Chapter 6 Relationship marketing using digital platforms

Main topics
• Using social media to improve customer loyalty and advocacy
• The challenge of customer engagement
• Customer lifecycle management strategy

Marketing orchestration
• Designing customer contact strategies to deliver the most relevant, most responsive
messages integrated across different communications channels based on customer context.
• Communications strategies are managed by marketing automation systems using rules or AI
(Artificial Intelligence) based on big data analysis rather than manually created campaigns.

Digital marketing insight 6.1: The goals of marketing orchestration

E-CRM: Electronic customer relationship management

Using digital communications technologies

• to maximize sales to existing customers
• to encourage continued usage of online services through techniques including database,
personalized web messages, customer services, email and social media marketing

E-CRM covers:
• using the website and social networks for customer development, from generating leads
through to conversion to an online or offline sale using email and web-based content to
encourage purchase;
• managing customer profile information and email list quality (coverage of email addresses
and integration of customer profile information from other databases to enable targeting);
• managing customer contact options through mobile, email and social networks to support
up-sell and cross-sell;
• data mining to improve targeting;
• providing online personalization or mass customization facilities to automatically
recommend the ‘next-best product’;
• providing online customer service facilities (such as frequently asked questions, call-back
and chat support);
• managing online service quality to ensure that first-time buyers have a great customer
experience that encourages them to buy again;
• managing the multichannel customer experience as customers use different media as part of
the buying process and customer lifecycle.
Using social media to improve customer loyalty and advocacy

Social CRM
The process of managing customer-to-customer conversations to engage existing customers,
prospects and other stakeholders with a brand and so enhance customer relationship
management.

Figure 6.1 Applications of social media across different business functions

What are the main social media platforms?

Social networks.
In most countries, the core social platforms where people interact through social networks are
Facebook, Instagram and Snapchat for consumer audiences, LinkedIn for business audiences
and Twitter for both.
Social commenting in blogs.
A company blog can form the hub of your social media strategy and you can look at tapping
into others’ blogs, whether company or personal or through blog outreach..
Social customer service.
Companies’ own customer-support forums are increasingly important for responding to
customer complaints, particularly in some sectors such as mobile phone and network
providers.
Social knowledge.
These are reference social networks such as Yahoo! Answers, Quora™ and Wikipedia. They
show how any business can engage its audience by solving their problems and subtly
showing how products have helped others.
Social streaming.
Rich and streaming media sites including photos (e.g. Pinterest), video (e.g., YouTube) and
podcasting.
Social search.
When Google+ was launched search engines incorporated more social features such as voting
for sites via a Google+1. With the wane in popularity of Google+ in recent years, these
features are seen less commonly today.
Social commerce.
Mainly relevant for the retail and travel sectors, social commerce involves reviews and
ratings on products and sharing of coupons on deals.

Social media activities management

Activity 1 Define listening and reputation strategy

Activity 2 Transform the brand through social media
Activity 3 Acquire new customers using social media
Activity 4 Increase sales to existing customers
Activity 5 Enhance customer service through social media
A vision for ‘anytime, anywhere’ customer service in the context of customer need

Digital customer engagement

Involvement.
Including website visits, time spent, pages viewed.
Interaction.
Including contributed comments to blogs, quantity/frequency of written reviews and online
comments as well as comments expressed in customer service.
Intimacy.
Implying sentiment tracking on third-party sites including blogs and reviews, as well as
opinions expressed in customer service calls.
Influence.
Referring advocacy indicated by measures such as likelihood to recommend, brand affinity
and content forwarded to friends.

Figure 6.3 Different consumer messaging options using marketing automation

Benefits of using CRM to support customer engagement

• Targeting more cost-effectively

• Deeper customer understanding
• Mass customisation of the marketing messages
• Increased breadth and depth of information
• Permission marketing
• Loyalty programs
• Lower cost
• Gamification

Opportunities for gamification involves applying game-based thinking to a brand, business or

organization to engage and develop loyalty.

Key features of gamification applied to digital marketing are:

• creative concept to engage;
• game mechanics to encourage play (badges, points, leader boards levels, interactions);
• game dynamics can be altered to reward and even penalize;
• game currencies to provide the motivation – this can be financial, status, need for doing
good, pleasure and influence.

Marketing applications of CRM

• Sales force automation

• Customer service management
• Managing the sales process
• Customer communication management
• Analysis
CRM technologies and data management

Three main types of customer data held in a CRM system

• Communication interaction data
• Personal profile
• Transaction data

Artificial intelligence for marketing

AI (Artificial Intelligence)
• Software and services that perform tasks previously requiring human analysis and
interaction.
• Marketing applications of AI typically aim to improve business-to-customer
communications including targeting media, personalized messaging and customer service
interactions.

Figure 6.6 Marketing applications of Artificial Intelligence through the customer lifecycle
Customer lifecycle management strategy

- Customer selection
It means defining the types of customers that a company will market to.
- Customer acquisition
It refers to marketing activities to form relationships with new customers while minimizing
acquisition costs and targeting high-value customers.
- Customer retention
It refers to the marketing activities taken by an organization to keep its existing customers.
- Customer extension
It refers to increasing the depth or range of products that a customer purchases from a
company. This is often referred to as ‘customer development’.

Figure 6.7 The four classic marketing activities of customer relationship management
Permission marketing

Customers agree (opt-in) to be involved in an organization's marketing activities, usually as a

result of an incentive.

Figure 6.8 A summary of an effective process of permission-based online relationship

building

Figure 6.9 Example of a pop-up on Smartinsights.com

Figure 6.10 Matrix of customer touchpoints for collecting and updating email contact and
other profile information
Personalisation and mass customization

- Personalization
Web-based personalization involves delivering customized content for the individual, through
web pages, email or mobile push notifications.
- Mass customization
The creation of tailored marketing messages or products for individual customers or groups
of customers typically using technology to retain the economies of scale and the capacity of
mass marketing or production.
→ To derive maximum benefits from the use of personal information consider giving
individuals more control

The relationship between satisfaction and loyalty

Figure 6.13 Factors affecting customer satisfaction and loyalty

Summary of elements of CRM strategy

• Permission marketing
• Personalisation and mass customisation
• Using digital media to increase customer loyalty
• Determining what customers value
• The relationship between satisfaction and loyalty
• Measuring the voice of the digital customers
• Differentiating customers by value and engagement
• Lifetime value modelling
• Product recommendations and propensity modelling

Essential digital skills: Relationship marketing

The digital marketing skills needed are to evaluate engagement and develop creative ways to
improve customer engagement and loyalty.

Specific skills include:

• assessing multichannel audience engagement and value using techniques such as RFM;
• boosting subscribers and profiling them through landing pages;
• planning a web, email and app-based contact strategy for improvement engagement;
• understanding and testing personalization using rules and AI-based approaches;
• auditing CRM technology;
• developing creative ways to engage audiences through social media.