Customer Relationship management with a link to a specific company

Internet Marketing

Assignment #3 Vit Horky

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Student Class: Semester: Due Date:

Vit Horky Internet Marketing Spring 2008 Oct 09 2008

Lecturer : Program: Actual Submission Date:

Jeff Buehler HND Business Oct 09 2008

Evidence Produced Eg. Report
Student Declaration

Location Handed to Lecturer/ emailed to Lecturer

I declare that the work contained in this assignment was researched and prepared by me, except where acknowledgement of sources is made. I understand that the college can and will test any work submitted by me for plagiarism. Note: The attachment of this statement on any electronically submitted assignments will be deemed to have the same authority as a signed statement

Signature: Date:

Oct 09 2008

A separate feedback sheet will be returned to you after your work has been graded. Refer to your Student Manual for the Appeals Procedure if you have concerns about the grading decision.

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Sep Oct 09 2008 FROM: Vit Horky, a Student of Prague College TO: Jeff Buehler, a Lecturer of Prague College

Author: Vit Horky Date: Oct 09 2008 Word count: 2,437 Lecture: Internet Marketing Semester: Spring 2008

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Table of Contents
Social Media Marketing examined through Internet with a link to a specific company.........5 What is the Customer Relationship Management.................................................... ............................5 Repeat business from existing customers................................................................................. ...........6 Development of a loyal customer base..................................................................... ...........................7 Benefits of CRM....................................................................................................................... ............7 Limits of CRM......................................................................................................... .............................8 How the CRM can be used on Internet................................................................... ............................8 Examples of CRM on internet...................................................................................... .....................9 Consumer´s rights to privacy and the UK Data Protection Act............................ ...............................12 The current CRM system in the Skoda Auto company.................................................... ...................12 Recommendations of improvements..................................................................................... .............13 References............................................................................................................ ..............15 Bibliography.................................................................................................................... ....18

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SOCIAL MEDIA MARKETING EXAMINED THROUGH INTERNET WITH A LINK TO A SPECIFIC COMPANY
A situation: I am a Internet Marketing consultant hired by the board of Skoda Auto a.s. company. I ams asked to introduce that Customer Relationship Management (CRM) generally is and I ams aksed to give a general overview of CRM at the Czech republic company Skoda Auto. I should assume that nobody from the board does not know mich about the subject.

What is the Customer Relationship Management
Customer Relationship Management (CRM) is a business strategy built based on the concept of being customer-centric. The main goal is to optimise revenue through improved customer satisfaction via improved interactions at each customer point of communication. It needs to underdstand the customer more, to understand the environment he/she lives and what concerns he/she has by evaluating the usage of the products the company offer or service that is provided. The idea of CRM is, according to STD Group Inc,2008, that it helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers.
1. It tracks and report every interaction with a customer, describing the customer's purchase, interest or demand. 2. The CRM isa universal instrument for collecting data about the service requests, order entry, satisfaction and billing. 3. The CRM is be able to measure the performance of the business on the basis of internal benchmarks. 4. The CRM facilitates the working processes and it emhasizes the positive and exclude the negative practices in the customer relations.

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Accenture, the IT consultancy, published in 2008 CRM recommendations, according to CXO Media Inc., 2008, for companies and they include:
✔ Striking a balance in how they use resources to market to the most valuable consumer segments; ✔ Distinguishing themselves through customer interactions that support a branded customer experience; ✔ Pumping up sales productivity by mapping processes to new technologies; ✔ Setting sales goals and establishing rewards for meeting them; compensating the sales team consistently; ✔ Narrowing the gap between customer expectations and the actual service experience; ✔ Using analytics tools to gain a deeper understanding of the actual intentions of customers in their own words.

Repeat business from existing customers
Building loyalty with customers, usually defined as maintaining repeat sales from existing customers, is the central role of relationship marketing. The best way for a company to build strong relationships with their customers is to build up customer loyalty. To achieve this, a company must develop an effective CRM strategy.

According to US trade publication Brandweek, as it is published by Lauchlan S,2007, 76 percent of consumers across all demographic groups consider a product's brand before making a final product selection. The average cost for acquiring a new customer is approximately five times more than keeping an existing customer for almost all industries. Therefore, building brand loyalty can save an organisation up to 500 per cent on new customer acquisition every year.

Development of a loyal customer base
Customers will buy a company's products or services if there some differentiation, a high level of service and consistent value that makes the product unique and

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more beneficial than those of the competition. The core product advantage can be however suddenly replicated or even improved by rivals.
“Companies need to be able to execute customer service at a consistently high level – hence the value of aligning CRM strategies correctly to create a quality of service differentiator.”

Lauchlan S, 2006

Benefits of CRM
A major bendit of customer-centered management in the company can be the development of better relations with existing customers, which can lead to:    increased sales through better timing due to anticipating needs based on historic trends identifying needs more effectively by understanding specific customer requirements cross-selling of other products by highlighting and suggesting alternatives or enhancements (upselling)  identifying which of your customers are profitable and which are not

Limits of CRM
The major disadvantages of Customer Relationship Management software isn't the tool itself as much as how business-to-business firms implement it. The CRM has to be managed and used only by those people who want to use it, who are motivate to keep always the system updated and who know how to the CRM use.
Moreover, when implementing a customer relationship management (CRM) system, it's critical to have a clear plan, both pre and post training for users, and a systematic approach to rolling out features. Some of the usual mistakes of sales managers and marketing managers are presented bellow.  Not integrating with accounting and marketing information, focusing too much on how sales people use CRM;  Not connecting with service departments, forgetting that customer relationships span the entire lifecycle of a service engagement;

8  Not planning or staging roll out with a systematic approach shaping the software to your company not the other way around;  Forgetting to set baseline measures then testing new features to drive improvements in your selling system;  Expecting customer relationships management to improve customer retention without implementing specific retention efforts;

(Hitt J, 2006)

How the CRM can be used on Internet
The Customer Relationship Management as a managerial approach of customeroriented management can be used on Internet as a powerful tool to communicate with customers, suppliers or organizations staff more efficiently. There are lot of options of usage of CRM systems. Some of the examples of usage are identified and described below:
1. Detailed information about a client and its purchases are automatically used in a electronic shop which offer the visitor personalized offerings. The offer is therefore more focused and the website brings more beneficial information to the customer. 2. The customer can use a website as a gate to information about the history of his/her purchases, invoices received etc. – the system retrieves information automatically from a CRM and other systems used by the company. 3. Companies such as telecommunication providers uses CRM systems through internet as a software that help them to get detailed information about the customer and its contracts at the time when the customer calls to helpline and ask for help/information/services. 4. The CRM system can gather very important information about customer complaints and concerns from the contact forms placed on corporate or produc website.

Examples of CRM on internet
1) Salesforce.com

9 The Salesforce system is a web-based solution, so called SaaS solution (Software as a service) that is a useful tool to manage customer data, sales data and other information essential for performing customer-oriented business. 2) Using CRM on Amazon Amazon.com has been regarded as a leader when it comes to using Customer Relationship Management. In order to retain their customers, Amazon.com utilizes cookies to keep track of your preferences. They give their customers the option to open an account with their website. When people sign up, the company has the capability of keeping a record of all the transactions someone has made. Included in the records are information such as: · Credit card information · Customers’ shipping address · Customers’ billing address · A status of all your orders · Product preferences (Kang F, 2007)

3) Inspiro Solutions, webdesign company The Prague-based internet marketing consultancy and webdesign studio developed its own ERP system on the core of Inspiro ERP that controls and manages information about all its clients, suppliers and solutions – the system basically manages all information relevant to communicate effectively with customers. The system was recently upgraded by new module of CRM system that allows employees to retrieve and use detailed information about the client, history of orders and contracts that has been signed. The system is fully accessible online through security access very similar to extranet access. 4) Palmolive CRM system The CRM system in the Palmolive company uses technologies of SAP. SAP 2007, publishes in the case study why SAP solution was chosen: ✔ Supports end-to-end planning and execution processes ✔ Aligns with Colgate’s SAP-centric global IT strategy ✔ Extends Colgate’s prior success with SAP software

10 ✔ Offers industry-specific trade promotion functions ✔ Leverages significant ongoing R & D investment by SAP ✔ Supports financial planning and analytical processes ✔ Leverages enterprise-wide data to make business decisions

Web based CRM, sometimes referred to as Hosted CRM, OnDemand CRM, Online CRM, Browser Based CRM and now SaaS (Software as a Service) software solutions, is where the Customer Relationship Management (CRM) software is hosted by an Application Service Provider (ASP), typically the vendor of the software. These web based CRM applications are delivered as services over the Internet, rather than on your local network like conventional CRM software. There are some of the characteristics of CRM system run as a web-based online solution:
✔ Often a lower cost of entry and lower total cost of ownership. ✔ Rapid implementation, although this can vary, depending on the vendor. ✔ Rapid transmission of information across organizational lines and locations. ✔ Accessibility - you can access web based CRM from anywhere provided you have Internet access. ✔ Hosted CRM systems don’t require the deployment of backend systems. ✔ No costly hardware server infrastructure necessary. ✔ Automatic upgrades to your CRM solution

(SmallBizCRM, 2008) A website providers and web communities have been more and more interested in using CRM as a complex tool how to improve communication and consequently business performance. Therefore, the market offers lot of solutions even for small companies that has not been used to think on CRM as a cost-effective solution.

Consumer´s rights to privacy and the UK Data Protection Act

11 Any consumer by using Internet is protected by a law given by a state where the user currently accessed the Internet. The United Kingdom released its UK Data Protection Act novelized in 1998 – its main message is, that all data muse be:
- Processed fairly and lawfully

- Obtained & used only for specified and lawful purposes - Adequate, relevant and not excessive - Accurate, and where necessary, kept up to date - Kept for no longer than necessary - Processed in accordance with the individuals rights (as defined) - Kept secure - Transferred only to countries that offer adequate data protection

The current CRM system in the Skoda Auto company
Skoda Auto use specialized e-commerce systém VYZKOUSENO.cz for order gathering and processing generated by end users. The system is developed on Microsoft Commerce Server 200 technology with implementation on individualized SpinxPersonal Web software. The system enables: – – To access the system from one point with one login Fast integration with other information systems of Skoda Auto run on Microsoft Commerce Server technology – Easy modifications and upgrades

THe systém has been developed for easy upgrade of CRM module. The CRM system is, according to the Case Study Published by Sprinx s.r.o., 2007, ready to cooperate with CRM.

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Recommendations of improvements
The Skoda Auto integrated e-commerce system should be more connected to CRM system. The customer-centred module should be used in order to get, sort and use information about Skoda´s customers and its purchases if the company want to achieve higher rate of repeate orders from existing customers.

Before any discussions about how to improve the CRM performance within a company following questions should be answered by responsible senior managers in the compan:

 

What is the annual and lifetime value of Skoda´s loyal customers? How does the company allocate marketing spend between loyal customers, in revenue and profits?

What is the brand's level of repeat purchase and how does this compare to automobile industry industry average?

   

What is the profile of the loyal customers? How do we acquire more of them? How well does the Skoda company reward loyal customers? What opportunities can Skoda give to loyal customers to buy more, or to recommend Skoda? Is Skoda proactive enough in customer satisfaction?

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REFERENCES
CXO Ltd. Accessed: October 8, 2008 Available on: [http://www.cio.com/article/27802/CRM_Challenges_and_Advice_for_CIOs_in_ ]

Data Protection Act Group
Accessed: October 8, 2008 Available on: [http://www.legislation.org.uk/intro.htm ]

eMarketer Inc. Accessed: September 28,2008 Available on: [http://www.emarketer.com/ ]

Internet Center for Management and Business Administration, Inc. Accessed: September 28,2008 Available on: [http://www.quickmba.com/marketing/research/ ]

Inspiro Solutions website Accessed: September 28,2008 Available on: [http://www.inspiro-solutions.cz/ ]

JWH Consolidated Inc. Accessed: October 8, 2008 Available on: [http://askjustinhitt.com/archives/2006/06/customer_relationship_manageme_1.html ]

Kang J Accessed: October 8, 2008 Available on: [http://www.iconocast.com/ZZZZResearch/eMarketinsg_amazon.pdf ]

15 Learn That.com Accessed: October 8, 2008 Available on: [http://www.learnthat.com/define/view.asp?id=292]

Lauchlan S, Sift Media Accessed: October 8, 2008 Available on: [http://www.mycustomer.com/cgi-bin/item.cgi?id=132635 ]

Office of Public Sector Information Accessed: October 8, 2008 Available on: [http://www.opsi.gov.uk/Acts/Acts1998/ukpga_19980029_en_1 ]

SAP America Inc. Accessed: October 8, 2008 Available on: [http://www.sap.com/solutions/business-suite/crm/index.epx]

SmallBizCRM Accessed: October 8, 2008 Available on: [http://www.smallbizcrm.com/small-business-crm-software-web-based.html ]

STD Group Inc. Accessed: October 8, 2008 Available on: [http://www.siteground.com/crm.htm]

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BIBLIOGRAPHY
Dave Chaffey et al, 2007, Internet Marketing, 3rd edition, Pearson Prentice Hall, United States of America

Edexcel HNC & HND Business, 2004, Marketing. BPP Professional Education, London

Edexcel HNC & HND Business, 2004, Organisation and Behaviour. BPP Professional Education, London

Kotler P & Keller K L, 2006, Marketing Management, 12th edition, Pearson Prentice Hall, United States of America

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