Digital Business – Weekly Assignment

Summary Chapter 8
Aileen Irmina P (19/440371/EK/22297

Customer relationship management (CRM) is an approach to building and sustaining

long-term business with customers. The CRM is effective in increasing the organisation’s
revenues, thereby the application of technology into it may support the improvement of
sustainable business. However, if the marketing of a company only based on simple assumption
that the loyal customer would generate profit, the company will lose the opportunity to enter
the other potential market. Therefore, the customer lifecycle is needed to maintain the
relationship between the company, through the acquisition, retention, and extension. The four
marketing activities that comprise CRM are: customer selection (defining the types of
customers that a company will market to); customer acquisition (marketing activities intended
to form relationships with new customers while maximising acquisition costs and targeting
high-value customers); customer retention (marketing activities undertaken by an organisation
to keep its existing customers); customer extension (increasing the depth or range of products
that a customer purchases from a company). Marketing application of CRM: salesforce
automation (SFA: sales representatives for account management); customer service
management (representatives in contact centres respond); managing the sales process (through
e-commerce sites, B2B); campaign management (managing advertising, direct mail, email);
analysis (through data warehouses and data mining).
e-CRM is stand for the Electronic Customer Relationship Management. It’s basically
using digital communications technologies to maximise sales to existing customers and
encourage continued usage of online services. This can be done by utilise the website and
online social presences for customer development, managing customer profile information and
email list quality, managing customer contact options through mobile, email, and social
networks, data mining, providing online personalisation, providing online customer service,
managing online service quality, and last but not least, managing the multichannel customer
experience.
Social CRM is the process of managing customer-to-customer conversations to engage
existing customers, prospects and other stakeholders with a brand and so enhance customer
relationship management. Customer-centric marketing is based on customer behaviour within
the target audience and seeks to fulfil the needs and wants of each individual customer.
Meanwhile sense and respond communications is delivering timely and relevant
communications to customers as the part of a contact strategy based on assessment of their
position in the customer lifecycle and monitoring specifics interactions with a company’s
website, emails, and staff.
The improvement of marketing using e-CRM could be achieved because it’s: targeting
more cost-effectively, achieving mass customisation of the marketing messages, increasing
depth, breadth, and nature of relationship, using different tools throughout the customer
lifecycle, and arranging a lower cost. Customer engagement is a repeated interactions that
strengthen the emotional, psychological or physical investment a customer has in a brand.
Permission marketing is when the customers agree to be involved in an organisation’s
marketing activities, usually as the result of an incentive. Interruption marketing is the way
marketing communications that disrupt customers’ activities. Opt-in when a customer
proactively agrees to receive further information, opt-out when a customer declines the offer
to receive further information.
Customer acquisition is the techniques used to gain new prospects and customers, that
can be characterised into offline marketing communication, digital marketing communications,
and digital media channels.
Referrer is the source of a website visit when a URL is typed in directly. This includes
in Cost per Acquisition (CPA). To control costs, allowable cost per acquisition must be set to
know the maximum target of cost spending. Traffic-building campaign is the approach to
online promoting techniques, to increase the audience of a site.
An effective way to develop social CRM strategy is by monitoring, mapping, managing
(management), middleware, and measuring (measurement). The objectives that can be used to
manage customer activity and value are: increasing number of new users per month and
annually through promoting online services, increasing the percentage of active users using
direct communications such as email, decreasing the percentage of dormant users, and
decreasing the percentage of inactive users. Lifetime value (LTV) is the total net benefit that a
customer or group of customers will provide a company over their total relationship with the
company.
Feedback on a product or services would be ultimate form of customer extension,
because the company will understand and know its customers better. SERVQUAL is a multi-
dimensional design to map the customer expectations and perceptions toward the company’s
service quality. Salesforce automation and call-centre applications that integrate workflow to
manages queries and a knowledge base form is comprehensively needed.