Customer Relationship Management

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19 augustus
2003augustus 2003

Customer Relationship Management

Chapter 9

BICT

2

Learning 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.


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3

Forecasts


Gartner (
www.gartner.com
)


$25 billion spent on CRM 2002


$50 billion by 2005



Yet 70% of CRM
p
rojects fail


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4

E
-
CRM


a definition


E
-
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…



i
mproving 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 customer relationship management



Get them

keep them

more!

Figure 9.1


Three phases of customer relationship management


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7

From old media to new media


From push to pull.


From monologue to dialogue.


From one
-
to
-
many to one
-
to
-
some and one
-
to
-
one.


From one
-
to
-
many to many
-
to
-
many communications


From ‘lean
-
back’ to ‘lean
-
forward’.


Form of tools changes.


Increase in communications intermediaries.


Integration remains important.

See diagrams in chapter 9 also on media characteristics

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Off/online communications techniques e
-
commerce


How to get traffic to website


Figure 9.3


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Overview components of CRM technologies



Figure 9.13


An overview of the components of CRM technologies


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Evaluate the effectiveness of the tools with AIMRITE


A
udience: can the target audience be reached?



I
mpact: can message get through the clutter?



M
essage: is message communication effective?



R
esponse: is responding easy (direct/indirect)?



I
nternal management: can the tools be

managed readily by agency or internally?



T
he
E
nd Result: What are the response rates, costs and returns?


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AIMRITE


Online advertising


Relationship banner ads and destination sites (
Figure 9.4
)

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Online ads
-

effectiveness


Evolve, not cycle


Flash, not GIF

(Rich media)


Use large ad formats

www.lemonad.com




Brand the first frame


Ditch ‘Click here!’


High contrast


Use < 15 ad elements


Use large logos


Include a human face


www.avantmarketer.com

www.atlasdmt.com
:
c
lick
-
t
hrough
r
ate (CTR)


vary 6 times more on placement than creative

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AIMRITE


Search engine marketing


PayPerClick=CostPerClick

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 optimi
z
ation (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

Figure 8.14

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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AIMRITE


Affiliates(and links)


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 marketing


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


But: aim right!?


e

mail marketing


spam


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The simple buying process


Figure 9.6


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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Relationship between satisfaction and loyalty


Figure 9.9


not straight line…

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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
-
out

Incentivise

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Permission marketing vs SPAM



Figure 9.11


Reactions to permission marketing vs SPAM

Source
: DTI (2000)