CUSTOMER RELATIONSHIP MANAGEMENT 1 1 Customer relationship management

CUSTOMER RELATIONSHIP MANAGEMENT 1 1

Customer relationship management E-CRM – A DEFINITION E-CRM is: • Applying – Internet and other digital technology… (web, e-mail, wireless, i. TV, databases) • To – acquire and retain customers (through a multi-channel buying process and customer lifecycle) • By – Improving customer knowledge, targeting, service delivery and satisfaction. 2 2

Customer relationship management 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 B 2 B context by supporting sales representatives by recording the sales process (SFA). • 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 later in the chapter, customers’ characteristics, their purchase behaviour and campaigns can be analysed in order to optimize the marketing mix. 3 3

Customer relationship management Figure The four classic marketing activities of customer relationship management 4 4

Customer relationship management There a range of customer extension techniques for CRM that are particularly important to online retailers: 1. Re-sell. Selling similar products to existing customers – particularly important in some B 2 B contexts as re-buys or modified re-buys. 2. Cross-sell. Sell additional products which may be closely related to the original purchase, but not necessarily so. 3. Up-sell. A subset of cross-selling, but in this case, selling more expensive products. 4. Reactivation. Customers who have not purchased for some time, or have lapsed, can be encouraged to purchase again. 5. Referrals. Generating sales fromrecommendations fromexisting customers, for example member-get-member deals. 5 5

Customer relationship management Benefits of e-CRM : 1. Targeting more cost-effectively. 2. Achieve mass customization of the marketing messages (and possibly the product). 3. Increase depth, breadth and nature of relationship. 4. A learning relationship can be achieved using different tools throughout the customer lifecycle. 5. Lower cost. 6 6

Customer relationship management Peppers and Rogers (1999) have applied their work on building one-toone relationships with the customer to the web. They suggest the IDIC approach as a framework for using the web effectively to form and build relationships. ‘IDIC’ represents the following : 1 Customer identification. 2 Customer differentiation. 3 Customer interactions. 4 Customization. 7 7

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Customer relationship management Lewis and Lewis (1997) identified five different types of web users who exhibit different searching behaviour according to the purpose of using the web : 1. 2. 3. 4. 5. Directed information-seekers. Undirected information-seekers. Directed buyers. Bargain hunters. Entertainment seekers. 9 9

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Customer relationship management Online and offline communications techniques for ecommerce Figure 9. 4 11 11

Customer relationship management The characteristics of interactive marketing communications 1 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 communications. 5 From‘lean-back’ to ‘lean-forward’. 6 The medium changes the nature of standard marketing communications tools such as advertising. 7 Increase in communications intermediaries. 8 Integration remains important. 12 12

Customer relationship management Figure An example of effectiveness measures for an online ad campaign 13 13

Customer relationship management Figure The affiliate marketing model (note that the tracking software and fee payment may be managed through an independent affiliate network manager) 14 14

Customer relationship management The purpose of interactive advertising Cartellieri et al. (1997) identify the following objectives: 1. 2. 3. 4. 5. Delivering content. Enabling transaction. Shaping attitudes. Soliciting response. Encouraging retention. 15 15

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Customer relationship management Customer lifecycle segmentation 17 17

Customer relationship management An overview of the components of CRM technologies Figure 18 18

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