1. Day 26 ELC 310

2. Copyright 2005 Prentice HallCh 1 -2 Agenda Questions? Assignment 5 Due Customer Relationship Management

3. Remaining Schedule Dec 13 (Friday the 13 th ) – E-Marketing Plan Presentation 20 Mins Dec 17 – Exam 3 Stokes 16-19, Strauss 14 & 15 8 AM to 8 PM Dec 19 E-Marketing Plan Due @ Midnight ©2014 Pearson Education, Inc. publishing as Prentice Hall 3

4. Customer Relationship Management E-Marketing/7E Chapter 15

5. Chapter 15 Objectives After reading Chapter 15, you will be able to: – Define customer relationship management (CRM) and identify the major benefits to e-marketers. – Outline the three pillars of relationship marketing for e- marketing. – Describe social CRM and how it relates to traditional CRM. – Discuss the nine major components needed for effective and efficient CRM in e-marketing. – Highlight some of the company-side and client-side tools that e-marketers use to enhance their CRM processes. – Differentiate CRM metrics by customer life cycle stage. 15-5 ©2014 Pearson Education, Inc. publishing as Prentice Hall

6. Best Buy is the 11 th largest U.S. e-commerce retailer with 1B online visitors and a multichannel strategy. In 2008 Best Buy initiated the Best Buy Community online. – 600,000 customers a quarter post 20,000 messages and view over 22 million pages of content. – The community has yielded $5M in benefits to Best Buy. Best Buy also uses Twitter to engage customers (@twelpforce). The Best Buy Story 15-6 ©2014 Pearson Education, Inc. publishing as Prentice Hall

7. Relationship Marketing Defined Relationship marketing is about establishing, maintaining, enhancing, and commercializing customer relationships through promise fulfillment. A firm using relationship marketing focuses more on wallet share, the amount of sales one customer can generate over time, than on market share. 15-7 ©2014 Pearson Education, Inc. publishing as Prentice Hall

8. From Mass Marketing To Relationship Marketing 15-8 ©2014 Pearson Education, Inc. publishing as Prentice Hall

9. Stakeholders The four stakeholders most affected by internet technologies include: 1.Employees who need training and access to data and systems used for relationship management. 2.Business customers in the supply chain. 3.Lateral partners, such as other businesses, not-for-profit organizations, or governments. 4.Consumers who are end users of products and services. 15-9 ©2014 Pearson Education, Inc. publishing as Prentice Hall

10. 3 pillars of relationship marketing 15-10 ©2014 Pearson Education, Inc. publishing as Prentice Hall

11. Customer Relationship Management CRM is a philosophy, strategy, and process that includes all 3 pillars. The benefits of CRM 1.0 include: – Increased revenue from better targeting. – Increased wallet share with current customers. – Longer retention of customers. The cost of acquiring a new customer is typically 5 to 7 times higher than the cost of retaining a current customer. Satisfied customers recommend Web sites, stores, and products to their friends in social media. 15-11 ©2014 Pearson Education, Inc. publishing as Prentice Hall

12. Maximizing Customers Through Retention Customer acquisition Customer retention 68% of customers leave due to poor treatment 1 Databases can decline 50% in 5 years if left dormant 3 52% marketers cite retention as top priority 2 36% marketers cite acquisition as top priority 2 Costs 5-7 times more than retention 15-12 ©2014 Pearson Education, Inc. publishing as Prentice Hall

13. Social Customer Relationship Management Social CRM (CRM 2.) adds social media technology and customer collaborative conversations to the process. Adds benefits such as: – Monitoring and improving reputations. – Learning more about customer needs, wants, and problems. – Improving target market selection and revenue potential. – Gathering data for market research on products and customer service. – Decreasing customer service costs. – Identifying new revenue opportunities. 15-13 ©2014 Pearson Education, Inc. publishing as Prentice Hall

14. CRM Evolves Using Social Media Company employee Customer CRM 1.0 MEDIA Phone E-mail In-person SMS Website Paper mail Traditional media Social CRM (2.0) MEDIA Blogs Social networks Microblogs Photo sharing Forums Wikis Reviews/Ratings Interactive Web sites Other social media Live chat All CRM 1.0 media Company employees Customers 15-14 ©2014 Pearson Education, Inc. publishing as Prentice Hall

15. 9 Building Blocks for Successful CRM 15-15 ©2014 Pearson Education, Inc. publishing as Prentice Hall

16. 1. CRM Vision To be successful, the CRM vision must start at the top and filter throughout the company to keep the firm customer focused. One key aspect of CRM vision is how to guard customer privacy. The benefits of using customer data must be balanced by the need to satisfy customers and not anger them. TRUSTe provides its seal and logo to any Web site meeting its privacy philosophies. 15-16 ©2014 Pearson Education, Inc. publishing as Prentice Hall

17. TRUSTe Builds User Trust 15-17 ©2014 Pearson Education, Inc. publishing as Prentice Hall

18. E-marketers must determine their objectives and strategies for initiating CRM programs and buying technology or setting up social media. Many CRM goals refer to customer loyalty. – An important CRM strategy is to move customers up the relationship intensity pyramid to advocacy. Another CRM goal involves building bonds with customers on 3 levels: financial, social and structural. 2. CRM Strategy 15-18 ©2014 Pearson Education, Inc. publishing as Prentice Hall

19. Three Levels of Relationship Marketing 15-19 ©2014 Pearson Education, Inc. publishing as Prentice Hall

20. 3. Customer Experience Management Consumers are constantly bombarded by marketing communications and unlimited product choices. – According to Sheth (1995), the basic tenet of CRM is choice reduction. – Many consumers are “loyalty prone,” and will stick with the right product as long as its promises are fulfilled. Synchronous and asynchronous technologies can provide automated and human communications that solve customer problems. 15-20 ©2014 Pearson Education, Inc. publishing as Prentice Hall

21. Relationships Over Multiple Communication Channels 15-21 ©2014 Pearson Education, Inc. publishing as Prentice Hall

22. CCM is content, people, and interaction driven, while traditional CRM is data-driven. CCM is about managing customer relationships and experiences by creating and monitoring online content. Listening the online chatter using technology such as Google Alerts and social media dashboards is more important than talking when a company is selling. 4. Customer Collaboration Management/Marketing (CCM) 15-22 ©2014 Pearson Education, Inc. publishing as Prentice Hall

23. Marketers collaborate within and outside the organization to focus on customer satisfaction to create a CRM culture. Online retailers can seamlessly link the “back- end” (e.g., inventory and payment) with the “front-end” CRM system and the entire supply chain management system (SCM). Extranets, two or more intranet networks that share information, allow CRM-SCM integration. 5. Organizational Collaboration 15-23 ©2014 Pearson Education, Inc. publishing as Prentice Hall

24. CRM-SCM Integration 15-24 ©2014 Pearson Education, Inc. publishing as Prentice Hall

25. 6. CRM Processes Firms use specific processes to move customers through the customer care life cycle. 15-25 ©2014 Pearson Education, Inc. publishing as Prentice Hall

26. Building a Dynamic Customer Profile 15-26 ©2014 Pearson Education, Inc. publishing as Prentice Hall

27. Sales Force Automation Sales force automation allows salespeople to build, maintain, and access customer records, manage leads, and manage their schedules. Up-to-date customer and prospect records help build customer relationships. Salesforce.com also has tools to monitor brand conversations in the social media. 15-27 ©2014 Pearson Education, Inc. publishing as Prentice Hall

28. Marketing Automation Marketing automation activities help provide: – Effective targeting. – Efficient marketing communication. – Real-time monitoring of customer and market trends. SAS, a business intelligence and predictive analytics software provider, offers automation software to aid CRM. 15-28 ©2014 Pearson Education, Inc. publishing as Prentice Hall

29. 7. CRM Information The more information a firm has, the better value it can provide to each current or prospective customer. Firms gain much information by tracking behavior electronically. – Bar code scanner data. – Software that tracks online movement, time spent per page, and purchase behavior. Databases can provide a 360° customer view across various channels. 15-29 ©2014 Pearson Education, Inc. publishing as Prentice Hall

30. 8. CRM Technology The internet forms the centerpiece of a firm’s CRM abilities. – Cookies, Web logs, bar code scanners, social media, and other tools help to collect information about consumers and their behaviors. Firms use company-side tools to push customized information to users. Client-side tools allow the customer to pull information that initiates the customized response from the firm. 15-30 ©2014 Pearson Education, Inc. publishing as Prentice Hall

31. Company-Side Tools (push) 15-31 ©2014 Pearson Education, Inc. publishing as Prentice Hall

32. Client-Side Tools (pull) 15-32 ©2014 Pearson Education, Inc. publishing as Prentice Hall

33. 9. CRM Metrics E-marketers use numerous metrics to assess the internet’s value in delivering CRM performance. – ROI – Cost savings – Revenues – Customer satisfaction – Customer Lifetime Value (LTV) – Contribution of each CRM tactic to these measures 15-33 ©2014 Pearson Education, Inc. publishing as Prentice Hall

34. Metrics Scoreboard by Salesforce.com 15-34 ©2014 Pearson Education, Inc. publishing as Prentice Hall

35. 10 RULES FOR CRM SUCCESS 1.Recognize the customer’s role. 2.Build a business case. 3.Gain buy-in from end users to executives. 4.Make every contact count. 5.Drive sales effectiveness. 6.Measure and manage the marketing return. 7.Leverage the loyalty effect. 8.Choose the right tools and approach. 9.Build the team. 10. Seek outside help. 15-35 ©2014 Pearson Education, Inc. publishing as Prentice Hall

36. CRM

37. Key Terms and Concepts Analytical CRM Software that assists a business in building customer relationships and analyses ways to improve them. Collaborative CRM Umbrella term for all the interactive options for serving customers. It is people- based customer support that includes: collaborative browsing, web-based text and voice chat, desktop sharing, application sharing, file transfer and phone support. Conversion funnel A defined path that visitors should take to reach the final objective. Customer relationship management (CRM) A strategy for managing a company’s interactions with clients and potential clients. It often makes use of technology to automate the sales, marketing, customer service and technical processes of an organization. eCRM Electronic Customer Relationship Management. Lead A potential customer. Operational CRM Entails supporting the “front office” business processes, which include customer contact (sales, marketing and service). Salesforce automation A type of program that automates the business task of sales associated with effective implementation, productivity forecasts. Stakeholder A person or organization with an interest (a “stake”) in how a resource is managed. Vendor Relationship Management (VRM) The emerging school of thought that incorporates the tools, technology and services that make it easy for customers to manage relationships with vendors.

38. What is CRM? Customer relationship management It implies a customer-focused approach to business.

39. Why use eCRM (electronic customer relationship management)? Because customers are communicating online. Meet and help them on their channel of choice.

40. Their voices can be heard in blogs, forums and other social media.

41. Technology can allow the online business to interact personally with a web visitor.

42. It also means marketing decisions can be made and tested quickly and adjusted.

43. An example: In 2002 Amazon.com launched free shipping orders over $99. This time limited offer allowed them to test and retract if necessary.

44. Today orders over $25 $35 are shipped for free.

46. But remember, technology should enable customer relationships, not replace meaningful ones.

47. Use the data collected online to build meaningful profiles of potential customers.

48. Use web analytics tools to gather information such as search keywords used to reach a website and navigation paths used within the website.

49. Use bespoke CRM software to centralise this data for use across all departments. All employees will have a 360 degree view of the customer. Bespoke = “made to order”

50. What is the difference between customer-centric and customer driven?

51. Customer-centric organisations put the customer at the centre of their planning and delivery.

52. Customer driven organisations provide tools to customers to actually drive the business.

53. Customers perform tasks which the organisation would traditionally take on.

54. Types of CRM

55. Operational CRM: the obvious channels that relate to customers - the front end.

56. Analytical CRM: analysing data to determine information about customer that can inform decisions.

57. e.g. Amazon.com

58. Use Salesforce automation CRM software to manage sales cycles and to collect customer sales data.

60. Use collaborative CRM to combine customer data across all facets of your company. e.g. Queries submitted to tech support can inform website updates and product development.

61. How do you put a value on CRM?

62. Look at it from: A marketing perspective A sales perspective A service perspective

63. Determine the value of a customer relationship to a business.

64. The revenue generated by the customer is the sales made to or through the customer The cost of acquiring the customer involves the marketing and advertising channels used to acquire them

65. Remember that all CRM goals must also be in line with business goals.

66. How can you use CRM to inform your marketing tactics?

67. Build CRM into every digital marketing channel!

68. In email marketing: Gain permission and respect privacy Segment databases to tailor content

69. Remember this is often the first point of contact for a customer service related message.

70. In online advertising: Speak to customers needs and present solutions Be wary of being intrusive

71. In affiliate marketing: Ensure effective communication with affiliates to ensure the correct message goes out!

72. In search engine marketing: Start with customer intent Use existing customer data to determine where to focus efforts

73. In social media: Track to establish consumer sentiment Turn delighted customers into advocates for your organisation

74. Communicate with customers where they feel most comfortable.

75. Technology has changed the ways we communicate with each other.

76. Email messages and SMS messages can be used to keep customers informed of the progress of a transaction. “Your package has been shipped. UPS tracking # 1z349837377777”

77. Voice over IP (VoIP) means that calls can be routed cheaply over the Internet.

79. Instant messengers allow fast, instant text based chat which can be used as an effective customer service channel.

81. Ensure all CRM channels can be tracked so that interactions and transactions can be analysed.

82. Use vendor relationship management (VRM) to address the imbalance of power between customers and vendors.

83. The goal is to give customers the power over information that is shared with vendors.

84. Further Reading? www.quirk.biz/emarketingtextbook