E-CRM (Electronic Customer Relationship Management) Introduction to e-CRM E-CRM (Electronic Customer Relationship Management)

Objectives 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 Core reference Chaffey www.booksites.net/chaffey

Issues for managers What is the balance between online and offline investment for customer acquisition? What technologies can be used to build and maintain the online relationship? How do we deliver superior service quality to build and maintain relationships?

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

Marketing applications of CRM A CRM system supports the following marketing applications: 1. Sales force automation (SFA). Sales representatives are supported in their account management through tools to arrange and record customer visits. 2. 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. 3. 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). 4. Campaign management. Managing ad, direct mail, e-mail and other campaigns. 5. 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.

Three phases of customer relationship management

A summary of an effective process of online relationship building

From old media to new media 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. Form of tools changes. 7. Increase in communications intermediaries. 8. Integration remains important.

Offline and online communications techniques for e-commerce

Evaluate the effectiveness of the tools with AIMRITE Audience: can the target audience be reached? Impact: can message get through the clutter? Message: is message communication effective? Response: is responding easy (direct/indirect)? Internal management: can the tools be managed readily by agency or internally? The End Result: What are the response rates, costs and returns?

AIMRITE – Online advertising Positive features Negative features Audience Impact Message Response Information management End Results

The relationship between banner ads and destination sites The relationship between online ads and destination sites

Skyscraper to microsite example

Standard landing page http://www.norwichunion.com/products/ insurance/travel/single_annual_travel.htm

Online ads - effectiveness Instruct, not hope Evolve, not cycle Flash, not GIF (Rich media) Use large ad formats www.lemonad.com Brand the first frame Brand top of skyscrapers Ditch ‘Click here!’ High contrast Use < 15 ad elements Use large logos Include a human face www.avantmarketer.com

AIMRITE – Search engine marketing Positive features Negative features Audience Impact Message Response Information management End Results

Search engine marketing Adwords select(PPC) Position: CPC and CTR Premium Sponsorships (Position:CPM)

1 Search engine registration What is it? ‘Timely submission of domain names, especially campaign-specific names to key search engines’. The issues: 1. Representation. Are you registered on the main search engines? Do you check continuously? 2. Time to register. Plan ahead and make use of paid inclusion services to ensure that campaign-specific URLs can be found when your campaign goes live. 3. New search engines. Search engines change in popularity – are you listed with the latest ones?

2 Search engine optimization (SEO) What is it? ‘Improving your competitive position in the search engine results listings’. The issues: 1. It’s not just meta-tags. Ignored by most search engines – keyword frequency in body copy, <title> tags, headings and links are much more important. 2. Doorway pages. Creating special pages optimised for different product-related keywords and search engines is a key technique for high listings. 3. It’s a continuous process. Search engine algorithms, popularity and competitor activity all change, so to stay competitive, SEO demands continuous attention (Use an agency).

Search engine indexing Stages involved in creating a search engine listing (Chaffey et al., Internet Marketing)

3 Search engine advertising (PPC) What is it? ‘Keyword-based, paid for placements or sponsored links to increase your prominence (Position based on bid)’. The issues: 1. SEO is not enough. Increasingly, SEO alone does not give sufficient visibility in many search engines. Paid placements are necessary to ensure visibility. 2. Is your PPC effective? As with any campaign, there are more and less effective approaches. Case study shows that by rationalising PPC, sales per day were doubled, while the cost per click was halved. 3. It’s a continuous process. Competitor activity varies, so automated bid management tools need to be used to optimise the bids, with frequent reviews of strategy effectiveness (www.gotoast.com, www.bidbuddy.co.uk).

Overture / Freeserve ad options Bid: £1.50 Bid: £1.32 Bid: £1.31

AIMRITE – Affiliates and links Positive features Negative features Audience Impact Message Response Information management End Results

Link building Affects ‘Page Rank’ or link popularity in Google – Type primary keywords into Google – Use “link:site name” or Optilink to find referrers – Beat them: in number AND reputation (referring text) A structured link-building programme will reap benefits both in terms of visitors and enhanced Google listings. Reciprocal links are free, but are mainly practical for intermediaries. Online PR is another form of link building. Is this neglected?

Affiliates What are they? ‘A commission based arrangement where referring sites (publishers) receive a commission on sales by merchants’. ‘Affiliate networks’ such as Trade Doubler have over 400,000 companies across Europe. Used for financial services and travel as well as retailers. MFI derives 8% of its online revenue from affiliates Affiliates help expand reach through niche sites

AIMRITE – E-mail marketing Positive features Negative features Audience Impact Message Response Information management End Results

Shorter campaign creation Faster response Shorter overall cycle time Why e-mail marketing? Higher response rates Shorter campaign creation Faster response Shorter overall cycle time Lower costs More precise targeting Multiple messages to convert More detailed testing and measurement The many benefits to e-mail marketing in comparison with traditional direct marketing have been analysed by Gartner G2 (2002). According to these analysts, e-mail marketing offers: Higher response rates. On average, response rates are between 6 to 8% for permission-based e-mail compared – a significantly higher figure than the majority of direct marketing campaigns. A shorter duration for campaign creation. Gartner G2 estimate that e-mail campaigns are completed in seven to 10 business days on average compared to four to six weeks for direct mail. A more rapid response. Gartner G2 reports that responses to e-mail accumulate in an average of three days, while direct mail requires an average response time of three to six weeks. A faster overall cycle time. Gartner G2 suggest that the overall cycle time of an e-mail campaign from creation to delivery and response is one-tenth the time of traditional direct mail. Lower costs. It is estimated that currently, e-mail costs range from $5 to $7 per thousand compared to $500 to $700 per thousand for direct mail. Gartner G2 (2002) Gartner G2 Says E-mail Marketing campaigns threaten traditional direct mail promotions. Gartner G2 Press release. March 19th, 2002. Claritas estimates the differences between e-mail and direct mail costs as follows for 100,000 customers: Cost item Direct Mail E-mail List cost £5K £15K Design £5K £5K Print £6K £0K Postage £13K £0K Fulfillment £7.5K £2.5K ================================================ Total £35.5K £22.5K

Example e-mail – rented list

Example e-mail house list

Example e-mail multi-message campaign Example of a campaign structure for an e-mail campaign. From Chaffey et al. Internet Marketing. Supplied by UK-based e-mail marketing specialists Harvest Digital (www.harvestdigital.com)

Reasons why businesses do not buy supplies online Source: DTI (2002)

The simple buying process

Online behaviours Directed information seekers. Will be looking for product, market or leisure information such as details of their football club’s fixtures. This type of user tends to be experienced in using the web and they are proficient in using search engines and directories. Undirected information seekers. These are the users usually referred to as surfers, who like to browse and change sites by following hyperlinks. This group tends to be novice users (but not exclusively so) and they may be more likely to click on banner advertisements. Directed buyers. These buyers are online to purchase specific products. For such users, brokers or cybermediaries who compare product features and prices will be important locations to visit. Bargain hunters. These users want to use the find offers available from sales promotions such as free samples or prizes. Entertainment seekers. Users looking to interact with the web for enjoyment through entering contests such as quizzes.

Responses to question: ‘How did you find the product website you Responses to question: ‘How did you find the product website you used to research a purchase?’ Responses to question: ‘How did you find the product website you used to research a purchase?’ Source: DoubleClick (2003b)

RS Components web site (www.rswww.com)

Personalisation on Silicon. com (www. silicon Personalisation on Silicon.com (www.silicon.com) for an IT manager audience Personalization on Silicon.com (www.silicon.com) for an IT manager audience Used with permission from CNET Networks UK Ltd. © 2001, all rights reserved

Which is permission marketing? Interruption marketing To promote we must compete with many marketing messages and cut into what the customer is currently doing. Permission marketing Give customers the option to receive information if they feel it will be of value to them. Which is permission marketing?  Tick if you wish to receive further information (Opt-in)  Tick if you do not wish to receive further information (Opt-out) Which is best? Opt-in Opt-out Incentivise www.permission.com

What exactly is permission marketing? Seth Godin: www.permission.com B2B Example: www.microstrategy.com Key features: Opt-in Based on initial incentive Opt-out Continue incentives through time to: Learn more about customer Tailor product offerings Sell more

Permission marketing vs SPAM Reactions to permission marketing vs SPAM Source: DTI (2000)

IDIC Source: Chaffey et al. (2003)

Cisco site feedback options (www.cisco.com)

Overview of the components of CRM technologies An overview of the components of CRM technologies

Summary Outline different methods of acquiring customers via electronic media Evaluate different buyer behaviour amongst online customers (B2C, B2B) Describe techniques for retaining customers and cross- and up-selling using new media Core reference Chaffey www.booksites.net/chaffey