A new e-commerce 2.0 buying model

A just released survey of the top 40 e-commerce sites asked users to rate their satisfaction with the buying experience. Of these top 40 sites, only 2 exceeded 80% satisfaction and most are at 70% or less.

E-commerce 2.0 requires taking existing best practices to a higher level. Technical and social changes of the last 8 years have to be accounted for.

  1. Prevalence of web 2.0 attitudes I wrote about earlier
  2. Influence and communication circles are expanding. Like in the classic AIDS commercial, every customer you touch, you have the potential to touch their friends and their friends’ friends. Now at internet speed.
  3. Social Web. Using the internet is not a solitary experience anymore. People surf together, buy together, twitter all day and share everything.
  4. Web applications are expected to be faster, sleeker and with a rich user interface
  5. Available anywhere. With improved browsers in phones, the phone with its small and limited browser is fast becoming a popular and growing way to surf the web.
  6. Data, data everywhere. The proliferation of interaction channels is making it harder than ever to collect and analyze it.
  7. Service orientation: whether you call it web as a platform, software as a service, service oriented architecture or just web services, web applications are expected to be social too.

Has the cognitive buying experience changed? How should all these changes affect the forward thinking enterprise?

The classic AIUAPR model (Awareness, Interest, Understanding, Attitudes, Purchase, Repeat purchase) can be expanded upon to include the web 2.0 concepts and create a solid backbone for the e-business 2.0 infrastructure. David Mercer in his book Marketing has laid a great foundation adding a few very relevant steps into this process

 simple-process

Susceptibility addresses the set of activities that promote a brand and makes the consumer susceptible to the advertising that brings specific brand and product awareness.

Understanding is added to the Interest as research and comparison are becoming an essential step in the purchasing decision

Legitimacy is ever more important as identities of sellers have to be credible enough to result in a transaction. A strong off-line brand name, heavy advertising or good seller feedback on eBay will make it easier for customers to trust the seller.

The Repeat purchase step was divided into the components that determine if the customer will come back

Experience encompasses the shopping experience, satisfaction / experience with the product or service and even the experience with customer service. As more sites and tools allow customers to share their experiences, the impact of positive or negative experiences is magnified beyond the immediate circles and is kept for posterity.

Loyalty is the culmination of all brand efforts to make you a frequent customer who is loyal to the brand and is a brand ambassador to others.

David Mercer also suggests adding Peers and Vendor activities in parallel to the customer process and examines how they influence the decision making process

 

Peers Customer Vendor

process-10

 

 

While this model greatly expands the basic AIUAPR model it addresses the reality e-commerce 1.0

In e-commerce 2.0, a few things change:

  1. Communications are not one sided. Every communication is interactive where data and opinions get exchanged.
  2. The Peer group definition had expanded to include everyone accessible through the internet that has an experience or an attitude/opinion towards the brand, product or service.
  3. As such, it is not enough for the Vendor to try and manage customer experience as they become peers, you need to manage and have specific information and communication plans for the peers as defined at every stage.

The new model will look something like this:

It includes on top the customer, peer, and vendor relationships

anewecommer3

On the other it looks at the customer lifecycle from e-awareness to e-commerce and e-service. Each one of these buckets includes the actions and interactions in the phase.

On the bottom it has the funnel that collects all possible data from all these interactions and processes it as analytics, to be fed into the systems and decision processes that will improve the next iterations.

E-commerce 2.0 high level map

ebusinessdiagram

 

What I think differentiates this model from traditional e-commerce models:

  1. Peers. The influence of peers as part of a social network or even opinions of strangers expressed in blogs and communities or review sites had increased tenfold and has to be acknowledged and managed.
  2. E-marketing is evolving into e-awareness as marketing and PR work together to create awareness to brand and products.
  3. Analytics need to be collected at many different levels. Customer actions and interactions not just on our site but through the awareness and service channels. The interactions with the brand can provide great data as to cause and effect and ROI

One thought on “A new e-commerce 2.0 buying model

  1. Pingback: The Surprising Link Between Web Usability, Customer Satisfaction and ROI « Edgewater Technology Weblog

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