COMP 6125 An Introduction to Electronic

Commerce

Session 2: Email Marketing & CRM

E-mail Marketing

• E-mail proclaimed to be one of the greatest tools in communication developed since 20rh century

• Companies want to send information on products and services to potential and existing customers – Spamming!

• Legalities involved and criticism given on this method of advertising

E-mail Marketing

• Sending emails on products, services, etc to customers who specifically request is allowed

• Hence obtaining permission prior to sending is a key element to email marketing strategy

• But how can you do this?

Permission Marketing

• Marketing strategy involving the practice of sending email messages to persons who request information on a particular product or topic (opt-in email)

• Developed by Seth Godin, current Vice President of Direct Marketing at Yahoo! And previous founder of YoYoDyne

Permission Marketing

• Cost of sending an email to a customer whose email address had already been obtained – less than one cent!

• Cost of purchasing email addresses or people who ask to receive specific kind of email – an additional few cents to a dollar for each message

Permission Marketing

• Conversion rate – percentage of persons who view the ad or promotion and respond to it

• For emails, conversion rate range from 10% - 30%

• For click-through rates, currently 5% and dropping!

• Which would you choose??

Combining Content and Advertising

• A successful method of email marketing schemes is to combine the ad with content of interest to viewer

• Example: including articles and news on particular topics of interest to specific market segment

• Note: avoid including large graphics and attachment as can clog up an inbox and create ill will; try hyperlinks instead which should lead to site hosting the information

Combining Content and Advertising

• Again, coordinate activities across all media and ensure message delivered is consistent

Managing E-mail Processing• Some companies find cannot handle growing numbers of

customers who opt-in to mailing lists

• Some companies cannot handle developing information-laden mail outs

• A concept of outsourcing the email processing to companies offering email management systems has developed; also may include the outsourced company purchasing email addresses

• Cost of outsourcing is between 1 and 2 cents for every valid email address

Technology-Enabled CRM

• Definitions– Clickstream: information gathered about a

visitor from a site on which pages viewed, how long each page was viewed, sequence of pages viewed, etc

–Marketspace: commerce in the information world; distinguished from marketplace which is commerce in the physical world

Technology-Enabled CRM

• Occurs when an organisation collects detailed information on a customer’s behaviours, needs and buying pattersn, and then uses that information to determine pricing, negotiate terms, tailor promotions, add product features, and otherwise customize the entire relationship with that customer

• Also referred to as eCRM

Technology-Enabled CRM

• Figure 4-10, pg 194

• As is shown, more tailored marketing and increased sense of one-to-one relationship

CRM in the Marketspace• In marketspace, information can be used to create new

value for customers– Online order history, recommendations for future

purchases based on past ones, etc

• Successful marketing techniques on the Web enable potential customers to easily find information and customize the depth and nature of the information – should encourage purchasing

• The eCRM tools increase the success of companies on the Web over the traditional model of advertising that work in the offline world

CRM in the Marketspace

• It is definitely important to track and examine behaviours of site visitors and then use the information to develop customized, value-added products and services

• The key is not to collect every piece of data on customers but only to focus on what really matters to salespeople and customers

• Automating this collection of data also assists in a successful implementation of CRM

Links

• Reference– Electronic Commerce, Seventh Annual Edition

by Gary Schneider

• Of Interest– IntelligentCRM –

http://www.intelligentCRM.com