Summary of Chapter 8

“Customer Relationship Management”

by: M. Aziz Putra Akbar (425436)

Chapter 8, entitled “Customer Relationship Management”, can be understood clearly

as how a digital business entity should build a rapport with its customers. The chapter
elaborates definition and ideas of electronic customer relationship management (eCRM),
conversion marketing, the online buying process, how to acquire customers, how to retain
customers, how to extend the reach of customers, and also how technology can be utilized in
CRM.
Customer relationship management (CRM) can be defined as approaches managers
can adopt in order to build and sustain a long term business relationship with customers.
CRM has been used for years because it could increase business revenues in several ways
like providing products and services that are exactly what customers need and want, better
customer service, close deals faster, and effective cross-selling transactions.
As business nowadays extends its operations to a more digitised way, traditional
CRM has become modernized and equipped with digital operation, making it called as the
electronic CRM (eCRM). What differentiates traditional CRM and eCRM are the activities of
digital marketing it makes use of, like increasing website and social presence, managing
customer profile information, using email and social networks, data mining, online
personalisation, online customer service, ensuring online service quality, and offering
multichannel customer experience. Some benefits of eCRM is that targeting the audience can
be done in a more cost-effective way, achieve mass customisation of the message, increase
depth and breadth of the nature of relationship, etc.
To get a better engagement and knowing more in depth about the customers,
businesses usually conduct customer profiling, or acquiring information that can be useful to
segment customers. First, the business should conduct customer identification. Followed by
customer differentiation. Then building customer interactions, and last is creating
customisation.
Such efforts should be done in order to perform and achieve the goal of conversion
marketing, which goals is to convert potential customers to become actual customers, and
existing customers to become repeat customers. There are 3 main parts where conversion
marketing takes place, which is the attraction phase (e.g site of visitor’s base), conversion
phase, and retention base.
In digital business, customers may have different buying processes of buying trends
from one and another. According to Lewis and Lewis (1997), there are 5 different types of
web users: directed information-seekers (directly looking for the information they seek),
undirected information-seekers (web users who just like to surf the internet and click on
hyperlinks), directed buyers (web users who use the internet only to buy products they
already know), bargain hunters (web users who like to use vouchers of offers), and
entertainment seekers (simply just like the use of internet). It is necessary for businesses to
understand which type of web users their customers would likely be because it will affect the
strategy formulation. For instance, deciding to operate in a B2B or B2C should be determined
carefully because their market structure, nature of buying unit, type of purchase, type of
buying decision, and communication may be different.
 When a business entity tries to acquire new customers, then there are several
characteristics of interactive marketing communication that should be taken into account. The
principles of converting from push to pull media, monologue to dialogue, one-to-many to
one-to-some or one-to-one, lean-back to lean-forward, the changes of medium, increasing
intermediaries, and making integration are just part of the communication. It is important to
assess the communication process regularly, one of which is by using the return on
investment (ROI) technique. Other digital marketing communication is to optimise the use of
search engine marketing and search engine optimisation, digital public relation, online
partnerships, digital advertising, email marketing, and social media marketing.
Once a business has acquired customers, it is equally important to retain the
customers by ensuring that the customers will make a return visit and return purchase of the
business’ product. Increasing customer loyalty can be done in at least 3 broad efforts called
the loyalty drivers: order fulfillment (with satisfaction), product performance, and post-sales
& service support. Personalisation can be very useful as it may give a better customer
experience. A business entity can offer personalisation in 4 categories: using web analytics,
using software as a service (SAAS), features of commerce management system, or B2B
marketing automation.
Retaining customers could also be done by ensuring the quality of products and
services, as well as the whole experience. When doing so, it is necessary to understand the
dimensions of quality:
- Tangibles
- Reliability
- Responsiveness
- Assurance, and
- Empathy
As there is a so-called customer lifecycle segmentation, which describes the steps and
cycle of customers when they first identify the product, making the purchase, until slowly
leaving the products, customer extension is used to increase the lifetime value of the life
cycle, or in other words to prolong the duration of the cycle. Such methods can be made like
sense-respond-adjust framework, recency-frequency-monetary (RFM) analysis, etc.
By using technology in the CRM process, it may help to adopt the marketing
automation, by saving time, increase efficiency, CRM integration, data collection,
multichannel management, increase consistency, and enabling personalisation.