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Electronic Customer

RelationshipManagement

E-CRM

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Learning Objective

To learn about E-CRM and how companies are

using the same for connecting with customers

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e - CRM

Internet provides a new set of tools for interactingwith customers.

One of the major changes the internet has brought to

the marketplace is putting more information and control

in the hands of customers.

Elimination of direct customer interaction by

automation has changed the way we deliver

experiences, but customer requirements about the

quality of that experience haventchanged.

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NEW CUSTOMER EXPECTATION

There are five key areas in which the internet has

impacted the way we do business:-

Access

Control

Speed

Globalization Automation

e - CRM

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E-CRM a definition

E-CRM is:

ApplyingInternet and other digital technology(web, e-mail, wireless, iTV, databases)

Toacquire and retain customers(through a multi-channel buying processand customer lifecycle)

ByImproving customer knowledge, targeting,service delivery and satisfaction.

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According to William McKnight, E-CRM is not just your

call center, self-service Web site, sales force automation

tool or the analysis of customers' purchasing behaviors.

E-CRM is all of these initiatives working together to

enable you to more effectively respond to your

customers' needs and to market to them on a one-to-

one basis. It's about the customer, not any individual

piece of technology. If we evaluate and understand how

our customers behave and how we need to respond to

them, then we can begin to understand the component

pieces of e-CRM.

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Concept of e-CRM

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Cost of Customer Contact

Internet is much more economical than otherchannels. For instance, it has been estimatedthat while it costs nearly US $1.07 per

transaction using the normal means, on theNet the costs comes to a mere cent.

Even when compared with telephone banking(5 cents) and the ATMs (2.7 cents), the Netseems to have an edge. In addition, thestrategic and social benefits may beconsiderable for both parties (Halinen 1989)

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Slide 10 of 43

American Airlines Offers Personalized

Web Sites

American Airlines (aa.com) unveiled a themost advanced personalized, one-to-oneinteractions and transactions on its Web site in

1998Intelligent agents enable the generation ofpersonalized Web pages for each of its 1million registered, travel-planning customers

Broadvisions application dynamically matchescustomer profiles to a database

Output of the matching process triggers the

creation of a real-time customized Web page

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Slide 11 of 43

The use of intelligent-agent technology

built a considerable edge over AAs

competitors Personalizing Web pages is becoming

more important in:

Increasing customer loyalty Cementing relationships with customers

Fostering the community of AA frequent

flyers

American Airlines Offers Personalized

Web Sites

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The following are the basic applications of e-CRM: Reducing technological gap:Implies that an application of e-

CRM in an organization brings an appropriate technology in use,which helps in reducing technological gaps.

Maintaining a data warehouse:Implies that the e-CRM system

of an organization is driven by a data warehouse. Reaching out customers by different channels:Implies that e-

CRM helps an organization to reach out to customers throughvarious modes, such as e-mail and online web chat.

Measuring communication efforts:Implies that e-CRM enables

marketers to view overall customer interaction history. Providing faster customer service:Implies that e-CRM enables

organizations to serve customers quickly by automating variousprocesses.

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Applications of e-CRM

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Most organizations require an effective e-CRMapplication for the following reasons:

Communicating with customers in a fast and convenient waythrough e-messaging, Internet, and digital marketing

Maintaining a systematic and organized database for bettercustomer feedback and support

Analyzing the touch-points of customer experience

Coping with fierce competition in the market

Collaborating internal and external information of anorganization

Empowering customers for making a convenient deal andgetting the required information

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Requirements of e-CRM

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The following are the benefits of e-CRM:

Direct Benefits:Imply that e-CRM helps an organization toreduce costs incurred on manual processes, achievemaximum output, and improve business performance.

Indirect Benefits: Includebenefits, such as reduced leadtimes for ordering products, minimum risk of obsoletestock, customer satisfaction, and effective communication.

Strategic Benefits:Refer to long-term benefits of e-CRMthat can be achieved through close interaction withcustomers, suppliers, and employees of an organization.

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Benefits of e-CRM

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Disadvantages of e-CRM

Can be impersonal

Systems aimed at increasing the efficiency

of the organization can end up

disenfranchising customers

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Customer-facing applications.These include all the

areas where customers interact with the company: call

centers, including help desks; sales force automation;

and field service automation. Such CRM applications

basically automate information flow or support employees

in sales or service.

Customer-touching applications.In this category,

customers interact directly with the applications. Notable

are self-service activities, such as FAQs; campaign

management; and general-purpose EC applications.

Customer-centric intelligence applications.These are

applications that analyze the results of operational

processing and use the results of the analysis to improve

CRM applications. Reporting, data warehousing, and

data mining are the prime topics here.

Online networking applications.Online networking

refers to methods that provide the opportunity to build

personal relationships with a wide range of people. These

include chat rooms, blogs, wikis, discussion lists, and

social network sites.

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Challenges of Managing Online

Relationships

Controlling blogs

Handling the dissatisfied customer

Brand hijack

Customer empowerment

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Developing Trust Online

Established brand name

Seals of approval (testimonies)

Payment safeguards (e.g. Paypal)

Acknowledge orders with a reference orcontact number

Give customers an element of control

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Keeping online customers

Track online behaviour for CRM purposes

Invest in excellent technical systems

Let customer personalize their site

Develop online communities and chatrooms

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Scope of

E-CRM

Increasing

the customer

base

Increasing

profitability

Ensuring

prolonged

existence of

customers

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Scope of e-CRM

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The following are some of the important tools

of e-CRM:

Customer Analytic Software

Data Mining Software

Campaign Management Software

Business Simulation

Personalized Messaging System

Real-time Decision Engine

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Tools of e-CRM

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Basis CRM e-CRM

Customer

Contacts

Contacts customers through retail stores,

business parties, telephone, and fax

Approaches customers through

channels, such as the Internet, e-

messaging, e-mail, and Personal

Digital Assistants (PDAs)

System Interface Requires ERP and back-end systems Requires front-end systems

backed with ERP system and data

warehouse

System Focus Designed on the basis of products and

job functions

Designed as per the needs of

customers

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Differences between CRM and e-CRM

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Barriers to Customer Adoption of the Internet

Barrier Customer concern Strategies Comments

Customer confidence

While many The process seems Design and build Look forCustomers unfamiliar your e-crm systems ways to mimic

Are eager simple, helpful and the best of

To shop friendly understand your companys

Online, many and prepare for what offline

Are not automation does well interactions

where it is weak. With your

customers.

e - CRM

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Barriers to Customer Adoption of the Internet

Barriers customer concern strategies comments

Customer Trust

Customers openness of the inter- Dont ask for If you requireDont trust net makes it appear more information too much

Us with hard to secure data. Than you really need. Information,

Their data, customers

Especially will fill in

Online garbage.

e - CRM

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Barriers to Customer Adoption of the Internet

Barriers Customer concerns strategies Comments

Legislation

Some legislation Legislation may limit Make a privacy Use yourThreatens the the information that can and security privacy policy

Internets ability be collected online and policy part of to support

To grow as a how it can be used your customer your brand

Medium for loyalty and image and

Transacting relationship build trust.

Business management

program

e - CRM

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Digital marketing is a strategy of promoting products or

services through the Internet, e-mail, or other electronic

devices.

It is used as a powerful tool to reach out to maximum number

of customers.

The following are different types of digital marketing:

Display Advertising

Search Engine Marketing (SEM)

Search Engine Optimization (SEO)

Social Media Marketing

E-mail Marketing

Video Marketing

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Digital Marketing

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The following are the checklists of e-business:

Keeping an eye on service quality

Measuring the effectiveness of all service channels

Maintaining effective communication with business

partners

Focusing on business processes

Identifying offline customers

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Checklists for Successful e-Business

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Customers Will Be The Driving

Force

Shift to Internet selling empowers customers

Fragmentation of demand can be met

Customer's rationality will determine what they buy on-line

E-tailing enables retailers to move customers up the Ladder of Loyalty

E-tailing benefits shoppers who are time poor

Digital TV will bring e-tailing closer to the average shopper

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Siebel: Serves the CRM needs of different industries, such ashealthcare, finance, telecommunications, insurance, and travel.

Oracle: Refers to a relational database management system(RDBMS), which is marketed by Oracle Corporation.

MySAP CRM: Provides CRM solutions to various industries. SAP ERPis another popular product from SAP.

PeopleSoft: ProvidesCRM solutions based on HTML, http, and XML.

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Important CRM Software

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The following are the guidelines for predicting the

buying behavior of online customers more

effectively:

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Anticipating the Buying Behavior of

Online Customers

Identifying the needs of customers

Increasing customer awareness

Evaluating available alternatives

Analyzing purchasing decisions

Understanding the post-purchase behavior

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Evaluating Return on Investment (ROI) is a challenging task forevery organization especially in e-marketing.

The following are the steps involved in evaluating e-CRM ROI: Identifying the possible cost savings aspects from e-CRM initiatives

Identifying the initial and ongoing costs for new software, services,

and relevant equipment Setting a time period in which the measurable results are expected to

be achieved

Analyzing a no change scenario over the identified time period

Involving finance experts for analyzing e-CRM budget and estimatingits expected ROI

Comparing the previous scenario with the existing one for determiningthe expected ROI

Approaching the project systematically so that the anticipated resultsare attained

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Evaluating e-CRM Return on

Investment