Web 2.0 for Business: Developing Customer Services

Summary

Web 2.0 tools provide firms with an opportunity to develop services that match customers’ needs and expectations (Sigala, 2012). In the Greek tourism sector, there are very few firms that use Web 2.0 to design, develop, and market new services. Most firms use Web 2.0 to collect data and respond to customer feedback. Web 2.0 has been used to improve or imitate existing products, rather than to develop new products (Sigala, 2012). Some participants highlighted the lack of support from those in managerial positions, as one of the reasons for its lower use in NSD (new service development).

Most managers have not realized the importance of Web 2.0 in NSD. Consequently, they assign fewer resources to exploit Web 2.0 in NSD. Web 2.0 has also been used in a few stages in NSD. Deriving his argument from the views of participants, the author recommends training in using Web 2.0 tools, selecting information relevant to market research, and understanding customer behavior (Sigala, 2012).

Key Learning Points

  • In order to remain competitive, firms that offer services need to use continuous improvement to upgrade their services (Sigala, 2012).
  • There is a need to understand customers’ needs and expectations (Sigala, 2012).
  • Identifying current customers and potential customers is a challenge that limits the accuracy of using Web 2.0 tools in NSD.
  • Learning about the customers’ latent need can help firms design and develop new products (Sigala, 2012).
  • However, it is difficult to identify the latent need of customers from Web 2.0 because customers are unlikely to be imaginative about the services that ought to be provided. In case they are conscious about their latent need, they are unlikely to express it properly.
  • Crowdsourcing can be used to generate ideas for NSD. However, it is unlikely to generate ideas that can create a long-term competitive advantage. The reason is that there is lack of secrecy about new ideas in Web 2.0 (Sigala, 2012).
  • In the Greek tourism sector, customer reviews are the most common source of information. Sigala (2012) elaborates that the Vodcast can give more in-depth information about customers’ feelings than the text messages found in customer reviews.
  • The reactive approach used by service providers increases the rate of improving existing services, but it hinders NSD. NSD requires training for a better selection of customer information for NSD.
  • Firms rarely use Web 2.0 in the designing, developing, and marketing stages of NSD. Most firms use Web 2.0 in the early stages of NSD. Firms rarely use Web 2.0 for service testing.
  • Firms need to select the information generated from Web 2.0 to determine information that is useful to NSD because of the risks associated with the quality of the community utilizing Web 2.0 (Sigala, 2012). Some participants felt that the feedback can only be useful if the Web 2.0 users reflect the customer base (Sigala, 2012). Great ideas should be evaluated, even if the number of users is less.
  • When using Web 2.0, firms should shift from developing products for the customer to develop products with the customer (Sigala, 2012).
  • In the Greek tourism industry, firms utilize Web 2.0 because of the pressure they receive from business partners and customers. It shows some firms do not recognize the opportunities created by Web 2.0.

Relevant Statements to the Session

  • Information generated from Web 2.0 is necessary to reduce uncertainty associated with launching a new product (Sigala, 2012).
  • It is easier to include customer views in the early stages of NSD than in the later stages (Sigala, 2012).
  • Web 2.0 can be used for market research, customers’ needs, and marketing (Sigala, 2012).
  • The views collected from Web 2.0 may not reflect the targeted customer base (Sigala, 2012).
  • Most customers lack the technical knowledge to be aware of their latent needs and to express them (Sigala, 2012).
  • Users will provide information that can be used to modify existing products. They are unlikely to imagine a new product. Customer involvement may only result in incremental innovation (Sigala, 2012).
  • Firms face the challenge of identifying the right group of customers, whose views are relevant to service development and improvement (Sigala, 2012).
  • Some customers may distort their views of the actual situation when interacting with the employees of a firm (Sigala, 2012). The firm may need the blind-participant approach to obtain unbiased views.
  • Risks associated with using Web 2.0 for NSD include lack of confidentiality, difficulties in selecting useful information, interpreting the different views, and customers’ lack of ideas for designing a new product (Sigala, 2012).
  • Customer reviews in NSD helps to evaluate value creation in the new product (Sigala, 2012).
  • Customers’ views help to properly differentiate products that match customers’ needs (Sigala, 2012).
  • Customers’ views, from Web 2.0, can be used to reinforce the success of the new service in the market. It can also increase the acceptance rates because of customer involvement in the product design (Sigala, 2012).
  • It creates an opportunity to educate users on the new service and its application (Sigala, 2012).
  • Podcasts, blogs, and Vodcasts are rarely used because they are considered to express the views of an insignificantly smaller number of users and lack of awareness on their usage (Sigala, 2012).
  • Firms spend less time and funds to support the use of Web 2.0 and to interact with customers (Sigala, 2012). Firms need to allocate more resources to Web 2.0 customers’ interaction.
  • Firms rarely use customers’ views in new product design.
  • Firms can use Web 2.0 to influence consumer tastes and preferences (Sigala, 2012).
  • Firms should try to integrate the use of Web 2.0 in all the three stages of NSD (Sigala, 2012).
  • User generated content (UGC) bears the risk of being abused by competitors and customers, who have bad intentions (Sigala, 2012).
  • The quality of the community engaging in the Web 2.0 can be evaluated using the number of users (Sigala, 2012). A large number of users represent a good sample from the customer base.
  • Web 2.0 is likely to generate ideas to be used to make incremental changes, rather than in NSD (Sigala, 2012).

Critical Analysis

It is possible to use crowdsourcing to get an idea for a new product from within the firm. Employees can evaluate customers’ views and select those which can only be satisfied with a new product. Sigala (2012) describes that Web 2.0 is unlikely to help the firm engage in disruptive innovation because customers are not conscious of their latent needs. Customers usually provide information in the form of a complaint or praise.

They may compare one service with another and give their rating relative to that offered by competitors. As a result, customers may help the firm to benchmark against the best practices in the industry. There is a limited possibility of getting a new product idea from customers because they concentrate on rating existing services. However, Snene & Leonard (2014) highlight the possibility of using customers’ views in designing and developing a new service.

Participant’s raised the concern that the views of customers may not be useful to firms when they are biased and when the community of Web users is distorted from the targeted customer base (Sigala, 2012). There is a possibility of higher customer sophistication in the segment of customers that interact using Web 2.0 than the entire customer base. If the Web 2.0 users are highly sophisticated customers, there is a possibility of leaving out the views of the less sophisticated customers.

The firm has to use its current customer lists to determine the targeted customers (Benckendorff, Sheldon & Fesenmaier, 2014). Level of education, age, and financial ability may be some of the factors that determine the type of tourists visiting a nation. By conducting a survey on customers, firms in the tourism industry may determine the fraction of its current customers who used any of the Web 2.0 tools. A lower fraction of actual tourists using Web 2.0 tools may indicate that the community of users does not reflect the customer base.

Customers may lack the technical knowledge to enable them to engage freely in product design. However, there are few limiting factors when engaging customers in marketing new products through Web 2.0. On Table 1, Sigala (2012) elaborates that only 11.7% of the participants involved customers in marketing a new product through Web 2.0. It shows that firms have placed more value on other communication channels to market new products.

Practical Implications

When I am using Web 2.0 in a real business case, the first step will be to determine whether I have a quality community of users. It requires a survey to be conducted on actual customers who use interactive Web sites and those who do not. It helps to find out whether the information from the Web 2.0 tools is a reflection of the customer base.

Customers may not directly provide ideas for new product development. However, I can evaluate some of their views and find needs that can only be satisfied with new products. The process of disruptive innovation requires technical expertise and a team to brainstorm on customers’ views. Incremental changes derived from customers’ views are helpful in benchmarking and adopting the best practices in the industry.

In new service development, it may be necessary to obtain training on selecting useful information and using different Web 2.0 tools. Firms should allocate time and funds to engage in collecting customer and market information from Web 2.0 tools. There is a need for training to increase customer involvement in product design and development.

Learning Reflections

I have usually thought that the interactive media provides SMEs with a less costly marketing opportunity. From the reading, I am surprised to find out that only a small number of respondents claimed that their firms used Web 2.0 to market new products. The research sample mainly consisted of small firms. I have learnt that I should assist my firm to fully utilize the opportunity found in Web 2.0 to design, develop, and market new products. I should try and involve customers’ views in all stages of the NSD.

References

Benckendorff, P., Sheldon, P., and Fesenmaier, D. (2014). Tourism Information Technology (2nd ed). Wallingford, UK: CABI.

Sigala, Marianna. (2012). Exploiting Web 2.0 for New Service Development: Findings and Implications from the Greek Tourism Industry. International Journal of Tourism Research, 14(6) (2012): 551-566. Web.

Snene, M., & Leonard, M. (2014). Exploring Service Science: 5th International Conference, IESS 2014, Geneva Switzerland, February 5-7 Proceeding. Cham: Springer International Publishing.