Chapter 6 Managing E-Service Quality What is E-Service Quality? Why it Matters How to Improve It JW:sel#5

E-Service Quality A major change in 21st century marketing characterized by:  A shift in emphasis from products and transactions to service and relationships > Advanced technologies and ever expanding electronic networks

Definition of E-Service Quality  E-service quality is the extent to which e-commerce providers effectively and efficiently manage customer interactions involving searching, shopping, purchasing and order fulfillment.

11 Major Dimensions of Perceived E-Service Quality Reliability Responsiveness Access Assurance Empathy Ease of Navigation Price knowledge Customization/personalization

Research Insights  A business process orientation is fundamental to service quality. Companies need to integrate front- office applications like order generation and customer support with back-office processes such as logistics and order fulfillment.  Online customer service has failed to live up to customer’s rising expectations, especially regarding responsiveness.  Forrester Research found that online customer satisfaction is most affected by the business being well-staffed, responsive, offering simple and easy returns, and providing order tracking capabilities.

Online Service Quality for Luxury Purchases Good customer service4.55 Money-back guarantee4.48 Easy return or exchange of merchandise4.46 Control over use of personal data4.43 Site reliability4.42 Ease of use4.33 Wide product selection3.99 Fast site3.97 Information related to products/services sold3.93 Wide range of shipping/delivery options3.88 Brand name3.65 Site personalization3.55 Physical presence3.49 Discounts or coupons3.24 Personalized product recommendations3.12 Recommendations to complement previous purchases 2.95 Source: Forrester Research Inc., 2001

E-Service and E-Service and Customer Satisfaction ☛ Service providers have come to realize that the Internet presents great opportunities as well as challenges in serving customer needs ☛ The new e-consumer is more informed and expects more from their service provider — traditional or online ☛ Companies doing business online need to see the link between customer service and repeat visits

Price Knowledge and Customer Expectations ☛ Price knowledge refers to the ability of online shoppers to determine shipping, comparison, and total prices ☛ Online consumers are pretty clear about what they expect online about what they expect online ☛ A recent study conducted by Mercer Management Consulting confirms the importance of information and convenience and why consumers value using the Internet

E-Service Quality and Customer Loyalty  e-Service quality is essential in creating customer e-satisfaction  Customers must continue doing business with most online firms for at least 2-3 years just for them to recover their initial acquisition costs

Variables that Predict Repeat Visits to Websites ■The most important variable was site content: Respondents cited "frivolous content" as a primary reason respondents do not return to the Website ■ The 2nd most important factor was whether the respondent found the visit enjoyable ■ Finally, site layout was cited as the third most important factor influencing the rate of repeat visits

How to Improve E-Service Quality Research has proposed that 5 components be considered in delivering e-service quality:  The core service  Facilitating services  Supporting services  Complementary services  The user interface (how the customer accesses services)

Definitions and Functions of E-Service Quality Components  Core services are the “raison d’etre.” They are designed to meet the primary demand needs of specific target markets.  Facilitating services make it possible to use the core service and, without them, the core service collapses.  Support services don’t facilitate using the core services but rather add value to them; support services might include the availability of useful links or “virtual book clubs.”

Definitions and Functions of Components (cont.)  Complementary services are services that accompany the core service and support their acquisition and use or disposition.  The user interface is a means of communication between the e-service marketer and the potential customer.

Keys for Building Website Trust  Maximize cues that build trust on your website your website  Use virtual-advisor technology to gain customer confidence and belief  Provide unbiased and complete information  Include competitive products  Provide open and transparent organizational communication  Keep your promises!

Improving Credibility with Online Merchants  Disclose the physical location where products are produced, including an address, telephone number, and address  Clearly distinguish news and information from advertising  Disclose financial relations, particularly when the relationships affect the cost to a consumer  Any posted incorrect information should be immediately corrected  Privacy policies should be easy to find and clearly and simply stated

Improving E-Service Quality Access Personalization ResponsivenessNavigation Assurance Price Quality

E-SQ – Concluding Remark The challenge for e-service marketers is to determine the relative performance and valence on each of the service quality attributes and devise strategies to improve in these areas