2GLO728 Emarketing Topic 3b CRM Extension - 20078

7/31/2019 2GLO728 Emarketing Topic 3b CRM Extension - 20078

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eMarketing Strategy

Ali Agha

Room F1.18

Harrow Business School

University of Westminster

Customer Relationship Management


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eMarketing Strategy

Based on

E-Business and E-Commerce Management

3

rd

edition 2007by

Dave Chaffey

Chapter 9

Pages 424-450

www.pearsoned.co.uk/chaffey
http://www.pearsoned.co.uk/chaffeyhttp://www.pearsoned.co.uk/chaffey


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Lecture Topics

Conversion Marketing

The Online Buying Process

Customer Acquisition ManagementCustomer Relationship Management

Customer Retention Management

Excelling in eCommerce Service Quality

Customer Extension


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Learning Objectives

Outline different methods for acquiring

customers via electronic media

Evaluate different buyer behaviour amongst

online customers

Describe techniques for retaining customersand cross and up-selling using new media


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Management Issues

What is the balance between online andoffline investment for customer

acquisition?What technologies can be used to build andmaintain the online relationship?

How do we deliver superior service qualityto build and maintain relationships?


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Introduction

Acquisition

PromotionIncentivesServicesProfilesCustomerserviceDirect e-mail

Retention

ExtranetsPersona-

lisationCommunityPromotionsLoyaltyschemes

Extension

Directe-mailLearningOnsitepromotions

Add ValueAdd ValueAdd Value


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eCRM

Electronic Customer Relationship Management Using digital

communications technologies to maximise sales to existing

customers and encourage continual usage of online services

How to use the website for customer

developmentgenerating leads, encouraging purchase,converting from off to online etc

Maintaining e-mail list quality customer profiles

Applying e-mail or other digital marketing tosupport upsell and cross-sell

Data mining targeting

eCRM poses the following management challenges:


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eCRM poses the following management challenges:

eCRM

Providing online customer service activitiesFAQs, call-back, chat rooms etc

Managing the online service quality

Managing the multi-channel customer experience

Tesco.com searchesabandoned shopping baskets

to encourage purchase

www.morethan.com arrangetriggered or follow-up emails after

a customer has asked for a quote

Sense and response communications Delivering timely relevant

communications to customers as part of a contact strategy based on

assessment of their position in the customer lifecycle and monitoring

specific interactions with a companys web site, e-mails and staff
http://www.morethan.com/http://www.morethan.com/


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Benefits of eCRM

Targeting more cost-effective

Can achieve mass customisation of themarketing messages

The breadth, depth and nature of the

relationship is increased

A learning relationship can be achieved using

different tools throughout the customer lifecycle

Using the Internet for relationship marketing involves

integrating the customer database with website to makerelationships targeted and personalised


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Permission Marketing


Interruption marketing

Opt-in Opt-out

Will companies pay customers to view ads?

www.alladvantage.com

Godin (1999)


Customers agree (opt-in) to be

involved in an organisations

marketing activities, usually

as a result of an incentive

Interruption Marketing

Marketing communications that

disrupt customers activities

500

marketing

messages a

day, going

to 3000
http://www.alladvantage.com/http://www.alladvantage.com/


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The process of acquisition and retention has beenlikened to dating:

Offer the prospect an incentive to volunteer

Using the attention offered, train prospect aboutproduct or service

Reinforce the incentive for permission to be

maintained Offer even more incentives to get more permission

Over time, leveragepermission to change

behaviour

Godin (1999)



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For an e-commerce site, customer retentionhas two distinct goals


To retain customers of the organisation (repeat

customers)

To keep customers using the online channel

(repeat visits)


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Maintaining online customer relationships isdifficult

Thats whats scary about customer relationshipsin the online space. Weve created this

empowered, impatient customer who has a short

attention span, a lot of choices, and a low barrierto switching.



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To create long-term online relationshipsthat built on acquisition, we need to analysethe drivers of satisfaction among e-

customers, since satisfaction drives loyaltyand loyalty drives profitability

The aim is to drive customers up the curve

to the zone of affection in the followingschematic



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Loya

lty

Satisfaction

0 50

100Evangelist

Terrorist

Zone of defection

Zone of

indifference

Loya

lty

Satisfaction

0 50

100Evangelist

Terrorist

Zone of defection

Zone of

indifference

Zone of affection


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For example, Dell Computer has created acustomer experience council that has

researched key loyalty drivers, identified

measures to track these and put in place anaction plan to improve loyalty



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Reicheld and Schefter (2000)

Loyalty driver

1. Orderfulfilment

2. Productperformance

3. Post saleservice andsupport

Summary metric

Ship to target. % that ship on timeexactly as the customer specified

Initial field incident ratethefrequency of problems experiencedby customers

On-time, first-time fixthe % ofproblems fixed on the first visit by aservice rep who arrives at the timepromised

Relationship between loyalty drivers and measures to assess their success atDell Computer


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The following are a few of the retentiontechniques that can be used

Personalisation and mass customisation

Extranets

Opt-in e-mail

Online communities

Customer Retention ManagementRetention techniques


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The following is an example of personalisation

on www.silicon.com for an IT manager

Customer Retention ManagementPersonalisation and mass customisation

Personalisation Delivering individualisedcontent through web pages or e-mail

Mass customisation Delivering customised content

to groups of users through web pages or e-mail

Collaborative filtering Profiling of customer interest

coupled with delivery of specific information and

offers, often based on the interests of similar customers
http://www.silicon.com/http://www.silicon.com/


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Extranets can be used to host online eventssuch as seminars, trade shows, user group

conferences, webcast virtual seminars etc.

The use of extranets presents a barrier toentry, particularly if users lose their

passwordsremedy: send out password

reminders.

Extranets provide good traceability of

marketing outcomes and tagging of visitors

Customer Retention ManagementExtranets


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Customer Retention ManagementExtranets

A Dutch insurer combined online and offlinetechniques to use an extranet to deliver mass

customisation. Existing customers were divided

into six segments and then contacted through a

direct mail campaign. Members of each segment

were given one of six passwords, so that when they

accessed the extranet there were six different

versions of content for the website giving productsuggestions and offers consistent with the segment.

Suggest how to organise data so that this can be

done


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Opt-in e-mail is a vital communication toolIt has the power of apush communication

And it is not SPAMSending Persistent

Annoying e-Mail

Customer Retention ManagementOpt-in e-mail

SPAM Unsolicited e-mail (usually bulk

mailed and untargeted)

CAUSE (the Coallition Against Unsolicited

Commercial Email)

www.cause.org
http://www.cause.org/http://www.cause.org/


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The rise of virtual communications in onlinenetworks has set in motion an unprecedented

shift from vendors of goods and services to

the customers who buy them. Vendors whounderstand this transfer of power and choose

to capitalise on it by organising virtual

communities will be richly rewarded withboth peerless customer loyalty and

impressive economic returns

Customer Retention ManagementOn-line communities

Hagel and Armstrong (1997)


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Depending on market sector, an organisationhas a choice of developing different types ofcommunity

For B2C communities of purposewww.autotrader.co.uk

positionwww.parentcentre.com

interestwww.football365.com

For B2B communities of

profession

Customer Retention ManagementOn-line communities

Online Community

A customer-to-customer

interaction delivered via e-mail

groups, web-based discussion

forums or chat rooms

i
http://www.autotrader.co.uk/http://www.parentcentre.com/http://www.football365.com/http://www.football365.com/http://www.parentcentre.com/http://www.autotrader.co.uk/


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Customer Retention ManagementRetention techniques for B2BActivity

Choose a sectore.g. international university, hotelchain, CD warehouse, online meal service, toy

factory, car manufacturer

You have limited resources for investment in

customer retention management techniques. Select

two techniques from personalisation, extranets, opt-

in e-mail marketing and online communities andexplain why you have chosen them over the others.

C i


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Customer Retention ManagementRetention techniques for B2BActivity

Did you choose technology-led marketing options?

Or

Marketing-led technology options?


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Customer extension has the aim of increasingthe lifetimevalue of the customer to the

company by encouraging cross-sales

Customer Extension Management

Lifetime value The combined

revenue attributable to a customer

during their relationship with a

company

Customer Extension Deepening

the relationship with the customer

through increased interaction and

product transactions

Focus on customer share, not market share

fire 70% of your customers and watch your

profits go up

C E i M


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The internet has great potential for gainingfeedback from customers about use of

products and servicesFor example, Cisco uses extranets to previewnew products that are being finalised before

being released

Customer Extension ManagementProduct evaluation and feedback


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C E i M


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1. Identify customer lifecycle groups

2. Identify customer profile characteristics

3. Identify behaviour in response and purchase4. Identify multi-channel behaviour (channel

preference)

5. Identify tone and style preference

Customer Extension ManagementOnline segmentation and targeting techniques

RFM Analysis

Recency, Frequency, monetary value

C t E t i M t


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Customer Extension ManagementOnline segmentation and targeting techniques

Customer lifecycle segmentation

1 First-time visitor

2 Return visitor

3 newly registered visitor

4 registered visitor

5 purchased once or n times

6 purchase inactive

7 purchase active: e-responsive

C t E t i M t


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The following slide conveys the complexityof providing CRM solutions

From both the customer and employeeperspective, the ultimate aim of CRMsystems is to enable contact regardless of

communication channel that the customerwants to use

Customer Extension ManagementCustomer Relationship Management (CRM) systems


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Database

s

Customer

applications

Customer

service

channels

Employee

channels

Emp

loyee

applications

Customer

Employee

Face-to-

Face

Mail/Fax

E-mailWeb/WAPKiosk

Phone

Face-to-

Face

Mail/Fax

E-mailWeb/WAP

Phone

SalesContact

Management

SalesOrder

Processing

Placeorder

Customerdetails andpreferences

Customer Serviceenquiry

(Post sales support)

EvaluateProduct

information

SupportContact

Management

Place order(received by

phone etc)

Customer servicecall centre

knowledge base

Sales

force automation

e-newsletteror e-mailcampaign

Campaignresponsedatabase

Campaignmanagement

system

C t E t i M t


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The ideal is

A single customer-facing and employeefacing application that supports all thecommunication channels

A single integrated database such that anyemployee has total visibility about acustomerthey can access all visit, sales and

support histories From a single vendor for ease of

implementation and support

Customer Extension ManagementIntegration with back office systems


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ThankYou

2GLO728 Emarketing Topic 3b CRM Extension - 20078

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