e-Customer Relationship Management

MBA 7607 – Managing E-Business

Faculty of Management Studies

University of Delhi
November 05, 2020

Prof. Jyoti P. Das

What is customer relationship management

“Strategy used to learn more about customers’ needs and behaviors in order to develop
stronger relationships with them”
is a business strategy with outcomes
• that optimise profitability, revenue and customer satisfaction
• by organizing around customer segments,
• fostering customer-satisfying behaviors and
• implementing customer-centric processes.”
History of CRM

B&S RM CIMS CRM e-CRM

Time
line Late 80’s Early 90’s Mid 90’s 2002 - Future
B&S – Buying & Selling
RM – Relationship Marketing
CIMS – Customer Information Management Systems
CRM – Customer Relationship Management
e-CRM- A subset of CRM that focuses on enabling customer interactions via e-channels
(The web, email and wireless)

Prof. Jyoti P. Das

Four marketing activities that comprise CRM
1. Customer selection means 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. Different ways of segmenting
customers by value and by their detailed lifecycle with the customer
are reviewed. From an e-business perspective we may want to
selectively target customer types who have adopted e-channels.
2. Customer acquisition refers to marketing activities intended to form
relationships with new customers while minimizing acquisition costs Four m arketing activities of customer relationship management
and targeting high-value customers. Service quality and selecting
the right channels for different customers are important at this
stage and throughout the lifecycle Historically, marketing has focused on the first
two elements in the customer lifecycle
3. Customer retention refers to the marketing activities taken by an
organization to keep its existing customers. Identifying relevant CRM aims to extend marketing over all four
offerings based on their individual needs and detailed position in the stages and build a lasting relationship with
customers which creates loyalty and keeps
customer lifecycle (e.g. number or value of purchases) is key. them coming back for more
4. Customer extension refers to increasing the depth or range of
products that a customer purchases from a company. This is often
referred to as ‘customer development’.
• Re-sell. Selling similar products to existing customers – particularly important in some B2B contexts as re-buys or modified re-buys.
• Cross-sell. Sell additional products which may be closely related to the original purchase, but not necessarily so.
• Up-sell. A subset of cross-selling, but in this case, selling more expensive products.
• Reactivation. Customers who have not purchased for some time, or have lapsed, can be encouraged to purchase again.
• Referrals. Generating sales from recommendations from existing customers, for example member-get-member deals.

Prof. Jyoti P. Das

IT applications of CRM

A CRM system to support the four activities is made up of different marketing applications:
• Sales force automation (SFA). Sales representatives are
supported in their account management through tools to
arrange and record customer visits.
• Customer service management. Representatives in
contact centres respond to customer requests for
information by using an intranet to access databases
containing information on the customer, products and
previous queries.
• Managing the sales process. This can be achieved
through e-business, or in a B2B context by supporting
sales representatives by recording the sales process
(SFA).
• Campaign management. Managing ad, direct mail, e-
mail and other campaigns.
• Analysis. Through technologies such as data warehouses
and approaches such as data mining, which are
explained later in the chapter, customers’ characteristics,
their purchase behaviour and campaigns can be analyzed
in order to optimize the marketing mix.
Prof. Jyoti P. Das
What is e-CRM
It is difficult to state where CRM ends and e-CRM starts, since today they both make
extensive use of digital technology and media
Customer Relations Management with an ‘e’.
E-CRM cannot be separated from CRM, it needs to be integrated and seamlessly. However, many
organizations do have specific E-CRM initiatives or staff responsible for E-CRM. Both CRM and E-CRM
are not just about technology and databases, it’s not just a process or a way of doing things, it
requires, in fact, a complete customer culture
The interactive nature of the web combined with e-mail
communications provides an ideal environment in which to
develop customer relationships, and databases provide a
foundation for storing information about the relationship and
providing information to strengthen it by improved,
personalized services. This online approach to CRM is ‘e-CRM’
E-CRM gives the advantages of delivering relevant messages and offers to customers at relatively low
cost. It can also be used to support customization of products. It is an ideal system to support the
trend from ‘mass marketing’ to ‘one-to-one’ or ‘customer-centric marketing’
Online marketers can track the past and current behaviours of customers in order to customize
communications to encourage future purchases. This approach, which is another aspect of reverse
marketing and also a key concept with e-CRM, can be characterized as ‘sense and respond
communications’
Prof. Jyoti P. Das
Definition of e-CRM

Applying… to… by…

acquire and retain

Internet and other improving customer
customers
digital technology… knowledge, targeting,
(through a multi-
(web, email, wireless, service delivery and
channel buying process
iTV, databases) satisfaction
and customer lifecycle)

Prof. Jyoti P. Das

Applications of e-CRM

• Chat Rooms Bulletin

• Boards and Fan Clubs
• Mailing Lists
• News Groups
• Observation studies through virtual reality and simulated environments Product-related
discussion groups and lists
• Forums
• Internet Surveys
• Recommender Software
• E-mail
• Online focus groups
• Interactive online interviews
• Survey panels
• Auctions
• Online trade shows
• Shopping agent

Prof. Jyoti P. Das

Benefits of e-CRM
• 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. The Internet 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 web site and expressed an
interest in its products by registering their name and address.
• Achieve mass customization of the marketing messages - Technology makes it possible to send
tailored e-mails at much lower costs than is possible with direct mail and also to provide tailored web
pages to smaller groups of customers
• Increase depth, breadth and nature of relationship - The nature of the Internet medium enables more
information to be supplied to customers as required. 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
• A learning relationship can be achieved using different tools throughout the customer lifecycle - Tools
summarize products purchased on-site and the searching behaviour 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 e-mails to the online customer
service facilities; online questionnaires asking about product category interests and opinions on
competitors; new product development evaluation
• Lower cost - Contacting customers by e-mail or through their viewing web pages costs less than using
physical mail, but perhaps more importantly, information only needs to be sent to those customers
who have expressed a preference for it, resulting in fewer mail-outs.
Prof. Jyoti P. Das
Trends in e-CRM – permission marketing

To understand the thinking and practice behind e-CRM, we have to relate it to the concept of
permission marketing since this is the driving force for CRM
Permission marketing is about seeking the customer’s permission before engaging them in a
relationship and providing something in exchange
From an e-commerce perspective, we can think of a customer agreeing to engage in a relationship
when they agree by checking a box on a web form to indicate that they agree to receiving further
communications from a company. This is referred to as ‘opt-in’
The alternate approach is ‘opt-out’, the situation where a customer has to consciously agree not to
receive further information
in many countries data protection laws requiring opt-in before customers receive communications and
mandatory inclusion of opt-out have now been introduced in an attempt to stop spamming
The importance of incentivization in permission marketing involves
• Offering the prospect an incentive to volunteer.
• Using the attention offered by the prospect, offer a curriculum over time, teaching the consumer about your
product or service.
• Reinforce the incentive to guarantee that the prospect maintains the permission.
• Offer additional incentives to get even more permission from the consumer.
• Over time, use the permission to change consumer behaviour towards profits

Prof. Jyoti P. Das

 Trends in e-CRM – customer profiling
To engage a customer in an online
relationship, the minimum information that
needs to be collected in an online form is
an e-mail address
What we really need, particularly for B2B
sites, is a qualified lead that provides us
with more information about the customer
to help us decide whether that customer is a
good prospect who should be targeted with
further communications
IDIC model for customer profiling
To continue the relationship it is essential to
build a customer profile that details each • Customer identification. This stresses the need to identify each
customer’s product interest, demographics customer on their first visit and subsequent visits. Common methods
for identification are use of cookies or asking the customer to log on
or role in the buying decision. This will affect to a site.
the type of information and services • Customer differentiation. This refers to building a profile to help
delivered at the retention stage. segment customers.
• Customer interactions. These are interactions provided on-site, such
Profiling is also important for selection of as customer service questions or creating a tailored product.
identify potential customers who are likely • Customization. This refers to personalization or mass customization
to be profitable and offer appropriate of content or e-mails according to the segmentation achieved at the
acquisition stage.
incentives

Prof. Jyoti P. Das

Trends in e-CRM – conversion marketing

To assess and improve the effectiveness of their customer relationship management implementation,
evaluation using the conversion marketing concept is useful
In an online context, this assesses how effective marketing communications are in converting:

• Web browsers or offline audiences to site visitors;

• Site visitors to engaged site visitors who stay on the
site and progress beyond the home page;
• Engaged site visitors to prospects (who are profiled
for their characteristics and needs);
• Prospects into customers;
• Customers into repeat customers.
E-business conversion funnel

At each conversion step, some visitors will switch from one channel to the other, dependent on
customers’ preferences and marketing messages which encourage customers to switch to other
channels for the next conversion step.
The dilemma for marketers is that the online channels are cheapest to service, but tend to have a
lower conversion rate than traditional channels because of the human element

Prof. Jyoti P. Das

Trends in e-CRM – conversion marketing
Many e-business failures have resulted from low conversion as a result of poorly targeted media
spending. The communications mix should be optimized to minimize the cost of acquisition of
customer
Optimization of the conversion to action on-site is important to the success of marketing
Conversion to customer acquisition will be low if the site design, quality of service and marketing
communications are not effective in converting visitors to prospects or buyers.

A scorecard based on the performance drivers for e-business

such as the costs for acquisition and retention, conversion
rates of visitors to buyers to repeat buyers, together with

Convert
Attract
churn rates is used to evaluate customer conversion.

Retain
There are three main parts to this scorecard:
Attraction. Size of visitor’s base, visitor acquisition cost and visitor
advertising revenue (e.g. media sites).
Conversion. Customer base, customer acquisition costs, customer
conversion rate, number of transactions per customer, revenue per
transaction, revenue per customer, customer gross income, customer
maintenance cost, customer operating income, customer churn rate, CONVERSION! This is one ofCthe
customer operating income before marketing spending.
– if not THE –
Retention. This uses similar measures to those for conversion
customers. most important word in CRM.

Prof. Jyoti P. Das

Online buying process….

Companies that understand how customers use

the new media in their purchase decision- making
can develop integrated communications strategies
that support their customers at each stage of the
buying process
Mixed-mode buying or how a customer changes
between an online channel and an offline channel
during the buying process is a key aspect of
devising online marketing communications since
the customer should be sup- ported in changing
from one channel to another.
The model of the buying process shown in the
figure is used in developing the right online
marketing tactics to support each stage of the
process for each business. Individual preferences for
using the web also differ. How the Internet impacts the buying process for a new purchaser

Your most unhappy customers are your greatest source of learning.”

Prof. Jyoti P. Das

… online buying process

There are five different types of web users who exhibit different searching behaviour according to the
purpose of using the web.
• Directed information-seekers. Will be looking for product, market or leisure information such as details of their
football club’s fixtures. This type of user tends to be experienced in using the web and is proficient in using search
engines and directories.
• Undirected information-seekers. These are the users usually referred to as ‘surfers’, who like to browse and change
sites by following hyperlinks. This group tends to be novice users (but not exclusively so) and they may be more
likely to click on banner advertisements.
• Directed buyers. These buyers are online to purchase specific products. For such users, brokers or cybermediaries
who compare product features and prices will be important locations to visit.
• Bargain hunters. These users want to use the offers available from sales promotions such as free samples or
prizes.
• Entertainment seekers. Users looking to interact with the web for enjoyment through entering contests such as
quizzes.
These different types of behaviour could be exhibited by the same person in different sessions online,
or, less likely, in the same session

Prof. Jyoti P. Das

E-CRM for customer acquisition

Customer acquisition

Use of the web site to Encouraging existing

acquire new customers customers to migrate to
for a company as qualified using online for purchase
leads that can hopefully or service
be converted into sales.

Before an organization can acquire customers through the content on its site, it must, of course,
develop marketing communications strategies to attract visitors to the web site.
Marketing communications for customer acquisition including
• search engine marketing
• online PR
• online partnerships
• interactive advertising
• e-mail marketing
• viral marketing
• Social media marketing

Prof. Jyoti P. Das

Techniques for effective CRM communications

E-CRM initiative owners constantly strive to

deliver the most effective mix of
communications to drive traffic to their e-
commerce sites.
The different techniques can be characterized
as traditional offline marketing
communications or rapidly evolving online
marketing communications which are today
referred digital media channels. From an e-
CRM context, the objective of employing these
techniques is often to acquire new visitors or
‘build traffic’ using the techniques summarized
in the figure
The diversity of marketing communications that
can be used to encourage site visitors is Online and offline communications techniques

highlighted.

Prof. Jyoti P. Das

The characteristics of interactive communications

It is important to understand the different communications characteristics of traditional and

new media to exploit the characteristics of digital media
• From push to pull.
• From monologue to dialogue.
• From one-to-many to one-to-some and one-to-one.
• From one-to-many to many-to-many communications.
• From ‘lean-back’ to ‘lean-forward’ - lean forward communication is a type of communication
where receivers lean forward to interact and control the flow of information in an active
manner. In lean back form of communication viewers can lean back and do receive the
information in a passive manner
• The medium changes the nature of standard marketing communications tools such as
advertising.
• Increase in communications intermediaries.
• Integration remains important.

Prof. Jyoti P. Das

 Assessing communication effectiveness
A campaign will not be successful if it meets its objectives of acquiring site visitors and cus- tomers but
the cost of achieving this is too high. It is also essential to have specific objectives for the cost of getting
the visitor to the site using different referrers such as search engine marketing combined with the cost of
achieving the outcomes during their visit.
This is stated as the cost per acquisition (CPA) .Depending on context and market of a site, CPA may refer
to different outcomes. Typical cost targets include:
• cost per acquisition – of a visitor
• cost per acquisition – of a lead
• cost per acquisition – of a sale.
To control costs, it is important for managers to define a
target allowable cost per acquisition. The figure shows the
full range of measures used by digital marketers to control
communications expenditure
Volume or number of visitors. This is usually measured as
thousands of unique visitors.
Measures used for setting campaign objectives or assessing campaign
Quality or conversion rates to action. This shows what success increasing in sophistication from bottom to top

proportion of visitors from different sources take specific

marketing outcomes on the web such as lead, sale or
subscription. Bounce rates can also be used to assess the
relevance and appeal of the page that visitor arrives on

Prof. Jyoti P. Das

 Assessing communication effectiveness
Cost (cost per click). The cost of visitor acquisition is usually measured specific to a particular online
marketing tool such as paid search engine marketing since it is difficult to estimate for an entire site with
many visitors referred from different sources
Cost (cost per action or acquisition). When cost of visitor acquisition is combined with conversion to
outcomes this is the cost of (customer) acquisition.
Return on investment (ROI). Return on investment is used to assess the profitability of any marketing
activity or indeed any investment.
profit generated from referrer
ROI =
Amount spent on advertising with referrer

A related measure, which does not take profitability into account is return on advertising spend (ROAS)
Total sales revenue generated from referrer
ROI =
Amount spent on advertising with referrer

Branding metrics. These tend to be only relevant to interactive advertising or sponsorship. They are the
equivalent of offline advertising metrics
Lifetime-value-based ROI. Here the value of gaining the customer is not just based on the initial purchase,
but the lifetime value and costs associated with the customer. This requires more sophisticated models
which can be most readily developed for online retailers and online financial services providers.

Prof. Jyoti P. Das

 Online marketing communications
There are various approaches to online marketing communications using techniques as shown in the
figure. These techniques are often combined in what is known as a ‘traffic-building campaign’; this is a
method of increasing the audience of a site using different online (and offline) techniques.
An organization’s investment in the techniques for customer acquisition should be based on the metrics
discussed. Most important is minimizing the cost of acquisition against volume required.

1 Search and marketing

• Keypha se analysis
• Sea rch engine
opti mization (SEO)
6 Social media marketing • Pa i d search marketing 2 Online PR
• Audi ence participation • Communicating with
• Ma na ging s ocial media online
pres ence • Li nk building
• Vi ra l ca mpaigns • Bl og, prodcast a nd RSS
• Cus tomer feedbacks • Onl i ne communities and
s ocial networks
Online
communication
5 e-mail marketing techniques 3 Online partnership
• Outbound email • Affi l iate marketing
ma rketing • Onl i ne s ponsorship
• Inbound email • Co-bra nding
ma rketing • Wi dget marketing
• Opt-i n email option 4 Interactive ads
• Si te s pecific media buys
• Ad networks
• Contra -deals
• Sponsorship
• Behavi oural targeting

Prof. Jyoti P. Das

Search engine marketing
Search engines and directories are the primary method of finding information about a company
and its products. It follows that if an organization is not prominent in the search engines, then
many potential sales could be lost since a company is dependent on the strength of its brand and
offline communications to drive visitors to the web site.
Keyphrase analysis
The starting point to successful search engine marketing is target the right
keyphrases. The focus is on ‘keyphrase’ rather than ‘keyword’ since search
engines attribute more relevance when there is a phrase match between the
keywords that the user types and a phrase on a page.
Companies should complete a ‘gap analysis’ which will identify keyphrases to
target by showing for each phrase, the number of visitors they could
potentially attract compared to the actual positions or number of visitors they
are receiving.
Sources for identifying the keyphrases customers are likely to type when
searching for products include organization’s market knowledge, competitors’
sites, keyphrases from visitors who arrive at the site using web analytics, the
internal site search tool and the keyphrase analysis tools. It is also useful to
understand customer searching behaviour
Keyphrases change over time: seasonal factors may affect keyphrases, or the
market may change rapidly and new keyphrases appear. By monitoring the
keyphrases an organization can ensure that they stay relevant to your business
and the market

Prof. Jyoti P. Das

 Search engine marketing
Search-engine optimization (SEO)
SEO involves a structured approach used to increase the position of a company or its products in
search-engine natural or organic results listings for selected key phrases. It also involves controlling
index inclusion or ensuring that as many pages of a site as possible are included within the search engine
Each search engine has its own evolving algorithm with hundreds of weighting factors truly there are
some common factors that influence search engine rankings.
• Frequency of occurrence in body copy - The number of times the key phrase is repeated in the text of the web page
is a key factor in determining the position for a key phrase. Copy can be written to increase the number of times a
word or phrase is used, its ‘key phrase density’ and ultimately boost position in the search engine.
• Number of inbound links (page rank) - The more links you have from good-quality sites, the better your ranking will
be. Some search engines use an assessment called ‘page rank’ to deliver relevant results since it counts each link
from another site as a vote.
• Title HTML tag - The keywords in the title tag of a web page that appears at the top of a browser window are
indicated in the HTML code by the TITLE keyword. If a keyphrase appears in a title it is more likely to be listed high
than if it is only in the body text of a page
• Meta-tags - Meta-tags are part of the HTML source file, typed in by web page creators, which is read by the search
engine spider or robot. They are effectively hidden from users, but are used by some search engines when robots
or spiders compile their index.
• Alternative graphic text - A site that uses a lot of graphical material and/or plug-ins, is less likely to be listed highly.
The only text on which the page will be indexed will be the TITLE keyword.

Prof. Jyoti P. Das

Search engine marketing
Paid search marketing
Paid search marketing or paid listings are similar to conventional advertising; here a relevant text ad
with a link to a company page is displayed when the user of a search engine types in a specific phrase
A series of text ads usually labelled as ‘sponsored links’ are displayed on the right and/or above and
below the natural search engine listings.
The advertiser doesn’t pay when the ad is displayed, but only when the ad is clicked on which then
leads to a visit to the advertiser’s web site – hence this is known as ‘pay-per- click marketing’!
In addition to paid search ads within the search engines, text ads are also displayed on third- party
sites which form a ‘content network’ where ‘contextual ads’ are displayed automatically according to
the type of content.

Prof. Jyoti P. Das

Online PR
Online PR or e-PR leverages the network effect of the Internet. Mentions of a brand or site on other
sites are powerful in shaping opinions and driving visitors to an organization’s site.
The main element of online PR is maximizing favourable mentions of an organization, its brands,
products or web sites on third-party web sites which are likely to be visited by its target audience. More
links there are from other sites to your site, the higher your site will be ranked in the natural or
organic listings of the search engines.
Minimizing unfavourable mentions through online reputation management is also an aspect of online
PR.

Online PR categories and activities

Create great content, link to great content and great content will link to you

Prof. Jyoti P. Das

Online PR
Communicating with media online
Communicating with media online uses the Internet as a new conduit to disseminate press releases
through e-mail and on-site and on third-party sites. Options to consider for a company include: setting
up a press-release area on the web site; creating e-mail alerts about news that journalists and other third
parties can sign up to; submitting your news stories or releases to online news feeds
Link building
Link building is a key activity for search engine optimization. It can be considered to be an element of
online PR since it is about getting the brand visible on third-party sites. Link building needs to be a
structured effort to achieve as many links into a web site as possible from referring web sites including
reciprocal links. The position in the search engine results pages will be higher if an organization has
quality links into relevant content on its site.
Blogs, podcasting and RSS
Weblogs or ‘blogs’ give an easy method of regularly publishing web pages which are best described as
online journals, diaries or news or events listings. They include feedback comments from other sites or
contributors to the site.
Podcasts are related to blogs since they can potentially be generated by individuals or organizations to
voice an opinion either as audio or less commonly as video
RSS (Really Simple Syndication) allows organizations to deliver news to a desktop computer. By
subscribing to RSS feeds, users can easily stay up-to-date with their favorite news sources. A feed reader
or aggregator is an application that collects and presents content from a news feed
Prof. Jyoti P. Das
Online PR
Online communities and social networks
The human wish to socialize and share experiences is the real reason behind the popularity of Web 2.0
sites such as the social networks. So it is important for organizations to determine how their audiences
use social networks and that the opportunities are to reach and interact with them.
Researches have highlighted the importance of social networks in influencing perceptions about
brands, products and suppliers
Members of a community or social network will differ in the extent to which they are connected with
others. The most influential network members will be highly connected and will discuss issues of
interests with a wider range of contacts than those who are less connected. It is important to target
the highly connected individuals since they are typically trusted individuals who other members of the
community may turn to for advice. But there is much discussion about the influence of the influencers
online
Researchers of community inter actions believe that is the collective interaction between typical
network members known as the ‘moderately connected majority’ that are equally important. ‘Most
social change is driven not by influentials, but by easily influenced individuals influencing other easily
influenced individuals’.
Creating a buzz – online viral marketing
From a functional point of view, online viral marketing often involves generating word-of- mouth and
links through to a web site so it is considered part of online PR.

Prof. Jyoti P. Das

Online partnership
Partnerships are an important part of today’s marketing mix. Some consider it as the eighth ‘P’. There
are three key types of online partnerships which need to be managed:
• affiliate marketing
• online sponsorship
• widget marketing
Affiliate marketing
Affiliate marketing has become very popular with e-retailers since many achieve over 20% of their
online sales through affiliates also known as ‘aggregators’ since they aggregate offers from different
providers. The benefit of affiliate marketing for the e-retailer, is that they, the advertiser, do not pay
until the product has been purchased or a lead generated. It is sometimes referred to as ‘zero-risk
advertising’
Online sponsorship
Online sponsorship is not straightforward. It’s not just a case of mirroring existing ‘real- world’
sponsorship arrangements in the ‘virtual world’ although this is a valid option. For the advertiser, online
sponsorship has the benefit that their name is associated with an online brand that the site visitor is
already familiar with.
Widget Marketing
A widget is a stand-alone application that can be embedded into any third party sites by any user on a
page. it can be installed and executed by an end user within a separate html based web page without
any additional compilation as it is a chunk of code which is portable
Prof. Jyoti P. Das
Interactive advertising

Advertising on the web takes place when an advertiser pays to place advertising content on
another web site. The process usually involves ad serving from a different server from that on
which the page is hosted
Advertising is possible on a range of sites in order to drive traffic to an organization’s destination
site or alternatively a micro-site or nested ad-content on the media owner’s site or on the
destination site.
Two primary goals of online display advertising are, first, using display adverts as a form of
marketing communication used to raise brand awareness and, second, as a direct response
medium focused on generating a response.
There are relatively few organizations who have used interactive advertising. The first pixels
banner ad was placed in 1995 and the call-to-action ‘Click here!’ generated a clickthough of 25%.
Since then, the clickthrough rate (CTR) has fallen dramatically as many consumers suffer from
‘banner blindness’ they ignore anything on a web site that looks like an ad.
Today the average CTR is typically less than 0.1%, although video ads can receive a higher response
rate. This low response rate, combined with relatively high costs has seemingly made some
marketers prejudiced against interactive advertising.
There are many innovative approaches to interactive advertising which are proved to increase
brand aware- ness and purchase intent.

Prof. Jyoti P. Das

Interactive advertising

Advertising on the web takes place when an advertiser pays to place advertising content on
another web site. The process usually involves ad serving from a different server from that on
which the page is hosted
Advertising is possible on a range of sites in order to drive traffic to an organization’s destination
site or alternatively a micro-site or nested ad-content on the media owner’s site or on the
destination site.
Two primary goals of online display advertising are, first, using display adverts as a form of
marketing communication used to raise brand awareness and, second, as a direct response
medium focused on generating a response.
There are relatively few organizations who have used interactive advertising. The first pixels
banner ad was placed in 1995 and the call-to-action ‘Click here!’ generated a clickthough of 25%.
Since then, the clickthrough rate (CTR) has fallen dramatically as many consumers suffer from
‘banner blindness’ they ignore anything on a web site that looks like an ad.
Today the average CTR is typically less than 0.1%, although video ads can receive a higher response
rate. This low response rate, combined with relatively high costs has seemingly made some
marketers prejudiced against interactive advertising.
There are many innovative approaches to interactive advertising which are proved to increase
brand aware- ness and purchase intent.

Prof. Jyoti P. Das

E-mail marketing
Email marketing is the act of sending a commercial message, typically to a group of people, using
email. In its broadest sense, every email sent to a potential or current customer could be
considered email marketing. It involves using email to send advertisements, request business, or
solicit sales or donations.
Email marketing strategies commonly seek to achieve one or more of three primary objectives:
• build loyalty
• trust
• band awareness
The term usually refers to sending email messages with the purpose of
• enhancing an organization’s relationship with current or previous customers
• encouraging customer loyalty and repeat business
• acquiring new customers or convincing current customers to purchase something immediately
• sharing third-party ads
When devising plans for e-mail marketing communications, marketers need to plan for:
• outbound e-mail marketing, where e-mail campaigns are used as a form of direct marketing to encourage trial
and purchases and as part of a CRM dialogue;
• inbound e-mail marketing, where e-mails from customers such as support enquiries are managed. These are
often managed today in conjunction with chat and co-browsing sessions.

Prof. Jyoti P. Das

E-mail marketing
Key measures for e-mail marketing are:
• Delivery rate this excludes e-mail ‘bounces’ – e-mails will bounce if the e-mail address is no longer valid
or a spam filter blocks the e-mail. So, online marketers check their ‘deliverability’ to make sure their
messages are not identified as ‘false positives’ by spam prevention software.
• Open rate – this is measured for HTML messages through downloaded images. It is an indication of
how many customers open an e-mail
• Clickthrough rate – this is the number of people who click through on the e-mail of those delivered
Opt-in e-mail options for customer acquisition
For acquiring new visitors and customers to a site, there are three main options for e-mail marketing
• Cold e-mail campaign - the recipient receives an opt-in e-mail from an organization that has rented an e-mail list
from a consumer e-mail list provider
• Co-branded e-mail - the recipient receives an e-mail with an offer from a company they have a reasonably strong
affinity with. Although this can be considered a form of cold e-mail, it is warmer since there is a stronger
relationship with one of the brands and the subject line and creative will refer to both brands. Co-branded e-mails
tend to be more responsive than cold e-mails to rented lists since the relationship exists and fewer offers tend to
be given.
• Third-party e-newsletter - an organization publicizes itself in a third-party e-newsletter. This could be in the form of
an ad, sponsorship or PR (editorial) which links through to a destination site. Since e-newsletter recipients tend to
engage with them by scanning the headlines or reading them if they have time, e-newsletter placements can be
relatively cost-effective

Prof. Jyoti P. Das

Social media marketing

Social media or Viral marketing harnesses the network effect of the Internet and can be effective in
reaching a large number of people. It is effectively an online form of word-of-mouth communications.
Viral marketing is increasingly being used for commercial purposes.
Developing a social media strategy
POST framework is used by many organizations to develop a social media strategy
• People – understanding he adoption of social media within an audience is the starting point
• Objectives – set different goals for different options to engage customers across different aspects of the customer
life cycle
• Strategy – how to achieve the organization’s goals.
• Technology – decide on the best social media platform to achieve the goals

Developing effective campaigns

To make a viral campaign effective three things are needed
• Creative material – the ‘viral agent’. This includes the creative message or offer and how it is spread
• Seeding. Identifying web sites, blogs or people to send e-mail to start the virus spreading.
• Tracking. To monitor the effect, to assess the return from the cost of developing the viral agent and seeding

Offline marketing communications

Offline communications will never disappear – they are effective at reaching an audience to encourage
them to visit a site, but are also useful as a way of having an impact or explaining a complex proposition
Prof. Jyoti P. Das
Online marketing communication
Promotion technique Main strengths Main weaknesses

1a Search engine optimization (SEO) Hi ghly ta rgeted, relatively l ow cost of PPC. Hi gh tra ffic
vol umes i f effective. Considered credible by s earchers
1b Pay-per-click (PPC) marketing Hi ghly targeted with controlled cost of acquisition.
Extend reach through content network
1c Trusted feed Upda te readily to reflect changes in product lines and
pri ces
2 Online PR Rel atively l ow cost and good targeting
Ca n a ssist with SEO through creation of backlinks
3a Affiliate marketing Pa yment is by results (e.g. 10% of sale or l eads goes to
referri ng site)
Intense competition, may compromise look of site.
Compl exity of changes to ranking algorithm
Rel atively costly i n competitive sectors and l ow vol ume
compa red with SEO
Rel atively costly, mainly relevant for e -retailers
Identifying online influencers and setting up partnerships
ca n be time-consuming. Need to monitor comments on
thi rd-party s ites
Cos ts of payments to a ffiliate networks for s et-up and
ma nagement fees
Cha nges to ranking algorithm may a ffect vol ume from
a ffi liates

3b Online sponsorship Mos t effective if low-cost, long-term co-branding
a rra ngement with synergistic site
4. Interactive advertising Ma i n i ntention to achieve visit, i .e. direct response
model. But also role in branding through media
mul ti plier effect
5. E-mail marketing Pus h medium – ca n’t be i gnored in user’s inbox. Ca n be
us ed for direct response l ink to web site. Integrates as a
res ponse mechanism with direct mail
Ma y i ncrease awareness, but does not necessarily l ead
di rectly to s ales
Res ponse rates have declined because of banner
bl i ndness
Requires opt-in for effectiveness. Better for customer
retention than for acquisition?
Inbox cut-through – message diluted amongst other e-
ma i ls. Limits on deliverability

6. Viral and word-of-mouth marketing
Traditional offline advertising (TV, print, etc)
Wi th effective vi ral agent possible to reach a large
number at relatively l ow cost.
Infl uencers i n social networks significant
La rger reach than most online techniques. Greater
crea ti vity possible, l eading to greater impact
Di fficult to create powerful vi ral concepts and control
ta rgeting. Risks damaging brand since unsolicited
mes sages may be received
Ta rgeting arguably l ess easy than online.
Typi ca lly high cost of a cquisition

Strengths and weaknesses of different communications channels for promoting an online presence

Prof. Jyoti P. Das

 E-CRM for customer retention
Customer retention

Repeat customers Repeat visits

To retain customers of the organization. To keep customers using the online channel

Schematic of the relationship between satisfaction and loyalty

To create long-term online customer relationships that

build on acquisition, to retain and extend, we need to
analyze the drivers of satisfaction amongst these e-
customers, since satisfaction drives loyalty and loyalty drives
profitability. The relationship is shown in the figure.
The objective of organizations is to drive customers up the
curve towards the zone of affection. However, the majority
are not in that zone and to achieve retention organizations
must understand why customers defect or are indifferent

Loyalty drivers Sum m ary metric

Order fulfilment Ship to target. Percentage that ship on time exactly asthe customer specified

Product performance Ini tial fi eld incident ra te – the frequency of problems experienced by customers.

Post-sale service and support On-ti me, fi rst-time fix – the percentage of problems fixed on the first vi sit by a s ervice rep who a rrives at the ti me promised.

Prof. Jyoti P. Das

Personalization and mass customization
Personalization and mass customization can be used to tailor information and opt-in e-mail can
be used to deliver it to add value and at the same time remind the customer about a product.
‘Personalization’ and ‘mass customization’ are terms that are often used interchangeably.
In the strict sense, personalization refers to customization of information requested by a site
customer at an individual level. Mass customization involves providing tailored content to a group
with similar interests. This approach is sometimes also referred to as ‘collaborative filtering’
All these personalization techniques take advantage of the dynamic possibilities of web content.
Users’ preferences are stored in databases and content is taken from a database. Personalization
can be achieved through several dynamic variables including:
• the customers’ preferences
• the date or time
• particular events
• the location
Creating personalization
Personalization of web content is much more
expensive than developing static content, since it
requires database integration and specialized
software tools which recognizes visitors when they
return and then accesses and displays the relevant
information from a database
Prof. Jyoti P. Das
Personalization and mass customization
Extranets
Since extranets require a user to log in they signify differential services through premium content and
services. Many options are possible.
A dynamic example of using an extranet is the use of the web to host online events that mirror
traditional events such as seminars, trade shows and user group conferences, virtual semi-ars with a
guest speaker by webcast, virtual trade shows where exhibitors, seminar speakers and delegates are
linked by the web. Other traditional retention methods such as loyalty schemes and sales promotions
translate well to the online environment.
Extranets pro-vide good traceability of marketing outcomes and tagging of visitors
Opt-in e-mail
Opt-in e-mail is vital in communicating the retention offers either through regular e-mail communications
such as a newsletter or higher-impact irregular e-mail communications such as details of a product
launch. e-mail has the power of traditional push communication. It enables a targeted message to be
pushed out to a customer to inform and remind and they are certain to view it within their e-mail inbox
Despite its potential, use of e-mail for marketing has negative connotations due to spam. Spam does not
mean that e-mail cannot be used as a marketing tool. Organizations must ask customers to provide their
e-mail address and then give them the option of ‘opting in’ to further communications.

Prof. Jyoti P. Das

Online communities

Community implemented as forums and social networks is a key feature of the new interactive media
that distinguishes them from traditional push media.
The key to successful community is customer-centred communication. It is a customer-to-customer
(C2C) interaction. Consumers, not businesses, generate the content of the site, e-mail list or bulletin
board
Depending on market sector, an organization has a choice of developing different types of community
for B2C, and communities of purpose, position, interest and profession for B2B.
• Purpose – people who are going through the same process or trying to achieve a particular objective. Examples
include those researching cars or stocks online.
• Position. People who are in a certain circumstance such as having a health disorder or being at a certain stage of
life, such as communities set up specifically for young people or old people.
• Interest. This community is for people who share an interest or passion such as sport, music, leisure or any other
interest
• Profession. These are important for companies promoting B2B services. For example, companies promoting
marketing services can showcase their expertise or services through participating in the networks
There are two types of online communities:
1. Public social networks. Instagram, Facebook, Twitter, TikTokwas a massive online community. Public social networks
are online communities that only require someone to have an account to be part of the community.
2. Branded communities. This type of community is the opposite of a public social network. You’ll need to provide
more than an email address and password to get inside of the community. You’ll need the right credentials to have
access to the community—even if it’s on a public social media platform.
Prof. Jyoti P. Das
Online communities
Advantages created for brands with online communities
• Drive product innovation - customers are the best people to tell the organization what product improvements
need to be made. They can tell what they love, what they hate, and what they never use. This online forum is a
megaphone for the customers as to what an organization can do to improve its product for them
• Get to know the customers – an organization can also use this megaphone to understand the before-and-after
state of the customers. Organizations will notice patterns in the way they describe their problems that they can
use to improve your copy. This makes the copy more relatable to your customer and shows them that this product
is the one they’re looking for
• Reduce support costs - inside the online community organizations look for patterns about the before-state of the
customers as well as their after-state. An organization’s goal after-state for its customers and the actual after-
.
state may differ if the customers are running into issues with your products.
• Product feedback - similar product complaints or questions in the online community should never be passed over.
While they are great for reducing the support costs, they’re even better at improving the product in exactly the
way that the customers want
7 Steps for Building an Online Community
1. Identify key stakeholders for the online community.
2. Define the purpose and goal
3. Select a community platform
4. Build a member profile.
5. Develop rules and norms
6. Set up your community.
7. Promote your community.

Prof. Jyoti P. Das

Techniques for managing customer activity and value

Within the online customer base of an organization, there will be customers who have different levels of
activity in usage of online services or in sales.
To improve the adoption of ‘web self-service’ which helps reduce costs it is important to define
measures which indicate activity levels and then develop tactics to increase activity levels through more
frequent use. Objectives and corresponding tactics should be set for:
• Increasing number of new users per month and annually - separate objectives should be set for existing customers
and new customers through promoting online services to drive visitors to the web site.
• Increasing % of active users - using direct communications such as e-mail, personalized web site messages, direct
mail and phone communications to new, dormant and inactive users increases the percentage of active users.
• Decreasing % of dormant users - were once new or active, but have not used within a time period to be classified as
active.
• Decreasing % of inactive users (or non-activated) users - these are those who signed up for a service such as online
banking and username was issued, but they have not used the service
The key retention metric for e-CRM sites, refers to repeat business. The main retention metrics are:
• Repeat-customer conversion rate – how many first-time customers purchase a second product?
• Repeat-customer base – the proportion of the customer base who have made repeat purchases.
• Number of transactions per repeat customer – this indicates the stage of development of the customer in the
relationship
• Revenue per transaction of repeat customer – this is a proxy for lifetime value since it gives average order value.

Prof. Jyoti P. Das

Lifetime value modelling
Lifetime value (LTV) is also key to the theory and practice of customer relationship management.
Lifetime value is defined as the total net benefit that a customer or group of customers will provide an
organization over their total relationship with a company.
Modelling is based on estimating the income and costs associated with each customer over a period of
time and then calculating the net present value in current monetary terms using a discount rate value
applied over the period
There are different degrees of sophistication in calculating LTV.
These are indicated in the figure
Option 1 is a practical way or approximate proxy for future LTV,
but the true LTV is the future value of the customer at an
individual level. Lifetime value modelling at a segment level 4 is
vital within marketing since it answers the question: How much
can I afford to invest in acquiring a new customer?
Lifetime value analysis enables marketers to:
• Plan and measure investment in customer acquisition programmes
• Identify and compare critical target segments
• Measure the effectiveness of alternative customer retention strategies
• Establish the true value of a company’s customer base
• Make decisions about products and offers
Different representations of lifetime value calculation
• Make decisions about the value of introducing new e-CRM technologies.
Prof. Jyoti P. Das
Lifetime value modelling
The figure gives an example of how LTV can be used to develop a CRM strategy for different customer
groups.
Four main types of customers are indicated by their current and future value as bronze, silver, gold
and platinum. Distinct customer groupings (circles) are identified according to their current value, as
indicated by current profitability and future value as indicated by lifetime value calculations
Each of these groups will have a customer profile signature based
on their demographics, so this can be used for customer
selection. Different strategies are developed for different
customer groups within the four main value groupings.
Some bronze customers such as Groups A and B realistically do
not have development potential and are typically unprofitable,
so the aim is to reduce costs in communications and if they do
not remain as customers this is acceptable.
Some bronze customers such as Group C may have potential for
growth, so for these the strategy is to extend their purchases.
Silver customers are targeted with customer extension offers
and gold customers are extended where possible although
these have relatively little growth potential.
Platinum customers are the best customers, so it is important to
understand the communication preferences of these customers
LTV-based segmentation plan
and not to over-communicate unless there is evidence that they
may defect.

Prof. Jyoti P. Das

E-CRM for customer extension
Customer extension

Re-sell Cross-sell Up-sell

Customer extension has the aim of increasing the lifetime value of the customer to the company
by encouraging cross-sale, re-sell or up-sell. When a customer returns to a web site it is an
opportunity for cross-selling and such offers can be communicated.
Direct e-mail is also an excellent way for informing a customer about other company products and it
is also useful in encouraging repeat visits by publicizing new content or promotions.
E-mail is vitally important to achieving online CRM since the web site is a pull medium which the
customer will only be exposed to if they decide to visit the web site and they are unlikely to do this
unless there is some stimulus. However, e-mail is a push medium where the customer can be
reminded about current promotions and offers and why they should visit the web site. This is why it
is so important to capture the customer’s e-mail address at the acquisition stage.
Many companies are now only proactively marketing to favoured customers. One UK financial
services provider has analyzed characteristics of high-churn-rate customers, and when a new
prospect fitting this profile contacts the call centre they are actively discouraged. Using these
techniques it is possible to increase share of customer’s wallet

Focus on share of customer, not market share – fire 70 per cent of your customers and watch your profits go up

Prof. Jyoti P. Das

E-CRM for customer wallet share

What is wallet share

Share of wallet (SOW) is the dollar amount an average customer regularly devotes to a particular
brand rather than to competing brands in the same product category. Companies try to maximize an
existing customer's share of wallet by introducing multiple products and services to generate as much
revenue as possible from each customer. A CRM campaign for example, may have a stated goal of
increasing the brand's wallet share for specific customers at the expense of its competitors. increasing
the SOW influence positively increasing the lifetime value of a customer
How to Calculate Share of Wallet
The most effective way to calculate share of wallet is known as "The Wallet Allocation Rule." The
formula relies on two factors: the number of brands within the specific category and how those
brands rank in terms of customer preference. These are the steps to finding your share of wallet.
1. Determine the number of brands
2. See how the customer ranks them
3. Use The Wallet Application Rule formula

For instance, say out of five fast-food restaurants, a consumer ranks Clint's second. According to the
Wallet application rule, Clint's has a 26.7% share of wallet for this customer

Prof. Jyoti P. Das

Online segmentation and targeting techniques
The most sophisticated segmentation and targeting schemes for extension are often used by e-retailers,
who have detailed customer profiling information and purchase history data as they seek to increase
customer lifetime value through encouraging increased use of online services over time.
The segmentation and targeting approach is based on five main elements which in effect are layered on
top of each other.
• Identify customer lifecycle groups. The figure illustrates this approach. As visitors use
online services they can potentially pass through seven or more stages. Once
companies have defined these groups and set up the customer relationship
management infrastructure to categorize customers in this way, they can then
deliver targeted messages, either by personalized on-site messaging or through
e-mails that are triggered automatically due to different rules
• Identify customer profile characteristics. This is a traditional segmentation based
on the type of customer. For B2C e-retailers it will include age, sex and
geography. For B2B companies, it will include size of company and the industry
Customer lifecycle segmentation
sector or application they operate in
• Identify behaviour in response and purchase. As customers progress through the lifecycle, though analysis of the database,
they will be able to build up a detailed response and purchase history which considers the details of recency, frequency,
monetary value and category of products purchased. This approach, which is known as ‘RFM or FRAC analysis’
• Identify multi-channel behaviour (channel preference). Regardless of the enthusiasm of the company for online channels,
some customers will prefer using online channels and others will prefer traditional channels. This will, to an extent, be
indicated by RFM and response analysis since customers with a preference for online channels will be more responsive and
will make more purchases online
• Tone and style preference. In a similar manner to channel preference, customers will respond differently to different types
of message

Prof. Jyoti P. Das

RFM/FRAC analysis for monitoring customer behaviour

To be able to identify customers in the categories of value, growth, responsiveness or defection risk an
organization needs to characterize them using information about them which indicates their
purchase and campaign response behaviour. This is because the past and current actual behaviour
is often the best predictor of future behaviour. An organization can then influence this future
behaviour.
E-CRM enables an organization to create a cycle of:
• Monitoring customer actions or behaviours and then . . .
• Reacting with appropriate messages and offers to encourage desired behaviours
• Monitoring response to these messages and continuing with additional communications and monitoring

Sense Respond Adjust

• Sense - monitor customer activities to classify them according to value, growth, responsiveness and defection risk.
• Respond - timely, relevant communications to encourage desired behaviours.
• Adjust - monitor responses and continue with additional communications
‘Sense and Respond’ technique has traditionally been completed by catalogue retailers such as using
‘RFM analysis’.
This technique is mostly used by the retail, but e-CRM gives great potential to applying it in a range of
techniques since we can use it not only to analyze purchase history, but also visit or log-in frequency
to a site or online service and response rates to e-mail communications.

Prof. Jyoti P. Das

RFM/FRAC analysis for monitoring customer behaviour
RFM is sometimes known as ‘FRAC’, which stands for: Frequency, Recency, Amount, Category. Two
related concepts are latency and hurdle rates. RFM analysis allows a comparison between potential
contributors or clients. It gives organizations a sense of how much revenue comes from repeat
customers (versus new customers), and which levers they can pull to try to make customers happier
so they become repeat purchasers.
RFM value analysis
• Recency—how recent was the customer’s action? The more recently a customer has made a purchase with a
company, the more likely he or she will continue to keep the business and brand in mind for subsequent
purchases. Compared with customers who have not bought from the business in months or even longer periods,
the likelihood of engaging in future transactions with recent customers is arguably higher.
• Frequency—how often did the customer act? The frequency of a customer’s transactions may be affected by
factors such as the type of product, the price point for the purchase, and the need for replenishment or
replacement. If the purchase cycle can be predicted, for example when a customer needs to buy new groceries,
marketing efforts could be directed towards reminding them to visit the business when items such as eggs or milk
have been depleted
• Monetary— how much did the customer spent? Monetary value stems from the lucrativeness of expenditures the
customer makes with the business during their transactions. A natural inclination is to put more emphasis
on encouraging customers who spend the most money to continue to do so.
• Latency – what is the average time between customer events. The average time between web-site visits, second
and third purchase and e-mail clickthroughs
• Hurdle rate—% of customers in a group who completed an action It can be used to compare different groups or
set an objective for the group
Prof. Jyoti P. Das
RFM/FRAC analysis for monitoring customer behaviour

 20% of customers have visited in the past 6 months

 5% of customers have made three or more
purchases in the year
 60% of registrants have logged on to the system in
the year
 30% have clicked through on e-mail in the year.

RFM value analysis

Grouping customers into different RFM categories

In the examples above, each division for Recency, Frequency and Monetary value is placed in an
arbitrary position to place a roughly equal number of customers in each group. This approach is
also useful since the marketer can set thresholds of value relevant to their under- standing of their
customers.
RFM analysis involves two techniques for grouping customers:
1. 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) as shown in the figure. It also shows one application of
RFM with a view to using communications channels more effectively. Lower-cost e-communications can be used to
communicate with customers who use online services more frequently since they prefer these channels and more
expensive communications can be used for customers who seem to prefer traditional channels
2. . Arbitrary divisions of customer database. This approach is also useful since the marketer can set thresholds of
value relevant to their understanding of their customers.
Prof. Jyoti P. Das
RFM/FRAC analysis for monitoring customer behaviour

 20% of customers have visited in the past 6 months

 5% of customers have made three or more
purchases in the year
 60% of registrants have logged on to the system in
the year
 30% have clicked through on e-mail in the year.

RFM value analysis

Grouping customers into different RFM categories

In the examples above, each division for Recency, Frequency and Monetary value is placed in an
arbitrary position to place a roughly equal number of customers in each group. This approach is
also useful since the marketer can set thresholds of value relevant to their under- standing of their
customers.
RFM analysis involves two techniques for grouping customers:
1. Statistical RFM analysis. This involves placing an equal number of customers in each RFM category using quintiles
of 20% as shown in the figure. It also shows one application of RFM with a view to using communications channels
more effectively. Lower-cost e-communications can be used to communicate with customers who use online
services more frequently since they prefer these channels and more expensive communications can be used for
customers who seem to prefer traditional channels
2. . Arbitrary divisions of customer database. This approach is also useful since the marketer can set thresholds of
value relevant to their understanding of their customers.
Prof. Jyoti P. Das
Propensity modelling

Propensity modelling is one name given to the approach of evaluating customer characteristics and
behaviour, in particular previous products or services purchased, and then making recommendations
for the next suitable product.
It is best known as ‘recommending the “next best product” to existing customers’.
A related acquisition approach is to target potential customers with similar characteristics through
renting direct mail or e-mail lists or advertising online in similar locations.
Steps in propensity modelling
1. Create automatic product relationships (i.e. next best product). The approach to this is for each product, to group
together products, previously purchased together. Then for each product, rank product by number of times
purchased together to find relationships.
2. Cordon off and minimize the ‘real estate’ devoted to related products. An area of screen should be reserved for
‘next-best product prompts’ for up-selling and cross-selling.
3. Use familiar ‘trigger words’. This is familiar from using other sites. Such phrases include:
‘Related products... ‘Your recommendations ... ‘Similar … ‘Customers who bought…’
‘Top 3 related products’.
4. Editorialize about related products, i.e. within copy about a product.
5. Allow quick purchase of related products.
6. Sell related product during checkout. And also on post-transaction pages, i.e. after one item has been added to
basket or purchased.

Prof. Jyoti P. Das

Technology solutions for CRM

Database technology is at the heart of delivering CRM applications. Often the database is accessible
through an intranet web site accessed by employees, or an extranet accessed by customers or
partners provides an interface with the entire customer relationship management system.
E-mail is used to manage many of the inbound, outbound and internal communications managed by
the e-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
Engines of e-CRM system
• The customer-centric information store
• The analysis and segmentation engine
• The personalisation engine
• The broadcast engine
• The transaction engine

Prof. Jyoti P. Das

Technology solutions for CRM
Integration with back-office systems
When implementing a CRM system i n an organization, the organization will have previously
invested in systems for other key business functions such as sales order processing or customer
support. These existing systems appear at both the applications and database levels.
It will not be financially viable to discard these applications, but integration with them is vital to give
visibility of the customer information to everyone in the organization and provide excellent customer
support. Thus integration of back-office systems is a vital part of deciding on and implementing CRM
systems.
Data quality
All CRM systems are critically dependent on the currency, completeness and accuracy of their
databases. One of the biggest challenges after installation is maintaining data quality. For data quality
to be managed successfully, the following are important:
• Establish a business owner. This issue is too important to be managed solely by technologists and it requires
management at customer contact points, which are part of the responsibility of marketing.
• Optimize quality on capture. Validation checks can be built in at data entry to check that fields such as postcode
are complete and accurate.
• Continuously improve quality. Customer contact details constantly change. All contact points, whether with the
web site, contact-centre staff, or sales staff should be used to help maintain data quality.
• Work towards a single view of customer. Many errors result because different data are stored in different
databases. Unifying the data in a single database is the aim for many organizations,
• Adopt a data quality policy. This is essential to help achieve the four steps above.
Prof. Jyoti P. Das
 Five engines of e-CRM
The customer-centric information store
Consolidates information about millions of customers together with
preferences, permissions, and information that may be useful to
them.

The analysis and segmentation engine

Helps in leveraging this customer information to build a business
campaign strategy and evaluate its success.

The personalisation engine

Helps in personalising the entire customer experience, configuring
unique sets of messages and offers to each customer.

The broadcast engine

Helps to proactively deliver information and offers to every
customer via the media of his or her choice.

The transaction engine

Helps to facilitate the interactions between customer and the
company, either exchanging information or driving transactions.

Prof. Jyoti P. Das

 Components of e-CRM system

The aim of CRM technology is to provide an interface between the customer and the employee that
replaces or facilitates direct interaction.
From both customer and employee perspectives, the ultimate aim of CRM systems is to enable contact
regardless of the communications channel that the customer wants to use, whether this is traditional
methods such as phone or fax or newer digital technologies. Thus the ideal CRM system will support
multi-channel communication or the customer-preferred channel. Regardless of channel, the customer
will have different needs depending on their stage in the buying process
In the figure, we identify three core needs for the customer – to
find out more information about a product, to place an order
and to receive post-sales support. Applications must be
provided to support each of these needs.
Likewise, the employee will have applications requirements to
support the customer and the sales and marketing objectives
of the organization; in the figure these are sales force
automation, to place an order received by phone, by fax or in
person and to answer customers’ questions via a support
system and knowledge base.
At the heart of the system is the database storage needed to
support these applications.
The IT infrastructure such as servers, middleware and An overview of the components of CRM technologies
networking is not shown in the figure.

Prof. Jyoti P. Das

Weekly assignment

Outline different methods of customer acquisition, retention and extension via

electronic media

Submission date: November 11, 2020

Prof. Jyoti P. Das