Electronic Customer

Relationship
Management
E-CRM

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 Introduction
1. New type of Customers & firms
2. Digital Firms and globalization
3. IS and researches
4. IT managers

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 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.

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 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....).

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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.

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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.
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 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

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Learning about Consumer
Behavior Online
Reasons for not making purchases

9.1
unfavorable experience

01
enjoy shopping off line

51 61
deleverly time
Reasons

too long to download the screen

32 42
cannot ask questions
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
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Consumer Behavior Online Slide 10 of 43
Consumer Decision Making
Process
Roles people play in the decision
making process
Initiator The person who suggests buying a particular product of
services

Influencer 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.

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Consumer Decision Model In
WEB Purchasing
5 phases of the generic purchase decision
model:

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Consumer Decision Making Process

1 2
Need Information
Recognition Search
3
Evaluation of
Alternatives
5
4
Purchase
Purchase
Outcome

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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

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One-to-One Marketing and Personalization in EC

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 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

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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

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 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.

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MyPoints Rewards Members for Time Spent Online
Source: www.mypoints.com
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Learning about Consumer
Behavior Online

Source: WebTrends product. (www.webtrends.com)

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 Consumer Behavior Online

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Example analysis from a WebTrends (www.webtrends.com
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
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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

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Market Research for EC
• Process of gathering and analyzing
information related to customers, and
markets.
• Tools:
– Observations
– Surveys
– Experiments
– Interviews

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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

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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

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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

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The goals of CRM

Using existing relationships to grow revenue

Using integrated information for excellent
service
Introducing consistent, replicable channel
processes and procedures

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 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)
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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

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 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
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CRM Applications

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 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.

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CRM Applications and Tools (cont.)

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CRM Applications and Tools (cont.)

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CRM Applications and Tools (cont.)

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CRM Applications and Tools (cont.)

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CRM Model from managerial
and marketing perspective,
Own Model.

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 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/cgi-
bin/linker?ext=i&ref=1080120308-21
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