Slide 9 1 Chapter 9 Customer relationship management

Slide 9. 1 Chapter 9 Customer relationship management Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 2 Learning outcomes Outline different methods of reaching and acquiring new customers via digital media • Evaluate different buyer behaviour amongst online customers • Describe techniques for retaining customers and cross- and up-selling using digital media communications • Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 3 Management issues • • Which digital media should we invest in to reach new audiences? What are the practical success factors for using digital media need to make customer acquisition more effective? What technologies can be used to build and maintain the online relationship? How do we deliver superior service quality to build and maintain relationships? Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 4 What is CRM? An approach to build and sustain long-term business with customers. Customer life cycle: The stage each customer will pass through in a long-term relationship through acquisition, retention, and extension. Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 5 CRM – Customer Life Cycle Figure 9. 1 The four classic marketing activities of customer relationship management Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 6 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 B 2 B context by supporting sales representatives by recording the sales process (SFA). Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 7 Marketing applications of CRM (Continued) • Campaign management. Managing ad, direct mail, email and other campaigns. • 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 behaviour and campaigns can be analysed in order to optimise the marketing mix. Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 8 e-CRM – a definition e-CRM is: • Applying… Internet and other digital technology… (web, email, wireless, i. TV, databases) • to… acquire and retain customers (through a multi-channel buying process and customer lifecycle) • by… improving customer knowledge, targeting, service delivery and satisfaction. Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 9 Benefits of e-CRM Some benefits include: • Targeting more cost effectively • Achieve mass customisation of the marketing messages • Increase depth, breadth, and nature of relationship • Enables learning relationship • Lower cost Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 10 Permission Marketing Figure 9. 2 A summary of an effective process of online relationship-building Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 11 Conversion Marketing Figure 9. 3 Reach–Act–Convert–Engage model Source: Smart Insights (2010) Introducing RACE = A practical framework to improve your digital marketing. Dave Chaffey, 15 July 2010. www. smartinsights. com/blog/digital-marketing. Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015 strategy/race‑a‑practical-framework‑to‑improve-your-digital- marketing.

Slide 9. 12 Online Buying Process A summary of how the Internet can impact on the buying process for a Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 edition © Marketing Insights Limited 2015 new purchaser Figure 9. 4 th

Slide 9. 13 Influences on Purchase A model of the relationship between different aspects of trust and consumer response based on the categories Figure 9. 5 Source: Bart et al. (2005). Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 14 Influences on Purchase – con’t Percentage who consider the different information sources as important when researching/considering a product or service Figure 9. 6 Chaffey, Digital Business and Centre, 2004. Source: Brand. New. World: AOL UK/Anne Molen (Cranfield School of Management)/Henley. E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 15 • • Characteristics of interactive marketing communications From push to pull From monologue to dialogue From one-to-many to one-to-some and one-to-one From one-to-many to many-to-many From lean-back to lean-forward Mediums Increase in communications intermediaries Integration Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 16 Assessing marketing communications effectiveness Measures used for setting campaign objectives or assessing campaign success increasing in sophistication from bottom to top Figure 9. 7 Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 17 Assessing marketing communications effectiveness – con’t Figure 9. 8 An example of effectiveness measures for an online ad campaign Insights Limited 2015 Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 edition © Marketing th

Slide 9. 18 Online marketing communications: 1 - Search Engine Marketing (SEM) How does Google work? • Crawling • Indexing • Ranking or scoring • Query request and results serving Importance of keyphrase analysis… Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 19 Figure 9. 9 1 - Search Engine Marketing (SEM): Search process Stages in producing natural search engine listings Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 20 1 - Search Engine Marketing (SEM): Search Engine Results Pages (SERPs) Search engine results page showing the two main methods for Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 edition © Marketing Insights Limited 2015 achieving visibility Figure 9. 10 th

Slide 9. 21 Online marketing communications: 1 - Search Engine Marketing (SEM) Search Engine Optimisation (SEO): A structured approach used to increase the position of a company or its products. Factors affecting search engine rankings: • Frequency of occurrence in body copy • Number of inbound links (page rank) • Title HTML tag • Meta-tags • Alternative graphic text Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 22 Online marketing communications: 2 - Online PR Leverages the network effect of the Internet. Activities considered to be online PR include: • Communicating with media online • Link-building • Blogs, podcasting, and RSS • Online communities and social networks • Brand presentation on third-party sites • Online viral marketing Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 23 Social Media and CRM strategy Figure 9. 12 Aspects of social CRM Source: Altimeter (2010). Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 24 Online marketing communications: 2 - Online PR Figure 9. 13 Online PR categories and activities Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 25 Online marketing communications: 3 - Online Partnerships A - ) Link building B - ) Affiliate marketing The affiliate marketing model (note that the tracking software and fee payment may be managed through an independent affiliate network manager) Figure 9. 14 C - ) Online Sponsorship Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 26 Online marketing communications: 4 – Interactive advertising Fundamental • Ad serving Objectives • Delivering content • Enabling transaction • Shaping attitudes • Soliciting response • Encouraging retention Targeting options • On a particular type of site • To target a registered user's profile • At a particular time of day or week • Online behavior Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 27 Online marketing communications: 5 – Email marketing Outbound email marketing Emails are sent to customers and prospects from an organisation Inbound email marketing Managament of emails from customers by an organisation Measures for evaluating email marketing • Delivery rate • Open rate • Clickthrough rate Opt-in email options for customer acquisition • Cold email campaign • Co-branded email • Third-party e-newsletter Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 28 Customer Retention Management Two goals of customer retention • Repeat customers • Repeat visits Personalisation and Mass Customisation • Personalisation • Collaborative filtering Techniques for managing customer activity and value • Increase # of new users • Increase # of active users • Decreasing # of dormant users • Decreasing # of inactive users Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 29 Figure 9. 17 Activity segmentation of a site requiring registration Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 30 Customer Retention Management – con’t Lifetime-value modelling Figure 9. 18 Different representations of lifetime-value calculation Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 31 Customer Retention Management – con’t Lifetime-value modelling Figure 9. 19 An example of an LTV-based segmentation plan Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 32 Customer Retention Management Improving online service quality • Tangibles • Reliability • Responsiveness • Assurance • Emphathy Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 33 Advanced online segmentation and targeting techniques depend on resources available, technology capabilities and opportunities afforded by the list: • Identify customer life cycle groups • Identify customer profile characteristics • Identify behaviour in response and purchase • Identify multichannel behaviour • Tone and style preference Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 34 Advanced online segmentation and targeting techniques Identifying customer life cycle groups Figure 9. 21 Customer life cycle segmentation Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 35 Recency, Frequency, Monetary value (RFM) analysis Related concepts: • Recency • Frequency • Monetary value Figure 9. 22 RFM analysis • Latency • Hurdle rate Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015

Slide 9. 36 Components of CRM technologies Figure 9. 23 An overview of the components of CRM technologies Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 th edition © Marketing Insights Limited 2015