Ebay Plus- Loyalty Program

COLOGNE BUSINESS SCHOOL (CBS)

eBay Plus- Loyalty Program

Term paper for         "Customer Relationship Management"

Winter Semester 2015

Lecturer:                 Prof. Dr. Mike Schallehn

Student's Name:        Christine Heitmann

Master of Arts in         International Business / Consulting

Student-No.                 1155500

Table of Contents

Table of Figures        

1.        Introduction        

2.        Strategic Customer Relationship Management        

2.1.        Definition and Importance of Strategic Customer Relationship Management        

2.2.        Loyalty        

2.3.        Loyalty and strategic CRM        

3.        Concept of Loyalty Concepts        

3.1.        General Concept of Loyalty Programs        

3.1.1.        True Loyalty        

3.1.2.        Efficiency Profits        

3.1.3.        Effectiveness Profits:        

3.1.4.        Value Alignment        

3.2.        Design Characteristics        

4.        eBay Plus        

4.1.        eBay        

4.2.        eBay Customer and Customer Segments        

4.3.        Loyalty Program eBay Plus        

4.4.        Customer segment of eBay Plus?        

4.5.        Who will benefit the most of eBay plus?        

4.6.        Effectiveness and Efficiency of the eBay P Design        

4.7.        Potential Improvements        

5.        Competitive Advantage of eBay Plus        

5.1.        Defining the term “competitive advantage”        

5.2.        Competitive Advantage of eBay and eBay Plus        

5.3.        Describing relevant competitors of eBay        

5.4.        Applying the VRIO concept        

6.        Conclusion        

Reference List        

Ethics Statement        

Table of Figures

Figure 1- Constant Cumulative Spending……………………………………………………7                                                                              Figure 2- Cyclical Cumulative Spending        

Figure 3- Relationship Management        

1. Introduction

Global changes as well as major improvements of the technology allow organizations nowadays to collect and analyze customer data in a way that is easier than it has been ever before. These modern systems do not only allow these investigations, they also allow a simultaneously interaction with the customer. Consequently, these changes require that the behavior of the companies is adapted to the environment. This concludes in a change of the business strategy, meaning “a shift from a product focus toward a customer-centric offer”. (Kumar & Reinartz, 2012, p.19).

Customer relationship management (hereinafter CRM) as a business strategy aimes to develop longlasting-term, mutually profitable, individual customer-supplier relationships. (Peelen, 2005, p.6) CRM includes different programs to attract the, analyze and satisfy the customer. As the name already says, building up a relation to the customer is the key project. As in every funcitioing relationhsip, trust and loyalty are crucial. So called loyaltiy programs (hereinafter LP) are a poplular tool for reaching and retaining this loyality.

The upcoming question is now, in how far are these loyalty programs useful/meaningful? Do they effeciently improve the competitive advantage of the organization? Exemplified on the recent launching of the loyalty program eBay plus, this paper will analyse the different impacts of loyalty programs.

1. Strategic Customer Relationship Management

This chapter will give some explanation

1. Definition and Importance of Strategic Customer Relationship Management

Customer relationship management is a “complex and holistic concept, organized around business processes and the integration of information technologies” (Bull, 2003, p.592). It is the use of customer related information or knowledge to deliver relevant products or services to customers (Levine, 2000, p.34)

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