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INTERNET MARKETING : INTEGRATING ONLINE AND OFFLINE STRATEGIES Customer Relationship Development and Management

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 3 GOOD ACQUISITION/CONVERSION Acquire Leads (High Potential, Unknown Potential) Drive Leads to Website (Product Page; Landing Page) 'Guide' Prospects Through Site (Personas, Paths) Recontact Program (Communications, Offers) Close Sale; Move to Retention Program TARGETED; POTENTIAL HIGH CLV

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 4 RETAINING CUSTOMERS IS CHEAPER THAN ACQUIRING THEM Average Firm Looses 50% Of Customer Base Every Five Years Reducing Defections Increases Profits Many Customers Who Defect Were Satisfied Extremely Satisfied Customers Are More Likely To Repurchase Satisfied Customer Tells Five People While Dissatisfied One Tells Nine

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 5 CLV FOR APPAREL PURCHASES Spent 67% More In Months than Referrals After 1 st Purchase; 7 Referrals After 10 Loyal Customers Would Buy Other Product Lines

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 6 THE ‘FAST LUBE’ EXAMPLE

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 7 MIDDLETON’S LIST OF LOYALTY PROGRAMS Membership cards and membership programs Welcome and thank you communications Satisfaction surveys, followed up by phone calls and letters Beefed up customer service, empowered to solve problems Enhanced technical support with follow up satisfaction calls Frequent buyer programs which permit customers to build up equity Event driven communications that are meaningful to the customers’ lives Databases that keep track of customer’s purchases, preferences, complements and complaints, which are used to carry out loyalty building services and dialogs. Integrated marketing programs where the advertising, direct communications, customer service, database marketing and sales programs are all orchestrated together and designed to build loyalty. Segmentation of the customer base by lifetime value groups, and different marketing programs designed for each segment.

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 8 FAST LUBE’S PROGRAM Reminder they decide to send post cards to people three months after each oil change, suggesting that people return for another change. Customer Service Training they also train their customer service representatives to consult their online databases to find out the customer’s name before they walk up to his car. In this way, they can say, "Hello Mr. Hughes. It is good to have you back. Do you want our Standard Service, like last time, or do you want to trade up to the Superior Service?" Referral in addition, they will train these customer reps to give the customer a post card that he can use to provide the name of someone else who could and should use Fast Lube service. Fast will send this person a personalized letter and a coupon. If the referred person uses the service, the referrer will get $20 off on their next oil change.

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 9 DIFFERENTIATE STRATEGY BY SEGMENT

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 10 WITH REFERRAL PROGRAM New Cohort Increase Same Additional Higher Cost/Better Customers? Additional Increase

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 11 PROGRAM SUMMARY

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 12 TRANSACTIONAL vs. RELATIONSHIP Transactional/MassMedia No Direct Contact with Customer No Ability to Identify and Track Relationship Often Owned by Channel (e.g. Retailer) Cost of Database /Gross Margin Relational Identify, Focus on Individual Customer Target Communication Growth in CLV On-Going Dialogue Seamlessly Satisfactory Customer Experience

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 13 PEPPERS & ROGERS CRM MODEL

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 14 APPLICATION FIG. 8-2 Search Title

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 15 ‘DING’ WIDGET 1 st 2 years 2 M Downloads $150M Sales ding_widget_racks_up_150_million_in_ticket_sales

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 16 THERE’S AN APP FOR THAT! MUJI IPAD APPS The minimalist Japanese retailer launched a series of iPad apps that transferred its characteristic style in clothing and home goods -- spare, clean and functional -- into digital WEBER'S ON THE GRILL IPAD APP This iPad app has a meat timer. BIG FORK, LITTLE FORK IPAD APP This iPad app from Kraft Foods is a tool for parents to teach their kids STARBUCKS CARD MOBILE APP While the coffee-chain launched this mobile payments app last September, it added in a loyalty program and expanding the mobile payments TIFFANY ENGAGEMENT RING FINDER IPHONE APP Not only does the app contain all the shapes, sizes and designs for Tiffany engagement rings, it also has a sizing tool where a clueless bachelor can put an existing ring on the touch screen to compare her size to the standard ring sizes. GE MOOD CAM IPHONE APP BEST BUY MOVIE MODE APP DISNEY TICKETS TOGETHER FACEBOOK APP Ad Age’s Marketer Best, Dec. 13, 10, 2010

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 17 FOUNDATIONS OF CRM Sales Force Automation Marketing Customer Service

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 18 SALES FORCE PRODUCTIVITY Productivity Tools such as  Call Reporting, Order/Inventory Status Sales Lead Generation Programs Telemarketing Management Tools  Sales Forecasting, Reporting

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 19 Land’s End  Multiple Ways To Contact, “Virtual Dressing Room,” Newsletter, Languages, Custom Products, Co-Browsing and More Yellow Freight  Continuous Improvement of Products and Self- Service Options, My Yellow, My Pickup and More ASPCA  Supportive, Informative Content; Registration Page with Strong Incentives; Importance of Personalized RELATIONSHIP FEATURES

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 20 B2B

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 21 B2C

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 22 ASPCA INCENTIVES TO REGISTER Ability to Send ECards Weekly Newsletters State-by-State Animal Protection Information Access to Archives of Their Magazine ASPCA Rewards Program Special Offers from ASPCA Online Store

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 23 RESPONSE TO PERSONALIZATION

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 24 RELATIONSHIP MARKETING IS A PROCESS, NOT A PROJECT STRATEGIC IMPERATIVE

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 25 THE CRM PROCESS

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 26 KEY CONCEPTS Targeting Personalization Customization

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 27 TARGETING AND PERSONALIZATION

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 28 PERMISSION-BASED TARGETING Home PagePreferences Page Figure 8-9

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 29 PERSONALIZING A WEB PAGE Figure 8-10

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 30 PERSONALIZING NEWSLETTER Figure 8-10

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 31 WHAT IS A COOKIE? TYPES OF COOKIES Session vs. Enduring Third Party vs. Site

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 32 GOOD OR BAD?

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 33 TYPES OF PERSONALIZATION Rules-Based User-Controlled Information-Driven

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 34 British Supermarket Tesco Is A Leader In CLV-Driven Loyalty Programs Administered Through Their Web Site A GLOBAL LEADER

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 35 UNDERSTAND CUSTOMER BEHAVIOR Over 11 Million Club Card Holders Accumulate Points with Purchases  “Thank You” Vouchers 4 Times/Year  Redeem at Tesco, For Club Offers Newsletter Mailings  “Over 80,000 Offer Combinations In Each Mailing”

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 36 EACH CUSTOMER MEASURED EACH WEEK Source: Dunhumby

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 37 DRIVES MARKETING PROGRAMS Source: Dunhumby Tesco Targeted Media Coupons at Till Club Mailings / Trade Driver Kids Club, Healthy Living Lifestyle Mailings Mainstream, Finer Foods, Healthy Clubcard Statement

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 38 COOP PROMOTIONS WITH BRANDS Tesco Current

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 39 RECENT DEVELOPMENTS Tesco Fresh N Easy – US Profits Up (Apr 08) – Asia/ E. Europe Set up Full-Service Bank (Jul 08) - RBS

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 40 METRICS ‘STEERING WHEEL’

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 41 FACEBOOK METRICS

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 42 SOCIAL CRM Ad m/watch?v=oOazBbJG ve8&feature=player_e mbedded ix-holes-your-bucket-blog/understanding-their- customer-journey-tesco-s-iphone-

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 43 CRITERIA FOR LOYALTY PROGRAMS Be Easy To Use Provide Immediate Rewards Have Value To Customer Be Targeted To Behavior Change Be Affordable Have A Published Exit Strategy

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 44 WHY CRM PROGRAMS FAIL Initiative Launched without Comprehensive Strategy Not Integral to the Business Strategy Based on What Worked for Another Company Launched without Concern for Effective Enterprise and Customer Interfaces Considered an IT Project Instead of a Business Initiative Launched without Defined Objectives and Metrics Considered a One-Time Event Lack of a Customer-Centric Culture Lack of  Top Management Leadership  Employee Buy-In

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 45 THE CRM VISION

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 46 CUSTOMER PROFILES Affluent professionals who want the best technology and entertainment experience Active younger males who want the latest technology and entertainment Family men who want technology to improve their lives—practical adopters of technology and entertainment Busy suburban moms who want to enrich their children's lives with technology and entertainment Small-business customers who can use Best Buy's products and services to enhance the profitability of their businesses Source: Peppers and Rogers, 2005

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 47 CREATED PERSONAS The Segment  Busy suburban moms who want to enrich their children's lives with technology and entertainment The Persona – Detailed Description  "Jill“ - a soccer-mom type who is the main shopper for the family but usually avoids electronics stores. She is well-educated and usually very confident, but she is intimidated by the products at Best Buy and the store clerks who spout words like gigabytes and megapixels.

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 48 A “JILL” STORE “Profiling” “Feminine Side”

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 49 MORE PROFILES – MORE EXECUTIONS Fascinating Post – Leaked Internal Documents

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 50 “CHARLIE” STORES/DEPARTMENTS

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 51 CRM SUCCESS FACTORS Good Customer Data Quality Processes and Systems Organizational Resources and Commitment Software is Necessary, but not Sufficient

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 52 SUMMARY CRM Key To Enterprise Profitability Customer Lifetime Value Key Metric Transactional Marketing Doesn’t Meet Needs CRM (Sales Force Automation, Marketing, Customer Service) “A Process, Not A Project” Profiling, Targeting, Personalization Loyalty Programs Can Be Helpful Seamless Customer Experience  All Touchpoints Acquire Right Customers  Retain Them