Transcript Digital Marketing and eCRM

Electronic Customer Relationship
Management (e-CRM): From Theory To Practice
Adam Vrechopoulos, MBA, Ph.D.
[email protected]
ELTRUN Research Center
www.eltrun.gr
ELTRUN-IMES
Lecturer, Department of Management Science and Technology
Athens University of Economics and Business (AUEB)
Outline
 Digital Marketing and eCRM
 Perspectives of eCRM
 eCRM Benefits and Opportunities
 CRM Process
 The role of Technology in eCRM
 Manipulating and Measuring eCRM Effectiveness
 Lessons Learned from Business Practice
Digital Marketing and eCRM
 Mass Marketing  STP Marketing Digital, Individualized,
Relationship Marketing through Interactive
Communication
 Focus on acquiring lots of new customers  retaining and
building more business with fewer loyal high-value customers
 Suggest solutions based on customer needs instead of
“pushing” products
 Develop long-term customer relationships with mutual
benefits, one at a time based on “trust” and “loyalty”
 Establishing, maintaining, enhancing, commercializing
customer relationships through promise fulfillment
Digital Marketing and eCRM
 CRM Objective: The development and maintenance of mutually
beneficial long-term relationships with strategically significant
customers
 e-CRM, uses digital processes, data and applications and integrates
customer information collected at every customer touch/interaction
point in the context of Multichannel Retailing (i.e. Internet, Web,
Mobile, Call Centers, Sales force, POS at the physical store, Digital
Interactive TV, etc.)
 CRM Levels/Perspectives: (a) Strategic, (b) Operational, (c) Analytical
 e-CRM allows firms to leverage their resources by applying them
disproportionately to the most profitable customers.
 Need to integrate a firm’s entire supply chain to create consumer
value
Perspectives of eCRM
 Management: eCRM is more a business strategy than technology. Aims
to manage customer life cycle, increase loyalty, profitability, retention
 Information Systems: Emphasis on technological aspects of eCRM
Technology. Combination of software, hardware, processes and
applications aligned with customer strategies
 E-Business: eCRM is an application of e-business digital activities.
Collect customer data at every “touch point”
 Knowledge Management: eCRM means learning customer better
 Marketing: eCRM is the 5th “P” of marketing mix. Emphasis on long
term relationships and one-to-one interactions through communication
channels
 Human Resource Management: Adoption of a customer-oriented
culture by both top management and employees within an organization
Perspectives of eCRM
[EB = EC + BI + CRM + SCM + ERP]
Where:
• EC = e-commerce
• BI = business intelligence
• CRM = customer relationship management
• SCM = supply chain management
• ERP = enterprise resource planning
Having solved their back-end problems through ERP,
many companies are now focusing on solving
their front-end ones through CRM
eCRM Benefits &
Opportunities
 Less expensive to retain one customer than to acquire one:
 reduced promotion costs
 higher response rates to promotional efforts
 sales teams are more effective when they know customers
 loyal customers cost less to service
 increase up and cross sell
 from a consumer’s perspective the basic dogma of CRM is choice
reduction - most customers desire brand loyalty as much as the firms
they patronize
 WOM is the heart of CRM
The idea (i.e., focus on profitable customers) is
not new. What is new is that ICT allows firms to
identify high-value customers and respond with
customized offers in realtime
eCRM Benefits &
Opportunities

Some indicative CRM projects goals:
Increase order size through more effectively
targeted cross-sell promotions
Expand wallet share by increasing the variety of
products and categories customers buy from you
Move overstocks by knowing which customers
will buy them at list price to avoid deep
discounting
Enable mutlichannel coordination of field sales,
inside sales, e-commerce and direct mail
through relevant product recommendations for
each customer interaction
eCRM Process
1. Identify
Interaction
2. Differentiate
Customize Marketing
Mix Offerings to meet
the needs of individual
customers
3. Customize
The Role of
Technology in eCRM

Technology greatly enhances CRM processes

Help to collect information about consumer behavior and
characteristics (e.g., bar code scanners, cookies, online
questionnaires, etc.)

Help to store information (e.g., data warehouses)

Help to convert information to knowledge (e.g., data
mining, OLAP techniques, etc.)

Result: Allow marketers to develop marketing mixes that
better meet individual needs (i.e., individualized marketing
mixes  mass customization)
The Role of
Technology in eCRM
 Customer Database:
 Transactions
 Customer
Contacts
 Customer
Preferences
 Descriptive
information (e.g. demographic data)
 Responses
to Marketing activities
Manipulating and Measuring
eCRM Effectiveness
 Manipulated Variables/Attributes/Features/Applications
& Tools: Those variables controlled by the retailer (e.g.
customer service through call centers, personalized
marketing campaigns, individualized selling proposals,
loyalty scheme programs, time to answer incoming mails,
integration with ERP systems, promotional programs, etc.).
 Dependent Variables: Those variables that refer to
Consumer Behaviour (e.g. sales, revisit rate, RFM, share of
wallet, number of new customers referred from partner sites,
campaign response, rate of customer recovery, prospect
conversion rate, customer up and cross-sell rate, average
order value (AOV), satisfaction, loyalty, trust, perceived
service quality, entertainment, time spend within the store,
number of complaints, current customer retention cost,
number of low-value customers move to high value, etc.)
Manipulating and Measuring
eCRM Effectiveness
.
.
.
.
.
.
Manipulated
Variables
Dependent
Variables
Lessons Learned from
Business Practice (1/7)
 Clear Vision & Commitment
 Permission Marketing
 Training and Education
 Motives
 Involvement of all stakeholders from the beginning
of the project
 Levit’s Diamond!
Lessons Learned from
Business Practice (2/7)
 eCRM must be part of the E-Marketing Plan
 Effective Measurement & Evaluation Mechanisms
and Contingency Plans
 Expertise within the company also in the case of
total outsourcing!
 Exploit eCRM for new business models &
opportunities
 Adopt an interdisciplinary approach
Lessons Learned from
Business Practice (3/7)
 Customer centric strategy
 Degree of improving or redesigning processes
 Software
 Technical Infrastructure
 Enable multichannel coordination
 Consider significant differences between cultures,
markets, business sectors and size of the company
Lessons Learned from
Business Practice (4/7)
 No always need to buy an expensive eCRM
software
 eCRM is both Strategy and Tool
 Need to clarify what is eCRM and what is not!!
 Buy one eCRM software module or the total
eBusiness solution?
 Do not ignore other than e-mail communication
channels (e.g. call-centers, salesforce, etc.)
Lessons Learned from
Business Practice (5/7)
 Opportunity  Low cost mass customization (e.g.
individualized printed catalogues)
 Target the right customers
 Streamline business processes that impact the
customer (CRM-ERP-SCM)
 Provide a 360-degree view of the customer
relationship
 Let customers help themselves and do their jobs –
Keep the control of the key manipulated variables
Lessons Learned from
Business Practice (6/7)
 Invest in Consumer Behaviour Surveys!
 Guard Consumer Privacy
 Get certifications
 Foster community (e.g. blogs!!)  build loyalty
 Differentiation by valuation is not profitable unless a
firm can say that at least half of its profits come
from 20% or fewer of its customers
 Family business and eCRM
Lessons Learned from
Business Practice (7/7)
 CRM means different things to different people!
 Debate: Is CRM an all or nothing process?
 Avoid unrealistic expectations!
 Use CRM consultants – Do not reinvent the wheel!
 Seek for vertical solutions (i.e. sector based)
 Measure Results form the first moment!