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CRM & Web2.0 by Joe Watkins
CRM & Web2.0 by Joe Watkins
CRM & Web2.0 by Joe Watkins
CRM & Web2.0 by Joe Watkins
CRM & Web2.0 by Joe Watkins
CRM & Web2.0 by Joe Watkins
CRM & Web2.0 by Joe Watkins
CRM & Web2.0 by Joe Watkins
CRM & Web2.0 by Joe Watkins
CRM & Web2.0 by Joe Watkins
CRM & Web2.0 by Joe Watkins
CRM & Web2.0 by Joe Watkins
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CRM & Web2.0 by Joe Watkins

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How to use new world Internet and digital for building loyalty. …

How to use new world Internet and digital for building loyalty.

Customer loyalty is arguably more important for online businesses than brick-and-mortar businesses since competitors can be reached by just one mouse click. In the Web 1.0 world, publish and commerce based sites needed be secure, reliable and available to enable loyalty. In 2004, Web 2.0 brought a world where users can contribute to and be part of every web interaction. The web is now not just an extension of a company’s operation that needs to “function” and Reichheld’s principals of Loyalty around “listening to your Partner, and creating mutual satisfaction” that were applied to traditional marketing now need to be deeply entrenched in digital strategy.

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  • 1. CRM & Web 2.0Joe Watkins 1Joe Watkins
  • 2. CRM & Web 2.0Table of ContentsWeb 2.0 & CRM: how to use new world web for building loyalty.......................................................... 3 Web 2.0 & New World Web ............................................................................................................... 3 Maslow & Hygiene Factors ................................................................................................................. 3 Price sensitivity ................................................................................................................................... 5 Content ............................................................................................................................................... 5 Data, Insights & Customer Targeting .................................................................................................. 6 Conversation ....................................................................................................................................... 8 Impact of Mobile and Emerging Technologies ................................................................................... 9 Concluding thoughts on Loyalty and Future Web ............................................................................ 11 Bibliography ...................................................................................................................................... 12 2Joe Watkins
  • 3. CRM & Web 2.0Web 2.0 & CRM: how to use new world web for building loyalty.Customer loyalty is arguably more important for online businesses than brick-and-mortarbusinesses since competitors can be reached by just one mouse click. In the Web 1.0 world,publish and commerce based sites needed be secure, reliable and available to enableloyalty. In 2004, Web 2.0 brought a world where users can contribute to and be part ofevery web interaction. The web is now not just an extension of a company’s operation thatneeds to “function” and Reichheld’s principals of Loyalty around “listening to your Partner,and creating mutual satisfaction” (Prewitt, 2002) that were applied to traditional marketingnow need to be deeply entrenched in digital strategy.Web 2.0 & New World WebThe move from Web 1.0 to Web 2.0 occurred when websites changed from being static siteson which users could passively view content created for them, to sites on which users couldgenerate and publish their own content. Wikipedia states that the “term Web 2.0 isassociated with web applications that facilitate participatory information sharing,interoperability, user-centred design and collaboration on the World Wide Web.” Web 2.0enabled us to move to the social media enabled world we now live in. The first glimmeringsof Web 2.0 appeared in 1999 and started to gain real traction by late 2004. Web 1.0 wasabout publishing content and commerce, Web 2.0 is about people and a “ParticipatoryWeb”. This open, participatory web environment encourages user contribution, enhancingpotential customer loyalty.The “New World Web” has become more than just Web 2.0 as originally defined. SocialMedia has become significantly more sophisticated than simply websites that allow users topublish content and mobile based web browsing is predicted to surpass PC based browsingby 2014 as predicted by Morgan Stanley (Ingram, 2010). New technologies and models areemerging that extend the options that users have to connect, engage and transact.Maslow & Hygiene FactorsAs applies across all customer touch points, before trying to create online communities,special loyalty programs, or other innovative web solutions, organisations need to addresskey hygiene factors to drive trust and continued loyalty to ensure negative experiences donot turn customers into detractors. 3Joe Watkins
  • 4. CRM & Web 2.0Maslow’s hierarchy of needs provides a guide to the order and priority with which needsshould be addressed through online functionality or programs. Organisations should firstensure that their online experience is simple, secure and easy to use and can be accessedanytime from any place or device. Once the core physiological and security needs havebeen addressed, businesses can explore how to target customers with personalisedofferings and programs that help to engender affinity with their brand through conversationand engagement in communities with which the brand is associated.Attractiveness of a website alone is not enough to inspire loyalty however it will engendertrust to drive initial engagement (Stafford, 2011). After initial engagement it is necessarythat the site provide interesting and relevant content that is easy to find to confirm loyalty.With so many good websites out there, if a user cannot find what they are looking for theywill find a new website quickly.Businesses need to ensure that every online experience across every device is consistentand meets the customer service promise as well as consistently meeting the core needs ofsecurity, reliability and ease of use. This is supported by Fred Reichheld (Prewitt, 2002)who argues that long-standing relationships arise from trust gained over many transactionsrather than a specific directed effort to “manage” loyal customers. In this new “InternetWorld” it would be easy to conclude that loyalty is non-existent when it is so easy for 4Joe Watkins
  • 5. CRM & Web 2.0customers to search for lower prices or other offerings in one mouse click; howeverReichheld’s research found that customers want trustworthiness now more than ever(Prewitt, 2002).Price sensitivityThe wide range of options open to consumers and the ease with which prices can becompared on the internet would often lead to a theory that price is a key driver in consumerchoice in the internet world. However research shows that while prices on the internet areoften 9 to 16 per cent lower than in offline stores, the online dispersion of prices can be ashigh as 33% (Lee-Kelley et al, 2003). This research also showed that price sensitivity ofInternet grocery sales was lower than for the same products purchased in offline stores.However consumers do tend to focus on price where little other information is provided todifferentiate products (Lee-Kelley et al, 2003).Research highlights that a positive experience in offline channels can lead to lower pricesensitivity when the product is subsequently purchased online. Further supporting thesuggestion that “price does not rule on the web, trust does” (Reichheld and Schefter, 2000).Saba is currently running a campaign where in-store customers are given a promotional cardoffering a prize when the card code is entered online, subsequently offering discounts offproducts purchased in-store or online. This is helping to drive loyalty and repeat purchaseas well as educating customers on their online channel. It could also be said that a positiveexperience online will drive lower price sensitivity and repeat purchasing online.ContentDelivery of useful, valued content to customers will drive loyalty and enhance brand value.If it is done consistently it will create a relationship based on trust. Content initiatives canalso extend to the offering of premium content, special promotions, or access to exclusiveinformation or networks for valued customers (Lichtenberg, 2007).IBM set up its Business Insight portal to give customers access to thought leadershipcontent, information, case studies, articles and tools. Customers that sign up to theprogram are sent invitations to exclusive Business Insight webinars, product launches,workshops and special events. IBM is adopting this strategy to position themselves as 5Joe Watkins
  • 6. CRM & Web 2.0leaders and trusted advisers for IT Professionals. By consistently delivering valuable contentIBM is establishing and building this relationship of trust.Looking back to Maslow, IBM would not have been able to build this portal unless or untilthe IBM Public Website was up to scratch from a security, ease of use and reliabilityperspective; firstly to ensure that its core web asset delivers an excellent experience, andsecondly because users of Business Insight will go to the main website and should not havea subsequent detractive experience.Data, Insights & Customer TargetingCollection of customer data to enable targeted and personalised content and offers can nowbe executed more extensively and data insights can be collected from a wider array ofsources across web, social media and mobile. Amazon was already leading the way in thisarea before Web 2.0 by giving customers book suggestions or offers personalised to eachindividual based on purchase history. 6Joe Watkins
  • 7. CRM & Web 2.0The data insights themselves can uncover a niche audience, point of difference or customerinterest around which a marketing strategy can be built. An excellent example of this is AirNew Zealand. After identifying a prime target market of ex-pat kiwis living in Australia, itexecuted two successful campaigns in 2007 and 2008 to build a data base and start anongoing dialogue with this segment (HOST, 2007). The “Home Sweet As” campaign includedtwo innovative competitions and resulted in 30,000 opt-ins for this audience. This campaignderived further insights that indicated there was an opportunity to create an onlineenvironment where this “community” of ex-pat Kiwis could come together. In 2009 Air NewZealand created the “Home Sweet As Portal” to give this audience a place to come togetheras a community and converse through blogging functionality on the site.This community was actively managed and fostered, and continued to grow, later amplifiedthrough Facebook and Twitter integration. Four years after the initial campaign, this onlineportal is now directly generating revenue with the addition of the functionality to purchaseand book flights on the site. If the campaign were initiated now, it would be possible toengage the same size audience through Facebook and Twitter faster and without the needto spend the initial time building the customer database before building the onlinecommunity. 7Joe Watkins
  • 8. CRM & Web 2.0ConversationAndy Lark, CMO of CBA, states that we have seen a “monumental shift in participation”(McIntyre, 2011). He says it is not enough to just transmit; now he has to engage withcustomers to listen, capture their thoughts, reward and incentivise content production.Andy Lark states that it isn’t enough to give customers good content – “content matters lessthan the conversation” (McIntyre, 2011).A one-way marketing driven conversation no longer engages customers. Building trust andearning loyalty is the act of creating a dialogue with customers: talking, sharing and listening(Lichtenberg, 2007). Web 2.0 has given marketers a number of new ways of engaging withcustomers through blogs, forums, chat rooms and communities to facilitate conversationswith customers. When customers can contribute ideas or opinions it improves theconnection that the customer has with the brand, but when the brand truly listens to thecustomer and acts on it, the business can deepen customer loyalty.Whilst this concept of customer driven innovation is not entirely new; blogs or communitieshave replaced formal research methods and enabled more companies to achieve this and toembrace a customer community in an ongoing, real-time, and informal way. Ducati, theItalian motorcycle company, is leveraging these new technologies to engage an onlinecustomer community on an ongoing basis to provide feedback on design, performance andexperience (Lichtenberg, 2007).However the target market and corporate value proposition should determine the extent towhich a two way conversation would be appropriate. Listening should always be in place toinput into customer insights and to enable engagement and response from a customerservice and sales point of view. However the creation of an online community or blogfunction should not be done if it is not appropriate to the audience segment or valueproposition.There must be a clear purpose and content strategy for a defined audience to enable asuccessful community strategy. Westpac’s “Ruby Connection” is a good example of anonline community for women in business purposed with helping them to be successfulprofessionally or in business. If Westpac set up “The Westpac Community” it is unlikelythat it would be successful. Businesses need to determine through insights an angle that 8Joe Watkins
  • 9. CRM & Web 2.0brings an audience together, a purpose they can stand for to that community and plan howto deliver value.Post Purchase engagement is becoming more important for responding to and addressingpost purchase issues and to validate the purchase decision. This engagement can help torecruit advocates for products or brand which is now particularly important as people relymore heavily on user generated content in their search for products and services. ForresterResearch found that 86% of respondents to a survey use ratings and reviews for onlinepurchases and 44% go online before buying products in-store (Hall, K. 2010). While this willhelp drive customers to a site, it is not in itself driving new customers’ loyalty. Howeverbusinesses should consider how to reward or bring the customers that do write reviewsfurther into their online conversation to drive increased loyalty with this segment.Impact of Mobile and Emerging TechnologiesWith Mobile based web browsing predicted to surpass PC based web browsing by 2014(Ingram, 2010), and a wide range of new devices coming out such as Tablets, Digital Tables,Virtual Gaming and other new technologies, it is necessary to keep these new trends on theradar in the race for customer loyalty. 9Joe Watkins
  • 10. CRM & Web 2.0Customers are now able to access the internet anywhere anytime through mobile devices;they can be targeted based on location (Near Field Communication, Apps or RFID); theycarry a computer 24/7 that has the capacity for a multitude of functions; they can watchvideo content or have video calls; play games; SMS or even just make or receive normalphone calls. At a minimum, businesses need to ensure that the strategies positioned aboveand online assets can be experienced through mobile devices. However mobile trends arerequiring marketers to consider more than just content or conversational strategies to driveloyalty. Mobile requires consideration of how the wants, needs or problems that customersare trying to solve can be addressed functionally through a mobile device.CBA’s Property Guide App is an exampleof an application that helps customersthrough the process of property search,research and financing. The idea wasdriven by a data insight that revealed that72% of customers use a laptop or mobilephone to access property information butthe information was difficult to find anduse (Wee, 2011). The app uses 10Joe Watkins
  • 11. CRM & Web 2.0augmented reality, Google maps, and integrates RP Data to give customers the ability tomap sales history, property listings, demographics, and median prices along with financialtools such as calculators and guides. It also enables customers to call or arrange anappointment with a loan specialist. The App was the first to cover all facets of the homebuying process and taps into the problem that the customer is trying to solve in a functionalway.Concluding thoughts on Loyalty and Future WebThe “New World Web” of Web 2.0, social media, mobile devices and emergent technologybrought a change that enabled customers to share experiences and content, anywhere, anytime through any device. This change to the web from being a publish and commercemedium to an environment that by its very nature is participative and about conversationmeans that loyalty strategies now need to have digital as a core enabler of loyalty ratherthan simply needing to ensure the web experience functions well and conveys the brandmessage consistently.Companies need to ensure the core online experience meets base hygiene factors ofavailability, security and ease of use before exploring more sophisticated loyalty initiativesthrough digital. However, listening and building insights through digital channels should beinitiated immediately, and when a business understands the purpose or position for which itshould stand in these communities, it should enter the conversation providing valued andtargeted content consistently to build trusted relationships. It is now more than justlistening, conversing and provision of content; companies need to think about the problemscustomers are trying to solve and explore ways that these needs can be functionallyaddressed. 11Joe Watkins
  • 12. CRM & Web 2.0Bibliography 1. Stafford, P. Attractive websites not enough to inspire loyalty, University of Melbourne Study Reveals. Smart Company, 2011. 2. Lichtenberg, J. User Web 2.0 Tools to Drive Loyalty, iMedia Connection, 2007. 3. Prewitt, E. Customer Relations: How to Build Customer Loyalty in an Internet World, CIO.com, 2002. 4. McIntyre, P. Virgin Banker Takes the Firm, AdNews 2011. 5. Reichheld, F.F. and Schefter, P. E-loyalty: your secret weapon on the Web”, Harvard Business Review, 2000. 6. Lee-Kelley, L. & Gilbert, D & Mannicom, R. How e-CRM can enhance customer loyalty, Marketing Intelligence & Planning, Emerald Insight, 2003. 7. Hall, K. Internet has killed customer loyalty, says research, ComputerWeekly.com, 2010. 8. Guo, M and Liu C. Loyalty of Web 2.0 Sites: The Role of Sense of Belonging, Association for Information Systems, 2010. 9. Ingram, M. Mary Meeker: Mobile Internet Will Soon Overtake Fixed Internet, Gigaom, 2010. 10. Wee, S. Best Media Innovation Winner, Media Federation of Australia, 2011. 11. HOST, Home. Sweet As, Creative Showcase, IAB Australia, 2007. 12Joe Watkins

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