Customer Service Strategies of ebay
...formation and by providing consistent and reliable resources that are very user friendly. Essentially, they maintain a souped-up classified-ad service and ensure that there are plenty of users (San Francisco Chronicle, 2002). The second key component is customer purchase support which insures that the information that is being provided has been designed to maximize the user experience and develop a customer relationship. The website is so popular that nearly 30 percent of all Internet users visited the site in October 2002, according to ComScore MediaMetrix. The total for the second place online auctioneer, Andale was just 3.4 percent (San Francisco Chronicle, 2002). eBay brings a community of buyers and sellers together and provide a simple online forum for them to conduct business. Over the past two years, ebay has streamlined its process and worked out some of the glitches that may have been in the early stages of the business. In 2000, eBay has branched out from its sometimes cumbersome auction format by acquiring Half.com, a site where sellers list new and used items for a fixed price. This has been an unqualified success and eBay has now expanded it into other categories of items (www.thestandrad.com, 2001). As part of its customer fulfillment, the third component, eBay also implemented a "buy it now" feature that lets customers bypass the auction process and buy an item outright. Now more than 35% of all the items offered, have this option., which has resulted in more trades for eBay. This process is faster and more efficient and has already increased business. eBay continuously looks for ways to improve on the process for customers. In addition, they began to offer a program option that would allow businesses the opportunity to set up a "storefront" on the site. The pilot program got such a strong response, that eBay did not have to do any further promotion. This is a testament to the strength of their brand. They have capitalized on their brand identity and value and have used it to parlay their original auction business into an international mega merchandiser. Because of its innovative practices, eBay's company revenues rose 62%, last year, to $1.1 billion. Profit growth has also accelerated as earnings jumped 172% last year to $249 million. (www.wralc.om 2003). With 31 million active buyers and sellers, eBay's online marketplace has created an Internet blockbuster success. Most users find that buying and selling on eBay is one of the easiest ways to do business. Mike Syiek, owner of San Francisco's Andover, which sells about $300,000 in merchandise a month on eBay states, "There is no other website that competes" (www.redding.com, 2002). eBay appears to excel in providing another of the value chain components, customer continuance and support. eBay has not only focused on keeping its current customers but knows that continued growth also depends on attracting new users. One of their key strategies is to make the website as mainstream as a large traditional retailer and offer customers a wider range of items at both fixed and auctioned prices. By providing both types of buying arrangements, they appeal to a wider audience. For instance, the company was quick to notice that a lot of users were listing cars in the miscellaneous section because there was no category for autos. The company set up a car category and eventually created a separate site for cars. Today, eBay boasts the largest auto site on the Internet (www.thestandard.com, 2001). Finally, the last component of the Internet service value chain is the implementation and management of a customer service channel, a feedback loop for handling customer dialogue. To begin with, eBay has provided users with an excellent help system, an online Seller's Guide, a Seller's checklist, Frequently Asked Questions and tools which are very easy to use. eBay has made excellent use of its website as a resource for buyers and sellers alike. According to 60 Minutes, the CBS News program, "The lure of a bargain, combined with the excitement of a Las Vegas gamble, is what brings in millions of Internet customers. The loyalty and enthusiasm of devoted eBay users all over the country is what has helped build eBay into the powerhouse it is today" (www.cbsnews.com, 2002). An eBay auction works exactly the same way as an old-fashioned one: the highest bidder wins. For example, Mike Benson, a St. Louis lawyer, is looking for a rare baseball card of Stan Musial. In seconds, he finds 84 different Stan Musial cards up for auction on eBay, including one for the very card he wants. To bid, he simply enters the highest amount he's willing to spend. In this case, it's $50. He eventually lost the card to a higher bid of $63. Every time there's a sale, eBay takes a cut of the action. As a result, eBay's market value is now worth more than Bloomingdale's, Macy's, Sears, and Toys 'R Us combined. "It was an entirely new idea that took advantage of the Net," says eBay CEO Margaret Whitman, "There's no land-based analog for eBay. We hold no inventory, we ship no product" (www.wral.com, 2003). The company's has even developed a feedback system, rating customer satisfaction. The reputation of a seller is critical -- too many negative comments and you're banned as an eBay seller forever. eBay investigates fraud claims, but relies mainly on buyers and sellers to police themselves. The company estimates that only 30 sellers out of a million fail to deliver on their promises. Analysis/Summary eBay has obviously done an outstanding job of creating one of the most successful websites on the Internet. But as an innovator, eBay is constantly addres...