Digital Business Strategies: E-commerce, CRM, and Crowdsourcing

E-commerce Fundamentals

Payment Methods for Online Shoppers

Online shoppers commonly use a credit card or a PayPal account to make payments. Other alternative methods include:

• Billing to mobile phones
• Cash on delivery (COD)
• Check
• Debit card
• Electronic money
• Gift cards
• Postal money order
• Invoice

Product Delivery Options

• Downloading (for music, movies, images, etc.)
• Drop shipping (the manufacturer ships the item directly to the consumer)
• In-store pick up (collecting items at a physical shop)
• Printing or by e-mail (tickets for concerts, cinema, etc.)

Market Share and Statistics

E-commerce represented 8% of sales in the USA. In 2012, there were 242 million people shopping online in China.

Advantages of E-commerce

• Convenience

  Online shops are usually available 24 hours a day, and many consumers have internet access both at work and at home.

• Information and Reviews

  Online stores provide more information about the product (instructions, demonstrations, advice, or how-to guides). Customers can also leave comments about the product.

• Price and Selection

  Generally, prices are lower on this channel. However, consumers must remember to factor in shipping costs.

Disadvantages of E-commerce

• Fraud and Security Concerns

  Consumers must ensure that the online retailer is legal and exists.

• Lack of Full Cost Disclosure

  It may not be easy to see the total cost upfront, as additional fees such as shipping are often not visible until the final step.

• Privacy Risks

  Involves giving personal information to the retailer.

• Product Suitability

  The product purchased may not be what the customer was expecting.

• E-mail Spam

E-commerce Platforms

Common platforms include PrestaShop and Shopify.

Crowdsourcing and Crowdfunding

Defining Crowdsourcing

Crowdsourcing is the practice of obtaining needed services, ideas, or content by soliciting contributions from a large group of people, rather than from traditional employees or suppliers.

How Crowdsourcing Works

Everyone contributes a small portion, which collectively creates a large result. Contributors are often found online or via social media, responding to an open call and creating a network focused on solving the problem.

Users, known as the crowd, can be paid or unpaid. Sometimes recognition or intellectual satisfaction is sufficient compensation.

Examples of Crowdsourcing

• The Oxford English Dictionary

  An open call was made for contributions by volunteers to index all words in the English language.

• Genealogy Research

  A method to find information about ancestors from other people.

• Modern Methods

  The internet has become the primary tool to access contributors and the information they supply.

Related Crowdsourcing Concepts

• Crowdvoting

  Occurs when a website gathers a large group’s opinions and judgment for a certain topic (e.g., Doritos, Heineken, Domino’s Pizza campaigns).

• Creative Crowdsourcing

  Used for projects such as graphic design, architecture, writing, and illustration.

Types and Criticism of Crowdsourcing

• Wisdom of the Crowd

  This type collects large amounts of information from people to create a complete database about a topic (e.g., Wikipedia).

• Microwork

  A crowdsourcing platform where users perform small tasks for low monetary amounts.

Criticism: Crowdsourcing has been criticized because of the low monetary rewards paid to crowdworkers.

Crowdfunding

Crowdfunding goals often involve securing donations for special humanitarian situations or funding new projects.

Customer Relationship Management (CRM)

Defining CRM

CRM stands for Customer Relationship Management. It involves using social media services and technologies to engage with customers.

CRM Applications

CRM has applications in marketing, customer service, and sales, including:

• Peer-to-peer customer support
• Idea management
• Market research
• Product launch and brand reputation management
• Payment processing
• Email marketing systems
• Content management
• Call center and customer support

Benefits of CRM Implementation

• Understand the customer better
• Retain customers through improved customer experience
• Attract new clients and contracts
• Increase profitability
• Decrease customer management costs

Implementing CRM

CRM can be implemented using tools like automated billing systems.

Social Media Marketing Strategies

SMM Definition and Goals

Social Media Marketing (SMM) refers to the process of gaining website traffic or attention through social media sites. Key activities include:

• Creating content that attracts attention.
• Encouraging readers to share content with their social networks (Word of Mouth).

Advantages for Companies:

• Easily accessible to anyone with internet access.
• Improves brand awareness and customer service.
• It is cheaper to implement marketing campaigns.

SMM Channels and Impact

• Social Media Websites

  People can interact directly with the company and the product (e.g., the “Share a Coke” case study). Without a big investment, companies can generate widespread discussion about their product.

• Blogs

  Blogs have an enormous impact, especially in fashion, gaining recognition from brands like Dolce & Gabbana, Burberry, and Vogue. Blogging is now a respectable career in the fashion industry.

• Mobile Phones

  Provide easy access to platforms and ensure users are always connected.

Engagement in SMM

In this context, engagement means that customers and stakeholders are participants rather than viewers. Everyone expresses and shares an opinion or an idea, effectively making customers part of the marketing department.

Social Media Marketing Tactics

Twitter

• Allows companies to promote their products on an individual level.
• Uses short messages that followers are more likely to read.
• Provides real-time connection.

Facebook

• Profiles are far more detailed than Twitter accounts.
• Allows for videos, photos, and longer descriptions.
• Can include testimonials from other users.

Foursquare

• Users can check into locations via their smartphones.
• A good marketing strategy involves offering discounts or free food/beverages for people checking into the location.
• Special privileges are often offered to the Mayor of that location.

Google+

Similar to Facebook, but integrates with the Google search engine, Google Adwords, and Google Maps.

Instagram

A free photo-sharing program and social network. (In September 2012, it had 100 million registered users.)

Blogs (Platform Use)

• Allows a company to provide longer descriptions of products and services.
• Can include testimonials.
• Provides links to Facebook, Twitter, and other blogs.

LinkedIn

A professional, business-related networking site used to create professional profiles and interact with others working in similar areas or companies.

Yelp

Consists of a comprehensive online index of business profiles. Businesses are searchable by location, similar to Yellow Pages. It functions as a social network featuring company profiles.

YouTube

Includes many ads that are usually synchronized with the video content. Videos can also be sponsored.

Social Bookmarking

Enables users to add, annotate, edit, and share bookmarks of web documents or e-books, thereby creating folksonomies.

Brand Ambassador Role

A brand ambassador is a marketing term for a person employed by a company to promote its products within the activity called branding. They are especially active in social media and can be celebrities or professional figures.