1. ©NCC Education Limited V1.0 Information Systems and Organisations Lecture 10: IS and the Customer

2. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.2 Scope and Coverage This topic will cover: IS to support and create customer value Customer relationship management eBusiness

3. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.3 Learning Outcomes By the end of this topic students will be able to: Understand how IS are relevant when dealing with customers in a variety of ways Critically analyse the changing world of organisation and customer interaction

4. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.4 Contents IS and customers Customer Relationship Management (CRM) eBusiness and eCommerce Emphasis – People, Organisation and Technology

5. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.5 Sales? What is Sales ? Dealing directly with INDIVIDUAL Customers Making Sales Managing Customer Experience

6. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.6 Marketing? What is Marketing ? Understanding the Market Promotion of Products and Services Matching Products and Services to Customer Needs

7. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.7 Marketing and Sales in the Enterprise Purchases (inputs) OPERATIONS What we Do with inputs Products & Services (outputs) Marketing Sales Feedback Markets and Customers Suppliers

8. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.8 Sales and Marketing - Information Flows Marketing Sales Potential Customers (leads) - Campaigns - Promotions - Advertising Existing Customers - Account Mgt - Sales Calls - Personal Selling - Target Driven

9. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.9 Performance Measures Sales and Marketing SALES Revenue Individual Targets Prizes for Success Short Term (Weekly, Monthly) MARKETING Revenue and Profitability Products Effectiveness of Campaigns Longer Term (Quarterly, Yearly)

10. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.10 Enterprise Applications Sales and Marketing SALES Product Details Sales Recording CRM -Diary -Scheduling -Customer Details -Sales Force monitoring -Commission Management MARKETING Product Details Product Sales Performance CRM -Customer Details -Campaign Management -Customer Buying Behaviour

11. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.11 CRM Many types of CRM Analytical (understanding customers) Transactional (managing customer processes) An introductory discussion of CRM principles can be found at the URL below: -http://www.businessballs.com/crmcustomerrelationshipm anagement.htmhttp://www.businessballs.com/crmcustomerrelationshipm anagement.htm

12. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.12 Customer Service Products & Services (outputs) Customer Service Applications Part of CRM Record Keeping MIS and Performance

13. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.13 eBusiness / eCommerce eBusiness - customers are other businesses and organisations: -Long history of electronic data interchange (EDI) of business transactions between organisations -Increasing business use of Internet beyond this eCommerce - customers/consumers interact with businesses and organisations via Internet, mobile devices and other type of interface: -Purchasing products and services -The recipients of marketing messages -Customer service of various sorts

14. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.14 Intermediation and Bundling 1 The Internet makes shopping for individual components of a ‘bundle’ possible/much easier for the consumer Leads to dis-intermediation and pressure on intermediaries’ margins -(e.g. Customer buying part of a holiday separately) Internet increases market visibility, prices, potential suppliers etc. for the consumer

15. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.15 Intermediation and Bundling 2 Third parties exist as intermediaries between the customer and suppliers/sellers Intermediaries can ‘bundle’ packages of products and services to make them easier to buy (e.g. travel agent)

16. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.16 The ‘Unbundled’ World In practice customers may choose to buy a package in some cases and buy unbundled in others....depending upon price, convenience etc. With the Internet, ‘Buyer Behaviour’ needs to be thought of partially as ‘User Behaviour’ in IS terms (Topic 9) Customer value proposition embraces the whole buying and service experience – not just the product

17. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.17 Typical EC Business Models 1 -Online direct marketing -Electronic tendering systems. -Name your own price -Find the best price -Affiliate marketing -Viral marketing -Group purchasing -Online auctions -Product and service customization -Electronic marketplaces and exchanges -Information brokers (informediaries) -Bartering -Deep discounting -Membership -Value-chain integrators -Value-chain service providers -Supply chain improvers -Social networks, communities, and blogging -Direct sale by manufacturers -Negotiation

18. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.18 Typical EC Business Models 2 Online direct marketing -Selling products or services online Electronic tendering (bidding) system (reverse auction) -Model in which a buyer requests would-be sellers to submit bids; the lowest bidder wins Name-your-own-price model (demand-collection model) -Model in which a buyer sets the price he or she is willing to pay and invites sellers to supply the good or service at that price

19. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.19 Typical EC Business Models 3 Find the best price (search engine model) -An intermediate company locates the lowest price (e.g. Confused.com) Affiliate marketing -An arrangement whereby a marketing partner (a business, an organization, or even an individual) refers consumers to the selling company’s Web site (by a banner ad or logo)

20. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.20 Typical EC Business Models 4 Viral marketing -Web-based Word-of-mouth marketing in which customers promote a product or service to friends or other people Group purchasing (volume-buying model, e-co-ops) -Quantity (aggregated) purchasing that enables groups of purchasers to obtain a discount price on the products purchased Online auctions -The highest bidders win (e.g. eBay)

21. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.21 Typical EC Business Models 5 Product and service customisation -Creation of a product or service according to the buyer’s specifications (e.g. Dell) Electronic marketplaces and exchanges -Virtual marketplace in which sellers and buyers meet and conduct different types of transactions (emalls) Information brokers (imformediaries) -Information brokers that provide privacy, trust, matching, search, content and other services (e.g. Bizrate.com)

22. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.22 Typical EC Business Models 6 Bartering -Exchanging products (e.g. Web-barter.com) Deep discounting -Companies offering products and services at deep discounts, as much as 50% of the retail price Membership -Only members get a discount Value-chain integrators -Adding value by aggregating products into more complete packages for customers e.g. car-selling + financing and insurance

23. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.23 Typical EC Business Models 7 Social networks, communities and blogging -Websites that connect people with specified interests by providing free services such as photo presentation, e- mail, blogging, etc. (e.g. Facebook) Direct sales by manufacturers -The manufacturer eliminates all intermediaries, selling directly to customers Negotiation -Offering negotiation capabilities between individuals or companies; also facilitated by Intelligent Agents

24. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.24 Customers and the Networked World In the last 20 years Information Systems have started to pervade our lives Increasingly the way in which organisations deal with customers is being transformed Example, Government. In the U.K. in the last year the author has used the Internet to: -Buy Car Tax -Apply for a New Passport -Submit a Tax Return and Pay Tax due -..... many information searches on Government websites

25. ©NCC Education LimitedV1.0 IS and the Customer Lecture 10 - 10.25 References http://www.businessballs.com/crmcustomerrelationshipmana gement.htmhttp://www.businessballs.com/crmcustomerrelationshipmana gement.htm Chaffey, D. (2007) E-Business and E-Commerce Management. Pearson Prentice Hall.

26. IS and the Customer Lecture 10 - 10.26 ©NCC Education LimitedV1.0 Lecture 10 – IS and the Customer Any Questions?