3. 'What criteria
determine who will
be our most
profitable
customers?'
'How can we
acquire this
customer in the
most efficient and
effective way?'
'How can we
increase
the loyalty and the
profitability of this
customer?'
'How can we keep
this customer for
as long as
possible?'
Customer
acquisition
Customer
selection
Customer
extension
Customer
retention
1 2
3
4
Customer
relationship
management cycle
Customer relationship management
consists of four elements
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4. Firm infrastructure
Human resource management
Research & development
Information & communication technology
Elicitation
of customer
preferences
Order-
specific
inbound
logistics
Order-
specific
construction
Marketing/
sales
forecast
General
purpose
inbound
logistics
Order-
neutral pre-
operations
Order-
specific
operations
Order-
specific
outbound
logistics
Customer
service/
building a
learning
relationship
Order-neutral Order-specific
Support
activities
Primary activities
Source: Adapted from F. Piller (2006), p. 175.
Mass-customization value chain puts the
user in charge of many traditional steps
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5. E-marketing strategy essentials
E-marketing strategy is a channel strategy
Objectives for online contribution %
- sales, service, profitability should drive our strategy
E-marketing strategy defines how we should:
1. Communicate benefits of using this channel
2. Prioritise audiences targeted through channel
3. Prioritise products available through channel
4. Hit our channel leads & sales targets
Acquisition, Conversion, Retention
Channel strategies thrives on differentials
BUT, need to manage channel integration
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10. Problems if no E-marketing strategy
1 Underestimated demand for online services
2 Market share loss
3 Resource duplication
4 Insufficient resource
5 Insufficient customer data
6 Efficiencies available through online
marketing
7 Opportunities for applying online marketing
tols
8 Changes required to internal IT systems
9 Inadequate tracking
10 Senior management support limited
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11. Usage of detailed e-marketing plans
in UK e-commerce organizations
Source: EConsultancy (2008)
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12. The SOSTAC® planning framework applied to
digital Internet marketing strategy development
Figure 4.4 Source: Chaffey and Smith (2008)
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14. Differences between relational and
transactional marketing
Transactional paradigm Relational paradigm
Market segment Individual customer
Transaction duration Lifetime
Margin Lifetime value
Market share Most valued customers
and customer share
Mass market broadcast Dialogue and tailored
communications
Passive consumers Empowered clients
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15. 5Is for CRM
Identification – can the customer be
recognised for different channel contacts?
Individualisation – can communications and
products be tailored?
Interaction – are communications two-way?
Integration – is there a 360 degree view of
the customer?
Integrity – is the relationship built on trust?
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16. CRM applications
1. Sales force automation
2. Customer service management
3. Managing the sales process
4. Campaign management
5. Analysis
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17. CRM data
Personal and profile data
Contact details
Preferences
Transaction data
Sales history
Communications data
Campaign history
Research / Feedback / Support queries
Contact reports (B2B)
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19. E-CRM benefits
Customer development
Managing e-mail list quality
Implementing e-mail marketing
Data mining
Personalisation and customization
Customer service quality and multi-channel
experience
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20. Permission marketing
Not interruption marketing
Not SPAM
Requires opt-in (online to e-mail)
Opt-out
Learning about the customer
Initial and continued relationship is based on
incentives
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21. Options for mass customization and
personalization using the Internet
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22. Summary of an effective process of permission-
based online relationship building
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23. Matrix of customer touch points for collecting
and updating customer e-mail contact / profile
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24. Extent to which different types of segmentation
variables tend to be predictive of response
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29. Peers
Peers Peers
Peers
Peers
Social networking site
Instant
messaging VoIP
Chats
Boards/
groups
Private
messages
Communication tools
Matching
Profile
• Contact data
• Multimedia
• Personal
network
•…
Person A
Profile
• Contact dat
• Multimedia
• Personal
network
•…
Person B
A B
Social networking offers communication
motives of discovery, homogeneity, sharing
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31. When seeding a message, one has to
concentrate on 3 types of people
Connectors
Maven
Salesmen
People who have expertise in various products,
prices or places. They enjoy sharing their
knowledge with friends and acquaintances on
Internet platforms.
People who have the skills to persuade others
when they are unconvinced.
People with an extraordinary high number of contacts,
friends and acquaintances, who ideally belong to
‘different worlds’; i.e. different areas of life.
Source: M. Gladwell (2000).
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32. Source: Adapted from Anderson C. (2006).
Downloads
Titles, ranked by popularity
25,000 50,000 100,000 900,000
0
5,000
10,000
Songs
available at
Rhapsody
and Wal-
Mart
Songs
available
only at
Rhapsody
‘Long tail’ represents large addition to
product range of traditional retailers
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33. Contacts ranked by
frequency
Networking
frequency
Source: Adapted from Anderson C. (2006).
Contact
pool
acessible
via
traditional
networking
tools
Additional
network
potential of
online
networking
‘Long tail’ of social networking provides access
to previously inaccessible market niches
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34. Implications for companies to access
and leverage the ‘long tail’
Lengthen the
tail
Fatten the tail
Drive demand
down the tail
SNS uses a variety of mechanisms to enrich
communication between users and thereby fattens
the tail by increasing the frequency of interaction.
This can be achieved by shifting users’ attention
to content that normally is not as easy to find.
By giving people access to a large pool of
individuals, SNS lengthens the tail of
potential social contacts.
Source: Anderson C. (2006).
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