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E-Marketing 5/E Judy Strauss and Raymond Frost. Chapter 15: Customer Relationship Management. Chapter 15 Objectives. After reading Chapter 15, you will be able to: Define customer relationship management and identify the major benefits to e-marketers.

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E marketing 5 e judy strauss and raymond frost

E-Marketing 5/EJudy Strauss and Raymond Frost

Chapter 15: Customer Relationship Management

Chapter 15 objectives
Chapter 15 Objectives

  • After reading Chapter 15, you will be able to:

    • Define customer relationship management and identify the major benefits to e-marketers.

    • Outline the three legs of CRM for e-marketing.

    • Discuss the eight major components needed for effective and efficient CRM in e-marketing.

    • Differentiate between relationship intensity and relationship levels.

    • Highlight some of the company-side and client-side tools that e-marketers use to enhance their CRM processes.

The cisco story
The Cisco Story

  • Cisco, a $34.9 billion B2B marketer, provides internet networking systems for corporate, government, and education clients.

  • The internet plays a major role in acquiring, retaining, and growing customer business.

    • 3 million users log on to the Cisco site each month.

    • Cisco has become adept at online customer relationship management (CRM).

The cisco story cont
The Cisco Story, cont.

  • Cisco set a goal to migrate customers to the online channel.

    • In 1996, 5% of their customers placed orders on the Web site.

    • Today 92.2% of their orders come through the internet.

  • Site user satisfaction is 4.7 on a 5.0 scale.

  • Can you think of other B2B marketers that utilize the internet as successfully as Cisco?

Relationship marketing defined
Relationship Marketing Defined

  • Relationship marketing is about establishing, maintaining, enhancing, and commercializing customer relationships through promise fulfillment.

  • Today it also means two-way communication with individual stakeholders, one at a time.

  • Business 2.0 callsrelationship capital the most important asset a firm can have.

  • A firm using relationship marketing focuses more on wallet share than on market share.

Continuum from mass marketing to relationship marketing
Continuum from Mass Marketing to Relationship Marketing


  • Firms can establish and maintain relationships with different stakeholder groups through internet technologies:

    • Employees who need training and access to data and systems used for relationship management.

    • Business customers in the supply chain.

    • Lateral partners, such as other businesses, not-for-profit organizations, or governments.

    • Consumers who are end users of products and services.

Customer relationship management
Customer Relationship Management

  • CRM is the process of acquiring, servicing, retaining, and building long-term relationships with customers.

  • The benefits of CRM include:

    • Increased revenue from better targeting.

    • Increased wallet share with current customers.

    • Retention of customers for longer time periods.

  • The cost of acquiring a new customer is typically 5 times higher than the cost of retaining a current customer.

Crm s facets
CRM’s Facets

  • CRM has 3 facets:

    • Sales force automation (SFA).

    • Marketing automation.

    • Customer service.

  • Used primarily in the B2B market, SFA helps salespeople to:

    • Build, maintain, and access customer records.

    • Manage leads and accounts.

    • Manage their schedules.

Marketing automation customer service
Marketing Automation & Customer Service

  • Marketing automation software aids marketers in effective targeting, marketing communication, and monitoring of customer and market trends.

    • Marketing automation software takes data from Web sites and databases and turns it into reports for CRM efforts.

  • Customer service is critical to building long-term customer relationships.

    • Most customer service occurs post purchase when customers have questions or complaints.

    • Key tools include e-mail, online live chat, Web self-service, and package tracking using PDAs.

8 building blocks for successful crm
8 Building Blocks for Successful CRM

  • The Gartner Group model of CRM covers 8 building blocks:

    • CRM vision

    • CRM strategy

    • Valued customer experience

    • Organizational collaboration

    • CRM processes

    • CRM information

    • CRM technology

    • CRM metrics

1 crm vision
1. CRM Vision

  • To be successful, the CRM vision must start at the top and filter throughout the company to keep the firm customer focused.

  • One key aspect of CRM vision is how to guard customer privacy.

  • The benefits of using customer data must be balanced by the need to satisfy customers and not anger them.

  • TRUSTe provides its seal and logo to any Web site meeting its privacy philosophies.

2 crm strategy
2. CRM Strategy

  • E-marketers must determine their objectives and strategies before buying CRM technology.

  • Many CRM goals refer to customer loyalty.

    • An important CRM strategy is to move customers up the relationship intensity pyramid (as discussed in Chapter 10).

  • Another CRM goal involves building bonds with customers on 3 levels:

    • Financial

    • Social

    • Structural

3 valued customer experience
3. Valued Customer Experience

  • Consumers are constantly bombarded by marketing communications and unlimited product choices.

    • According to Jagdish Sheth (1995), the basic tenet of CRM is choice reduction.

    • Many consumers are “loyalty prone,” and will stick with the right product as long as its promises are fulfilled.

  • Synchronous and asynchronous technologies can provide automated and human services that solve customer problems.

4 organizational collaboration
4. Organizational Collaboration

  • Marketers collaborate within and outside the organization to focus on customer satisfaction.

  • Online retailers can seamlessly link the “back-end” (e.g., inventory and payment) with the “front-end” CRM system and the entire supply chain management system (SCM).

    • CRM-SCM integration allows immediate inventory checking at the wholesaler or manufacturer.

  • Extranets, two or more intranet networks that share information, allow CRM-SCM integration.

5 crm processes
5. CRM Processes

  • Firms use specific processes to move customers through the customer care life cycle.

Crm processes cont
CRM Processes, cont.

  • CRM processes are used to:

    • Identify customers.

    • Differentiate customers.

    • Customize the marketing mix.

    • Interact with customers.

6 crm information
6. CRM Information

  • The more information a firm has, the better value it can provide to each current or prospective customer.

  • Firms gain much information by tracking behavior electronically.

    • Bar code scanner data.

    • Software that tracks online movement, time spent per page, and purchase behavior.

7 crm technology
7. CRM Technology

  • Technology, such as toll-free numbers, electronic kiosks, and voice mail, greatly enhance CRM processes.

  • The internet forms the centerpiece of a firm’s CRM abilities.

    • Cookies, Web logs, bar code scanners help to collect information about consumers and their behaviors.

  • Firms use company-side tools to push customized information to users.

  • Client-side tools allow the customer to pull information that initiates the customized response from the firm.

Crm software
CRM Software

  • The leading software firms in the large enterprise B2B market include:

    • Siebel Systems

    • SAP

    • Oracle

    • Onyx Software

8 crm metrics
8. CRM Metrics

  • E-marketers use numerous metrics to assess the internet’s value in delivering CRM performance.

    • ROI

    • Cost savings

    • Revenues

    • Customer satisfaction

  • One study named customer retention, ROI, and customer lift (increased response or transaction rates) as the most important metrics.

Crm metrics cont
CRM Metrics, cont.

  • One very important CRM metric is customer lifetime value (LTV).

    • The LTV calculation demonstrates the benefits of retaining customers over time and the need for building wallet share.

    • LTV also illustrates that no matter how good customer retention is, the firm must still focus on customer acquisition activities.

  • Exhibit 15.21 illustrates customer LTV.

10 rules for crm success
10 Rules for CRM Success

  • Recognize the customer’s role.

  • Build a business case.

  • Gain buy-in from end users to executives.

  • Make every contact count.

  • Drive sales effectiveness.

  • Measure and manage the marketing return.

  • Leverage the loyalty effect.

  • Choose the right tools and approach.

  • Build the team.

  • Seek outside help.