Transcript week 11 ecom

Slide 9.1
Chapter 9
Customer relationship management
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.2
Learning outcomes
• 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.
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.3
Management issues
• 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?
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.4
What is CRM?
• You have a job interview for Centrica
(AA, British Gas, Goldfish) working in the CRM team
www.theaa.co.uk, www.house.co.uk
• How would you explain the terms:
– CRM
– e-CRM
• Why does Centrica have a CRM function?
– Why is CRM different?
– What are benefits of this approach?
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.5
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.
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.6
Marketing applications of CRM
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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 B2B 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.
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.7
Figure 9.1
The four classic marketing activities of customer relationship management
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.8
Figure 9.2
A summary of an effective process of online relationship building
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.9
Figure 9.3
Multi-channel conversion model
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.10
Figure 9.4
Online and offline communications techniques for e-commerce
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.11
Variation in UK media consumption in hours (bars) compared to
percentage media expenditure (squares)
Figure 9.5
Source: Compiled from EIAA (2005) and IAB (2005)
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.12
Measures used for setting campaign objectives or assessing campaign
success increasing in sophistication from bottom to top
Figure 9.6
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.13
Figure 9.7
An example of effectiveness measures for an online ad campaign
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.14
Percentage who consider the different information sources as important
when researching/considering a product or service
Figure 9.8
Source: BrandNewWorld: AOL UK/Anne Molen (Cranfield School of Management)/Henley Centre, 2004
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.15
Figure 9.9
Search engine results page showing the two main methods for achieving
visibility
Source: Screenshot reprinted by permission of Google, Inc
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.16
Figure 9.10
The affiliate marketing model
(note that the tracking software and fee payment may be managed through an independent affiliate network manager)
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.17
Figure 9.11
E-mail response figures
Source: Epsilon Interactive
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.18
Figure 9.12
Schematic of the relationship between satisfaction and loyalty
Source: Adapted and reprinted by permission of Harvard Business Review from graph on p. 167 from ‘Putting the service-profit chain to work,’ by Heskett, J., Jones, T., Loveman, G.,
Sasser, W. and Schlesinger, E., in Harvard Business Review, March–April 1994. Copyright © 1994 by the Harvard Business School Publishing Corporation, all rights reserved
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.19
Relationship between loyalty drivers and measures to assess their success
at Dell Computer
Table 9.4
Source: Reprinted by permission of Harvard Business Review from information on pp. 105–13 from ‘Your secret weapon on the web’, by Reicheld, F. and Schefter, P., in Harvard
Business Review, July–August 2000. Copyright © 2000 by the Harvard Business School Publishing Corporation, all rights reserved
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.20
Figure 9.13
Activity segmentation of a site requiring registration
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.21
Figure 9.14
Different representations of lifetime value calculation
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.22
Figure 9.15
An example of an LTV-based segmentation plan
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.23
Figure 9.16
Customer lifecycle segmentation
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.24
Figure 9.17
RFM analysis
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.25
Figure 9.18
An overview of the components of CRM technologies
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.26
Tesco
The strategic decisions covered in this PowerPoint provide a useful framework for summarizing
the strategic approaches adopted by Tesco.com:
• Decision 1: Market and product development strategies.
Tesco has used the Internet to extend its market into new product markets, such as financial
services, white goods and DVD rentals. While these are promoted through the store, the
web provides a wider choice of products, more detailed information about products and a
method of purchase. The internet can also support entry into new geographical markets.
• Decision 2: Business and revenue model strategies.
New revenue sources are available through extending the product range online as explained
above, and also with new digital revenue streams such as those for music downloads and eDiets. Tesco also supports advertising on its site of related product such as financial
services.
• Decision 3: Target market strategy.
Tesco.com has a broad market of customer types, so it is less relevant for them to use online
to selectively target these with communications. However, the article explains how Tesco
has used the web and e-mail to target more closely through targeting different lifecycle
groups – these are customers who are grouped according to their level of adoption of online
service. Tesco also uses the web to target specific requirements such as Diets and Financial
Services through search engine marketing.
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.27
Tesco
• Decision 4: Positioning and differentiation strategy (including the marketing mix).
Tesco offers some unique online promotions and lower online prices for select products
such as financial services which could attract a percentage discount when purchased online.
It appears not to use the service elements of the mix for positioning beyond the slogan ‘You
Shop, We Drop’. But attention has been paid to improving the customer experience through
usability activities and reduction of download times.
The marketing mix which is covered in Chapter 5 is also suitable for assessing some of the
tactical elements of Tesco.com strategy.
• Product
• Price
• Place
• Promotion
• Process, People and Physical evidence
• Decision 5: Multi-channel distribution strategy.
This is straightforward. Tesco.com has taken the decision to distribute Internet orders via
stores unlike some rivals such as Ocado (www.ocado.com) who have setup distribution
channels.
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.28
Tesco
• Decision 6: Multi-channel communications strategy.
This is not referred to in the article – this describes the mix between online
and offline communications tools for driving visitors to the site. Offline
communications in store and through direct mail are clearly important for
attracting visitors to the site.
• Decision 7: Online communications mix and budget.
Again, this is not mentioned, although the importance of e-mail marketing for
customer communications is apparent.
• Decision 8: Organizational capabilities (7S).
Tesco has achieved focus online by creating a separate ‘Tesco.com’ brand
and a separate division headed by Wade Gery.
Read Boots uses CRM technology to get closer to its customers
• The case shows how marketers at the UK chemist Boots use the
customer purchase history data collected through its Boots Advantage
Card loyalty card programmes to improve marketing.
• Note that this e-business application is independent from its retail site at
www.wellbeing.com, which it uses to sell a selection of its products.
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.29
Questions
• What different types of searching behaviour
are exhibited by online users and what are the
implications for someone responsible for traffic
building on a site?
• Outline four different methods of building web
site traffic
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 9.30
Answer
1
Two main types are:
• directed searching – structured searching using
search engines; so registration on most popular
search engines and techniques to boost position in
listing important
• undirected searching – typically based on links; so
link-building campaign is important
2
• Online – search engine registration
• Online – link building/reciprocal links
• Offline – ads placed on TV or print
• Online/offline – PR media mentions
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007