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Electronic Customer Relationship Management E-CRM Slide 1 of 43 Introduction 1. New type of Customers & firms 2. Digital Firms and globalization 3. IS and researches 4. IT managers Slide 2 of 43 Introduction Today’s Customers • • • • • • • Are sophisticated. Are price sensitive. Are demanding. Live time-compressed lives. Want their needs met. Want their products fast with greater convenience. Have unprecedented control. Slide 3 of 43 Introduction Today’s companies are: • • • • • • • Are digital companies. Flatten (less hierarchy). Location Independent. Decentralization. Flexibility. Low transaction and coordinating cost. Using strong IT infrastructure ( Enterprise software, hardware, Internet, LAN,WAN etc....). Slide 4 of 43 Introduction Why the Need for Satisfied Customers Cost up five to six times more to get new customers. They buy more. Take less time. Bring in new customers. Less price sensitive. Great advertisers. May be able to charge 10 percent more than competitors. Dissatisfied customers tell others, as many as 20 others about there experience. Slide 5 of 43 Introduction Why the Need for Satisfied Customers FedEx promises customers to “absolutely, positively” get your package to its destination on time, and it delivers on its promise. Slide 6 of 43 Measuring Customer Satisfaction • • • Are you getting new customers? Are good customers leaving? What are you doing to keep customers loyal? Response time, this should be targeted from 24 to 48 hours at most. Security and privacy, (secure payments, information). Return Policy, this will increase customer trust and loyalty. Ease return products of service will make customer more satisfaction. Navigability, Easy to navigate the firm Web site Quality assurance, every think must work properly Slide 7 of 43 Learning about Consumer Behavior Online Reasons for not making purchases 9.1 unfavorable experience 01 enjoy shopping off line 51 61 too long to download the screen cannot ask questions 32 42 Reasons deleverly time security and safty 23 cannot return item easly 44 judging the quality of product 15 chipping charges 0 10 20 30 40 50 60 percentages Reasons for not making purchases Source : Temking 2002 Slide 8 of 43 Learning about Consumer Behavior Online Model of consumer behavior online • Social variables—people are influenced by: Family members, friends, co-workers, “what’s in fashion this year” • Cultural/community variables—where the consumer lives • Other environmental variables: Available information, government regulations, legal constraints, situational factors Slide 9 of 43 Consumer Behavior Online Slide 10 of 43 Consumer Decision Making Process Roles people play in the decision making process Initiator Influencer The person who suggests buying a particular product of services The person whose advise carries some weight in making a final purchasing decision. Decider The person who makes the buying decision Buyer The person who makes the actual purchase. User The person who uses the product or service. Slide 11 of 43 Consumer Decision Model In WEB Purchasing 5 phases of the generic purchase decision model: Slide 12 of 43 Consumer Decision Making Process 1 Need Recognition 2 Information Search 3 Evaluation of Alternatives 5 Purchase Outcome 4 Purchase Slide 13 of 43 One-to-One Marketing and Personalization in EC One-to-one marketing: Marketing that treats each customer in a unique way Personalization—the matching of services, products, and advertising content to individual consumer Slide 14 of 43 One-to-One Marketing and Personalization in EC Slide 15 of 43 Market segmentation Market segmentation: The process of dividing a consumer market into logical groups for conducting marketing research, advertising, and sales Market research tools data mining data warehousing Slide 16 of 43 Tools for Gathering info. Web bugs: Tiny graphics files embedded on e-mail messages and in Web sites that transmit information about the user and their movements to a Web server Spyware: Software that gathers user information, through an Internet connection, without the user’s knowledge Slide 17 of 43 Tools for Gathering info. Company-Side Tools (push) Description Cookies Cookies are small files written to the user’s hard drive after visiting a Web site. When the user returns to the site, the company’s server looks for the cookie file and uses it to personalize the site. Web log analysis Every time a user accesses a Web site, the visit is recorded in the Web server’s log file. This file keeps track of which pages the user visits, how long he stays, and whether he purchases or not. Data mining Data mining involves the extraction of hidden predictive information in large databases through statistical analysis. Real-time profiling Real-time profiling occurs when special software tracks a user’s movements through a Web site, then compiles and reports on the data at a moment’s notice. Collaborative filtering Collaborative filtering software gathers opinions of like-minded users and returns those opinions to the individual in real-time. Slide 18 of 43 MyPoints Rewards Members for Time Spent Online Source: www.mypoints.com Slide 19 of 43 Learning about Consumer Behavior Online Source: WebTrends product. (www.webtrends.com) Slide 20 of 43 Consumer Behavior Online Example analysis from a WebTrends (www.webtrends.com Slide 21 of 43 American Airlines Offers Personalized Web Sites • American Airlines (aa.com) unveiled a the most advanced personalized, one-to-one interactions and transactions on its Web site in 1998 Intelligent agents enable the generation of personalized Web pages for each of its 1 million registered, travel-planning customers • Broadvision’s application dynamically matches customer profiles to a database Output of the matching process triggers the creation of a real-time customized Web page Slide 22 of 43 American Airlines Offers Personalized Web Sites • The use of intelligent-agent technology built a considerable edge over AA’s competitors • Personalizing Web pages is becoming more important in: – Increasing customer loyalty – Cementing relationships with customers – Fostering the community of AA frequent flyers Slide 23 of 43 Market Research for EC • Process of gathering and analyzing information related to customers, and markets. • Tools: – – – – Observations Surveys Experiments Interviews Slide 24 of 43 Market Research for EC (cont.) Aim of marketing research is to: discover marketing opportunities and issues establish marketing plans better understand the purchasing process evaluate marketing performance develop advertising strategy Slide 25 of 43 Market Research for EC (cont.) Limitations of online market research 1. There may be too much data available. 2. Responses may be inaccurate. 3. Technical problems may cause a loss of respondents. 4. There are ethical and legal considerations. 5. It is difficult to build representative samples Slide 26 of 43 CRM and Its Relationship with EC Customer relationship management (CRM): A customer service approach that focuses on building long-term and sustainable customer relationships that add value both for the customer and the company eCRM: Customer relationship management conducted electronically Slide 27 of 43 The goals of CRM Using existing relationships to grow revenue Using integrated information for excellent service Introducing consistent, replicable channel processes and procedures Slide 28 of 43 Managing the customer life cycle: the three phases of CRM Acquiring new customers Enhancing the profitability of existing customers Retaining profitable customers for life Acquire Enhance Retain It costs six times more to sell to a new customer than to sell to an existing one, (Ravi k. et al, 2001) Slide 29 of 43 CRM Applications and Tools: Delivering Customer Service in Cyberspace CRM applications improve upon traditional customer service by means of easier communications and speedier resolution of customer problems Customer service adds value to products and services It is an integral part of a successful business Slide 30 of 43 CRM Applications and Tools (cont.) Classifications of CRM applications Customer-facing applications Customer-touching applications Customer-centric intelligence applications Data warehouse Data mining: involves sifting through an immense amount of data to discover previously unknown patterns Auto responders: Automated e-mail reply systems (text files returned via e-mail), which provide answers to commonly asked questions Sales force automation (SFA): Software that automates the tasks performed by sales people in the field, such as data collection and its transmission Slide 31 of 43 CRM Applications Slide 32 of 43 CRM Applications- Databases An ideal database should contains the following information •Transactions tasks: This should include a complete purchase history with associated information such as: price paid, quantities, discounts, addresses, sales person, delivery date etc. •Customer communications: Including sales calls, services requests or any customer links with the company. •Descriptive information: For the sake of segmentation and data analysis purposes. •Customers’ responses to marketing motivation. This information should contain the customer responded to a direct marketing program, a sales contact, or any other direct contact. •The data must be updated and corrected when needed. Slide 33 of 43 CRM Applications and Tools (cont.) Slide 34 of 43 CRM Applications and Tools (cont.) Slide 35 of 43 CRM Applications and Tools (cont.) Slide 36 of 43 CRM Applications and Tools (cont.) Slide 37 of 43 CRM Model from managerial and marketing perspective, Own Model. Slide 38 of 43 References: Business Today, Ninth Edition, Mescon, Bovee Thill, Prentice Hall Publishers Deitel, 2004, “E-business and e-commerce for managers”, Prentice hall. Example analysis from a WebTrends (www.webtrends.com MyPoints Rewards Members for Time Spent Online, : www.mypoints.com Ravi k. et al, 2001, e-Business Roadmap for success, 2nd edition, Prentice hall. Turban E. et al, 2004, “ electronic commerce a managerial perspective”, Prentice hall Terri c. et al, 2003, “E-business marketing:”,prentice hall, 2003 TRUSTe Builds User Trust : www.truste.org WebTrends product. (www.webtrends.com) http://www.emeraldinsight.com/rpsv/cgi-bin/linker?ext=i&ref=1080120308-23 http://docserver.emeraldinsight.com/deliver/cw/mcb/14637154/v9 n5/s2/p572.htm? www.prenhall.com/turban http://www.emeraldinsight.com/rpsv/cgibin/linker?ext=i&ref=1080120308-21 Slide 39 of 43