1

“Does online interaction with promotional video increase 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

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Table of Contents

Introduction ................................................................................................................................ 7

Literature 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 ......................................................................................................... 32

Research Methodology ............................................................................................................ 35

Data collection ..................................................................................................................... 36

Survey design ....................................................................................................................... 36

Survey response rates ........................................................................................................... 39

Survey 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 ............................................................................ 60

Limitations and Further research ............................................................................................. 66

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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 .......................................................................................... 68

Conclusions and Recommendations ........................................................................................ 69

Conclusions .......................................................................................................................... 69

Recommendations ................................................................................................................ 72

A) Format of interactive media .......................................................................................... 72

B) Feature videos every 3 months ..................................................................................... 73

C) Interactive features ........................................................................................................ 74

Bibliography ............................................................................................................................ 75

Appendices ............................................................................................................................... 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: .................................................................................................... 89

Definitions that Focus on Process ............................................................................................ 89

Appendix 4 ............................................................................................................................... 93

Internet subscription growth rates ........................................................................................ 93

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Table of Figures

Table 1 Benefits consumers want from websites .................................................................... 13

Table 2 Technology leading vs Market demand. Source: Suarez and Lanzolla (2005) ......... 23

Table 3 Survey sample ............................................................................................................ 39

Table 4 Age profile of respondents ......................................................................................... 43

Table 5 Gender profile between ages 30-44 ........................................................................... 43

Table 6 Profession by Industry Sector .................................................................................... 45

Table 7 Gender profile with the advisory professions ............................................................ 47

Table 8 Do respondents watch promotional video ................................................................ 51

Table 9 Age profile of respondents who watch video clips .................................................... 52

Table 10 Attitude to media clips ............................................................................................. 55

Table 11 Sector profile of respondents in table 9 ................................................................... 56

Table 12 Professional profile of respondents who ranked David communications skills as his

most important attribute ........................................................................................................... 58

Table 13 Attitude towards learning more about business ........................................................ 59

Table 14 Sector profile of respondents who want to learn more ............................................. 59

Table 16 Age profile of respondents who would watch more videos ...................................... 62

Table 17 Gender profiles of respondents who would watch more videos ............................... 62

Table 18 Net promoter score rankings .................................................................................... 63

Table 19 Net Promoter score ................................................................................................... 64

Table 20 Respondents who would recommend David ........................................................... 65

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Acknowledgements

Firstly, I would like to thank David Mellor. I was about to give up on my proposed

topic until I met David. He told me that he had just commissioned some promotional

videos 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 patience

throughout the Business Mastery project.

Finally, I must thank my family in Ireland and my girlfriend, Caroline, for their support

and encouragement.

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Introduction

It is accepted that the introduction of a new media format mimics the incumbent media in the

very early stages. Over the course of time the new media establishes itself, develops

customers and replaces the incumbent media.

The internet has been evolving and maturing quickly. We are now at in a phase called Web

2.0. Web 2.0 is the term given to the increased functionality of the internet and the

interactive capability within that website. The internet now facilitates blogging, online

communities and video interaction.

One of the questions still to be answered about interactive media, is whether interactive

promotional media will be adopted by consumers as they adopted promotional

advertisements on TV? Can interactive promotional media generate customer loyalty and

profits?

Online interactive media is a relatively new form of media. Websites such as

www.youtube.com the largest video hosting website in the world, which was founded in

2005, 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 firms

installing high speed broadband capabilities. Without that investment in infrastructure it

would be impossible to watch interactive promotional videos. Handset and device

manufactures have also invested in portable devices that can download and play video media.

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Interactive visual media is more engaging than traditional media such as print, radio, and TV

because 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 than

that of traditional TV advertising. Viewers can decide how many times and for how long

they want to watch media clips.

Interactive media is more creative than print media because moving images provide us with

a unique visual experience. When combined with audio effects the impact of interactive

media is greatly enhanced. For example, one’s desire to visit an exotic tourist destination

often 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 to

remember that experience. Positive experiences leave a lasting impression.

.

Currently online businesses from entertainment to retailers are investing large sums of money

on interactive promotional video. They are investing because they believe it will help

educate their customers and provide those customers with a positive experience so that they

will remain loyal and also attract new customers.

There is little published research into interactive media. Previous research into the use of rich

visual imagery has found that consumers will engage with media which stimulates their

senses. Other research into consumers’ attitudes towards websites also provides evidence

that positive experiences can trigger behavioural changes. The study of computer technology

and how it influences behaviour and attitudes is called Captology. Online video is a

subcategory within Captology.

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Currently there is little evidence that investment in interactive media generates an adequate

return. It could be that firms are investing in it just because their competitors are. This is not

a strategic rationale for investment nor does it explain how interactive promotional media can

help differentiate firms from their competitors. Any previous research undertaken into

interactive media and interactive communication was primarily focused on identifying

general attitudes toward websites. The focus was on identifying what different forms of

advertising were generating positive attitudes towards that website. No research focused on

the impact of promotional video on websites.

The majority of the academic research is over five years old and was undertaken before the

interactive capabilities of Web 2.0 emerged.

My research is timely because of the lack of research into interactive promotional video and

the 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.

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To provide evidence that interactive media generates customer loyalty and is an indicator of

future growth I am using the Net Promoter score1. The Net Promoter score is a methodology

for determining the attractiveness of firms to its current and future customers. Word of mouth

is considered the most powerful form of recommendation. Most recommendations we

receive are 3rd

party endorsements in the form of advertising. The aim of advertising and

promotions is to convince us that we need certain products or services. Advertisers and

promoters achieve their goal by trying to convince us that something is missing from our

lives. 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 recommendation

from someone we know we are not sceptical and accept it. We accept it because we have

shared beliefs and opinions.

The effectiveness of the Net Promoter Score as indicator of future growth is disputed by

some but it is appropriate to use it for this project as it is an easy to use tool for research

purposes.

The internet and especially Web 2.0 has changed the way people use the internet. The

interactive capabilities of Web 2.0 have encouraged internet users to take more control over

how they use the internet. Web users are now more engaged with the internet and expect

more information than ever before.

Web 2.0 has changed the way firms compete on the internet; firms which encourage a high

level 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 promotional

video on web users.

1 http://en.wikipedia.org/wiki/Net_promoter_score

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Literature review

The Internet

To watch promotional video on a website you have to be connected to the internet. Websites

grab your attention but it is the internet which enables those websites.

The internet is a global network of computers which are networked together and publicly

accessible.

Stewart and Pavlov (2002) suggest that “the internet is a set of technologies that came into

being 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 and

make 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 create

value for us. This list includes savings we make on products and services we buy on the

internet. 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 subscription

entertainment 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 characteristics

that differentiates it from traditional media is its potential for interactivity”

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Leckenby and Li (2000)2 defined interactive advertising as the presentation and promotion of

products, services and ideas by an identified sponsor through mediated means, involving

mutual interaction between consumers and marketers.

The internet and the technologies which support the internet have had a major influence on

society and have changed the way people behave. Interactive media enhances the browsing

experience and encourages people to spend more time online.

Attitudes toward the Web

Our attitudes are our mental view of something. They help shape our opinions and

behaviours. To get a better understanding of why interaction takes place on the internet it is

necessary to establish the factors that influence our attitudes towards the web.

The internet provides us with more information sources to review before we make our

purchasing decisions. (Hof 2001)3

One of the main advantages of the internet is that it has reduced the cost of accessing

information. (Bakos 1997) In general, consumers have taken advantage of the falling costs of

accessing 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 interactive

media” 3 Hof, Robert D. 2001. “Don’t Cut Back Now.”

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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 that

consumers armed with increased non price information on which to base a choice, can make

selections that lead to a higher level of post purchase satisfaction, thereby increasing levels of

loyalty”.

The behaviour of online customers is driven by the design, layout, and emotions they feel

while they are on a particular website.

To deliver an effective online experience it is necessary to identify and classify all the

individual elements which have a likely effect on the final outcome. This classification helps

marketers identify the resources that they require to deliver effective online campaigns. It

also adds to the debate about how consumers’ behaviour changes over time. Early in the

website design process, a list of the benefits that consumers want from a website should be

identified.

Table 1 below lists some of the design characteristics which should be considered when

developing a website. It is the combination of these design characteristics which provide

benefits to the users. The failure of one of the characteristics can destroy the customer

experience.

Functional Psychological Content

Usability Trust StyleConvenience Transaction security Atmosphere

Search facilities Data security Price

Speed Product

Table 1 Benefits consumers want from websites

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Nah and Davis (2002) define web usability as “the ability to find one’s way around the

desired information and very importantly to know what to do next”. The design of a website

which gives the user a visual experience requires state of the art technologies but, more

importantly, thorough knowledge of the needs and characteristics of the end users.

The psychological factors which power our emotions are influenced by the message that is

being communicated. If we believe the messages that are being communicated on a website

are 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 be

able to navigate around the site easily. For example, new customers will be looking for a

different experience than returning users but it is presumed that returning customers

previously have had a positive experience. Customers who lapse and do not return need to be

targeted 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 offline

experience we expect to encounter. A poorly designed and dysfunctional site threatens the

goodwill that has developed between the brand and its customer. This potentially not only

affects how successful and effective the web will be as a distribution channel but also the

firm’s physical activities as well. A study carried out using a Dieringer research group

established that half of all adult internet users who abandoned online orders have changed

their overall opinion of that brand because of the negative online experience they encountered.

(Costantinides 2004)

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A more recent study by Kwon and Lennon (2009) found that online performance does affect

offline beliefs. A study carried out by Demandware4 in May 2011, found that 52% of

respondents who had a bad online experience were less likely to shop for the same brand

offline.

The importance of the visual appeal of a website and how much interaction takes place on

that 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 internet

shopping it was discovered that consumers under the age of 25 were more willing to use new

technologies. He doesn’t give the exact reasons why this is so. The new technologies

highlighted were mobile phones and computers. He also segmented the consumers by age

group and found that consumers under the age of thirty-five preferred the TV for finding out

about new products than people over thirty-five. The people over thirty-five preferred

speaking with store attendants to gather their information. The inference from this is that TV

adverts 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 the

same theory holds true for online consumers under the age of thirty-five when they are

watching 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

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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 important

motivational factor across all age groups.

If a website is visually poor and cannot deliver a positive experience then there is little

chance that customers will have a positive attitude towards that website. If they do not have a

positive attitude will never become loyal customers.

Interaction

Rafaeli (1988, p. 11) defined interactivity as: “An expression of the extent that, in 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.”

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 search

engines 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

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Lee (2000) believes that a more efficient way of measuring interactivity is to analyse user’s

attitudes and perceptions.

Analysis of process, function, or perception must be used in conjunction with dimensions

which include how much control individuals have and the time frame involved.

The internet encourages interaction and allows online vendors to personalise the service they

offer. When customers are satisfied with a service they have received they also facilitate

interaction with other online users because they are willing to share experiences and

suggestions. This encourages a networking of experiences effect, where positive consumer

experience help reduce uncertainty and cognitive dissonances. Networking and establishing

contact with other online communities has become very acceptable. Web 2.0 has facilitated

this. It is not seen as intrusive and has a powerful impact. Communities across the web use

online forums, chat rooms, bulletin boards to comment on their experiences. From a strategic

perspective firms must recognise that Web 2.0 has given customers more control, which has

meant that firms have had to become more efficient. The nature of competition for many

industries has changed with the introduction of Web 2.0. The media sector has experienced

this change more so than other industries - newspaper sales and classified adverts have been

decimated while community sites such as Facebook and Twitter have become the dominant

media channels.

This online networking effect is considered to have the same impact as word of mouth but in

an 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 a

single interaction. The premise behind structure theory is that structure supports and

encourages interaction.

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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 and

because current experiences are influenced by past experiences learning takes place. When

sustained interaction takes place it is purposeful, goal driven, dynamic, and continues over

time.

The design and layout of web pages support the theory of structure. Websites are

continuously evolving with new functionality being added constantly. Examples of new

functionality include personalisation, online payment systems and interactive media.

Structure also encourages positive online behaviour. An example of this is Wikipedia or

YouTube. Users of these sites police the sites for inappropriate content and then have it

removed. They set the acceptable norms and other users adhere to them. This could be

considered an informal code of conduct which also evolves. Web 2.0 has made the evolution

of the code of conduct easier because it has become accepted practice for web users to leave

comments and feedback in structured areas on websites.

There are always external threats and sustainable interaction must be aware of the threat of

substitutes or compliments. Technology is continuously striving to make processes more

efficient and when interaction is a core part of the consumption process it is always possible

to substitute some element of that interaction. Online, this happens very fast. This tends to

happen when a new technology makes the existing technology redundant. Online video has

now become a substitute for static images.

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What structure theory is proving is that interactivity is a combination of two functions. Firstly

it is a process, in that consumers and marketers are engaged in interactivity to achieve a

common 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 because

interaction forces it change. This supports the hypothesis that interaction caused a

behavioural 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 communications

The challenge with interactive media such as the internet and interactive services which use

the internet as a distribution channel is to find ways to measure the effectiveness of those

channels; 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. This

personalisation is done by allowing the users to choose what types of content they are

interested in receiving.

Leong, Huang, and Stanners (1998) scrutinized 10 key media attributes where the objective is

to

(1) Draw attention

(2) Convey detailed information

(3) Stimulate emotions

(4) Change or maintain attitude

(5) Involve the audience

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(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 providers

have to address these attributes and find ways to make sure that new media is aligned with

each of these media attributes.

Interactive media has changed the way we communicate. It has become a two way process

where the principle objective is to encourage interaction by the end user.

Duncan and Moriarty (1998)6 argued that “communication (rather than persuasion) is the

base that forms the relationship between the customer and the marketer, even as the rate of

interaction between them increases”.

In order to understand interactive media it is important to analyse the structural

characteristics of interactive media and identify why interactive media is effective. The

effectiveness 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 the

dimensions 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 they

get.

6 Duncan, Tom and S.E. Moriarty. 1998.”A Communication –Based Marketing Model for

Managing Relationships.” Journal of Marketing 62 (April):1-13

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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 it

doesn’t matter what method of analysis is used to measure the web as long as that analysis

includes a format for measuring the attitudes of web users.

The current means of gathering information about interaction on the web is to use derivatives

of established exposure measurement techniques such as “click rates”, which is the number of

clicks 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 analyse

those results in an interactive context. New measures in a traditional context may not work

as traditional frameworks were designed before internet media had begun to substitute

traditional media. The design of those measurement frameworks didn’t take into account

how interaction was influencing the media. Media is continuously evolving but many of the

frameworks have remained static. To some extent the data is manipulated to fit the

framework and because of this the results may be inaccurate.

Any framework designed for measuring interactivity must be diagnostic; it must measure

process as well as outcomes. It must be longitudinal and able to track changes in customer

requirements and levels of product knowledge. The framework should include

psychographic questions to capture the characteristics of consumers. Identifying consumers

who think in pictures or words is important because consumers who find pictures and visuals

more appealing are thought to use a more complex processing mechanism.

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During the course of his investigations (Burke 2002)7 categorised shoppers.

He found that the visual appeal of products in consumer electronics, furniture, lighting and

apparel was critical to the purchase of those products. In the furniture category he found that

50% 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 media

It 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 new

markets are created and demand is proven to exist in those markets then the race is on to

secure the resources to meet that demand. One of the most effective ways of creating a

technical edge over competitors is an early start to investment in technology. Getting to grips

with technology early allows a firm to accumulate and master the technical knowledge

required to maintain a lead over their competitors. This can be a risky strategy because a firm

can accumulate significant costs before they generate a return on that investment. In the

worst 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 switch

to 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 of

these 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

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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 chances

of success are slim because the market risks and technology risks increase. The market risks

are those risks associated with the demand for the new offering. These risks include the

demand for the product and the growth rate of that demand. The technology risks are the

risks associated with the evolution of the technology that is used in the delivery of the

product or service.

The chart below developed by Suarez and Lanzolla outlines the different outcomes between a

technology driven market and a demand driven market.

Table 2 Technology leading vs. Market demand. Source: Suarez and Lanzolla (2005)

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Interactive media is no longer at the early stage in its lifecycle where only early adopters are

using 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 media

has 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 interactive

media has established itself, new ways of increasing the frequency of consumer interaction

with it will be developed.

This means that the demand is being driven by the market and that the rate of technology

change 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 their

internal capabilities.

Listing capabilities is not a new exercise, but it is different from identifying assets or the

opportunities and threats of entering a new market segment.

Capabilities should be thought of more as a collection of skills and knowledge that has been

accumulating 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 in

securing access to them. They are also non transferable

Leonard and Barton (1992) suggest that there are four components in the successful

distribution of knowledge. Firstly knowledge and skills of employees, secondly the know

how to understand the information systems, thirdly the internal management structures that

create and manage the information and lastly the day to day routines and values which shape

the culture.

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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 customer

segments?

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 of

the interactive video. As the frequency of interaction increases so will the revenue and

profits generated from the use of interactive media.

Promotional video in Tourism

I’m including a review of the use of promotional video in tourism. Promotional videos or TV

adverts have been used effectively to promote destinations. The purpose of the

advertisements is to stimulate us visually and introduce us to the positive experiences we will

have if we visit that location.

Buhalis (2000, p.112) stated that “promoting destinations essentially implies the development

of communication channels with clientele and other stakeholders to increase awareness and

persuade 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 about

tourist destination.

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There are many views on which of the different media are the most influential. Advertisers

prepare the text and imagery to give locations a sense of meaning and then they use

technology 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 destination

advertising.

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 tested

promotional video.

A focus group of forty-seven international travellers was tested. The travellers were from

Asia, Europe and America. The focus group was tested with a list of general destination

images. 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 was

similar 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 emotions

the focus groups had of China. After watching the video the participants were asked to add

any 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 travel

destination was changed and the desire and likelihood of the participants going to China

increased. The video succeeded in creating a behaviour change.

8 Govers R, Go FM, Kumar K. 2007. Promoting tourism destination image. Journal of Travel

Research 46(1): 15–23.

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There is some evidence to suggest that movies and television series can influence the choice

of destination. New Zealand had an increase in tourism after the success of the Lord of the

Rings movies. The movies brought the scenery of New Zealand to new audiences.

Promotional Video in Music

Promotional videos have been used by the music industry very successfully. Music videos

help to establish a relationship between artists and their audience. This is why the success of

music videos as a promotional tool is being reviewed.

Enhancing the customer experience was identified as one of the key growth strategies from

the E-retail report compiled by Verdict research. According to surveys Verdict conducted,

customers want a better visual experience, especially in clothing and footwear. New

technologies which enhance the appearance of products now provide a better visual

experience and help enhance the overall customer shopping experience.

The music industry was one of the early pioneers of promotional video clips. Major record

labels have been using promotional clips since the 1970’s to promote their artists. The goal of

the music video is to help increase the sales of the artist, but video can be a long term

strategic initiative as it has been with Rap and R&B. In May 1981 MTV launched first 24

hour cable music television channel. This new distribution channel for promotional video

transformed the industry. The popularity of music video revitalised a music industry which

had been in recession. It revived consumers’ interest in music.

28

Madonna, Cyndi Lauper and Boy George were up and coming artists in the 1980’s and music

videos allowed them to cultivate and promote their unique image. Madonna has reinvented

her image many times and this has always been accompanied by a promotional video. Rap

and R&B music got virtually no air time twenty years ago in the USA. With funding from

the record companies and investment in promotional video, MTV increased the amount of air

time 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”. The

music video is delivering the content for the TV distribution channels such as MTV while the

audio 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 twenty

three 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 singles

had accompanying videos.

By 1994, the industry was spending $150 million annually on video clip production with the

average promotional video costing $60,000-$80,000.9

Promotional videos were strategically important to record labels. Promotional video and

MTV 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 would

then 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 recording

industry”. Popular Music Vol. 16/3 pp.295

29

Customer loyalty & Net promoter score

Customer loyalty is not easy to define. Is customer loyalty driven by attitude or by

behaviour? If it is the case that customer loyalty is driven by attitude what should be

measured and how should it be measured?

Are behaviour metrics such as frequency of purchase and the value of the items enough to

determine customer loyalty?

(Assael, 1992) suggests that “The very term loyalty implies commitment rather than just

repetitive behaviour, which suggests that there is a need for a cognitive as well as a

behavioural view”

As part of their analysis Reichheld and Sasser (1990) tried to estimate what contribution

customer retention made to profitability. They argue that “as a customer’s relationship with

the company lengthens, profits rise. And not just a little. Companies can boost profits by

almost 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 shift

in management thinking and focus towards improving customer satisfaction with the aim of

increasing the customer retention ratio when customers are worth keeping i.e. profitable

customers.

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 ever

about customers, it has become increasing time consuming to manage all that data.

30

It is reaching a point that customer loyalty models are becoming so complex and difficult to

implement that managers are reluctant to implement them. Traditionally firms would engage

with market researchers and consultants to complete customer analysis. These firms are

specialist in customer analysis.

There were many sceptics who didn’t believe in the concept of customer loyalty. The reason

they found acceptance difficult was that there were multiple outcomes, and too much

management time was used up administering these outcomes.

An article in the December 2003 Harvard Business review entitled “The one number you

need 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 a

firm on an 11 point scale. Respondents most likely to recommend are called promoters and

give scores of 9 or 10. The least likely are called the detractors and give scores of between 0

and 6.

The promoters are subtracted from the detractors to reach the net promoter score. This is

generally 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 mobile

communications word of mouth can become viral in a very short time. The advantage of

word of mouth is that is cheap. Word of mouth assumes credibility because consumers

believe they are receiving credible information rather than being sold to.

31

In a study by Godes and Mazlin 10

on the effects of word of mouth, they could not establish

the 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 the

best indicator of a firm’s growth. There is some evidence that word of mouth can improve

the sales of a company.

The general consensus is that word of mouth is positive for a company.

E-Learning

It is accepted that new media mimics the existing media it is replacing. Early photography

imitated painting while early film making mimicked stage shows. The web as a

communications platform has broader capabilities than books or class room teaching. The

web has given consumers access to vast amounts of information. This has led to discovery

based learning. Discovery based learning is learning that occurs from spending time on the

web accessing different sources of information. Surfing the web is now an acceptable form

of entertainment.

John Seley Brown (2000) considers this fusion of learning and entertainment as

“infotainment”

We are in a new “learning ecology” Brown (2000).

10

“Using online conversations to study word-of-mouth communication”, Marketing Science ,

Vol. 23 (Fall) , pp. 545 – 560.

32

E-learning is still evolving and one of the main challenges is how to transform e-information

into human knowledge. We need to know what it will allow us to do compared to what we

can do currently. Educators recognise this as social challenge and not a technical one. Web

users 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 as

video is a technology which allows for a greater transfer of knowledge than traditional print

media. Knowledge is a combination of explicit knowledge or “know what”, and tacit

knowledge or “know how”, where skills and practices are shared and demonstrated. The

advantages of E learning are that they build on communications and interaction.

The combination of persuasive technology and mass distribution across different devices

means 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 by

changing their behaviour? If E-learning does have the capability to change behaviour then

the expectations and outcomes of the learners will also change.

Persuasion technology

Modern 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 called

Captology.

33

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 and

secondly on attitude or behavioural changes.

The spread of computers and the network effect they create is very powerful. The influence

of computers on our lives continues to grow and because we are more dependent on

computers than ever, the way we interact with computers has the ability to change our

attitudes and behaviours. Computers and computing technology have the power of

persuasion.

Studies suggest that people form social relationships with computers (Reeves & Nass, 1996).

A positive customer experience is about providing memorable interaction. The user gains

information about a product or service they didn’t already know. Interacting with computers

and software on computers can deliver explicit and tacit knowledge.

The design and layout of computers and more importantly software applications which use

computers influence our motivation to interact with the technology. If we are motivated to

interact with computers, then our attitude towards computers will be more positive and we

will expect to enjoy our experience.

As previously discussed, a poor online experience can lead to negative offline perceptions

about a product or service. The unintended consequences of overlooking human computer

interaction can seriously damage reputations.

The purpose of having a website is to promote a product or service; to make it easier for your

customers to learn more about you and what you have to offer. For example, Amazon.com

has a website which encourages people to buy repeatedly.

34

They do this by making the website not only easy to navigate but also uses persuasion

applications which help motivate you to make further purchases. These persuasion

applications range from user registration and product reviews to one click purchasing. All

these applications work together to provide the customer experience.

Technology lifecycles on the web are becoming shorter. The internet has become a mature

market; 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 broadband

speeds were not quick enough to allow viewers to have a rich visual media experience. Now

with broadband more widely available rich media such as video is established.

Video technology within the framework of computing technology is one of those tools of

persuasion that is having a significant impact on changing consumers’ behaviour. Video has

the ability to increase the human computer interaction because we know that interactions

appeal to our visual senses and absorbing tacit information through observation is one of the

ways we learn.

Captology is made up of macro and micro elements. The macro objective is to change the

behaviour of users. The micro subset includes applications which enable the macro effect

such as spreadsheets, power point and word processing. Video technology crosses both

macro and micro elements. The macro elements are considered the interactive elements

which help transfer knowledge, the micro elements are applications which help network and

share the media.

From the evidence laid out in the literature there is reason to believe that interactive

promotional video has persuasion capabilities, encourages learning and can generate

customer loyalty.

35

For interactive media to be influential there needs to be market demand. Websites must

generate a positive experience for their users. If website users do not have a positive attitude

towards 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 Methodology

The Business Mastery Project is based on a quantitative approach. The purpose of the

research is to investigate if promotional video increases customer life time value and to make

recommendations on implementing video as a communications strategy to David Mellor, who

is a business mentor and a member of the executive education team at Cass business school.

www.davidmellormentoring.com

To establish whether promotional videos does influence customers it was necessary to

identify 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-one

settings”.

The promotional videos had to be accessible through an internet browser and available for

viewing across different devices such as PC, laptop or mobile phone.

36

Data collection

The research has been underpinned by a quantitative research methodology.

A comprehensive literature review of what causes internet users to interact with online

advertising, why promotional video has been successful in the music industry and why

customer lifetime value is important has been carried out.

Survey design

A number of key success factors were identified and the risks associated with achieving those

success factors were identified during the design of the survey.

A) Non-incentivised survey responses

It is widely accepted that people do not like completing surveys. Despite this, it seemed that

an online survey was the best way of gathering information, because the survey candidates

had 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. Incentivised

surveys can suffer from selection bias because incentives such as monetary rewards can

encourage people who need the money to participate in the survey.

When monetary rewards are offered (Hanson 1980) argues that "one expects that although

compliance is attained with the use of an incentive [i.e., the subject response] the degree of

compliance [i.e., the quality of the response] would be lower".

37

In order to mitigate the risk of a low response rate the survey had to remain simple and

because the survey was non-incentivised it was decided to limit the length to a maximum of

20 questions which would take no longer than 5 minutes to complete.

B) Interact with the website

To complete the survey respondents had to interact with at least one of the videos on the

website. In order to mitigate the risk of respondents not being able to find the website or the

video gallery tabs within the website, the links to those pages were embedded within the

survey.

There are five videos in total located in the video gallery section of the website ranging from

one minute ten seconds to five minutes in length.

The topics include one to one mentoring, entrepreneurship, and corporate development tools

such as PRISM.

C) Question design

It was necessary to keep the questions as simple as possible because of the time constraints

and the requirements for participants to interact with the website.

The questions were short, easy to read, and simple to answer. The questions and answers

were 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 these

questions is ranked according with importance, with 1 being the least important and 5 being

the most important.

38

There are questions set out using Likert’s scales.

The Likert scale is used to gauge the attitude of respondents. The range is from “strongly

disagree to strongly agree”. Respondents answer accordingly if they agree or not.

The survey was divided into three subcategories. In the first subcategory there were six

questions designed to identify the general attitude the respondents had towards the internet

and whether they thought interactive media had value as a communication tool. The

questions followed a logical order, were easy to answer and would not put off respondents

from completing the rest of the survey.

The second subcategory was more specific about David’s website and this is the point that

respondents needed to open his website and watch one of the videos.

The third section collected general demographic data about the respondents.

D) Survey distribution

The survey was distributed online via www.kwiksurvy.com. An email invitation was sent to

my 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 questions

were numbered 1 to 20 and general instructions were given so that respondents were clear on

how to answer the questions.

The fonts remained consistent throughout.

39

Survey response rates

Non-incentivised survey response rates are low. General client satisfaction level surveys of

12 to 20 questions have response rates of less than 10%.11

Determining the correct sample of people to send the survey was based upon three criteria:

A) Business people

B) Entrepreneurs

The category “Business people” was defined as a group of people where the participants had

an interest in business. This included members of business associations etc.

The entrepreneurs’ category was defined as people who were owner/managers and who

needed mentoring.

Survey sample (No. of people) Entrepreneurs

Business

associates Other

David 900 300 0

Ross 30 70 100

Table 3 Survey sample

They survey began on the 13th

of July and concluded on the 2nd

of August. One reminder was

sent out during the second week of the survey. 110 completed surveys were received, which

is 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

40

Survey analysis

Introduction to the findings

The 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 profile

with the use of promotional media.

Critical analysis

The responses to the survey will provide the answer to the research question “does online

interaction with promotional video increase learning and customer lifetime value?”

In addressing the question it was decided to focus on four general areas that would underpin

the findings from the survey.

Accuracy of the sample

Analysis of the number of respondents who answered the survey allows some inferences, on

how the overall population would interact with interactive media if everyone in the

population had been sampled, to be made. It was necessary to collect as many responses as

possible 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 the

population versus surveying the full population

There are three acceptable margins of error categories 90%, 95%, and 99%.

41

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 if

respondents were sampled continuously, that the answers would be exactly the same 95% of

the time.

From the beginning it was necessary to collect as many responses as possible so that the

survey was statistically significant.

The minimum level of responses I was looking for was 96. At that level inferences can be

drawn 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 during

which 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 are

less than 10%. A response rate of 7.8% is acceptable and satisfactory response ratio. Given

the difficulty in getting responses when using non-incentivised surveys, this is a good result.

Demographic profile of the respondents

Analysis of the demographic profile of the respondents gives us an insight into the age

profiles, genders, and professions of David’s clients. It was necessary to start with

demographic analysis even though demographic information can be quite limited in what it

tells us about the respondents, because it doesn’t capture any attitudinal information and

should 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 respondents

would have been male.

42

Traditionally, it has been males who have been the entrepreneurs, but recently this has been

changing, and there has been an increase in the number of female entrepreneurs and business

owners. According to the University of New Hampshire Centre for Venture Research, the

percentage of women among “start-up capital” seekers in the US has increased from 12.6% in

2000 to 20% in 2011. The success rate of the number of women who applied for funding has

also increased from 9.5% in 2008 to 13% in 2010.12

64.5% of the respondents were male and 35.5% were female. This is roughly 2/3 male and

1/3 female. Further analysis will show how this statistic changes and what implication this

has for interactivity and customer loyalty.

It is generally accepted that most people who think about becoming entrepreneurs do so when

they are in their 30’s. By the time entrepreneurs are in their 40’s they have passed through

the start-up phase and are into the growth phase. As David’s clients are entrepreneurs and

business managers it can be presumed that the majority of the respondents in the survey are

between the ages of 30 and 45.

12

http://online.wsj.com/article_email/SB10001424052702303627104576413670597119208-

lMyQjAxMTAxMDAwNjEwNDYyWj.html

43

Q18:Age

5.45%

7.27%

12.27%

16.36%

18.18%

13.64%

11.82%

6.36%

3.64%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

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

%

Table 4 Age profile of respondents

The chart above breaks down the age profile of the respondents. The age group with the most

respondents is the 40-44 year old age group with 18.18%. 46.8% of respondents fall within

the 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, but

within the 30-44 age groups it was necessary to carry out further analysis and find out if the

gender 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 30-44

Table 5 above shows that male gender is more prominent. It can be seen from the

percentages that the female gender increases as the age groups increase.

44

This is significant because during the literature review it was suggested that older people

were less likely to have positive attitudes towards the web.

This statistic also suggests that females are also entrepreneurs and business owners but they

tend to be older than their male equivalents. The significance of this is that for David there is

a 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 adopters

only but has spread to a much greater audience.

Analysis of the different age groups suggests that entrepreneurs and business owners who are

established and have the resources to invest in their business are most likely to fall within the

30-44 age groups. They are also the ones who will benefit most from the advice that David

has to give. The reasons they will benefit the most is because he will have encountered many

of the problems they have experienced during his corporate life. His ability to communicate

his experiences and whether the respondents learnt from interacting with David’s video clips

is dealt with further in the section on interactive learning.

The UK economy is mainly a service based economy and the majority of entrepreneurs are

focusing on delivering services. It was necessary to offer a selection of options where most

of the categories were service orientated rather than manufacturing.

Analysis of the breakdown of the industry profiles is expected to show that David’s clients

provide specialist information services. During the survey design it was necessary to gauge

the attitudes of the respondents on what they thought were the most important benefits of the

internet. Access to the latest information was ranked the most important benefit. Analysis of

the industries where the respondents are employed should confirm that a large percentage of

the respondents are employed in a consulting or professional capacity.

45

It has been suggested in the literature review that interactive media is suitable for E-learning

and this will be investigated further in the report.

Table 6 below breaks the industries down by profession.

Q19:What sector is your business in?

3.3%

0.8%

8.2%

9.8%

1.6%

20.5%

7.4%

3.3%

7.4% 7.4%

9.9%

15.6%

4.9%

0%

5%

10%

15%

20%

25%

Retail

Com

mun

ications

Finan

ce IT

Telec

oms

Con

sulta

ncy

Bus

ines

s se

rvices

Med

ia

Edu

catio

n

Mar

ketin

g

Pro

fess

iona

l ser

vice

s

Other

N/A

Sector

%

Table 6 Profession by Industry Sector

Consultancy is the sector where the most respondents are employed and communications is

the 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 that

those respondents are the MBA students from Cass Business School.

The second largest segment is “other” with 15.6%, the list of industry options was small

versus the number of industries and sub industries that exists, and it’s a little surprising that

the other category didn’t have a larger percentage.

46

To get a better insight into which industries maybe most inclined to interact with promotional

media industries which share similar characteristics are grouped together. The reasoning

behind this is that advisory services such as consultancy are driven by the need to

communicate explicit knowledge while in the IT industry there is a need for communicating

explicit and tacit information.

The first major grouping for analysis includes: Consultancy, Business services, Professional

services, and marketing. For the purpose of this report these are referred to as advisory

services.

45.2% of respondents are represented by these four categories. It can be presumed from this

statistic that a significant number of respondents are in careers where sharing their knowledge

is critical and where effective communication methods are required.

The second major grouping of industries which are related is: IT, Communications, Telecoms

and Media. Together they represent 15.5% of the respondents. For the purpose of this report

this group is referred to as technology services.

It is not surprising that these industries are so well represented. The new economies that have

sprung up around the internet and IT have attracted many new entrepreneurs who have left

traditional industries and started up new ventures with internet and IT services.

The technology and advisory services between them employ 60% of the respondents.

47

Final investigation of the demographics of the sample investigates the gender breakdown

within 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 professions

The breakdown between male and female respondents in table 7 shows that in all but one

profession, Business Services, the male gender is roughly 75% of the sample versus the

overall survey where males are 64.5% of the total survey.

Analysis of the demographics shows that the gender balance remains relatively consistent

with some variation in the percentages in the 40-44 age groups. The professional profile of

the 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 based

services are the most likely to use the internet to search for the latest information.

48

Time and Frequency

Frequency is often considered an indicator of customer loyalty. When someone has a

positive experience on the internet they are more likely to have a positive attitude towards the

internet. The more times a person interacts with a website the greater the chance that an

emotional attachment will develop between the user and the website.

We know from the general attitude questions in the survey that access to the latest

information 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 an

advantage over their competitors.

It was necessary to find out how much time our respondents spend on the web per week

developing 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 their

business.

General Internet trends

The general trend is consumers are spending more time online. The internet has developed

into a fully integrated entertainment, lifestyle and shopping utility. Internet subscription is

maturing 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 time

spent online will increase as the internet reaches maturity.

According to a BBC news report,13

British web users in 2010 were spending 65% more time

online than they did three years previously.

13

http://www.bbc.co.uk/news/10122834

49

UK Online Measurement Company (UKOM) pointed out that the average surfer in 2010 was

spending 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 spend

more than 22 hours per week online as the time they spent on social and entertainment sites

was not surveyed. Demographic analysis shows that business advisory services which

includes 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 7

of those coming from a consulting background and 4 from professional services.

The frequency with which respondents search for consulting advice is an indicator of how

often 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 for

this advice at least once every three months.

These figures demonstrate that it is essential to use the internet to access the latest

information and that consumers expect greater amounts of information to be available to

them.

This supports the theory by (Bakos 1997; Brynjolfsson and Smith 1999), who believe that

customers demand more information about products.

From the analysis on time and frequency, we know that more time is being online with an

increasing amount of time being spent searching for the latest information. The amount of

information on the internet is increasing all the time. The corresponding effect of this

increase in information will be an increase in the amount of time spent online.

50

Attitudes towards the web

This section analyses how interactive media changes attitudes towards the web. How do

interactive media change attitudes on the web?

From the literature review we know that creating a positive experience is important for

generating positive attitudes towards the web.

Firstly, it was necessary to find out what the respondents thought were the most important

benefits of the web. Establishing those benefits would make it easier to identify their

motivations and attitudes. The first question in the survey asked the respondents to rank the

most important benefits of the internet using a scale of 1 to 5, with 1 being the least important

and 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 to

information implies that it easy to access the information and that the information is timely

and accurate.

As access to information is the most important benefit the survey investigated which

candidates watched promotional clips and whether they interacted with David’s website.

David has five video clips on the website which discuss topical business issues.

51

If interactive media is on a website and it is not being viewed, then website users are not

experiencing all the website has to offer. A poor experience is a sure way of prompting

customers 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?

7%

26%

53%

14%

0%

10%

20%

30%

40%

50%

60%

Always Weekly Occasionally (once every 3 months) Never

Frequency

%

Table 8 Do respondents watch promotional video

Collectively 86.73% of respondents watched videos. From these percentage rates on can infer

that interactive media is no longer at the early adopter stage. 53% of the respondents watch

interactive at least once every three months.

52

This indicates that there is demand for interactive media and that the frequency with which

respondents engage with interactive media should increase as the supply and quality of the

interactive 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 general

appeal of interactive media.

Further investigation into the 58 respondents who watch video clips occasionally shows that

31 out of the 58 respondents, 53.4%, were between the ages of 30 and 44. The table below

breaks 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 clips

From a commercial standpoint the majority of entrepreneurs and owner managers of small to

medium 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 age

groups and feel comfortable that his material will be watched.

53

Probing further into general attitudes about how viewers rate interactive media as a way of

giving advice, Question 5 from the survey asked respondents whether they agreed with the

statement 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 a

good way to give advice.

The last question on attitude towards the net and interactive media came from the analysis of

two questions simultaneously. The questions were “Do you watch promotional video clips if

they 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 three

months) watched interactive media on websites with statistics form the second part of the

question, respondents who agreed that interactive media is a good way to give advice gave us

a 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. This

sector had 10 responses out of the total of 35.

The consultancy industry is one of the first professions to use communication and media

techniques to improve the communication of information. These statistics support the

previous demographic analysis of the different professions and the amount of time those

professions spend online developing their business.

The age groups most represented from the 35 respondents were the groups from 30-34 and

35-39 which had 8 respondents each. 16 respondents represented 14.5% of the total

respondents. Again this age profiling supports that previous analysis on entrepreneurs and

business owner managers tend to be between the ages of 30 and 45.

54

This analysis gives an insight into the attitudes of the respondents towards the web and their

willingness 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 are

visually 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 the

demographic statistics and the attitudes statistics, it was a bit surprising that the advisory

industry which includes consultancy and professional services were the most inclined to

interact with promotional media. This could be because the respondents in these professions

realise the value of information more than respondents from other professions.

Interactive media changes attitudes on the web because of the experience it delivers.

Interactive learning

The next area of analysis is how interactive media encourages learning. What are the key

capabilities that interactive media has and how does it implement them?

The consulting and professional services professions are expected to benefit from

advancements in E-learning. One of those advancements is how interactive media will

increase communications. Technical barriers to E-learning such as internet penetration,

broadband speeds, and the attitude of consumers to accept new technologies, are falling. The

acceptance of electronic books such as the Amazon Kindle has been a milestone in the

acceptance of E-learning. In the few years since the launch of the Kindle the technology has

quickly passed through the early adopters phase and is now being accepted by the early

majority. 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

55

This shows that the traditional norms about education are evolving. E-leaning is now

becoming market driven rather than technology driven. When there is market driven demand

there is less chance of technical obsolescence. Interactive media is at a key stage in its

development.

To analyse the potential influence interactive media will have within an E-learning

environment it was necessary to get a better understanding of what the respondents thought of

media clips. If the majority of respondents thought that interactive media was only for

entertainment, this would have been quite negative. The survey indicated this was not the

case. The respondents think interactive media is a good way to give advice but this needs to

be 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

6.3%

36.6%

26.8% 26.8%

3.6%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Strongly disagree Disagree Not sure/ NA Agree Strongly agree

Opinion

%

Table 10 Attitude to media clips

56

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 that

media clips can be used for more other application than just entertainment. That is they

disagreed with the statement.

This also supports the framework that users get a positive experience from interacting with

media.

It can be assumed that users who agreed with that statement did so because they may be

waiting to have a positive interactive experience or they may have had a positive experience

but subconsciously that experience hadn’t registered with them.

The respondents who had a positive interactive media experience may have had that

experience while they were online purchasing goods or learning about new products and

services.

It is possible that the 27% who are not sure would react positively if they had engaged with

interactive media. That experience may not have happened for them yet or they could be

considered part of the late majority or laggards.

Further analysis of the 36.6% or 42 respondents who disagreed with the statement is in table

11 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 9

The table shows that of the 24 of the 42 respondents came from the professions where

information and communication of knowledge is essential. This also supports our previous

demographic analysis and attitudinal analysis.

57

A key part of learning is how well the tutors conduct themselves and their ability to

communicate their experience and knowledge. Interactive video is only as good as the

content 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 experience

they 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 interactive

media as effectively as possibly.

His ability to make an impact using interactive media will have a direct impact on the

audience 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 on

a 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 how

David 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 logically

this 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 that

the message came across clearly.

58

The third statement was –

“Video clips were too long” -

which intended to find out how long the viewers would be engaged before they lost interest

and 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. The

inference from this ranking is that the respondents are learning from viewing the videos and

that they regard the information as valuable.

A breakdown of the respondents in question 13 shows us that the number of respondents per

category 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 attribute

The main difference is in the consulting category, where there is an increase in the number of

consultants who agree that David communicates his knowledge clearly.

In the final review of educational merits of interactive media as an educational application it

was necessary to find out if the respondents wanted to learn more after interacting with

David’s videos.

59

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 David's videos I want to learn more about business

4.5%

11.7%

56.8%

34.3%

2.7%

0%

10%

20%

30%

40%

50%

60%

Strongly disagree Disagree Not sure/ Na Agree Strongly Agree

Opinion

%

Table 13 Attitude towards learning more about business

34.3% agreed with the statement and 2.7% strongly agreed with it. 56.8% of the respondents

are unsure or considered the question non applicable. That could be because the topics that

were 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 gender

profile 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 more

These statistics prove that both genders are receptive to learning via interactive media.

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Importantly, only 16.2% of the respondents did not want to learn more about business after

watching the clips. The assumption behind the 16.2% who didn’t want to learn is that they

were the respondents who were not involved in business. We know this because the survey

was sent to MBA students in Cass and other respondents who were not entrepreneurs/owner

managers. We also know that 30% of respondents do not search for consulting advice at all.

Repeat viewers & Net Promoter Score

The final section for analysis is how interaction can create lifetime value. Lifetime value is

linked with customer loyalty. Lifetime value is extremely important because the cost of

acquiring new customers is continuously increasing. A small increase in the number of

retained customers can lead to a significant increase in revenues and profits. Traditionally,

lifetime value has been calculated using a mathematical formula which discounts the future

profits of customers and attaches a new present value to each customer. In this study no

transaction was taking place so it was necessary to use a different framework for calculating

customer loyalty.

It was decided to use the Net Promoter score. The Net Promoter score is a reasonably new

framework for predicting firm growth. Its simplicity has won it many supporters but there

are some doubters as to how accurate it can predict growth. The basic principles behind the

net promoter score it is that positive recommendations from existing users translate into new

sales 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 a

positive experience when they viewed David’s clips.

61

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 be

indicators of future intention to return to the site. This also supports the theory that frequency

is an indicator of customer loyalty. We already know from the respondents that the main

benefit of the internet is access to information and that David communicates his knowledge

clearly. These two pieces of information are the two key reasons why 38.2% or 43

respondents are willing to return when David posts new interactive videos.

Q14: If there were regular videos of David giving advice would you watch them

38.2%

27.2%

34.6%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Yes No Not sure

Opinion

%

Table 15 %age of respondents who would watch regular videos of David

62

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 videos

The table compares the age profile of the respondents who took the survey and the age profile

of 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 videos

The survey established that a significant number of respondents are willing to watch regular

videos. It also investigates whether the respondents who ranked David a 9 or a 10 in the net

promoter 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 respondents

and those willing to recommend David.

63

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 are

unwilling to recommend and award a score of between 0 and 6 and the “promoters” award a

score 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 a

3 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

17.0%

3.6%

6.3%

1.8%

4.5%

14.3%

5.4%

9.8%

17.0%

3.6%

17.0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Rank 0 Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Rank 8 Rank 9 Rank 10

Ranking

%

Table 18 Net promoter score rankings

Table 19 below calculates the Net Promoter Score. From the table we can see that the score

is negative. The first assumption to be drawn from that score is that very few people are

willing to recommend David and that the promotional videos he has commissioned are not

stimulating enough for the respondents.

64

This suggests that promotional video does not fulfil customer expectations; that promotional

video is not a suitable tool for communicating with customers; that it does not encourage

frequent 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 the

videos.

40% or 44 people didn’t watch any of the videos. Respondents who would be unwilling to

watch 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 score

A better way to prove that his investment in promotional video encourages learning and

customer loyalty is to compare the number of respondents who are willing to watch regular

videos 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 videos

of David. 24 respondents ranked David either a 9 or 10.

Proof of customer loyalty will come from analysing the unique id numbers of the respondents

who watch regular video and then gave David a 9 or 10 ranking on the Net Promoter Score.

65

Table 20 Respondents who would recommend David

Of the 43 respondents who were willing to watch more videos and the 24 respondents who

ranked 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 promote

David to their friends. These 19 respondents are proof that interaction with promotional

video 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 small

percentage increase in customer retention can lead to a significant increase in customer

profits.

This figure proves that interaction with promotional video increases learning and customer

lifetime value.

Unique ID number of people who

would watch more videos

Unique ID number of people who

awarded a 9 or 10 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

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Limitations and Further research

Limitations

There has been very little research carried out into interactive promotional media and it was

the intention of the author to supply evidence that interactive media can improve learning and

generate customer loyalty. From the very beginning of the research project it was necessary

to identify a website that was offering interactive promotional media.

The limitations are survey limitations and methodology limitations.

Survey limitations

There were a number of limitations to using surveys for gathering information. Early in the

project a distribution list was drawn up of who were the most likely people to participate in

the survey. Further screening could have been carried out to make sure that the survey

candidates were more suitable. Were they entrepreneurs or business owners and did they use

the internet to search for business consulting advice?

Non-incentivised surveys have low participation rates; to increase the participation rates a

financial incentive could have been included. Earlier in the report some of the problems

with incentivising surveys using financial rewards were highlighted. The length and design

of the survey had limitations. It was decided that the survey should take no longer than five

minutes 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 to

David’s website. This required that the survey candidates spend some time on David’s site

before completing the survey. It was possible that some of the candidates might click onto

the website but never view any of the video clips.

67

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 before

going on to the next question.

The survey was hosted on a 3rd

party website. If respondents were not familiar with filling

out online surveys then this may have negatively impacted their willingness to complete the

survey.

Methodology limitations

Face to face interviews would be considered the most appropriate form of survey considering

the complex nature of the question, which includes investigating people’s attitudes towards

the web, E-learning and interactivity.

The number of candidates involved rendered this inappropriate so an online survey was

undertaken.

Technical limitations also existed. The assumption was made that the survey candidates had

the required broadband speed to be able to download the videos and watch the video.

Further research

A lot of the literature review had to come from older studies which were carried out during

the Web 1.0 era when websites were not interactive. Banner advertising was considered

interactive during that era. It is only in recent years that high speed broadband has allowed

internet users to watch interactive media clips. Three main areas where further research is

needed have been identified and outlined overleaf.

68

Web 2.0 and attitudes towards the internet

A 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 attitudes

and how the design and layout of a web site influences our browsing experience. More

research could be carried out into how interactive media will influence the design of mobile

devices in the future.

E-learning

Further study into E-learning could analyse the relationship between the duration of media

clips and how successfully they absorb that information. Other studies could focus on the

technology used to support E-learning.

Demand for interactive media

The demand for interactive promotional media is no longer driven by the early adopters, but

compared 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 that

drove the demand for TV adverts and then compare the growth in TV advertisements with the

growth in promotional media on the web. TV adverts were a substitute for radio adverts.

Will interactive promotional adverts become as substitute for TV adverts?

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Conclusions and Recommendations

Conclusions

The research question asked if online interaction with promotional video increases learning

and customer lifetime value?

Currently there is little research on promotional video but over the next few years the use of

promotional video is expected increase because of its interactive capabilities.

Promotional videos from David’s website www.davidmellormentoring.com were used to test

whether 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 had

an involvement in business.

The results suggest that online interaction with promotional video increases learning and

customer lifetime value. Analysis of the survey indicates that access to the latest information

was ranked as the most important benefit of the internet.

This is significant because attitudes determine our willingness to use the internet and our

interaction with websites. Attitudes influence our motivations and our future behaviour.

Respondents were asked if they used the internet to search for consulting/ business advice. A

significant proportion of respondents use the internet to search for advice and search for

advice 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.

70

The literature review point out that media which stimulates our senses is more effective in

delivering positive experiences. Positive experiences on the internet encourage a structural

shift in internet users towards the source of that experience.

When users enjoy an interactive experience they are likely to demand that experience in the

future. 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 interactive

media is www.youtube.com. YouTube has made it simple to watch the videos on its site and

also encourage the structural shift towards interactive media by making it easy to forward

videos to other users.

One of the issues with new media is that it tends to substitute other forms of media very

quickly. Interactive media will eventually be substituted by a new form of media which is

even more engaging.

Interactive media is no longer at the early adopter stage. It has become widely accepted. To

prove this the survey analysed the demographics of the respondents. Respondents from all the

age groups interacted with David’s videos. Respondents from every profession interacted

with the videos but the respondents from the advisory categories - consulting, business and

professional services were the most frequent users. It is possible that these professions

realise the value of information more than the other professions and therefore use the internet

more than other professions. There was no real difference between the genders in their

willingness to interact with the video clips.

The market is still a long way from maturity.

There are significant opportunities for new interactive services.

71

One of the benefits of launching an interactive media service now is that there is demand for

interactive media, and internet users will engage with interactive media if it provides them

with a positive experience. This is important because it increases the chances of success and

generating 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 is

suitable for E-learning, survey respondents were asked if they wanted to learn more about

business after watching David’s videos. 34.3% of the respondents wanted to learn more. The

reason that they wanted to learn more is because David communicated his knowledge very

well.

This supports the argument that interactive media supports E-learning. E-learning is still

developing, but there should be significant future opportunities within education for

interactive media.

Frequency is an indicator of customer loyalty. As previously started, if a website delivers a

positive experience it will encourage more frequent interaction. To prove that frequency is

an indicator of customer loyalty respondents were asked if they would watch regular videos

of David giving advice and if they would recommend David to friends or colleagues who

were looking for business advice.

38.2%, or 43 respondents, said they would watch regular videos of David giving advice. Of

the 43 respondents who would watch David on a regular basis, 19 of those said they would

recommend 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 learning

can increase learning and customer lifetime value.

72

Recommendations

When potential clients of David’s are searching the internet for mentoring and business

advice and they navigate to www.devidmellormentoring.com, the relationship between

themselves and David begins. First impressions of a website are extremely important. A

clients’ first encounter with a website should convince them about the quality of service they

are going to receive. First impressions of www.devidmellormentoring.com should be

motivating and encourage a positive attitude towards that website. Clients should be looking

forward to having a positive experience.

The literature review indicates how a poor online experience influences offline decisions. If

a website cannot generate deliver a positive experience for its user it will fail to retain

customers.

The recommendations I’m suggesting are designed to deliver a positive experience to David’s

existing internet clients and future web clients. The following recommendations should

increase customer loyalty and encourage clients to use the website more frequently to get the

latest mentoring and management information.

A) Format of interactive media

Access 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 information

clearly as his best attribute.

David should focus on developing a portfolio of videos which contain the latest management

and mentoring advice for different professions. The videos should encourage as much

interaction as possible so that the viewer is engaged and learning.

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Every video should be focused on showing how David can create a positive behavioural

change for the viewer. Positive behaviour change should be achievable and all the resources

to achieve that behavioural change should be on the website.

David should start with the advisory professions which includes consultancy, professional

and business services. These professions represented a large proportion of the respondents to

the survey.

It is clear that David has the ability and communications skills to deliver complex

information on a high level.

Within these professions David could position himself as the consultants’ consultant.

B) Feature videos every 3 months

The second recommendation is to put feature videos on the site at least every three months

and more frequently if they are required. The majority of survey respondents viewed

promotional video at least once every three months and this would be expected to increase as

interactive video becomes more popular.

Feature videos are where David discusses major topics. Feature videos are where David sets

out the mentoring program for a specific industry or for a specific framework. Feature videos

should be supported by short reminder videos which are put on the site once a month. The

objective of the short reminder videos is to reflect on the feature videos and to reinforce any

of the suggestions that are made in the feature videos.

Reminder videos are also a good way of introducing new clients to the themes and concepts

that will be discussed in the feature videos and because they are short it is less likely that

viewers will quit before they have viewed the entire clip.

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C) Interactive features

The final suggestion is to encourage viewers to leave comments about the videos. Web 2.0

encourages more interactivity and currently the video gallery doesn’t encourage viewers to

forward videos to friends or colleagues who are looking business/mentoring advice. There

should be a way for users to make comments on what they have learnt from interacting with

the website and to make future recommendations.

These recommendations help to retain clients and attract new clients. A small increase in

client 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 the

future design and content of the site. As previously outlined, websites evolve through

interaction. Having this level of interaction should guarantee that as the website evolves it

maintains its ability to deliver positive experiences.

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80

Appendices

Appendix 1

Link to survey on Kwik survey website. http://www.kwiksurveys.com?s=NNMLFM_dde30d7d

Appendix 2

Respondents answers to the survey in chart format:

Q1: Rank the most important benefits of the internet

18%

13%

16%

19%

34%

15%

18%

23%

25%

19%

13%

15%

42%

15% 15%

26%

22%

12%

23%

17%

27.0%

33.0%

7.0%

18.0%

15.0%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Faster communications Access to the latest

information

Finding new

opportunities

24 hour access to

services

Save money, compare

prices

Benefits

Rank 1(least important)

Rank 2

Rank 3

Rank 4

Rank 5(Most important)

81

Q2: Indicate the number of hours per week you spend online developing your business

14.2%

12.4%

16.8% 16.8%

15.0%

6.2%

8.0%

3.5%

2.7%

4.4%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

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?

7.3%

26.4%

52.7%

13.6%

0%

10%

20%

30%

40%

50%

60%

Always Weekly Occasionally (once every 3 months) Never

Frequency

%

82

Q4: Media clips are mostly for entertainment

6.3%

36.6%

26.8% 26.8%

3.6%

0%

5%

10%

15%

20%

25%

30%

35%

40%

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

0.8%

8.0%

21.4%

54.5%

15.2%

0%

10%

20%

30%

40%

50%

60%

Strongly disagree Disagree Not sure/ NA Agree Strongly agree

Opinion

%

83

Q6: Do you ever use the internet to search for professional business consulting/ advice?

68.5%

31.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Yes No

%

Q7: If yes how often do you search for consulting advice?

8.2%

24.6%

37.3%

30.0%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Daily Weekly Occasionally (once every 3 months) Never

Frequency

%

84

Q8: Have you ever visited David Mellor's website

38.9%

61.1%

0%

10%

20%

30%

40%

50%

60%

70%

Yes No

%

Q9: How long is it since you visited his site?

26.4%

2.7% 2.7%

7.3%

60.9%

0%

10%

20%

30%

40%

50%

60%

70%

Within the last week Within the last 2 weeks Within the last month Within the last 3 weeks Don't remember

Frequency

%

85

Q13: Please rank the following statements

25.0%

12.0%

47.0%

15.0%

28.0%

43.0%

12.0%

17.0%

25.0%

31.0%

21.0%

24.0%

22.0%

15.0%

20.0%

44.0%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Visually they are clear and

organised

Language is simple Video clips were too long David communicates his

knowledge clearly

Opinions

%

Rank 1

Rank 2

Rank 3

Rank 4

Q14: If there were regular videos of David giving advice would you watch them

38.2%

27.2%

34.6%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Yes No Not sure

Opinion

%

86

Q16: How likely is it that you would recommend David to a friend or colleague who is looking for

business advice

17.0%

3.6%

6.3%

1.8%

4.5%

14.3%

5.4%

9.8%

17.0%

3.6%

17.0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

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

64.5%

34.6%

0%

10%

20%

30%

40%

50%

60%

70%

Male Female

%

87

Q18:Age

5.45%

7.27%

12.27%

16.36%

18.18%

13.64%

11.82%

6.36%

3.64%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

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?

3.3%

0.8%

8.2%

9.8%

1.6%

20.5%

7.4%

3.3%

7.4% 7.4%

9.9%

15.6%

4.9%

0%

5%

10%

15%

20%

25%

Ret

ail

Com

mun

icat

ions

Fina

nce IT

Teleco

ms

Con

sulta

ncy

Bus

ines

s se

rvices

Med

ia

Edu

catio

n

Mar

ketin

g

Pro

fess

iona

l ser

vice

s

Oth

erN/A

Sector

%

88

Q20: What annual turnover does your business generate

15.5%

0.0%

10.9%

5.5%

7.3%

17.3%

14.6%

1.8%

2.7% 2.7%

5.5%

16.4%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

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

%

89

Appendix 3

Definitions of interaction:

Definitions that Focus on Process

Study Definition/Description of Interactivity Key Elements

Bezjian-Avery,

Calder, and Iacobucci

1998

“In interactive systems, a customer controls the

content of the interaction requesting or giving

information…. The hallmark of these new media

is their interactivity – the consumer and the

manufacturer enter into dialogue in a way not

previously possible” (p.23).

User control and

dialogue between

consumer and

manufacturer

Cho and Leckenby

1999

“The degree to which a person actively engages

in advertising processing by interacting with

advertising messages and advertisers” (p.163).

Interchange

between individuals

and advertisers

Guedj et al. 1980 “A style of control” (p.69). User control

Ha and James 1998 “Interactivity should be defined in terms of the

extent to which the communicator and the

audience respond to, or are willing to facilitate,

each other’s communication needs” (p.461).

Responsiveness

Haeckel 1998 “The essence of interactivity is exchange” (p.63). Exchange

Heeter 2000 “An interaction is an episode or series of episodes

of physical actions and reactions of an embodied

human with the world, including the environment

and objects and beings in the world.”

Action and reaction

Miles 1992 “An interactive communication involves

responsiveness of the displayed message to the

message receiver” (p.150).

Responsiveness

Pavlik 1998 “Interactivity means two-way communication

between source and receiver, or, more broadly

multidirectional communication between any

number of sources and receivers” (p.137).

Two-way

communication

Rafaeli 1988 “Interactivity is an expression of the extent that in

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).

Responsiveness

Steuer 1992 “Interactivity is the extent to which users can

participate in modifying the form and content of a

mediated environment in real time” (p.84).

Real-time

participation

90

Definitions of Interaction continued.

Definitions that Focus on Features

Study Definition/Description of Interactivity Key Elements

Ahren, Stromer-

Galley, and Neuman

2000

Media interactivity was defined in terms of

features such as audio and video. Human

interaction was defined in terms of features such

as bulletin boards and chat rooms.

Multimedia,

features for two-

way

communication

Carey 1989 Interactive media are: “technologies that provide

person-to-person communications mediated by a

telecommunications channel (e.g. a telephone

call) and person-to-machine interactions that

simulate interpersonal exchange (e.g. an

electronic banking transaction)” (p.328).

Channels for

human-to-human or

human-to-computer

exchange

Ha and James 1998 Identified five characteristics of interactivity:

playfulness, choice, connectedness, information

collection, and reciprocal communication.

Five characteristics

that constitute

interactivity

Jensen 1998 “Interactivity may be defined as: a measure of a

media’s potential ability to let the user exert an

influence on the content and/or form of the

mediated communication” (p.201).

Features that enable

user control

Lombard and Snyder-

Dutch 2001

“We define interactivity as a characteristic of a

medium in which the user can influence the form

and/or content of the mediated presentation or

experience.”

Features that enable

user control

McMillan 2000a Identified thirteen features that, based on

literature about interactivity, might suggest that a

Web site is interactive. Included: E-mail links,

registration forms, survey/comment forms, chat

rooms, search engines, and games.

Web site features

that facilitate two-

way

communication and

control

Novak, Hoffman, and

Yung 2000

Interactive speed is a construct that contributes to

flow and is based on measures such as waiting

time, loading time, and degree to which

interacting with the Web is “slow and tedious”

(p.29).

Time required for

interaction

Straubhaar and

LaRose 1996

“We will use the term interactive to refer to

situations where real-time feedback is collected

from the receivers of a communications channel

and is used by the source to continually modify

the message as it is being delivered to the

receiver” (p.12).

Functions that

enable customized

and timely

feedback

91

Definitions of Interaction continued.

Definitions that Focus on Perception

Study Definition/Description of Interactivity Key Elements

Day 1998 “The essence of interactive marketing is the use

of information from the customer rather than

about the customer.” (p.47).

Consumer

involvement

Kiousis 1999 “With regard to human users, it [interactivity] …

refers to the ability of users to perceive the

experience to be a simulation of interpersonal

communication and increase their awareness of

telepresence” (p.18).

Simulation of

interpersonal

communication

McMillan 2000b Individuals rated interactivity of sites based on

their perceptions of two-way communication,

level of control, user activity, sense of place, and

time sensitivity.

Perception of two-

way

communication,

control, activity,

sense of place, and

time sensitivity

Newhagen, Cordes,

and Levy 1996

Conceptualize interactivity based on “the

psychological sense message senders have of

their own and the receivers’ interactivity”

(p.165).

Perception of

interaction by self

and others

Schumann, Artis, and

Rivera 2001

“Ultimately it is the consumer’s choice to

interact, thus interactivity is a characteristic of the

consumer, and not a characteristic of the medium.

The medium simply serves to facilitate the

interaction.”

Consumer’s choice

to interact

Wu 1999 “Perceived interactivity can be defined as a two-

component construct consisting of navigation and

responsiveness” (p.6).

Perceptions of

navigation and

responsiveness

92

Definitions of Interaction continued.

Definitions that Combine, Process, Features, and/or Perception

Study Definition/Description of Interactivity Key Elements

Coyle and Thorson

2001

“A web site that is described as interactive should

have good mapping, quick transitions between a

user's input and resulting actions, and a range of

ways to manipulate the content” (p.67).

Mapping, speed,

and user control.

Hanssen, Jankowski,

and Etienne 1996

“Aspects of interactivity were clustered around

three terms: equality (containing aspects such as

participants, mutual activity, role exchange,

control), responsiveness (e.g. mutual discourse,

nature of feedback, response time) and functional

communicative environment (e.g. bandwidth,

transparency, social presence, artificial

intelligence)” (p.71).

Equality,

responsiveness, and

functional

environment

Heeter 1989 Interactivity is a multi-dimensional concept that

includes: complexity of choice available, effort

users must exert, responsiveness to the user,

monitoring information use, ease of adding

information, and facilitation of interpersonal

communication.

Complexity, effort,

responsiveness,

monitoring,

participation,

interpersonal

communication

Lieb 1998 Interactivity is seen as having two primary

definitions. The first is a kind of personalization.

The second type is community building.

User control,

interpersonal

communication

McMillan 2002

Identifies four types of interactivity based on

intersection of user control and direction of

communication: monologue, feedback,

responsive dialogue, and mutual discourse.

Monologue,

feedback,

responsive

dialogue, and

mutual discourse.

Zack 1993 He suggests that the following key factors emerge

from the literature as elements of interactivity: the

simultaneous and continuous exchange of

information; the use of multiple non-verbal cues;

the potentially spontaneous, unpredictable, and

emergent progression of remarks; the ability to

interrupt or preempt; mutuality; patterns of turn-

taking, and the use of adjacency pairs.

Exchange, non-

verbal cues,

spontaneity,

unpredictability,

progression of

remarks, ability to

interrupt, mutuality

turn-taking,

adjacency.

93

Appendix 4

Internet subscription growth rates

94