits
• Not many sites have the amount of visitors needed to interest large advertisers

Portals

• Portals include Yahoo, Google, AOL, and MSN.

Newspaper Advertising

• It is unclear whether portals aid or hurt newspaper businesses.

Job Sites

• Examples are interbiznet.com

Mixed Advertising-Subscription Model

• Subscribers pay a fee and accept a certain level of advertising
• Companies have had varying levels of success
• Top newspapers globally use a mixed advertising-subscription model

Transaction Fee Model

• Companies offer services for a fee
• The commission is calculated by the number and size of the transactions processed
• If the web provides visitors with transaction information, it will replace part of the personal service.

Commission Models for Travel Agents

• Travel agents generate commissions on airline tickets, hotel reservations, and car rentals.
• Commission is obtained for facilitating the transaction.

Automobile Sales

• Distributors buy from factories and sell to consumers, including showrooms and staff.
• Distributors negotiate the sale price.
• The concept is to eliminate the salesperson, utilizing the website ot manage the labor of the seller

Examples of Commission Models

• Insurance brokers earn commission on the sale of insurance policies
• Those selling tickets to espectacles like concerts, events and seminars
• Real estate brokers and mortgage lenders provide traditional broker services over the Internet

Revenue Models for Service Commissions

• Companies offer a variety of services on the web for a commission
• The commission is based on the value of the service provided.
• Gaming visitors pay to play online games.
• Concerts and movies are available to subscribers due to the bandwidth

General Professional service support

• Despite legal difficulties, there are online support sites for lawyers, doctors, and engineers.

Freemium Model

• Freemium offers basic services for free and charges for advanced or special services.
• "Freemium" combines "free" and "premium".
• This model offers consumers a free basic service with a more complete version available for purchase.

Establishing an Effective Commercial Presence on the Web

• An organization's presence is its public image to stakeholders such as customers, suppliers, employees, shareholders, and neighbors.

Identifying Web Presence Objectives

• Companies build intentionally-designed sites to create distinct presences on the web.
• Good web design enhances image
• Web design can serve as sales brochure, product showroom, financial report and employment ad
• Web design can act as a client contact point
• Companies should decide which web characteristics are important to include

Achieving Web Presence Objectives

• Attract visitors to the website.
• Ensure site is interesting enough for continued exploration
• Convince visitors to follow links for more information
• Build visitor confidence.
• Establish a consistent impression based on the desired image of the organization.
• Motivate visitors to return

Defining "How Different is the Web?"

• In the 1990s, company websites were simple
• They contained basic operating information
• There was little marketing research to see what visitors wanted
• Most links to emails went unanswered
• A reason for failure to achieve WEB objectives is misunderstanding the difference between the web and other media.
• Web designers and consultants have reprimanded firms for their uninspired use of the web's interactive nature
• The web should be used as a two way communication channel

Meeting the Needs of Website Visitors

• Objectives behind website visits include:
  • Knowing products and service
  • Buying products and services
  • Accessing to information on warranties, service, or repair policies for purchased products
  • general knowledge of a company or organization plus financial details for investment decisions.

Accessibility

• Accessibility is the degree to which those with disabilities can use an object, visit a place, or access a service.
• Flexibility in the web interface is key
• There are concerns over the use of Flash, Silverlight, and Java FX.
• Different devices are used by different people

Confidence and Loyalty

• It is necessary to produce accessible and abundant information
• One has to account for service quality
• Fostering customer’s trust turns them into loyal patrons
• Service is critical differentiator for attracting extra payments

Classification of Websites for Electronic Commerce

• Routine oversight of e-commerce websites by companies exists
• The oversight covers utilization and customer service
• These sites are helpful for deciding which sites to favor or not.

Website Utilization

• Research indicates that few companies achieve all goals with their web presence.
• Failures come from issues such as failure to provide sufficient interactive contact opportunities
• Overly busy or non-responsive to inquiries

Website Testing

• Companies perform website usability testing
• Companies learn if their desired customer needs and behaviors are satisfied
• Companies observe different ways customers explore multiple options or designs to decide which is most useful

Website Redesign

• Companies redesign websites to improve the user experience.
• Navigation can be difficult due to information overload.
• Redesigns should be customer-focused

Client-Centered Website Design

• Design the site based on how visitors navigate links
• Organize by navigational structure, not company structure.
• Provide fast access to information.
• Avoid inflated marketing statements in product and service descriptions.
• Do not use jargon or commercial terms.
• Create a site that works on older browsers, old computers, and slow connections.
• Use consistent design features and colors.
• Label navigation controls clearly
• Test text visibility on small monitors
• Ensure color combinations do not impair clarity
• Conduct usability tests with potential users navigating various versions of the site.

Connecting with Customers

• Target both existing and potential customers

Modes of Communication

• General ways to identify and reach customers are:
  • Personal contact
  • Mass communication
• The Internet is not a mass medium or tool for personal contact