Managing E-Business

Learning Diary 8
Abhilasha Singh 302

OUTLINE DIFFERENT METHODS OF CUSTOMER ACQUISITION, RETENTION AND EXTENSION VIA

ELECTRONIC MEDIA

CUSTOMER ACQUISITION

Customer
acquisition

Use of the web site to

Encouraging existing
acquire new customers
customers to migrate to
for a company as qualified
using online for purchase
leads that can hopefully
or service
be converted into sales.

There are various methods of customer acquisition. Before an organization can acquire customers through
the content on its site, it must, of course, develop marketing communications strategies to attract visitors
to the web site.

 Search Engine Marketing: It is the primary method of finding information about a company and its
products. It follows that if an organization is not prominent in the search engines, then many
potential sales could be lost since a company is dependent on the strength of its brand and offline
communications to drive visitors to the web site.
 Online PR: Online PR or e-PR leverages the network effect of the Internet. Mentions of a brand or
site on other sites are powerful in shaping opinions and driving visitors to an organization’s site.
The main element of online PR is maximizing favourable mentions of an organization, its brands,
products or web sites on third-party web sites which are likely to be visited by its target audience.
 Online partnerships: Partnerships are an important part of today’s marketing mix. Some consider it
as the eighth ‘P’. There are three key types of online partnerships which need to be managed:
o Affiliate marketing
o Online sponsorship
o Widget marketing
 Interactive advertising: Advertising on the web takes place when an advertiser pays to place
advertising content on another web site. The process usually involves ad serving from a different
server from that on which the page is hosted
  E-mail marketing: Email marketing is the act of sending a commercial message, typically to a group
of people, using email. In its broadest sense, every email sent to a potential or current customer
could be considered email marketing. It involves using email to send advertisements, request
business, or solicit sales or donations.
 Social Media Marketing: Social media or Viral marketing harnesses the network effect of the
Internet and can be effective in reaching a large number of people. It is effectively an online form
of word-of-mouth communications. Viral marketing is increasingly being used for commercial
purposes.

CUSTOMER RETENTION

Customer
Retention

Repeat customers Repeat visits

To retain customers of To keep customers
the organization. using the online channel

To create long-term online customer relationships that build on acquisition, to retain and extend, we need
to analyze the drivers of satisfaction amongst these e-customers, since satisfaction drives loyalty and
loyalty drives profitability. The relationship is shown in the figure. The objective of organizations is to drive
customers up the curve towards the zone of affection. However, the majority are not in that zone and to
achieve retention organizations must understand why customers defect or are indifferent.

CUSTOMER EXTENSION
Customer extension has the aim of increasing the lifetime value of the customer to the company by
encouraging cross-sale, re-sell or up-sell. When a customer returns to a web site it is an opportunity for
cross-selling and such offers can be communicated. Direct e-mail is also an excellent way for informing a
customer about other company products and it is also useful in encouraging repeat visits by publicizing
new content or promotions. E-mail is vitally important to achieving online CRM since the web site is a pull
medium which the customer will only be exposed to if they decide to visit the web site and they are
unlikely to do this unless there is some stimulus. However, e-mail is a push medium where the customer
can be reminded about current promotions and offers and why they should visit the web site. This is why it
is so important to capture the customer’s e-mail address at the acquisition stage. Many companies are
now only proactively marketing to favoured customers. One UK financial services provider has analyzed
characteristics of high-churn-rate customers, and when a new prospect fitting this profile contacts the call
centre they are actively discouraged. Using these techniques, it is possible to increase share of customer’s
wallet

Customer
Retention

Repeat customers Repeat visits

To retain customers of To keep customers using
the organization. the online channel