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E-Marketing Relationship Marketing Using the Internet
Azu19 KODon 21 April 2010
Transcript of E-Marketing Relationship Marketing Using the Internet
By Muhamed Azrul Azli & Gilang Ramadhan
To discuss the concept of e-CRM
Understanding personalization & customer profiling thru internet marketing.
Identify privacy issues regarding one-to-one marketing.
To discuss the relationships between database, direct and relationship marketing.
To discuss the integration of website and telemarketing
E-Marketing Objectives Part 1 Discussion on self assessment exercise.
Part 2- Holden and Toyota website comparison.
Outline of Presentation Electronic-Consumer Relationship Marketing The internet as a suitable medium for
CRM is Active and Web is Passive.
E-CRM involves creating strategies and plans for how the digital technology and digital data can support CRM”.
According to Smith & Chaffey, using digital communications technology to maximize sale to existing costumer and encourage continued usage of online services. It is used as generating lead of online and offline sale to support up sale and cross sale, data mining, online costumer services, enhance costumer experiences and supporting loyalty programs.
The objective of CRM regardless thru online/offline is to increase customer loyalty in order to increase profitability over customers life time value (LTV)
Its aim at improving all aspects of the level of customer service.
Targeting more cost effectively - Wider reach of customers the relationship targeted and personalized
Achieve mass customization of the marketing messages
Increase the depth and breadth the nature of relationship
Lower cost in term of contacting customers
Personalization web based involves delivering customize content for the individual, through web pages, email or push technology.
A tailored information to an individual level.
Form lasting and loyal relationships with customers by profiling individualized content, information, offerings and services.
Personalization- An Internet Marketing Concept The benefit... Learn more about customers-learn and understand the why and how they prefer to do business with your organization.
This type of customer information is key to success in business today and into the future.
Increase interactivity and present a personal web experience
Enable Collaborative filtering that can be used to profiled the consumer interest with specific information and offer that based on similar interest of similar customers.
Web personalization coupled with tracking provides a powerful tool to monitor the performance of the website What is customer profiling?? Customer Profiling – means using the website to find
out of a customer specifics interest and characteristic.
The Importance of Customer Profiling
To retain valuable, long-term customers are fundamental to a successful business and are hard to replace.
“According to a 2008 survey by the CMO Council, loyal
customers are 15 times as likely to increase spend as high-risk,intermittent customers are and acquiring new customers can cost five times as much as satisfying and retaining current ones”.
Savvy marketers use customer profiling to understand their best customers.
Who are they?
What do they need?
Understand the identify of the common demographic
i.e. location, purchase behavior etc.
By customer profiling, marketers are able to retain these top customers and acquire more prospects similar to their criteria.
Gathering and storing customer information is not as complicated as it once was. But the question lies on how to use them at best advantage?
Using customer profiles techniques into action, they can help companies to improve profitability by utilizing customer retention and acquisition.
Marketers who have an understanding of their customers and can put it to work—possess the key to successful lead generation.
As a result, marketers can arm their sales force with qualified leads—many of which will turn into sales and ultimately increase their marketing ROI.
Sense & Respond- Concepts and Benefits A philosophy.
A different management approach.
A complete logic.
A way of measuring the service from the customers perspective.
It is now a core competency in a ‘better way of thinking.
To be able to identify customers in the category of value, growth and responsiveness, there is a need to characterize them using information about them which indicates their purchase and campaign- response behavior
Reacting with appropriate message and offers to encourage desired behaviours
monitoring customers past and present actions and behavior
Sensing is done thoroughly by using technology to monitor visits to particular content on a website or clicking on particular links in an email.
Response can be done through messages on site or in email Benefits of Sense and Response Improve efficiency – calls relating to traditional issues, such as how to use Outlook, have been reduced dramatically, saving time and resources
Enhance staff satisfaction – users are now experiencing fewer IT problems and less downtime
Increase productivity – as each helpdesk call was taking an average of 15 minutes to resolve,
staff can spend much more time on value-adding activities
Address key issues – support resources are free to deal with more complex issues
that have a larger and more longer-term beneficial effect when resolved
Improve system availability – the IT infrastructure is much more stable and available
Focus on core business – departmental resources can be concentrated on core business
activities, rather than managing IT systems FUJITSU- Sense and Respond Based on a case study by Perry (2004) of Fujitsu have successfully applied
the sense and respond approach, in the past two years Fujitsu has reduced
the level of calls to the BMI help desk by 40%. The time to fix has also
reduced by 70%, both as a result of increased knowledge of the
Sense and Respond is Fujitsu’s unique approach to service that
eliminates wasted effort and cost. Instead of simply working to IT
objectives, Fujitsu staff give priority to the customer’s business
Instead of simply fixing IT problems, staff are empowered to find and fix
the causes of those problems, so that they don’t happen again. In
practice, Sense and Respond makes users happier and more
productive at lower cost.
Paul Reynolds comments, “Sense and Respond is not about short term cost
savings, but about long-term efficiency. For example, no-one can afford
helpdesk calls to escalate, because that makes users unhappy and the
Department inefficient, so we have to address the underlying issues and
that’s what Sense and Respond does. As a result, we have some of the
best system availability statistics in government, which is important,
because of the BIS’ role in leading the way and setting the standard in
the use of technology.”(Perry, 2004)
How can customers concern about privacy be responded to when conducting one-to-one marketing using the internet? Disclaimer – ‘we will not share’ is the magic phrase to counter the main fear of their detail being passed on.
Full privacy statement- should be available for those who need it.
Customers should be reassured about the privacy of their data. The key is openness.
only send promotional e-mail or pass on details to other companies, if they opt-in to this arrangement;
allow customers to access their data if required (one of the provisions of the Data Protection Act);
explain why information is collected; how it will benefit the customer;
clearly describe techniques such as cookies that affect privacy.
Databases are necessary to store the details of customers, and their preferences such as order-history.
It provides technological enabler allowing vast amount of data and accessed in ways that create business opportunities.
The database content can then be used to tailor direct marketing by providing offers to customers that are consistent with their needs.
Direct Marketing provides the tactics that deliver the marketing communications to the individual customer.
This approach is evolving rapidly with the advent of the internet, the rise of call centres and advances in logistics.
This is the basis for relationship marketing – understanding customer needs and then responding to them.
Therefore an online relationship marketing is effective since it provides an interactive multimedia environment in which the cutomer opts-in to the relationship .
For more than 30 years, direct mailing marketers for non-profit organizations have used an informal RFM analysis to target their mailings to customers most likely to make donations.
The reasoning behind RFM was simple: people who donated once were more likely to donate again. With the advent of e-mail marketing campaigns and customer relationship management software, RFM ratings have become an important tool.
Using RFM analysis, customers are assigned a ranking number of 1,2,3,4, or 5 (with 5 being highest) for each RFM parameter. The three scores together are referred to as an RFM "cell" .
The database is sorted to determine which customers were "the best customers" in the past, with a cell ranking of "555" being ideal.
The concept and application of RFM analysis to different type of web presence RFM stands for recency, frequency and Monetary value.
RFM analysis is a marketing technique used to determine quantitatively which customers are the best ones by examining how recently a customer has purchased (recency), how often they purchase (frequency), and how much the customer spends (monetary).
Also is a method used for analyzing customer behavior and defining market segments.
RFM analysis is based on the marketing axiom that "80% of your business comes from 20% of your customers."
In relation to web presence, online application for recency include monitoring through time to identify vulnerable customers, and scoring customers to preferentially target more responsive customers for cost savings.
Online application for frequency analysis include combining recency analysis for RF targeting
Thus monetary value depends on the frequency as the proxy with the purchase, to monitor which customers buys our products or services frequently and how much the monetary value they spent.
Customers who had spent the most money in total were more likely to buy again. The most valuable customers tended to continue to become even more valuable.
Integrating Telemarketing into Website Telemarketing
Is a direct selling method using telephone as intermediary to the consumer.
Telephone was used in the first time of telemarketing practice, but later it also a method using direct face to face.
In contemporary marketing, telemarketing is not only done through the telephone, but can also be done through other means such as;
Marketing a product through email.
A web site can be used to promote the use of telesales
through the use of call-back systems where the customer
selects a time they can be phoned to discuss a pre-sales,
sales or post-sales support question
Thank You for your attention!! References List
Chaffey, D., Chadwick, F.E., Mayer, R., Johnston, K., (2009). Internet Marketing:Strategy, Implementation and Practice. 4th ed. Pearson Education Limited UK.
www.holden.com.au The relationship between database marketing, direct marketing and relationship marketing