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Explain the benefits of e-CRM in detail.

Marks: 5 M, 10 M

Year: Dec 2014, May 2014

E-CRM benefits:

i. Targeting more cost effectively:

• Traditional marketing is often based on mailing lists compiled according to criteria that mean not everyone contacted is the target market.
• For example, the company wishing to acquire new customers may use postcodes to target area with appropriate demographics, but within the postal district the population may be heterogeneous.
• The result of poor targeting may be low response rates, perhaps less than 1%.
• The Internet has the benefit that the list of contacts is self-selecting or prequalified.
• The company will aim to build relationships with those who have visited the website and expressed an interest in its products by registering their name and address.
• The act of visiting the website and browsing indicates a target customer.
• Thus, the approach to acquiring new customers with whom to build relationships is fundamentally different, as it involves attracting the customers to the website, where the company provides an offer to make them register.

ii. Achieve mass customization of the marketing process:

• This tailoring process is defined in the subsequent action.
• Technology makes it possible to send tailored e-mails at much lower costs than is possible with direct mail and also to provide tailored web pages to smaller groups of customers (micro-segments).

iii. Increase depth, breadth and nature of relationships:

• The nature of the Internet medium enables more information to be supplied to customers as required.
• For example, special pages such as Dell premier can be setup to provide customers with specific information.
• The nature of relationship can be changed in that contact with a customer can be made more frequently.
• The frequency of contact with the customers can be determined by customers – whenever they have the need to visit personalized pages – or they can be e-mail by the company according to their communication preferences.

iv. A learning relationship can be achieved using different tools throughout the customer life-cycle:

• For example, tools summarize products purchased on site and the searching behaviour that occurred before these products were bought; online feedback forms about the site or products are completed when a customer requests information; questions asked through forms or e-mails to the online customer service facilities; online questionnaires asking about product category interests and opinion on competitors; new product development evaluation- commenting on prototypes of new products.

v. Lower cost:

• Contacting customers by email or through their viewing web pages costs less than using physical mail, but perhaps more importantly, information only needs to be sent to those customers who have expressed a preference for it, resulting in fewer mail-outs.
• Once personalization technology has been purchased, much of the targeting and communications can be implemented automatically.