CRM

Dr Biswajit Ghosh

1
Customer relation management
 Our Roadmap
Mobile e-commerce strategy
12
E-business strategy
Strategic Strategy formulation Strategy
analysis implementation
3 External
analysis 5 9
Strategy Internal
options organisation

Opportunities/
threats

6 7 10 13
Strengths/ Sustaining Exploring Interaction with
weaknesses competitive new market suppliers Implementation
advantage spaces

4
Internal
analysis
8 11
Creating and
capturing Interaction with
value users/customers

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 Customer relationship management
consists of four elements
'What criteria 'How can we
determine who will acquire this
be our most customer in the
profitable most efficient and
customers?‚ 1 2 effective way?
Minimum Cost
Who is the target Customer Customer
Life cycle selection acquisition
Value
Click to add text
Customer
relationship
management cycle
4 3

'How can we Customer Customer 'How can we keep

increase extension retention this customer for
the loyalty and the as long as
profitability of this possible?'
customer?'
What is the Customer Lifecycle?
 The customer lifecycle refers to the process of prospects becoming aware of a product,
making a purchase from a brand, and ideally becoming a company's longtime customer.
 The process is made up of five stages: reach, acquisition, conversion, retention,
and loyalty.

 Reach:

 In this stage, a customer searches for a product after becoming aware of an issue or
problem they need to solve.
 This stage is called “reach” because it's your chance to reach the customer while they're
deliberating.
 In this stage, your customer is comparing products across competing brands (including
yours), carrying out research, and reading customer reviews. Social media marketing,
SEO, search engine marketing, and other inbound and outbound methods should place
your brand on this customer's radar.
 This stage is successful when the customer reaches out to you for more information,
looking to either educate themselves further or get a definitive price.

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 What is the Customer Lifecycle?
 Loyalty
 In this stage, the customer becomes an important asset to the brand by making
additional purchases. They might post on social media about their experience
with your company and write product reviews that inform a future customer
during the reach stage.
 Brand loyalty is of the utmost importance.
 Referral/Advocacy
 The most prized and preferred client you will get is the one who evangelizes
your product to others. Not only will these “brand ambassadors” refer people to
your network, they will also activate and bring in traffic.
 At this point, it is essential that any revenue-sharing schemes that you put into
place are:
 Transparent
 Paid out on time
What is the Customer Lifecycle?

 Acquisition :

 Acquisition refers to the act of getting customers to your website from various media. To
acquire new customers, you can:
 Use your offline presence to increase brand awareness and drive traffic to your website.
E.g. You can conduct seminars and presentations with specific calls-to-action ("visit
www.example.com to download my notes and extra resources").
 Make sure your website is SEO-ready to attract customers who are searching for exactly
what you offer.
 You also have the option of running paid online ads (such as Google AdWords or Facebook
Ads) to drive traffic to your website. However, this should only be done once organic
growth tactics such as the ones presented in this article have been exhausted completely.

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 What is the Customer Lifecycle?

 Conversion
 Having gained all necessary information and being delighted with your brand's customer
experience, the prospect makes a purchase. They've officially converted and turned into
your customer.
 In this stage, you want to make it clear that you're providing value. They've entered a
relationship with you, not just made a purchase.
 But the work doesn't end here. It's time to retain the customer so that they continuously
come back to your brand.

  Retention
 Customer retention starts by finding out how the customer feels. Check in with them to ask
how they've enjoyed their new product or service. Carry out customer service surveys,
measure your Customer Satisfaction Score, and establish a 
Voice of the Customer program to find out what you can do better.
 Using information directly from them, you can continuously make improvements to your
products and services, as well as the customer service experience.
 In this retention stage, you'll want to offer exclusive perks that only your customers have
access to. 24/7 support, product discounts, and referral bonuses are all perks that can take
your customer from a plain purchaser to a brand promoter.
Upselling vs. Cross-selling:
 Upselling and cross-selling are sales strategies that aim to
convince the buyer to spend more money than they originally
intended. 
 With upselling, the seller encourages the buyer to purchase an
upgrade, an add-on, or the premium version of a product.

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Upselling
 For example, let’s say that you run a software company that sells products using a monthly
subscription model. While reviewing your existing customer base — let’s say a total of
10,000 subscribers — a member of your sales team notices that one customer is subscribed
to the basic version of your main product at $50 a month. The representative approaches
that customer and suggests that, for an additional $10 a month, they could upgrade to
premium version and gain access to a wider feature set. 

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 Cross-selling:
 With cross-selling, the seller encourages the buyer to purchase another product in addition to the
primary product.
 To return to our software sales example, let’s say you offer your customers a volume discount for bundling
two products. Using this discount, a customer can purchase two software licenses — ordinarily priced at
$50 a month, each — for a total of $80 a month. This nets out to an additional $30 per month or $360 per
year for every customer who chooses to bundle. Again, assuming that your existing customer base consists
of 10,000 subscribers, if even one out of every 10 subscribers chooses to bundle, you’re looking at an
additional $360,000 in revenue per year.
 Examples of Upselling & Cross-selling

 Manufacturing: While in the process of selling a major piece of equipment to an

enterprise-level organization, the sales representative offers the customer additional
coverage in the form of an extended warranty.
 Field Service: While performing routine maintenance for a customer, a field service
technician notices that another piece of equipment needs repair, if not replacement. The
technician uses an app on their mobile device to capture and enter the sales opportunity
into the system, including notes and pictures. A sales team member then receives an alert
about the potential sales opportunity, assesses the opportunity, and follows up directly with
the customer.
 Financial Services: A bank teller pulls up a customer’s profile and, based on 
householding data, sees that the customer has a child who is nearing college age. Based
on this information, the teller sends the customer promotional materials about student
checking accounts and student loan options.
 Insurance: While onboarding a new home insurance policy holder, a property and
casualty insurance agent notifies the customer that they can lower their monthly rate by
bundling home and auto insurance policies.
 Retail: A major clothing company offers automatically generated product
recommendations based on previously viewed items and purchases to customers browsing
its website.
 Consumer-packaged Goods: Based on customer purchase history data, a CPG company
notices that three particular items are frequently bought together. The company decides to
offer these items as a bundle to customers as a promotion.
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Benefits of Upselling & Cross-selling
 Increasing revenue is just one of the many ways in which your business can benefit from
upselling and cross-selling. Let’s look at some of the other advantages that upselling and
cross-selling offer.

 Upselling and cross-selling can strengthen customer relationships. Upselling and

cross-selling aren’t as simple as offering customers the next best version of your company’s
product or service or promoting other products from your catalog.

 Upselling and cross-selling can increase a customer’s lifetime value

(LTV). Speaking of loyalty, 57% of customers report spending more on brands or
providers to which they are loyal. To that end, upselling and cross-selling not only
strengthen relationships and secure loyalty — they can also increase the average order
value of each purchase and turn one-time customers into repeat buyers,
 Mass-customization value chain puts the
user in charge of many traditional steps
Firm infrastructure
Support activities

Human resource management

Research & development

Information & communication technology

Elicitation Order- Order-

of specific specific
customer inbound Customer
construction Order- service/
preferences logistics Order-
specific specific building a
operations outbound learning
Marketing/ General Order- logistics relationship
sales purpose
inbound neutral pre-
forecast operations
logistics

Primary activities

Order-neutral Order-specific
Source: Adapted from F. Piller (2006), p. 175.
E commerce services and support for Customer Retention

 What Is Customer Retention?

 Customer retention is the ability of a company to retain its customers
over a specified period. If a company has high customer retention, that
means its customers continue to rebuy the same products, to
resubscribe to the same services or, in some other way, continue
buying from that company.

 Prioritize Customer Service. ...

 Offer Personalized Product Recommendation. ...
 Develop Customer Loyalty Programs. ...
 Optimize Digital Marketing Campaigns. ...
 Craft Creative Social Media Marketing Strategy. ...
 Send Newsletters for Promotional Offers. ...
 Leverage User-Generated Content.
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E commerce services and support for Customer Retention

 Be Quick to Answer Simple Enquiries

 Imagine, a prospect or a customer is surfing your website/mobile app
and has a quick question. Nothing too complex or detailed. Something
very basic. They are looking for a quick chat with your rep. In addition,
they might even want to have a short call about it as well. All this and
much more can easily be done with a helpdesk software which
supports all the channels that your target audience frequents.

 2. Complete Visibility of Order Status

 3.Post Delivery Support and Vendor Management

 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
Internal and external influences on
Internet marketing strategy

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A smart new-generation CRM architecture capable of
seamlessly integrating a company's customer-serving
processes Integrating Processes to Build Relationships:
Customer Relationship Management
New CRM architecture differs from the old in the customer-
centered nature of its software applications.

The new CRM organizes business processes around the

customers' needs. Older CRM architecture focused on
internal processes in functional areas, such as marketing
and sales.
Measurements and feedback from the customer drive
improvements in the new CRM process.

The customer's viewpoint becomes integral to the sales and

service process, allowing it to change and adapt
with the customer's needs.
Integration Requirements of the Next-Generation CRM
Infrastructure
The hot topic, the buzzword, the sweeping technological trend
that business will ride into the next
century: integration, integration, integration. The next generation
of CRM applications is no exception.
Customer intimacy requires integration. For a CRM infrastructure
to be effective, it must integrate
• Customer content
• Customer contact information
• End-to-end business processes
• The extended enterprise, or partners
• Systems

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Integration of Customer Content

The ability to access, manage, and process all relevant customer content, including the seamless
integration of structured and unstructured customer data, has emerged as a key requirement for
CRM applications today.
For example, customer service agents and loan officers need access to various types of
structured data, such as customer and product information, and to unstructured data, such as
faxes, digitized voice messages, images of applications, and credit reports.

Without a holistic view of the customer and the ability to understand his or her desires, the
promise of CRM cannot be realized. Customer service will continue to be mediocre at best.

In the past, companies realized the importance of customer data and vigorously began collecting
customer information. But then they didn't know what to do with the volumes of data they had
collected.

With the levels of customer service attainable with a well-executed CRM strategy, companies are
learning how to use data they've gathered, integrating it into their daily operations.
Integration of Customer Contact Information
Excellence in contact management means not forcing your customers to play
same product every time they call for service or support.

Contact management (CM) is the electronic capture of customer information

with the capability to access and share this information throughout the
organization for sales and service purposes.

Today's managers must pay close attention to the firm's contact management
capabilities, as the number of opportunities for customer inter action has
increased significantly in recent years. Today, customer inquiries and
transactions can come from a variety of channels, including the call center and
the Internet. Capturing and sharing these interactions within an organization
should be top CM priority.

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Integration of End-to-End Business Processes

Today's restructuring efforts must focus more on identifying solutions that anticipate
and address customer needs and less on solving internal process problems. In order to
make this shift in focus, a company must first integrate its business processes across
functions.
For example, sales and service are often viewed as separate functions: Sales occur
during the sales cycle, and service is an after-sale activity.

When these functions are viewed as separate, customers often get different
answers, depending on whether they talk to a sales or a service representative. With so
many firms breaking down the barriers between the sales and service functions, keeping
them separate is no longer tenable if a company is to remain competitive.

In today's customer-driven environment, service must start before the sale and be
present in every interaction a customer has with the company.

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 Integration of the Extended Enterprise:
Interenterprise Customer Care

One form of this integration is partner relationship management

(PRM), which focuses on channel sales functions, allowing
resellers to work in real time with their vendors.

The goal of PRM is to create long-term competitive

differentiation by giving a company and its partners the ability
to trade information and to distribute leads and data about
common customers.
The greatest benefit of PRM is on distribution channels, long
underserved by the traditional CRM applications.

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Integration of Systems: Customer Application Integration
The demand for complete relationship management is driving the need to integrate telephony,
Web,
and database technologies to provide a 360-degree view of customer attributes and account
history.
For a company's CRM infrastructure to provide the fullest possible benefit, the following four
technologies
must work together:
• Legacy systems. —Many organizations have 20-year-old systems that cannot be discarded and
that must be integrated into the CRM infrastructure. The primary integration tools are middleware
and messaging software to increase the efficiency of extracting data from these systems.
• Computer telephony integration (CTI). —CTI allows companies to apply consistent business
logic in managing incoming calls. Real-time information about a caller is captured and linked
with customer information from a company's varied data repositories. This information is then
used to determine the resources needed to address the caller's needs

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Data warehousing. —Data warehouses extract data from
transaction systems and structure the information so it can
be effectively analyzed. In order to execute a CRM strategy,
tremendous volumes of data must be organized or massaged
in order to be used. Massaging information is no longer the
repetitive, mechanical process used by traditional transaction
systems.
• Decision support technology. —This technology uses
sophisticated analytical and modeling tools to assist
companies with making decisions about customer needs.
These decisions are based on accumulated relationship data.
Once in place, these systems, such as E.Phiphany,
help companies to retain their best customers.

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 Next-Generation CRM Trends

It's important to note that a CRM infrastructure alone isn't

sufficient. The growth of the CRM market is also occurring
at customer contact points, such as call centers and the
Web, and managers should pay close attention to the
customer dynamics at these contact points .

As CRMinfrastructures become more widely accepted, we

anticipate that customer needs and expectations
will change subtly across various channels, reflecting the
enhanced customer support capacity of
CRM systems.

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Managers not only need to understand the dynamics of call center and Internet
customer contact points but must also determine the impact that Internet-
delivered customer service will have on traditional communication channels of
support.

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Increased speed of deployment and realization of benefits. —Even after an
organization has decided to buy CRM software, additional time is still needed to acquire
the resources, the product expertise, and the hardware/network infrastructure to
deploy it.

Address all project deployment risk factors. —Many CRM projects fail because
teams focus solely on the technical aspects of deploying the system. These technical
aspects—deploying server hardware and installing and configuring software—are more
tangible during the implementation phase of a project and grab most of the project
team's attention.

Level financial commitment over time. —To deploy CRM software, a company has
to commit substantial resources up front to purchase license fees and annual
maintenance charges; set up development, testing, and production server
environments; integrate the application into the company's business processes; create a
help desk; and establish other components of a support infrastructure.

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Hierarchy of organisation plans
including e-marketing plans
 Selling-chain management
 Selling-chain management is an application framework that helps sell better—and more effectively
 —across all channels by establishing linkages between previously disconnected
 sales function within a company and the firm's sales processes.

Why is this type of application framework needed? The e-business landscape has created new
business and technical challenges that are straining traditional enterprise software models and
presenting substantial barriers to companies pursuing multichannel sales opportunities. As a
result, companies are seeking new ways to define and to deliver integrated sales solutions.

Case Study : The xerographic process, which was invented by Chester Carlson in 1938 and
developed and commercialized by the Xerox Corporation, is widely used to produce high-
quality text and graphic images on pape. PARC [A Research xerox company, XEROX ALTO] -
> Steve Jobs -> 1000000 Shares of Apple -> Sell GUI technology -> apple macintosh [1984];

Bill Gates introduce New GUI [Microsoft Windows]

CRM Infrastructure

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 Why have a CRM Infrastructure system?

 A CRM Infrastructure system helps businesses keep customer contact details up

to date, track every customer interaction, and manage customer accounts. It is
designed to help businesses improve customer relationships and also Customer
Lifetime Value (CLV). This is vital because of the vast amount of such data
businesses generate daily.
 The issue of customer data raises a challenge which CRM systems exist to
address. Every time someone picks up the phone and talks to a customer, goes
out to meet a new sales prospect, or follows up a promising lead, they learn
something new and potentially valuable. Traditionally, 
all this data went into analogue or unconnected media such as notebooks or
laptops, or even just stayed in people’s heads.

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Key features of a CRM system

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 Social media integration
 CRM platforms today can help businesses make the most of social media as
a source of new leads, intelligence on prospects and information for
customer service agents. All these new streams of social data are
integrated with the rest of the available data about a customer, to deliver
the fullest ever picture and a host of new actionable insights
 LEARN MORE ABOUT SOCIAL CRM 
 Harnessing artificial intelligence
 Some CRM systems can use artificial intelligence (AI) to learn from available
data in order to make recommendations based on company processes. In
this way, the system constantly and automatically improves, becoming
smarter and more targeted to the needs of customers.

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 Salesforce offers the world’s leading cloud-based CRM software,
offering a range of innovative and far-reaching CRM solutions that can
be effectively customised to the requirements of businesses of all sizes,
from global enterprises to start-up micro-enterprises. Key reasons for
choosing Salesforce include:

 All based in the cloud

 Scalable
 Easy to use
 Easy to customise
 A platform for growth
 Automatic updates and upgrades
 Mobile
 Integration options
 Track record of innovation

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 Importance of Technology in Customer Relationship

 IT is enabler and choosing right technology is

managerial acumen.
 First one has to find out initiatives which need
improvements through technology, Identifying
these initiative is one of the key tasks of a
manager.

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Importance of Technology in Customer Relationship

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 Technological Tools

 The application of technology is the most exciting, fastest growing, and

changing the way customers get information about products and services.
Technology includes all of the equipment, software, and communication links
that organizations use to enable or improve their processes, including everything
from simple overhead transparency projectors to laptop computers.

 Electronic Point of Sale (EPOS) : The main benefit of EPOS and retail
scanner systems is the amount of timely and accurate information they deliver.
Advances in the technology have significantly aided the scope for data analysis.
IN addition to the original scanner-related data on sales rate, stock levels, stock
turn, price and margin, retailers now have information about the demographics,
socio-economic and lifestyle characteristics of consumers. They can, in addition,
assess the impact of a whole host of variables-price, promotion, advertising,
position in store, shelf position, number of facings, and so on.

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 Sales Force Automation :

 These systems help in automating and optimizing sales

processes to shorten the sales cycle and increase sales
productivity.
 They enable the company to track and manage all qualified
leads, contacts, and opportunities throughout the sales cycle
including customer support

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 Salesforce offers the world’s leading cloud-based CRM software,
offering a range of innovative and far-reaching CRM solutions that can
be effectively customised to the requirements of businesses of all sizes,
from global enterprises to start-up micro-enterprises. Key reasons for
choosing Salesforce include:

 All based in the cloud

 Scalable
 Easy to use
 Easy to customise
 A platform for growth
 Automatic updates and upgrades
 Mobile
 Integration options
 Track record of innovation

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Customer Service Helpdesk :
 These applications help the company in automating the customer
support processes, which enable it to deliver high quality service to
their customers.
 Such software helps in logging the information about customers,
enquiries, and suggestions, etc. It also helps in directing these queries
to appropriate employees within the company.
 It maintains information regarding status of customer enquiries and
stores all support calls and related communications to final resolution,
continually updating the database accordingly.
 With an automated customer service, a company can reduce the costs
of maintaining its customer service department while at the same time
improving the level and quality of customer service.

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Call Centers :
 Call centre helps in automating the operations of inbound and
outbound calls generated between company and its customers.
 These solutions integrate the voice switch of automated telephone
systems with agent host software allowing for automatic call routing to
agents, auto display of relevant customer data, predictive dialling, self-
service interactive Voice Response systems, etc.
 These systems are useful in high volume segments like banking,
telecom and hospitality.
 Today, more innovative channels of interacting with customers are
emerging as a result of new technology, such as global telephone
based call centres and the Internet.

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Database Marketing
 The important aspect in database marketing is to understand the
customer in a comprehensive manner, and for that the company
should maintain a proper customer database.
 The customer database is an organized collection of comprehensive
information about individual customers or prospects that is current,
accessible and actionable for such marketing purposes as lead
generation, lead qualification and sale of a product or service or
maintenance of customer relationships.
 In short Database marketing is the technique of gathering all the
information available about the customer, leads, and prospects into a
central database and using that information to drive all the marketing
efforts. The information is stored in a marketing database and can be
used at both the strategic and tactical levels to drive targeted
marketing efforts.

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Technical Architecture
 Technical Architecture The technical architecture is driven by the meta data
catalogue. “Everything should be meta data-driven,” says Thornthwaite. “The
services should draw the needed parameters from tables, rather than hard-
coding them.” An important component of technical architecture is the data
staging process, which covers five major areas:

 • Extract - data comes from multiple sources and is of multiple types.

 Data compression and encryption handling must be considered at this area, if it
applies. • Transform - data transformation includes surrogate key management,
integration, de-normalization, cleansing, conversion, aggregation, and auditing.
 • Load - loading is often done to multiple targets, with load optimization and
support for the entire load cycle.
 • Security - administrator access and data encryption policies.

 • Job control - this includes job definition, job scheduling (time and event),
monitoring, logging, exception handling, error handling, and notification.

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Data mining
 Data mining is an activity that provides intelligence to the CRM initiative .It is not
just execution of exotic data extraction algorithms but a process (Brachman and
Anand, 1996)7 that enables informed decisions to be taken by the employees at
the customer contact point.
 The most commonly used techniques in data mining are:
 • Artificial neural networks: Non-linear predictive models that learn through
training and resemble biological neural networks in structure.
 • Decision trees: Tree-shaped structures that represent sets of decisions. These
decisions generate rules for the classification of a dataset. Specific decision tree
methods include Classification and Regression Trees (CART) and Chi Square
Automatic Interaction Detection (CHAID).
 • Genetic algorithms: Optimization techniques that use process such as genetic
combination, mutation, and natural selection in a design based on the concepts
of evolution.
 • Nearest neighbour method: A technique that classifies each record in a dataset
based on a combination of the classes of the k record(s) most similar to it in a
historical dataset (where k ³ 1). Sometimes called the k-nearest neighbor
technique.
 • Rule induction: The extraction of useful if-then rules from data based on
statistical significance.
Technical Architecture of CRM
Systems
 The rapid growth and expansion of CRM systems can be described in
three dimensions - business process, industry and technology.
 First, CRM systems have broadened support and automation of
business operations, from call center operation, workflow management,
e-procurement, to sales force automation (SFA).
 Second, CRM systems have been deployed in a wide variety of
industries from financial CRM, marketing CRM, and pharmaceutical
CRM to automotive CRM.
 Finally, the CRM technology has evolved from traditional CRM, online or
Web based CRM, Hosted CRM, and Mobile CRM to Wireless CRM.

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 A CRM system consists of three major components:

 • CRM Software - This is the backend of CRM systems which usually includes a
relational database for storing persistent information, a software applications for
handling business logics.
 • Client Hardware - It could be a PC or handheld devices for accessing
enterprise information.
 • Mobile Middleware - A middleware facilitates the interactions between CRM
software and access devices or PCs. The Mobile middleware provides great
benefits for mobile workers to access and share enterprise information across
organizational lines and locations.
Emerging impact of e–commerce on CRM:
 Emerging impact of e–commerce on CRM: In a fast changing Internet world
there are very clear trends that are emerging:
 • Speed: people expect service at internet speed. • Increase of globe market
space: More and more people, communities across the globe are able to build
relationships.
 • Around the clock availability: Internet offers round the clock availability of gods
and services 24X7.
 • Expansion of partners: Internet offers exponential ability for the organization
and people alike to partner with suppliers and customers alike across the globe.
• Disappearance of Time Zones: The only time zone that is applicable is Internet
time zone.
 Vertical E-market Place: Industry specific market places such as being formed by
Auto giants where organized buyers and sellers can meet, list, negotiate, order
and track delivery.
 • Buy sites and sell sites: Where consumers or organizations alike can buy and
sell online through online shopping mart concept.
 • Horizontal market place: Services that run across different vertical e-market
places or business to customer (B2C) Buy and sell sites. Such sites could be
delivery sites, insurance etc • Use of Internet to optimize “Supply Chain
Management”: While earlier organizations use to feel EDI “rather an expensive
preposition” for limited number of partners organizations, organizations are in a
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Recent Trends in CRM:
 1) Analytical CRM:-Firms are now encouraging their analytical teams to work closer with
their customers as it offers ample room for growth in profitability. They are endeavoring to
see what sort of analysis actually matters to the customer through finding out what
contributes to their highest satisfaction. The interest in this new functionality is easily one
of the fastest growing trends in the industry.
 2) CRM - Mobile and Social networking:-Another hot trend in the CRM industry is the
“mobile” interest. CRM has currently gone mobile and is easily assessable almost anywhere.
This new trend is fast gaining ground as the need for easy access is fundamental to any
executive. Social networking sites are also being mined to garner the benefits of CRM.
 3) Outsourcing CRM:-Outsourcing CRM is yet another new trend gaining ground. Sales
force leads the pack in this area. Despite initial hesitation in this area, firms now realize
that it is a good bet. The lure in this area is the lower costs involved, contributing to overall
profitability.
 4) CRM and Cloud Computing:-Cloud computing is a relatively new term referring to
scalable, virtualized computing resources available on the Internet. There is now a growing
demand for CRM cloud computing solutions and more vendors are jumping to satisfy this
demand. Initially, it was a rent-versus-own argument. There are pros and cons to both
approaches, but when it comes to rescuing small businesses from a recession-made dry
spell, the cloud is almost always the rainmaker’s choice —

COMP7880-IC-59
 The growth of database marketing has been
facilitated by:
 The powerful processing capability and the
immense storage capacity of the state of the
art computers
 The manner in which the telecommunication
technology is harnessed to make the
customer and market data available to the
wide variety of staff involved in the marketing
and sales office.

COMP7880-IC-60
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
Usage of detailed e-marketing plans
in UK e-commerce organizations

Source: EConsultancy (2008)

 The SOSTAC® planning framework applied to
digital Internet marketing strategy development

Figure 4.4 Source: Chaffey and Smith (2008)

Linkages between CRM and related
marketing approaches
 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
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?
CRM applications
1. Sales force automation
2. Customer service management
3. Managing the sales process
4. Campaign management
5. Analysis
CRM data
 Personal and profile data
 Contact details
 Preferences
 Transaction data
 Sales history
 Communications data
 Campaign history
 Research / Feedback / Support queries
 Contact reports (B2B)
Categoriszng customers according
to value
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
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
Options for mass customization and
personalization using the Internet
Summary of an effective process of permission-
based online relationship building
Matrix of customer touch points for collecting
and updating customer e-mail contact / profile
Extent to which different types of segmentation
variables tend to be predictive of response
Elements of the IDIC framework
Different representations of lifetime
value calculation
An example of an LTV-based
segmentation plan
Relationship between service quality,
customer satisfaction, loyalty
 Social networking offers communication
motives of discovery, homogeneity, sharing

Social networking site

A Peers B
Matching
Person A Peers Peers Person B
Profile
Profile
• Contact data
• Contact da
• Multimedia Peers Peers
• Multimedia
• Personal
• Personal
network Instant Boards/ Chats VoIP Private
• … messaging groups messages network
• …
Communication tools
 Internet help dissolve the trade-
off between richness and reach
Richness
• bandwidth
• customization
• interactivity
The Internet

Reach (Number of
people interacting)
Sales- Tele Postal TV
person marketing mailing advertising
Source: Adapted from P. Evans and T. Wurster (1999)
 When seeding a message, one has to
concentrate on 3 types of people

People with an extraordinary high number of

Connectors contacts, friends and acquaintances, who ideally
belong to ‘different worlds’; i.e. different areas of life.
People who have expertise in various products,
Maven prices or places. They enjoy sharing their
knowledge with friends and acquaintances on
Internet platforms.
Salesmen People who have the skills to persuade others
when they are unconvinced.

Source: M. Gladwell (2000).

 ‘Long tail’ represents large addition to
10,000
product range of traditional retailers

Songs
Downloads

available at
Rhapsody Songs
and Wal- available
Mart only at
Rhapsody
5,000

0 25,000 50,000 100,000 900,000

Titles, ranked by popularity

Source: Adapted from Anderson C. (2006).
 ‘Long tail’ of social networking provides access
to previously inaccessible market niches

Contact
pool
acessible
Networking

via
frequency

traditional
networking Additional
tools network
potential of
online
networking

Contacts ranked by
frequency
Source: Adapted from Anderson C. (2006).
 Implications for companies to access
and leverage the ‘long tail’

By giving people access to a large pool of

Lengthen the individuals, SNS lengthens the tail of
tail potential social contacts.
SNS uses a variety of mechanisms to enrich
Fatten the tail communication between users and thereby fattens
the tail by increasing the frequency of interaction.
Drive demand This can be achieved by shifting users’ attention
down the tail to content that normally is not as easy to find.

Source: Anderson C. (2006).