CRM & the new economy april 091

CRM & the New Economy

Dirk van der Laan University of Applied Sciences Windesheim

School of Business & Economics Zwolle

The Netherlands

2 CRM & the new economy april 09

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CRM in the new economy

What is the new economy?– Trends & characteristics

E-business design: change from– Focus on supply to– Focus on demand

Growing power of the customer:– CRM

The latest developments

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New economy

Webshopping in the Netherlands– 2000 – 2006 growth from 0,5 to 3,8 billion– Average shopping amount grew from 269 to 441

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Aspects of the new economy

– Digitalization and connectivity– Digital products Software, cd’s, manuals, mp3, Ipod

TDC (time, distance, complexity)– Rapid world 24*7– Worldwide economy callcenters in India– Complex world mortgage, calculations

– Disintermediation and reintermediation: changes in the industrial column

Dell, tickettracker.nl, air france.com, easyjet, independer

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Aspects of the new economy

– Customization– Reverse of chains Dell– Transparency of markets– Individual offers and demands

Harley-Davidson, Mercedes, Windesheim– Demanding customers

Letsbuyit.com (buyers join forces)– Services instead of products

OCE– Industry convergence

– Kodak (chemicals to electronics)– Shiseido (cosmetics to dermatology drugs)– Disney (cartoons, theme parks to films, hotels, ships, retail stores)– Vodafone (digital television, phone, new services)

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customizing

www.italiaanseoverhemden.nl

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Mass marketing 1-1 marketing

Average customer Individual customer

Customer anomity Customer profile

Standard product Customized market offer

Mass production Customized production

Mass distribution Individualized distribution

Mass advertising Individualized message

Mass promotion Individualized incentives

One way message Two way messages

Economies of scale Economies of scale

Conclusion

Power to the Customer Competitor is 2 clicks away

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New economy

– Knowledge– Creativity– Relationships

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How to react on the demands of the new economy???

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E-Business design

Self diagnosis Reverse the value chain Choose a focus

– Service excellence (customer intimacy) – Operational excellence– Continuous innovation excellence

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E-Business design

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Here we come to CRM

What is CRM???

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CRM

CRM means:– Redesigning functional roles– Reengineering work processes– Motivating people– Implementing CRM technology

CRM creates the possibility to realize customization

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CRM definitie 1

CRM is the continuously and systematically creating and developing of relationships with individual customers to obtain mutual benefits.

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CRM

Customer Relationship Murder

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CRM

CRM comprises 3 phases:

1. Acquiring new customers (relatively expensive !) Like going on a first date

– (only a determined suitor acts despite the feelings of insecurity, hesitancy, fear and anticipation)

2. Enhancing the profitability of existing customers– Cross-selling

– Other product, complementary item– Up-selling

– Similar product of better quality Deep-selling

– Selling more of the same product cup a soup (instant soup) Lower the costs

– (self service gas station, event driven marketing) References

– Tupperware parties

3. Retaining profitable customers– Reward agents that retain customers– Reward customers that retain (State Farm insurance)– Branding, loyalty programs

CRM

Customers

Sales

Sales/customer

retention

acquisition

enhancing

21 CRM & the new economy april 09

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CRM marketing and fulfillment

Sell well and deliver fast Campaign management Opt-in and opt-out

Fulfillment structure: product delivery and question answering

Sales force automation

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CRM loyalty and retention

Keep track of the account and transaction histories of your customers

Site is built to sell

Integrate e-commerce systems with traditional sales channels and fulfillment apps

Value drivers CRM

improved ability to target profitable customers; integrated offerings across channels; improved sales force efficiency and effectiveness; individualized marketing messages; customized products and services; improved customer service efficiency &

effectiveness improved pricing

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New economy

Customer segments Customer lifetime value Focus on stakeholders Customer retention Customer satisfaction Under-promising, over-delivering

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CRM

Information system

Customer Product Process Communication Marketing

Modern marketing

Growing power of Google Search engine marketing Conversion-marketing

– Web analytics– Multivariable testing

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The latest developments

Experience Economy– Not only information exchange but experience

Games Clips Meeting places Good quality

– Blue ray– 17 inch– Audio surround

This is a communication platform for marketeers!

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New ways of communication

Viral marketing Hyves, facebook, MSN Mobile Marketing Experience Youtube Wilders, Obama Social Media Crowd Sourcing Social webshopping

– Cobrowsing, chatting, swarming– LiveCom & Cobrowser.net

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Social Media

• Crowd sourcing • Data mining • Rating • Co creation• Word of mouth Marketing

Zoekterm “Geert Wilders”

A) Geert Wilders: Pushing the envelope Radio Netherlands - Jan 24 2008 B) Geert Wilders’ anti-Koran film goes live on Internet PanARMENIAN.Net - Mar 28 2008 C) Prosecutor will not charge Dutch politician Geert Wilders for incitement against Muslims San

Diego Union Tribune - Jun 30 2008 D) Dutch court orders prosecution of anti-Islamic legislator Geert Wilders KBS Radio - Jan 21 2009 E) Geert Wilders, martyr Telegraph.co.uk - Feb 12 2009

Marketing + Education

Brand

Community

Consumer

Relation

Rel

atio

n Relatio

n

Before Current

Crowd sourcing

Tom tom map share User

Firm

No proft Proft

No proft

Proft

Before: 100 designers avg age 29

After: 1.000.000 designers avg age 9

AFOL: Adult Fan of Lego

Wikipedia

User

Firm

No proft Proft

No proft

Proft

Started in 2001684 million visitors in 2008. 75,000 active contributors 10,000,000 articles 250 languages.

Relatively few people actively contribute

Charlie bit my finger - again

http://www.youtube.com/watch?v=_OBlgSz8sSM&feature=related

http://www.youtube.com/watch?v=BIWeEFV59d4

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Summary

We talked about New economy New business models CRM The latest developments

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links

Internet and marketing magazins: Advertising age www.adage.com Businessweek www.businessweek.com C-net Bussiness www.news.com E-Commerce Times www.ecommercetimes.com Hotwired www.hotwired.com The Red Herring www.redherring.com Web Week www.webweek.com Wired www.wired.com Adformatie www.adformatie.nl E-merce www.emerce.nl Webwereld www.webwereld.nl

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FIN

http://www.youtube.com/watch?v=4eQyIGkxlKY