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Chapter 15 Objec2ves

E-Marke2ng/7E
Chapter 15

ABer reading Chapter 15, you will be able to:

Dene customer rela2onship management (CRM) and
iden2fy the major benets to e-marketers.
Outline the three pillars of rela2onship marke2ng for e-
marke2ng.
Describe social CRM and how it relates to tradi2onal CRM.
Discuss the nine major components needed for eec2ve
and ecient CRM in e-marke2ng.
Highlight some of the company-side and client-side tools
that e-marketers use to enhance their CRM processes.
Dieren2ate CRM metrics by customer life cycle stage.

Customer Rela2onship Management

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The Best Buy Story

Rela2onship Marke2ng Dened

Best Buy is the 11th largest U.S. e-commerce

retailer with 1B online visitors and a

mul2channel strategy.
In 2008 Best Buy ini2ated the Best Buy
Community online.
600,000 customers a quarter post 20,000
messages and view over 22 million pages of
content.
The community has yielded $5M in benets
to Best Buy.
Best Buy also uses Twi[er to engage
customers (@twelpforce).

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Rela2onship marke2ng is about establishing,

maintaining, enhancing, and commercializing
customer rela2onships through promise
fulllment.
A rm using rela2onship marke2ng focuses
more on wallet share, the amount of sales one
customer can generate over 2me, than on
market share.

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From Mass Marke2ng To

Rela2onship Marke2ng

Stakeholders
The four stakeholders most aected by internet
technologies include:
Employees who need training and access to
data and systems used for rela2onship
management.
Business customers in the supply chain.
Lateral partners, such as other businesses,
not-for-prot organiza2ons, or governments.
Consumers who are end users of products
and services.

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Customer Rela2onship Management

3 pillars of rela2onship marke2ng

CRM is a philosophy, strategy, and process that

includes all 3 pillars.
The benets of CRM 1.0 include:
Increased revenue from be[er targe2ng.
Increased wallet share with current customers.
Longer reten2on of customers.
The cost of acquiring a new customer is typically 5
to 7 2mes higher than the cost of retaining a
current customer.
Sa2sed customers recommend Web sites, stores,
and products to their friends in social media.
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Maximizing Customers Through Reten2on

Customer
acquisi2on

Social CRM (CRM 2.) adds social media technology and

customer collabora2ve conversa2ons to the process.
Adds benets such as:
Monitoring and improving reputa2ons.
Learning more about customer needs, wants, and
problems.
Improving target market selec2on and revenue poten2al.
Gathering data for market research on products and
customer service.
Decreasing customer service costs.
Iden2fying new revenue opportuni2es.

Customer
reten2on
52% marketers cite
reten2on as top p
riority2

Costs 5-7 2mes m

ore
than reten2on

36% marketers cite

acquisi2on as top
priority2

Social Customer Rela2onship Management

Databases can decline

50% in 5 years if leB
dormant3
68% of customers
leave
due to poor treatm 1
ent

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CRM Evolves Using Social Media

15-10

9 Building Blocks for Successful CRM

Social CRM (2.0)

Customers

CRM 1.0

Company
employee

MEDIA
Phone
E-mail
In-person
SMS
Website
Paper mail
Customer
TradiConal media

Company
employees

MEDIA
Blogs
Social networks
Microblogs
Photo sharing
Forums
Wikis
Reviews/RaCngs
InteracCve Web sites
Other social media
Live chat
All CRM 1.0 media

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1. CRM Vision

TRUSTe Builds User Trust

To be successful, the CRM vision must start at

the top and lter throughout the company to
keep the rm customer focused.
One key aspect of CRM vision is how to guard
customer privacy.
The benets of using customer data must be
balanced by the need to sa2sfy customers and
not anger them.
TRUSTe provides its seal and logo to any Web
site mee2ng its privacy philosophies.
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2. CRM Strategy

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Three Levels of Rela2onship Marke2ng

E-marketers must determine their objec2ves

and strategies for ini2a2ng CRM programs and
buying technology or sehng up social media.
Many CRM goals refer to customer loyalty.
An important CRM strategy is to move
customers up the rela2onship intensity
pyramid to advocacy.
Another CRM goal involves building bonds with
customers on 3 levels: nancial, social and
structural.
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Rela2onships Over Mul2ple

Communica2on Channels

3. Customer Experience
Management
Consumers are constantly bombarded by
marke2ng communica2ons and unlimited product
choices.
According to Sheth (1995), the basic tenet of
CRM is choice reduc2on.
Many consumers are loyalty prone, and will
s2ck with the right product as long as its
promises are fullled.
Synchronous and asynchronous technologies can
provide automated and human communica2ons
that solve customer problems.
15-17

4. Customer Collabora2on
Management/Marke2ng (CCM)

15-18

5. Organiza2onal Collabora2on

CCM is content, people, and interac2on driven,

while tradi2onal CRM is data-driven.
CCM is about managing customer rela2onships
and experiences by crea2ng and monitoring
online content.
Listening the online cha[er using technology
such as Google Alerts and social media
dashboards is more important than talking
when a company is selling.
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Marketers collaborate within and outside the

organiza2on to focus on customer sa2sfac2on
to create a CRM culture.
Online retailers can seamlessly link the back-
end (e.g., inventory and payment) with the
front-end CRM system and the en2re supply
chain management system (SCM).
Extranets, two or more intranet networks that
share informa2on, allow CRM-SCM integra2on.

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CRM-SCM Integra2on

6. CRM Processes
Firms use specic processes to move customers
through the customer care life cycle.

15-21

Building a Dynamic Customer Prole

15-22

Sales Force Automa2on

Sales force automa2on allows salespeople to
build, maintain, and access customer records,
manage leads, and manage their schedules.
Up-to-date customer and prospect records
help build customer rela2onships.
Salesforce.com also has tools to monitor brand
conversa2ons in the social media.

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Marke2ng Automa2on

7. CRM Informa2on

Marke2ng automa2on ac2vi2es help provide:

Eec2ve targe2ng.
Ecient marke2ng communica2on.
Real-2me monitoring of customer and
market trends.
SAS, a business intelligence and predic2ve
analy2cs soBware provider, oers automa2on
soBware to aid CRM.

The more informa2on a rm has, the be[er

value it can provide to each current or
prospec2ve customer.
Firms gain much informa2on by tracking
behavior electronically.
Bar code scanner data.
SoBware that tracks online movement, 2me
spent per page, and purchase behavior.
Databases can provide a 360 customer view
across various channels.

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8. CRM Technology

15-26

Company-Side Tools (push)

The internet forms the centerpiece of a rms

CRM abili2es.
Cookies, Web logs, bar code scanners, social
media, and other tools help to collect
informa2on about consumers and their
behaviors.
Firms use company-side tools to push
customized informa2on to users.
Client-side tools allow the customer to pull
informa2on that ini2ates the customized
response from the rm.
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9. CRM Metrics

Client-Side Tools (pull)

E-marketers use numerous metrics to

assess the internets value in delivering
CRM performance.
ROI
Cost savings
Revenues
Customer sa2sfac2on
Customer Life2me Value (LTV)
Contribu2on of each CRM tac2c to
these measures

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Metrics Scoreboard by Salesforce.com

15-30

10 RULES FOR CRM SUCCESS

1. Recognize the customers role.
2. Build a business case.
3. Gain buy-in from end users to execu2ves.
4. Make every contact count.
5. Drive sales eec2veness.
6. Measure and manage the marke2ng return.
7. Leverage the loyalty eect.
8. Choose the right tools and approach.
9. Build the team.
10. Seek outside help.

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THE END

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