introduction to e-crm e-crm (electronic customer relationship management)

Introduction to e-CRM

•E-CRM (Electronic Customer Relationship Management)

2Professor L.A. Macaulay

Objectives

Outline different methods of acquiring customers via electronic media

Evaluate different buyer behaviour amongst online customers

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

Core reference Chaffey www.booksites.net/chaffey

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Issues for managers

• What is the balance between online and offline investment for customer acquisition?

• What technologies can be used to build and maintain the online relationship?

• How do we deliver superior service quality to build and maintain relationships?

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E-CRM – a definitionE-CRM is:

• Applying…Internet and other digital technology… (web, e-mail, wireless, iTV, databases)

• to… acquire and retain customers (through a multi-channel buying process and customer lifecycle)

• by…improving customer knowledge, targeting,service delivery and satisfaction

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Marketing applications of CRM

A CRM system supports the following marketing applications:1. Sales force automation (SFA). Sales representatives are

supported in their account management through tools to arrange and record customer visits.

2. Customer service management. Representatives in contact centres respond to customer requests for information by using an intranet to access databases containing information on the customer, products and previous queries.

3. Managing the sales process. This can be achieved through e-commerce sites, or in a B2B context by supporting sales representatives by recording the sales process (SFA).

4. Campaign management. Managing ad, direct mail, e-mail and other campaigns.

5. Analysis. Through technologies such as data warehouses and approaches such as data mining, which are explained further later in the chapter, customers characteristics, their purchase behaviour and campaigns can be analysed in order to optimize the marketing mix.

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Three phases of customer relationship management

Three phases of customer relationship management

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A summary of an effective process of online relationship building

A summary of an effective process of online relationship building

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From old media to new media1. From push to pull.2. From monologue to dialogue.3. From one-to-many to one-to-some and

one-to-one.4. From one-to-many to many-to-many

communications5. From ‘lean-back’ to ‘lean-forward’.6. Form of tools changes.7. Increase in communications

intermediaries.8. Integration remains important.

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Offline and online communications techniques for e-commerce

Offline and online communications techniques for e-commerce

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Evaluate the effectiveness of the tools with AIMRITE

• Audience: can the target audience be reached?

• Impact: can message get through the clutter?

• Message: is message communication effective?

• Response: is responding easy (direct/indirect)?

• Internal management: can the tools be managed readily by agency or internally?

• The End Result: What are the response rates, costs and returns?

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AIMRITE – Online advertising Positive features Negative features

Audience

Impact

Message

Response

Information management

End Results

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The relationship between banner ads and destination sites

The relationship between online ads and destination sites

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Skyscraper to microsite example

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Standard landing page

http://www.norwichunion.com/products/insurance/travel/single_annual_travel.htm

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Online ads - effectiveness

• Instruct, not hope• Evolve, not cycle• Flash, not GIF

(Rich media)• Use large ad formats

www.lemonad.com

• Brand the first frame• Brand top of skyscrapers• Ditch ‘Click here!’• High contrast• Use < 15 ad elements• Use large logos• Include a human face

www.avantmarketer.com

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AIMRITE – Search engine marketingPositive features Negative features

Audience

Impact

Message

Response

Information management

End Results

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Search engine marketing

Adwords select(PPC)

Position: CPC and CTR

Premium Sponsorships (Position:CPM)

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1 Search engine registration

• What is it?‘Timely submission of domain names, especially campaign-specific names to key search engines’.

• The issues:1. Representation. Are you registered on the main search engines? Do you check continuously?

2. Time to register. Plan ahead and make use of paid inclusion services to ensure that campaign-specific URLs can be found when your campaign goes live.

3. New search engines. Search engines change in popularity – are you listed with the latest ones?

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2 Search engine optimization (SEO)

• What is it?‘Improving your competitive position in the search engine results listings’.

• The issues:1. It’s not just meta-tags. Ignored by most search engines – keyword frequency in body copy, <title> tags, headings and links are much more important.2. Doorway pages. Creating special pages optimised for different product-related keywords and search engines is a key technique for high listings.3. It’s a continuous process. Search engine algorithms, popularity and competitor activity all change, so to stay competitive, SEO demands continuous attention (Use an agency).

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Search engine indexing

Stages involved in creating a search engine listing (Chaffey et al., Internet Marketing)

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3 Search engine advertising (PPC)

• What is it?‘Keyword-based, paid for placements or sponsored links to increase your prominence (Position based on bid)’.

• The issues:

1. SEO is not enough. Increasingly, SEO alone does not give sufficient visibility in many search engines. Paid placements are necessary to ensure visibility.

2. Is your PPC effective? As with any campaign, there are more and less effective approaches. Case study shows that by rationalising PPC, sales per day were doubled, while the cost per click was halved.

3. It’s a continuous process. Competitor activity varies, so automated bid management tools need to be used to optimise the bids, with frequent reviews of strategy effectiveness (www.gotoast.com, www.bidbuddy.co.uk).

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Overture / Freeserve ad options

Bid: £1.50

Bid: £1.32

Bid: £1.31

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AIMRITE – Affiliates and links Positive features Negative features

Audience

Impact

Message

Response

Information management

End Results

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Link building

• Affects ‘Page Rank’ or link popularity in Google – Type primary keywords into Google – Use “link:site name” or Optilink to find referrers – Beat them: in number AND reputation (referring text)

• A structured link-building programme will reap benefits both in terms of visitors and enhanced Google listings.

• Reciprocal links are free, but are mainly practical for intermediaries.

• Online PR is another form of link building. Is this neglected?

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Affiliates

• What are they?‘A commission based arrangement where referring sites (publishers) receive a commission on sales by merchants’.

• ‘Affiliate networks’ such as Trade Doubler have over 400,000 companies across Europe. Used for financial services and travel as well as retailers. MFI derives 8% of its online revenue from affiliates

• Affiliates help expand reach through niche sites

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AIMRITE – E-mail marketingPositive features Negative features

Audience

Impact

Message

Response

Information management

End Results

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Why e-mail marketing?

• Higher response rates • Shorter campaign creation • Faster response • Shorter overall cycle time• Lower costs

More precise targeting Multiple messages to convert More detailed testing and measurement

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Example e-mail – rented list

OHT 9.30

© Marketing Insights Limited 2004

Example e-mail – rented list

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Example e-mail house list

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Example e-mail multi-message campaign

Example of a campaign structure for an e-mail campaign.

From Chaffey et al. Internet Marketing.Supplied by UK-based e-mail marketing specialists Harvest Digital (www.harvestdigital.com)

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Reasons why businesses do not buy supplies online

Reasons why businesses do not buy supplies online

Source: DTI (2002)

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The simple buying process

The simple buying process

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Online behaviours• Directed information seekers. Will be looking for product, market

or leisure information such as details of their football club’s fixtures. This type of user tends to be experienced in using the web and they are proficient in using search engines and directories.

• Undirected information seekers. These are the users usually referred to as surfers, who like to browse and change sites by following hyperlinks. This group tends to be novice users (but not exclusively so) and they may be more likely to click on banner advertisements.

• Directed buyers. These buyers are online to purchase specific products. For such users, brokers or cybermediaries who compare product features and prices will be important locations to visit.

• Bargain hunters. These users want to use the find offers available from sales promotions such as free samples or prizes.

• Entertainment seekers. Users looking to interact with the web for enjoyment through entering contests such as quizzes.

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Responses to question: ‘How did you find the product website you used to research a purchase?’

Responses to question: ‘How did you find the product website you used to research a purchase?’

Source: DoubleClick (2003b)

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RS Components web site (www.rswww.com)

RS Components web site (www.rswww.com)

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Personalisation on Silicon.com (www.silicon.com) for an IT manager audience

Personalization on Silicon.com (www.silicon.com) for an IT manager audience

Used with permission from CNET Networks UK Ltd. © 2001, all rights reserved

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Permission marketing• Interruption marketing

– To promote we must compete with many marketing messages and cut into what the customer is currently doing.

• Permission marketing– Give customers the option to receive information if they feel it will be

of value to them.

www.permission.com

Opt-in Opt-outIncentivise

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What exactly is permission marketing?

• Key features:– Opt-in – Based on initial incentive– Opt-out– Continue incentives through time to:

• Learn more about customer• Tailor product offerings• Sell more

Seth Godin: www.permission.com B2B Example: www.microstrategy.com

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Permission marketing vs SPAM

Reactions to permission marketing vs SPAM

Source: DTI (2000)

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IDIC

Source: Chaffey et al. (2003)

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Cisco site feedback options (www.cisco.com)

Cisco site feedback options (www.cisco.com)

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Overview of the components of CRM technologies

An overview of the components of CRM technologies

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Summary

– Outline different methods of acquiring customers via electronic media

– Evaluate different buyer behaviour amongst online customers (B2C, B2B)

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

– Core reference Chaffey www.booksites.net/chaffey