ch. 9

panicyfewInternet and Web Development

Nov 18, 2013 (3 years and 8 months ago)

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Slide 9.
1

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Customer relationship management

Chapter 9

Slide 9.
2

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Learning outcomes


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.

Slide 9.
3

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Management issues


What are the practical success factors digital
media need to make customer acquisition
more effective?


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


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

Slide 9.
4

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Work Left From Last Class


Read the Econsultancy interview on pp 484
-
485 and visit
http://www.warnerleisurehotels.co.uk/



Answer these questions

1.
What did Warner Breaks (WB) found about the
online marketing?

2.
What did they do to attract and retain
customers?

3.
What special about the older generation
regarding online transactions?

4.
Do you feel that their website is well
-
designed
for the targeted audience?

Slide 9.
5

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

What is CRM?


You have a job interview for a company such
as Future Shop or Staples working in the CRM
team


How would you explain the terms:


CRM


E
-
CRM


Why does the company have a CRM function?


Why is CRM different?


What are benefits of this approach?

Slide 9.
6

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

What is CRM?


It is a strategy used to learn more about
customers' needs and behaviors in order to
develop stronger relationships with them.

http://www.cio.com/article/40295/CRM_Definition_and_Solutions



An approach to building and sustaining long
-
term business with customers

Slide 9.
7

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.1

The four classic marketing activities of customer relationship management

Slide 9.
8

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Marketing applications of CRM


A CRM system supports the following marketing
applications:


Sales force automation (SFA). Sales representatives
are supported in their account management through
tools to arrange and record customer visits


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


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)

Slide 9.
9

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Marketing applications of CRM

(Continued)


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


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

Slide 9.
10

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

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…



improving customer knowledge, targeting,



service delivery and satisfaction

Slide 9.
11

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

E
-
CRM


Benefits


What benefits can e
-
CRM produce?
Ref. p. 487


What’s Wikinomics and how can a company take
advantage of it to enhance CRM?
Ref. p. 488 Box 9.1


What is permission marketing?
Ref. p.488


What is customer profiling?
Ref. p.490


What is IDIC?

Identification, differentiation, interactions, and customization



Slide 9.
13

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Conversion Marketing


Using marketing communications to change the potential
customers to actual and existing customers to repeating
customers


Many companies invest primarily in customer acquisition
but not enough in conversion.


What can be done to improve the conversion rate?




Slide 9.
14

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Online Buying Process


What is the typical online and offline purchase
process?


How can online marketing communications
support the purchase process?


Searching behaviors


Directed info seeker


Undirected info seeker


Directed buyer


Bargain hunters


Entertainment seeker



Slide 9.
15

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.3

A summary of how the Internet can impact on the buying process for a

new purchaser

Slide 9.
16

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Online Buying Process


Differences btw B2C and B2B Buyer Behavior


Market structure


Nature of the buyer unit


Type of purchase


Importance of Trust



Slide 9.
17

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.4

A model of the relationship between different aspects of trust and

consumer response based on the categories of Bart
et al
. (2005)

Slide 9.
18

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Online Buying Process


What is net promoter score?
Ref. p.495


How to support online advocacy?

Ref. p.497


How to manage online detractors?



Slide 9.
19

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.5

Percentage who consider the different information sources as important

when researching/considering a product or service

Source
: BrandNewWorld: AOL UK/Anne Molen (Cranfield School of Management)/Henley Centre, 2004

Slide 9.
20

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Customer Acquisition Management


The characteristics of interactive Marketing Comm

1.
From push to pull

2.
From monolog to dialog

3.
From 1:M to 1 to some and 1:1

4.
From 1:M to M:M

5.
From lean
-
back to lean
-
forward

6.
The medium changes the nature of the standard
marketing communication tools

7.
Increase in communication intermediaries

8.
Integration remains important

Slide 9.
21

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.6

Online and offline communications techniques for e
-
commerce

Slide 9.
22

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Assessing Market Comm Effectiveness

Acquisition cost


Per visitor


Per lead


Per sale

Bounce rate


% of visitors entered the site but left
immediately after viewed one page only



Slide 9.
23

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.7

Measures used for setting campaign objectives or assessing campaign

success increasing in sophistication from bottom to top

Slide 9.
24

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Online Marketing Communication

Search engine marketing


Assessing the effectiveness of a web campaign

Ref. p. 504, Fig. 9.8


How does Google work?


Crawling

indexing

ranking

query request
and result serving


Keyphrase analysis


Search
-
engine optimization

review



Slide 9.
25

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.8

An example of effectiveness measures for an online ad campaign

Slide 9.
26

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.10

Stages in producing natural search engine listings

Slide 9.
27

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Which are the ranking factors
affecting position In Google SERPs?

200

+
-


On
-
page optimization


Document meta data


Document content


Creation of new pages


Off
-
page optimization


Link
-
building


External links


‘Links In’


‘Backlinks’


‘Inbound links’


AND Internal links


Behavioural


Popularity of sites from toolbar


Google’s search spam filters

Slide 9.
28

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Which SEO ranking factors

should I focus on?


On page optimization:


<title> tag = 4.9/5


Keyword frequency and density = 3.7/5


Keyword in headings = <h1> = 3.1, <h2> = 2.8



Keyword in document name = 2.8


Meta name description = 2/5


Meta name keywords = 1/5



Off
-
page optimization:


More backlinks (higher PageRank)= 4/5


Link anchor text contains keyword = 4.4/5



Page assessed as a hub = 3.5/5


Page assessed as an authority = 3.5/5


Link velocity (rate at which changes) = 3.5/5


See
http://www.seomoz.org/article/search
-
ranking
-
factors

http://docs.google.com/Present?docid=dc3qhbxg_1217d9mwjwg3

Slide 9.
29

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Online Marketing Com
-
Paid Search

Factors affect returns


Distribution of daily budget



Amount bid (Max CPC)



* Clickthrough rate



* Creative quality including creative testing



* Match types especially negative matches



Use of content network



Time
-
of
-
day (day parting)



Landing page quality



Click fraud!


* In Google AdWords, Live Search and Yahoo! Quality Score especially
important

Slide 9.
31

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Online Marketing Communication

Online PR


Maximizing favorable mentions of an organization, its
brands, products, to web sites on 3
rd
-
party web sites

1.
Communication with media online

2.
Link building

3.
Blogs, podcasting and RSS

4.
Online community and social networks

5.
Marketing how your brand is presented on 3
rd

party
sites

6.
Creating a buzz
-
online viral marketing

Slide 9.
32

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.11

Online PR categories and activities

Slide 9.
33

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Online Marketing Communication

Online Partnership


Affiliate marketing


Read the mini Case Study 8.4 on p. 516. Explain why
companies have scaled back e
-
communication
spending.


What is online
-
sponsorship?
http://www.davechaffey.com/E
-
marketing
-
Insights/Internet
-
advertising
-
online/Online
-
sponsorship



What’s the differences between online sponsorship and
affiliate marketing?


Slide 9.
34

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.12

The affiliate marketing model (note that the tracking software and fee

payment may be managed through an independent affiliate network manager)

Slide 9.
35

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Online Marketing Communication

Interactive Advertising


What is media multiplier/halo effect?


Purpose of Interactive Advertising


Delivering content


Enabling transactions


Shaping attitudes


Soliciting response


Encouraging retention

Slide 9.
36

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Online Marketing Communication

Interactive Advertising


Interactive ad target options


On a particular type of site


To target a registered user’s profile


At a particular time of day/week


Online behavior

dynamically serving relevant
content or ad that matches the interest of a site
visitor.


Interactive ad formats


Banner size, message length, promotional
incentive, animation, action phrase, company
brand/logo


Slide 9.
37

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Online Marketing Communication

Media planning


What’s the optimum mix of online/offline
advertising? Ref. p.520, table 9.2

E
-
mail marketing

Read the Mini Case Study 9.5

What are the major challenges of email marketing?

What’s opt
-
in options for e
-
mail marketing?

Viral marketing


achieve marketing objectives through self
-
replicating
viral processes, analogous to the spread of
pathological and computer viruses.


Three important factors


Creative Material


Seeding

Find the starting point


Tracking


Slide 9.
38

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.13

E
-
mail response figures

Source
: Provided by SmartFOCUS Digital (www.smartfocusdigital.com), an e
-
mail service provider that send e
-
mails to UK and European or
ganizations such as publishers and retailers

Slide 9.
39

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.14

TopTable (www.toptable.co.uk)

Slide 9.
40

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Channel Comparison Summary

Ref. p. 526 table 9.3 for details

Slide 9.
41

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Customer Retention Management

Goals of Customer Retention


Retain customers


Keep customers using online channel


Satisfaction


loyalty


profitability


How to keep customers satisfied?


Experience from Dell

ref. table 9.4 on p. 528

Personalization and mass customization


Mass customization

deliver customized
content to groups of users through web or email


Collaborative filtering

deliver specific info and
offers based on the interests of similar
customers



Slide 9.
42

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.15

Schematic of the relationship between satisfaction and loyalty

Source
: Adapted and reprinted by permission of
Harvard Business Review
from graph on p. 167 from ‘Putting the service
-
profit chain to work,’ by Heskett, J., Jones, T., Loveman, G.,

Sasser, W. and Schlesinger, E., in
Harvard Business Review
, March

April 1994. Copyright © 1994 by the Harvard Business School Publishing Corporation, all rights reserved

Slide 9.
43

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Customer Retention Management

Online Community


Online Community becomes important to the
success of the business


Various 3
rd

party online communities and
cooperation sponsored communities have been
established in the recent years.


B2B, in many cases B2C, communities are
commonly built based on


purpose
-
people who do the similar jobs or
achieve a similar objectives


Position


Interest


Profession

Slide 9.
44

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.16

UTalkMarketing example of a professional online community

Source
: www.utalkmarketing.com, the UK’s leading community website for client side marketers

Slide 9.
45

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Customer Retention Management

Online Community


Do we need an online community?


How to build one?


Questions to be asked before start a
community


Typical problems


Empty community


Silent community


Critical community


Slide 9.
46

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Customer Retention Management

Managing Customer activity and value


Increase # of new users


Increase % of active users


Decrease % of dormant users


Decrease % of non
-
activated users

Retention metrics are often used


Repeat
-
customer conversion rate


Repeat customer base


# of transaction per repeat customer


Revenue per transaction of repeat customer

Slide 9.
47

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.17

Activity segmentation of a site requiring registration

Slide 9.
48

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Customer Retention Management

Lifetime Value
Modeling


Total net benefit that a customer or a group of
customers will
provide

over their total
relationship with the company


What can LTV be used for?


Ref. p. 535


Slide 9.
49

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.18

Different representations of lifetime value calculation

Slide 9.
50

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.19

An example of an LTV
-
based segmentation plan

Slide 9.
51

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Excelling in E
-
Commerce Service Quality

Improving online service quality


Tangible

easy of use and visual appeal of the site


Reliability

availability of the site


Responsiveness

speed of page load, speed of
responses to questions, if any


Assurance

quality of response, privacy and
security, etc.


Empathy

personalized interaction, context,
task relevant help and assistance, e.g., during
the purchase process

Slide 9.
52

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Customer Extension


The goal is to increase the lifetime value of the
customer


What does “
Focus on share of customer, not market
share”
mean ? (
ref. p. 540, 2
nd

paragraph
)


Advanced online segmentation and target
techniques


Identify lifetime group


Identify profile characteristics


Identify behavior in response and purchase


Identify multi
-
channel behavior


Tone and style preference


Slide 9.
53

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.20

Customer lifecycle segmentation

Slide 9.
54

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Customer Extension


Advanced online segmentation and target
techniques


Sense, respond, and adjust


Monitor customer actions or behaviour


React with appropriate messages and offers


Monitor response to the messages and act
accordingly


(RFM) value analysis


Recency

how recent was the customer’s action?


Frequency

How often did the customer act?


Monetary

How much did the customer spent?


Hurdle rate

% of customers in a group who completed an
action; it can be used to compare different groups or set an
objective for the group


Slide 9.
55

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Technology Solution for CRM

Technologies in use


Database is the core of the CRM


Web interface becomes the main stream


Emails and workflow systems are commonplace


Customer self
-
service is the trend

Types of CRM Applications


Find more info about products/service


Place an order


Receive post
-
sales service

Integration with back
-
office systems


How to link with the backend legacy system is a
big challenge

Slide 9.
56

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Figure 9.22

An overview of the components of CRM technologies

Slide 9.
57

Dave Chaffey,
E
-
Business and E
-
Commerce Management
, 4
th

Edition, © Marketing Insights
Limited 2009

Technology Solution for CRM

Single vendor solution or multiple vendors?


Why the question?


What’s your opinion?

Data Quality


CRM systems depend on the currency, completeness,
and accuracy of their database


Guidelines must be followed to achieve the goal

Ref. p. 549

Case Study


Read the case study on pp. 549
-
551 and answer the
question:


What made Tesco so successful?