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Electronic Customer Relationship Management

E-CRM

Electronic Customer Relationship Management

E-CRM

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1.1. New type of Customers & New type of Customers & firmsfirms

2.2. Digital Firms and Digital Firms and globalizationglobalization

3.3. IS and researchesIS and researches

4.4. IT managersIT managers

IntroductionIntroduction

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IntroductionIntroductionToday’s Customers

• Are sophisticated.

• Are price sensitive.

• Are demanding.

• Live time-compressed lives.

• Want their needs met.

• Want their products fast with

greater convenience.

• Have unprecedented control.

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IntroductionIntroductionToday’s companies are:

• Are digital companies.

• Flatten (less hierarchy).

• Location Independent.

• Decentralization.

• Flexibility.

• Low transaction and coordinating cost.

• Using strong IT infrastructure ( Enterprise software, hardware, Internet, LAN,WAN etc....).

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IntroductionIntroductionWhy the Need for Satisfied Customers

Cost up five to six times more to get new customers.

They buy more.

Take less time.

Bring in new customers.

Less price sensitive.

Great advertisers.

May be able to charge 10 percent more than competitors.

Dissatisfied customers tell others, as many as 20 others about there experience.

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IntroductionIntroductionWhy the Need for Satisfied Customers

FedEx promises customers to “absolutely, positively” get your package to its destination on time, and it delivers on its promise.

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• Are you getting new customers?

• Are good customers leaving?

• What are you doing to keep customers loyal?

Measuring Customer SatisfactionMeasuring Customer Satisfaction

Response time, this should be targeted from 24 to 48 hours at most.

Security and privacy, (secure payments, information).

Return Policy, this will increase customer trust and loyalty. Ease return

products of service will make customer more satisfaction.

Navigability, Easy to navigate the firm Web site

Quality assurance, every think must work properly

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Learning about Consumer Learning about Consumer Behavior OnlineBehavior Online

Reasons for not making purchases

5144

3224

2316

1510

1.9

0 10 20 30 40 50 60

chipping charges

judging the quality of product

cannot return item easly

security and safty

cannot ask questions

too long to download the screen

deleverly time

enjoy shopping off line

unfavorable experience

Rea

son

s

percentages

Source : Temking 2002Reasons for not making purchases

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Learning about Consumer Behavior Learning about Consumer Behavior OnlineOnline

Model of consumer behavior onlineModel of consumer behavior online• Social variables—people are influenced by:

Family members, friends, co-workers, “what’s in fashion this year”

• Cultural/community variables—where the consumer lives

• Other environmental variables: Available information, government

regulations, legal constraints,

situational factors

Slide 10of 43Consumer Behavior Consumer Behavior

OnlineOnline

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Consumer Decision Making Consumer Decision Making ProcessProcess

Roles people play in the decision Roles people play in the decision making processmaking process

InitiatorInitiator

Influencer

Decider

Buyer

User

The person who suggests buying a particular product of services

The person whose advise carries some weight in making a final purchasing decision.

The person who makes the buying decision

The person who makes the actual purchase.

The person who uses the product or service.

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Consumer Decision Model Consumer Decision Model In WEB PurchasingIn WEB Purchasing

5 phases of the generic purchase 5 phases of the generic purchase decision model:decision model:

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Consumer Decision Making ProcessConsumer Decision Making Process

1Need

Recognition

1Need

Recognition

2Information

Search

2Information

Search

3Evaluation ofAlternatives

3Evaluation ofAlternatives

4Purchase

4Purchase

5PurchaseOutcome

5PurchaseOutcome

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One-to-One Marketing and One-to-One Marketing and Personalization in ECPersonalization in EC

One-to-one marketing: Marketing that treats each customer in a unique way

Personalization—the matching of services, products, and advertising content to individual consumer

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One-to-One Marketing and Personalization in ECOne-to-One Marketing and Personalization in EC

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Market segmentation:Market segmentation: The process of dividing a The process of dividing a consumer market into logical groups for conducting consumer market into logical groups for conducting marketing research, advertising, and salesmarketing research, advertising, and sales

Market research toolsMarket research toolsdata mining data warehousing

Market segmentationMarket segmentation

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Tools for Gathering info.Tools for Gathering info.

Web bugs: Tiny graphics files embedded on e-mail messages and in Web sites that transmit information about the user and their movements to a Web server

Spyware: Software that gathers user information, through an Internet connection, without the user’s knowledge

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Company-Side Tools(push) Description

Cookies Cookies are small files written to the user’s hard drive after visiting a Web site. When the user returns to the site, the company’s server looks for the cookie file and uses it to personalize the site.

Web log analysis Every time a user accesses a Web site, the visit is recorded in the Web server’s log file. This file keeps track of which pages the user visits, how long he stays, and whether he purchases or not.

Data mining Data mining involves the extraction of hidden predictive information in large databases through statistical analysis.

Real-time profiling Real-time profiling occurs when special software tracks a user’s movements through a Web site, then compiles and reports on the data at a moment’s notice.

Collaborative filtering Collaborative filtering software gathers opinions of like-minded users and returns those opinions to the individual in real-time.

Tools for Gathering info.Tools for Gathering info.

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MyPoints Rewards Members for Time Spent OnlineSource: www.mypoints.com

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Learning about Consumer Learning about Consumer Behavior OnlineBehavior Online

Source: WebTrends product. (www.webtrends.com)

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Example analysis from a WebTrends (www.webtrends.com

Consumer Behavior OnlineConsumer Behavior Online

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American Airlines Offers Personalized Web Sites

• American Airlines (aa.com) unveiled a the most advanced personalized, one-to-one interactions and transactions on its Web site in 1998

Intelligent agents enable the generation of personalized Web pages for each of its 1 million registered, travel-planning customers

• Broadvision’s application dynamically matches customer profiles to a database

Output of the matching process triggers the creation of a real-time customized Web page

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• The use of intelligent-agent technology built a considerable edge over AA’s competitors

• Personalizing Web pages is becoming more important in:– Increasing customer loyalty– Cementing relationships with customers – Fostering the community of AA frequent flyers

American Airlines Offers Personalized Web Sites

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Market Research for ECMarket Research for EC

• Process of gathering and analyzing information related to customers, and markets.

• Tools:– Observations– Surveys– Experiments– Interviews

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Market Research for ECMarket Research for EC (cont.)(cont.)

Aim of marketing research is to:discover marketing opportunities and

issuesestablish marketing plansbetter understand the purchasing

processevaluate marketing performancedevelop advertising strategy

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Market Research for ECMarket Research for EC (cont.)(cont.)

Limitations of online market researchLimitations of online market research1.       There may be too much data available.2.       Responses may be inaccurate.3.       Technical problems may cause a loss of respondents.4.       There are ethical and legal considerations.5.      It is difficult to build representative samples

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CRM and Its Relationship with ECCRM and Its Relationship with EC

Customer relationship Customer relationship management (CRM):management (CRM): A customer A customer service approach that focuses on service approach that focuses on building long-term and sustainable building long-term and sustainable customer relationships that add customer relationships that add value both for the customer and value both for the customer and the companythe companyeCRM: Customer relationship management conducted electronically

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The goals of CRMThe goals of CRM

Using existing relationships to grow revenue

Using integrated information for excellent service

Introducing consistent, replicable channel processes and procedures

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Managing the customer life Managing the customer life cycle: the three phases of cycle: the three phases of CRMCRM

Acquiring new customersEnhancing the profitability of existing

customersRetaining profitable customers for life

Acquire

Enhance

Retain

It costs six times more to sell to a new customer than to sell to an existing one, (Ravi k. et al, 2001)

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CRM Applications and Tools:CRM Applications and Tools: Delivering Customer Service in Delivering Customer Service in CyberspaceCyberspace

CRM applications improve upon CRM applications improve upon traditional customer service by means of traditional customer service by means of easier communications and speedier easier communications and speedier resolution of customer problems resolution of customer problems

Customer service adds value to products and services

It is an integral part of a successful business

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CRM Applications and Tools CRM Applications and Tools (cont.)(cont.)Classifications of CRM applications

Customer-facing applicationsCustomer-touching applicationsCustomer-centric intelligence applications

Data warehouseData warehouse

Data mining: Data mining: involves sifting through an immense amount of data to discover previously unknown patternsAuto responders: Automated e-mail reply systems (text files

returned via e-mail), which provide answers to commonly asked questions

Sales force automation (SFA): Software that automates the tasks performed by sales people in the field, such as data collection and its transmission

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CRM CRM ApplicationsApplications

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CRM Applications- DatabasesCRM Applications- Databases

•Transactions tasks: This should include a complete purchase history with associated information such as: price paid, quantities, discounts, addresses, sales person, delivery date etc.•Customer communications: Including sales calls, services requests or any customer links with the company.•Descriptive information: For the sake of segmentation and data analysis purposes.•Customers’ responses to marketing motivation. This information should contain the customer responded to a direct marketing program, a sales contact, or any other direct contact.•The data must be updated and corrected when needed.

An ideal database should contains the following information

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CRM Applications and Tools CRM Applications and Tools (cont.)(cont.)

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CRM Applications and Tools CRM Applications and Tools (cont.)(cont.)

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CRM Applications and Tools CRM Applications and Tools (cont.)(cont.)

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CRM Applications and Tools CRM Applications and Tools (cont.)(cont.)

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CRM Model from managerial and marketing perspective, Own Model.

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References:References: Business Today, Ninth Edition, Mescon, Bovee Thill, Prentice Hall Publishers Deitel, 2004, “E-business and e-commerce for managers”, Prentice hall. Example analysis from a WebTrends (www.webtrends.com MyPoints Rewards Members for Time Spent Online, : www.mypoints.com

Ravi k. et al, 2001, e-Business Roadmap for success, 2nd edition, Prentice hall. Turban E. et al, 2004, “ electronic commerce a managerial perspective”, Prentice hall Terri c. et al, 2003, “E-business marketing:”,prentice hall, 2003 TRUSTe Builds User Trust : www.truste.org WebTrends product. (www.webtrends.com)

http://www.emeraldinsight.com/rpsv/cgi-bin/linker?ext=i&ref=1080120308-23

http://docserver.emeraldinsight.com/deliver/cw/mcb/14637154/v9n5/s2/p572.htm?

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