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9 CUSTOMER RELATIONSHIP
MANAGEMENT
ABOUT CRM
You have a job interview for a company such as Future Shop or Staples
working in the CRM team
How would you explain the terms:
 CRM, E-CRM
Why does the company have a CRM function?
 Why is CRM different?
 What are benefits of this approach?
What is CRM?
It is a strategy used to learn more about customers' needs and behaviors in order
to develop stronger relationships with them.
 http://www.cio.com/article/40295/CRM_Definition_and_Solutions
An approach to building and sustaining long-term business with customers
Figure 9.1
The four classic marketing activities of customer relationship management
CUSTOMER EXTENSION TECHNIQUES FOR
ONLINE RETAILERS
(a) Re-sell
 Selling similar products to existing customers–particularly important in some B2B contexts as
re-buys or modified re-buys.
(b) Cross-sell
 Sell additional products which may be closely related to the original purchase, but not
necessarily so. Example ?
(c) Up-sell
 A subset of cross-selling, but in this case, selling more expensive products
(d) Reactivation
 Customers who have not purchased for some time, or have lapsed, can be encouraged to
purchase again.
(e) Referrals
 Generating sales from recommendations from existing customers, for example member-getmember deals.
MARKETING APPLICATIONS OF CRM
A CRM system supports the following 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-commerce sites, 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 further later in the chapter, customers
characteristics, their purchase behaviour and campaigns can be analysed in order to
optimize the marketing mix
E-CRM
Applying… Internet and other
digital technolog (web, e-mail,
wireless, iTV, databases)
to… acquire and retain customers
(through a multichannel buying process and
customer lifecycle)
by… improving customer
knowledge, targeting, service
delivery and satisfaction
E-CRM – BENEFITS
Targeting more cost-effectively.
Achieve mass customization of the marketing messages
Increase depth, breadth and nature of relationship
A learning relationship can be achieved using different tools
throughout the customer lifecycle
Lower cost
CONVERSION MARKETING
Using marketing communications to change the potential customers to
actual and existing customers to repeating customers
Many companies invest primarily in customer acquisition but not
enough in conversion.
What can be done to improve the conversion rate?

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
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Web browsers or offline audiences to site visitors;
Site visitors to engaged site visitors
Engaged site visitors to prospects
Prospects into customers
Customers into repeat customers
A model of the relationship between different aspects of trust and
consumer response based on the categories of Bart et al. (2005)
Figure 9.4
Percentage who consider the different information sources as important
when researching/considering a product or service
Figure 9.5
Source: BrandNewWorld: AOL UK/Anne Molen (Cranfield School of Management)/Henley Centre, 2004
Figure 9.6
Online and offline communications techniques for e-commerce
Measures used for setting campaign objectives or assessing campaign
success increasing in sophistication from bottom to top
Figure 9.7