Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.1

e-CRM

Building customer relationships in cyberspace…

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.2

Learning objectives

• Assess the relevance of the concepts of relationship, direct and database marketing on the Internet;

• evaluate the potential of the Internet to support one-to-one marketing and the range of techniques and systems available to support dialogue with the customer over the Internet;

• assess the characteristics required of tools to implement one-to-one marketing.

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.3

Questions for marketers

• How can the Internet be used to support the different stages of the customer lifecycle?

• How do I implement permission marketing?

• What do personalization and mass customization mean and how should I apply them in my marketing?

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.4

Building Customer Relationships

Most companies consider themselves ”customer focused...”

In reality, they are ”product-centric.”

vs.Exchange/TrasactionRelationship/Long-term

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.5

Customer Relationship Management (CRM)

You need to BUILD (and integrate) a customer- relationships infrastructure...

Few companies make ”customer focus” a reality•Business models did not require it.•Technology was not available•Organizational resistance was high!

The ENTIRE company must work together

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.6

Chew on this a while...

•It costs six times more to sell to a new customer

•Dissatisfied customer will tell 8-10 (???)

•Firm can boost profits 85% by retaining 5% of your customers

•Odds of selling to a NEW customer = 15% (OLD = 50%)

•70% of unhappy customers will come back if handled right!

•More than 90% of today’s firms do NOT have the necessary sales and service integration to support e-commerce.

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.7

Defining CRM

Goals of integrating sales & service:

•Use existing relationships to grow revenue

•Use integrated information for excellent service

•Introduce more repeatable sales processes and procedures

•Create new value...instill loyalty

•Be PROactive, not REactive...

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.8

Becoming ”customer” focused...

Don’t focus on ”improving” customer service...

LIKE IN REAL RELATIONSHIPS:-Be consistent-Be dependable/reliable-Focus on EVERY encounter

True for MNEs & SMEs...

If you can’t make me ”love” you, at least make me ”like” you!

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.9

Differences between relational and transactional marketing

Empowered clientsPassive consumers

Dialogue and tailored communications

Mass market broadcast

Most valued customers and customer share

Market share

Lifetime valueMargin

LifetimeTransaction duration

Individual customerMarket segment

Relational paradigmTransactional paradigm

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.10

Elements of CRM

Figure: Linkages between customer relationship management and related marketing approaches

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.11

CRM applications

1. Sales force automation

2. Customer service management

3. Managing the sales process

4. Campaign management

5. Analysis

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.12

CRM data

• Personal and profile data– Contact details– Preferences

• Transaction data– Sales history

• Communications data– Campaign history– Research / Feedback / Support queries– Contact reports (B2B)

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.13

CRM aims and focus

Figure: The relationship between the customer acquisition, retention and extension phases of the customer lifecycle and loyalty and customer value

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.14

CRM resource

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.15

The 5 I’s• Identification – can the customer be

recognized for different channel contacts?

• Individualization – can communications and products be tailored?

• Interaction – are communications two-way?

• Integration – is there a 360 degree view of the customer?

• Integrity – is the relationship built on trust?

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.16

Permission marketing

• Key concepts– Not interruption marketing– Not SPAM– Requires opt-in (online to e-mail)– Opt-out– Learning about the customer– Initial and continued relationship is based on

incentives

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.17

Mass customization & personalization

Figure: Options for mass customisation and personalisation using the Internet

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.18

Example – Silicon

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.19

IDIC

Figure: The elements of the IDIC framework

Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003OHT 6.20

e-CRM tools

• Database

• Data mining

• Personalization systems

• Outbound e-mail

• Inbound e-mail management

• Virtual communities