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Electronic Customer
RelationshipManagement
E-CRM
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Learning Objective
To learn about E-CRM and how companies are
using the same for connecting with customers
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e - CRM
Internet provides a new set of tools for interactingwith customers.
One of the major changes the internet has brought to
the marketplace is putting more information and control
in the hands of customers.
Elimination of direct customer interaction by
automation has changed the way we deliver
experiences, but customer requirements about the
quality of that experience haventchanged.
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NEW CUSTOMER EXPECTATION
There are five key areas in which the internet has
impacted the way we do business:-
Access
Control
Speed
Globalization Automation
e - CRM
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E-CRM a definition
E-CRM is:
ApplyingInternet and other digital technology(web, e-mail, wireless, iTV, databases)
Toacquire and retain customers(through a multi-channel buying processand customer lifecycle)
ByImproving customer knowledge, targeting,service delivery and satisfaction.
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According to William McKnight, E-CRM is not just your
call center, self-service Web site, sales force automation
tool or the analysis of customers' purchasing behaviors.
E-CRM is all of these initiatives working together to
enable you to more effectively respond to your
customers' needs and to market to them on a one-to-
one basis. It's about the customer, not any individual
piece of technology. If we evaluate and understand how
our customers behave and how we need to respond to
them, then we can begin to understand the component
pieces of e-CRM.
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Concept of e-CRM
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Cost of Customer Contact
Internet is much more economical than otherchannels. For instance, it has been estimatedthat while it costs nearly US $1.07 per
transaction using the normal means, on theNet the costs comes to a mere cent.
Even when compared with telephone banking(5 cents) and the ATMs (2.7 cents), the Netseems to have an edge. In addition, thestrategic and social benefits may beconsiderable for both parties (Halinen 1989)
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Slide 10 of 43
American Airlines Offers Personalized
Web Sites
American Airlines (aa.com) unveiled a themost advanced personalized, one-to-oneinteractions and transactions on its Web site in
1998Intelligent agents enable the generation ofpersonalized Web pages for each of its 1million registered, travel-planning customers
Broadvisions application dynamically matchescustomer profiles to a database
Output of the matching process triggers the
creation of a real-time customized Web page
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Slide 11 of 43
The use of intelligent-agent technology
built a considerable edge over AAs
competitors Personalizing Web pages is becoming
more important in:
Increasing customer loyalty Cementing relationships with customers
Fostering the community of AA frequent
flyers
American Airlines Offers Personalized
Web Sites
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The following are the basic applications of e-CRM: Reducing technological gap:Implies that an application of e-
CRM in an organization brings an appropriate technology in use,which helps in reducing technological gaps.
Maintaining a data warehouse:Implies that the e-CRM system
of an organization is driven by a data warehouse. Reaching out customers by different channels:Implies that e-
CRM helps an organization to reach out to customers throughvarious modes, such as e-mail and online web chat.
Measuring communication efforts:Implies that e-CRM enables
marketers to view overall customer interaction history. Providing faster customer service:Implies that e-CRM enables
organizations to serve customers quickly by automating variousprocesses.
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Applications of e-CRM
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Most organizations require an effective e-CRMapplication for the following reasons:
Communicating with customers in a fast and convenient waythrough e-messaging, Internet, and digital marketing
Maintaining a systematic and organized database for bettercustomer feedback and support
Analyzing the touch-points of customer experience
Coping with fierce competition in the market
Collaborating internal and external information of anorganization
Empowering customers for making a convenient deal andgetting the required information
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Requirements of e-CRM
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The following are the benefits of e-CRM:
Direct Benefits:Imply that e-CRM helps an organization toreduce costs incurred on manual processes, achievemaximum output, and improve business performance.
Indirect Benefits: Includebenefits, such as reduced leadtimes for ordering products, minimum risk of obsoletestock, customer satisfaction, and effective communication.
Strategic Benefits:Refer to long-term benefits of e-CRMthat can be achieved through close interaction withcustomers, suppliers, and employees of an organization.
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Benefits of e-CRM
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Disadvantages of e-CRM
Can be impersonal
Systems aimed at increasing the efficiency
of the organization can end up
disenfranchising customers
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Customer-facing applications.These include all the
areas where customers interact with the company: call
centers, including help desks; sales force automation;
and field service automation. Such CRM applications
basically automate information flow or support employees
in sales or service.
Customer-touching applications.In this category,
customers interact directly with the applications. Notable
are self-service activities, such as FAQs; campaign
management; and general-purpose EC applications.
Customer-centric intelligence applications.These are
applications that analyze the results of operational
processing and use the results of the analysis to improve
CRM applications. Reporting, data warehousing, and
data mining are the prime topics here.
Online networking applications.Online networking
refers to methods that provide the opportunity to build
personal relationships with a wide range of people. These
include chat rooms, blogs, wikis, discussion lists, and
social network sites.
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Challenges of Managing Online
Relationships
Controlling blogs
Handling the dissatisfied customer
Brand hijack
Customer empowerment
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Developing Trust Online
Established brand name
Seals of approval (testimonies)
Payment safeguards (e.g. Paypal)
Acknowledge orders with a reference orcontact number
Give customers an element of control
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Keeping online customers
Track online behaviour for CRM purposes
Invest in excellent technical systems
Let customer personalize their site
Develop online communities and chatrooms
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Scope of
E-CRM
Increasing
the customer
base
Increasing
profitability
Ensuring
prolonged
existence of
customers
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Scope of e-CRM
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The following are some of the important tools
of e-CRM:
Customer Analytic Software
Data Mining Software
Campaign Management Software
Business Simulation
Personalized Messaging System
Real-time Decision Engine
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Tools of e-CRM
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Basis CRM e-CRM
Customer
Contacts
Contacts customers through retail stores,
business parties, telephone, and fax
Approaches customers through
channels, such as the Internet, e-
messaging, e-mail, and Personal
Digital Assistants (PDAs)
System Interface Requires ERP and back-end systems Requires front-end systems
backed with ERP system and data
warehouse
System Focus Designed on the basis of products and
job functions
Designed as per the needs of
customers
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Differences between CRM and e-CRM
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Barriers to Customer Adoption of the Internet
Barrier Customer concern Strategies Comments
Customer confidence
While many The process seems Design and build Look forCustomers unfamiliar your e-crm systems ways to mimic
Are eager simple, helpful and the best of
To shop friendly understand your companys
Online, many and prepare for what offline
Are not automation does well interactions
where it is weak. With your
customers.
e - CRM
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Barriers to Customer Adoption of the Internet
Barriers customer concern strategies comments
Customer Trust
Customers openness of the inter- Dont ask for If you requireDont trust net makes it appear more information too much
Us with hard to secure data. Than you really need. Information,
Their data, customers
Especially will fill in
Online garbage.
e - CRM
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Barriers to Customer Adoption of the Internet
Barriers Customer concerns strategies Comments
Legislation
Some legislation Legislation may limit Make a privacy Use yourThreatens the the information that can and security privacy policy
Internets ability be collected online and policy part of to support
To grow as a how it can be used your customer your brand
Medium for loyalty and image and
Transacting relationship build trust.
Business management
program
e - CRM
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Digital marketing is a strategy of promoting products or
services through the Internet, e-mail, or other electronic
devices.
It is used as a powerful tool to reach out to maximum number
of customers.
The following are different types of digital marketing:
Display Advertising
Search Engine Marketing (SEM)
Search Engine Optimization (SEO)
Social Media Marketing
E-mail Marketing
Video Marketing
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Digital Marketing
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The following are the checklists of e-business:
Keeping an eye on service quality
Measuring the effectiveness of all service channels
Maintaining effective communication with business
partners
Focusing on business processes
Identifying offline customers
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Checklists for Successful e-Business
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Customers Will Be The Driving
Force
Shift to Internet selling empowers customers
Fragmentation of demand can be met
Customer's rationality will determine what they buy on-line
E-tailing enables retailers to move customers up the Ladder of Loyalty
E-tailing benefits shoppers who are time poor
Digital TV will bring e-tailing closer to the average shopper
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Siebel: Serves the CRM needs of different industries, such ashealthcare, finance, telecommunications, insurance, and travel.
Oracle: Refers to a relational database management system(RDBMS), which is marketed by Oracle Corporation.
MySAP CRM: Provides CRM solutions to various industries. SAP ERPis another popular product from SAP.
PeopleSoft: ProvidesCRM solutions based on HTML, http, and XML.
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Important CRM Software
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The following are the guidelines for predicting the
buying behavior of online customers more
effectively:
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Anticipating the Buying Behavior of
Online Customers
Identifying the needs of customers
Increasing customer awareness
Evaluating available alternatives
Analyzing purchasing decisions
Understanding the post-purchase behavior
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Evaluating Return on Investment (ROI) is a challenging task forevery organization especially in e-marketing.
The following are the steps involved in evaluating e-CRM ROI: Identifying the possible cost savings aspects from e-CRM initiatives
Identifying the initial and ongoing costs for new software, services,
and relevant equipment Setting a time period in which the measurable results are expected to
be achieved
Analyzing a no change scenario over the identified time period
Involving finance experts for analyzing e-CRM budget and estimatingits expected ROI
Comparing the previous scenario with the existing one for determiningthe expected ROI
Approaching the project systematically so that the anticipated resultsare attained
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Evaluating e-CRM Return on
Investment
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