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INTERNET MARKETING : INTEGRATING ONLINE AND OFFLINE STRATEGIES. Customer Relationship Development and Management. GOOD ACQUISITION/CONVERSION. TARGETED; POTENTIAL HIGH CLV. RETAINING CUSTOMERS IS CHEAPER THAN ACQUIRING THEM. Average Firm Looses 50% Of Customer Base Every Five Years
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INTERNET MARKETING:INTEGRATING ONLINE AND OFFLINE STRATEGIES Customer Relationship Development and Management
GOOD ACQUISITION/CONVERSION TARGETED; POTENTIAL HIGH CLV
RETAINING CUSTOMERS IS CHEAPER THAN ACQUIRING THEM • Average Firm Looses 50% Of Customer Base Every Five Years • Reducing Defections Increases Profits • Many Customers Who Defect Were Satisfied • Extremely Satisfied Customers Are More Likely To Repurchase • Satisfied Customer Tells Five People While Dissatisfied One Tells Nine
CLV FOR APPAREL PURCHASES • Spent 67% More In Months 31-36 than 1-6 • 3 Referrals After 1st Purchase; 7 Referrals After 10 • Loyal Customers Would Buy Other Product Lines
ZAPPOS > CUSTOMER SERVICE • 7.4 Million Customers • 3.3 M. Made a Purchase in Last 12 mo. • 75% of Orders > Returning Customers • They Order 2.5 Times More Often • They Have Higher Average Order Sizes • 43% of New Customers from WOM http://www.christine.net/2008/02/zappos-shares-s.html
Transactional/MassMedia No Direct Contact with Customer No Ability to Identify and Track Relationship Often Owned by Channel (e.g. Retailer) Cost of Database /Gross Margin Relational Identify, Focus on Individual Customer Target Communication Growth in CLV On-Going Dialogue Seamlessly Satisfactory Customer Experience TRANSACTIONAL vs. RELATIONSHIP
‘DING’ WIDGET • 2 years • 2 M Downloads • $150M Sales http://www.videoactivereport.com/southwest_airlines_ding_widget_racks_up_150_million_in_ticket_sales
FOUNDATIONS OF CRM Sales Force Automation Customer Service Marketing
SALES FORCE PRODUCTIVITY • Productivity Tools such as • Call Reporting, Order/Inventory Status • Sales Lead Generation Programs • Telemarketing • Management Tools • Sales Forecasting, Reporting
RELATIONSHIP FEATURES • Land’s End • Multiple Ways To Contact, “Virtual Dressing Room,” Newsletter, Languages, Custom Products, Co-Browsing and More • Yellow Freight • Continuous Improvement of Products and Self-Service Options, My Yellow, My Pickup and More • ASPCA • Supportive, Informative Content; Registration Page with Strong Incentives; Importance of Personalized Email
ASPCA INCENTIVES TO REGISTER • Ability to Send ECards • Weekly Email Newsletters • State-by-State Animal Protection Information • Access to Archives of Their Magazine • ASPCA Rewards Program • Special Offers from ASPCA Online Store www.aspca.org
STRATEGIC IMPERATIVE RELATIONSHIP MARKETINGIS A PROCESS,NOT A PROJECT
KEY CONCEPTS • Targeting • Personalization • Customization
PERMISSION-BASED TARGETING Home Page Preferences Page Figure8-9
PERSONALIZING A WEB PAGE Figure 8-10
PERSONALIZING EMAIL NEWSLETTER Figure 8-10
WHAT IS A COOKIE? • TYPES OF COOKIES • Session vs. Enduring • Third Party vs. Site
TYPES OF PERSONALIZATION • Rules-Based • User-Controlled • Information-Driven
A GLOBAL LEADER British Supermarket TescoIs A Leader In CLV-Driven Loyalty ProgramsAdministered Through Their Web Site
UNDERSTAND CUSTOMER BEHAVIOR • Over 11 Million Club Card Holders • Accumulate Points with Purchases • “Thank You” Vouchers 4 Times/Year • Redeem at Tesco, For Club Offers • Newsletter Mailings • “Over 80,000 Offer Combinations In Each Mailing” www.tesco.com
EACH CUSTOMER MEASURED EACH WEEK Source: Dunhumby
Clubcard Statement Coupons at Till Lifestyle Mailings Club Mailings / Trade Driver Mainstream, Finer Foods, Healthy Kids Club, Healthy Living DRIVES MARKETING PROGRAMS Tesco Targeted Media Source: Dunhumby
Tesco COOP PROMOTIONS WITH BRANDS Current http://www.tesco.com/clubcard/clubcard/
RECENT DEVELOPMENTS Tesco Fresh N Easy – US http://online.wsj.com/article/SB123595003457704779.html?mod=djemITP Profits Up (Apr 08) – Asia/ E. Europe Set up Full-Service Bank (Jul 08) - RBS
METRICS ‘STEERING WHEEL’ http://www.tesco-careers.com/home/about-us/visions-and-values???
FACEBOOK METRICS http://pagedata.insidefacebook.com/
CRITERIA FOR LOYALTY PROGRAMS • Be Easy To Use • Provide Immediate Rewards • Have Value To Customer • Be Targeted To Behavior Change • Be Affordable • Have A Published Exit Strategy
WHY CRM PROGRAMS FAIL • Initiative Launched without Comprehensive Strategy • Not Integral to the Business Strategy • Based on What Worked for Another Company • Launched without Concern for Effective Enterprise and Customer Interfaces • Considered an IT Project Instead of a Business Initiative • Launched without Defined Objectives and Metrics • Considered a One-Time Event • Lack of a Customer-Centric Culture • Lack of • Top Management Leadership • Employee Buy-In
CUSTOMER PROFILES • Affluent professionals who want the best technology and entertainment experience • Active younger males who want the latest technology and entertainment • Family men who want technology to improve their lives—practical adopters of technology and entertainment • Busy suburban moms who want to enrich their children's lives with technology and entertainment • Small-business customers who can use Best Buy's products and services to enhance the profitability of their businesses Source: Peppers and Rogers, 2005
CREATED PERSONAS • The Segment • Busy suburban moms who want to enrich their children's lives with technology and entertainment • The Persona – Detailed Description • "Jill“ - a soccer-mom type who is the main shopper for the family but usually avoids electronics stores. She is well-educated and usually very confident, but she is intimidated by the products at Best Buy and the store clerks who spout words like gigabytes and megapixels.
A “JILL” STORE “Profiling” http://www.washingtonpost.com/wp-dyn/content/article/2005/08/16/AR2005081601906.html “Feminine Side” http://www.usatoday.com/money/industries/retail/2006-12-20-best-buy-usat_x.htm
MORE PROFILES – MORE EXECUTIONS Fascinating Post – Leaked Internal Documents http://consumerist.com/368894/leaks-best-buys-internal-customer-profiling-document
CRM SUCCESS FACTORS • Good Customer Data • Quality Processes and Systems • Organizational Resources and Commitment • Software is Necessary, but not Sufficient
SUMMARY • CRM Key To Enterprise Profitability • Customer Lifetime Value Key Metric • Transactional Marketing Doesn’t Meet Needs • CRM (Sales Force Automation, Marketing, Customer Service) • “A Process, Not A Project” • Profiling, Targeting, Personalization • Loyalty Programs Can Be Helpful • Seamless Customer Experience • All Touchpoints • Acquire Right Customers Retain Them