Does online interaction with promotional video increase customer learning and lifetime value?
Upcoming SlideShare
Loading in...5
×
 

Does online interaction with promotional video increase customer learning and lifetime value?

on

  • 528 views

 

Statistics

Views

Total Views
528
Views on SlideShare
528
Embed Views
0

Actions

Likes
0
Downloads
3
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Does online interaction with promotional video increase customer learning and lifetime value? Does online interaction with promotional video increase customer learning and lifetime value? Document Transcript

  • “Does online interaction with promotional videoincrease customer learning and customer lifetime value?” Presented by: Ross Moran 080052402 In partial fulfilment of the: Executive Master of Business Administration Degree Submitted for: Business Mastery Project Presented to: Dr. Sionade Robinson Faculty of Management; Cass Business School City University London Date: 5th September 2011 Word Count: 15,062 1
  • Table of ContentsIntroduction ................................................................................................................................ 7Literature review ...................................................................................................................... 11 The Internet .......................................................................................................................... 11 Attitudes toward the Web ................................................................................................ 12 Interaction ........................................................................................................................ 16 Interactive communications ............................................................................................. 19 Sustainable demand for interactive media ........................................................................... 22 Promotional video in Tourism ............................................................................................. 25 Customer loyalty & Net promoter score .............................................................................. 29 E-Learning ........................................................................................................................... 31 Persuasion technology ......................................................................................................... 32Research Methodology ............................................................................................................ 35 Data collection ..................................................................................................................... 36 Survey design ....................................................................................................................... 36 Survey response rates ........................................................................................................... 39Survey analysis ........................................................................................................................ 40 Introduction to the findings .................................................................................................. 40 Critical analysis ................................................................................................................ 40 Accuracy of the sample .................................................................................................... 40 Demographic profile of the respondents .......................................................................... 41 Time and Frequency ........................................................................................................ 48 Attitudes towards the web ................................................................................................ 50 Interactive learning .......................................................................................................... 54 Repeat viewers & Net Promoter Score ............................................................................ 60Limitations and Further research ............................................................................................. 66 2
  • Limitations ........................................................................................................................... 66 Survey limitations ............................................................................................................ 66 Methodology limitations .................................................................................................. 67 Further research ................................................................................................................... 67 Web 2.0 and attitudes towards the internet ...................................................................... 68 E -learning ........................................................................................................................ 68 Demand for interactive media .......................................................................................... 68Conclusions and Recommendations ........................................................................................ 69 Conclusions .......................................................................................................................... 69 Recommendations ................................................................................................................ 72 A) Format of interactive media .......................................................................................... 72 B) Feature videos every 3 months ..................................................................................... 73 C) Interactive features ........................................................................................................ 74Bibliography ............................................................................................................................ 75Appendices ............................................................................................................................... 80 Appendix 1 ........................................................................................................................... 80 Link to survey on Kwik survey website. ............................................................................. 80 Appendix 2 ........................................................................................................................... 80 Respondents answers to the survey in chart format: ............................................................ 80 Appendix 3 ........................................................................................................................... 89 Definitions of interaction: .................................................................................................... 89Definitions that Focus on Process ............................................................................................ 89Appendix 4 ............................................................................................................................... 93 Internet subscription growth rates ........................................................................................ 93 3
  • Table of FiguresTable 1 Benefits consumers want from websites .................................................................... 13Table 2 Technology leading vs Market demand. Source: Suarez and Lanzolla (2005) ......... 23Table 3 Survey sample ............................................................................................................ 39Table 4 Age profile of respondents ......................................................................................... 43Table 5 Gender profile between ages 30-44 ........................................................................... 43Table 6 Profession by Industry Sector .................................................................................... 45Table 7 Gender profile with the advisory professions ............................................................ 47Table 8 Do respondents watch promotional video ................................................................ 51Table 9 Age profile of respondents who watch video clips .................................................... 52Table 10 Attitude to media clips ............................................................................................. 55Table 11 Sector profile of respondents in table 9 ................................................................... 56Table 12 Professional profile of respondents who ranked David communications skills as hismost important attribute ........................................................................................................... 58Table 13 Attitude towards learning more about business ........................................................ 59Table 14 Sector profile of respondents who want to learn more ............................................. 59Table 16 Age profile of respondents who would watch more videos...................................... 62Table 17 Gender profiles of respondents who would watch more videos ............................... 62Table 18 Net promoter score rankings .................................................................................... 63Table 19 Net Promoter score ................................................................................................... 64Table 20 Respondents who would recommend David ........................................................... 65 4
  • 5
  • AcknowledgementsFirstly, I would like to thank David Mellor. I was about to give up on my proposedtopic until I met David. He told me that he had just commissioned some promotionalvideos and offered to help. It has been enjoyable and rewarding to work with him.Secondly, my thanks go to Dr. Sionade Robinson for her guidance and patiencethroughout the Business Mastery project.Finally, I must thank my family in Ireland and my girlfriend, Caroline, for their supportand encouragement. 6
  • IntroductionIt is accepted that the introduction of a new media format mimics the incumbent media in thevery early stages. Over the course of time the new media establishes itself, developscustomers and replaces the incumbent media.The internet has been evolving and maturing quickly. We are now at in a phase called Web2.0. Web 2.0 is the term given to the increased functionality of the internet and theinteractive capability within that website. The internet now facilitates blogging, onlinecommunities and video interaction.One of the questions still to be answered about interactive media, is whether interactivepromotional media will be adopted by consumers as they adopted promotionaladvertisements on TV? Can interactive promotional media generate customer loyalty andprofits?Online interactive media is a relatively new form of media. Websites such aswww.youtube.com the largest video hosting website in the world, which was founded in2005, broke ground by allowing anyone (business organisations, individuals, governments,etc.) to post promotional videos online.In the last few years significant investment has taken place with telecommunication firmsinstalling high speed broadband capabilities. Without that investment in infrastructure itwould be impossible to watch interactive promotional videos. Handset and devicemanufactures have also invested in portable devices that can download and play video media. 7
  • Interactive visual media is more engaging than traditional media such as print, radio, and TVbecause it encourages the viewer to become more involved in the subject they are watching.The viewer also has a greater level of control over the level of information they receive thanthat of traditional TV advertising. Viewers can decide how many times and for how longthey want to watch media clips.Interactive media is more creative than print media because moving images provide us witha unique visual experience. When combined with audio effects the impact of interactivemedia is greatly enhanced. For example, one’s desire to visit an exotic tourist destinationoften increases after viewing it on screen rather than seeing images in a holiday brochure.When people received a positive experience in the past they are more likely to be able toremember that experience. Positive experiences leave a lasting impression..Currently online businesses from entertainment to retailers are investing large sums of moneyon interactive promotional video. They are investing because they believe it will helpeducate their customers and provide those customers with a positive experience so that theywill remain loyal and also attract new customers.There is little published research into interactive media. Previous research into the use of richvisual imagery has found that consumers will engage with media which stimulates theirsenses. Other research into consumers’ attitudes towards websites also provides evidencethat positive experiences can trigger behavioural changes. The study of computer technologyand how it influences behaviour and attitudes is called Captology. Online video is asubcategory within Captology. 8
  • Currently there is little evidence that investment in interactive media generates an adequatereturn. It could be that firms are investing in it just because their competitors are. This is nota strategic rationale for investment nor does it explain how interactive promotional media canhelp differentiate firms from their competitors. Any previous research undertaken intointeractive media and interactive communication was primarily focused on identifyinggeneral attitudes toward websites. The focus was on identifying what different forms ofadvertising were generating positive attitudes towards that website. No research focused onthe impact of promotional video on websites.The majority of the academic research is over five years old and was undertaken before theinteractive capabilities of Web 2.0 emerged.My research is timely because of the lack of research into interactive promotional video andthe absence of investment returns on interactive media. First stage in my project plan was to identify a website that had non-entertainment interactive media. David Mellor kindly allowed me to use his website, davidmellormentoring.com, as the basis for my research. Second step was the design of a survey questionnaire which was easy to answer and relevant to the audience. Third stage was deciding on the relevant sample size and how participants were selected for the survey. Fourth stage was analysis of the data. The analysis of the data should identify that sustainable demand exists for interactive media. It should show that the market for interactive media has passed the early adopter stage and that there is significant future growth for interactive media. 9
  • To provide evidence that interactive media generates customer loyalty and is an indicator offuture growth I am using the Net Promoter score1. The Net Promoter score is a methodologyfor determining the attractiveness of firms to its current and future customers. Word of mouthis considered the most powerful form of recommendation. Most recommendations wereceive are 3rd party endorsements in the form of advertising. The aim of advertising andpromotions is to convince us that we need certain products or services. Advertisers andpromoters achieve their goal by trying to convince us that something is missing from ourlives. Advertisers and promoters sell at us and this creates consumer scepticism..The reason word of mouth is so strong is that when we receive a personal recommendationfrom someone we know we are not sceptical and accept it. We accept it because we haveshared beliefs and opinions.The effectiveness of the Net Promoter Score as indicator of future growth is disputed bysome but it is appropriate to use it for this project as it is an easy to use tool for researchpurposes.The internet and especially Web 2.0 has changed the way people use the internet. Theinteractive capabilities of Web 2.0 have encouraged internet users to take more control overhow they use the internet. Web users are now more engaged with the internet and expectmore information than ever before.Web 2.0 has changed the way firms compete on the internet; firms which encourage a highlevel of interaction such as YouTube, Twitter and Facebook are changing the media industry.This research will add to the existing research about web 2.0 and the impact of promotionalvideo on web users.1 http://en.wikipedia.org/wiki/Net_promoter_score 10
  • Literature reviewThe InternetTo watch promotional video on a website you have to be connected to the internet. Websitesgrab your attention but it is the internet which enables those websites.The internet is a global network of computers which are networked together and publiclyaccessible.Stewart and Pavlov (2002) suggest that “the internet is a set of technologies that came intobeing within the context of an existing social and economic structure”.If the internet really does bring benefits to society then it should be available to everyone andmake communications easier. There should be explicit benefits from interacting with it.Keeney (1999) lists a number of ways in which the internet can improve our lives and createvalue for us. This list includes savings we make on products and services we buy on theinternet. Every day the number of products and services available on the internet increases.A growing number of people are accessing the vast amount of free and subscriptionentertainment options available.The internet has the capability to improve our lives, make existing markets more competitive,and create new markets.Stewart and Pavlov (2002) argue that” the real power of the internet and the characteristicsthat differentiates it from traditional media is its potential for interactivity” 11
  • Leckenby and Li (2000)2 defined interactive advertising as the presentation and promotion ofproducts, services and ideas by an identified sponsor through mediated means, involvingmutual interaction between consumers and marketers.The internet and the technologies which support the internet have had a major influence onsociety and have changed the way people behave. Interactive media enhances the browsingexperience and encourages people to spend more time online.Attitudes toward the WebOur attitudes are our mental view of something. They help shape our opinions andbehaviours. To get a better understanding of why interaction takes place on the internet it isnecessary to establish the factors that influence our attitudes towards the web.The internet provides us with more information sources to review before we make ourpurchasing decisions. (Hof 2001)3One of the main advantages of the internet is that it has reduced the cost of accessinginformation. (Bakos 1997) In general, consumers have taken advantage of the falling costs ofaccessing information on the web. Consumers’ demand more information about products.The more information customers receive, the greater the benefit to them.2 Stewart, D. Pavlou, P. “From consumer response to active consumer measuring effectiveness of interactivemedia”3 Hof, Robert D. 2001. “Don’t Cut Back Now.” 12
  • Another benefit is that the cost of accessing that information continues to fall. (Bakos 1997;Brynjolfsson and Smith 1999), Reibstein (2002,p3) argues that “some people believe thatconsumers armed with increased non price information on which to base a choice, can makeselections that lead to a higher level of post purchase satisfaction, thereby increasing levels ofloyalty”.The behaviour of online customers is driven by the design, layout, and emotions they feelwhile they are on a particular website.To deliver an effective online experience it is necessary to identify and classify all theindividual elements which have a likely effect on the final outcome. This classification helpsmarketers identify the resources that they require to deliver effective online campaigns. Italso adds to the debate about how consumers’ behaviour changes over time. Early in thewebsite design process, a list of the benefits that consumers want from a website should beidentified.Table 1 below lists some of the design characteristics which should be considered whendeveloping a website. It is the combination of these design characteristics which providebenefits to the users. The failure of one of the characteristics can destroy the customerexperience. Functional Psychological Content Usability Trust Style Convenience Transaction security Atmosphere Search facilities Data security Price Speed Product Table 1 Benefits consumers want from websites 13
  • Nah and Davis (2002) define web usability as “the ability to find one’s way around thedesired information and very importantly to know what to do next”. The design of a websitewhich gives the user a visual experience requires state of the art technologies but, moreimportantly, thorough knowledge of the needs and characteristics of the end users.The psychological factors which power our emotions are influenced by the message that isbeing communicated. If we believe the messages that are being communicated on a websiteare authentic then we are more likely to spend more time on that website.For a successful outcome for the user and the website, two objectives must be completed.Firstly the customer must know what they are seeking to achieve and secondly they must beable to navigate around the site easily. For example, new customers will be looking for adifferent experience than returning users but it is presumed that returning customerspreviously have had a positive experience. Customers who lapse and do not return need to betargeted with a new customer experience so that their loyalty may be regained.The quality of the online experience influences our perception about the quality of offlineexperience we expect to encounter. A poorly designed and dysfunctional site threatens thegoodwill that has developed between the brand and its customer. This potentially not onlyaffects how successful and effective the web will be as a distribution channel but also thefirm’s physical activities as well. A study carried out using a Dieringer research groupestablished that half of all adult internet users who abandoned online orders have changedtheir overall opinion of that brand because of the negative online experience they encountered.(Costantinides 2004) 14
  • A more recent study by Kwon and Lennon (2009) found that online performance does affectoffline beliefs. A study carried out by Demandware 4 in May 2011, found that 52% ofrespondents who had a bad online experience were less likely to shop for the same brandoffline.The importance of the visual appeal of a website and how much interaction takes place onthat website has previously been researched. In a study of more than 2800 web users, the“design” was the category that was most discussed by the participants in the study (Fogg,Soohoo, Danielson, Marable, Stanford, & Tauber, 2003).Burke (2002) also investigated the visual appeal of websites. In his study about internetshopping it was discovered that consumers under the age of 25 were more willing to use newtechnologies. He doesn’t give the exact reasons why this is so. The new technologieshighlighted were mobile phones and computers. He also segmented the consumers by agegroup and found that consumers under the age of thirty-five preferred the TV for finding outabout new products than people over thirty-five. The people over thirty-five preferredspeaking with store attendants to gather their information. The inference from this is that TVadverts will have a greater visual impact on consumers under the age of thirty-five.If visual impact is a motivating factor on this age group then it could be assumed that thesame theory holds true for online consumers under the age of thirty-five when they arewatching promotional adverts on the internet. The Burke research was carried out in 2002.The web was still in the early adopter phase and Web 2.0 was still some way off.4 http://www.demandware.com/Demandware-Survey-Reveals-Web-Centric-Consumers-Have-Highly-Volatile-Brand-Loyalty/pr_2011_05_03,default,pg.html 15
  • According to the latest information from Verdict Research, in their UK E-Retailing report,the internet is maturing and the year on year growth rate of internet subscribers is slowing5.The web is no longer only for early adopters so visual impact should be an importantmotivational factor across all age groups.If a website is visually poor and cannot deliver a positive experience then there is littlechance that customers will have a positive attitude towards that website. If they do not have apositive attitude will never become loyal customers.InteractionRafaeli (1988, p. 11) defined interactivity as: “An expression of the extent that, in a givenseries of communication exchanges, any third (or later) transmission (or message) is relatedto the degree to which previous exchanges referred to even earlier transmissions.”A lot of the research on interaction has been on process, such as the exchange of information(Rafaeli 1988, 1990; Rafaeli and LaRose 1993; Zack 1993) or investigated how searchengines and chat room enhance interactivity. (Ha and James 1998; Massey and Levy 1999;McMillan 1998; Schultz 1999, 2000).Novak, Hoffman, and Yung argue that “interactivity takes place on three dimensions,(a) speed of the interaction,(b) mapping of the interaction based on how natural and intuitive the interaction is(c) range of the interaction” (Number of possibilities for action at a given time).5 UK E-Retailing 2010, Retailers need to think more strategically. April 2010 16
  • Lee (2000) believes that a more efficient way of measuring interactivity is to analyse user’sattitudes and perceptions.Analysis of process, function, or perception must be used in conjunction with dimensionswhich include how much control individuals have and the time frame involved.The internet encourages interaction and allows online vendors to personalise the service theyoffer. When customers are satisfied with a service they have received they also facilitateinteraction with other online users because they are willing to share experiences andsuggestions. This encourages a networking of experiences effect, where positive consumerexperience help reduce uncertainty and cognitive dissonances. Networking and establishingcontact with other online communities has become very acceptable. Web 2.0 has facilitatedthis. It is not seen as intrusive and has a powerful impact. Communities across the web useonline forums, chat rooms, bulletin boards to comment on their experiences. From a strategicperspective firms must recognise that Web 2.0 has given customers more control, which hasmeant that firms have had to become more efficient. The nature of competition for manyindustries has changed with the introduction of Web 2.0. The media sector has experiencedthis change more so than other industries - newspaper sales and classified adverts have beendecimated while community sites such as Facebook and Twitter have become the dominantmedia channels.This online networking effect is considered to have the same impact as word of mouth but inan online context. The power of word of mouth is discussed later in the report.One characteristic that differentiates media interactivity on the internet is the concept of“sustained interactivity”. Sustained interactivity is interaction which is not restricted to asingle interaction. The premise behind structure theory is that structure supports andencourages interaction. 17
  • The structure theory assumes that human action is performed within the context of pre-existing structures which adapt over time. Structural change is continuously evolving andbecause current experiences are influenced by past experiences learning takes place. Whensustained interaction takes place it is purposeful, goal driven, dynamic, and continues overtime.The design and layout of web pages support the theory of structure. Websites arecontinuously evolving with new functionality being added constantly. Examples of newfunctionality include personalisation, online payment systems and interactive media.Structure also encourages positive online behaviour. An example of this is Wikipedia orYouTube. Users of these sites police the sites for inappropriate content and then have itremoved. They set the acceptable norms and other users adhere to them. This could beconsidered an informal code of conduct which also evolves. Web 2.0 has made the evolutionof the code of conduct easier because it has become accepted practice for web users to leavecomments and feedback in structured areas on websites.There are always external threats and sustainable interaction must be aware of the threat ofsubstitutes or compliments. Technology is continuously striving to make processes moreefficient and when interaction is a core part of the consumption process it is always possibleto substitute some element of that interaction. Online, this happens very fast. This tends tohappen when a new technology makes the existing technology redundant. Online video hasnow become a substitute for static images. 18
  • What structure theory is proving is that interactivity is a combination of two functions. Firstlyit is a process, in that consumers and marketers are engaged in interactivity to achieve acommon purpose and secondly it has a more strategic function, which is to change behaviour.The structure of theory states that over time media has no option but to change becauseinteraction forces it change. This supports the hypothesis that interaction caused abehavioural change whether it is wanted or not. This point is so important it is worth re-emphasising - the format of media is constantly changing because of interaction.Interactive communicationsThe challenge with interactive media such as the internet and interactive services which usethe internet as a distribution channel is to find ways to measure the effectiveness of thosechannels; traditional methods may not be good enough. (Pavlou and Stewart 2000, 2001).Customer experience is one of the defining principles of how people interact with new media.The personalisation of the media interface increases the customer experience. Thispersonalisation is done by allowing the users to choose what types of content they areinterested in receiving.Leong, Huang, and Stanners (1998) scrutinized 10 key media attributes where the objective isto(1) Draw attention(2) Convey detailed information(3) Stimulate emotions(4) Change or maintain attitude(5) Involve the audience 19
  • (6) Precipitate action(7) Efficiently reach target markets(8) Create brand, product, and corporate awareness(9) Communicate product, brand image(10) Communicate the corporate brand image.All of the ten media attributes are used by traditional advertisers. Online media providershave to address these attributes and find ways to make sure that new media is aligned witheach of these media attributes.Interactive media has changed the way we communicate. It has become a two way processwhere the principle objective is to encourage interaction by the end user.Duncan and Moriarty (1998) 6 argued that “communication (rather than persuasion) is thebase that forms the relationship between the customer and the marketer, even as the rate ofinteraction between them increases”.In order to understand interactive media it is important to analyse the structuralcharacteristics of interactive media and identify why interactive media is effective. Theeffectiveness of interactive communications must include the viewers’ perspective.Traditional methods have been very successful at capturing the dimensions of passive media.Those same methods have been ineffective when they have been used to capture thedimensions of interactive communications.One of the dimensions of interactive communication they have failed to capture has been“presence”. Presence is defined as the amount of effort the users inputs for the response theyget.6 Duncan, Tom and S.E. Moriarty. 1998.”A Communication –Based Marketing Model forManaging Relationships.” Journal of Marketing 62 (April):1-13 20
  • Chen and Wells (1999) created their own scales to measure the effectiveness of web sites.They constructed their scale after consultation with experienced web users. They argue that itdoesn’t matter what method of analysis is used to measure the web as long as that analysisincludes a format for measuring the attitudes of web users.The current means of gathering information about interaction on the web is to use derivativesof established exposure measurement techniques such as “click rates”, which is the number ofclicks on an advertisement divided by the number of times the ad is displayed.Not only do we need new ways of measuring interactive media but we also need to analysethose results in an interactive context. New measures in a traditional context may not workas traditional frameworks were designed before internet media had begun to substitutetraditional media. The design of those measurement frameworks didn’t take into accounthow interaction was influencing the media. Media is continuously evolving but many of theframeworks have remained static. To some extent the data is manipulated to fit theframework and because of this the results may be inaccurate.Any framework designed for measuring interactivity must be diagnostic; it must measureprocess as well as outcomes. It must be longitudinal and able to track changes in customerrequirements and levels of product knowledge. The framework should includepsychographic questions to capture the characteristics of consumers. Identifying consumerswho think in pictures or words is important because consumers who find pictures and visualsmore appealing are thought to use a more complex processing mechanism. 21
  • During the course of his investigations (Burke 2002)7 categorised shoppers.He found that the visual appeal of products in consumer electronics, furniture, lighting andapparel was critical to the purchase of those products. In the furniture category he found that50% of customers surveyed expected websites to provide full page display pictures and 36%of customers expected more advanced visual technology such as 3- dimensional.Sustainable demand for interactive mediaIt is difficult to predict whether there will be sustainable demand for a product or service.When a new technology disrupts the market place new markets are created. When newmarkets are created and demand is proven to exist in those markets then the race is on tosecure the resources to meet that demand. One of the most effective ways of creating atechnical edge over competitors is an early start to investment in technology. Getting to gripswith technology early allows a firm to accumulate and master the technical knowledgerequired to maintain a lead over their competitors. This can be a risky strategy because a firmcan accumulate significant costs before they generate a return on that investment. In theworst case, the entire investment may have to be written off.A different option is to identify the scarce resources and secure access to them.The final and most difficult way is to build a customer base that would be reluctant to switchto a competitor because of either the inconvenience or the expense.There are two significant external factors over which the firm has no control. The first ofthese is the pace of technology revolution and the second is the pace of market evolution.7 Burke, R 2002 “Technology and what customers want in the physical and virtual store”Journal of the Academy of Marketing Science Vol. 30 (4) pp.411-432 22
  • Suarez and Lanzolla (2005) discuss the long term success factors for first mover advantage.When a new product or service is different from existing products on the market the chancesof success are slim because the market risks and technology risks increase. The market risksare those risks associated with the demand for the new offering. These risks include thedemand for the product and the growth rate of that demand. The technology risks are therisks associated with the evolution of the technology that is used in the delivery of theproduct or service.The chart below developed by Suarez and Lanzolla outlines the different outcomes between atechnology driven market and a demand driven market.Table 2 Technology leading vs. Market demand. Source: Suarez and Lanzolla (2005) 23
  • Interactive media is no longer at the early stage in its lifecycle where only early adopters areusing it. It is not necessary to be the first mover in this market because the market is growing.Similar to other technologies, the technical infrastructure which supports interactive mediahas a lifecycle. Interactive media is growing and has been accepted by the early majority.The frequency with which users are interacting with it is still unknown. Now that interactivemedia has established itself, new ways of increasing the frequency of consumer interactionwith it will be developed.This means that the demand is being driven by the market and that the rate of technologychange will slow down so that a return on investment can occur.In order to maintain a competitive position within the market place firms must identify theirinternal capabilities.Listing capabilities is not a new exercise, but it is different from identifying assets or theopportunities and threats of entering a new market segment.Capabilities should be thought of more as a collection of skills and knowledge that has beenaccumulating over the years. They are a combination of explicit and tacit knowledge.Capabilities are difficult for another firm to copy; they are rare and there is difficulty insecuring access to them. They are also non transferableLeonard and Barton (1992) suggest that there are four components in the successfuldistribution of knowledge. Firstly knowledge and skills of employees, secondly the knowhow to understand the information systems, thirdly the internal management structures thatcreate and manage the information and lastly the day to day routines and values which shapethe culture. 24
  • When internal capabilities are harnessed and combined with marketing, R&D resources, etc.,is it possible to maintain the competitive advantage and address the needs of your customersegments?Interactive media is new and delivers an experience and, because it delivers this experience,there is demand for the technology. New services will emerge that will increase the use ofthe interactive video. As the frequency of interaction increases so will the revenue andprofits generated from the use of interactive media.Promotional video in TourismI’m including a review of the use of promotional video in tourism. Promotional videos or TVadverts have been used effectively to promote destinations. The purpose of theadvertisements is to stimulate us visually and introduce us to the positive experiences we willhave if we visit that location.Buhalis (2000, p.112) stated that “promoting destinations essentially implies the developmentof communication channels with clientele and other stakeholders to increase awareness andpersuade them to purchase products”.Traditionally marketing organisations have used a combination of advertising, travel fairs,brochures and direct marketing to reach consumers who require more information abouttourist destination. 25
  • There are many views on which of the different media are the most influential. Advertisersprepare the text and imagery to give locations a sense of meaning and then they usetechnology to communicate the message to their audience.A study by Govers et al (2007) 8 discovered that communications such as television,magazines, internet, books and movies were very influential versus other form of destinationadvertising.Shani et al (2009) found that promotional video does have an impact on the desire to travel.During their investigation into the attractiveness of China as a tourist destination they testedpromotional video.A focus group of forty-seven international travellers was tested. The travellers were fromAsia, Europe and America. The focus group was tested with a list of general destinationimages. The objective was to gauge their general reaction to the destination images of China.A promotional video called “China Forever” was shown. The objective of the video wassimilar to other media in that it was displaying the unique landscape, quality of the facilities,rich heritage and people. The purpose of showing the video was to draw out new emotionsthe focus groups had of China. After watching the video the participants were asked to addany additional attributes they saw in the video.The results of the study showed that promotional video has significant persuasive powers.The video had a positive impact because the focus group’s perception of China as a traveldestination was changed and the desire and likelihood of the participants going to Chinaincreased. The video succeeded in creating a behaviour change.8 Govers R, Go FM, Kumar K. 2007. Promoting tourism destination image. Journal of TravelResearch 46(1): 15–23. 26
  • There is some evidence to suggest that movies and television series can influence the choiceof destination. New Zealand had an increase in tourism after the success of the Lord of theRings movies. The movies brought the scenery of New Zealand to new audiences.Promotional Video in MusicPromotional videos have been used by the music industry very successfully. Music videoshelp to establish a relationship between artists and their audience. This is why the success ofmusic videos as a promotional tool is being reviewed.Enhancing the customer experience was identified as one of the key growth strategies fromthe E-retail report compiled by Verdict research. According to surveys Verdict conducted,customers want a better visual experience, especially in clothing and footwear. Newtechnologies which enhance the appearance of products now provide a better visualexperience and help enhance the overall customer shopping experience.The music industry was one of the early pioneers of promotional video clips. Major recordlabels have been using promotional clips since the 1970’s to promote their artists. The goal ofthe music video is to help increase the sales of the artist, but video can be a long termstrategic initiative as it has been with Rap and R&B. In May 1981 MTV launched first 24hour cable music television channel. This new distribution channel for promotional videotransformed the industry. The popularity of music video revitalised a music industry whichhad been in recession. It revived consumers’ interest in music. 27
  • Madonna, Cyndi Lauper and Boy George were up and coming artists in the 1980’s and musicvideos allowed them to cultivate and promote their unique image. Madonna has reinventedher image many times and this has always been accompanied by a promotional video. Rapand R&B music got virtually no air time twenty years ago in the USA. With funding fromthe record companies and investment in promotional video, MTV increased the amount of airtime they gave to rap and R&B and now this genre is well established.Moore (2004, p 179) argues that “Music video is a hybrid of content and advertising”. Themusic video is delivering the content for the TV distribution channels such as MTV while theaudio part of the music video is promoting the sales of CDs, etc.The success of promotional video grew throughout the 1980’s. In May 1981 only twentythree of the top 100 singles on the Billboards “hot 100” had accompanying music videos.This increased to eighty two by May 1986, and by 1989 ninety-seven of the top 100 singleshad accompanying videos.By 1994, the industry was spending $150 million annually on video clip production with theaverage promotional video costing $60,000-$80,000.9Promotional videos were strategically important to record labels. Promotional video andMTV allowed the record labels to bypass the radio stations that refused to play their artists.Record labels would heavily promote their artist on MTV. The profile of the artists wouldthen increase and the radio stations would as a result be forced into playing those artists’songs.9 Banks, J. 1998 “Video in the machine: the incorporation of music video into the recordingindustry”. Popular Music Vol. 16/3 pp.295 28
  • Customer loyalty & Net promoter scoreCustomer loyalty is not easy to define. Is customer loyalty driven by attitude or bybehaviour? If it is the case that customer loyalty is driven by attitude what should bemeasured and how should it be measured?Are behaviour metrics such as frequency of purchase and the value of the items enough todetermine customer loyalty?(Assael, 1992) suggests that “The very term loyalty implies commitment rather than justrepetitive behaviour, which suggests that there is a need for a cognitive as well as abehavioural view”As part of their analysis Reichheld and Sasser (1990) tried to estimate what contributioncustomer retention made to profitability. They argue that “as a customer’s relationship withthe company lengthens, profits rise. And not just a little. Companies can boost profits byalmost 100 per cent by retaining just five per cent more of their customers”Customer relationship management has become a lot more important. There has been a shiftin management thinking and focus towards improving customer satisfaction with the aim ofincreasing the customer retention ratio when customers are worth keeping i.e. profitablecustomers.It is essential that firms are able to identify the most suitable customer loyalty metrics.Customer loyalty schemes have existed for a long time but now, with more data than everabout customers, it has become increasing time consuming to manage all that data. 29
  • It is reaching a point that customer loyalty models are becoming so complex and difficult toimplement that managers are reluctant to implement them. Traditionally firms would engagewith market researchers and consultants to complete customer analysis. These firms arespecialist in customer analysis.There were many sceptics who didn’t believe in the concept of customer loyalty. The reasonthey found acceptance difficult was that there were multiple outcomes, and too muchmanagement time was used up administering these outcomes.An article in the December 2003 Harvard Business review entitled “The one number youneed to know” by Fred Reichheld, changed managements’ perception of customer loyalty.Reichheld developed a simple loyalty based metric called the “Net Promoter Score”.Reichheld claimed that the “Net Promoter Score” was the best indicator of a firm’s growth.The net promoter score is calculated by asking people how likely they are to recommend afirm on an 11 point scale. Respondents most likely to recommend are called promoters andgive scores of 9 or 10. The least likely are called the detractors and give scores of between 0and 6.The promoters are subtracted from the detractors to reach the net promoter score. This isgenerally a percentage figure.The net promoter score has its foundations in the power of word of mouth.Word of mouth can be positive or negative. Thanks to improvements in mobilecommunications word of mouth can become viral in a very short time. The advantage ofword of mouth is that is cheap. Word of mouth assumes credibility because consumersbelieve they are receiving credible information rather than being sold to. 30
  • In a study by Godes and Mazlin 10 on the effects of word of mouth, they could not establishthe link between word of mouth and an increase in sales from a loyal customer base.Rust et al discovered that the effects of word of mouth were hard to monitor.Keiningham et al. (2004) tested Reichhelds hypothesis that the net promoter score was thebest indicator of a firm’s growth. There is some evidence that word of mouth can improvethe sales of a company.The general consensus is that word of mouth is positive for a company.E-LearningIt is accepted that new media mimics the existing media it is replacing. Early photographyimitated painting while early film making mimicked stage shows. The web as acommunications platform has broader capabilities than books or class room teaching. Theweb has given consumers access to vast amounts of information. This has led to discoverybased learning. Discovery based learning is learning that occurs from spending time on theweb accessing different sources of information. Surfing the web is now an acceptable formof entertainment.John Seley Brown (2000) considers this fusion of learning and entertainment as“infotainment”We are in a new “learning ecology” Brown (2000). “Using online conversations to study word-of-mouth communication”, Marketing Science ,10Vol. 23 (Fall) , pp. 545 – 560. 31
  • E-learning is still evolving and one of the main challenges is how to transform e-informationinto human knowledge. We need to know what it will allow us to do compared to what wecan do currently. Educators recognise this as social challenge and not a technical one. Webusers are linked together via a network of communities who share similar characteristics.Rich media such as video clips has been social accepted by web users. Rich media such asvideo is a technology which allows for a greater transfer of knowledge than traditional printmedia. Knowledge is a combination of explicit knowledge or “know what”, and tacitknowledge or “know how”, where skills and practices are shared and demonstrated. Theadvantages of E learning are that they build on communications and interaction.The combination of persuasive technology and mass distribution across different devicesmeans that E-learning is a disruptive technology. We have yet to find out how influential e-learning will be. Will it just support existing practices or will it alter how people learn bychanging their behaviour? If E-learning does have the capability to change behaviour thenthe expectations and outcomes of the learners will also change.Persuasion technologyModern computing has gone well beyond the function of performing complex calculations(Denning & Metcalfe, 1997).Computers have three functions which they perform for end users,a) tools, b) media, and c) social actions. .The study of computer technology and how it influences behaviour and attitudes is calledCaptology. 32
  • This subject matter is relatively new compared to other areas of human computer interaction(Fogg, 1997, 1998).Firstly Captology is focused on analysing the planned persuasive effects of technology andsecondly on attitude or behavioural changes.The spread of computers and the network effect they create is very powerful. The influenceof computers on our lives continues to grow and because we are more dependent oncomputers than ever, the way we interact with computers has the ability to change ourattitudes and behaviours. Computers and computing technology have the power ofpersuasion.Studies suggest that people form social relationships with computers (Reeves & Nass, 1996).A positive customer experience is about providing memorable interaction. The user gainsinformation about a product or service they didn’t already know. Interacting with computersand software on computers can deliver explicit and tacit knowledge.The design and layout of computers and more importantly software applications which usecomputers influence our motivation to interact with the technology. If we are motivated tointeract with computers, then our attitude towards computers will be more positive and wewill expect to enjoy our experience.As previously discussed, a poor online experience can lead to negative offline perceptionsabout a product or service. The unintended consequences of overlooking human computerinteraction can seriously damage reputations.The purpose of having a website is to promote a product or service; to make it easier for yourcustomers to learn more about you and what you have to offer. For example, Amazon.comhas a website which encourages people to buy repeatedly. 33
  • They do this by making the website not only easy to navigate but also uses persuasionapplications which help motivate you to make further purchases. These persuasionapplications range from user registration and product reviews to one click purchasing. Allthese applications work together to provide the customer experience.Technology lifecycles on the web are becoming shorter. The internet has become a maturemarket; it is just over ten years since the web became a distribution platform for information.Only a few years ago rich media clips would not have been available because broadbandspeeds were not quick enough to allow viewers to have a rich visual media experience. Nowwith broadband more widely available rich media such as video is established.Video technology within the framework of computing technology is one of those tools ofpersuasion that is having a significant impact on changing consumers’ behaviour. Video hasthe ability to increase the human computer interaction because we know that interactionsappeal to our visual senses and absorbing tacit information through observation is one of theways we learn.Captology is made up of macro and micro elements. The macro objective is to change thebehaviour of users. The micro subset includes applications which enable the macro effectsuch as spreadsheets, power point and word processing. Video technology crosses bothmacro and micro elements. The macro elements are considered the interactive elementswhich help transfer knowledge, the micro elements are applications which help network andshare the media.From the evidence laid out in the literature there is reason to believe that interactivepromotional video has persuasion capabilities, encourages learning and can generatecustomer loyalty. 34
  • For interactive media to be influential there needs to be market demand. Websites mustgenerate a positive experience for their users. If website users do not have a positive attitudetowards that website, they will not interact with it and so not learn.If these conditions are not met, interactive promotional video will fail to fulfil its potential.Therefore, the content reviewed in the literature review is relevant to the research question.Research MethodologyThe Business Mastery Project is based on a quantitative approach. The purpose of theresearch is to investigate if promotional video increases customer life time value and to makerecommendations on implementing video as a communications strategy to David Mellor, whois a business mentor and a member of the executive education team at Cass business school.www.davidmellormentoring.comTo establish whether promotional videos does influence customers it was necessary toidentify videos where the objective is to increase sales or provide education.David has recently started producing promotional videos where he discusses topics such as“entrepreneurism and the big society” and “working with clients in group and one-to-onesettings”.The promotional videos had to be accessible through an internet browser and available forviewing across different devices such as PC, laptop or mobile phone. 35
  • Data collectionThe research has been underpinned by a quantitative research methodology.A comprehensive literature review of what causes internet users to interact with onlineadvertising, why promotional video has been successful in the music industry and whycustomer lifetime value is important has been carried out.Survey designA number of key success factors were identified and the risks associated with achieving thosesuccess factors were identified during the design of the survey. A) Non-incentivised survey responsesIt is widely accepted that people do not like completing surveys. Despite this, it seemed thatan online survey was the best way of gathering information, because the survey candidateshad to access the internet to view one of the promotional videos on David’s website.Non incentivised surveys have a lower response rate than incentivised surveys. Incentivisedsurveys can suffer from selection bias because incentives such as monetary rewards canencourage people who need the money to participate in the survey.When monetary rewards are offered (Hanson 1980) argues that "one expects that althoughcompliance is attained with the use of an incentive [i.e., the subject response] the degree ofcompliance [i.e., the quality of the response] would be lower". 36
  • In order to mitigate the risk of a low response rate the survey had to remain simple andbecause the survey was non-incentivised it was decided to limit the length to a maximum of20 questions which would take no longer than 5 minutes to complete. B) Interact with the websiteTo complete the survey respondents had to interact with at least one of the videos on thewebsite. In order to mitigate the risk of respondents not being able to find the website or thevideo gallery tabs within the website, the links to those pages were embedded within thesurvey.There are five videos in total located in the video gallery section of the website ranging fromone minute ten seconds to five minutes in length.The topics include one to one mentoring, entrepreneurship, and corporate development toolssuch as PRISM. C) Question designIt was necessary to keep the questions as simple as possible because of the time constraintsand the requirements for participants to interact with the website.The questions were short, easy to read, and simple to answer. The questions and answerswere relevant to all the participants who were asked to fill out the survey.There was a mixture of closed end questions where there answer to the question was “yes” or“no”.There were a number of ranked or ordinal questions. The choice of answers for thesequestions is ranked according with importance, with 1 being the least important and 5 beingthe most important. 37
  • There are questions set out using Likert’s scales.The Likert scale is used to gauge the attitude of respondents. The range is from “stronglydisagree to strongly agree”. Respondents answer accordingly if they agree or not.The survey was divided into three subcategories. In the first subcategory there were sixquestions designed to identify the general attitude the respondents had towards the internetand whether they thought interactive media had value as a communication tool. Thequestions followed a logical order, were easy to answer and would not put off respondentsfrom completing the rest of the survey.The second subcategory was more specific about David’s website and this is the point thatrespondents needed to open his website and watch one of the videos.The third section collected general demographic data about the respondents. D) Survey distributionThe survey was distributed online via www.kwiksurvy.com. An email invitation was sent tomy contacts and David’s contacts.The survey was published on my Facebook homepage and on my Linkedin home page.Each respondent who participated was given a unique identification number. The questionswere numbered 1 to 20 and general instructions were given so that respondents were clear onhow to answer the questions.The fonts remained consistent throughout. 38
  • Survey response ratesNon-incentivised survey response rates are low. General client satisfaction level surveys of12 to 20 questions have response rates of less than 10%.11Determining the correct sample of people to send the survey was based upon three criteria: A) Business people B) EntrepreneursThe category “Business people” was defined as a group of people where the participants hadan interest in business. This included members of business associations etc.The entrepreneurs’ category was defined as people who were owner/managers and whoneeded mentoring. Business Survey sample (No. of people) Entrepreneurs associates Other David 900 300 0 Ross 30 70 100Table 3 Survey sampleThey survey began on the 13th of July and concluded on the 2nd of August. One reminder wassent out during the second week of the survey. 110 completed surveys were received, whichis a 7.8% response rate.67% (73 out of 110) of responses were recorded in the first week of the survey.11 http://www.peoplepulse.com.au/Survey-Response-Rates.htm 39
  • Survey analysisIntroduction to the findingsThe objective of the survey is to find out(A) What are the key benefits of the internet?(B) What are the benefits from interacting with promotional video on davidmellor.com?(C) To make specific recommendations on how David Mellor can increase his online profilewith the use of promotional media.Critical analysisThe responses to the survey will provide the answer to the research question “does onlineinteraction with promotional video increase learning and customer lifetime value?”In addressing the question it was decided to focus on four general areas that would underpinthe findings from the survey.Accuracy of the sampleAnalysis of the number of respondents who answered the survey allows some inferences, onhow the overall population would interact with interactive media if everyone in thepopulation had been sampled, to be made. It was necessary to collect as many responses aspossible and prove that the survey was statistically significant versus the overall population.The margin of error of the sample is that which occurs after surveying a sample of thepopulation versus surveying the full populationThere are three acceptable margins of error categories 90%, 95%, and 99%. 40
  • The confidence interval is the statistic which explains how reliable the answers are.The confidence interval for the survey is 95%. In this survey it is expected that ifrespondents were sampled continuously, that the answers would be exactly the same 95% ofthe time.From the beginning it was necessary to collect as many responses as possible so that thesurvey was statistically significant.The minimum level of responses I was looking for was 96. At that level inferences can bedrawn about how the population would answer the questions if all of them were asked.The survey is statistically significant and had 110 replies over the three week period duringwhich responses were collected.The survey had margin of error of 90% and a confidence interval of 95%.Survey response rates for general client satisfaction surveys which are non-incentivised areless than 10%. A response rate of 7.8% is acceptable and satisfactory response ratio. Giventhe difficulty in getting responses when using non-incentivised surveys, this is a good result.Demographic profile of the respondentsAnalysis of the demographic profile of the respondents gives us an insight into the ageprofiles, genders, and professions of David’s clients. It was necessary to start withdemographic analysis even though demographic information can be quite limited in what ittells us about the respondents, because it doesn’t capture any attitudinal information andshould always be used in conjunction with other information when making assumptions.Before this survey was sent out, it was assumed that the vast majority of the respondentswould have been male. 41
  • Traditionally, it has been males who have been the entrepreneurs, but recently this has beenchanging, and there has been an increase in the number of female entrepreneurs and businessowners. According to the University of New Hampshire Centre for Venture Research, thepercentage of women among “start-up capital” seekers in the US has increased from 12.6% in2000 to 20% in 2011. The success rate of the number of women who applied for funding hasalso increased from 9.5% in 2008 to 13% in 2010.1264.5% of the respondents were male and 35.5% were female. This is roughly 2/3 male and1/3 female. Further analysis will show how this statistic changes and what implication thishas for interactivity and customer loyalty.It is generally accepted that most people who think about becoming entrepreneurs do so whenthey are in their 30’s. By the time entrepreneurs are in their 40’s they have passed throughthe start-up phase and are into the growth phase. As David’s clients are entrepreneurs andbusiness managers it can be presumed that the majority of the respondents in the survey arebetween the ages of 30 and 45.12 http://online.wsj.com/article_email/SB10001424052702303627104576413670597119208-lMyQjAxMTAxMDAwNjEwNDYyWj.html 42
  • Q18:Age 20% 18.18% 18% 16.36% 16% 14% 13.64% 12.27% 11.82% 12% % 10% 8% 7.27% 6.36% 6% 5.45% 4% 3.64% 2% 0% 20-24 yrs 25-29 yrs 30-34 yrs 35-39 yrs 40-44 yrs 45-49 yrs 50-54 yrs 55-59 yrs 60+ yrsTable 4 Age profile of respondentsThe chart above breaks down the age profile of the respondents. The age group with the mostrespondents is the 40-44 year old age group with 18.18%. 46.8% of respondents fall withinthe age group of 30-44. This is in line with the expectation of the age breakdown.We already know that roughly 2/3rds of the respondents are male and 1/3 are female, butwithin the 30-44 age groups it was necessary to carry out further analysis and find out if thegender demographic had changed within any the of the age groups. Age Groups No. Male No. Female % Male % Female 30-34 15 4 78.9% 21.1% 35-39 11 4 73.3% 26.7% 40-44 12 8 60.0% 40.0% Table 5 Gender profile between ages 30-44Table 5 above shows that male gender is more prominent. It can be seen from thepercentages that the female gender increases as the age groups increase. 43
  • This is significant because during the literature review it was suggested that older peoplewere less likely to have positive attitudes towards the web.This statistic also suggests that females are also entrepreneurs and business owners but theytend to be older than their male equivalents. The significance of this is that for David there isa doubling of the female audience between the ages of 30 and 44.This supports the theory that promotional video is no longer being viewed by early adoptersonly but has spread to a much greater audience.Analysis of the different age groups suggests that entrepreneurs and business owners who areestablished and have the resources to invest in their business are most likely to fall within the30-44 age groups. They are also the ones who will benefit most from the advice that Davidhas to give. The reasons they will benefit the most is because he will have encountered manyof the problems they have experienced during his corporate life. His ability to communicatehis experiences and whether the respondents learnt from interacting with David’s video clipsis dealt with further in the section on interactive learning.The UK economy is mainly a service based economy and the majority of entrepreneurs arefocusing on delivering services. It was necessary to offer a selection of options where mostof the categories were service orientated rather than manufacturing.Analysis of the breakdown of the industry profiles is expected to show that David’s clientsprovide specialist information services. During the survey design it was necessary to gaugethe attitudes of the respondents on what they thought were the most important benefits of theinternet. Access to the latest information was ranked the most important benefit. Analysis ofthe industries where the respondents are employed should confirm that a large percentage ofthe respondents are employed in a consulting or professional capacity. 44
  • It has been suggested in the literature review that interactive media is suitable for E-learningand this will be investigated further in the report.Table 6 below breaks the industries down by profession. Q19:What sector is your business in? 25% 20.5% 20% 15.6% 15% % 9.8% 9.9% 10% 8.2% 7.4% 7.4% 7.4% 4.9% 5% 3.3% 3.3% 1.6% 0.8% 0% l ai s e IT s nc y s ia n g s er /A et io n nc om ic e ed at io tin ic e th N R ca t na ec lta rv M uc ke rv O ni Fi el su se d ar l se u T on s E M na m C es io om in C us ss B fe ro P SectorTable 6 Profession by Industry SectorConsultancy is the sector where the most respondents are employed and communications isthe sector where the least number of respondents are employed.4.9% of respondents who took the survey were not involved in any industry and I expect thatthose respondents are the MBA students from Cass Business School.The second largest segment is “other” with 15.6%, the list of industry options was smallversus the number of industries and sub industries that exists, and it’s a little surprising thatthe other category didn’t have a larger percentage. 45
  • To get a better insight into which industries maybe most inclined to interact with promotionalmedia industries which share similar characteristics are grouped together. The reasoningbehind this is that advisory services such as consultancy are driven by the need tocommunicate explicit knowledge while in the IT industry there is a need for communicatingexplicit and tacit information.The first major grouping for analysis includes: Consultancy, Business services, Professionalservices, and marketing. For the purpose of this report these are referred to as advisoryservices.45.2% of respondents are represented by these four categories. It can be presumed from thisstatistic that a significant number of respondents are in careers where sharing their knowledgeis critical and where effective communication methods are required.The second major grouping of industries which are related is: IT, Communications, Telecomsand Media. Together they represent 15.5% of the respondents. For the purpose of this reportthis group is referred to as technology services.It is not surprising that these industries are so well represented. The new economies that havesprung up around the internet and IT have attracted many new entrepreneurs who have lefttraditional industries and started up new ventures with internet and IT services.The technology and advisory services between them employ 60% of the respondents. 46
  • Final investigation of the demographics of the sample investigates the gender breakdownwithin the advisory professions. Profession Male Female % Male % Female Consultancy 19 6 76.0% 24.0% Marketing 9 3 75.0% 25.0% Business Services 4 6 40.0% 60.0% Professional services 9 3 75.0% 25.0%Table 7 Gender profile with the advisory professionsThe breakdown between male and female respondents in table 7 shows that in all but oneprofession, Business Services, the male gender is roughly 75% of the sample versus theoverall survey where males are 64.5% of the total survey.Analysis of the demographics shows that the gender balance remains relatively consistentwith some variation in the percentages in the 40-44 age groups. The professional profile ofthe respondents is skewed towards information advisory services and technology services.This evidence proves that there are no age biases in internet usage and that advisory basedservices are the most likely to use the internet to search for the latest information. 47
  • Time and FrequencyFrequency is often considered an indicator of customer loyalty. When someone has apositive experience on the internet they are more likely to have a positive attitude towards theinternet. The more times a person interacts with a website the greater the chance that anemotional attachment will develop between the user and the website.We know from the general attitude questions in the survey that access to the latestinformation has been ranked at the most important benefit of the internet.From that we can infer that websites which are up to date with current information have anadvantage over their competitors.It was necessary to find out how much time our respondents spend on the web per weekdeveloping their business and how frequently they search the web for consulting advice.The vast majority, 75% of respondents, spend up to 10 hours a week online developing theirbusiness.General Internet trendsThe general trend is consumers are spending more time online. The internet has developedinto a fully integrated entertainment, lifestyle and shopping utility. Internet subscription ismaturing fast, see appendix table 4 from verdict research.With the user base of the internet expected to reach 42.5m people in the UK in 2014 timespent online will increase as the internet reaches maturity.According to a BBC news report,13 British web users in 2010 were spending 65% more timeonline than they did three years previously.13 http://www.bbc.co.uk/news/10122834 48
  • UK Online Measurement Company (UKOM) pointed out that the average surfer in 2010 wasspending 22 hours and 15 minutes surfing. Most of this time was spent on social networks.The sample of respondents from this survey are more focused and are more likely to spendmore than 22 hours per week online as the time they spent on social and entertainment siteswas not surveyed. Demographic analysis shows that business advisory services whichincludes consultancy and professional services employ the greatest percentage of respondents.I9 respondents spend a total of 7-10 hours per week on line developing their business with 7of those coming from a consulting background and 4 from professional services.The frequency with which respondents search for consulting advice is an indicator of howoften they search for the most recent and relevant information.As previously stated the greatest benefit of the internet is access to the latest information.68% of respondents search the internet for business consulting/ advice and 70% search forthis advice at least once every three months.These figures demonstrate that it is essential to use the internet to access the latestinformation and that consumers expect greater amounts of information to be available tothem.This supports the theory by (Bakos 1997; Brynjolfsson and Smith 1999), who believe thatcustomers demand more information about products.From the analysis on time and frequency, we know that more time is being online with anincreasing amount of time being spent searching for the latest information. The amount ofinformation on the internet is increasing all the time. The corresponding effect of thisincrease in information will be an increase in the amount of time spent online. 49
  • Attitudes towards the webThis section analyses how interactive media changes attitudes towards the web. How dointeractive media change attitudes on the web?From the literature review we know that creating a positive experience is important forgenerating positive attitudes towards the web.Firstly, it was necessary to find out what the respondents thought were the most importantbenefits of the web. Establishing those benefits would make it easier to identify theirmotivations and attitudes. The first question in the survey asked the respondents to rank themost important benefits of the internet using a scale of 1 to 5, with 1 being the least importantand 5 being the most important.The 5 options were: a) Faster communications b) Access to the latest information c) Finding new opportunities d) 24 hour access to services e) Save money, compare prices.Access to the latest information was ranked the most important benefit. Access toinformation implies that it easy to access the information and that the information is timelyand accurate.As access to information is the most important benefit the survey investigated whichcandidates watched promotional clips and whether they interacted with David’s website.David has five video clips on the website which discuss topical business issues. 50
  • If interactive media is on a website and it is not being viewed, then website users are notexperiencing all the website has to offer. A poor experience is a sure way of promptingcustomers to abandon a website.In order to identify if the survey candidates watched promotional clips, question 3 asked“Do you watch media clips or promotional videos if they are on a website?”There were four response options: f) Always g) Weekly h) Occasionally (once every 3 months) i) Never Q3: Do you watch media clips or promotional videos if they are on a website? 60% 53% 50% 40% % 30% 26% 20% 14% 10% 7% 0% Always Weekly Occasionally (once every 3 months) Never FrequencyTable 8 Do respondents watch promotional videoCollectively 86.73% of respondents watched videos. From these percentage rates on can inferthat interactive media is no longer at the early adopter stage. 53% of the respondents watchinteractive at least once every three months. 51
  • This indicates that there is demand for interactive media and that the frequency with whichrespondents engage with interactive media should increase as the supply and quality of theinteractive media improves.The survey had a total of 110 respondents; 72 out of a total 110 survey respondents (65%)are within the age groups of 20-44. The age profile of respondents also supports the generalappeal of interactive media.Further investigation into the 58 respondents who watch video clips occasionally shows that31 out of the 58 respondents, 53.4%, were between the ages of 30 and 44. The table belowbreaks down the age ranges for viewers who occasionally watch interactive clips. Age Groups No. % 20-24 2 3.4% 25-29 1 1.7% 30-34 12 20.7% 35-39 9 15.5% 40-44 10 17.2% 45-49 9 15.5% 50-54 10 17.2% 55-59 4 6.9% 60+ 1 1.7% Table 9 Age profile of respondents who watch video clipsFrom a commercial standpoint the majority of entrepreneurs and owner managers of small tomedium organisations start their business when they are between 30 and 40 years of age.David can continue pitching his mentoring services at entrepreneurs within the 30-40 agegroups and feel comfortable that his material will be watched. 52
  • Probing further into general attitudes about how viewers rate interactive media as a way ofgiving advice, Question 5 from the survey asked respondents whether they agreed with thestatement that“Interactive media (video) is a good way to give advice versus other media”.54% of respondents, or 59 responses, agreed with the statement that interactive media was agood way to give advice.The last question on attitude towards the net and interactive media came from the analysis oftwo questions simultaneously. The questions were “Do you watch promotional video clips ifthey are on a website” and “interactive media is a good way to give advice”?Aggregating the statistics from respondents who said they occasionally (once every threemonths) watched interactive media on websites with statistics form the second part of thequestion, respondents who agreed that interactive media is a good way to give advice gave usa total of 35 respondents out of 110 replies which equates to 31.8% of the total respondents.Of those 35 respondents the consultancy profession were the largest sector represented. Thissector had 10 responses out of the total of 35.The consultancy industry is one of the first professions to use communication and mediatechniques to improve the communication of information. These statistics support theprevious demographic analysis of the different professions and the amount of time thoseprofessions spend online developing their business.The age groups most represented from the 35 respondents were the groups from 30-34 and35-39 which had 8 respondents each. 16 respondents represented 14.5% of the totalrespondents. Again this age profiling supports that previous analysis on entrepreneurs andbusiness owner managers tend to be between the ages of 30 and 45. 53
  • This analysis gives an insight into the attitudes of the respondents towards the web and theirwillingness to interact with interactive media if it is on a website.It reinforces the evidence from the literature review which suggests, that when web users arevisually stimulated and given access to timely information, they will interact with that media.Positive attitudes create the foundation for a relationship for customer loyalty. Reviewing thedemographic statistics and the attitudes statistics, it was a bit surprising that the advisoryindustry which includes consultancy and professional services were the most inclined tointeract with promotional media. This could be because the respondents in these professionsrealise the value of information more than respondents from other professions.Interactive media changes attitudes on the web because of the experience it delivers.Interactive learningThe next area of analysis is how interactive media encourages learning. What are the keycapabilities that interactive media has and how does it implement them?The consulting and professional services professions are expected to benefit fromadvancements in E-learning. One of those advancements is how interactive media willincrease communications. Technical barriers to E-learning such as internet penetration,broadband speeds, and the attitude of consumers to accept new technologies, are falling. Theacceptance of electronic books such as the Amazon Kindle has been a milestone in theacceptance of E-learning. In the few years since the launch of the Kindle the technology hasquickly passed through the early adopters phase and is now being accepted by the earlymajority. Amazon14 the online retailer are now selling more Kindles than paperbacks.14 http://technolog.msnbc.msn.com/_news/2011/01/28/5940731-kindle-books-now-outsell-paperbacks 54
  • This shows that the traditional norms about education are evolving. E-leaning is nowbecoming market driven rather than technology driven. When there is market driven demandthere is less chance of technical obsolescence. Interactive media is at a key stage in itsdevelopment.To analyse the potential influence interactive media will have within an E-learningenvironment it was necessary to get a better understanding of what the respondents thought ofmedia clips. If the majority of respondents thought that interactive media was only forentertainment, this would have been quite negative. The survey indicated this was not thecase. The respondents think interactive media is a good way to give advice but this needs tobe substantiated with more information.To begin with, respondents were asked whether they agreed with the statement“Media clips are mostly for entertainment”. This was question 4 in the survey. Q4: Media clips are mostly for entertainment 40% 36.6% 35% 30% 26.8% 26.8% 25% % 20% 15% 10% 6.3% 5% 3.6% 0% Strongly disagree Disagree Not sure/ NA Agree Strongly agree OpinionTable 10 Attitude to media clips 55
  • 6.3% of respondents strongly disagreed and 36.6% disagreed with that statement. 26.6%were not sure if they agreed.These are good supporting statistics in that they show nearly half of respondents think thatmedia clips can be used for more other application than just entertainment. That is theydisagreed with the statement.This also supports the framework that users get a positive experience from interacting withmedia.It can be assumed that users who agreed with that statement did so because they may bewaiting to have a positive interactive experience or they may have had a positive experiencebut subconsciously that experience hadn’t registered with them.The respondents who had a positive interactive media experience may have had thatexperience while they were online purchasing goods or learning about new products andservices.It is possible that the 27% who are not sure would react positively if they had engaged withinteractive media. That experience may not have happened for them yet or they could beconsidered part of the late majority or laggards.Further analysis of the 36.6% or 42 respondents who disagreed with the statement is in table11 below. Profession No. % Consultancy 9 21.4% Marketing 3 7.1% Business Services 7 16.7% Professional services 5 11.9% Table 11 Sector profile of respondents in table 9The table shows that of the 24 of the 42 respondents came from the professions whereinformation and communication of knowledge is essential. This also supports our previousdemographic analysis and attitudinal analysis. 56
  • A key part of learning is how well the tutors conduct themselves and their ability tocommunicate their experience and knowledge. Interactive video is only as good as thecontent it is supporting.If tutors have poor communication skills they will not look confident in their presentation.The viewers’ experience will also be poor because they will not be getting the experiencethey were expecting and neither side will be encouraged to invest more time and effort.David’s business is mentoring and because of this it is necessary for him to use interactivemedia as effectively as possibly.His ability to make an impact using interactive media will have a direct impact on theaudience and their willingness to make return visits.It was necessary to find out how effectively David used the video clips.In question 13 of the survey, the respondents were asked to rank four different statements ona scale of 1 to 4; number 1 being lowest and number 4 being the highest.The statements were designed to give an indication of what aspects were important in howDavid communicated his knowledge.The first statement was -“Visually they are clear and organised”-if the videos were of poor quality and the respondents were unable to follow them logicallythis would result in a poor viewing experience.The second statement was -“Is the language simple”-to check that the language was not confusing or difficult and thatthe message came across clearly. 57
  • The third statement was –“Video clips were too long” -which intended to find out how long the viewers would be engaged before they lost interestand decided to quit watching the clips?The final statement –“David communicates his knowledge clearly”-focussed on how articulate David was at communicating his knowledge.The final statement was ranked the most important with 44% or 48 respondents. Theinference from this ranking is that the respondents are learning from viewing the videos andthat they regard the information as valuable.A breakdown of the respondents in question 13 shows us that the number of respondents percategory is very similar to those of question 4. Profession No. % Consultancy 12 25.0% Marketing 7 14.6% Business Services 7 14.6% Professional services 3 6.3% Table 12 Professional profile of respondents who ranked David communications skills as his most important attributeThe main difference is in the consulting category, where there is an increase in the number ofconsultants who agree that David communicates his knowledge clearly.In the final review of educational merits of interactive media as an educational application itwas necessary to find out if the respondents wanted to learn more after interacting withDavid’s videos. 58
  • Question 15 of the survey asked respondents whether they agreed with the statement -“after watching David’s videos I want to learn more about business”. Q15: After watching Davids videos I want to learn more about business 60% 56.8% 50% 40% 34.3% % 30% 20% 11.7% 10% 4.5% 2.7% 0% Strongly disagree Disagree Not sure/ Na Agree Strongly Agree OpinionTable 13 Attitude towards learning more about business34.3% agreed with the statement and 2.7% strongly agreed with it. 56.8% of the respondentsare unsure or considered the question non applicable. That could be because the topics thatwere discussed on the video clips were not relevant to their business.Of the 34.3% or 28 respondents who agreed that they wanted to learn more, the genderprofile of those respondents was nearly exactly the same as those of the overall survey.The table below break down the respondents by profession. Profession No. % Male Female % Male % Female Consultancy 10 35.7% 19 9 67.9% 32.1% Marketing 3 10.7% Business Services 4 14.3% Professional services 4 14.3% Others 6 21.4%Table 14 Sector profile of respondents who want to learn moreThese statistics prove that both genders are receptive to learning via interactive media. 59
  • Importantly, only 16.2% of the respondents did not want to learn more about business afterwatching the clips. The assumption behind the 16.2% who didn’t want to learn is that theywere the respondents who were not involved in business. We know this because the surveywas sent to MBA students in Cass and other respondents who were not entrepreneurs/ownermanagers. We also know that 30% of respondents do not search for consulting advice at all.Repeat viewers & Net Promoter ScoreThe final section for analysis is how interaction can create lifetime value. Lifetime value islinked with customer loyalty. Lifetime value is extremely important because the cost ofacquiring new customers is continuously increasing. A small increase in the number ofretained customers can lead to a significant increase in revenues and profits. Traditionally,lifetime value has been calculated using a mathematical formula which discounts the futureprofits of customers and attaches a new present value to each customer. In this study notransaction was taking place so it was necessary to use a different framework for calculatingcustomer loyalty.It was decided to use the Net Promoter score. The Net Promoter score is a reasonably newframework for predicting firm growth. Its simplicity has won it many supporters but thereare some doubters as to how accurate it can predict growth. The basic principles behind thenet promoter score it is that positive recommendations from existing users translate into newsales because customers who are unsure are convinced after receiving the recommendation.Before investigating the net promoter score it is necessary to find out if the respondents had apositive experience when they viewed David’s clips. 60
  • Question 14 asked“if there were regular videos of David giving advice would you watch them?”38.2% indicated that they would return to the site and watch clips of David giving advice.While 27.2% said no, 34.6% of the respondents were not sure. Positive responses should beindicators of future intention to return to the site. This also supports the theory that frequencyis an indicator of customer loyalty. We already know from the respondents that the mainbenefit of the internet is access to information and that David communicates his knowledgeclearly. These two pieces of information are the two key reasons why 38.2% or 43respondents are willing to return when David posts new interactive videos. Q14: If there were regular videos of David giving advice would you watch them 45% 40% 38.2% 34.6% 35% 30% 27.2% 25% % 20% 15% 10% 5% 0% Yes No Not sure OpinionTable 15 %age of respondents who would watch regular videos of David 61
  • Further analysis of the 38.2% who would watch regular videos of David is in the table below. Age profile of respondents who would watch regular videos of David giving advice Age % 20-24 yrs 7.0% 25-29 yrs 4.7% 30-34 yrs 9.3% 35-39 yrs 16.3% 40-44 yrs 20.9% 45-49 yrs 16.3% 50-54 yrs 11.6% 55-59 yrs 11.6% 60+ yrs 2.3% Table 16 Age profile of respondents who would watch more videosThe table compares the age profile of the respondents who took the survey and the age profileof the respondents who would watch regular videos of David.The survey shows that 2% more females would watch David’s video clips compared to males. Gender profile of respondents who would watch regular videos of David giving advice Gender % Male 62.8% Female 37.2% Table 17 Gender profiles of respondents who would watch more videosThe survey established that a significant number of respondents are willing to watch regularvideos. It also investigates whether the respondents who ranked David a 9 or a 10 in the netpromoter score were the same respondents who were willing to watch regular videos.It is important that there is an overlap or a correlation between the numbers of respondentsand those willing to recommend David. 62
  • The net promoter score is worked out by subtracting the percentage score of the “detractors”from the percentage score of the “promoters’”. The detractors are those people who areunwilling to recommend and award a score of between 0 and 6 and the “promoters” award ascore of 9 or 10. Table 18 shows the rankings used in calculating the Net Promoter Score(NPS).Generally, this type of survey would be done on a large number of people using more than a3 week time frame for gathering information. Q16: How likely is it that you would recommend David to a friend or colleague who is looking for business advice 18% 17.0% 17.0% 17.0% 16% 14.3% 14% 12% 9.8% 10% % 8% 6.3% 6% 5.4% 4.5% 4% 3.6% 3.6% 1.8% 2% 0% Rank 0 Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Rank 8 Rank 9 Rank 10 RankingTable 18 Net promoter score rankingsTable 19 below calculates the Net Promoter Score. From the table we can see that the scoreis negative. The first assumption to be drawn from that score is that very few people arewilling to recommend David and that the promotional videos he has commissioned are notstimulating enough for the respondents. 63
  • This suggests that promotional video does not fulfil customer expectations; that promotionalvideo is not a suitable tool for communicating with customers; that it does not encouragefrequent viewing and therefore is not helping to generate customer loyalty.But that score is not accurate because it also includes those people who didn’t watch thevideos.40% or 44 people didn’t watch any of the videos. Respondents who would be unwilling towatch any videos in the future were included too. Detractors Promoters Rank 0-6 Rank 9-10 % % 52.68% 20.53% NPS -32.15% Table 19 Net Promoter scoreA better way to prove that his investment in promotional video encourages learning andcustomer loyalty is to compare the number of respondents who are willing to watch regularvideos and then recommend David to a friend or colleague who is looking for business advice.From the previous research we know that 43 respondents are willing to watch regular videosof David. 24 respondents ranked David either a 9 or 10.Proof of customer loyalty will come from analysing the unique id numbers of the respondentswho watch regular video and then gave David a 9 or 10 ranking on the Net Promoter Score. 64
  • Unique ID number Unique ID number of people who of people who would watch more awarded a 9 or 10 videos NPS 1 6752709 6752709 2 6821548 6821548 3 6848570 6848570 4 6752286 6752286 5 6775876 6775876 6 6821986 6821986 7 6828811 6828811 8 6828861 6828861 9 6838956 6838956 10 6851413 6851413 11 6864194 6864194 12 6864336 6864336 13 6864660 6864660 14 6866982 6866982 15 6867178 6867178 16 6867407 6867407 17 6911655 6911655 18 6940596 6940596 19 7056789 7056789 Table 20 Respondents who would recommend DavidOf the 43 respondents who were willing to watch more videos and the 24 respondents whoranked David a 9 or a 10 on the Net Promoter Score, 19 respondents were in both categories.What this means is that 19 respondents are willing to watch regular videos and promoteDavid to their friends. These 19 respondents are proof that interaction with promotionalvideo increase learning generates customer lifetime value.This represents 17.3% of the overall 110 respondents.17.3% is a significant percentage of any survey. The literary review shows that a smallpercentage increase in customer retention can lead to a significant increase in customerprofits.This figure proves that interaction with promotional video increases learning and customerlifetime value. 65
  • Limitations and Further researchLimitationsThere has been very little research carried out into interactive promotional media and it wasthe intention of the author to supply evidence that interactive media can improve learning andgenerate customer loyalty. From the very beginning of the research project it was necessaryto identify a website that was offering interactive promotional media.The limitations are survey limitations and methodology limitations.Survey limitationsThere were a number of limitations to using surveys for gathering information. Early in theproject a distribution list was drawn up of who were the most likely people to participate inthe survey. Further screening could have been carried out to make sure that the surveycandidates were more suitable. Were they entrepreneurs or business owners and did they usethe internet to search for business consulting advice?Non-incentivised surveys have low participation rates; to increase the participation rates afinancial incentive could have been included. Earlier in the report some of the problemswith incentivising surveys using financial rewards were highlighted. The length and designof the survey had limitations. It was decided that the survey should take no longer than fiveminutes to complete and that it should have no more than 20 questions.The main limitation of the survey was that it required people to interact with the links toDavid’s website. This required that the survey candidates spend some time on David’s sitebefore completing the survey. It was possible that some of the candidates might click ontothe website but never view any of the video clips. 66
  • Therefore guaranteeing the accuracy of responses to the survey was the biggest challenge.To make sure they were as accurate as possible it was necessary to answer a question beforegoing on to the next question.The survey was hosted on a 3rd party website. If respondents were not familiar with fillingout online surveys then this may have negatively impacted their willingness to complete thesurvey.Methodology limitationsFace to face interviews would be considered the most appropriate form of survey consideringthe complex nature of the question, which includes investigating people’s attitudes towardsthe web, E-learning and interactivity.The number of candidates involved rendered this inappropriate so an online survey wasundertaken.Technical limitations also existed. The assumption was made that the survey candidates hadthe required broadband speed to be able to download the videos and watch the video.Further researchA lot of the literature review had to come from older studies which were carried out duringthe Web 1.0 era when websites were not interactive. Banner advertising was consideredinteractive during that era. It is only in recent years that high speed broadband has allowedinternet users to watch interactive media clips. Three main areas where further research isneeded have been identified and outlined overleaf. 67
  • Web 2.0 and attitudes towards the internetA positive experience is one of the main indicators of positive attitudes towards the internet.More research could be carried out into how interactive media generates positive attitudesand how the design and layout of a web site influences our browsing experience. Moreresearch could be carried out into how interactive media will influence the design of mobiledevices in the future.E-learningFurther study into E-learning could analyse the relationship between the duration of mediaclips and how successfully they absorb that information. Other studies could focus on thetechnology used to support E-learning.Demand for interactive mediaThe demand for interactive promotional media is no longer driven by the early adopters, butcompared to other media the demand is still low.Further study could take place into predicting the future demand for the interactive media.The review might include a review of the technical and non-technical market conditions thatdrove the demand for TV adverts and then compare the growth in TV advertisements with thegrowth in promotional media on the web. TV adverts were a substitute for radio adverts.Will interactive promotional adverts become as substitute for TV adverts? 68
  • Conclusions and RecommendationsConclusionsThe research question asked if online interaction with promotional video increases learningand customer lifetime value?Currently there is little research on promotional video but over the next few years the use ofpromotional video is expected increase because of its interactive capabilities.Promotional videos from David’s website www.davidmellormentoring.com were used to testwhether promotional video can increase learning and increase customer loyalty.The survey consisted of twenty questions which took no more than five minutes to complete.The majority of the people who were asked to complete the survey were entrepreneurs or hadan involvement in business.The results suggest that online interaction with promotional video increases learning andcustomer lifetime value. Analysis of the survey indicates that access to the latest informationwas ranked as the most important benefit of the internet.This is significant because attitudes determine our willingness to use the internet and ourinteraction with websites. Attitudes influence our motivations and our future behaviour.Respondents were asked if they used the internet to search for consulting/ business advice. Asignificant proportion of respondents use the internet to search for advice and search foradvice on a regular basis.Interaction with promotional video influences behaviour and creates positive experiences.Interaction influences behavioural because it encourages users to become more involved.Users become more involved when they are stimulated. 69
  • The literature review point out that media which stimulates our senses is more effective indelivering positive experiences. Positive experiences on the internet encourage a structuralshift in internet users towards the source of that experience.When users enjoy an interactive experience they are likely to demand that experience in thefuture. They are also more likely to promote that positive experience to other users.An example of a website which has been able to capitalise on the shift towards interactivemedia is www.youtube.com. YouTube has made it simple to watch the videos on its site andalso encourage the structural shift towards interactive media by making it easy to forwardvideos to other users.One of the issues with new media is that it tends to substitute other forms of media veryquickly. Interactive media will eventually be substituted by a new form of media which iseven more engaging.Interactive media is no longer at the early adopter stage. It has become widely accepted. Toprove this the survey analysed the demographics of the respondents. Respondents from all theage groups interacted with David’s videos. Respondents from every profession interactedwith the videos but the respondents from the advisory categories - consulting, business andprofessional services were the most frequent users. It is possible that these professionsrealise the value of information more than the other professions and therefore use the internetmore than other professions. There was no real difference between the genders in theirwillingness to interact with the video clips.The market is still a long way from maturity.There are significant opportunities for new interactive services. 70
  • One of the benefits of launching an interactive media service now is that there is demand forinteractive media, and internet users will engage with interactive media if it provides themwith a positive experience. This is important because it increases the chances of success andgenerating a return on that investment.Interactive video encourages learning because the respondents have to be more involved.They control how much information they are exposed to. To prove that promotional issuitable for E-learning, survey respondents were asked if they wanted to learn more aboutbusiness after watching David’s videos. 34.3% of the respondents wanted to learn more. Thereason that they wanted to learn more is because David communicated his knowledge verywell.This supports the argument that interactive media supports E-learning. E-learning is stilldeveloping, but there should be significant future opportunities within education forinteractive media.Frequency is an indicator of customer loyalty. As previously started, if a website delivers apositive experience it will encourage more frequent interaction. To prove that frequency isan indicator of customer loyalty respondents were asked if they would watch regular videosof David giving advice and if they would recommend David to friends or colleagues whowere looking for business advice.38.2%, or 43 respondents, said they would watch regular videos of David giving advice. Ofthe 43 respondents who would watch David on a regular basis, 19 of those said they wouldrecommend David to friends and colleagues who were looking for advice.This represents are 17.3% of the total number of respondents who completed the survey.This is a significant proportion and proves that online interaction with promotional learningcan increase learning and customer lifetime value. 71
  • RecommendationsWhen potential clients of David’s are searching the internet for mentoring and businessadvice and they navigate to www.devidmellormentoring.com, the relationship betweenthemselves and David begins. First impressions of a website are extremely important. Aclients’ first encounter with a website should convince them about the quality of service theyare going to receive. First impressions of www.devidmellormentoring.com should bemotivating and encourage a positive attitude towards that website. Clients should be lookingforward to having a positive experience.The literature review indicates how a poor online experience influences offline decisions. Ifa website cannot generate deliver a positive experience for its user it will fail to retaincustomers.The recommendations I’m suggesting are designed to deliver a positive experience to David’sexisting internet clients and future web clients. The following recommendations shouldincrease customer loyalty and encourage clients to use the website more frequently to get thelatest mentoring and management information.A) Format of interactive mediaAccess to the latest information was identified as the most important benefit of the internet.Web users want the latest information before they make their decisions.The respondents identified David’s ability to communicate his knowledge and informationclearly as his best attribute.David should focus on developing a portfolio of videos which contain the latest managementand mentoring advice for different professions. The videos should encourage as muchinteraction as possible so that the viewer is engaged and learning. 72
  • Every video should be focused on showing how David can create a positive behaviouralchange for the viewer. Positive behaviour change should be achievable and all the resourcesto achieve that behavioural change should be on the website.David should start with the advisory professions which includes consultancy, professionaland business services. These professions represented a large proportion of the respondents tothe survey.It is clear that David has the ability and communications skills to deliver complexinformation on a high level.Within these professions David could position himself as the consultants’ consultant.B) Feature videos every 3 monthsThe second recommendation is to put feature videos on the site at least every three monthsand more frequently if they are required. The majority of survey respondents viewedpromotional video at least once every three months and this would be expected to increase asinteractive video becomes more popular.Feature videos are where David discusses major topics. Feature videos are where David setsout the mentoring program for a specific industry or for a specific framework. Feature videosshould be supported by short reminder videos which are put on the site once a month. Theobjective of the short reminder videos is to reflect on the feature videos and to reinforce anyof the suggestions that are made in the feature videos.Reminder videos are also a good way of introducing new clients to the themes and conceptsthat will be discussed in the feature videos and because they are short it is less likely thatviewers will quit before they have viewed the entire clip. 73
  • C) Interactive featuresThe final suggestion is to encourage viewers to leave comments about the videos. Web 2.0encourages more interactivity and currently the video gallery doesn’t encourage viewers toforward videos to friends or colleagues who are looking business/mentoring advice. Thereshould be a way for users to make comments on what they have learnt from interacting withthe website and to make future recommendations.These recommendations help to retain clients and attract new clients. A small increase inclient retention can lead to a significant improvement in profitability.There is another purpose for having clients leave their comments and that is to help shape thefuture design and content of the site. As previously outlined, websites evolve throughinteraction. Having this level of interaction should guarantee that as the website evolves itmaintains its ability to deliver positive experiences. 74
  • BibliographyAasael (1992), Consumer Behaviour and Marketing Action, 4th edition, PWS-Kent, Boston,MA.Alba, Joseph, John Lynch, Barton Weitz, Chris Janiszewski, Richard Lutz, Alan Sawyer andStacey Wood. 1997. “Interactive Home Shopping: Consumer, Retailer, and ManufacturerIncentives to Participate in Electronic Marketplaces.” Journal of Marketing 61(July):38-53Amin, A. and Wilkinson, F. (1999), “Learning, proximity and industrial performance: anintroduction”, Cambridge Journal of Economics, Vol. 23, Cambridge Political EconomySociety, pp. 121-5Bakos, Y. 1997.”Reducing, Buyer Search Costs: Implications for Electronic Marketplaces.”Management Science 43 (12): 1676-1692Banks, J. 1998 “Video in the machine: the incorporation of music video into the recordingindustry”. Popular Music Vol. 16/3 pp.293-309Beach, D. (1980), Personnel: The Management of People at Work, Macmillan, New York,NY.Buhalis D. 2000. Marketing the competitive destination of the future. Tourism Management21(1): 97–116. 75
  • Burke, R 2002 “Technology and what customers want in the physical and virtual store”Journal of the Academy of Marketing Science Vol. 30 (4) pp.411-432Chen, Qimei, and William Wells (1999),"Attitude toward the Site," Journal of AdvertisingResearch, 39 (5), 27-37.Chevalier J. and D. Mayzlin, 2003, “The Effect of Word of Mouth on Sales: Online BookReviews”, Working Paper Series # 28 & MK #15, Yale School of Management.Constantinides, E. 2004 “Influencing the online customer’s behaviour: the Web experience”Internet Research Vol. 14 (2) pp.111-126Duncan, Tom and S.E. Moriarty. 1998.”A Communication –Based Marketing Model forManaging Relationships.” Journal of Marketing 62 (April):1-13Godes, D. and Mayzlin, D. (2004) ‘Using online conversations to study word-of-mouthcommunication’, Marketing Science, Vol. 23 (Fall), pp. 545 – 560.Govers R, Go FM, Kumar K. 2007. Promoting tourism destination image. Journal of TravelResearch 46(1): 15–23.Ha, S.H., Bae, S.M. and Park, S.C. (2002), “Customer’s time variant purchase behaviour andcorresponding marketing strategies: an online retailer’s case”, Computers & IndustrialEngineering, Vol. 43 No. 4, pp. 801-20. 76
  • Hansen, Robert A. (1980), "A Self-Perception Interpretation of the Effect of Monetary andNonmonetary Incentives on Mail Survey Respondent Behavior," Journal of MarketingResearch, 17 (February), 77-83.Hof, Robert D. 2001. “Don’t Cut Back Now.” BusinessWeek, October 1, p. EB34.Huhtamo, Erkki (1999), "From Cybernation to Interaction: A Contribution to anArchaeology of Interactivity," The Digital Dialectic: New Essays on New Media, P.Lunenfeld, eds., Cambridge, MA: MIT Press, 96-110.Keeney, Ralph L. 1999. “The Value of Internet Commerce to the Customer.” ManagementScience 45 (April): 533-542.Kolb, D. (1984) Experiential Learning: Experience as a Source of Learning and Development,Prentice-Hall, Englewood Cliffs, NJ.Leckenby, J.D. and H.Li. (2000). “From the Editors: Why We Need the Journal of InteractiveAdvertising.” Journal of Interactive Advertising 1 (1). Retrieved from www. jiad.orgLee, Jae-Shin (2000), "Interactivity: A New Approach," paper read at Association forEducation in Journalism and Mass Communication, at Phoenix, AZ.Leonard-Barton, Dorothy (1992), "Core Capabilities and Core Rigidities: A Paradox inManaging New Product Development," Strategic Management Journal, 13 (Summer), 11-25. 77
  • Leong, Elaine K. F., Xueli Huang, and P.-J. Stanners, 1998. “Comparing the Effectiveness ofthe Website With Traditional Media.” Journal of Advertising Research, September -October,44-49Moore, C. 2004 “A Picture Is Worth 1000 CDs: Can the Music Industry Survive as a Stand-Alone Business?” American Music, Vol.22 (1) pp. 176-186Novak, T.P., D.L. Hoffman, and Y.-F. Yung. 2000. “Measuring the Customer Experience inOnline Environments: A Structural Modelling Approach.” Marketing Science: 19 (1): 22-42O’Brien, L. and Jones, C. (1995) “Do rewards really create loyalty?” Harvard BusinessReview, May-June, pp. 75-82.Rafaeli, S. (1988). Interactivity: From new media to communication. In R.P. Hawkins, J.M.Wiemann, & S. Pingree (Eds.), Advancing communication science: Merging mass andinterpersonal process, (pp. 110-134). Newbury Park, CA: Sage.Reeves, Byron, and Clifford Nass (1996), The Media Equation: How People Treat Computers, Television, and New Media Like Real People and Places, New York: Cambridge University Press/CSLI.——— (2000), "Perceptual Bandwidth," Communications of the ACM, 43 (3), 65-70.Reeves, B., & Nass, C. I. (1996). The media equation: How people treat computers,television, and new media like real people and places. New York: Cambridge UniversityPress. 78
  • Reichheld, F.F. and Sasser, W.E. (1990), “Zero defects: quality comes to service”, HarvardBusiness Review, September/October, pp. 105-11.Reichheld, F.F. (1994), “Loyalty and the renaissance of marketing”, Marketing Management,Vol. 2 No. 4, pp. 10-21.Rodgers, Shelly, and Esther Thorson (2000), "The Interactive Advertising Model: HowUsers Perceive and Process Online Ads," Journal of Interactive Advertising, 1 (1), Availableonline: http://jiad.org/vol1/no1/rodgers/index.html.Rust, R. , Zeithaml, V. A. and Lemon, K. N. (2000) ‘Driving customer equity’, The FreePress, New York, p. 46.Stewart, D. Pavlou, P. “From consumer response to active consumer measuring effectivenessof interactive media” Journal of the Academy of Marketing Science 30.376Tamimi, N., Rajan, M. and Sebastianelli, R. (2003), “The state of online retailing”, InternetResearch, Applications and Policy, Vol. 13 No. 3, pp. 146-55. 79
  • AppendicesAppendix 1Link to survey on Kwik survey website.http://www.kwiksurveys.com?s=NNMLFM_dde30d7dAppendix 2Respondents answers to the survey in chart format: Q1: Rank the most important benefits of the internet 45% 42% 40% 35% 34% 33.0% 30% 27.0% 26% 25% Rank 1(least important) 25% 23% 23% Rank 2 22% Rank 3 20% 19% 19% Rank 4 18% 18% 18.0% 17% Rank 5(Most important) 16% 15% 15% 15% 15% 15.0% 15% 13% 13% 12% 10% 7.0% 5% 0% Faster communications Access to the latest Finding new 24 hour access to Save money, compare information opportunities services prices Benefits 80
  • Q2: Indicate the number of hours per week you spend online developing your business 18% 16.8% 16.8% 16% 15.0% 14.2% 14% 12.4% 12% 10%% 8.0% 8% 6.2% 6% 4.4% 4% 3.5% 2.7% 2% 0% 0 hours Less than 1 1 to 2 2 to 6 7 to 10 11 to 15 16 to 20 20 to 30 30 to 50 50+ Hours Q3: Do you watch media clips or promotional videos if they are on a website? 60% 52.7% 50% 40%% 30% 26.4% 20% 13.6% 10% 7.3% 0% Always Weekly Occasionally (once every 3 months) Never Frequency 81
  • Q4: Media clips are mostly for entertainment 40% 36.6% 35% 30% 26.8% 26.8% 25%% 20% 15% 10% 6.3% 5% 3.6% 0% Strongly disagree Disagree Not sure/ NA Agree Strongly agree Opinion Q5: Interactive media (video) is a good way to give advice compared to other media 60% 54.5% 50% 40%% 30% 21.4% 20% 15.2% 10% 8.0% 0.8% 0% Strongly disagree Disagree Not sure/ NA Agree Strongly agree Opinion 82
  • Q6: Do you ever use the internet to search for professional business consulting/ advice? 80% 70% 68.5% 60% 50%% 40% 31.5% 30% 20% 10% 0% Yes No Q7: If yes how often do you search for consulting advice? 40% 37.3% 35% 30.0% 30% 24.6% 25%% 20% 15% 10% 8.2% 5% 0% Daily Weekly Occasionally (once every 3 months) Never Frequency 83
  • Q8: Have you ever visited David Mellors website 70% 61.1% 60% 50% 40% 38.9%% 30% 20% 10% 0% Yes No Q9: How long is it since you visited his site? 70% 60.9% 60% 50% 40%% 30% 26.4% 20% 10% 7.3% 2.7% 2.7% 0% Within the last week Within the last 2 weeks Within the last month Within the last 3 weeks Dont remember Frequency 84
  • Q13: Please rank the following statements 50% 47.0% 45% 44.0% 43.0% 40% 35% 31.0% 30% 28.0% Rank 1 25.0% 25.0% Rank 2 24.0%% 25% 22.0% Rank 3 21.0% 20.0% Rank 4 20% 17.0% 15.0% 15.0% 15% 12.0% 12.0% 10% 5% 0% Visually they are clear and Language is simple Video clips were too long David communicates his organised knowledge clearly Opinions Q14: If there were regular videos of David giving advice would you watch them 45% 40% 38.2% 34.6% 35% 30% 27.2% 25%% 20% 15% 10% 5% 0% Yes No Not sure Opinion 85
  • Q16: How likely is it that you would recommend David to a friend or colleague who is looking for business advice 18% 17.0% 17.0% 17.0% 16% 14.3% 14% 12% 9.8% 10%% 8% 6.3% 6% 5.4% 4.5% 4% 3.6% 3.6% 1.8% 2% 0% Rank 0 Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Rank 8 Rank 9 Rank 10 Ranking Q17:Gender 70% 64.5% 60% 50% 40% 34.6%% 30% 20% 10% 0% Male Female 86
  • Q18:Age 20% 18.18% 18% 16.36% 16% 14% 13.64% 12.27% 11.82% 12%% 10% 8% 7.27% 6.36% 6% 5.45% 4% 3.64% 2% 0% 20-24 yrs 25-29 yrs 30-34 yrs 35-39 yrs 40-44 yrs 45-49 yrs 50-54 yrs 55-59 yrs 60+ yrs Q19:What sector is your business in? 25% 20.5% 20% 15.6% 15%% 9.8% 9.9% 10% 8.2% 7.4% 7.4% 7.4% 4.9% 5% 3.3% 3.3% 1.6% 0.8% 0% l ai ns e IT s nc y s ia n g s er /A et tio nc m ic e ed at io tin ce th N R na co lta rv ke vi O ca Fi le u se M uc ar er u ni T e ns s Ed M ls m C o es ona n si om si C Bu es of Pr Sector 87
  • Q20: What annual turnover does your business generate 20% 18% 17.3% 16.4% 16% 15.5% 14.6% 14% 12% 10.9%% 10% 8% 7.3% 6% 5.5% 5.5% 4% 2.7% 2.7% 1.8% 2% 0.0% 0% 0-9k 10-19k 20-29k 30-39k 40-49k 50-149k 150-500k 500-999k 1-4.9m 5-9.9m 10m-19.9m 20+ Turnover 88
  • Appendix 3Definitions of interaction: Definitions that Focus on ProcessStudy Definition/Description of Interactivity Key ElementsBezjian-Avery, “In interactive systems, a customer controls the User control andCalder, and Iacobucci content of the interaction requesting or giving dialogue between1998 information…. The hallmark of these new media consumer and is their interactivity – the consumer and the manufacturer manufacturer enter into dialogue in a way not previously possible” (p.23).Cho and Leckenby “The degree to which a person actively engages Interchange1999 in advertising processing by interacting with between individuals advertising messages and advertisers” (p.163). and advertisersGuedj et al. 1980 “A style of control” (p.69). User controlHa and James 1998 “Interactivity should be defined in terms of the Responsiveness extent to which the communicator and the audience respond to, or are willing to facilitate, each other’s communication needs” (p.461).Haeckel 1998 “The essence of interactivity is exchange” (p.63). ExchangeHeeter 2000 “An interaction is an episode or series of episodes Action and reaction of physical actions and reactions of an embodied human with the world, including the environment and objects and beings in the world.”Miles 1992 “An interactive communication involves Responsiveness responsiveness of the displayed message to the message receiver” (p.150).Pavlik 1998 “Interactivity means two-way communication Two-way between source and receiver, or, more broadly communication multidirectional communication between any number of sources and receivers” (p.137).Rafaeli 1988 “Interactivity is an expression of the extent that in Responsiveness a given series of communication exchanges, any third (or later) transmission (or message) is related to the degree to which previous exchanges referred to even earlier transmissions” (p.111).Steuer 1992 “Interactivity is the extent to which users can Real-time participate in modifying the form and content of a participation mediated environment in real time” (p.84). 89
  • Definitions of Interaction continued. Definitions that Focus on FeaturesStudy Definition/Description of Interactivity Key ElementsAhren, Stromer- Media interactivity was defined in terms of Multimedia,Galley, and Neuman features such as audio and video. Human features for two-2000 interaction was defined in terms of features such way as bulletin boards and chat rooms. communicationCarey 1989 Interactive media are: “technologies that provide Channels for person-to-person communications mediated by a human-to-human or telecommunications channel (e.g. a telephone human-to-computer call) and person-to-machine interactions that exchange simulate interpersonal exchange (e.g. an electronic banking transaction)” (p.328).Ha and James 1998 Identified five characteristics of interactivity: Five characteristics playfulness, choice, connectedness, information that constitute collection, and reciprocal communication. interactivityJensen 1998 “Interactivity may be defined as: a measure of a Features that enable media’s potential ability to let the user exert an user control influence on the content and/or form of the mediated communication” (p.201).Lombard and Snyder- “We define interactivity as a characteristic of a Features that enableDutch 2001 medium in which the user can influence the form user control and/or content of the mediated presentation or experience.”McMillan 2000a Identified thirteen features that, based on Web site features literature about interactivity, might suggest that a that facilitate two- Web site is interactive. Included: E-mail links, way registration forms, survey/comment forms, chat communication and rooms, search engines, and games. controlNovak, Hoffman, and Interactive speed is a construct that contributes to Time required forYung 2000 flow and is based on measures such as waiting interaction time, loading time, and degree to which interacting with the Web is “slow and tedious” (p.29).Straubhaar and “We will use the term interactive to refer to Functions thatLaRose 1996 situations where real-time feedback is collected enable customized from the receivers of a communications channel and timely and is used by the source to continually modify feedback the message as it is being delivered to the receiver” (p.12). 90
  • Definitions of Interaction continued. Definitions that Focus on PerceptionStudy Definition/Description of Interactivity Key ElementsDay 1998 “The essence of interactive marketing is the use Consumer of information from the customer rather than involvement about the customer.” (p.47).Kiousis 1999 “With regard to human users, it [interactivity] … Simulation of refers to the ability of users to perceive the interpersonal experience to be a simulation of interpersonal communication communication and increase their awareness of telepresence” (p.18).McMillan 2000b Individuals rated interactivity of sites based on Perception of two- their perceptions of two-way communication, way level of control, user activity, sense of place, and communication, time sensitivity. control, activity, sense of place, and time sensitivityNewhagen, Cordes, Conceptualize interactivity based on “the Perception ofand Levy 1996 psychological sense message senders have of interaction by self their own and the receivers’ interactivity” and others (p.165).Schumann, Artis, and “Ultimately it is the consumer’s choice to Consumer’s choiceRivera 2001 interact, thus interactivity is a characteristic of the to interact consumer, and not a characteristic of the medium. The medium simply serves to facilitate the interaction.”Wu 1999 “Perceived interactivity can be defined as a two- Perceptions of component construct consisting of navigation and navigation and responsiveness” (p.6). responsiveness 91
  • Definitions of Interaction continued. Definitions that Combine, Process, Features, and/or PerceptionStudy Definition/Description of Interactivity Key ElementsCoyle and Thorson “A web site that is described as interactive should Mapping, speed,2001 have good mapping, quick transitions between a and user control. users input and resulting actions, and a range of ways to manipulate the content” (p.67).Hanssen, Jankowski, “Aspects of interactivity were clustered around Equality,and Etienne 1996 three terms: equality (containing aspects such as responsiveness, and participants, mutual activity, role exchange, functional control), responsiveness (e.g. mutual discourse, environment nature of feedback, response time) and functional communicative environment (e.g. bandwidth, transparency, social presence, artificial intelligence)” (p.71).Heeter 1989 Interactivity is a multi-dimensional concept that Complexity, effort, includes: complexity of choice available, effort responsiveness, users must exert, responsiveness to the user, monitoring, monitoring information use, ease of adding participation, information, and facilitation of interpersonal interpersonal communication. communicationLieb 1998 Interactivity is seen as having two primary User control, definitions. The first is a kind of personalization. interpersonal The second type is community building. communicationMcMillan 2002 Identifies four types of interactivity based on Monologue, intersection of user control and direction of feedback, communication: monologue, feedback, responsive responsive dialogue, and mutual discourse. dialogue, and mutual discourse.Zack 1993 He suggests that the following key factors emerge Exchange, non- from the literature as elements of interactivity: the verbal cues, simultaneous and continuous exchange of spontaneity, information; the use of multiple non-verbal cues; unpredictability, the potentially spontaneous, unpredictable, and progression of emergent progression of remarks; the ability to remarks, ability to interrupt or preempt; mutuality; patterns of turn- interrupt, mutuality taking, and the use of adjacency pairs. turn-taking, adjacency. 92
  • Appendix 4Internet subscription growth rates 93
  • 94