CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

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E-COMMERCE IT430

Lesson 32

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

The sum of a company's customer service solutions constitutes its customer relationship management

(CRM) system. Level of traffic at the online business site and the available resources would normally

determine whether or not a business should have CRM. It provides fast and effective service to customers

and ensures that corrective measures are readily in place. CRM includes call handling, sales tracking and

Transaction support (technology/personnel etc.). Three tools can be used to improve customer service, that

is, log file analysis, cookies and data mining. Under CRM system, call centers can be set up having customer

service representatives who can be reached trough phone, e-mails or online chatting. There are software

tools or tracking devices that can provide feedback on how many number of internet users actually viewed a

banner or a marketing message and how many actually clicked on the advertisement. Log files consist of

data generated by site visits and include information about each visitor's location, IP address, time of visit,

frequency of visits etc. There are businesses that provide the services of analyzing web log files. The results

would show how effective your web site is and indicate the top-referring web sites. You know that cookies

allow e-commerce sites to record visitor behavior. They can be used to track customers online and do

personalization. Many customers do not know that their information is being collected and used by the e-

business site. Thus, informational privacy rights of customers can be breached in cases where cookies are

used.

One major goal of CRM is to establish a long-lasting relationship between a company and its customers.

Good customer services can help in building a sense of loyalty towards company and its products or

services. Experts have pointed out five stages of loyalty as customer relationships develop over a period of

time. One can find that the intensity of relationship increases as the customer moves through the first four

stages. In the fifth stage a decline occurs and the relationship terminates.

See Fig. 1 below:

Awareness

Exploration Familiarity

Commitment Separation

Time

Fig. 1

Let us briefly examine these stages:

Awareness

This is the first stage where customers recognize the name of the company or any of its products. However,

they have never interacted with the company before. A company/business can achieve this level by properly

advertising its brand.

Exploration

At the exploration stage the potential customers know more about the company or its products. For

instance, they may have visited the web site of the company and have exchanged any information with it.

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E-COMMERCE IT430

Familiarity

At this stage, customers have completed several business transactions with the company and know its

policies regarding refund, privacy of information, discounts etc.

Commitment

Having completed a number of satisfactory transactions, some customers may have developed a strong

sense of loyalty or preference for the products or brand of a company. They are said to be at the

commitment stage in their relationship with a business. Such loyal customers often tell others about their

satisfaction as regards products/services offered by the company. Sometimes, companies make concessions

on price or other terms of business to bring customers into this stage.

Separation

After a period of time those conditions over which a valuable customer relationship is established might

change. Customers might not be any longer satisfied with the product quality or customer service. On the

other hand, a company may also find that a loyal customer is proving to be very expensive to maintain.

Thus, the parties enter into the separation stage. Note that the objective of any marketing strategy is to

bring the customers quickly to the committed stage and try to hold them there as long as possible.

Life Cycle Segmentation

These five stages are also called customer life cycle. Using them to create groups of customers is called

customer life-cycle segmentation. Segment information is useful for companies to develop better

relationship with the customers. Companies, thus, know about their customers and their level of

relationship with the company, and can customize their product/service.

B2B Marketing on the Web

For effective CRM, it is necessary that there is complete integration between different steps in a customer

transaction. So, the processes of selling, buying, marketing, front-end and back-end operations should be

fully linked and integrated with each other.

Key difference between B2C and B2B is that in case of B2B there is no direct contact with the end users,

whereas this contact exists in B2C. Thus, an e-business can have direct response or feedback from its

customers in B2C as compared to B2B. For example, an online business that deals in the supply of raw

material to an online manufacturing business has a very limited chance of receiving direct feedback from

end customers about its product/services due to lack of contact with them. That is one reason why a

marketing plan is different in B2B from B2C.

Search Engines

A search engine is a program that scans web sites and forms a list of relevant sites based on keywords or

other search-engines ranking criteria. It allows people to find information about their area of interest out of

large amount of information available on the internet. Examples of famous e-businesses that provide search

engine facilities are google, altavista, yahoo etc. As a marketer, after you have launched your e-commerce

web site, you should look for the registration of the same with popular search engines so that your site

appears on search engine results.

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