Improving performance through eMarketing Intelligence

Practical e-CRM Part 1

Practical e-CRM Part 1

Topics

Introduction.

What is e-CRM?

What are we trying to achieve through e-CRM?

Supporting the buying process online

References. 3

This article illustrates practical approaches to implementing e-CRM through a web site, through links to sites showing best practice.

Customer relationship management (CRM) has received much negative press in the last year or so with reports of project failure rates exceeding 70% and some of the main software providers such as Siebel, Oracle and Broadvision reporting declining revenues and shedding staff. Behind these stories, however, there is little evidence that marketers have abandoned their belief in the concept. In 2001, the CRM market totalled $22 billion, a 10.6 percent increase from 2000 revenue according to Gartner (2002). A similar increase is forecast in 2002, partly due to smaller and medium businesses investing in CRM technology.

In the CIM one-day workshop Practical e-CRM (http://www.cimtraining.com), we answer ten questions aimed at improving the return from online CRM. In this article we focus on just one of these ten questions how to support the online customer through the different stages of the buying process.

Before looking at how we can support the buying process online, we need to look behind the e-CRM buzzword what is it and what are we trying to achieve through deploying it?

What is e-CRM?

McDonald and Wilson (2001) note that the term Customer Relationship Management is often used as a synonym for relationship marketing. They give a typical definition: a management approach that enables organisations to identify, attract and increase the retention of profitable customers by managing relationships with them. With information technology increasingly used by marketers to manage customer information, database technology is essential to effective CRM. What then does e add to CRM? E-CRM refers to achieving CRM through using Internet technologies primarily the web and e-mail allied to database marketing.

In this first article on e-CRM we will focus on how we can use the web site to manage customer relationships through providing online content and services. In the second article, we go on to look at how the web site, databases and e-mail can be used together to profile customers and then target them with tailored communications.

To deliver effective web services for customers, the scope for e-CRM must be right; companies have to develop a plan to support the:

        full customer lifecycle from customer identification, acquisition, retention and extension.

        whole buying process including pre-purchase, purchase and post-purchase.

        integration of online and offline communications since the purchase behaviour of many customers is now mixed-mode or multichannel with part of the buying process online and part offline.

        sharing of customer data across different sales and marketing functions including direct customer contacts through sales reps or retail locations as well as phone or e-mail contacts.

        analytic capabilities to analyse and improve the effectiveness of marketing campaigns and inbound contact management.

To develop the full-range of these services is a major undertaking which will take years rather than months. However, it is possible to use the web site to achieve quick wins. For example many companies use the web site, in combination with other media for customer acquisition campaigns. House (www.house.co.uk), the online portal for British Gas, ran a prize draw to win a 250,000 house promoted through offline media which achieved acquisition of tens of thousands of e-mail addresses. Similarly, customer retention aims can be supported by e-newsletters. Dabs.com (www.dabs.com), the hardware and software e-tailer, have a weekly e-newsletter with a different theme each week such as digital cameras or digital printing to support sales promotions in these areas.

What are we trying to achieve through e-CRM?

This article will focus on practical solutions, but we need to have a good understanding of our current CRM offering and realistic objectives, if e-CRM is going to deliver a return on investment. To assist in planning e-CRM, two of most useful frameworks are for:

1. CRM Analysis. The QCi CMAT benchmarking tool. This is applied by CRM consultants QCi to assess the current CRM capabilities of clients against best practice. Key areas of analysis are: the proposition, customer management activity, people, process and technology.

http://www.eccs.uk.com/advice/best_man_guidelines/CMAT.pdf

2. CRM objective setting. Making a compelling case for CRM article. This article, by specialist CRM analysts Hewson, although dating back to 2000, provides a useful start for identifying objectives and costs. Objectives are broken down into four areas of increasing sales, customer benefits, reducing costs and competitive advantage.

http://www.hewson.co.uk.

Supporting the buying process online

One of ten questions about implementing e-CRM focuses on identifying the right solutions for the buying process. Rayport and Jaworski (2001) have developed, the Egg diagram, a useful tool to assess how well a company is supporting the customer decision process. This can be used to benchmark companies e-CRM capabilities against best practice in sector. They say: The process begins by first articulating the steps of the Customer Decision Process that the consumer passes through for a particular product category. Next, one identifies the products, services, and information that will aid the consumer in moving through these various stages. This approach does not only look at how online services assist the consumer, but also looks at the integration between online and offline information and services. In this article, however, we will focus on online support of the decision process. To perform this analysis in a structured way, it is best to identify how the online proposition will appeal to different site visitors with different needs, it is best if a customer scenario or visitor task analysis is performed which identifies the range of audiences and their information or service needs. An outline of this approach is given by Patricia Seybold in her book The Customer Revolution. Such an analysis was performed in the development of the Superbreak accommodation site (www.superbreak.com), with key task behaviour including availability searches, bargain searches and browsing by area.

Awareness

Online, 80% of web users search for new products and supplier using search engines. It follows that we should maximise awareness of online services through optimising our placement on these search engines by keyword analysis for likely search terms for different visitor scenarios using tools such as KeyWordCount (www.keywordcount.com) and WordTracker (www.wordtracker.com).

We should then make sure that these terms are favourably positioned relative to competitors either using search engine optimisation to increase the position in the search engine, or, where necessary, Pay Per Click advertising. Three main search engines which typically account for 90% of site visitors referred from search engines.

The WNIM articles by James Colborn describe search engine tactics discuss these techniques further:

http://www.wnim.com/issue6/pages/searchengine.htm

http://www.wnim.com/issue7/pages/searchengine.htm

Search

As we have seen, search engines and are the most popular way to locate sites. It follows that, once on site an effective Quick or Advanced search tool should be readily available.

Example: RS Components support customer search through 5 different options.

http://www.rswww.com. Simple search available top left. Choose Search, Advanced Search.

See Jakob Nielsens site for further guidelines on Search.

http://www.useit.com/alertbox/20010513.html

Useful guidelines are also available for accommodating first-time visitors through improving home page usability:

http://www.useit.com/alertbox/20020512.html

Evaluation

A key task of web site visitors interested in purchasing is selecting the most appropriate product based on their needs. There can be a bewildering choice of product models and specifications. Simplifying the evaluation process is worthwhile and online automated product selectors can assist.

Example: Epson product selector narrows down choice of product based on customer criteria.

http://www.epson.co.uk/selector2/intro.htm

Example: Open University Learners Guide to Course choice a lower tech, but effective simplification of choice.

http://www3.open.ac.uk/learners-guide/course-choice/

Purchase

A well known phenomenon amongst online retail is the failure of many site visitors to complete purchase. The Streets Online case below shows that practical measures can significantly increase trolley conversion rates. Director of Logistics, Mike Stockdale explained:

We achieved an 11 per cent increase by reducing the number of pages in the ordering process from seven to three. We achieved a 6 per cent increase from changing the position of images, and a 5 per cent increase by adding the automatic detection of errors in the form.

Such thinking can also be applied to non-retail sites to convert visitors to action.

Example: Streets Online

http://www.eccs.uk.com/advice/case_studies/CS_Technology/case02.asp

Example: easyJet simplifies online ordering process

http://www.easyjet.com/en/

Support

Achieving effective customer support online is a balance between delivering a good-level of customer service and the costs of achieving this. For major online e-tailers such as easyJet there is potential to receive hundreds of thousands of phone enquiries per month. Since each contact will cost several pounds to answer, big savings are possible by encouraging customer self-service where the customer looks at answers to frequent service queries. Choosing Contact Us on the easyJet site does not immediately provide a customer phone number, rather it steps customers through FAQ and then an online form. While this approach may be most appropriate for a brand whose central promise is low price, some elements of this approach can be applied to all companies. As easyJet put it:

We've tried to make the FAQ and email service as simple and efficient as possible in order to keep the cost down and provide you with a good service, but if you're really stuck then, of course, you can call us:>

Example: easyJet minimises online enquiries

http://www.easyjet.com/en/ Choose Contact Us.

Putting more thought into the design of online enquiries can help improve the quality of service while reducing costs:

Example: Servista Support contact form:

http://www.servista.com/custserv/support-form.jsp

Finally, for technical products, automated diagnosis tools and online support forums can enable the customer to understand the cause and solutions for product related problems.

Example: Epson diagnostics service:

http://selfservice.epson-europe.com/start_eng.htm

Example: Symantec diagnostics service:

http://www.symantec.com/region/reg_eu/techsupp/index.html

Rewards

The rewards part of the buying process refers to using different incentives to help develop loyalty. Many pure-play e-tailers are advanced in their use of personalisation of promotions based on past purchases. For others, it is less easy to make use of e-CRM technology for this purpose. Practical measures can be taken in web site design to make these rewards more effective. Using a regular, prominent area of the screen for these offers, such as top right will increase awareness of these offers. Sales promotions which start on a regular day of the month can also help reinforce these rewards. However, this assumes that site visitors will return, and they are unlikely to unless they receive an offline stimulus. Direct mail to promote online rewards such as competitions and special offers is important to this. Also important is to encourage site visitors to sign-up to e-newsletters which will provide the required stimulus via the subscribers in-box.

Example: Dell Computer use direct mail and online offers effectively

http://www.dell.co.uk

Example: RS Components link online promotions through direct mail and e-mail

http://www.rswww.com

Superbreak use e-newsletters and on-site promotions effectively

http://www.superbreak.com

In next months article

Supporting the online buying-process through e-CRM is only one aspect of improving e-CRM practice that is covered in the one day CIM workshop on Practical e-CRM (LINK:http://www.cimtraining.com). What we have looked at is very much a customer-oriented view of CRM. What we have not covered is the need to identify and learn about the customer through profiling in order to deliver more targeted offers. In next months article, we look at techniques for identifying site visitors and customers and then tailoring communications based on the information collected.

References

Gartner (2002) Gartner Dataquest Forecasts CRM Services Revenue to Increase 15 Percent in 2002 Press Relase. SAN JOSE, Calif., April 9, 2002.

McDonald, M. and Wilson, H. (2002) New marketing: transforming the corporate future. Oxford: Butterworth-Heinemann.

Rayport, J. and Jaworski, B. (2001) e-Commerce. McGraw-Hill, NY: NY.

Seybold, P. (2002) The Customer Revolution. Random House, NY, NY.

Note: This article is one of a series originally written between 2000 and 2003 for The Chartered Institute of Marketing What's New in Marketing Newsletter. Many of the concepts remain valid, but some more recent concepts such as Web 2.0 and social networks aren't referenced. More recent editions of my books contain more up-to-date examples and latest thinking.

For the latest on these concepts see my DaveChaffey.com blog site for E-CRM articles.