1. Slide 9.1 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Chapter 9 Customer relationship management

2. Slide 9.2 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 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.

3. Slide 9.3 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Management issues What is the balance between online and offline investment for customer acquisition? What technologies can be used to build and maintain the online relationship? How do we deliver superior service quality to build and maintain relationships?

4. Slide 9.4 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 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 www.theaa.co.ukwww.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?

5. Slide 9.5 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 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.

6. Slide 9.6 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 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 later in the chapter, customers’ characteristics, their purchase behaviour and campaigns can be analysed in order to optimize the marketing mix.

7. Slide 9.7 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Figure 9.1 The four classic marketing activities of customer relationship management

8. Slide 9.8 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Figure 9.2 A summary of an effective process of online relationship building

9. Slide 9.9 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Figure 9.3 Multi-channel conversion model

10. Slide 9.10 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Figure 9.4 Online and offline communications techniques for e-commerce

11. Slide 9.11 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Figure 9.5 Variation in UK media consumption in hours (bars) compared to percentage media expenditure (squares) Source: Compiled from EIAA (2005) and IAB (2005)

12. Slide 9.12 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Figure 9.6 Measures used for setting campaign objectives or assessing campaign success increasing in sophistication from bottom to top

13. Slide 9.13 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Figure 9.7 An example of effectiveness measures for an online ad campaign

14. Slide 9.14 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Figure 9.8 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

15. Slide 9.15 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Figure 9.9 Search engine results page showing the two main methods for achieving visibility Source: Screenshot reprinted by permission of Google, Inc

16. Slide 9.16 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Figure 9.10 The affiliate marketing model (note that the tracking software and fee payment may be managed through an independent affiliate network manager)

17. Slide 9.17 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Figure 9.11 E-mail response figures Source: Epsilon Interactive

18. Slide 9.18 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Figure 9.12 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

19. Slide 9.19 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Table 9.4 Relationship between loyalty drivers and measures to assess their success at Dell Computer Source: Reprinted by permission of Harvard Business Review from information on pp. 105–13 from ‘Your secret weapon on the web’, by Reicheld, F. and Schefter, P., in Harvard Business Review, July–August 2000. Copyright © 2000 by the Harvard Business School Publishing Corporation, all rights reserved

20. Slide 9.20 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Figure 9.13 Activity segmentation of a site requiring registration

21. Slide 9.21 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Figure 9.14 Different representations of lifetime value calculation

22. Slide 9.22 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Figure 9.15 An example of an LTV-based segmentation plan

23. Slide 9.23 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Figure 9.16 Customer lifecycle segmentation

24. Slide 9.24 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Figure 9.17 RFM analysis

25. Slide 9.25 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Figure 9.18 An overview of the components of CRM technologies

26. Slide 9.26 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Tesco The strategic decisions covered in this PowerPoint provide a useful framework for summarizing the strategic approaches adopted by Tesco.com: Decision 1: Market and product development strategies. Tesco has used the Internet to extend its market into new product markets, such as financial services, white goods and DVD rentals. While these are promoted through the store, the web provides a wider choice of products, more detailed information about products and a method of purchase. The internet can also support entry into new geographical markets. Decision 2: Business and revenue model strategies. New revenue sources are available through extending the product range online as explained above, and also with new digital revenue streams such as those for music downloads and e- Diets. Tesco also supports advertising on its site of related product such as financial services. Decision 3: Target market strategy. Tesco.com has a broad market of customer types, so it is less relevant for them to use online to selectively target these with communications. However, the article explains how Tesco has used the web and e-mail to target more closely through targeting different lifecycle groups – these are customers who are grouped according to their level of adoption of online service. Tesco also uses the web to target specific requirements such as Diets and Financial Services through search engine marketing.

27. Slide 9.27 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Tesco Decision 4: Positioning and differentiation strategy (including the marketing mix). Tesco offers some unique online promotions and lower online prices for select products such as financial services which could attract a percentage discount when purchased online. It appears not to use the service elements of the mix for positioning beyond the slogan ‘You Shop, We Drop’. But attention has been paid to improving the customer experience through usability activities and reduction of download times. The marketing mix which is covered in Chapter 5 is also suitable for assessing some of the tactical elements of Tesco.com strategy. Product Price Place Promotion Process, People and Physical evidence Decision 5: Multi-channel distribution strategy. This is straightforward. Tesco.com has taken the decision to distribute Internet orders via stores unlike some rivals such as Ocado (www.ocado.com) who have setup distribution channels.

28. Slide 9.28 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Tesco Decision 6: Multi-channel communications strategy. This is not referred to in the article – this describes the mix between online and offline communications tools for driving visitors to the site. Offline communications in store and through direct mail are clearly important for attracting visitors to the site. Decision 7: Online communications mix and budget. Again, this is not mentioned, although the importance of e-mail marketing for customer communications is apparent. Decision 8: Organizational capabilities (7S). Tesco has achieved focus online by creating a separate ‘Tesco.com’ brand and a separate division headed by Wade Gery. Read Boots uses CRM technology to get closer to its customers The case shows how marketers at the UK chemist Boots use the customer purchase history data collected through its Boots Advantage Card loyalty card programmes to improve marketing. Note that this e-business application is independent from its retail site at www.wellbeing.com, which it uses to sell a selection of its products. www.wellbeing.com

29. Slide 9.29 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Questions What different types of searching behaviour are exhibited by online users and what are the implications for someone responsible for traffic building on a site? Outline four different methods of building web site traffic

30. Slide 9.30 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Answer 1 Two main types are: directed searching – structured searching using search engines; so registration on most popular search engines and techniques to boost position in listing important undirected searching – typically based on links; so link-building campaign is important 2 Online – search engine registration Online – link building/reciprocal links Offline – ads placed on TV or print Online/offline – PR media mentions