Assignment 2

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Part 2

Strategy and applications

Chapter 8

Customer relationship management

Digital Business and E-Commerce Management Seventh Edition

Learning outcomes

Outline different methods of reaching and acquiring new customers via digital media

Evaluate different buyer behaviour amongst online customers

Describe techniques for retaining customers and cross- and up-selling using digital media communications

Management issues

Which digital media should we invest in to reach new audiences?

What are the practical success factors for using digital media 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?

e-CRM – a definition

e-CRM is:

Applying… Internet and other digital technology… (web, email, 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.

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).

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 optimise the marketing mix.

The four classic marketing activities of customer relationship management

How does IS/IT (e-bus) facilitate each step in the marketing activities of CRM?

How to use technology to build a one-to-one relationships for effective CRM

Customer identification identify on the first visit, cookies or asking customer to log on

Customer differentiation build a profile to help segment the customers using dbases

Customer Interactions record the type of online interaction eg service questions, or creating a tailored product

Customisation mass customisation / personalisation of content or emails according to customer profile

Benefits of e-CRM

Targeting more cost effectively

Achieve mass customisation of the marketing messages

Increase depth, breadth and nature of the relationship

A learning relationship can be achieved using different tools throughout the customer life cycle

Lower cost

Source: Smart Insights (2010) Introducing RACE: A practical framework to improve your digital marketing. Dave Chaffey, 15 July. www.smartinsights.com/blog/digitalmarketing- strategy/race-a-practical-framework-to-improve-your-digital-marketing

Reach–Act–Convert–Engage model

how to manage/improve commercial value gained from digital marketing. (Hurdle rates, the percentage of customers who perform an activity, enable you to assess how many of your audience are engaged with your marketing activities)

A summary of how the Internet can impact on the buying process for a new purchaser

Develop online marketing tactics to support each stage of the business process. (PPC pay per click)

Source: Bart et al. (2005).

Figure 8.8 A model of the relationship between different aspects of trust and consumer response based on Bart et al.’s eight website categories

Percentage who consider the different information sources as important when researching/considering a product or service

Source: www.statista.com/statistics/324550/most-trusted-source-of-information-on-products-services-in-theunited-kingdom-uk

Figure 8.10 Measures used for setting campaign objectives or assessing campaign success, increasing in sophistication from bottom to top

Figure 8.11 An example of effectiveness measures for an online ad campaign

How does Google work?

Crawling- identifies relevant pages for indexing and access. Done by robots (bots), also known as spiders These access web pages and retrieve a reference URL

Indexing- Index created to enable a search engine to rapidly find the most relevant pages

Ranking or scoring- The indexing process produces a look up of all pages that contain particular words in the query. Now they need to be sorted to get the most relevant. Ranked on criteria.

Query request and results serving- The searchers query is accepted, location assessed by IP address, ranking occurs in real time and then displayed.

See http://www.seomoz.org/article/search-ranking-factors

http://docs.google.com/Present?docid=dc3qhbxg_1217d9mwjwg3

Which are the ranking factors affecting position in Google SERPs?

200 + −

On-page optimisation

Document meta data

Document content

Creation of new pages

Off-page optimisation

Link-building

External links

‘Links in’

‘Backlinks’

‘Inbound links’

AND internal links

Behavioural

Popularity of sites from toolbar

Google’s search spam filters

How many search ranking factors?

Today is all about practical tips with examples. No theory – assuming you know – if not, see this slide. Which sectors represented.

Which SEO ranking factors should I focus on?

On page optimisation:

<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 optimisation:

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

Which factors affect returns from paid search?

Distribution of daily budget

Amount bid (Max CPC)

* Clickthrough rate

* Creative quality including creative testing

* Campaign structure

* 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

Aspects of Search Engine Optimisation

Frequency of occurrence, The number of times the keyphrase is repeated in the text of the web page

Number of inbound links, the more links from good quality sites the better the ranking

Title HTML tag if key phrase is in the title it is more likely to be listed high

Graphic text a site that uses a lot of graphical content is less likely to be listed highly

Stages in producing natural search engine listings (SERPS, Search Engine Results Pages)

Source: Altimeter (2010).

Aspects of social CRM

Marketing, eg monitoring, analysis social listening tools; Sales, understand where prospects are discussing product selection; Service and support, customer self help through forums provided by vendor and neutral sites; Innovation, using conversations to foster new ideas, Collaboration, using intranet internally, Customer experience, enhance experience

Figure 8.19 Online PR categories and activities

Figure 8.24 Activity segmentation of a site requiring registration

Figure 8.25 Different representations of lifetime-value (LTV) calculation

1=use history to approximate LTV, 2=use history of a segment, 3= projected individual value etc

How much can I afford to invest in acquiring a new customer?

An example of an LTV (life time value monitoring) -based segmentation plan

develop a CRM strategy specific for each customer group with the aim of shifting customers to a higher Life Time Value (LTV). What ‘e’ strategies help?

Customer lifecycle segmentation

visitors pass through stages using online services, CRM infrastructure is set up to target the different groups with relevant messages, eg emails auto generated according to rules that have been set up. Also shift customers from 1 to 7.

Recency, frequency, monetory value (RFM) analysis

Recency of customer action eg purchasing,

Highest frequency, number of times an action is completed in a period of time eg purchase visit etc,

monetary value analysis, eg average order value, total annual purchase

Figure 8.29 An overview of the components of CRM Technologies

Questions

Discuss the main types of online marketing communication using CRM for traffic building and revenue growth. Give examples from well-known business situations.

What are the management issues associated with managing data and applications integration in CRM?

Choose a business you are familiar with and discuss the opportunities for using CRM?

Discuss how the use of CRM may differ between B2B and B2C businesses.

Discuss the advantages and disadvantages of CRM e-business strategies of personalisation, community-building, and direct email.

Discuss the relationship between customer satisfaction, loyalty and sales in relation to online business.

Summary

You should be able to outline different methods of reaching and acquiring new customers via digital media

You should be able to evaluate different buyer behaviour amongst online customers

You should be able to describe techniques for retaining customers and cross- and up-selling using digital media communications