COMP 6125 An Introduction to Electronic
Commerce
Session 2: Email Marketing & CRM
E-mail Marketing
• E-mail proclaimed to be one of the greatest tools in communication developed since 20rh century
• Companies want to send information on products and services to potential and existing customers – Spamming!
• Legalities involved and criticism given on this method of advertising
E-mail Marketing
• Sending emails on products, services, etc to customers who specifically request is allowed
• Hence obtaining permission prior to sending is a key element to email marketing strategy
• But how can you do this?
Permission Marketing
• Marketing strategy involving the practice of sending email messages to persons who request information on a particular product or topic (opt-in email)
• Developed by Seth Godin, current Vice President of Direct Marketing at Yahoo! And previous founder of YoYoDyne
Permission Marketing
• Cost of sending an email to a customer whose email address had already been obtained – less than one cent!
• Cost of purchasing email addresses or people who ask to receive specific kind of email – an additional few cents to a dollar for each message
Permission Marketing
• Conversion rate – percentage of persons who view the ad or promotion and respond to it
• For emails, conversion rate range from 10% - 30%
• For click-through rates, currently 5% and dropping!
• Which would you choose??
Combining Content and Advertising
• A successful method of email marketing schemes is to combine the ad with content of interest to viewer
• Example: including articles and news on particular topics of interest to specific market segment
• Note: avoid including large graphics and attachment as can clog up an inbox and create ill will; try hyperlinks instead which should lead to site hosting the information
Combining Content and Advertising
• Again, coordinate activities across all media and ensure message delivered is consistent
Managing E-mail Processing• Some companies find cannot handle growing numbers of
customers who opt-in to mailing lists
• Some companies cannot handle developing information-laden mail outs
• A concept of outsourcing the email processing to companies offering email management systems has developed; also may include the outsourced company purchasing email addresses
• Cost of outsourcing is between 1 and 2 cents for every valid email address
Technology-Enabled CRM
• Definitions– Clickstream: information gathered about a
visitor from a site on which pages viewed, how long each page was viewed, sequence of pages viewed, etc
–Marketspace: commerce in the information world; distinguished from marketplace which is commerce in the physical world
Technology-Enabled CRM
• Occurs when an organisation collects detailed information on a customer’s behaviours, needs and buying pattersn, and then uses that information to determine pricing, negotiate terms, tailor promotions, add product features, and otherwise customize the entire relationship with that customer
• Also referred to as eCRM
Technology-Enabled CRM
• Figure 4-10, pg 194
• As is shown, more tailored marketing and increased sense of one-to-one relationship
CRM in the Marketspace• In marketspace, information can be used to create new
value for customers– Online order history, recommendations for future
purchases based on past ones, etc
• Successful marketing techniques on the Web enable potential customers to easily find information and customize the depth and nature of the information – should encourage purchasing
• The eCRM tools increase the success of companies on the Web over the traditional model of advertising that work in the offline world
CRM in the Marketspace
• It is definitely important to track and examine behaviours of site visitors and then use the information to develop customized, value-added products and services
• The key is not to collect every piece of data on customers but only to focus on what really matters to salespeople and customers
• Automating this collection of data also assists in a successful implementation of CRM
Links
• Reference– Electronic Commerce, Seventh Annual Edition
by Gary Schneider
• Of Interest– IntelligentCRM –
http://www.intelligentCRM.com
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