Learning objectives Assess the relevance of the concepts of relationship, direct and database marketing marketing on the Internet; evaluate the potential of the Internet to support one-to-one marketing and the range of techniques and systems available to support dialogue with the customer over the Internet; assess the characteristics required of tools to implement one-to-one marketing.

Questions for marketers How can the Internet be used to support the different stages of the customer lifecycle? How do I implement permission marketing? What do personalisation and mass customisation mean and how should I apply them in my marketing?

Elements of CRM Figure 6.1 Linkages between customer relationship management and related marketing approaches

Differences between relational and transactional marketing Transactional paradigm Relational paradigm Market segment Individual customer Transaction duration Lifetime Margin Lifetime value Market share Most valued customers and customer share Mass market broadcast Dialogue and tailored communications Passive consumers Empowered clients

CRM applications Sales force automation Customer service management Managing the sales process Campaign management Analysis

Personal and profile data CRM data Personal and profile data Contact details Preferences Transaction data Sales history Communications data Campaign history Research / Feedback / Support queries Contact reports (B2B)

CRM aims and focus Figure 6.2 The relationship between the customer acquisition, retention and extension phases of the customer lifecycle and loyalty and customer value

CRM resource

5Is Identification – can the customer be recognised for different channel contacts? Individualisation – can communications and products be tailored? Interaction – are communications two-way? Integration – is there a 360 degree view of the customer? Integrity – is the relationship built on trust?

Permission marketing Key concepts Not interruption marketing Not SPAM Requires opt-in (online to e-mail) Opt-out Learning about the customer Initial and continued relationship is based on incentives

Mass customisation and personalisation Figure 6.4 Options for mass customisation and personalisation using the Internet

Online relationship building Figure 6.5 A summary of an effective process of online relationship building

Example – Virgin Megastores

Example – Silicon

Example – Clearly Business

IDIC Figure 6.7 The elements of the IDIC framework

e-CRM tools Database Data mining Personalisation systems Outbound e-mail Inbound e-mail management Virtual communities