Transcript On-page optimization

9 CUSTOMER RELATIONSHIP
MANAGEMENT
ABOUT 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?
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 long-term business with customers
Figure 9.1
The four classic marketing activities of customer relationship management
CUSTOMER EXTENSION TECHNIQUES FOR
ONLINE RETAILERS
(a) Re-sell
 Selling similar products to existing customers–particularly important in some B2B contexts as
re-buys or modified re-buys.
(b) Cross-sell
 Sell additional products which may be closely related to the original purchase, but not
necessarily so. Example ?
(c) Up-sell
 A subset of cross-selling, but in this case, selling more expensive products
(d) Reactivation
 Customers who have not purchased for some time, or have lapsed, can be encouraged to
purchase again.
(e) Referrals
 Generating sales from recommendations from existing customers, for example member-getmember deals.
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)
 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 further later in the chapter, customers
characteristics, their purchase behaviour and campaigns can be analysed in order to
optimize the marketing mix
E-CRM
Applying… Internet and other
digital technolog (web, e-mail,
wireless, iTV, databases)
to… acquire and retain customers
(through a multichannel buying process and
customer lifecycle)
by… improving customer
knowledge, targeting, service
delivery and satisfaction
E-CRM – BENEFITS
Targeting more cost-effectively.
Achieve mass customization of the marketing messages
Increase depth, breadth and nature of relationship
A learning relationship can be achieved using different tools
throughout the customer lifecycle
Lower cost
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?
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Web browsers or offline audiences to site visitors;
Site visitors to engaged site visitors
Engaged site visitors to prospects
Prospects into customers
Customers into repeat customers
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
A summary of how the Internet can impact on the buying process for a
new purchaser
Figure 9.3
ONLINE BUYING PROCESS
Differences btw B2C and B2B Buyer Behavior
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Market structure
Nature of the buyer unit
Type of purchase
Importance of Trust
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
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
CUSTOMER ACQUISITION MANAGEMENT
The characteristics of interactive Marketing Comm
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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
Increase in communication intermediaries
Integration remains important
Figure 9.6
Online and offline communications techniques for e-commerce
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
Measures used for setting campaign objectives or assessing campaign
success increasing in sophistication from bottom to top
Figure 9.7
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
Figure 9.8
An example of effectiveness measures for an online ad campaign
Figure 9.10
Stages in producing natural search engine listings
WHICH ARE THE RANKING FACTORS
AFFECTING POSITION IN GOOGLE SERPS?
On-page optimization
 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
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
ONLINE MARKETING COMMUNICATION
Online PR
Maximizing favorable mentions of an organization, its brands,
products, to web sites on 3rd-party web sites
Communication with media online
Link building
Blogs, podcasting and RSS
Online community and social networks
Marketing how your brand is presented on 3rd party sites
Creating a buzz-online viral marketing
Figure 9.11
Online PR categories and activities
AFFILIATE MARKETING
The affiliate marketing model (note that the tracking software and fee
payment may be managed through an independent affiliate network manager)
Figure 9.12
Online Marketing Communication
INTERACTIVE ADVERTISING
What is media multiplier/halo effect?
Purpose of Interactive Advertising
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Delivering content
Enabling transactions
Shaping attitudes
Soliciting response
Encouraging retention
Online Marketing Communication
INTERACTIVE ADVERTISING
Interactive ad target options
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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
Online Marketing Communication
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
Online Marketing Communication
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
Figure 9.14
TopTable (www.toptable.co.uk)
CUSTOMER RETENTION MANAGEMENT
Goals of Customer Retention
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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
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
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
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purpose-people who do the similar jobs or achieve a similar objectives
Position
Interest
Profession
Customer Retention Management
Figure 9.16
UTalkMarketing example of a professional online community
Source: www.utalkmarketing.com, the UK’s leading community website for client side marketers
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
CUSTOMER RETENTION MANAGEMENT
Managing Customer activity and value
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Increase # of new users
Increase % of active users
Decrease % of dormant users
Decrease % of non-activated users
Retention metrics are often used
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Repeat-customer conversion rate
Repeat customer base
# of transaction per repeat customer
Revenue per transaction of repeat customer
Figure 9.17
Activity segmentation of a site requiring registration
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
Figure 9.18
Different representations of lifetime value calculation
Figure 9.19
An example of an LTV-based segmentation plan
EXCELLING IN E-COMMERCE SERVICE
QUALITY
Improving online service quality
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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
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
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Identify lifetime group
Identify profile characteristics
Identify behavior in response and purchase
Identify multi-channel behavior
Tone and style preference
Figure 9.20
Customer lifecycle segmentation
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
TECHNOLOGY SOLUTION FOR CRM
Technologies in use
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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
Figure 9.22
An overview of the components of CRM technologies
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
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Ref. p. 549
Case Study
Read the case study on pp. 549-551 and answer the question:
What made Tesco so successful?
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.
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?
ACTIVITY
Read the Econsultancy interview on pp 484-485 and visit
http://www.warnerleisurehotels.co.uk/
Answer these questions
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What did Warner Breaks (WB) found about the online marketing?
What did they do to attract and retain customers?
What special about the older generation regarding online transactions?
Do you feel that their website is well-designed for the targeted audience?
E-CRM – ACTIVITY
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