Download Analysis of the Precision Marketing Technological System on CRM

Analysis of the Precision Marketing Technological System on CRM
LI Zhihong 1, LIANG Dong 2
1, 2. Business School, Jianghan University, Wuhan, Hubei, China
1, 2. Key Research Institute of Strategies and Development in Manufacturing Industry in Wuhan of
China
[email protected]
Abstract: Precision Marketing is regarded as a kind of new marketing innovation technology, but its
roles in the customer relationship management(i.e. CRM) and the connotation of its technological
system are still to be further studied. The paper applies the case study and the description research
methods, analyzes the content, the core ideas and the operating modules of the precision marketing ,
thinks that the precision marketing and CRM are closely correlated, and constructs technological
systems of the precision marketing based on CRM, and finally draws a conclusion that the precision
marketing on CRM will better help companies solve the problem of how to focus on customers, retain
the existent customers, attract new ones, raise the customer’s loyalty to the firm and realize the added
value of customers.
Keywords: Precision marketing, Customer relationship management, Technological systems
1. Introduction
Marketing technology innovation has recently developed fast at home and abroad. So many marketing
professors as Zhang Weiying, Guo Guoqing, Gan Biqun, Philip Kotler, Gary Armstrong, and Michael
Czinkota,etc. have contributed much to the marketing theory and practices. New marketing theories and
ideas as brand marketing, perceived customer value and marketing audit and so on keep on appearing.
Precision marketing, as an important marketing innovation technology, is attracting more and more
attention of the theoretical cycle and of companies. To use it suitably can not only reduce the cost of the
firm and bring about many competitive advantages, but also produce benefits for the customer and foster
the loyalty of him. Precision marketing is presented as management ideas to give a fast response to the
customer’s needs and functions. It creates an atmosphere where buyers and sellers can communicate
with each other timely and matches the management philosophy of customer orientation, low costs,
convenience and full communication of the customer relationship so as to maximize the effectiveness of
companies and customers. So, the paper does a comprehensively analysis of the technology system of
the precision marketing in the angle of the customer relationship management.
2. Customer Relationship Management and Precision Marketing
2.1. Customer relationship management
Customer Relationship Management (CRM) is a management system that operates for customers, of
customers and around customers and that implements the managerial thoughts and patters of the
company through a set of software, of which the core is embodied in the customer solution, the
customer cost, convenience and communication (i.e. four Cs). It also emphasizes the active and total
participation of the customer.
The key of CRM is the management of the customer data by way of Internet, e-commerce, multimedia,
data bank and digging, expert systems and computerized call center. Its purpose is to improve
automatically the business process relating to CRM in the fields of selling, marketing, customer services
and supports, etc. CRM is helpful to deeply unearth the target customer, support the development
strategy of the company, carry out the management and application of the customer information, build a
centralized marketing management platform around customers and realize the normalization of business
and management and the maximization of benefits.
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2.2. Precision marketing
Precision marketing aims at a measurable low-cost expansion of a company by means of setting up
customized communication systems with modern information technology on the base of accurate
location. It includes three levels of meaning, namely, precise marketing ideas; measurable; reaching the
company target of low cost and sustainable development.
The main content of the precision marketing is to break through the qualitative limits of the traditional
marketing location and to make marketing satisfy the demands of measurable precision in maintaining a
long-term personified communication with customers by means of advanced data technology, network
communication and modern logistics. It gets rid of high-cost tie of the traditional advertisement and is
able to make companies grow fast in a low cost. Its systematic solution keeps a close
inter-communication between companies and customers so that the customer’s personified demands are
met continuously. In this way, stable and loyal customer blocs are formed and the value is added with a
chain-typed reaction so as to make the firm develop at a high and stable speed.
The precision marketing operates in several modules. One is data management that is used to administer
the inner information and data contacts so as to centralize and share the trans-region and
trans-department data; another is process management that can stabilize the management process by
regulating and treating the relative business; the third is smart management that can provide effective
concerns and services for customers and exact decision foundation for companies by way of smart
analysis.
2.3. Linkage between the precision marketing and customer relationship management
First, the customer relationship management emphasizes the customer solution and all the activities of
the firm should be guided by consumers’ demands and needs. Also, the precision marketing highlights
the expectancy and satisfaction of the target market. To reach this aim, the nearer the firm approaches
the consumer, the better. In one hand, information may be distorted naturally because of a multi-link
transmission and filtration; on the other hand, a man-made distortion may happen because the interest
bodies in different links might exaggerate or lessen the information owing to their own benefits. The
precision marketing cuts the complicated links and directly communicates with consumers with various
modern information spreading tools, which avoids the information distortion and is able to precisely
understand the consumer’s demands and needs.
In the meanwhile, the customer relationship management pays much attention to the customer cost
while the precision marketing reduces the consumer’s satisfaction cost. The precision marketing is the
shortest of all the marketing channels. Its marketing expenditure is greatly cut due to the reduction of
circulation and of the shop rents. Also, the satisfaction cost of the consumer is much reduced for the
sake of the perfect ordering and distributing systems.
The customer relationship management cares for convenience and communication, too. The precision
marketing often offers large quantities of commodity and service messages and the customer can get
what he wants to buy at home, which lessens the do-shopping trouble of the customer and enhances the
convenience. Besides, the precision marketing realizes the bi-way communication with customers.
Traditional marketing concerns market shares while the precision marketing more cares for the
customer’s value and the added value. The core of the latter is CRM. As an effective means of CRM, the
precision marketing attracts more and more attention and is widely used by the firm.
3. Analysis of the Precision Marketing Technology Systems on CRM
Among the precision marketing technology system on CRM, the customer value-added service is the
center of the system. Accurate market location functions around the center. Personified communication
serves the location and product development and design. Integrated sales network is an important
approach to make the customer service value added (see Figure 1).
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Personified
Communication
Integrated Sales
Network
Accurate
Market
Location
Product
Development
and Design
Customer
Value-added
Service
Figure 1 Precision Marketing Technology Systems
3.1. Customer value-added service
The target of the precision marketing is to retain customers and add value after sales. Perfect quality and
service are usually shown after sales. Only by accurate customer service systems can the existing
customers be retained and the new be attracted and the customer’s loyalty be fostered. The loyalty is the
main origin of the firm’s profits. To realize the added value of the customer, the firm must retain
existing customers and attract the new and raise the customer’s loyalty to the firm. The customer
delivered value becomes the crucial way of the added value.
The precision marketing is an effective tool of getting the customer delivered value. The customer
delivered value, first put forward by Professor Philip Kotler, means difference between the customer’s
total cost and value. The total cost includes the expenditure of money, time and energy, etc. The total
value consists of the benefits obtained by customers such as product value, service value and image
value and so on. In buying, customers always tend to maximize the customer delivered value. So the
firm must provide more customer delivered value than its rivals.
The precision marketing raises the customer’s total value. Its point-to-point marketing approach is
helpful to fully consider the consumer’s personified demands, which strengthens the adaptability of
products and creates more benefits for customers. At the same time, the precision marketing pays more
attention to the creation of service and to offering consumers perfect service. In addition, the precision
marketing strives to upgrade its image by way of series of marketing activities in order to foster the
consumer’s preference and loyalty to the firm.
The precision marketing reduces the customer’s total cost. Consumers care for not only the price of
commodity, but also the relative goods information as convenience and service, etc. Therefore, to be
more competitive, the firm must take it into consideration whether the price can be accepted or not by
consumers and how much time and energy should be spent in buying commodity. The latter expenditure
is named as transaction costs that directly affect the possibility of transaction and the marketing result.
So the reduction of transaction costs becomes the key agent of reforming marketing approach. The
precision marketing cuts down the commodity selling cost and the customer’s money cost, and
especially reduces the time and energy cost of consumers in searching goods information, so does the
transaction cost. Therefore, with the rise of the customer’s total value and the fall of customer’s total
cost, the customer delivered value increases. The precision marketing is becoming a willingly accepted
marketing approach by the firm.
3.2. Accurate market location
Market segmentation and location is quite imperative in modern marketing activities. Only by an exact
segmentation can an effective location of market, products and brands be maintained. After an exact
measurement and analysis of the consumer buying behavior, data systems are erected. Then based on
the systems, a selection of customers is implemented and the effectiveness of the market segmentation
and location is proved through the market test. For example, Winner Union has succeeded in realizing
its product precision location with the aid of the marketing test system of “Market Location
Technology”. The systems are built on the complex figure theoretic module. The real experimental data
are obtained in a simulated actual marketplace. The simulated markets include goods shelves, network
experiment and visiting users, etc.
3.3. Personified communication
The precision marketing needs accuracy, so mass media are not quite suitable for it. Its communication
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tools mainly consist of telephones, short messages, DM, EDM, customer participation advertisement,
and network popularization, etc. DM means mails and EDM refers to network mails. The customer
participation advertisement, different from the traditional promotion such as allowance, and discount,
etc. aims at designing some activities that can attract the interest and attention of customers for the
purpose of his participation. Its designing emphasis is laid on the conception of activity agents. Its
principles are presented as follows: make the accurately positioned groups be interested in the activities
so as to reach the aim of their participation, then communicate with them one by one. The activity agent
means something that can attract the attention of the special customer groups and more concerns the
study of consumption psychology, and of consumer buying behavior. For example, Dongfeng Citroen
Automotive Co. Ltd (DPCA) is quite successful in its after-sales service communication (see Figure 2).
By way of personified contacts, it gives its customers family-like concerns and has established
harmonious relations among customers, cars and nature.
Appointment
User Visit and Welcome
Trouble Check and Diagnose
Repair Quality Check
Repair Cars
Repair Quotation and Sign
Task List
Explain Repair Items
And Present Invoice
Deliver Cars
User Revisit
Figure 2 After-sales Service Process of DPCA
3.4. Product development and design
To match the precision location and communication, the precision marketing needs personified products
and services based on different consumers and demands to satisfy the market needs. Customization is an
important tool to hit its target. Take Dell for example, using the advanced supply chain management,
process control, call centers and e-commerce, etc, Dell has succeeded in the production according to the
customer’s needs. Accurate, personified product and service systems are based on modern production
and process management as supply chain management, ERP, BPR, etc. BMW has been operating in
precision production module of car assembling and delivering timely according to the customer’s order.
3.5. Point- to- point integrated sales network
The sales organization of the precision marketing includes comprehensive reliable logistic distribution
and payment systems and call centers of customized communication. Convenient and fast logistic
distribution and reliable payment systems are the key parts of the precision marketing. Winner Union
has applies the governmental post network to realize its goods distribution and payment. Call centers are
platforms of customer-to-customer communication which are carried out by network technology and
telephones. Their main functions lie in settling the customer’s order, answering the customer’s question
and maintaining the relationship with customers with the concerns to them. Basically, the precision
marketing is independent of the marketing channel and hierarchy of the traditional marketing systems.
4. Conclusion
In the times when customers are becoming major players in the market, how to focus on customers,
retain the existent customers, attract new ones, raise the customer’s loyalty to the firm and realize the
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added value of customers is the key issue of the marketing. The precision marketing, well known for its
capacity of fast, precise, low-cost, high-efficient and comprehensive satisfaction with the customer’s
personified demands, will be more and more popular in solving the above issue in the market. The paper
makes an analysis and study of the technology system of the precision marketing around the customer
relationship management, which gives an idea and approach of the firm marketing practices.
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