COMP 6125 An Introduction to Electronic Commerce Session 2: Marketing & CRM

Marketing proclaimed to be one of the greatest tools in communication developed since 20rh century Companies want to send information on products and services to potential and existing customers – Spamming! Legalities involved and criticism given on this method of advertising

Marketing Sending s on products, services, etc to customers who specifically request is allowed Hence obtaining permission prior to sending is a key element to marketing strategy But how can you do this?

Permission Marketing Marketing strategy involving the practice of sending messages to persons who request information on a particular product or topic (opt-in ) Developed by Seth Godin, current Vice President of Direct Marketing at Yahoo! And previous founder of YoYoDyne

Permission Marketing Cost of sending an to a customer whose address had already been obtained – less than one cent! Cost of purchasing addresses or people who ask to receive specific kind of – an additional few cents to a dollar for each message

Permission Marketing Conversion rate – percentage of persons who view the ad or promotion and respond to it For s, conversion rate range from 10% - 30% For click-through rates, currently 5% and dropping! Which would you choose??

Combining Content and Advertising A successful method of marketing schemes is to combine the ad with content of interest to viewer Example: including articles and news on particular topics of interest to specific market segment Note: avoid including large graphics and attachment as can clog up an inbox and create ill will; try hyperlinks instead which should lead to site hosting the information

Combining Content and Advertising Again, coordinate activities across all media and ensure message delivered is consistent

Managing Processing Some companies find cannot handle growing numbers of customers who opt-in to mailing lists Some companies cannot handle developing information- laden mail outs A concept of outsourcing the processing to companies offering management systems has developed; also may include the outsourced company purchasing addresses Cost of outsourcing is between 1 and 2 cents for every valid address

Technology-Enabled CRM Definitions –Clickstream: information gathered about a visitor from a site on which pages viewed, how long each page was viewed, sequence of pages viewed, etc –Marketspace: commerce in the information world; distinguished from marketplace which is commerce in the physical world

Technology-Enabled CRM Occurs when an organisation collects detailed information on a customer’s behaviours, needs and buying pattersn, and then uses that information to determine pricing, negotiate terms, tailor promotions, add product features, and otherwise customize the entire relationship with that customer Also referred to as eCRM

Technology-Enabled CRM Figure 4-10, pg 194 As is shown, more tailored marketing and increased sense of one-to-one relationship

CRM in the Marketspace In marketspace, information can be used to create new value for customers –Online order history, recommendations for future purchases based on past ones, etc Successful marketing techniques on the Web enable potential customers to easily find information and customize the depth and nature of the information – should encourage purchasing The eCRM tools increase the success of companies on the Web over the traditional model of advertising that work in the offline world

CRM in the Marketspace It is definitely important to track and examine behaviours of site visitors and then use the information to develop customized, value-added products and services The key is not to collect every piece of data on customers but only to focus on what really matters to salespeople and customers Automating this collection of data also assists in a successful implementation of CRM

Links Reference –Electronic Commerce, Seventh Annual Edition by Gary Schneider Of Interest –IntelligentCRM –