CRM AND DATABASE

MARKETING
DIGITAL MARKETING
MMRK831
CUSTOMER RELATIONSHIP MANAGEMENT
(CRM) DEFINED
CRM is an approach adopted by an organization to
build and sustain long term business with customers.
It is about acquiring customers and retaining them to
develop their lifetime value to the business.
CRM is about forming long term relationships with
customers and goes beyond short term transactions.
Customer relationships are the key to unlocking the
lifetime value of the customer.
Relationships make customers loyal.
CUSTOMER RELATIONSHIP MANAGEMENT
(CRM) DEFINED
CRM is about treating each customer uniquely.
“our vision is that if we have 20 million
customers, then we should have 20 million
stores.” Jeff Bezos, CEO, Amazon.com.
I know who you are, I remember you. I get you
to talk to me. And then because I know
something about you, my competitors don’t
know, I can do something for you my competitors
can’t do-not for any price.” (Newell, 2000).
CUSTOMER RELATIONSHIP MANAGEMENT
The digital environment offers a host of methods for
managing customer relationships at lower cost.
The new technologies permit firms to collect a
variety of customer information which can be used
to offer personalised service and form relationships.
Firms should use CRM tools to monitor customer
behaviour, respond with appropriate product
offerings or communication and monitor the
response to these messages.
CUSTOMER RELATIONSHIP MANAGEMENT
AND PERMISSION MARKETING
Dialogue should endear customers to the firm.
Offer an incentive so as to receive permission to
enter into a relationship.
Purpose of incentive is for customer to provide
e-mail address and personal details.
CUSTOMER RELATIONSHIP MANAGEMENT
AND PERMISSION MARKETING
Permission marketing is a term coined by Seth
Godin (1999).
It is about seeking the customer’s permission
before engaging in a relationship and providing
something in exchange (Godin, 1999).
Customers must consent to receiving marketing
communication often by e-mail or sms.
Business can establish how dialogue emerges
between the firm and customers or among
customers themselves.
CRM AND CUSTOMER PROFILING
Successful CRM is dependent on profiling the
customer i.e. Identifying customer’s product
interests, demographics, role in the buying
decision.
Enables company to identify potential profitable
customers so as to offer appropriate incentives.
N.B. Information registration should not be
upfront since it acts as a barrier to entering a
site.
Database marketing, cleaning the database
and profiling
Nowadays databases are sophisticated.
Contain purchase history, value of purchases,
response to promotions and special offers, data
from cookies and personal details, predictive
data, frequency of purchases, demographic
information.
Vital that the database collects the right
information.
 Big data and crm
 large volume of data from sources such as web
analytics, social media, graphic media, sponsored
links, sociodemographic data, among others, and
which does not depend on the size of the organization.
(13) (PDF) Big Data as a Customer Management
Relationship Tool. Available from:
https://www.researchgate.net/publication/310050440_
Big_Data_as_a_Customer_Management_Relationship_
Tool
[accessed Mar 05 2021].
 5 Vs model; volume, velocity, and variety, value, and
veracity of Big Data
Database marketing, cleaning the database
and profiling
Effective CRM relies on having a good database.
Database is the collection of customer information from
many channels; websites, cookies, call centres and
surveys.
E-commerce firms must remember that customers value
their communication
Information gathering must not be invasive
Uses of the data
Answer customer queries.
Build customer profiles
Generate personalised communication
Ensuring effective relationships online
Contact must not be too intense.
Contact must be both online and offline.
The medium must suit the target market.
Determine customer preferences with regard to
the manner in which they want to receive
information about special offers, reminders or
announcements.
Timing must be appropriate.
Information must be stored in databases.
Ensuring effective relationships online
Use information in database to tailor the
communication to the customers’ individual
preferences.
Use e-mails to stay in touch with customers.
Updates of insurance claims, motor repairs,
staying in touch with customers after a purchase,
special offers, new products.
Offer social network forum for customers to
communicate amongst themselves.
Process of online relationship building
Identify customers on the website and track them
with cookies.
Differentiate customers.
Build profiles of customers and develop segments
based on the profiles.
Interact with customers to get more information and
develop special products for targeted segments.
Communicate with customers using customised or
personalised communication to maintain a
relationship with them.
 Benefits of E-CRM
E-CRM enables the provision of online services such
as tracking the status of a parcel which has been sent
by courier or tracking the progress of a loan application.
E-CRM is cheaper
It is fast because most of the responses are automated.
Help e-commerce organizations build relationships with
customers.
Customers receive information that is more relevant,
tailored and interactive.
 Stages of E-CRM
Attract customers with online and offline
communication.
Capture data-use the Internet to obtain customer data.
Get closer-use the data and CRM tools to make
contact with the customers and to learn more about
them.
Embrace them-make the customer feel loved.
Golden handcuffs-make the experience so personal
or special that the customer not only becomes loyal but
there is lock in and the customer will not want to leave.
 E-CRM and personalization
Information in the database allows the
firm to personalize e-mails, SMSs and
even web pages when the customer logs
on with a password.
Personalization enhances relationships.
Creates a sense of ownership for
customers.
 Forms of personalization
Customization-allow customers to exert their
preferences e.g. web page design; mode of
communication
Individualization-use of information from
cookies and other tools to deliver tailored
content.
In-group characterization-consumers receive
content, communication or offers which are
designed for people like them.
 Online differentiation
Differentiation is “the process of adding a set of
meaningful and valued differences to distinguish
the company’s offering from competitors’
offering” (Kotler, 2003:315).
Online differentiation strategies
Site environment/atmospherics
Offline it refers to in-store ambience.
Can also be utilized online. Online it refers to the
look and feel of the site.
 Online differentiation
can be likened to the physical evidence.
Site must be:
 user friendly.
Easy to download.
Portray accurate product and company
information.
Easy to navigate
 Online differentiation
Tangibilizing the intangible
Create 3D images of your product
Take consumers on virtual tours
Have product image enlargements trial
downloads
Customer reviews
 Online differentiation
Building Trust
Key issue on the Internet especially if customers are
paying online or their information is tracked for
personalized service or channel management.
Define company’s private policy and strictly adhere
to it.
Use a safe and encrypted payment system
Use digital signatures
Provide contact details of personnel in your company
 Online differentiation
Efficiency and timely processing
Make it easy for customers to place orders.
Deliver product timely. Have alliances to assist in
distribution.
Deliver what is promised.
 Online differentiation
Pricing
Monitor competitor prices
Offer premium prices by offering unique support
services e.g. customization
Offer potential customer savings
Price differentiation can be easily imitated.
Non pricing differentiation is more enduring.
 Online differentiation
CRM
Build customer relationships with customers
Engage in seamless communication
Engage in knowledge management
 Online differentiation
Enhance the customer experience
Create social networks
Allow consumers to configure the product
Take customers for virtual tours