Managing Customer Relationships on the Internet

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1 MASTER S THESIS 2005:02 PB Managing Customer Relationships on the Internet Muhammad Ali Khan Muhammad Amer Shahzad Social Science and Business Administration Programmes Department of Business Administration and Social Sciences Division of Industrial Marketing and e-commerce CONTINUATION COURSES Supervisor: Tim Foster 2005:02 PB ISSN: ISRN: LTU - PB - EX /2 - - SE

2 ACKNOWLEDGEMENTS 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 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 I

3 ABSTRACT 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. II

4 TABLE OF CONTENT TABLE OF CONTENT 1 INTRODUCTION Background Problem Discussion Research Purpose & Questions Outline of Thesis 6 2 LITERATURE REVIEW The Online Environment Key Quality Factors in Website Design 10 Clarity of purpose..10 Design Accessibility and speed.. 14 Content Determinants of Successful Website Design. 17 Page Loading Speed...17 Business Content 18 Navigation Efficiency 19 Security..20 Marketing/Customer Focus APID Model Proposed Attracting...22 Informing...23 Positioning Customer Services Framework of Customer Services.25 Placing Order.26 Payment Option.27 Shipping Information.28 Returns...28 Interactive Services 29 Web Policy Dimensions of Internet Service Quality 31 Performance...32 Access 32 Security..32 Sensation 32 Information Benefits of e-crm 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 III

5 TABLE OF CONTENT 4 METHODOLOGY Purpose of Research Research Approach Research Strategy Data Collection Method Sample Selection Analysis of Data Quality Standards.44 5 DATA PRESENTATION Case 1: How can the online environment be described? How are the customers served in this online environment? Case 2: How can the online environment be described? How are the customers served inthis online environment? DATA ANALYSIS v Within-Case Analysis of Within-Case Analysis of Cross-Case Analysis How are the customers served in this online environment? Within-Case Analysis of Within-Case Analysis of Cross-Case Analysis FINDINGS AND CONCLUSIONS How can the online environment be described? How are the customers served in this online environment? Implication for managers Implications for theory Implications for further research..74 REFERENCES APPENDIX A OBSERVATION CHECKLIST APPENDIX B APPENDIX C IV

6 TABLE OF CONTENT 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 and cross case analysis Table 6: How and serve customers in online environment cross case analysis...68 V

7 INTRODUCTION 1 INTRODUCTION 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 they 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) 1

8 INTRODUCTION 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 touch points can include the Internet, , 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). 2

9 INTRODUCTION 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, to $245 for fashion retailers such as, to $500 for (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; e- CRM is the customer facing Internet portion of CRM. It includes capabilities like selfservice knowledge bases, automated 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 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 3

10 INTRODUCTION more quickly. Besides, the customers served are actually world-wide. Here comes e- CRM. Companies adoptions of e-crm are slow but success rates are high due to its complexity (, 2001). Some recent CRM packages integrate the speechenabled 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. 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 should 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. 4

11 INTRODUCTION 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? 5

12 INTRODUCTION 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. 1. Introduction 2. Literature Review 3. Conceptual Framework 4. Methodology 5. Data Presentation 6. Data Analysis 7. Findings & Conclusions Figure 1: Outline of Thesis Source: Created by author 6

13 INTRODUCTION 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. 7

14 LITERATURE REVIEW 2 LITERATURE REVIEW 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 , 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 8

15 LITERATURE REVIEW 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 online. 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) 9

16 LITERATURE REVIEW 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 principle 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) 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- 10

17 LITERATURE REVIEW 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 change 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 use 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 11

18 LITERATURE REVIEW 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 navigate 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). 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 that 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 12

19 LITERATURE REVIEW 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 13

20 LITERATURE REVIEW 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) 14

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