E-Commerce Customer Relationship Management

roughhewnstupidInternet and Web Development

Nov 18, 2013 (3 years and 1 month ago)

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E
-
Commerce Customer Relationship Management

Pesewa Presentati ons

Learning Objectives


Identify the key features of the Internet audience


Discuss the basic concepts of consumer behaviour and
purchasing decisions


Understand how consumers behave online


Describe the basic marketing concepts needed to
understand Internet marketing


Identify and describe the main technologies that
support online marketing


Identify and describe basic e
-
commerce marketing and
branding strategies


Explain how online market research is conducted


Consider the function and practice of effective CRM



Online Activities

What drives consumer behaviour?


Five stages in the consumer decision process:


awareness of need


search for more information


evaluation of alternatives


the actual purchase decision


post
-
purchase contact with the firm




How do we use this information?


Decision
-
Making Process

e
-
Business: drivers and inhibitors


Drivers and Inhibitors toward e
-
business


Drivers:






Inhibitors:

Life
-
Cycle (SDLC) Approach

Phase 1:

Business Planning

Phase 2:

Infrastructure

Technology

Phase 3:

Design

Phase 4:

Marketing

Phase 5:

Fulfilment

Phase 6:

Maintenance

Enhancement

VISION

WWW

Website and marketing

“What criteria

determine who will be our
most profitable
customers?”


Gartner’s Model of Customer Interaction:
http://www.gartner.com


Customer

Extension

Customer

Retention

Customer

Selection

Customer

Acquisition

Relationship

Marketing

“How can we acquire this
customer in the most
efficient / effective way?

“How can we keep this
customer for as long as
possible?”

“How can we increase the
loyalty and profitability of
this customer?”

Understand your customers


Lewis & Lewis (1997) identify 5 basic types of Internet
users

1.
Directed information seekers: searching for timely,
relevant, accurate information on a topic or topics

2.
Undirected information seekers: classic “web surfer”
user who follows a random interest
-
driven path
through the web following links at random or where
their interest is captured briefly

3.
Bargain hunters: seeking free items, trial samples and
giveaways

4.
Entertainment seekers: browsing online entertainment,
games, music, streaming audio or video

5.
Directed buyers: hard
-
core shoppers online; they know
what they want and where to find it and buy it

Online Retailing: 8 Cs

1.
Content: Is it a compelling offering to the Customer?

2.
Convenience: How easy is the site to navigate and use?

3.
Customer Care: Extent to which the organization shows a commitment to
Customers (Terms & Conditions, Privacy, etc)

4.
Community: Cybercommunity as integral part of Customer experience (e.g
YouTube)

5.
Communication: Where Customer can opt into a conversation with the
organization, and expect to receive a useful exchange of information

6.
Connectivity: Site
-
to
-
site connectivity (useful and meaningful links) and User
-
to
-
site connectivity (speed of access, navigability, site design, etc)

7.
Customisation: Basic form of relationship marketing where site recalls previous
transactions and Customer may be able to control what (s)he sees

8.
Concern for Customers (and Customer concerns): Relates to understanding
Customer fears, inhibitors and distractions (e.g. security, trust, 128
-
bit data
encryption, etc)

Jones et al, 2001

How can you segment them?

Customers’ Characteristics

What do they want from your site?

Return to consumer decision
-
making process:

How do they behave online?

What do they do / look for?

What do they buy?

How do they find you?

What entices them to buy?

What do we need to offer?

What do we need to offer?

In my opinion: Customer Service

Not Products, but BRANDS

Customer Relationship Management


CRM: Customer Relationship Management.



Strategy used to learn more about customers' needs and

behaviours in order to develop stronger relationships with them.


Good customer relationships are at the heart of e
-
business success.


There are many technological components to CRM, but it is wrong to think of
CRM in primarily technological terms.


CRM is a strategic process that helps firms understand their customers’ needs
better


Indicates how those needs can be best met, and improve profitability


Strategy depends on bringing together information about customers and market
trends so that products and services can be marketed and sold more effectively.


CRM seeks to build long
-
term relationship with customers


CRM Tools


Many software companies offer CRM solutions,
including:


IBM [IBM.com]


SAP [sap.com]


NetSuite

[NetSuite.co.uk]


Goals of CRM:


providing services and products that are exactly what

customers want (need?)


offering better customer service


cross selling and
upselling

products more effectively


helping sales staff close deals faster


retaining existing customers and discovering new ones


Derived from cio.com

CRM Strategy


For effective CRM, an organization must first understand who its customers are and what
their value is over a lifetime.


Company must then determine what the needs of its customers are and how best to meet
those needs.


For example, many financial institutions keep track of customers' life stages in order to market
appropriate banking products like mortgages or Investment Trusts to them at the right time to fit
their needs.


Next, the organization must look into all of the different ways information about customers
comes into a business, where and how this data is stored and how it is currently used.


One company, for instance, may interact with customers in a number of different ways:


mail campaigns,


Web sites,


brick
-
and
-
mortar stores,


call centres,


mobile sales force staff and


marketing and advertising efforts.


CRM systems link up each of these. Data flows between operational systems (like sales and inventory
systems) and analytical systems that look for patterns.


Analysts then comb through the data to obtain a holistic view of each customer and pinpoint areas
where better services are needed.

Basic Marketing Strategies


Marketing: The strategies and actions firms take to establish a relationship with a
consumer and encourage purchases of products and services


Internet marketing: Using the Web, as well as traditional channels, to develop a
positive, long
-
term relationship with customers, thereby creating competitive
advantage for the firm by allowing it to charge a higher price for products or services
than its competitors can charge


Firms within an industry compete with one another on four dimensions:


Differentiation


Cost


Focus


Scope


Marketing seeks to create unique, highly differentiated products or services
that are produced or supplied by one trusted firm (“little monopolies”)




Internet Marketing Technologies


Web transaction logs
[
http://www.netmechanic.com/news/vol4/promo_no11.htm]


Search Engine Submission (absolutely essential): Need to tell the world
that you exist!


Cookies and Web bugs
[
http://www.eff.org/Privacy/Marketing/web_bug.html]


Databases, data warehouses, and data mining


Collaborative Filtering (e.g. Amazon.com)


Advertising networks


Customer relationship management (CRM) systems

[but remember that it is not just about technology]


Organizational Resources:


http://www.emarketingassociation.com/


http://www.marketingtoday.com/emarketing/index.htm


http://www.emarketinganswers.com/


http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1075384972


http://hk.solutions.yahoo.com/emarketing/whyyahoo_main.htm


http://searchenginewatch.com/




Revolution in Internet Marketing


Three broad impacts:


Internet has broadened the scope of marketing communications


Internet has increased the richness of marketing communications


Internet has greatly expanded the information intensity of the
marketplace

Unique Aspects of e
-
Marketing

Web Transaction Logs


Built into Web server software


Records user activity at a Web site


WebTrends a leading log analysis tool


Can provide treasure trove of marketing information, particularly
when combined with:


Registration forms


used to gather personal data


Shopping cart database


captures all item selection, purchase and
payment data

Example Web Logfile (4 seconds)

Marketing Use of Log Data

Cookies


Cookies: small text file that Web sites place on a visitor’s client
computer every time they visit, and during the visit as specific pages
are accessed.


Cookies provide Web marketers with a very quick means of
identifying the customer and understanding his or her prior behavior


Location of cookie files on computer depends on browser version

Typical Cookie File (Netscape)

Web Bug


Tiny (1 pixel) graphic files embedded in e
-
mail messages and on Web
sites


Used to automatically transmit information about the user and the
page being viewed to a monitoring server



SPYWARE!


Often included with freeware and shareware.


Contains executable files (programs) that can obtain passwords, credit card
data and other private material from client computers on networks


Some also include aspects of Trojan Horse software


http://www.spywareguide.com/


http://www.webopedia.com/TERM/s/spyware.html


Social Issue: Should Web Bugs be
banned


Marketers claim Web bugs are innocuous; privacy advocates say, if so, why
are they hidden


Different types include clear GIF, executable bugs and script
-
based executable
bugs


Privacy Foundation guidelines for Web bug usage:


Should be visible and labelled to indicate function


Should identify name of company that placed it


Should display disclosure statement if clicked


Should be able to opt
-
out


Network Advertising Initiative (NAI) calls them Web beacons, and have issued
their own guidelines


Currently, no government regulation

Databases and Data Warehouses


Database: Software that stores records and attributes


Database management system (DBMS): Software used to create, maintain and
access databases


SQL (Structured Query Language): Industry
-
standard database query and
manipulation language used in a relational databases


Relational database: Represents data as two
-
dimensional tables with records
organized in rows and attributes in columns; data within different tables can be
flexibly related as long as the tables share a common data element


Data warehouse: Database that collects a firm’s transactional and customer
data in a single location for offline analysis by marketers and site managers

Relational DB View of Customers

Data Mining


Set of analytical techniques that look for patterns in data of a database or
data warehouse, or seek to model the behaviour of customers


Types include:


Query
-
driven


based on specific queries


Model
-
driven


involves use of a model that analyses key variables of interest to
decision makers


Rule
-
based


examines demographic and transactional data of groups and
individuals at a Web site and attempts to derive general rules of behaviour for
visitors


Collaborative filtering


behavioural approach; site visitors classify themselves
into affinity groups based on common interests; products are then recommended
based on what other people in the group have recently purchased


Data Mining & Personalisation

Advertising Networks


Best known for ability to present users with banner advertisements
based on a database of user behavioural data


DoubleClick best
-
known example


Ad server selects appropriate banner ad based on cookies, Web bugs,
backend user profile databases

How Advertising Network Works

CRM System


Repository of customer information that records all of the contacts that a
customer has with a firm and generates a customer profile available to
everyone in the firm with a

need to “know the customer”


Customer profiles can contain:


Map of the customer’s relationship with the firm


Product and usage summary data


Demographic and psychographic data


Profitability measures


Contact history


Marketing and sales information

Example of CRM System

Market Entry Strategies


For new firms:


Pure clicks/first mover


Mixed “clicks and bricks”/alliances


For existing firms:


Pure clicks/fast follower


Mixed “clicks and bricks”/brand extensions

Generic Entry Strategies

Establishing Customer Relationship


Permission marketing: Marketing strategy in which companies obtain
permission from consumers before sending them information or promotional
messages (example: opt
-
in e
-
mail)


Affiliate marketing: Marketing strategy that relies on referrals; Web site
agrees to pay another Web site a commission for new business opportunities
it refers to the site


Viral marketing: Process of getting customers to pass along a company’s
marketing message to friends, family, and colleagues


Brand leveraging: Process of using power of an existing brand to acquire new
customers for a new product or service

Customer Retention


Mass market
-
personalization continuum ranges from mass marketing to
direct marketing to micromarketing to personalized, one
-
to
-
one marketing


One
-
to
-
one marketing: Involves segmenting the market on a precise and
timely understanding of an individual’s needs, targeting specific marketing
messages to these individuals and then positioning the product vis
-
à
-
vis
competitors to be truly unique


Mass
-
Market Personalisation

Other Retention Techniques


Customization: Changing the product (not just the marketing message) according
to user preferences


Customer co
-
production: Allows the customer to interactively create the product


Transactive content: Results from the combination of traditional content with
dynamic information tailored to each user’s profile


Customer service tools include:


Frequently asked questions (FAQs)


text
-
based listing of common questions and
answers


Real
-
time customer service chat systems


company’s service representatives
interactively exchange text messages with one or more customers on a real
-
time
basis


Intelligent agent technology


bots


Automated response systems


send e
-
mail confirmations and acknowledgments
(autoresponders)



Net Pricing Strategies


Pricing (putting a value on goods and services) an integral part of marketing strategy


Traditionally, prices based on:


Fixed cost (costs of building production facility


Variable costs (costs involved in running production facility)


Market’s demand curve (quantity of goods that can be sold at various prices)


Price discrimination: Selling products to different people and groups based on their
willingness to pay


Free products/services: Can be used to build market awareness


Versioning: Creating multiple versions of a good and selling essentially the same
product to different market segments at different prices


Bundling: Offers consumers two or more goods for one price


Dynamic pricing:


Auctions


establish an instant market price for goods


Yield management


Managers set prices in different markets, appealing to
different segments in order to sell excess capacity


Channel Management Strategies


Channel: Refers to different methods by which goods can be
distributed and sold


Channel conflict: Occurs when a new venue for selling products or
services threatens or destroys existing venues for selling goods


Examples: online airline/travel services and traditional offline travel
agencies


Some manufacturers are using partnership model to avoid channel
conflict

Online Market Research


Market research: Involves gathering information that will help a firm identify
potential products and customers


Two general types:


Primary research


involves gathering first
-
hand information using techniques
such as surveys, personal interviews and focus groups


Secondary research


relies on existing, published information as basis for
analysing market

Types of Survey Questions

Popular Research Tools

Marketing Communications


What is marketing communications?


Two aspects:


Branding (statements of “quality, reliability, non
-
price factors”)


Sales (promotion)


Promotional aspect : “buy NOW!”


Branding aspect: Focus on differentiated benefits of product


Online Brand Development and brand reinforcement


CRITICAL to business success


Develop and sustain competitive advantage


Create a climate of TRUST (building guangxi)


Create corporate “image” in mind of online visitor


Online Advertising


A mixed blessing
-

permission marketing: OK; spam: BAD


Try
http://www.emarketer.com


Online marketing jargon


Banner ad


Pop
-
up


Pop
-
under


Button


Rich media ad


Interstitial ad


Superstitial ad


Banner swapping


Banner exchanges


Cross
-
linking


Search engine marketing


Placement


Paid listing


Sponsorship


Affiliate marketing


Direct e
-
mail marketing

Please do some online searches

for these terms and concepts

and build a database (on cards,

or whatever), to ensure that

you understand the concepts


and

their importance to

e
-
enabled business operation