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CHAPTER 5RELATIONSHIP MARKETING USING DIGITAL PLATFORMS
NUR AQILAH BINTI ZAINUDINBM2403B
LEARNING OBJECTIVES
• Assess the relevance and alternative approaches for using digital platforms for customer relationship management
• Evaluate the potential of the Internet to support one-to-one marketing, and the range of techniques and systems available to support dialogue with the customer through digital media
• Assess how to integrate social and mobile interactions to develop social CRM capabilities
INTRODUCTION
Customer Relationship Management (CRM)
=======>>A marketing led approach
to building and sustaining long-term business with
customer>>Is essential for any sustainable business this applies equally to online elements of a business.>>Failure to build relationship with visitors and sales largely caused the failure of many dot-coms following huge expected on customer acquisition
One-to-One marketing=======
>> A unique dialogue occurs between a company and individual customers(or group of customers with
similar need)>> so many companies
apply CRM by using approaches which automate
the tailoring of services to develop relationship with
particular customer segment, group and
individuals.
ELECTRONIC CUSTOMER RELATIONSHIP
MANAGEMENT (E-CRM)
Involve s creating strategies and plan for how digital
technology and digital data can support CRM
# Using the website and online social presences for customer
development # Managing customer profile
information from other database # Managing customer contact option through mobile, e-mail,
and social networkData mining to improve targetingProvide online customer service
facilitiesManaging online service quality
Managing multichannel customer experience
FROM E-CRM TO SOCIAL CRM
1. Marketing monitoring 2. Sales
3. Service and support
4. Innovation 5. Collaboration
6. Customer experience
E-CRM====
Using digital communication techno. to maximize sales to
existing customerSOCIAL CRM
====Managing C2C conversation to engage existing customer,
prospect and other stakeholder
The scope of Social CRM across business functions.
THE CHALLENGE OF CUSTOMER ENGAGEMENT
Customer engagement as marketing new key metric, given then rapidly increasing online media fragmentation and the challenges of keeping customers engaged with brands given the proliferation of
choice.
Customer engagement : repeated interactions that strengthen the emotional , psychological or physical investment a customer has in
a brand.
media fragmentation : describes a trend to increasing choice and consumption of a range of media in terms of different channels such
as web and mobile and also within channel such as TV, radio stations, magazines and more website.
FOUR PARTS : Involvement, interaction, intimacy, influence
BENEFITS OF USING E-CRM TO SUPPORT CUSTOMER ENGAGEMENT
TARGETING MORE COST EFFECTIVELY
MASS CUSTOMISATION OF THE MARKETING MESSAGE
INCREASED DEPTH AND BREADTH OF INFORMATION AND IMPROVE THE NATURE
OF RELATIONSHIP
DEEPERCUSTOMER UNDERSTANDING AND MORE RELEVANT COMMUNICATION
CAN BE DELIVERED
LOWEST COSTDELIVERING LOYALTY
PROGRAMMES
OPPORTUNITIES FOR GAMIFICATION
Marketing applications of e- crm
Sales force automation: sales representatives are supported in their account
management through tools to arrange and
record customer visit.
Customer services management :
representatives in contact centers respond to
customer request for information by using intranet to access.
Managing the sales process : can be achieved through e-commerce sites
Customer communications
management : managing communications
integrated across different channels like direct mail,
e- mail, social network
Analysis : through technologies such as data
warehouse and approaches such as data
mining
Crm technologies and data
Database technology is at the heart of delivering these CRM applications. The database is accessible through an intranet website accessed by employees or an extranet
accessed by customers or partners providing an interface on to the entire customer relationship management
system.
3 main types of customer data ==========================
Personal and profile data : include contact details and characteristic for profiling customers such as age and
sex,business size.Transaction data : record of each purchase transaction
including specific product purchased, quantities, category, location, date, time and channel where purchase
Communication data : record of which customers have been targeted by campaign and their response to them.
Customer lifecycle management
CUSTOMER LIFECYCLE
Stages each customer will pass through in a long term relationship through acquisition, retention and extensionCUSTOMER SELECTION
defining the types of customers that a company will market to. It means identifying different groups of customers for which to develop offerings and to target during acquisition, retention and extension.CUSTOMER ACQUISITION
refer to the marketing activities to form relationship with new customers while minimizing acquisition costs and targeting high value customers.CUSTOMER RETENTION
refer to the marketing activities taken by an organization to keep its existing customers.CUSTOMER EXTENSION
refer to increasing the depth or range of products that a customer purchase from a company.
The four classic marketing activities of customer relationship management
CUSTOMER EXTENSION TECHNIQUES THAT ARE PARTICULARLY IMPORTANT TO RETAILER
RE-SELL
UP-SELL
REACTIVATION
REFERRALS
CROSS-SELL
5 IS
IDENTIFICATION – can the
customer be recognised for
different channel contacts?
INDIVIDUALISATION
– can communications and products be
tailored?
INTEGRATION – is there a 360 degree view of the customer?
INTEGRITY – is the
relationship built on trust?
INTERACTION – are
communications two-way?
PERMISSION MARKETING
>Is a significant concept that underpins online CRM in management of the customer lifecycle.
>Permission marketing is a term coined by Seth Godin (1999) it is the best characteristics with just three or four words.
Stage of the customer lifecycle
STAGE 1 = ATTRACT NEW AND EXISTING CUSTOMER TO
ONLINE PRESENCE
STAGE 2a = INCENTIVES VISITORS TO
ACTION
STAGE 3 = MAINTAIN
DIALOGUE USING ONLINE
COMMUNICATION
STAGE 4 = MAINTAIN
DIALOGUE USING OFFLINE
COMMUNICATION
STAGE 2b = CAPTURE
CUSTOMER INFORMATIO
N TO MAINTAIN RELATIONS
HIP.
A summary of an effective process of permission-based online relationship building
E-MAIL MARKETING AND SOCIAL CRM COMMUNICATION STRATEGY
PRINCIPLE 1<> CONSIDER SELECTIVE OPT-IN TO COMMUNICATION
<>Communication preferences to the customer to ensure more
relevant communication.
PRINCIPLE 3<> OFFER A RANGE OF OPT-IN INCENTIVES
<>many websites now have free win save incentives to encourage
opt-in, but often it is one incentive fits all visitors.
PRINCIPLES 6<> CREATE AN OUTBOUND CONTACT STRATEGY<> Online permission marketers
need a plan for number, frequency and type of online and
offline communications and offers.
PRINCIPLE 2<> CREATE A COMMON CUSTOMER PROFILE. <>A structured approach data capture is needed otherwise
some data will be missed, as is the case will be company that
collected 80,000 e-mail address.
PRINCIPLE 4<> DON’ T MAKE OPT-OUT TOO EASY
<>often marketers make it too easy to unsubscribe.
PRINCIPLE 5<> WATCH, DON’T ASK OR SENSE AND RESPOND
<>The need to ask interruptive questions can be reduce through
the use of monitoring clicks to better understand customer need
and to trigger follow up communications.
RIGHT TOUCHING THROUGH DEVELOPING ONLINE CONTACT STRATEGIES
increase in media fragmentation and the development of high
attention media such as social network, the need for developing
a structured approach to communicating with customer
across the lifecycle has become more urgent.
THE CONTACT STRATEGY SHOULD INDICATE :
1 FREQUENCY 2 INTERVAL
3 CONTENT AND OFFERS 4 LINKS
5 A CONTROL STRATEGY
THE EMOTIONALLY UNSUBSCRIBED E-MAIL LIST MEMBERS
Measure the level of activity in e-mail response at a more granular
level.
Test different frequencies
Develop automated customer lifecycle e-mails which are part of
the contact strategy.
Ensure the field that are used to customize messages
Use offline communications.
PERSONALISATION AND MASS CUSTOMISATION
Personalization and mass customization
can be used to tailor information
content, website or within an opt-in e-
mail.
PERSONALISATION=====
Refer to customization information requested by a site customer at
an individual level
MASS CUSTOMISATION
====providing tailored content to a group or individuals with similar interests.
COLLABORATIVE FILTERING
====Customer are openly asked what them are, by checking boxes corresponding to their
interest.
USING DIGITAL MEDIA TO INCREASE CUSTOMER LOYALTY AND VALUE
The ultimated commercial aim of relationship marketing
approaches such as e-CRM and social CRM is to increase engagement with customers leading to increase customer
loyalty and direct sales.
DETERMINING WHAT CUSTOMER VALUE
Consider the different forms of online interaction a
consumer can have with a brand that can determine
their perceptions of satisfaction and influence
loyalty
Emotional loyalty===
Demonstrated by favorable perception, options and
recommendation
Behavioral loyalty===
Demonstrated by repeat sales and response to marketing campaign
THE RELATIONSHIP BETWEEN SATISFACTION AND LOYALTY
Terms satisfaction and loyalty are sometimes used interchangeable seen that they do not necessarily respond.
CUSTOMER SATISFACTION>>Refer to the
customer is happy about the quality of
product and service.
>>A customer with product or service
increases, so should their behavioral and emotional together
with advocacy.
MEASURING THE VOICE OF THE CUSTOMER IN DIGITAL MEDIA
Online voice of customer (VoC)
=== Qualitative
assessments of the effectiveness of digital
presence based on direct customer feedback. They
answer ‘who and why’ questions about how customers interact with brands online
Net promoter score (NPS)
=== A measure of the
number of advocates a company or website
has who would recommend it
compared to the number of detractors.
Differentiating customers by value and engagement
A core approach to relationship marketing is to focus our limited resources and activities on the most valuable customers.
Within the online customer base of service and purchasing.
OBJECTIVES AND CORRESPONDING TACTICS
• Increase the number of new users per month and annually.
• Increase the percentage of active users• Decreasing the percentage of dormant
users• Decreasing the percentage of inactive
users.
Lifetime value modelling
Is a key to the theory and practice of
customer relationship management.
Digital technology has enabled
marketers to become more sophisticated in
how identify and target valuable
customers
Recency frequency monetary value (rfm) analysis
Recency
Frequency
Monetary value
Latency
Hurdle rate
Recency frequency monetary value ( RFM ) analysis
Recency : customer action such as
purchase , site visit, account access, e-
mail response
Frequency : is the number of times an action is completed
in a period of a customer action
such as purchase, visit, e-mail response
Hurdle rate : the proportion of customer that fall within a
particular level of activity for example, the percentage of
members of an e-mail list and click on the e-mail within 90 day
period.
Latency : the average length of time that different
activities such as log in, paying bills, first
and second purchase.
Monetary value : can be measured in different way .
Generally, customers with higher monetary values tend to have a
higher loyalty and potential future value
since they have purchased more items.
GROUPING CUSTOMERS INTO DIFFERENT RFM CATEGORIES
STATISTICAL RFM ANALYSIS=====
this involves placing an equal number of customers in each
RFM category using quintiles of 20% (10 deciles can also be used for larger databases)
ARBITRARY DIVISIONS OF CUSTPMER DATABASE
====This approach is also useful since the marketers can set thresholds
of value relevant to their understanding of their customers.
PRODUCT RECOMMENDATIONS AND PROPENSITY MODELING
====PROPENSITY MODELING
Is one name given to the approach of evaluating customistics and behavior
in particular previous product or services purchases and
recommendations for the next suitable product.
Applying virtual communities and social networks for crm
1. CREATING COMMUNITY THROUGH SOCIAL NETWORKS
FACEBOOK COMPANY PAGETWITTER PAGE
LINKED IN COMPANY PAGES AND GROUP
GOOGLE+ GOOGLE+YOUTUBE CHANNEL
2. CREATING YOUR OWN PRESENCEPURPOSEPOSITIONINTEREST
PROFESSION
SUMMARY
1. E-CRM enables ‘sense and respond’ communications where personalised e-mail or web based messages can be delivered based on disclosed or inferred customers preferences stored as customer profiles.
2. E-CRM also involves management of online services to deliver customer service which is aimed at improving brand loyalty.
3. The classic model for permission marketing to support E-CRM is :Step 1 – attract customers to website, partner microsite or social presence such as Facebook.Step 2a – incentive in order to gain contact and profile information.Step 2b – capture customer information to maintain the relationship and profile the customer.Step 3 – maintain dialogue through using online communications to achieve repeat site visits.Step 4 – maintain dialogue consistent with customer’s profile using e-mail, social media messaging or where cost- effective, direct mail or outbound phone contact.