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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? 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 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 Figure 9.6 Online and offline communications techniques for e-commerce Measures used for setting campaign objectives or assessing campaign success increasing in sophistication from bottom to top Figure 9.7