Lesson 7

Lesson 7
CRM and
Database
Marketing
CUSTOMER RELATIONSHIP MANAGEMENT
(CRM) DEFINED
• CRM is an approach adopted by an organization to build

and sustain long term business with customers.
• It is about acquiring customers and retaining them to
develop their lifetime value to the business.
• CRM is about forming long term relationships with
customers and goes beyond short term transactions.
• Customer relationships are the key to unlocking the
lifetime value of the customer.
• Relationships make customers loyal.
11/27/2024Annual Review 2
(CRM) DEFINED
• CRM is about treating each customer uniquely.

• “our vision is that if we have 20 million customers, then
we should have 20 million stores.” Jeff Bezos, CEO,
Amazon.com.
• “I know who you are, I remember you. I get you to talk
to me. And then because I know something about you,
my competitors don’t know, I can do something for you
my competitors can’t do-not for any price.” (Newell,
2000).
(CRM) DEFINED
• The digital environment offers a host of methods for

managing customer relationships at lower cost.
• The new technologies permit firms to collect a variety of
customer information which can be used to offer
personalized service and form relationships.
• Firms should use CRM tools to monitor customer
behavior, respond with appropriate product offerings or
communication and monitor the response to these
messages.
AND PERMISSION MARKETING
• Dialogue should endear customers to the firm.

• Offer an incentive so as to receive permission to
enter into a relationship.
• Purpose of incentive is for customer to provide e-
mail address and personal details.
AND PERMISSION MARKETING
• Permission marketing is a term coined by Seth

Godin (1999).
• It is about seeking the customer’s permission
before engaging in a relationship and providing
something in exchange (Godin, 1999).
• Customers must consent to receiving marketing
communication often by e-mail or sms.
• Business can establish how dialogue emerges
between the firm and customers or among
customers themselves.
CRM AND CUSTOMER PROFILING
• Successful CRM is dependent on profiling the

customer i.e. Identifying customer’s product
interests, demographics, role in the buying
decision.
• Enables company to identify potential profitable
customers so as to offer appropriate incentives.
• N.B. Information registration should not be
upfront since it acts as a barrier to entering a
site.
Database marketing, cleaning the database
and profiling
• Nowadays databases are sophisticated.

• Contain purchase history, value of purchases,
response to promotions and special offers, data
from cookies and personal details, predictive
data, frequency of purchases, demographic
information.
• Vital that the database collects the right
information.
BIG DATA and CRM
• large volume of data from sources such as web

analytics, social media, graphic media,
sponsored links, sociodemographic data, among
others, and which does not depend on the size of
the organization.
Database marketing, cleaning the database
and profiling
• Effective CRM relies on having a good database.
• Database is the collection of customer information from
many channels; websites, cookies, call centers and
surveys.
• E-commerce firms must remember that customers
value their communication
• Information gathering must not be invasive
• Uses of the data
• Answer customer queries.
• Build customer profiles
Ensuring effective relationships online
• Contact must not be too intense.

• Contact must be both online and offline.
• The medium must suit the target market.
• Determine customer preferences with regard to the
manner in which they want to receive information about
special offers, reminders or announcements.
• Timing must be appropriate.
• Information must be stored in databases.
Ensuring effective relationships online
• Use information in database to tailor the

communication to the customers’ individual
preferences.
• Use e-mails to stay in touch with customers.
• Updates of insurance claims, motor repairs, staying in
touch with customers after a purchase,
• special offers, new products.
• Offer social network forum for customers to
communicate amongst themselves.
Process of online relationship building
• Identify customers on the website and track them with

cookies.
• Differentiate customers.
• Build profiles of customers and develop segments
based on the profiles.
• Interact with customers to get more information and
develop special products for targeted segments.
• Communicate with customers using customized or
personalized communication to maintain a relationship
with them.
Benefits of E-CRM
• E-CRM enables the provision of online services such as

tracking the status of a parcel which has been sent by
courier or tracking the progress of a loan application.
• E-CRM is cheaper
• It is fast because most of the responses are automated.
• Help e-commerce organizations build relationships with
customers.
• Customers receive information that is more relevant,
tailored and interactive.
Stages of E-CRM
• Attract customers with online and offline

communication.
• Capture data-use the Internet to obtain customer data.
• Get closer-use the data and CRM tools to make contact
with the customers and to learn more about them.
• Embrace them-make the customer feel loved.
• Golden handcuffs-make the experience so personal or
special that the customer not only becomes loyal but
there is lock in and the customer will not want to leave.
E-CRM and personalization
• Information in the database allows the firm to

personalize e-mails, SMSs and even web pages when
the customer logs on with a password.
• Personalization enhances relationships.
• Creates a sense of ownership for customers.
Forms of personalization
• Customization
allow customers to exert their preferences e.g. web
page design; mode of communication
• Individualization
use of information from cookies and other tools to
deliver tailored content.
• In-group characterization
consumers receive content, communication or offers
which are designed for people like them.
Online differentiation
• Differentiation is “the process of adding a set of

meaningful and valued differences to distinguish the
company’s offering from competitors’ offering” (Kotler,
2003:315).
• Online differentiation strategies
• Site environment/atmospherics
• Offline it refers to in-store ambience.
• Can also be utilized online. Online it refers to the look
and feel of the site.
• It can be likened to the physical evidence.

• Site must be:
user friendly
• Easy to download.
• Portray accurate product and company information.
• Easy to navigate
• Tangibilizing the intangible

• Create 3D images of your product
• Take consumers on virtual tours
• Have product image enlargements trial downloads
• Customer reviews
• Building Trust
• Key issue on the Internet especially if customers are
paying online or their information is tracked for
personalized service or channel management.
• Define company’s private policy and strictly adhere to
it.
• Use a safe and encrypted payment system
• Use digital signatures
• Provide contact details of personnel in your company
• Efficiency and timely processing

• Make it easy for customers to place orders.
• Deliver product timely.
• Have alliances to assist in distribution.
• Deliver what is promised.
• Pricing
• Monitor competitor prices
• Offer premium prices by offering unique support
services e.g. customization
• Offer potential customer savings
• Price differentiation can be easily imitated.
• Non pricing differentiation is more enduring.
• CRM
• Build customer relationships with customers
• Engage in seamless communication
• Engage in knowledge management
• Enhance the customer experience

• Create social networks
• Allow consumers to configure the product
• Take customers for virtual tours
• Enhance the customer experience

• Create social networks
• Allow consumers to configure the product
• Take customers for virtual tours
The end

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• CRM is an approach adopted by an organization to build

• CRM is about treating each customer uniquely.

• The digital environment offers a host of methods for

• Dialogue should endear customers to the firm.

• Permission marketing is a term coined by Seth

• Successful CRM is dependent on profiling the

• Nowadays databases are sophisticated.

• large volume of data from sources such as web

• Contact must not be too intense.

• Use information in database to tailor the

• Identify customers on the website and track them with

• E-CRM enables the provision of online services such as

• Attract customers with online and offline

• Information in the database allows the firm to

• Differentiation is “the process of adding a set of

• It can be likened to the physical evidence.

• Tangibilizing the intangible

• Efficiency and timely processing

• Enhance the customer experience

• Enhance the customer experience

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