1. Chapter 9 Customer Relationship Management

2. Consumer Decision Making Process
5 phases of the generic purchase decision model:
need identification
information search
evaluation of alternatives
purchase and delivery
after-purchase evaluation

3. Consumer Decision Making Process (cont.)
What? Where?
Product brokering: Deciding what product to buy
Merchant brokering: Deciding from whom (from what merchant) to buy a product

4. One-to-One Marketing and Personalization in EC
One-to-one marketing: Marketing that treats each customer in a unique way
Personalization: The matching of services, products, and advertising content to individual consumers
User profile: The requirements, preferences, behaviors, and demographic traits of a particular customer

5. Major strategies used to compile user profiles
Solicit information directly from the user
Observe what people are doing online
Build from previous purchase patterns
Perform marketing research

6. Cookie: A data file that is placed on a user’s hard drive by a Web server, frequently without disclosure or the user’s consent, that collects information about the user’s activities at a site
Customer loyalty
Customer loyalty: Degree to which a customer will stay with a specific vendor or brand
Increased customer loyalty produces cost savings through:
lower marketing costs
lower transaction costs
lower customer turnover expenses
lower failure costs
E-loyalty: Customer loyalty to an e-tailer

7. CRM and Its Relationship with EC
Customer relationship management (CRM): A customer service approach that focuses on building long-term and sustainable customer relationships that add value both for the customer and the company
E-CRM is:
Applying… Internet and other digital technology… (web, , 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

8. Marketing applications of CRM
A CRM system supports the following marketing applications:
1. Sales force automation (SFA). Software that automates the tasks performed by sales people in the field, such as data collection and its transmission
2. 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.
3. 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).
4. Campaign management. Managing ad, direct mail, and other campaigns.
5. 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 behavior and campaigns can be analyzed in order to optimize the marketing mix.

9. CRM and Its Relationship with EC
Extent of service
Customer acquisition (prepurchase support)
Customer support during purchase
Customer fulfillment (purchase dispatch)
Customer continuance support (postpurchase)

10. Three phases of customer relationship management
Figure 9.1  Three phases of customer relationship management

11. CRM - Benefits & Limitations
Benefits of CRM
Provides:
choices of products and services
fast problem resolution and response
easy and quick access to information
Limitations of CRM
Requires integration with a company’s other information systems which is costly
Difficult to support mobile employees

12. Five factors required to implement a CRM program effectively:
Customer-centric strategy
Commitments from people
Improved or redesigned processes
Software technology
Infrastructure

13. CRM and Its Relationship with EC
Web-related metrics a company uses to determine the appropriate level of customer support:
Response time
Site availability
Download time
Timeliness
Security and privacy
On-time order fulfillment
Return policy
Navigability

14. The simple buying process
Figure 9.6  The simple buying process

15. Online behaviours
Directed information seekers. Will be looking for product, market or leisure information such as details of their football club’s fixtures. This type of user tends to be experienced in using the web and they are proficient in using search engines and directories.
Undirected information seekers. These are the users usually referred to as surfers, who like to browse and change sites by following hyperlinks. This group tends to be novice users (but not exclusively so) and they may be more likely to click on banner advertisements.
Directed buyers. These buyers are online to purchase specific products. For such users, brokers or cybermediaries who compare product features and prices will be important locations to visit.
Bargain hunters. These users want to use the find offers available from sales promotions such as free samples or prizes.
Entertainment seekers. Users looking to interact with the web for enjoyment through entering contests such as quizzes.

16. Schematic of the relationship between satisfaction and loyalty
Figure 9.9  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 Copyright © 1994 by the Harvard Business School Publishing Corporation, all rights reserved.

17. IDIC
Source: Chaffey et al. (2003)

18. Overview of the components of CRM technologies
Figure 9.13  An overview of the components of CRM technologies

19. CRM Applications and Tools:
CRM applications improve upon traditional customer service by means of easier communications and speedier resolution of customer problems
Customer service adds value to products and services
It is an integral part of a successful business
Classifications of CRM applications
Customer-facing applications
Customer-touching applications
Customer-centric intelligence applications
Online networking and other applications

20. CRM Applications and Tools (cont.)
Customer-facing applications
Customer interaction center (CIC): A comprehensive service entity in which EC vendors address customer service issues communicated through various contact channels
Intelligent agents in customer service and call centers
Autoresponders: Automated reply systems (text files returned via ), which provide answers to commonly asked questions

21. CRM Applications and Tools (cont.)
Customer-touching applications
Personalized Web Pages
E-Commerce Applications
Campaign Management
Web Self-Service
Activities conducted by users on the Web to provide answers to their questions (e.g., tracking) or for product configuration
Self-tracking
Self-configuration and customization

22. CRM Applications and Tools (cont.)
Customer-centric applications
Data reports
Data warehouse
A single, server-based data repository that allows centralized analysis, security, and control over the data

23. CRM Applications and Tools (cont.)
Data analysis and mining
Analytic applications automate the processing and analysis of CRM data
can be used to analyze the performance, efficiency, and effectiveness of an operation’s CRM applications
Data mining involves sifting through an immense amount of data to discover previously unknown patterns

24. CRM Applications and Tools (cont.)
Online networking and other applications
Forums
Chat rooms
Usenet groups
newsletters
Discussion lists

25. CRM Applications and Tools (cont.)
Mobile CRM
the delivery of CRM applications to any user, whenever and wherever needed
Voice communication
people are more comfortable talking with a person, even a virtual one, than they are interacting with machines. The smile and the clear pronunciation of the agent’s voice increases shoppers’ confidence and trust

26. CRM Applications and Tools (cont.)
Role of knowledge management and intelligent agents in CRM
Automating inquiry routing and answering queries requires knowledge
Generated from historical data and from human expertise and stored in knowledge bases for use whenever needed
Intelligent agents support the mechanics of inquiry routing, autoresponders, and so on

27. Evaluate the effectiveness of the tools with AIMRITE
Audience: can the target audience be reached?
Impact: can message get through the clutter?
Message: is message communication effective?
Response: is responding easy (direct/indirect)?
Internal management: can the tools be managed readily by agency or internally?
The End Result: What are the response rates, costs and returns?