managing customer relationships on the internet

LIST OF FIGURES Figure 1: Outline of Thesis………6 Figure 2: Conceptual Model for a quality website………..9 Figure 3: Attributes which affect the effectiveness of a commercial Website………22

MASTER’S THESIS

Department of Business Administration and Social Sciences Division of Industrial Marketing and e-Commerce

CONTINUATION COURSES

Supervisor: Tim Foster

Muhammad Ali Khan Muhammad Amer Shahzad

Social Science and Business Administration Programmes

Managing Customer Relationships

on the Internet

ACKNOWLEDGEMENTS

This thesis is a part of our program; Masters in E-Commerce at Division of Industrial Marketing at Luleå University of Technology It is written in autumn 2004-05 It was very interesting to learn this way of study, when we were acting in a new way, with the websites to find the answers or our questions

Thanks GOD! We have done it We would like to thank our supervisor Tim Foster, without the guidance and supervision of whom, we might not be able to write this thesis

in time He encouraged and pushed us, in a right direction, to finalize it We learnt much from our supervisor, during classed and during his supervision We would also like to thank our opponent, whose criticism gave us an opportunity to see our work in another way and to improve it

At the end we are very thankful to our friends who helped us during this process of learning and writing, and our parents who always encouraged and supported us to be innovative in our life

Luleå University of Technology, January 2005

Muhammad Ali Khan Muhammad Amer Shahzad

ABSTRACT

‘Virtual exchange’ is bringing buyers and sellers together electronically rather than having to go to a physical market place The Internet is affecting every facet of business life, obliterating current business models It is becoming increasingly clear that stalled or failed CRM projects are often the result of companies lacking a thorough understanding

of what CRM initiatives entail The purpose of our study is to find out that how customer relationships are being managed (CRM) on the Internet Our research explores, describes and begins to explain, how the most successful airlines of the world are satisfying their customers by providing services through their websites How the companies are describing online environment for their customers Is it user friendly and meeting their requirements of customers or not In our study, we have used individual case analysis for each company and cross case analysis for both companies Our finding concerns with the contents and their customer services, provided on the websites of airlines The contents match with theory mostly, but there are still some to implement by them They are much efficient in providing online services but still they need to provide complete shipping information and money back guarantee Companies should use chat functions for customer’s immediate interactions, whether cookies are better option That’s why companies are spending billions of dollars to process information of their customers for CRM on internet Finally, implications for theory, managers and future research are described

TABLE OF CONTENT

1 INTRODUCTION……… ……… 1

1.1 Background………1

1.2 Problem Discussion……….……… 4

1.3 Research Purpose & Questions……… 5

1.4 Outline of Thesis………6

2 LITERATURE REVIEW……… 8

2.1 The Online Environment……… 10

2.1.1 Key Quality Factors in Website Design………10

Clarity of purpose……… 10

Design……… ……….11

Accessibility and speed……… …14

Content……… 15

2.1.2 Determinants of Successful Webs ite Design………….…………17

Page Loading Speed……… 17

Business Content………18

Navigation Efficiency………19

Security……… 20

Marketing/Customer Focus………21

2.1.3 APID Model Pro posed……… …… 21

Attracting……… 22

Informing………….……… 23

Positioning……….24

2.2 Customer Services……… 25

2.2.1 Framework of Customer Services……….25

Placing Order……….26

Payment Option……….27

Shipping Information……….28

Returns……… 28

Interactive Services………29

Web Policy……….30

2.2.2 Dimensions of Internet Service Quality………31

Performance……… 32

Access………32

Security……… 32

Sensation………32

Information………33

2.2.3 Benefits of e-CRM……… ………33

Improved Customer Satisfaction………33

3 CONCEPTUAL FRAMEWORK……… 36

RQ1 How can the online environment be described? 36

RQ2 How are the customers served in this online environment? 38

Emerged Frame of Reference………39

4 METHODOLOGY…… ……… 40

4.1 Purpose of Research……….40

4.2 Research Approach……… 41

4.3 Research Strategy……….41

4.4 Data Collection Method……… 42

4.5 Sample Selection……… 43

4.6 Analysis of Data……… 43

4.7 Quality Standards……….44

5 DATA PRESENTATION………46

5.1 Case 1: Britishairways.com……….46

5.1.1 How can the online environment be described? 46

5.1.2 How are the customers served in this online environment? 49

5.2 Case 2: Singaporeair.com………50

5.2.1 How can the online environment be described? 51

5.2.2 How are the customers served inthis online environment? 53

6 DATA ANALYSIS……… …… 56

v 6.1.1 Within-Case Analysis of Britishairways.com…….……… 56

6.1.2 Within-Case Analysis of Singaporeair.com……….……….58

6.1.3 Cross-Case Analysis……….… ……….60

6.2 How are the customers served in this online environment? 63

6.2.1 Within-Case Analysis of Britishairways.com……….………… 63

6.2.2 Within-Case Analysis of Singaporeair.com……….……….65

6.2.3 Cross-Case Analysis……… ……….67

7 FINDINGS AND CONCLUSIONS……… 70

7.1 How can the online environment be described? 70

7.2 How are the customers served in this online environment? 71

7.3 Implication for managers……….73

7.4 Implications for theory……….73

7.5 Imp lications for further research……… 74

R EFERENCES ……… ……… 75

A PPENDIX A – O BSERVATION C HECKLIST ……… …… ……….81

A PPENDIX B – www.britishairways.com 84

A PPENDIX C – www.singaporeair.com ……….…….……… 85

LIST OF FIGURES

Figure 1: Outline of Thesis………6

Figure 2: Conceptual Model for a quality website……… 9

Figure 3: Attributes which affect the effectiveness of a commercial Website………22

Figure 4: Preferred Methods of Customer Contact……… 30

Figure 5: An emerged frame of reference……… 39

LIST OF TABLES Table 1: Customer Service Components………26

Table 2: Dimensions of Internet Service Quality……… 31

Table 3: Research Question One………37

Table 4: Research Question Two………38

Table 5: How online environment is described in britishairwas.com and singaporeair.com – cross case analysis……….……… …61

Table 6: How britishairwas.com and singaporeair.com serve customers in online environment – cross case analysis……….………… 68

1 I NTRODUCTION

This chapter provides background information of Customer Relationship Management and the virtual Customer Relationship Management that will then be followed by a problem discussion Finally the chapter will end with the purpose of study, the research questions and the outline of thesis

1.1 Background

Customer Relationship Management (CRM) is a comprehensive set of processes and technologies for managing the relationships with potential and current customers and business partners across marketing, sales, and service regardless of the communication channel The goal of the CRM is to optimize customer and partner satisfaction, revenue and business efficiency by building the strongest possible relationships and at an organizational level Successful CRM requires a holistic approach to every relationship with the entire organization sharing and contributing to that view (Greenberg, 2001)

CRM is a comprehensive business and marketing strategy that integrates technology, process and all business activities around the customers (Anton, 1996; Anton and Hoeck, 2002) The concept of RM spread like wildfire during the 1990s In its wake followed first 1to1, then CRM The last two concepts represent the same basic thinking; together with less known designations the y re brands for offerings from various consultants Today, CRM is the most frequently used term, but as late as 1998 it was only one of several acronyms that fought for attention RM is the broader, overriding concept CRM and 1to1 do not deal with networks but focus on the customer-supplier interaction (Evert Gummesson, 2002)

CRM is the values and strategies of relationship marketing – with particular emphasis on customer relationships – turned into practical application (Evert Gummesson, 2002) CRM is a process designed to collect data related to customers, to grasp features of customers, and to apply those qualities in specific marketing activities (Swift, 2001) CRM is not a new concept In fact, CRM has continuously existed from the past However, CRM has recently become the focus of attention Because, 1) The relationship with customers is newly recognized as a key point to solidify competitive power of a company; 2) As companies procure large volumes of data related to customers, they can perform customer management more easily and efficiently using data warehousing, data mining, and other information technologies; 3) The Internet has opened up a new medium for business and marketing, and we can express customer actions in online into data In other words, the scope of data to analyze behaviours of customers is extended, and the environment for one-to-one marketing has been enhanced (Ahn, 2001)

CRM technologies can be divided into three functional categories, operational CRM, analytical CRM, and collaborative CRM (Trepper, 2000)

Operational CRM category includes customer- facing applications that integrate front-,

back-, and mobile offices, with the purpose to increase the efficiency of customer interactions (Trepper, 2000) This involves automating business operations processes, such as order management, customer service, marketing automation, sales- force automation, and field service In order to succeed employees must have the right skills and the company must have a customer-centric focus (Lawrence et al, 2001)

Analytical CRM category involves applications that analyze customer data generated by

operational tools (Trepper, 2000) The data is often stored in a data warehouse, which can

be described as a large repository of corporate data (Dyche, 2002) The data stored in the data warehouse shall give the company information that will allow them to provide value

to their customers Hence, it is crucial to capture the right data, a process that must be accomplished with great customer care and understanding (Newell, 2000) A Data Warehouse is more detailed described below

Collaborative CRM category focuses on facilitating interaction between customers and

companies (Trepper, 2000) One-way communication must be replaced by two-way communication, where the customer gets involved early with issues affecting their future purchase behaviour (Lawrence et al, 2001) In other words, Collaborative CRM involves any CRM function that provides a point of interaction between the customer and the supplier For example, technologies, such as electronic communication, are used to facilitate relevant, timely, and personalized interaction with the customers (Greenberg, 2001)

In some organizations, CRM is simply a technology solution that extends separate databases and sales force automation tools to bridge sales and marketing functions in order to improve targeting efforts Other organizations consider CRM as a tool specifically designed for one-to-one (Peppers and Rogers, 1999) customer communications, a sole responsibility of sales/service, call centers, or marketing departments CRM is not merely technology applications for marketing, sales and service, but rather, when fully and successfully implemented, a cross- functional, customer-driven, technology- integrated business process management strategy that maximizes relationships and encompasses the entire organization (Goldenberg, 2000) A CRM business strategy leverages marketing, operations, sales, customer service, human resources, R&D and finance, as well as information technology and the Internet to maximize profitability of customer interactions For customers, CRM offers customization, simplicity, and convenience for completing transactions, regardless of the channel used for interaction (Gulati and Garino, 2000)

CRM technology applications link front office (e.g sales, marketing and customer service) and back office (e.g financial, operations, logistics and human resources) functions with the company’s customer touch points (Fickel, 1999) A company’s touc h points can include the Internet, e- mail, sales, direct mail, telemarketing operations, call centers, advertising, fax, pagers, stores, and kiosks Often, these touch points are controlled by separate information systems CRM integrates touch points around a common view of the customer (Eckerson and Watson, 2000)

CRM is defined as an acquisition and retention of customers and the resulting profitability (Menconi, 2000; Nykamp, 2001) Customer retention is cheaper and more profitable than customer attraction As Inc magazine reports, the customer acquisition cost per single transactions for online retailers ranges from $100 for amazon.com, to

$245 for fashion retailers such as bluefly.com, to $500 for furniture.com (Inc Tech 2001, 2001) Furthermore retention contributes to the creation of reputation, which also lowers customer acquisition costs Reputation is an intangible asset, which modern corporations explicitly manifest in the form of brand advertising

CRM is used to manage and increase the value of B2C relationships But while the implementation of CRM helps to acquire and retain customer, it also has increased operational costs Managing customer relationship is expensive and cumbersome especially where cross-divisional communications are required to link customer needs to fulfilment channel Web-based CRM uses the Internet to integrate and simplify customer related business processes, reducing costs of customer facing operations and increase the interactivity and self-service of the customers (Web Associates, 2000)

While the objective of CRM remains the same, the development of information and communication technology allows for a significant increase in the scale and scope of customer services The e-CRM is defined as the application of information and communication technology to increase the scale and scope of customer services It’s imperative that a company’s various divisions share a single view of customers, and project a single view of company back to the customer So, e-CRM systems need to be designed fundamentally from a customer’s perspective, and with a holistic approach to integrated lead generation, lead conversion and customer fulfilment process

Brent Frei, president and CEO of Onyx software, provide this caution for e-CRM; CRM is the customer facing Internet portion of CRM It includes capabilities like self-service knowledge bases, automated email responses, personalization of web content, online product bundling and pricing and so on E-CRM gives Internet users the ability to interact with the business through their preferred communication channel, and it allows the business to offset expensive customer service agents with technology So the value is largely one of improved customer satisfaction and reduced cost through improved efficiency However an e-CRM strategy deployed alone can also backfire and actually result in decreased satisfaction If the customer’s interactions through electronic channel are not seamlessly integrated with those taking place through traditional channels, the customer is likely is to become frustrated Also, if the basis for the content being served

“e-up to the customer doesn’t consider all the data gathered by the rest of the business, the customer is likely being served in a wrong way Therefore, it’s imperative that e-CRM be installed in conjunction with traditional CRM and that the two are tightly integrated Otherwise the value of e-CRM might actually be negative” (Paul Greenberg, 2004)

With the involvement of the Internet in CRM, its functions have been changed a lot By using the Internet, CRM becomes more interactive Customers are actually transacting with the companies The new customer- facing products and services can be implemented

more quickly Besides, the customers served are actually world-wide Here comes CRM Companies’ adoptions of e-CRM are slow but success rates are high due to its complexity (IT-Analysis.com, 2001) Some recent CRM packages integrate the speech-enabled specific application functions which embrace customer support, order management, and sales force automation or modules within individual applications These products are provided by companies such as Siebel Systems, Oracle, and SAP

e-1.2 Problem Discussion

Implementation of e-CRM has resulted in increased competitiveness for many companies

as witnessed by higher revenues and lower operational costs Managing customer relationships effectively and efficiently boosts customer satisfaction and retention rates (Reichheld, 1996a, b; Jackson, 1994; Levine, 1993) E-CRM applications help organizations assess customer loyalty and profitability on measures such as repeat purchases, money spent and longevity CRM applications help answer questions such as

"What products or services are important to our customers? How sho uld we communicate with our customers? What are my customer's favourite colours or what is my customer's size?" In particular, customers benefit from the belief that they are saving time and money as well as receiving better information and special treatment (Kassanoff, 2000) (Injazz J Chen, Karen Popovich)

E-CRM was developed on the basis that customers vary in their needs, preferences, buying behaviour, and price sensitivity Therefore, by understanding customer drivers and customer profitability, companies can better tailor their offerings to maximize the overall value of their customer portfolio Reichheld (1996) has documented that a 5 percent increase in customer retention resulted in an increase in average customer lifetime value of between 35 percent and 95 percent, leading to significant improvements

in company profitability

Without a clear e-CRM strategy, it is difficult to determine and coordinate the organizational changes needed for e-CRM to be successful long term E-CRM strategy is based on an understanding of how the customer wants to do business with the firm, rather than how the firm wants to do business with the customer E-CRM strategy development, therefore, must be a joint process between the customer, suppliers and the seller

Since, many businesses are using the Internet to expand their reach, improve customer service and develop and maintain closer relationships with their customers For example, customer relationship management (CRM) software enables marketers to offer online interactions that are customizable to the individual customer, allowing online marketers

to better match their offerings and the online experience to consumers’ needs, wants and preferences, even in markets with millions of prospects and customers Thus, a successful Web site can be instrumental in its impact on the relationship effectiveness of a firm and significantly add to the bottom line Yet, in order to determine what constitutes a successful Web site, it must be able to understand how users perceive and utilize it

One study of 202 CRM projects found that only 30.7 per cent of the organisations said that they had achieved improvements in the way they sell to and service customers (Dickie, 2000) Moreover, a recent and broader survey estimates that 70 per cent of companies will ultimately fail (Giga, 2001) The Giga survey revealed that: companies generally underestimate the complexities of CRM, lack clear business objectives and tend

to invest inadequately in the provision of CRM software While the findings by Giga highlight a fairly gloomy scenario, it is clear that not all organisations are facing failure (Christopher Bull, 2003) It is becoming increasingly clear that stalled or failed CRM projects are often the result of companies lacking a thorough understanding of what CRM initiatives entail

1.3 Research Purpose & Questions

The purpose of this study is to provide a better understanding of how the Internet is used

as a strategic tool in e-CRM

Based on the above purpose, the following research questions would be posed in order to address the purpose:

Research Question 1: How can the online environment be described?

Research Question 2: How are the customers served in this online environment?

1.4 Outline of Thesis

This study contains seven chapters We are at the end of the first chapter, which describes

us the background and problem discussion with purpose of our research and two research questions The contents of the rest of the chapters are described below the figure

Figure 1: Outline of Thesis

Source: Created by author

The second chapter provides the literature about two research questions Chapter three describes the frame of reference for the study, aimed at conceptualizing the useful aspects

of the literature for our research Next, the chapter four is methodology describing and motivating research methodology used in this study

Chapter five presents’ data collected from the websites of two airlines within the frame of reference described in the previous chapter Chapter six is analysis, including within case analysis of each airline website and cross case analysis, where the data is compare from both studies of research questions Finally, chapter seven draws the conclusions of the study with recommendations for managers, theory and further research

2 L ITERATURE R EVIEW

The aim of this chapter is to explore the role of Internet as a strategic tool in the implementation of Customer Relationship Management Firstly, literature related to the first question, Website environment will be described Then, literature related to the second research question, virtual customer relationship management will be presented After that, studies related to third question, benefits of e-CRM will be discussed

Cox & Dale have been developed a conceptual model for assessing how a Website meets the needs of customers The study has identified quality to be judged in four categories

Each category relates to a different part of the Website experience and serves to enhance customer satisfaction to the extent that the customers will return

(1) Ease of use (the design of the Website);

(2) Customer confidence (how the Website inspires trust by the customer);

(3) On-line resources (capability of the Website to offer and deliver products on services);

(4) Relationship services (how the Website bonds with the customer and inspires loyalty)

Ease of use is given to all the factors relating to the design of the Website The Key

Quality Factors (KQFs) in this category reflect the usability of the Website during customer navigation and aim to reduce customer frustration The virtual nature of a Website means that communication with the customer has to be enabled through the use

of text, graphics and animation Guidance through the Website is done by means of links and searches All of these factors relate to the design of the Website and its usability factor If the design is of poor quality, customers will not be able to navigate pages to find what they are looking for, and are unlikely to make transactions (Ibid)

The second category customer confidence refers to how customers feel when visiting a

Website in terms of accessibility, speed, reliability and customer service The KQFs identified should help to create a good experience for the customer by making them feel safe and confident in not only using the site to find information but actually make transactions Trust is a crucial factor in e-business and is one of the main barriers to customers making purchases on- line due to security issues with credit cards and privacy issues concerning what happens to their personal details Trust can also be linked to customer service Customers need to know that they can contact a company if problems occur and preferably interact with a company employee either via e- mail, telephone or by instant messaging on- line The use of FAQ should satisfy customers and deter them from using customer service, but the ability to contact a person heightens the feeling of confidence in the Website (Ibid)

For the category on-line resources the KQFs refer to the products and services offered on

the Website, with a focus on the Website's ability to provide sufficient information for customers to make the correct choice and be able to make a purchase on-line If customers are making purchases on- line, products need to be shown and described

sufficiently well for customers to make choices Once selected and ordered, confirmation details and delivery expectations should be communicated clearly and quickly to the customer and where possible, they should have the means to keep track of their order on-line Others refer to the feedback mechanism during the transaction process and afterwards, which allows the customer to be kept informed of their order (Ibid)

Figure 2: Conceptual Model for a quality website

Source: Cox & Dale, 2002

The category relationship services contain KQFs that add value to the customer

experience by building a relationship with them or by offering extra services and information It contains the quality factors that enable the Website to establish a relationship with the customer through customisation, frequent buyer incentives and through offering services that add value (Ibid)

We will follow a “conceptual model for a quality website” in our rest of the chapter to

collect a literature for website environment, customer services

2.1 The Online Environment

The medium of the Internet and the development of e-commerce are progressing extremely fast on a global scale (Constantine & Lockwood, 1999) However, while the Internet acts as a faster and less costly platform for consumers and businesses it has inadvertently increased the importance of customer satisfaction By making transactions faster and easier it has enabled the customer to switch just as quickly between e-businesses, causing the element of competition to take on a new diversion Heskett (1994) stressed the importance of customer satisfaction to achieve good financial performance in services in the physical world, and the same can be said of e-commerce where a customer can be lost if unable to access a Website or if the experience proves unsatisfactory

In e-businesses there is too much attention pays to the aesthetic design of the Website, which ends up looking amazing but actually causes frustration because customers have difficulty in finding what they are looking for According to Ody (2000), the main reasons why customers go onto the Internet is to find information or buy a product or service with an emphasis on convenience and speed Ziff- Davies (2000) points out that the concept of the Internet has raised customers' sensitivity to fast customer service Any e-business that sticks to this basic princ iple when designing its Website should be relatively successful

According to Donlan (1999) although delivery is also highly important in fulfilling customer needs, perceptions and expectations also need to be managed and the Website plays a main role in this Once the basis of the Website function is clear, the type of customer it is hoped will be attracted can then be assessed and judgement made on what graphics, effects and other matter can be added to increase the value proposed (Cox & Dale, 2002)

2.1.1 Key Quality Factors in Website design

Cox & Dale (2002) has identified a conceptual model of key quality factors (KQFs) in Website design These are different KQFs that can be used as a check list when creating a website or redesigning a new one The detail of KQFs is:

Clarity of purpose

This refers to what the Website is offering to the customer It must state clearly whether it

is providing just information or whether it enables the customer to make transactions

on-line (Holt, 2000; Creative Good, 2000; Vassilopoulou and Keeling, 2000) One Website assessed as part of the study offered quotations for insurance, allowing the customer to fill in details as to what needed to be insured and the conditions required When the customer had finished, he or she expected the Website to calculate an insurance package but instead it thanked the customer and explained that the insurance details were obtainable by telephone or in person from the relevant branch The information given on the home page was clearly misleading and users will probably not access the site again (Cox & Dale, 2002)

As well as stating what the Website offers, the information should be clearly and logically organised (Foremski, 2000; Vassilopoulou & Keeling, 2000): if customers have

to take time to find the information they are looking for, they are unlikely to stay on the Website In some cases, user instructions are needed before the customer can navigate the Website An example of this is exchange platform Websites where customers can exchange goods with other customers or offer prices and requests to businesses through the Website This type of business model has rarely been accessible offline and is a new experience for many people Therefore clear instructions are needed directly from the home page to avoid confusion and frustration (Cox & Dale, 2002)

Design

The role of Web designer is occupied by professionals and amateurs alike Books on the subject mean that anyone, whether creating a Website as a hobby at home or starting up a new business, can do it but usability is the key to a successful Website PR Newswire (2000), report an IDC study which concluded that "Web performance and design are currently the largest obstacles to online purchases" The Website should reflect the image that the company is trying to project and which the customer will remember and return to The key issues in design are:

The navigation of a Website cannot be carried out without valid links (Constantine &

Lockwood, 1999; Spool, 1999) Links should cha nge colour once used so that the user knows they have used the link before and should correctly describe the information to which they lead (Creative Good, 2000; Vassilopoulou and Keeling, 2000) This is also relevant for graphics which can be used as links Well- thought-out Websites feature graphics which change to text when the mouse cursor passes over them, revealing the category of products relating to the graphic (Cox & Dale, 2002)

Constantine & Lockwood (1999) also discuss the problem of page bouncing and deep drilling Page bouncing occurs when the user follows links that serve a series of pages and then has to return to the original page before finding a link to more pages This results when the information is finely subdivided The answer is to us e probability to decide whether a user interested in one topic will be interested in another and to create a direct link between the two The other problem of deep drilling is similar to page bouncing but refers to Websites where the user has to follow multiple links which are sometimes confusing and force the user to go back and forth between pages to find

information which should logically follow on from information found on the earlier pages (Cox & Dale, 2002)

Links are the main way for the users to na vigate their way around a site and should be clear and to the point Spool (1999) argue that links should not be embedded in pages of text which requires the user to scroll down to find them and also that the link should not

be so long as to fall on to two lines This as well as misleading the user into thinking that there are two links instead of one is also a waste of space (Cox & Dale, 2002)

Although an increasing number of people around the world are starting to use the Internet, one should never assume that once a user has navigated one Website, they can

easily navigate them all (Constantine & Lockwood, 1999) Each Website represents a

different business or value proposition and therefore the layout will differ according to what the Website is offering Furthermore, the pages within the Website need to be

consistent in appearance and design (Spool, 1999) Vassilopoulou & Keeling (2000)

argue that it is also important that the same procedures occur for similar or related things wherever the user may be within the site

In order to achieve this level of consistency many Websites feature a menu which appears

in the same place, with all the main links on every page Spool (1999) discovered that menus or navigation bars at the top and bottom of a page allowed more users to navigate the site successfully than menus at the side Creative Good (2000) point out that there should be a "home" button on every page to help the user get back to the home page if necessary without having to click on the back button in the browser menu, which could

be a lengthy and frustrating process depending on where the user is in the site Spool (1999) also found that users navigating sites with a site map were twice as successful in finding what they wanted, compared to those sites without, and that informing the customer of where they were was important Creative Good (2000), on the other hand, argue that a Website with a clear menu and relevant information should be satisfactory and that users are not actually interested in where they are within a site as long as the links are clear

The pages on a Website should ideally be short; however, in some cases scrolling pages

are sufficient if the information is suitably laid out and not excessively long Holt (2000) argues that the use of headings and paragraphs is as important as in a book, magazine or newspaper and there should be a button at the bottom of the page or each section asking

if the user wants to return to the top of the page For transaction purposes, it is crucial that customers are able to make purchases quickly with minimum pages in the check out process (see Foremski, 2000; PR Newswire, 2000) Amazon.com have been praised for their "one click" order process and one or two pages should be the limit in all Websites enabling ordering on- line It also goes without saying that the process of opening an account should also require just one page for ease of use by the customer (Cox and Dale, 2002)

Foremski (2000) discusses further issues for shopping on- line and points out tha t some Websites make simple mistakes which cause frustration for the customer One such

mistake is not to provide a check out button so that the customer can proceed straight to

the order process from any page There should also be a shopping basket button for the user to press at any time to see what they have placed in their virtual shopping basket, allowing them to remove items if so wished (Cox and Dale, 2002)

Constantine & Lockwood (1999) examine the feedback principle which is the basis for

any software design and is especially important for interaction with customers on the Internet The principle basically implies telling the user what is happening inside the system This could refer to advising the user of an error in their address input and that the Web page is being updated, allowing the customer to see what is currently in their shopping basket or confirming order details Many Websites will inform the user of a mistake by writing the information in red next to the relevant box or area This communicates clearly to the user that they have made a mistake and need to redo something in order to proceed The communication of a Website is carried out via text, graphics and moving animation, with text being minimal and to the point and clearly set out Spool (1999) found that Web pages with a lot of white spaces were less successful than those with few or no white spaces

Due to the creative input of designing a Website, there can be an overwhelming urge to use multiple graphics and inappropriate animation Customers use the Internet because it

is fast and putting large graphics onto Web pages slows down access to the page and will probably frustrate the customer into abandoning the site Graphics should therefore be small and relevant as well as being sharp to the eye (Holt, 2000; Foremski, 2000; Vassilopoulou and Keeling, 2000) Holt (2000) suggests that colour is very important and

is something that designers ignore at their peril A dull Website will most likely deter customers because it projects a negative image

Constantine and Lockwood (1999) state that animation should not distract users from the content of the page and the information they are looking for Foremski (2000) points out that designers tend to forget that most visitors to their sites still use low modem connections and may not be able to support animations Clever e-businesses offer an option to the user as to whether they want to browse their Website with or without downloading software to make the site more interactive and animated, which avoids irritating people who simply want to retrieve relevant information and quickly (Cox & Dale, 2002)

The use of a search mechanism to navigate a Website is one of the first strategies used by

customers to a Website Spool (1999) found that a third of the users tried this facility first before resorting to links and the menu One of the outcomes was that users assumed that the search would cover the entire site and got confused when the search only covered a particular area; this needs to be made clear next to the search button The use of drop down lists can clear up this confusion because it informs the user of what information is available without the user having to guess what to type into the search box (Creative Good, 2000; Foremski, 2000)

Once the search facility has been used, the results should be listed in order, starting with the most relevant Creative Good (2000) suggest that the results should ideally be on one page only and limited in number; however, if the site is a search engine, one would

expect a few pages of results depending on the amount of sites it scans According to Spool et al (1999) one of the important aspects is that the results are relevant and information such as advertisements will deter users from using that particular search facility again Creative Good (2000) also mention the use of language in the search criteria; they found that many search facilities did not recognise singular and plurals for searching the same word

Whether filling in a form to register with a Website or proceeding to order and purchase,

the layout of such forms for personal detail entry should be self-explanatory or provide examples of the format to be used Some Websites inundate the user with a mass of unnecessary instructions Constantine & Lockwood (1999) comment on the design of the input fields and how address fields which are equal in length have no link with the information to be entered A postcode field should be short enough to hold six or seven letters and not be given the same length as a field for a city At the same time, the address layout, for example, should be relevant to the nationality of the customers using the Website (Cox & Dale, 2002)

Accessibility and speed

Perhaps the most critical factor for any Website is accessibility This refers to the ability for customers to access the Website of a particular e-business and navigate its site Vassilopoulou & Keeling (2000) rate accessibility as the speed with which the home page and following pages download Holt (2000) also stresses the importance of a fast downloading home page Zona Research (Gann, 1999) have calculated the probability of customers using a site if the page response was too slow, reporting that, if the page downloaded under seven seconds, fewer than 10 per cent of customers would leave the site and that if the page takes eight seconds, 30 per cent of customers will leave, and if it exceeds 12 seconds, 70 per cent will leave Bearing in mind that customers use the Internet for convenience and speed, they will not tolerate slow access The zone of tolerance for customer expectations leaves no margin for error and e-businesses must address speed and anticipated capacity needs as a matter of prime importance (Cox & Dale, 2002)

Gann (2000) also emphasises the fact that Websites must be accessible 24 hours a day, seven days a week, and 365 days of the year The research group IDC believe that "by

2003, between a third and half of all ecommerce will be conducted outside normal business hours" (Gann, 2000) Andersen Consulting (1999) carried out a survey of purchasing on- line over the Christmas period 1999 and discovered that not only were many sites blocked, under construction or otherwise inaccessible, but that the time for ordering varied enormously After attempting to buy 480 gifts at 100 different Websites, they were only able to complete 350 orders and found that the order time at e-tailers was shorter than for on- line BAM companies and that it also depended on the time of day This finding indicates that e-businesses need to study when customers are making maximum use of a site and adjust resources accordingly (Cox & Dale, 2002)

Content

Content refers to what a Website actually offers in terms of information and is as important as the design aspect If the information is insufficient, misleading or irrelevant, the customer will most likely opt to use a competitor site The content refers not only to what type of products or services the Website is offering but also what policies the e-business has, for example, on the use of customer information or on returning goods This latter information is not always easily accessible but it is important to customers, especially when buying products or services on- line or if they have to register to access the site (Cox & Dale, 2002)

The breadth of selection of products and services should be relative to the e-business and

what it is offering; however, the access to the selection is important Creative Good (2000) commented on sites where the customer has to fill in a survey before they can see the selection of products and services on offer, which causes frustration and abandonment

of the site In the same vein, Forrester Research carried out a survey that found that if a product or service was offered on the second or third page, customers were 50 per cent less likely to find them (Foremski, 2000) It is important that the selection of items be immediately accessible from the home page through obvious links; the need for speed and convenience is emphasised

Vassilopoulou and Keeling (2000) argue that for any product advertised on the Internet, a

clear picture with all the necessary information of product brand, size, colour, capabilities

and price should be provided so that the customer is not misled Creative Good (2000) reported on a Website in which the information relating to the picture of the products was

at the side so customers had to spend time matching the information to each product It is often such simple mistakes as this that can cause intense frustration As well as stating a product description, the conditions of purchasing a product should also be made available

to the customer Clicksure (1999) states that information on warranties and guarantees should be made available to the customer either during the selection process or when purchasing an item

One of the most irritating factors for customers shopping on- line is to find that the item they have requested is not available If they are informed of this whilst choosing the product (i.e the informatio n on stock availability is real-time) they may well continue to browse the Website and find something else of interest The worst case scenario is for the customer to place the order and to be sent an e- mail a few days later informing them that the product is out of stock (Andersen Consulting, 1999)

Creative Good (2000) gave an example of a Website, where the customers could place items in their shopping basket but then only found out during the purchasing process whether the goods were in stock It also showed a shipping price even though the goods could not be shipped In the Andersen Consulting study (1999), it was found that many companies carried on taking orders to be delivered for Christmas even though the products were either not in stock or would not make a pre-Christmas delivery This indicates the importance of providing real-time information for customer convenience

Ideally, any delivery information should be made accessible from the home page or with

the product information so that customers are aware of the prices before they begin to make any purchases (Vassilopoulou & Keeling, 2000) If customers go through the purchasing process only to find that the shipping costs are more than they want to pay, they will leave with negative feelings If they know this cost from the outset, they may still proceed with a purchase or be able to contact the company to discuss it further and thus the company may be able to turn a negative factor into a positive experience (Cox & Dale, 2002)

Concerning delivery times, some Websites have managed to streamline their back-end processes to get orders out to the customer the next day For products such as CDs, books and clothes, this delivery expectation can be reached but for other products, expectations are not so high As long as the Website advises the customer of the time limit for delivering a product, the customer will be content if it arrives within that time As Creative Good (2000) points out, service quality is heightened if e-businesses take into account the holiday seasons and issue a warning to customers that they need to order earlier due to later delivery times

It is important for the customer when making a transaction through a Website to be aware

of all the company terms and conditions of that purchase Clicksure (1999) is a company

that offers a quality certification for e-businesses that they can put on their Website In return the e-businesses must ensure that company policies on cancelling orders, returning goods and refunds as well as the terms and conditions of the sales are accessible to the customer throughout the Website The Website should also give the choice of law for settlement of disputes and whether the company is a member of a regulatory board or ombudsman (Cox & Dale, 2002)

Due to the global nature of the Web and the ability to make purchases across borders, a Website should also list any extra charges or tax that a customer will have to pay if they are not from the same country as the origin of the e-Business (Cox & Dale, 2002)

Lack of security whilst making transactions online is reported to be the main barrier to

customers shopping on- line It is crucial that any Website has a security policy accessible

on every page or offers a secure payment method on- line (Verdict, 2000; Vassilopoulou

& Keeling, 2000; Vernon, 2000; Clicksure, 1999) The risk of fraud on- line is proposed

to be the same as paying by credit card in a restaurant; however, customers are far more reluctant to give out card details on- line and new ways of paying for goods over the Internet are being rapidly developed Some e-businesses have their security managed by a third party, as described by Vernon (2000)

Another key barrier to shopping on- line is privacy (Wiegran & Koth, 2000;

Vassilopoulou & Keeling, 2000; Clicksure, 1999; Vernon, 2000; Holt, 2000; Ody, 2000) Unless they give permission, customers do not want their personal information being accessed by third parties or being used by companies to increase their customer base In some countries this kind of information is legally protected, in others it is not the case

and with the Internet crossing many borders, worried customers should learn to look at the privacy policies before committing any personal details to that e-business (Cox and Dale, 2002)

Clicksure (1999), points out that it is a legal requirement that Websites contain a physical address for the company with title and registration details so that customers can contact the company or check that it exists The Internet has become a new arena for fraud and deceit and customers should be able to check to see whether the companies behind the Websites are bona fide (Cox & Dale, 2002)

2.1.2 Determinants of Successful Website Design

The success of e-commerce for any company, especially if it is not a well-known name,

is greatly dependent on the appropriate design of its Website Gehrke & Turban (1999) have indicated five major categories of web site design, which are page loading speed, business content, navigation efficiency, security, and marketing/customer focus Then, it

is identified that how to create an effective website using these categories of website design

Page-Loading Speed

According to a survey conducted by Hamilton (1997) speed (i.e., slow speed) was the number one complaint of Web users (77%) Most potential e-commerce customers do not want to wait for a seemingly endless page to load Instead, they hit the browser ‘stop’ button and go elsewhere Therefore, large, pretty graphic files and “cool” animation may come at a price to the Web business owner in terms of lost business (Busch, June 1997, p 98-99) In some cases page- loading speed is out of the control of the Website builder Such factors as server speed, customers’ computer power and modem speed, quality of telephone lines, and other factors are to be blamed Recommended remedies are as follows:

Keep graphics simple and meaningful: Wilson (1998) refers to excessive graphics as

“Image Inflammation.” He recommends limiting the total graphics and text for a single Web page to 60KB A rule of thumb is to allocate about 5KB, 5KB, 16KB, 8KB, 16KB, and 10KB, respectively, to each of these elements)

Limit the use of animation and/or multimedia plugin requirements: Animation is a

contributor to slow page loading Haine (1998) recommends that if a designer thinks it is necessary to have animation, it should be made to stop cycling after ten seconds to allow the user to scroll it off the screen Nunley (1998) suggests that information content should account for 80% of the site Audio clips and other multimedia gizmos that require users

to download plug- in programs, install them, reboot and return to the Website drive away users Blower (1998) advises against using proprietary tags and graphics requiring a banner stating, “Best Viewed with Brand X Browser.” An anonymous author in the

March 1998, Economist recommends that designers should not require viewers to download software to view a Website’s contents

Use thumbnails: Thumbnail graphics, which typically contain only about 10 KB, are an

effective way to utilize graphics without significantly increasing the page- loading time Thumbnails give the user a choice of whether or not to wait for the loading of a larger picture without forcing it as a default

Provide ‘text-only’ choice: Providing an option to load text only increases speed and

allows the use of a greater variation of browsers (Heath, 1998)

Check and monitor your server and Internet route: Sometimes a slow Website is not the

fault of the designer (Smith, 1997)

Use progressive rendering: Sklaire (Janal, 1997, p 352) describes this term as allowing

text to load first, followed by graphics This allows the user to read the content while the graphics are loading

Business Content

Business content is a major Website issue because the quality of presentation and usefulness of the content determine whether a potential customer will be attracted to, or driven away, from the site Recommended remedies are as follows:

Use clear and concise text with proper spelling and grammar to describe the business:

This is by far the most commonly prescribed recommendation in the literature Too often business Websites are ambiguous, one has no clue as to what the business is really about, what the company sells, or what its services are (Gehrke & Turban, 1999)

Provide contact information on each page: A site with no information on whom to

contact may drive business away Smith (1997) recommends installing ‘mail-to’ links on every page Maloff (1997, p 70) suggests a more elaborate method, which is posting threaded on- line discussions, message boards, or even interactions via real- time, on- line chat

Use simple background colors and textures: Heath (1998) prefers green on black, and

Wilson (1998) provides a “how to” dealing with colors and textures

Provide free services or useful information: Free content is a valuable feature (Bancroft,

1997) But free content is likely to decrease as the Web becomes more mature and commercial The Wall Street Journal, Business Week, and others provided free information for months and then started to charge for it Wilson (1997) believes that prospective customers are more likely to purchase when site owners make sure that the free service is closely related to what is being sold

Make regular changes to the site: This is wise for two reasons: 1) Visitors want to see

fresh material, and 2) Updating the site often will ensure that the information is current (Gehrke & Turban, 1999)

Limit registration forms and the amount of requested information on them: Another way

to drive away customers is to blitz them with intimidating registration forms, and especially those that request a burdensome amount of unnecessary information (Gehrke

& Turban, 1999)

Jokes on the site—avoid or not There are differing opinions regarding this

recommendation (Heath & Guglielmo, 1998) Contrary to this opinion, Janal (1997, p 311) states that telling jokes (and adding a new one each day) on the Website is a good business strategy and results in repeat visits

Create a Frequently Asked Questions (FAQ) section: It enhances users’ understanding of

what is offered at a site It also helps the site owner by reducing the amount of correspondence necessary to answer repeatedly the same questions

Avoid ‘Under Construction’ signs: Berst (1998) listed this as one of his “Seven Deadly

Website Sins.” If you must use such a sign, provide an approximate date of opening Tadjer (1998) recommends to “design for flexibility.” This means that urgent changes can be made without having to take the site off line

Navigation Efficiency

Without efficient and user-friendly navigation, the user is likely to get confused, lost, or frustrated and leave the site for good

Use well labeled, accurate (no broken) links: An ambiguously labeled link or a link that

hits a dead end is one of the most annoying design faults in a Website Haine (1998) recommends to word each link carefully so that it answers two questions: 1) “What will I get if I click here?” and 2) “Why would I want to get that?”

Avoid the use of frames: One of the reasons for using frames is when a company wants to

make its logo visible from all underlying pages But frames have been overused in many Websites Tadjer (1998) brought out that frames make book marking difficult and some browsers do not support frames Wilson (1998) adds: frames cut up the screen into windows that require excessive vertical and/or horizontal scrolling, they look ugly, they

do not always print out correctly on some browsers, they are resented when site owners use them to link to from external sites, and their content is often skipped when search engine “spiders” come to call Berst (1998) adds: some frames do not scroll when they should while others do scroll when they should not and some frames produce a miserable patchwork effect Bremser (1997) supports the use of frames but only if the frame layout

is made simple

Keep navigation consistent: There is some disagreement in the literature on this issue

Wilson (February 1998, p 5) states, “Provide as many alterna te ways to navigate your site as necessary Buttons, image maps, hyperlinks, search engines, and drop-down menu systems all contribute to overall user friendliness when used appropriately.” Berst (1998,

p 1) disagrees by stating, “Sometimes you click on a left sidebar Sometimes you get a drop-down box Okay, I know we’re all still inventing this as we go along But if your core navigation metaphor changes mid-stream, you have committed a sin Even if you haven’t created perfect navigation, at least be consistent Please.” Tadjer (1998) supports

a navigation bar on each page Also, buttons on any navigation bar should be those that let customers make purchases

Provide an effective search engine in the site: This applies mainly to large sites or for

sites with a lot of randomly accessed content Haine (1998, p 4) puts it very succinctly:

“…in ecommerce, each failed product search is equivalent to a clerk saying ‘Sorry, I don’t think we carry that item.’” Search engines should be prominent and easy to use

Use distinctive hot buttons: Hot buttons provide easy navigation and a personalized effect

to the Web page Busch (1997) recommends using unusual shapes and colors in addition

to the traditional rectangular or circular shapes

Use long pages with links rather than subsequent pages: There is some disagreement on

this issue Heath (1998) suggests that long pages with links within the page are confusing because users scroll down to read a paragraph, then return to the top of the page only to select the same paragraph again from the index Janal (1997) disagrees by stating that using long pages with links should be encouraged Linking within one long page is also faster than reloading subsequent pages

Use site maps/guides if the site has many underlying pages: A large site with several

underlying pages should have a map or guide that allows the user to jump to any page from any page (Gehrke & Turban, 1999)

Avoid links that open up new browsers or pop-up ads: These links may be both invasive

and offensive It wastes the users’ time and energy because new pages and/or browsers popped opened force them to wait, and “point and click” to close (Gehrke & Turban, 1999)

Security

Security has become a very important issue with the development of the Internet Websites The major recommendations are listed below:

Stress the use of security: To enable secure transactions it is necessary to implement SSL

or SET technology As Tadjer (1998) states, “the words ‘secure server’ help to make the consumer feel safe Also, an optional link to a security practices page and/or legal notices for visitors to read also add an additional calming effect”

Protect your copyrights: Anytime a Website owner writes, paints, or composes

something new, it is advisable to copyright it It is also important to place a statement in the Web page indicating that the material is copyrighted (Gehrke & Turban, 1999)

Generate a confirmation page after a consumer makes a purchase: A confirmation notice

(and number) of a purchase is very useful Further, an e- mail confirmation that the order was shipped is also a good idea (Gehrke & Turban, 1999)

Marketing/Customer Focus

A Website should be evaluated as to how well it markets its products and services, and also as to how well it keeps the customer in focus Listed below are some recommendations regarding this topic:

Provide as many payment alternatives as possible: The more payment alternatives a site

offers, the more likely a sale will result If certain customers refuse to accept the fact that

an encryption setup, then give them the option to fax or call their credit card number in Also, if international business is expected, make it easy to accept local currency Provide current exchange rates (Gehrke & Turban, 1999)

Be up front about business practices: One of the best ways to gain trust is to be honest

with the customers about business practices If cookies are used, the site owner should disclose that information Also, the business practices should be displayed openly on the home page to build reassurance (Gehrke & Turban, 1999)

Use an auto responder: The storefront owner should always automate to expedite e-mail

replies A customer who fails to get a timely answer to a question via e- mail is likely to

be a lost customer Most e- mail programs, like Microsoft Exchange, have auto responders built in By using intelligent agents, it is possible to sort e-mail and send customized replies (Gehrke & Turban, 1999)

Write the Website in English or give the English choice: English is recognized as the

worldwide universal business language Therefore, writing a Website in English (or at least giving the English choice) seems to be the logical thing to do Buttons with the language choice provides the user with the convenience to select the preferred language (Gehrke & Turban, 1999)

2.1.3 APID model proposed

One of the comprehensive formulations in assessing Website effectiveness was developed by Simeon (1999) Simeon proposed the AIPD model, arguing that an effective Website must accomplish four principal objectives:

Attracting

Clearly, the extent to which an organization is able to increase traffic flow to its site, the chances that commercial interactions can take place are similarly increased (Simeon, 1999) Reach has always been a measure of marketing communications effectiveness, a focus on access to and connection with a target audience Unconstrained by physical

limitations, cyber-reach on the Internet can explode Hence, the first task of e- marketing

is to attract a steady stream of interested users to visit the firm's online presence (Yang,

Ahmed, Ghingold, Boon, Mei, Hwa, 2003)

There are a variety of methods to attract interested parties to a company's Website For well-known companies with an established brand, the URL or Web address, is itself a competitive advantage, a tool to attract users to the firm's online presence When online consumers do not directly navigate to the firm's URL they can still be directed there through the use of affiliates, non-competing e-commerce firms who act as partners by directing visitors to their site to a separate e-commerce site, typically for a fee or commission should a purchase take place Jupiter Communications currently estimates that 25 percent of Internet retail sales are the result of affiliates programs In fact, US$80 million of sales for dozens of CNET's affiliates were facilitated in just the third quarter of

1998 (Hoffman & Novak, 2000)

Banner advertisements have also been used to build traffic by many online companies

The use of banner advertisements can have a significant impact on the number of hits a Website receives and may even translate into actual purchases on the Web (Pardun & Lamb, 1999) This seems to be contradictory to the findings of a case study on CDNow

by eLab where only a very small percentage of visitors to CD; Now arriving through banner advertisements were actually converted into paying customers In fact, the reported average price of banner advertisements has plummeted in recent years due to their perceived ineffectiveness (Yang, Ahmed, Ghingold, Boon, Mei, Hwa, 2003)

Some researchers advocate the use of traditional media to promote the Website (Pardun

& Lamb, 1999), a technique particularly relevant for firms with integrated e-commerce and "bricks-and-mortar" presence And, recommendations from others may also be a powerful source for attracting and acquiring new customers (Hoffman & Novak, 2000) Thus, there are numerous approaches to attracting visitors to one's Website Clearly, however, the process must be managed to control average customer acquisition costs Recent research shows that some companies incur an average acquisition cost that may,

in some cases, be higher than the average lifetime value of the customers (Hoffman and Novak, 2000) E- marketers must evaluate the cost effectiveness of the various methods of attracting customers and budget their promotional expenditures accordingly Regardless

of how customer acquisition is accomplished, it is obvious that the first order of business

in e-commerce is to bring current and potential customers to the Website (Yang, Ahmed, Ghingold, Boon, Mei, Hwa, 2003)

Motley Fool, for example, organize their Website's content and provide tools to ease decision making The Motley Fool, a Website on personal financial investment, has aggressively leveraged user-generated content It is arguably one of the most successful online communities Many empirical studies have shown user- friendliness as one of the most important criteria influencing their use of a Website (Abels., 1998) It includes factors such as the interface and aesthetic features, global site understandability, ease of use, range of search capabilities and availability (Olsina, 1999) Hence, visitors must be able to easily move through the site and obtain the content they seek easily and enjoyably However, this may be difficult to achieve, particularly when a Website matures, since new features and functions are constantly added to the Website Consumers may be confused with the information content or the Website becomes complicated to use This can result in customer defection (Yang, Ahmed, Ghingold, Boon, Mei, Hwa, 2003)

Many consumers appear to prefer graphical interface, simply pointing and clicking,

which makes it easier for consumers to navigate a site and find what they want It was observed, for example, that the more interactive a Website is compared to its competitors, the more likely that site would be included in Lycos' "top five percent site hits" (Ghose & Dou, 1998) Moreover, individuals will be more motivated to revisit a Website they interact with (Webster, 1993; Kolsar & Galbraith, 2000)

Positioning

The positioning capability of a Website relates to the key factors determining the

company's e-commerce market positioning strategy (Simeon, 1999) Prior research has concluded that discounted price (Reichheld & Schefter, 2000), convenience and unique merchandise (Phau & Sui, 2000) are some of the market positioning strategies adopted by most e- marketers For example, Virtual Vineyards, a Web-based company that markets wines, adopted a niche market positioning strategy Many of the wines that are sold on the Website come from small vineyards and are not easily obtainable Thus, the positioning capability of a Website reflects its ability to deliver the benefits sought by targeted customers brought to the site through "attracting" efforts (Yang, Ahmed, Ghingold, Boon, Mei, Hwa, 2003)

The delivery function emphasizes on the way the Website provides reliability, speed,

security and interactivity (Simeon, 1999) To examine the delivery capacity, attributes such as warranty and after-sales service, customer support (Hoffman and Novak, 2000), mode of payment, downloading time (Abels et al., 1998) are user-based criteria that likely influence consumers' use of, and satisfaction with, a Website

In addition, security and privacy are vital components of effective commercial Websites

(Wang, 2000; Reicheld & Schefter, 2000; Head & Yuan, 2000) Security and privacy are directly related to trust, which is a vital competitive advantage in the online environment (Spar & Bussgang, 1996; Wang et al., 2000) Recent negative publicity regarding lapses

in privacy and the integrity of e-commerce vendors has slowed the development of online

markets Businesses must take proactive steps to build a climate of trust with end customers (Yang, Ahmed, Ghingold, Boon, Mei, Hwa, 2003)

2.2 Customer Services

The Internet offers a whole ne w way to communicate with the customers that will change the way business are being made It also offers the whole new way to establish report with the customers Many things such as answering customer questions, solving customer’s problems, and selling additional products to the customers can now be computerised The most important reason for web-based customer service is the feasibility of proffering full-time availability New trends in business call for 24-hour accessibility If the task is to find the right answers in a database, the solution is to let the customers for it themselves (Sterne, 2000)

2.2.1 Framework of customer services

The Internet can be used to provide consistent and comprehensive product and customer service information This benefits the consumer by providing more non-sensory information than is possible to provide in brick-and- mortar retail stores In addition, customer service over the Web is likely to be more consistent than traditional retailing because the online retailer can provide more detailed and extended information to any shopper at any time (Silverman, 1998) Quality of service is not subject to extreme variation resulting from peak traffic periods or sales personnel expertise Jang & Burns

(2004) have defined a frame work of Customer Services

Table 1: Customer Service Components

Returns Money Back Guarantee

Convenient Returning information

Interactive Service

Email Toll- fee number Interactive chat function FAQ

Site map

Web Policy

Privacy Security Policy Company Information

Source: Jang & Burns, 2004

Placing Order

Number of Order Method: Connee (1998) states that the customer should have the

possibility to choose between different methods of payment when shopping online Companies offering their products on the Internet must let the customer choose between for an example invoice, or Internet bank

Order Status This feature allows the user to find out which stage of the shipping process

his/her order is in Customers are more likely to feel satisfied if they know of the status of their order than if they do not Customers know that company keep information about

them in computers They know that web site is on a computer and computers can talk to each other The customer expectation is yours computer can talk to each other and the customer can access account information that; what was the last order customer placed? Has it shipped yet? When it will be delivered? When will my backorder be filled? Are there any alternative products I can get faster? (Sterne, 2000)

Confirmation of product order by email: According to Zemke & Connellan (2001) when

customers places an order in the faceless, voiceless world of e-commerce they often have anxiety that the order just placed has disappeared into a virtual black hole That is why e-business must recognize electronic order confirmation as one of the easiest and most cost effective ways to increase customer satisfactio n and provide such a service An auto response is a very powerful little tool that sends out a canned reply to incoming message before a human even looks at it This provides an immediate proof of delivery to make your customers know the ball is firmly your court (Sterne, 2000)

Efficient handling of orders and queries: One received the orders it must be processed

quickly and accurately The order processing system prepares invoices and sends order information to those who need it Both the company and its customer benefit when the order-processing steps are carried out efficiently The order cycle time involves all the activities in receiving orders, approving them, delivering the product on time and collecting payment Customers value the fast order cycle time (Kotler & Armstrong, 1996)

Payment Option

Number of credit card accepted: An e-commerce application must support one or more

payment systems The load and hence delays due to processing payments must be incorporated in the instrumentation of e-commerce benchmark application Payment systems are available for products that cost cents or fraction of a cent to thousands of dollars Micro payment systems tend to be expensive but have a niche market The Mondex system based on Smart Cards that can support multiple applications and store cash is one of the more promising payment systems However the most common payment system found in the majority of present-day ecommerce sites is the traditional credit card system, which means that it should be included as the base payment system into present e-commerce benchmark specifications (Dawn Jutla, Peter Bodorik, Yie Wang, 2000)

Offline Payments: Most of the customers arriving via online channel tend to use

multichannel sites to collect information and place orders but prefer physical stores for pickup and payment Less than one third of the customers in the sample are traditional online users who chose direct delivery and online payment (Teltzrow & Berendt, 2003) Offline payments involve no contact with a third party during payment the transaction involves only the payer and payee The obvious problem with offline payments is that it

is difficult to prevent payers from spending more money than they actually possess In a purely digital world, a dishonest payer can easily reset the local state of his system to a prior state after each payment (Asokan, Janson, Steiner, Waidner, 1997)

Pay Later: In pay- later (credit) payment systems, the payee’s bank account is credited the

amount of sale before the payer’s account is debited Credit card systems fall into this category From a protocol point of view, pay-now and pay- later systems belong to the same class: Because a payment is always done by sending some sort of “form” from payer to payee (whether it be a check or credit card slip or some other form), we call these systems check- like

Shipping Information

Shipping and handling Information: Ideally, any delivery information should be made

accessible from the home page or with the product information so that customers are aware of the prices before they begin to make any purchases (Vassilopoulou & Keeling, 2000) If customers go through the purchasing process only to find that the shipping costs are more than they want to pay, they will leave with negative feelings If they know this cost from the outset, they may still proceed with a purchase or be able to contact the company to discuss it further and thus the company may be able to turn a negative factor into a positive experience (Cox & Dale, 2002)

Concerning delivery times, some Websites have managed to streamline their back-end processes to get orders out to the customer the next day For products such as CDs, books and clothes, this delivery expectation can be reached but for other products, expectations are not so high As long as the Website advises the customer of the time limit for delivering a product, the customer will be content if it arrives within that time As Creative Good (2000) points out, service quality is heightened if e-businesses take into account the holiday seasons and issue a warning to customers that they need to order earlier due to later delivery times

Sales tax information: Due to the global nature of the Web and the ability to make

purchases across borders, a Web site should also list any extra charges or tax that a customer will have to pay if they are not from the same country as the origin of the e-Business It is important for the customer when making a transaction through a Web site

to be aware of all the company terms and conditions of that purchase (Sterne, 2000)

Returns

Money Back Guarantee: Successful guarantees reinforce customer loyalty The

guarantees assure the consumer that if they are less than satisfied with their purchase, they can invoke the guarantee within a certain period and under certain conditions Offering guarantees signals to customers that the firm is committed to deliver high quality of product and service (Hoffman & Bateson, 1997)

Convenient Returning information: Many companies do not provide returning

information of the products According to Resource Marketing, their results show that only 10 out of 45 sites offered fair warranty and return services (Mardesich, 1999) Providing a lenient or fair return system will lower the perceived risk involved The customer is more likely to purchase the product if they know that returning the product

will be of minimal hassle and at no expense Providing the high service is directly related

to increasing sales Companies should also pay the postage to have the product returned Paying the postage will again, lower the perceived risk, will most likely help in stimulating sales Of course, this can only prove to be beneficial if the product doesn’t have a high defective rate (Lee, 2003)

Interactive Service

It is important to remember that making the sale is the beginning, not the end, of a relationship with a long-term customer According Janal (1998), there are many tools to help online marketers to support their activities concerning customer service

E-mail: Most companies with a large customer service situation have implemented some

sort of call management system There are countless help-desk and call-centre software packages on the market today To make the most of them make sure there is a link between incoming e- mail and current back-end system (Sterne, 2000) E- mail falls between the spoken word and the written word The company should emphasise clarity and professionalism and also apply the same rules to the company’s email capability as they do to the phone, the fax, and the copy machine Responding to a customer comment, question, or complaint via e- mail requires the same care used when responding over phone and in writing (Cleaver, 1999)

Frequently Asked Question (FAQ): FAQ’s is a place of introduction It provides the

fundamental and lets the casually curious as well as the internet hunter-seeker come up to speed as quickly as possible The organization of FAQ page deserves serious thought Those that are well organized will be used and save a great deal of telephone time for both the customers and the companies It must be easy to navigate and proper expectations must be set so customers do not spend their time only The shorter the FAQ are the less potential help it will be and lower the value Dates containing last updates should not be published if the company is not planning to keep the FAQ page fresh The pointer of the FAQ must be on the homepage as a stand-out-button so people can easily

find the FAQ on the web (Sterne, 2000)

Interactive chat function: Online text chatting provides real time communication between

customers and suppliers Those who are not able to get an answer online have the option

to contact a service representative immediately if the company offers text chatting (Dietel, 2001) Chat Rooms also attract new customers, increase customer loyalty and enhance relationships For example, a virtual vineyard’s chat room allows a customer to discuss issues with both company experts and wine lovers This is an e-service that is widely used to support e-communities

Sitemap: It is helpful for the customers to give the sitemap on the website because when

the website information is extensive and there is not room on the screen for all of the contents it is usually possible to scroll or skim through the page Surveys done show that

to give site map is very useful for the user to find the information required to them

Toll-free Number: According to Zemke & Connellan (2001) toll- free numbers are still the

most preferred way of contact for customers when it comes to customer service issues as shown in the figure below:

Figure 4: Preferred Methods of Customer Contact

Source: Zemke &Connellan 2001, p.18

Web Policy

Privacy: One of the sticky issues that frequently crops up when the discussion gets to

data gathering and customer specific information being accumulated is privacy (Sterne, 2000) Online customers are concerned about their information privacy because they do not have the ability to control the access others have to personal information on the web anonymity is valuable and regarded as describable for many online shopers as one of the most powerful methods of protecting information privacy Information privacy is the ability of individual to control the access that others have to their personal information Online shoping allows business on the market space to collect much more detailed consumer behaviour information than it is possible from most business on the market place (Hoffman, Novak & Peralta, 1997)

Security Policy: According to Collins (1998) one of the problems over the Internet is how

to pay for goods offered on the Internet There are several systems available that now, after many years make it feasible for both users and electronic retailers to buy and sell over the Internet The problem has always been the one of security The term transaction usually means monetary values changing hands Whenever that occurs, security becomes

an issue Another problem lies in the fact that electronic mail messages are normally sent unencrypted, which means that any one who intercepts and e-mail message could read its contents without difficulty There has been an understandable reluctance by users to send their credit cared details that could be read by any other user Web-services that provide

detailed information on trust and the security system implemented by companies for secure transactions are important attributes in B2C e-commerce (Collins, 1998)

Company Information: Today customers are more educated and demand more

information therefore it is important to have available public materials to inform them about the company Public materials include annual reports, brochures, articles, and company newsletters, and magazines and audiovisuals materials, for example films and audiocassettes (Kotler & Armstrong, 1996)

2.2.2 Dimensions of Internet service quality

The conceptualization and assessment of service quality continues to play an important role in marketing for both academics and practitioners alike The SERVQUAL scale was developed in an attempt to measure how consumers perceive the quality of a service (Parasuraman, 1985, 1988, 1991, 1994) The most recent version of this scale comprises five dimensions: 1) tangibles, 2) reliability, 3) responsiveness, 4) assurance; and 5) empathy (Parasuraman et al., 1994) Current discourse among marketing academics and practitioners suggests that in order to accurately assess service quality in different industry settings, modifications of the SERVQUAL scale may be warranted (Carman, 1990; Dean, 1999)

Although the number of individuals purchasing products over the Internet continues to increase, the decline and failure of such high-profile e-commerce sites as pets.com, priceline.com, and vroom.com, help to emphasize the importance of maintaining a high level of service quality in this highly competitive venue Through phenomenological interviews with Internet users, this study attempts to fulfill this research gap by developing a preliminary set of five Internet service quality dimensions ( Trocchia & Janda, 2003)

Table 2: Dimensions of Internet Service Quality

Dimension Description

Source: Trocchia & Janda (2003), “How do consumers evaluate Internet retail service quality?”

Performance

Customers must be confident of a firm's ability to confirm process and deliver their online order correctly and speedily If mistakes occur, the company must be able and willing to put matters right with minimum hassle to the customer A further aspect of performance is that the customer expects Web sites to load quickly and be easy to navigate (ibid)

Access

Customers expect to be able to access a wide assortment of models and brands within a given product category Clients highlight the Internet's ability to provide convenient access to products from all over the world Having access to a wide variety of goods at one Web site reduces the need for customers to move from one site to another (ibid) Customers, who live in remote areas, or abroad, may be particularly interested in having goods available to them that are not available locally A number of interviewees felt that the goods offered by online retailers improved the quality of their lives By providing such services, Internet retailers can foster a strong sense of customer loyalty and repeat purchase behaviour (ibid)

Security

Customers' most significant security concern is the risk involved in using credit cards when purchasing online Some people also expressed fears that their Internet activities were being monitored, perhaps by the government, marketing organizations or the Internet service provider They were also concerned about being placed on mass mailing lists (ibid)

Retailers may wish to educate their customers about the security of their billing and payment systems If the Web site has experienced few transaction-security problems, the online firm may wish to promote its track record Online retailers may also consider disclosing the steps taken to safeguard personal information about their customers from other marketers (ibid)

Sensation

Many people have an idea that shops offer an environment that the Internet cannot replicate In particular, they liked to be able to see and touch the merchandise However, some people preferred Internet shopping because they did not have to deal with a salesperson Online retailers who offer sales assistance may wish to provide their regular customers with the option of automatically connecting with a salesperson or shopping on their own (ibid)

Information

Most of people used the Internet for checking product availability and comparing prices, features and quality While many people welcomed the Internet as a powerful and convenient research tool, others said that online searches brought up either too much or too little information, or information that was irrelevant (ibid)

Online purchase decisions are often influenced by the credibility of the Web site Customers must be able to trust an information source because of its reputation or because of their previous experience of dealing with it Online retailers can provide hotlinks to watchdog organizations so that customers can be reassured that they are dealing with a reputable marketer The credibility of information may be further improved by offering generous return policies and access to a live customer-service representative (ibid)

2.2.3 Benefits of e-CRM

The primary goal of e-CRM is met when e-Services and transactions are more convenient and less expensive for customers This in turn facilitates the company’s fundamental goals: increasing revenues and reducing costs Web associates (2000), has defined benefits of successful e-CRM implementation

Improved Customer Satisfaction

E-services are always available, accommodating any schedule: Electronics commerce is

exponentially increasing the availability of information, giving customers access to more knowledge, of better quality and faster than before Businesses online provide an information-rich environment by which competitors can identify, match and Improve product innovation A company that can respond to the needs of customers, accommodate their requests promptly and support their buying decisions creates value and wins customer patronage and loyalty (Singh, 2001)

Services take less time to render, adding to customer’s convenience: Customer service

applications in electronic commerce are more critical than in conventional sales, since customers and merchants do not meet face-to- face A click of a mouse is enough for an online customer to select a new provider Online customers expect fast, friendly and high quality service They want choice, convenience and a responsive service with a personal touch (Zhao and Gutierrez, 2001)

Orders can usually be processed and delivered more quickly: In electronic commerce

environment clients are solutions available to them The increased information available

to marketers and advertisers, the streamlined supply chain, and the new retail channel,

made possible by electronic commerce, significantly affect the satisfaction of customers,

whether they are individual consumers or in other businesses (Adam et al., 1999)

Turban et al (2000) suggest that increasing customer satisfaction increases customer loyalty It has been suggested by Doney and Cannon (1997), cited by Jarvenpaa et al

(2001), that trust is an “order qualifier” for purchase decisions

Online self service is immediate, private, relevant and easy to access: Online services

such as easy search of products and services, provision of product specifications that reduce communication costs, secure electronic system to complete transactions, updated product delivery information and quick responses to customer queries are important to win online customers and to make them keep coming back to the site for further

purchases (Turban et al., 2000)

According to de Ruyter (2001, p 186), “an e-service is an interactive, content centred and Internet-based customer service, driven by the customer and integrated with related organisational customer support processes and technologies with the goal of strengthening the customer-service provider relationship” Providing personalised and accurate customer information with better tracking, delivery and payment details is an online service in B2C e-commerce generally appreciated by customers Other services such as interactive and personalised customer communications, speed and accuracy, enhanced capability to track and measure transactions, instantaneous 24x7 communications and the ability to offer different combinations of product and service elements please customers and improve buyer and customer relationships in the B2C e-space

Customer’s feedback to the company is immediate and customers are gratified by knowing they can easily communicate their needs To find answers to electronic

commerce queries customers can communicate by telephone, fax or e- mail However, because this communication was done initially by phone these remote help desks are referred to as call centres For electronic commerce new technology products are extending the functionality of the conventional call centre to e- mail and to Web interaction, integrating these into one product For example, e-Front Office combines Web channels such as automated e- mail reply, Web knowledge bases, and portal- like self-service, with call centre agents or field service personnel Such centres are sometimes called telewebs

Ho and Wu’s (1999) research indicates that the most important factors in electronic commerce e-services appreciated by customers are logistical support, technological characteristics, information characteristics, homepage presentation and product characteristics Logistical support requires quick response to customers’ needs via e-mail

or fax, quickly delivering goods to customers, and providing after-sales service Technological factors include modern computer and network facilities and well structured information systems Information factors encompass reliable output information and secure transaction Homepage presentation should provide for an easy to