Transcript Presentation for Chapter 9

Slide 9.1
Chapter 9
Customer relationship management
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
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, 4th Edition, © Marketing Insights Limited 2009
Slide 9.3
Management issues
• What are the practical success factors digital
media need to make customer acquisition
more effective?
• 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, 4th Edition, © Marketing Insights Limited 2009
Slide 9.4
Work Left From Last Class
• Read the Econsultancy interview on pp 484485 and visit http://www.warnerleisurehotels.co.uk/
• Answer these questions
1. What did Warner Breaks (WB) found about the
online marketing?
2. What did they do to attract and retain
customers?
3. What special about the older generation
regarding online transactions?
4. Do you feel that their website is well-designed
for the targeted audience?
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.5
What is CRM?
• You have a job interview for a company such
as Future Shop or Staples working in the CRM
team
• How would you explain the terms:
– CRM
– E-CRM
• Why does the company have a CRM function?
– Why is CRM different?
– What are benefits of this approach?
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.6
What is CRM?
• It is a strategy used to learn more about
customers' needs and behaviors in order to
develop stronger relationships with them.
http://www.cio.com/article/40295/CRM_Definition_and_Solutions
• An approach to building and sustaining longterm business with customers
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.7
Figure 9.1
The four classic marketing activities of customer relationship management
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.8
Marketing applications of CRM
• 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)
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.9
Marketing applications of CRM
(Continued)
• Campaign management. Managing ad, direct mail, email and other campaigns
• 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
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.10
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, 4th Edition, © Marketing Insights Limited 2009
Slide 9.11
E-CRM – Benefits
• What benefits can e-CRM produce? Ref. p. 487
• What’s Wikinomics and how can a company take
advantage of it to enhance CRM? Ref. p. 488 Box 9.1
• What is permission marketing? Ref. p.488
• What is customer profiling? Ref. p.490
• What is IDIC?
Identification, differentiation, interactions, and customization
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.13
Conversion Marketing
• Using marketing communications to change the potential
customers to actual and existing customers to repeating
customers
• Many companies invest primarily in customer acquisition
but not enough in conversion.
• What can be done to improve the conversion rate?
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.14
Online Buying Process
• What is the typical online and offline purchase
process?
• How can online marketing communications
support the purchase process?
• Searching behaviors
• Directed info seeker
• Undirected info seeker
• Directed buyer
• Bargain hunters
• Entertainment seeker
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.15
A summary of how the Internet can impact on the buying process for a
new purchaser
Figure 9.3
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.16
Online Buying Process
• Differences btw B2C and B2B Buyer Behavior
– Market structure
– Nature of the buyer unit
– Type of purchase
– Importance of Trust
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.17
A model of the relationship between different aspects of trust and
consumer response based on the categories of Bart et al. (2005)
Figure 9.4
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.18
Online Buying Process
• What is net promoter score? Ref. p.495
• How to support online advocacy?
Ref. p.497
• How to manage online detractors?
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.19
Percentage who consider the different information sources as important
when researching/considering a product or service
Figure 9.5
Source: BrandNewWorld: AOL UK/Anne Molen (Cranfield School of Management)/Henley Centre, 2004
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.20
Customer Acquisition Management
The characteristics of interactive Marketing Comm
1.
2.
3.
4.
5.
6.
From push to pull
From monolog to dialog
From 1:M to 1 to some and 1:1
From 1:M to M:M
From lean-back to lean-forward
The medium changes the nature of the standard
marketing communication tools
7. Increase in communication intermediaries
8. Integration remains important
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.21
Figure 9.6
Online and offline communications techniques for e-commerce
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.22
Assessing Market Comm Effectiveness
Acquisition cost
– Per visitor
– Per lead
– Per sale
Bounce rate
– % of visitors entered the site but left
immediately after viewed one page only
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.23
Measures used for setting campaign objectives or assessing campaign
success increasing in sophistication from bottom to top
Figure 9.7
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.24
Online Marketing Communication
Search engine marketing
• Assessing the effectiveness of a web campaign
Ref. p. 504, Fig. 9.8
• How does Google work?
• Crawlingindexingrankingquery request
and result serving
• Keyphrase analysis
• Search-engine optimization—review
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.25
Figure 9.8
An example of effectiveness measures for an online ad campaign
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.26
Figure 9.10
Stages in producing natural search engine listings
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.27
Which are the ranking factors
affecting position In Google SERPs?
• On-page optimization
200
+-
– Document meta data
– Document content
– Creation of new pages
• Off-page optimization
– Link-building
• External links
– ‘Links In’
– ‘Backlinks’
– ‘Inbound links’
• AND Internal links
• Behavioural
– Popularity of sites from toolbar
• Google’s search spam filters
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.28
Which SEO ranking factors
should I focus on?
•
On page optimization:
• <title> tag = 4.9/5
• Keyword frequency and density = 3.7/5
• Keyword in headings = <h1> = 3.1, <h2> = 2.8
• Keyword in document name = 2.8
• Meta name description = 2/5
• Meta name keywords = 1/5
•
Off-page optimization:
• More backlinks (higher PageRank)= 4/5
• Link anchor text contains keyword = 4.4/5
• Page assessed as a hub = 3.5/5
• Page assessed as an authority = 3.5/5
• Link velocity (rate at which changes) = 3.5/5
See http://www.seomoz.org/article/search-ranking-factors
http://docs.google.com/Present?docid=dc3qhbxg_1217d9mwjwg3
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.29
Online Marketing Com-Paid Search
Factors affect returns
•
Distribution of daily budget
•
Amount bid (Max CPC)
•
* Clickthrough rate
•
* Creative quality including creative testing
•
* Match types especially negative matches
•
Use of content network
•
Time-of-day (day parting)
•
Landing page quality
•
Click fraud!
* In Google AdWords, Live Search and Yahoo! Quality Score especially
important
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.31
Online Marketing Communication
Online PR
• Maximizing favorable mentions of an organization, its
brands, products, to web sites on 3rd-party web sites
1. Communication with media online
2. Link building
3. Blogs, podcasting and RSS
4. Online community and social networks
5. Marketing how your brand is presented on 3rd party
sites
6. Creating a buzz-online viral marketing
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.32
Figure 9.11
Online PR categories and activities
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.33
Online Marketing Communication
Online Partnership
• Affiliate marketing
• Read the mini Case Study 8.4 on p. 516. Explain why
companies have scaled back e-communication
spending.
• What is online-sponsorship? http://www.davechaffey.com/Emarketing-Insights/Internet-advertising-online/Online-sponsorship
• What’s the differences between online sponsorship and
affiliate marketing?
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.34
The affiliate marketing model (note that the tracking software and fee
payment may be managed through an independent affiliate network manager)
Figure 9.12
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.35
Online Marketing Communication
Interactive Advertising
• What is media multiplier/halo effect?
• Purpose of Interactive Advertising
– Delivering content
– Enabling transactions
– Shaping attitudes
– Soliciting response
– Encouraging retention
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.36
Online Marketing Communication
Interactive Advertising
• Interactive ad target options
–
–
–
–
On a particular type of site
To target a registered user’s profile
At a particular time of day/week
Online behavior—dynamically serving relevant
content or ad that matches the interest of a site
visitor.
• Interactive ad formats
– Banner size, message length, promotional
incentive, animation, action phrase, company
brand/logo
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.37
Online Marketing Communication
Media planning
– What’s the optimum mix of online/offline
advertising? Ref. p.520, table 9.2
E-mail marketing
Read the Mini Case Study 9.5
What are the major challenges of email marketing?
What’s opt-in options for e-mail marketing?
Viral marketing
– achieve marketing objectives through self-replicating
viral processes, analogous to the spread of
pathological and computer viruses.
– Three important factors
•
•
•
Creative Material
Seeding—Find the starting point
Tracking
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.38
Figure 9.13
E-mail response figures
Source: Provided by SmartFOCUS Digital (www.smartfocusdigital.com), an e-mail service provider that send e-mails to UK and European organizations such as publishers and retailers
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.39
Figure 9.14
TopTable (www.toptable.co.uk)
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.40
Channel Comparison Summary
Ref. p. 526 table 9.3 for details
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.41
Customer Retention Management
Goals of Customer Retention
–
–
–
–
–
Retain customers
Keep customers using online channel
Satisfaction  loyalty  profitability
How to keep customers satisfied?
Experience from Dell—ref. table 9.4 on p. 528
Personalization and mass customization
– Mass customization—deliver customized
content to groups of users through web or email
– Collaborative filtering—deliver specific info and
offers based on the interests of similar
customers
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.42
Figure 9.15
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, 4th Edition, © Marketing Insights Limited 2009
Slide 9.43
Customer Retention Management
Online Community
• Online Community becomes important to the
success of the business
• Various 3rd party online communities and
cooperation sponsored communities have been
established in the recent years.
• B2B, in many cases B2C, communities are
commonly built based on
– purpose-people who do the similar jobs or
achieve a similar objectives
– Position
– Interest
– Profession
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.44
Figure 9.16
UTalkMarketing example of a professional online community
Source: www.utalkmarketing.com, the UK’s leading community website for client side marketers
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.45
Customer Retention Management
Online Community
• Do we need an online community?
• How to build one?
• Questions to be asked before start a
community
• Typical problems
– Empty community
– Silent community
– Critical community
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.46
Customer Retention Management
Managing Customer activity and value
–
–
–
–
Increase # of new users
Increase % of active users
Decrease % of dormant users
Decrease % of non-activated users
Retention metrics are often used
–
–
–
–
Repeat-customer conversion rate
Repeat customer base
# of transaction per repeat customer
Revenue per transaction of repeat customer
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.47
Figure 9.17
Activity segmentation of a site requiring registration
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.48
Customer Retention Management
Lifetime Value Modeling
• Total net benefit that a customer or a group of
customers will provide over their total
relationship with the company
• What can LTV be used for?
–
Ref. p. 535
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.49
Figure 9.18
Different representations of lifetime value calculation
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.50
Figure 9.19
An example of an LTV-based segmentation plan
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.51
Excelling in E-Commerce Service Quality
Improving online service quality
– Tangible—easy of use and visual appeal of the site
– Reliability—availability of the site
– Responsiveness—speed of page load, speed of
responses to questions, if any
– Assurance—quality of response, privacy and
security, etc.
– Empathy—personalized interaction, context,
task relevant help and assistance, e.g., during
the purchase process
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.52
Customer Extension
• The goal is to increase the lifetime value of the
customer
• What does “Focus on share of customer, not market
share” mean ? (ref. p. 540, 2nd paragraph)
• Advanced online segmentation and target
techniques
– Identify lifetime group
– Identify profile characteristics
– Identify behavior in response and purchase
– Identify multi-channel behavior
– Tone and style preference
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.53
Figure 9.20
Customer lifecycle segmentation
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.54
Customer Extension
• Advanced online segmentation and target
techniques
– Sense, respond, and adjust
• Monitor customer actions or behaviour
• React with appropriate messages and offers
• Monitor response to the messages and act
accordingly
– (RFM) value analysis
•
•
•
•
Recency—how recent was the customer’s action?
Frequency—How often did the customer act?
Monetary—How much did the customer spent?
Hurdle rate—% of customers in a group who completed an
action; it can be used to compare different groups or set an
objective for the group
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.55
Technology Solution for CRM
Technologies in use
–
–
–
–
Database is the core of the CRM
Web interface becomes the main stream
Emails and workflow systems are commonplace
Customer self-service is the trend
Types of CRM Applications
– Find more info about products/service
– Place an order
– Receive post-sales service
Integration with back-office systems
– How to link with the backend legacy system is a
big challenge
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.56
Figure 9.22
An overview of the components of CRM technologies
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 9.57
Technology Solution for CRM
Single vendor solution or multiple vendors?
– Why the question?
– What’s your opinion?
Data Quality
• CRM systems depend on the currency, completeness,
and accuracy of their database
• Guidelines must be followed to achieve the goal
Ref. p. 549
Case Study
– Read the case study on pp. 549-551 and answer the
question:
– What made Tesco so successful?
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009