How Electronic customer relationship management (E-CRM) involves creating strategies and plans
For how digital technology and
digital data can support CRM.
Digital marketing activities that are within the scope of E-CRM which we will cover in
this:
● Using the website and online social presences for customer development from gener-
ating leads through to conversion to an online or offline sale using email and web-based
content to encourage purchase.
● Managing customer profile information and email list quality (coverage of email
addresses and integration of customer profile information from other databases to
enable targeting).
● Managing customer contact options through mobile, email and social networks to
support up-sell and cross-sell.
● Data mining to improve targeting.
● Providing online personalisation or mass customisation facilities to automatically
recommend the ‘next-best product’.
● Providing online customer service facilities (such as frequently asked questions, call-
back and chat support).
● Managing online service quality to ensure that first-time buyers have a great customer
experience that encourages them to buy again.
● Managing the multichannel customer experience as they use different media as part of
the buying process and customer lifecycle.
From e-CRM to social CRM
The interactive nature of the web combined with email and mobile communications
provides an ideal environment in which to develop customer relationships, and data-
bases provide a foundation for storing information about the relationship and providing
information to strengthen it by improved, personalised services. This online approach
to CRM is often known as electronic customer relationship management (e-CRM).
E-CRM, can be characterised as sense and respond communications. The classic
example of this is the personalisation facilities provided by Amazon where personal
recommendations are provided through email marketing and personalised messages to
site visitors.
we have seen the growing popularity of social media with
consumers and as a marketing technique. It’s natural that a new marketing approach,
social CRM has developed to determine how social media can be applied to develop
customer relationships and customer value. The scope of e-CRM and social CRM crosses
many business processes.
The challenge of customer engagement
heralded customer engagement as ‘marketing’s new key metric’, given the
rapidly increasing online media fragmentation and the challenges of keeping customers
engaged with brands given the proliferation of choice. Customer engagement is sometimes
used to refer to engaging customers on a single touchpoint, such as whether someone dwells on
the site for a significant time or whether they convert to sale or other outcome. Instead engage-
ment really refers to the long-term ability of a brand to gain a customer’s attention on an
ongoing basis whether the engagement could occur on-site, in third-party social networks or in
email or traditional direct communications. Richard Sedley, commercial director of customer
experience consultancy an international design consultancy, has
developed the definition of customer engagement as: ‘Repeated interactions that strengthen
the emotional, psychological or physical investment a customer has in a brand.’
The commercial aim of engagement is to maximise customer value through using
customer interactions to lead to more profitable relationships.
developed a framework to measure online engagement through the
customer lifecycle and also away from a brand’s own site, such as on publisher sites or
social networks.
According to Forrester, engagement has four parts which can be measured both online
and offline:
● Involvement . Forrester says that online this includes website visits, time spent, pages
viewed.
● Interaction. This is contributed comments to blogs, quantity/frequency of written
reviews, and online comments as well as comments expressed in customer service. (We
could add the recency, frequency and category of product purchases, and also ongoing
engagement in email marketing programmes, as discussed later in this chapter; all are
important here.)
● Intimacy . This is sentiment tracking on third-party sites including blogs and reviews, as
well as opinions expressed in customer service calls.
● Influence . This is advocacy indicated by measures such as likelihood to recommend,
brand affinity, content forwarded to friends, etc.
It should be measured by data collected both online and offline. Forrester analyst Brian
Haven says (Forrester, 2007):
Using engagement, you get a more holistic appreciation of your customers’ actions,
recognising that value comes not just from transactions but also from actions people
take to influence others. Once engagement takes hold of marketing, marketing messages
will become conversations, and dollars will shift from media buying to customer
understanding.
Benefits of using e-CRM to support customer engagement
Using digital platforms for relationship marketing involves integrating the customer data-
base with websites and messaging to make the relationship targeted and personalised.
Through doing this, marketing can be improved through:
● Targeting more cost-effectively . Traditional targeting, for direct mail for instance,
is often based on mailing lists compiled according to criteria that mean that not
everyone contacted is in the target market. For example, a company wishing to
acquire new affluent consumers may use postcodes to target areas with appropriate.
demographics, but within the postal district the population may be heterogeneous.
The result of poor targeting will be low response rates, perhaps less than 1 per cent.
Permission marketing or inbound marketing has the benefit that the list of contacts is
self-selecting or pre-qualified. A company will only aim to build relationships with
those who have visited a website and expressed an interest in its products by regis-
tering their name and address.
● Mass customisation of the marketing messages (and possibly the product). This
tailoring process is described in a subsequent section. Technology makes it possible to
send tailored emails at much lower cost than is possible with direct mail and also to
provide tailored web pages to smaller groups of customers (microsegments).
● Increased depth and breadth of information and improve the nature of relationship.
Digital media enables more information to be supplied to customers as required through
content marketing. For example, special pages such as Dell’s Premier can be set up to
provide customer groups with specific information. The nature of the relationship can
be changed in that contact with a customer can be made more frequently. The frequency
of contact with the customer can be determined by customers – whenever they have
the need to visit their personalised pages – or they can be contacted by email by the
company.
● Deeper customer understanding and more relevant communications can be delivered
through a sense and respond approach. Examples of sense and respond communica-
tions include tools that summarise products purchased on-site and the searching behav-
iour that occurred before these products were bought; online feedback forms about the
site or products are completed when a customer requests free information; questions
asked through forms or emails to the online customer service facilities; online ques-
tionnaires asking about product category interests and opinions on competitors; new
product development evaluation – commenting on prototypes of new products.
● Lower cost. Contacting customers by email or through their viewing web pages costs
less than using physical mail, but, perhaps more importantly, information needs to be
sent only to those customers who have expressed a preference for it, resulting in fewer
mail-outs. Once personalisation technology has been purchased, much of the targeting
and communications can be implemented automatically.
● Delivering loyalty programmes. Loyalty schemes are often used to encourage customer
extension and retention. You will be familiar with schemes run by retailers such as the
Tesco Clubcard or Nectar schemes or those of airlines and hotel chains. Such schemes
are often used for e-CRM purposes, as follows:
a initial bonus points for sign-up to online services or initial registration;
b points for customer development or extension – more points awarded to encourage
second or third online purchase;
c additional points to encourage reactivation of online services.
● Popular products are offered for a relatively low number of points to encourage repeat
purchases.
● Opportunities for gamification. Gamification involves applying game-based thinking
to a brand, business or organisation to engage and develop loyalty. Research shows
that game play itself stimulates the human brain (releasing dopamine) and the now
proven mechanics from gaming can be brought into marketing, and especially mobile
marketing. Some key features of gamification applied to digital marketing are:
– creative and concept to engage;
– game mechanics to encourage play (badges, points, leader-boards, levels,
interactions);
– game dynamics can be altered to reward and even penalise;
– game currencies to provide the motivation – this can be financial, status, need for
doing good, pleasure and influence.
Marketing applications of e-CRM
E-CRM systems support the following marketing applications:
1 Sales force automation (SFA) . Sales representatives are supported in their account
management through tools to arrange and record customer visits.
2 Customer service management . Representatives in contact centres respond to customer
requests for information by using an intranet to access databases containing infor-
mation on the customer, products and previous queries. It is more efficient and may
increase customer convenience if customers are given the option of web self-service ,
i.e. accessing support data through a web interface.
3 Managing the sales process . This can be achieved through e-commerce sites, or in a
B2B context by supporting sales representatives by recording the sales process (SFA).
4 Customer communications management . Managing communications integrated across
different channels like direct mail, email, mobile messaging, personalised web messages
and social networks.
5 Analysis . Through technologies such as data warehouses and approaches such as
data mining, which are explained further later in the chapter, customers’ characteris-
tics, their purchase behaviour and campaigns can be analysed in order to optimise the
marketing mix.
CRM technologies and data
Database technology is at the heart of delivering these CRM applications. Often the data-
base is accessible through an intranet website by employees or an extranet by customers
or partners providing an interface onto the entire customer relationship management
system. Email is used to manage many of the inbound, outbound and internal commu-
nications managed by the CRM system. A workflow system is often used for automating
CRM processes. For example, a workflow system can remind sales representatives about
customer contacts or can be used to manage service delivery, such as the many stages of
arranging a mortgage. The three main types of customer data held as tables in customer
databases for CRM are typically:
1 Personal and profile data. These include contact details and characteristics for profiling
customers, such as age and sex (B2C), and business size, industry sector and the indi-
vidual’s role in the buying decision (B2B).
2 Transaction data. A record of each purchase transaction including specific product
purchased, quantities, category, location, date and time and channel where
purchased.
3 Communications data . A record of which customers have been targeted by campaigns
and their response to them (outbound communications). Also includes a record of
inbound enquiries and sales representative visits and reports (B2B).
The behavioural data available through 2 and 3 are very important for targeting
customers to more closely meet their needs.
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