Customer relationship management

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?

What is CRM? You have a job interview for Centrica (AA, British Gas, Goldfish) working in the CRM team www.theaa.co.uk, www.house.co.uk How would you explain the terms: CRM E-CRM Why does Centrica have a CRM function? Why is CRM different? What are benefits of this approach?

E-CRM – a definition E-CRM is: Applying… Internet and other digital technology… (web, e-mail, 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, 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

Figure 9.1 The four classic marketing activities of customer relationship management

Figure 9.2 A summary of an effective process of online relationship building

Figure 9.3 A summary of how the Internet can impact on the buying process for a new purchaser

Figure 9.4 A model of the relationship between different aspects of trust and consumer response based on the categories of Bart et al. (2005)

Figure 9.5 Percentage who consider the different information sources as important when researching/considering a product or service Source: BrandNewWorld: AOL UK/Anne Molen (Cranfield School of Management)/Henley Centre, 2004

Figure 9.6 Online and offline communications techniques for e-commerce

Figure 9.7 Measures used for setting campaign objectives or assessing campaign success increasing in sophistication from bottom to top

Figure 9.8 An example of effectiveness measures for an online ad campaign

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 200 + - 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. 16

Which SEO ranking factors should I focus on? On page optimization: <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 optimization: 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 http://docs.google.com/Present?docid=dc3qhbxg_1217d9mwjwg3

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

Figure 9.9 Search engine results page showing the two main methods for achieving visibility Source: Screenshot reprinted by permission of Google, Inc

Figure 9.10 Stages in producing natural search engine listings

Figure 9.11 Online PR categories and activities

Figure 9.12 The affiliate marketing model (note that the tracking software and fee payment may be managed through an independent affiliate network manager)

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)

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

Figure 9.16 UTalkMarketing example of a professional online community Source: www.utalkmarketing.com, the UK’s leading community website for client side marketers

Figure 9.17 Activity segmentation of a site requiring registration

Figure 9.18 Different representations of lifetime value calculation

Figure 9.19 An example of an LTV-based segmentation plan

Figure 9.20 Customer lifecycle segmentation

Figure 9.21 RFM analysis

Figure 9.22 An overview of the components of CRM technologies