Introduction to e-CRM

• What is e-CRM? It’s a collection of tools that enables you to meet and exceed customer expectations. How? By identifying buying trends, simplifying online transactions, and creating better understanding of your customers.
• e-CRM is based on customer information that personalizes interactions and simplifies the closing of transactions. e-CRM also helps you reach your customers at the right time and at the right place by helping you identify their needs and expectations.
• Creating a company that focuses on e-commerce requires an effective e-CRM system. It’s a new way of doing business that capitalizes on the global marketplace.
• One benefit is setting buy-in from your entire staff by creating a better understanding of what e-CRM can do for your business. It will also help you identify the driving forces of your competitors and create a clearer picture of the global market place.
• Understanding the driving forces behind e-CRM will help you get buy-in from your entire staff, understand what sort of effort an e-CRM system requires, and identify the driving forces of your competitors.
• How does e-CRM affect your business? It can help create marketing campaigns. It can increase customer retention. It can improve internal business processes.
• e-CRM is an essential part of today’s business world, regardless of how you perceive it’s effect. What is fueling the interest in e-CRM? These forces are:
  o economic drivers
  o marketing expectations
  o technological advancements
• One of the driving forces behind e-CRM is the pressure to remain competitive in the business world. Many companies are interested in the low costs and efficient processing of e-CRM. The first force that leads to e-CRM implementation is economic drivers.
• Internally, companies want to decrease costs and streamline business processes.
• Externally, those companies must maintain relationships with their business partners. E-CRM can help then meet both these goals.
• Improving customer satisfaction and acquiring new customers is another key aspect of e-CRM. Marketing departments are central ingredients to accomplish these goals. The second force that leads to e-CRM implementation is marketing expectations. As the market becomes saturated with new products delivered online; it’s important to create advertising that differentiate your products from others.
  o New customer leads: Competition is fierce, so we need any advantage we can find to acquire new customers. Through e-CRM we can more accurately identify our target audience. Prospecting for new clients is less costly and more effective when we use e-CRM in conjunction with our website.
  o Improved relationship with customers: We can offer our clients more detailed product information than ever before. And e-CRM provides an outstanding marketing tool that helps identify client needs. Along with other factors, e-CRM definitely improves our relationship with our customers.
  o Customer loyalty: We want our customers to come to us for all of their purchasing needs. By identifying our competition and offering new needs we can maintain customer loyalty. e-CRM helps us identify these needs and plan for the future.
• The third force that leads to e-CRM implementation is technological advancements.
• Information can be stored and transmitted more quickly and cheaply than ever before. With advances in technology, customers have more buying options available to them. Your business must stand out from the crowd.
• Some forces that lead to e-CRM implementation are marketing expectations, economic drivers, and technological advancements.
• The first two business functions addressed by e-CRM go hand in hand: sales automation and marketing automation. How does e-CRM handle these functions? Sales people are given access to customer information to assist them in up-selling and cross-selling. What does the customer expect or need? e-CRM will help identify customer needs through data-mining processes. It will then share findings throughout the company to create complete view of the customer.
• In marketing, employees are provided with new ways to generate leads and target advertising to appropriate audiences. Marketing automation is heavily based on data mining as well. This aspect of e-CRM allows you to learn more about your customers.
  e-CRM offers a number of easy to meet customer needs. While you can use it to improve business practices, its main focus is improving your relationships with your customers.
• The third business function addressed by e-CRM in customer service.
• e-CRM can help you effectively identify customer problems and needs. Along with meeting customer expectations, e-CRM provides opportunities for cross-selling and up-selling, which can increase revenues.
• With your suppliers and distributors just a mouse click away via computer networks, it’s easier than ever to maintain relationships with your business partners. This is the fourth business function addressed by e-CRM: business partner relationships. e-CRM allows you to maintain close contact with third-party distributors, suppliers, and re-sellers. It also improves relationships with your suppliers and allows you to have instant contact with your partners.
• e-CRM allows for the automation of sales, improvement in customer service, and better business partner relationships.
• e-CRM gives salespeople access to customer information to assist them in up-selling and cross-selling. It provides new ways to generate leads and target advertising.
• If one has an effective e-CRM system in place, you will be better able to identify and address customer satisfaction problems.
• e-CRM is not necessary for the creation of peer focus groups. It allows one to identify consumer needs through data-mining processes.
• e-CRM keeps one in continual contact with third-party distributors, suppliers, resellers, and partners. It improves relationships with business partners.
• There are hundreds of software options available through e-CRM. But, in general they all serve one purpose: improving standard business practices.
• To fully realize the positive effect of the Internet on sales, you must integrate web services into every department of your company. This means educating management leaders.
• Educate employees in the new processes involved with e-CRM. Integrate the system throughout all the company’s internal and external processes. This is the second principle for improving business practices through e-CRM.
• To build trust and loyalty with your customers, you must accurately identify their needs. Effective e-CRM depends on accurate analysis of customer information. The key methods of recognizing customer expectations are:
  o Analysis
  o Categorization
  o Forecasting
  Without a way of examining data to personalize interactions, one won’t get the most out of one’s e-CRM system. The first method of recognizing customer expectations is analysis. Data tools used with e-CRM allow one to analyze the buying patterns of a customer. Through e-CRM software, one can create queries that will help one-answer questions about your customers’ needs. One can also use these tools to identify faulty business practices and improve customer satisfaction.
  After analyzing information, one must organize it to help discover customer-buying patterns. The second method of recognizing customer expectations is categorization. Use customer information to determine customer satisfaction levels to product type, region, age demographic, or any other category one chooses. It’s also important to analyze and categorize information correctly to avoid making faulty assumptions.
  The third method of recognizing customer expectations is forecasting. Take the information you have gathered and, based on what you have learned about your customers’ behavior; predict what your customers will do in given situations.
  You’re probably familiar with a traditional warehouse. It’s a storage area in companies maintain an inventory of products for later delivery to customers. So what’s a data warehouse? It’s basically the same thing – except rather than storing tangible material, information is stored. Rather then requiring warehouse workers with forklifts, data warehouses require a system of software applications and query tools that gather and organize the “inventory”.
• Data warehousing can be invaluable tool in maintaining and electronic customer relationship management (e-CRM) system. It’s a method of storing business information gathered from customers, suppliers, and other vendors for later use.
  A data warehouse functions by storing customer information in databases for easy access. The information is then used to:
  Identify customer trends
  Solve business problems
  Gain a clearer picture of one’s business practices.
• Basically, a data warehouse gathers and organizes data. This data is then available for analyzing and measuring business trends. Data warehousing is a method of compiling information from various sources and centralizing it for easy access. Data warehouses are used with query tools that perform tasks specified by the user. These queries offer information that help lead to better customer service, product improvement, and better business practices.
• People without extensive database knowledge can use data warehouses. Understanding the technical aspects of data mining and warehousing is not necessary to perform simple analyses of one’s customer information. Query tools allow even the most inexperienced user to use a data warehouse. The main components of data warehousing are:
  Planning: Before data are stored in the warehouse, they are placed in a temporary location where they are “cleansed”. The warehousing system manages the information by rectifying any potential system errors that might occur during data processing.
  Conversion: A data warehousing system includes applications that ensure customer data can be stored to work without any format. These data are manipulated to create consistent records for later queries.
  Extraction: The data are managed by applications that point search tools in the proper directions when running a query. If any information is changes, extractions and transformation tools are updated. This enables one to quickly search for key words or organize information by specific data fields.
  Delivery: Data warehousing applications retrieve, display, analyze, and control information for your e-CRM needs. This information can be shared through all types of computer systems, from hand-held computers to mainframes, so everyone can access it.
• Before e-CRM, providing personalized service to every customer was not cost-effective. But now technology offers companies the change to improve service for each and every customer. The first method of using technology to personalize customer service is tailoring the customer experience to individual needs. e-CRM in conjunction with an effective data-mining system gives all the information one needs to tailor the customer shopping experience.
• Technology allows one to interact with thousands of customers with one simple e-mail.
• The second method of using technology to personalize customer service is using subscription tools.
• Many customers prefer speaking with sales representatives to ordering products online. One must use one’s e-CRM system to maintain relationships with these customers as well.
• The third method of using technology to personalize customer service is decreasing one’s reliance on the Internet.
• With all the interactions with customers throughout a year, it’s important to avoid inundating them with unwanted information. The first method of improving the transaction process through e-CRM systems help maintain harmonious relationships with your customers by sending information only to customers who want it. Receive permission to send e-mail or to call with offers. Use the online ordering process to learn more about one’s customers.
• Even after one has reached customers, they won’t jump into a transaction. They want time to measure one’s products and compare them to the competitors’. The next methods of improving the transaction process through e-CRM are negotiating and closing transactions. By negotiating, one can offer customers samples, let them test products, and discuss options for sales and warranties. All of this negotiating can take place online by creating an interactive Web site.
• An overlooked aspect of the business relationship is post-sales support. The last method of improving the transaction process through e-CRM is providing customer support after the sale. Offer upgrades, useful accompaniments, warranties, and service plans, and then follow through with the proper support. To improve your retention of existing customers, you must be more than a product distributor. Impress your customers by maintaining relationships with them.
• The transaction should not be overlooked in the customer service process. Just because a customer agrees to purchase your goods doesn’t mean your role in the sale ends.
• If a company is new to data mining, the first way to develop data-mining capabilities is by getting outside help. One can hire the expertise from an independent consulting firm, a company that supplies data-mining software, or a data-mining center. If a company doesn’t have the skills internally, it would need outside help, and if one only expects to need data-mining capability once, using an outside data-mining center may be the best option.
• There’s a good chance that many of your company’s data-mining needs are similar to the needs of other companies in your industry or across industries. In that case, it’s very likely that software already exists to handle your needs. When creating your e-CRM system, you’ll have various data-mining options to choose from. Of course, that doesn’t mean the fit will be effortless.
• If your e-CRM system is going to become an essential part of your business strategy, you’ll probably want to develop your data-mining capability in-house. You may still use outside expertise and commercially available software. However, your focus will be on developing the skills and capabilities within your company’s personnel to manage and implement the data-mining system.
• A company’s specific situation will dictate the primary approach it will use to develop a data-mining capability. Factors that need to be considered are the extent of existing-in-house expertise and the degree to which the need for data mining is short-term or permanent. The availability of software addressing the company’s needs is another factor to consider. While one approach may drive the development process, there’s a good chance that your company will use elements of more than one approach.
• Data mining is itself a set of techniques for seeking patterns in data. Some techniques work with numerical data while others work with categorical data. This means the technique selected must suit the type of data being used or the data must be transformed to a suitable form. The major data-mining techniques are listed below:
  Cluster Detection: This automatic process seeks natural clusters in the data. It is most commonly applied when you suspect there may be correlations in the data seek but aren’t sure what they might be.
  Decision Trees: Decision Trees are used to sort data into increasingly smaller categories. They are used to classify records but can also be used to predict outcomes.
  Neural Networks: Neural Networks are more complex than decision trees but are very effective for producing predictions. They work well in conjunction with decision trees.
  Online analytical processing (OLAP) is sometimes considered the starting point for e-CRM analysis. The powerful querying capability of advanced OLAP systems can provide a reliable basis for customer segmentation. In addition, it can provide insight to patterns of customer demand and product preference. Any complex database search can be conducted using OLAP. Like statistical tools and data mining, OLAP is a decision-support technique. It provides information that can form the basis for more effective strategies for managing customer relationships.
• Used in conjunction with OLAP, statistical tools can add mathematical precision to the analysis of customer relationship data. It can help identify correlations between demographic factors such as income and product preferences. It can also provide information about response of particular customer segments to marketing campaigns.
  Analytical techniques supporting decision making, particularly in e-CRM, have been advancing rapidly in recent years. Rapid acquisitions of new capabilities by the major providers of analytical software now promise even more integration of the diverse techniques. Companies moving aggressively into e-CRM, therefore, are likely to have even more powerful analytical tools to work with in the future.
• Once a customer centric data capture and storage capability has been established in the organization, analysis and segmentation become the tools that allow personalization and campaign planning.
• The most effective electronic customer relationship management (e-CRM) systems don’t stand alone. They are integrated with some combination of call centers, direct mail marketing, sales, and customer support. Some categories of e-CRM support that are generally available are:
  Marketing automation
  Sales-force automation
  Customer service
  Data gathering and analysis
• An effective e-CRM system is more than just a transactional Web site. It must include active plans to capture new customers and retain existing customers. Marketing campaigns support both of these goals, and customer service is also vital to retaining customers. Depending on the industry, marketing plans may include contact through a combination of person-to-person, advertising, direct mail, Internet, and research.
  When a company implements e-CRM, it generally purchases at least part of the automation technology from outside vendors. Packages provided by vendors will include some combination of the enlisted capabilities:
  Marketing management automation
  Sales-force automation
  Customer service
  Data analysis
• Most marketing automation support packages take advantage of the tremendous capability the Web offers for capturing demographic and other data to enhance customer segmentation and targeting. These can provide a solid platform for effective marketing campaigns.It’s unlikely that one will find a single vendor who provides integration of all four categories of e-CRM support. The tendency, however, has been to include increasingly broader capabilities in integrated packages. When one is responsible for identifying sources of e-CRM support, the key is determining what mix of customer service, marketing automation, sales-force automation, and analysis one needs.