1. © 2008 Thomson, a part of the Thomson Corporation. Thomson, the Star logo, and Atomic Dog are trademarks used herein under license. All rights reserved.

2. INTERNET MARKETING : INTEGRATING ONLINE AND OFFLINE STRATEGIES Customer Relationship Development and Management

3. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 3 GOOD ACQUISITION/CONVERSION Acquire Leads (High Potential, Unknown Potential) Drive Leads to Website (Product Page; Landing Page) 'Guide' Prospects Through Site (Personas, Paths) Recontact Program (Communications, Offers) Close Sale; Move to Retention Program TARGETED; POTENTIAL HIGH CLV

4. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 4 RETAINING CUSTOMERS IS CHEAPER THAN ACQUIRING THEM Average Firm Looses 50% Of Customer Base Every Five Years Reducing Defections Increases Profits Many Customers Who Defect Were Satisfied Extremely Satisfied Customers Are More Likely To Repurchase Satisfied Customer Tells Five People While Dissatisfied One Tells Nine

5. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 5 CLV FOR APPAREL PURCHASES Spent 67% More In Months 31-36 than 1-6 3 Referrals After 1 st Purchase; 7 Referrals After 10 Loyal Customers Would Buy Other Product Lines

6. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 6 ZAPPOS > CUSTOMER SERVICE 7.4 Million Customers  3.3 M. Made a Purchase in Last 12 mo. 75% of Orders > Returning Customers  They Order 2.5 Times More Often  They Have Higher Average Order Sizes 43% of New Customers from WOM http://www.christine.net/2008/02/zappos-shares-s.html

7. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 7 ZAPPOS ON SOCIAL MEDIA

8. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 8 TRANSACTIONAL vs. RELATIONSHIP Transactional/MassMedia No Direct Contact with Customer No Ability to Identify and Track Relationship Often Owned by Channel (e.g. Retailer) Cost of Database /Gross Margin Relational Identify, Focus on Individual Customer Target Communication Growth in CLV On-Going Dialogue Seamlessly Satisfactory Customer Experience

9. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 9 PEPPERS & ROGERS CRM MODEL

10. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 10 ‘DING’ WIDGET 2 years 2 M Downloads $150M Sales http://www.videoactivereport.com/southwest_airlines_ding_widget_racks_up_150_million_in_ticket_sales

11. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 11 AMAZON LOVES WIDGETS

12. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 12 FOUNDATIONS OF CRM Sales Force Automation Marketing Customer Service

13. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 13 SALES FORCE PRODUCTIVITY Productivity Tools such as  Call Reporting, Order/Inventory Status Sales Lead Generation Programs Telemarketing Management Tools  Sales Forecasting, Reporting

14. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 14

15. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 15 Land’s End  Multiple Ways To Contact, “Virtual Dressing Room,” Newsletter, Languages, Custom Products, Co-Browsing and More Yellow Freight  Continuous Improvement of Products and Self- Service Options, My Yellow, My Pickup and More ASPCA  Supportive, Informative Content; Registration Page with Strong Incentives; Importance of Personalized Email RELATIONSHIP FEATURES

16. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 16 B2B

17. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 17 B2C

18. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 18 ASPCA INCENTIVES TO REGISTER Ability to Send ECards Weekly Email Newsletters State-by-State Animal Protection Information Access to Archives of Their Magazine ASPCA Rewards Program Special Offers from ASPCA Online Store www.aspca.org

19. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 19 RESPONSE TO PERSONALIZATION

20. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 20 RELATIONSHIP MARKETING IS A PROCESS, NOT A PROJECT STRATEGIC IMPERATIVE

21. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 21 THE CRM PROCESS

22. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 22 KEY CONCEPTS Targeting Personalization Customization

23. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 23 TARGETING AND PERSONALIZATION

24. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 24 PERMISSION-BASED TARGETING Home PagePreferences Page Figure 8-9

25. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 25 PERSONALIZING A WEB PAGE Figure 8-10

26. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 26 PERSONALIZING EMAIL NEWSLETTER Figure 8-10

27. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 27 WHAT IS A COOKIE? TYPES OF COOKIES Session vs. Enduring Third Party vs. Site

28. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 28 GOOD OR BAD?

29. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 29 TYPES OF PERSONALIZATION Rules-Based User-Controlled Information-Driven

30. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 30 British Supermarket Tesco Is A Leader In CLV-Driven Loyalty Programs Administered Through Their Web Site A GLOBAL LEADER

31. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 31 UNDERSTAND CUSTOMER BEHAVIOR Over 11 Million Club Card Holders Accumulate Points with Purchases  “Thank You” Vouchers 4 Times/Year  Redeem at Tesco, For Club Offers Newsletter Mailings  “Over 80,000 Offer Combinations In Each Mailing” www.tesco.com

32. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 32 EACH CUSTOMER MEASURED EACH WEEK Source: Dunhumby

33. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 33 DRIVES MARKETING PROGRAMS Source: Dunhumby Tesco Targeted Media Coupons at Till Club Mailings / Trade Driver Kids Club, Healthy Living Lifestyle Mailings Mainstream, Finer Foods, Healthy Clubcard Statement

34. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 34 COOP PROMOTIONS WITH BRANDS Tesco Current http://www.tesco.com/clubcard/clubcard/

35. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 35 RECENT DEVELOPMENTS Tesco Fresh N Easy – US http://online.wsj.com/article/SB123595003457704779.html?mod=djemITP Profits Up (Apr 08) – Asia/ E. Europe Set up Full-Service Bank (Jul 08) - RBS

36. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 36 METRICS ‘STEERING WHEEL’ http://www.tesco-careers.com/home/about-us/visions-and-values???

37. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 37 FACEBOOK METRICS http://pagedata.insidefacebook.com/

38. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 38 CRITERIA FOR LOYALTY PROGRAMS Be Easy To Use Provide Immediate Rewards Have Value To Customer Be Targeted To Behavior Change Be Affordable Have A Published Exit Strategy

39. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 39 WHY CRM PROGRAMS FAIL Initiative Launched without Comprehensive Strategy Not Integral to the Business Strategy Based on What Worked for Another Company Launched without Concern for Effective Enterprise and Customer Interfaces Considered an IT Project Instead of a Business Initiative Launched without Defined Objectives and Metrics Considered a One-Time Event Lack of a Customer-Centric Culture Lack of  Top Management Leadership  Employee Buy-In

40. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 40 THE CRM VISION

41. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 41 CUSTOMER PROFILES Affluent professionals who want the best technology and entertainment experience Active younger males who want the latest technology and entertainment Family men who want technology to improve their lives—practical adopters of technology and entertainment Busy suburban moms who want to enrich their children's lives with technology and entertainment Small-business customers who can use Best Buy's products and services to enhance the profitability of their businesses Source: Peppers and Rogers, 2005

42. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 42 CREATED PERSONAS The Segment  Busy suburban moms who want to enrich their children's lives with technology and entertainment The Persona – Detailed Description  "Jill“ - a soccer-mom type who is the main shopper for the family but usually avoids electronics stores. She is well-educated and usually very confident, but she is intimidated by the products at Best Buy and the store clerks who spout words like gigabytes and megapixels.

43. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 43 A “JILL” STORE “Profiling” http://www.washingtonpost.com/wp-dyn/content/article/2005/08/16/AR2005081601906.htmlhttp://www.washingtonpost.com/wp-dyn/content/article/2005/08/16/AR2005081601906.html “Feminine Side” http://www.usatoday.com/money/industries/retail/2006-12-20-best-buy-usat_x.htmhttp://www.usatoday.com/money/industries/retail/2006-12-20-best-buy-usat_x.htm

44. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 44 MORE PROFILES – MORE EXECUTIONS Fascinating Post – Leaked Internal Documents http://consumerist.com/368894/leaks-best-buys-internal-customer-profiling-document

45. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 45 “CHARLIE” STORES/DEPARTMENTS

46. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 46 CRM SUCCESS FACTORS Good Customer Data Quality Processes and Systems Organizational Resources and Commitment Software is Necessary, but not Sufficient

47. Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 47 SUMMARY CRM Key To Enterprise Profitability Customer Lifetime Value Key Metric Transactional Marketing Doesn’t Meet Needs CRM (Sales Force Automation, Marketing, Customer Service) “A Process, Not A Project” Profiling, Targeting, Personalization Loyalty Programs Can Be Helpful Seamless Customer Experience  All Touchpoints Acquire Right Customers  Retain Them