Introduction:
Insite sells a trust-based online adviser- a software technology that help customers select the products on the web and feel more comfortable with on-line buying. It is very useful for customers in choosing complex array of product choices such as pickup trucks and notebook computers, however Mr Stefan Nappi the president and chief executive officer of Insite Marketing Technology thinks why Insite is very promising (successful) but yet selling poorly. As years passed, Insite is running low on cash and looking to raise a new investment although many companies are trying to figure out how to sell products over the web. Insite needs to understand why sales lag (fall), how to boost sales, and how to prove investors that Insite is a winning product and winning plan to sell product.
History:
There are 3 cofounders of Insite in Feb 1997
1. Professors Glen Urban and John Little – they brought a wealth of new ideas on virtual buying environments, trust, discrete- choice modeling, customer segmentation and product acceptance modeling
2. Jeffrey Stamen- he is the president of another company the MDS which was co founded by Prof Urban and John.
With their long history of working together these 3 cofounders formed the intellectual core of the company and recruited other executive on the firm one of them is
Stefan Nappi- an MIT graduate with a 20 year history of building software organizations and former chief operating officer of Intranet, chief executive and president.
Nappi looked for people who were committed to build a company and hired staff with solid experienced and imagination, Stefan then hired a soft ware engineer to create new product and technical architect.
The company started building its prototype which is the Trust Advisor for only 100,000 USD and the first prototype was ready in May 1997.
Insite raised 1.5M USD from investors and increased its staff to 15 people in 1998
Insite’s 4th employee was an expert in user interface design who designed the CD based game Toy Story. The company wanted the product that is accessible just like a game.
Product Information and selling on the internet
· Internet offers and unparalleled (unique) opportunity to get accurate (correct) relevant (useful) information in to the hands of the consumers in their buying decisions – “Product Information”
· A website can know the minute details of million products that a normal salesperson could know
· The web seems ideal for distributing the product information and for increasing sales
· On the web information is all there but the customer needs to work hard to find it
Buying information- intensive products: Consumer’s perspective: - consumers point of view
- Every product offers on the internet has a complex series of features, strengths, weakness and issues with price tag example are cars, computers and home entertainment.
However buying can be frustrating and consumers may fear that sales people make an advantage of them, pushing expensive, unimportant details etc. The point is consumers would like to and need to trust the seller on the time of buying the product.
Selling Information- Intensive Products: Sale’s perspective- Sales point of view
- The seller must translate all the features of each new product and prepare a sales talking point. In order to achieve this training is required,
However training is time consuming – required a long period of time
On line Retail vs Traditional retail
Traditional retailers rely on personal knowledge and sales skills of in-store staff and the sales people needs to build a personal relationship with the customer in order to close the sales.
The staff asks questions, listen to responses and observe the customers behavior.
Online retail- is buying products over the web or internet so it doesn’t have an interactive social mechanism which is very important point of sales. Judging products over the web is also harder as the consumer wonder whether the seller will deliver as promised, if their credit card is safe or who will they consult if there is something wrong with the product.
Information- Intensive products: Insite’s Solution
Insite’s Trusted advisor system would help customers to buy product in much the same way that they would help for an effective and trustworthy counselor. System provides an unbiased (fair) product information.
** Please see the summary of the type of product that needs advisor like technology on page 61.
Technological Core
- Insite’s Trust advisor is a sophisticated data base and decision analysis tools that is the customer’s basis or preferences when they shop online
- The advisor brings products to shoppers rather than requiring shoppers to find products on their own
- It has the ability to tally revenue and cost savings delivered by the Advisor
Insite offers 2 performance levels for Trusted Advisor
1. Fully Featured Trusted advisor - which requires 3 months of elapsed time with one staff year of effort
2. Simplified Advisor - that can be implemented in less than one month of elapsed time and 3 staff months of effort
Alternative to Insite
- There are a lot of internet advisor technologies that approach sales on the internet. Other alternative addresses helps consumers to choose an appropriate products, create social connection, creating trust worthy information and creating trust in online retailer
Augmenting (Expand / Increase) Self Service with personal service
- Example of web based self service with personal service is Retailers Lands’ End – this service let shoppers speak to customer service representative live over the web via chat or voice call.
Then if the customer cannot find the item that they are looking for, the representative can take the shopper’s browser to find it.
Product Selection via Clever Questioning
- Other companies have a software technology that pose a serried of questions to buyer and deduce buyer preferences from the answers.
Each tool then shows the best product recommendations from the questions.
Collaborative Filtering: Customers Helping Customers
- Collaborative Filtering uses the past purchase behavior of one customer to recommend items to another customer who is in some way similar to that customer.
See example on page 63
Third Party Rating Services: A seal of approval
- Third party agencies such as TRUSTe involve a third party rating services. It provides a verification that the company is acting responsibly. Trust does not directly recommend products but rather it evaluates the overall privacy of a site that users are more comfortable when making online purchases.