This document discusses using digital platforms for customer relationship management. It defines key concepts like customer relationship management (CRM), one-to-one marketing, and electronic CRM (E-CRM). E-CRM uses digital technologies to maximize sales to existing customers, while social CRM manages customer-to-customer conversations to engage customers, prospects, and other stakeholders. The document also examines techniques for customer engagement, acquisition, retention, and extension using digital media and discusses how to measure customer satisfaction and loyalty online.

1. CHAPTER 5
RELATIONSHIP
MARKETING USING
DIGITAL PLATFORMS
NUR AQILAH BINTI ZAINUDIN
BM2403B

2. LEARNING OBJECTIVES
• Assess the relevance and alternative approaches for using
digital platforms for customer relationship management
• Evaluate the potential of the Internet to support one-to-one
marketing, and the range of techniques and systems available
to support dialogue with the customer through digital media
• Assess how to integrate social and mobile interactions to
develop social CRM capabilities

3. INTRODUCTION
Customer Relationship
Management (CRM)
=======
>>A marketing led approach
to building and sustaining
long-term business with
customer
>>Is essential for any
sustainable business this
applies equally to online
elements of a business.
>>Failure to build
relationship with visitors and
sales largely caused the
failure of many dot-coms
following huge expected on
customer acquisition
One-to-One marketing
=======
>> A unique dialogue
occurs between a company
and individual customers(or
group of customers with
similar need)
>> so many companies
apply CRM by using
approaches which automate
the tailoring of services to
develop relationship with
particular customer
segment, group and
individuals.

4. ELECTRONIC CUSTOMER
RELATIONSHIP
MANAGEMENT (E-CRM)
Involve s creating strategies
and plan for how digital
technology and digital data can
support CRM
# Using the website and online
social presences for customer
development
# Managing customer profile
information from other database
# Managing customer contact
option through mobile, e-mail,
and social network
Data mining to improve targeting
Provide online customer service
facilities
Managing online service quality
Managing multichannel customer
experience
FROM E-CRM TO SOCIAL
CRM
1. Marketing monitoring 2. Sales
3. Service and support
4. Innovation 5. Collaboration
6. Customer experience
E-CRM
====
Using digital communication
techno. to maximize sales to
existing customer
SOCIAL CRM
====
Managing C2C conversation
to engage existing customer,
prospect and other
stakeholder

5. ThescopeofSocialCRMacrossbusinessfunctions.

6. THE CHALLENGE OF CUSTOMER ENGAGEMENT
Customer engagement as marketing new key metric, given then
rapidly increasing online media fragmentation and the challenges of
keeping customers engaged with brands given the proliferation of
choice.
Customer engagement : repeated interactions that strengthen the
emotional , psychological or physical investment a customer has in
a brand.
media fragmentation : describes a trend to increasing choice and
consumption of a range of media in terms of different channels such
as web and mobile and also within channel such as TV, radio
stations, magazines and more website.
FOUR PARTS : Involvement, interaction, intimacy, influence

7. BENEFITS OF USING E-CRMTO SUPPORT CUSTOMER ENGAGEMENT
TARGETING MORE COST
EFFECTIVELY
MASS CUSTOMISATION OF
THE MARKETING MESSAGE
INCREASED DEPTH AND
BREADTH OF INFORMATION
AND IMPROVE THE NATURE
OF RELATIONSHIP
DEEPERCUSTOMER
UNDERSTANDING AND MORE
RELEVANT COMMUNICATION
CAN BE DELIVERED
LOWEST COST
DELIVERING LOYALTY
PROGRAMMES
OPPORTUNITIES FOR
GAMIFICATION

8. Marketing applications of e- crm
Sales force automation:
sales representatives are
supported in their account
management through
tools to arrange and
record customer visit.
Customer services
management :
representatives in contact
centers respond to
customer request for
information by using
intranet to access.
Managing the sales
process : can be achieved
through e-commerce sites
Customer
communications
management : managing
communications
integrated across different
channels like direct mail,
e- mail, social network
Analysis : through
technologies such as data
warehouse and
approaches such as data
mining

9. Crm technologies and data
Database technology is at the heart of delivering these
CRM applications. The database is accessible through an
intranet website accessed by employees or an extranet
accessed by customers or partners providing an interface
on to the entire customer relationship management
system.
3 main types of customer data
==========================
Personal and profile data : include contact details and
characteristic for profiling customers such as age and
sex,business size.
Transaction data : record of each purchase transaction
including specific product purchased, quantities, category,
location, date, time and channel where purchase
Communication data : record of which customers have
been targeted by campaign and their response to them.

10. Customer lifecycle management
CUSTOMER LIFECYCLE
Stages each customer will pass through in a long term relationship through
acquisition, retention and extension
CUSTOMER SELECTION
defining the types of customers that a company will market to. It means
identifying different groups of customers for which to develop offerings and
to target during acquisition, retention and extension.
CUSTOMER ACQUISITION
refer to the marketing activities to form relationship with new customers
while minimizing acquisition costs and targeting high value customers.
CUSTOMER RETENTION
refer to the marketing activities taken by an organization to keep its existing
customers.
CUSTOMER EXTENSION
refer to increasing the depth or range of products that a customer purchase
from a company.

11. Thefour classicmarketingactivitiesof customerrelationshipmanagement

12. CUSTOMER EXTENSIONTECHNIQUESTHATARE PARTICULARLY
IMPORTANTTO RETAILER
RE-SELL
UP-SELL
REACTIVATI
ON
REFERRA
LS
CROSS-
SELL

13. 5 IS
IDENTIFICATION
– can the
customer be
recognised for
different channel
contacts?
INDIVIDUALISATI
ON
– can
communications
and products be
tailored?
INTEGRATION
– is there a 360
degree view of
the customer?
INTEGRITY
– is the
relationship built
on trust?
INTERACTION
– are
communications
two-way?

14. PERMISSION MARKETING
>Is a significant concept that underpins online CRM in
management of the customer lifecycle.
>Permission marketing is a term coined by Seth Godin
(1999) it is the best characteristics with just three or four
words.

15. Stage of the customer lifecycle
STAGE 1 =
ATTRACT NEW
AND EXISTING
CUSTOMER TO
ONLINE
PRESENCE
STAGE 2a =
INCENTIVES
VISITORS TO
ACTION
STAGE 3 =
MAINTAIN
DIALOGUE USING
ONLINE
COMMUNICATION
STAGE 4 =
MAINTAIN
DIALOGUE USING
OFFLINE
COMMUNICATION
STAGE 2b =
CAPTURE
CUSTOMER
INFORMATI
ON TO
MAINTAIN
RELATIONS
HIP.

16. Asummaryofaneffectiveprocessofpermission-basedonlinerelationshipbuilding

17. E-MAILMARKETINGANDSOCIALCRMCOMMUNICATIONSTRATEGY
PRINCIPLE 1<> CONSIDER
SELECTIVE OPT-IN TO
COMMUNICATION
<>Communication preferences to
the customer to ensure more
relevant communication.
PRINCIPLE 3<> OFFER A RANGE
OF OPT-IN INCENTIVES
<>many websites now have free
win save incentives to encourage
opt-in, but often it is one
incentive fits all visitors.
PRINCIPLES 6<> CREATE AN
OUTBOUND CONTACT STRATEGY
<> Online permission marketers
need a plan for number,
frequency and type of online and
offline communications and
offers.
PRINCIPLE 2<> CREATE A
COMMON CUSTOMER PROFILE.
<>A structured approach data
capture is needed otherwise
some data will be missed, as is
the case will be company that
collected 80,000 e-mail address.
PRINCIPLE 4<> DON’ T MAKE OPT-
OUT TOO EASY
<>often marketers make it too
easy to unsubscribe.
PRINCIPLE 5<> WATCH, DON’T
ASK OR SENSE AND RESPOND
<>The need to ask interruptive
questions can be reduce through
the use of monitoring clicks to
better understand customer need
and to trigger follow up
communications.

18. RIGHT TOUCHING THROUGH
DEVELOPING ONLINE CONTACT
STRATEGIES
increase in media fragmentation
and the development of high
attention media such as social
network, the need for developing
a structured approach to
communicating with customer
across the lifecycle has become
more urgent.
THE CONTACT STRATEGY
SHOULD INDICATE :
1 FREQUENCY
2 INTERVAL
3 CONTENT AND OFFERS
4 LINKS
5 A CONTROL STRATEGY
THE EMOTIONALLY
UNSUBSCRIBED E-MAIL
LIST MEMBERS
Measure the level of activity in e-
mail response at a more granular
level.
Test different frequencies
Develop automated customer
lifecycle e-mails which are part of
the contact strategy.
Ensure the field that are used to
customize messages
Use offline communications.

19. PERSONALISATIONAND MASS CUSTOMISATION
Personalization and
mass customization
can be used to
tailor information
content, website or
within an opt-in e-
mail.
PERSONALISATION
=====
Refer to customization
information requested
by a site customer at
an individual level
MASS
CUSTOMISATION
====
providing tailored
content to a group
or individuals with
similar interests.
COLLABORATIVE
FILTERING
====
Customer are openly asked
what them are, by checking
boxes corresponding to
their interest.

20. USING DIGITALMEDIATO INCREASE CUSTOMER LOYALTYAND VALUE
The ultimated commercial aim
of relationship marketing
approaches such as e-CRM
and social CRM is to increase
engagement with customers
leading to increase customer
loyalty and direct sales.
DETERMINING WHAT
CUSTOMER VALUE
Consider the different forms
of online interaction a
consumer can have with a
brand that can determine
their perceptions of
satisfaction and influence
loyalty
Emotional loyalty
===
Demonstrated by favorable
perception, options and
recommendation
Behavioral loyalty
===
Demonstrated by repeat sales and
response to marketing campaign

21. THE RELATIONSHIPBETWEEN SATISFACTIONAND LOYALTY
Terms satisfaction and
loyalty are sometimes
used interchangeable
seen that they do not
necessarily respond.
CUSTOMER
SATISFACTION
>>Refer to the
customer is happy
about the quality of
product and service.
>>A customer with
product or service
increases, so should
their behavioral and
emotional together
with advocacy.

22. MEASURINGTHE VOICE OFTHE CUSTOMER IN DIGITALMEDIA
Online voice of
customer (VoC)
===
Qualitative
assessments of the
effectiveness of digital
presence based on
direct customer
feedback. They
answer ‘who and why’
questions about how
customers interact
with brands online
Net promoter score
(NPS)
===
A measure of the
number of advocates
a company or website
has who would
recommend it
compared to the
number of detractors.

23. Differentiating customers by value and engagement
 A core approach to relationship
marketing is to focus our limited
resources and activities on the most
valuable customers.
 Within the online customer base of
service and purchasing.
 OBJECTIVES AND CORRESPONDING
TACTICS
• Increase the number of new users per
month and annually.
• Increase the percentage of active users
• Decreasing the percentage of dormant
users
• Decreasing the percentage of inactive
users.

24. Lifetime value modelling
 Is a key to the theory
and practice of
customer relationship
management.
 Digital technology
has enabled
marketers to become
more sophisticated in
how identify and
target valuable
customers
Recency frequency monetary
value (rfm) analysis
Recency
Frequency
Monetary value
Latency
Hurdle rate

25. Recency frequency monetary value ( RFM ) analysis
Recency : customer
action such as
purchase , site visit,
account access, e-
mail response
Frequency : is the
number of times an
action is completed
in a period of a
customer action
such as purchase,
visit, e-mail
response
Hurdle rate : the proportion of
customer that fall within a
particular level of activity for
example, the percentage of
members of an e-mail list and
click on the e-mail within 90 day
period.
Latency : the
average length of
time that different
activities such as log
in, paying bills, first
and second
purchase.
Monetary value : can
be measured in
different way .
Generally, customers
with higher monetary
values tend to have a
higher loyalty and
potential future value
since they have
purchased more items.

26. GROUPING CUSTOMERS INTO DIFFERENTRFM CATEGORIES
STATISTICAL RFM ANALYSIS
=====
this involves placing an equal
number of customers in each
RFM category using quintiles of
20% (10 deciles can also be
used for larger databases)
ARBITRARY DIVISIONS OF
CUSTPMER DATABASE
====
This approach is also useful since
the marketers can set thresholds
of value relevant to their
understanding of their customers.

27. PRODUCT RECOMMENDATIONS
AND PROPENSITY MODELING
====
PROPENSITY MODELING
Is one name given to the approach of
evaluating customistics and behavior
in particular previous product or
services purchases and
recommendations for the next suitable
product.

28. Applying virtual communities and social networks for crm
1. CREATING COMMUNITY
THROUGH SOCIAL NETWORKS
FACEBOOK COMPANY PAGE
TWITTER PAGE
LINKED IN COMPANY PAGES
AND GROUP
GOOGLE+ GOOGLE+
YOUTUBE CHANNEL
2. CREATING YOUR OWN
PRESENCE
PURPOSE
POSITION
INTEREST
PROFESSION

29. SUMMARY
1. E-CRM enables ‘sense and respond’ communications where personalised e-mail or web
based messages can be delivered based on disclosed or inferred customers preferences
stored as customer profiles.
2. E-CRM also involves management of online services to deliver customer service which is
aimed at improving brand loyalty.
3. The classic model for permission marketing to support E-CRM is :
Step 1 – attract customers to website, partner microsite or social presence such as
Facebook.
Step 2a – incentive in order to gain contact and profile information.
Step 2b – capture customer information to maintain the relationship and profile the
customer.
Step 3 – maintain dialogue through using online communications to achieve repeat site
visits.
Step 4 – maintain dialogue consistent with customer’s profile using e-mail, social media
messaging or where cost- effective, direct mail or outbound phone contact.