Continue in 2 seconds

The “E” Side of CRM

Published
  • April 06 2000, 1:00am EDT
More in

For the next few articles we will focus on some issues and concepts on the "e" side of customer relationship management (CRM). As companies continue to master the science of running transactions through their Web site, we see a gravitation to Web marketing. The Web is increasingly becoming a key loyalty driver as customers continue to find the convenience and (in some cases) the speed of the Internet appealing. As competition heats up, the Web and the distance to your competitor is measured in seconds instead of miles, and slick graphics are no longer a sufficient incentive to justify ordering over the Web.

Last month we talked about the new types of analysis and data that can be captured from Web sites. This month, we continue along that theme and look at campaign management on the Web. Several vendors and practitioners were interviewed during this last month, and their thoughts and opinions are included in this article.

Fear

The fear factor looms heavily over the ROI of marketing on the Web. As mentioned in past articles where I reviewed the 1999 summer and winter NCDM conferences, attendees were, at the beginning of the conference, concerned that they were "behind" others in their Web marketing efforts. However, by the end of both shows, there was the collective sigh of relief that, though there were companies that had serious Web marketing programs, the majority of the companies were still early on in the analysis, proof of concept and initiative phases.

This relief does not last long. I would guess that soon after returning from these shows, these same individuals were bombarded with press releases and stories about how everyone else was successful at such efforts. We will most likely notice at the 2000 summer NCDM show that many organizations have made serious progress and that others need to be concerned. When presenting at various conferences, I have found that I only receive a small number of raised hands when I ask the question, "Who is doing marketing on the Web?" When asked "Who has an initiative to do marketing on the Web?" 100 percent of the hands are raised. However, more hands have recently started to show.

What are People Doing?

It appears that most companies are currently focusing on customer acquisition. This is especially true of the dot-coms that are trying to drive traffic to their Web sites. Whether they choose to use direct mail, advertising or e-mail, the goal is to protect and promote the brand and get as many people to the site as possible. For example, if you are a BusinessWeek subscriber, you have probably been bombarded with communications incenting you to visit their Web site for investment advice and other features. Your bank has probably sent you a number of direct-mail pieces encouraging you to use the Web to receive "X" months of free bill payment. And, of course, there is the never- ending advertising from traditional hard-copy publishers to visit their online magazine.

Retention campaigns are practiced less frequently. These campaigns usually take the form of Web campaigns or what is sometimes referred to as passive campaigns. Basically, these are campaigns that are "waiting" for specific customers to visit a site. When the Web site detects the visit, specific content is shown to that customer (i.e., "It’s time to renew your subscription and receive XYZ great deal..."). The concept is inherently flawed, however, for if you do have a customer who is probably going to churn, it is most likely because that customer does not visit the site very often. As a result, the passive mechanism does not work as well. The consumer will not witness the "great deal." E-mail retention campaigns are less frequent than Web retention campaigns, but many of the organizations we talked to are planning to incorporate e-mail retention into their marketing mix in the near future. The difficulty to retention campaigns is the data. Whereas acquisition campaigns are relatively easy – you have a prospect and you mail to them – retention requires an understanding of the data and involves a matrix of various creatives or pitches. Many start-up dot-coms do not have enough data on their customers and, as a result, are not utilizing the channel as a retention tool. Other companies have not brought the sophisticated database marketing techniques they use in the offline world to the online world.

One place I would love to see more e-mail retention campaigns is for hard-copy magazine subscription. You know what I am talking about. You get the magazine with the cardboard on the front that says, "Time to renew, fax, call or use our Web site." However, when I am online, I either forget that I have to resubscribe or I don’t have the Web address handy. It would be ideal to receive an e-mail to which we could respond.

Innovative companies who have mastered the data are starting to use e-mail campaigns not only for retention but for true relationship building. Of the companies we talked to, there seems to be a common thread. Signing up for Web sites is easy, and customers seem to over- subscribe. They sign up for multiple Web sites, log in the first time and promptly forget about the site. Some companies have stated metrics to help them correlate the amount of usage it takes in the first "X" amount of months to know if this customer is going to stick around. These organizations use e-mail with highly personalized content to try to drive usage during those first months. Driving usage appears to increase interest in the site and lower the churn rate. Why does it work? Because it is very simple for the customer to click on a link located at the bottom of the e-mail. This is especially true if the customer recently subscribed – and forgot – about the site. The competition for clicks is fierce, and it is easy to get lost.

Don’t think that this is a marketing tool for only business-to-consumer-focused companies – the Web is simplifying business-to-business communications as well. In one way, shape or form, we heard from various companies how e-campaign management has solidified and improved relationships with their partners. The most frequently heard comment was for lead dissemination. Basically, the company receives a lead, maybe through an acquisition e-mail campaign. The company then forwards a communication to the appropriate third-party channel partner via an e-mail notifying them of the lead. Through a link in the e-mail, the partner can access the company’s extranet that informs them about the details of the lead and maybe even what the potential customer reviewed on the Web site during the visit. This type of communication enhances the relationship with the partner and forwards the right information to the right person needed to close the sale. Companies practicing this trick are enjoying greater loyalty from their partners through this automated process.

But it’s Not that Easy

All vendors agreed that publicity and the media have made everything about the Web – especially e-mail campaigns – sound very easy. As we always preach, do your due diligence, perform your analysis and make sure your project is aimed in the right direction. Can you get a 50+ percent response rate? Yes, maybe you can, but not in day one and not for every campaign.

E-mail response rates are currently exponentially higher than other channels. But all vendors will warn that the novelty for the customer will eventually wear off – not as much as banner ads – but the novelty will wear off and the competition will increase.

Most companies that stumble with these efforts share similar experiences. They combine fear with moving too quickly and tackling too much at one time. Without setting up the right infrastructure, the right strategy, the right technology and the right process, these initiatives never have a chance of getting off the ground. Before launching any of these initiatives, marketers should be asking themselves, "Who are the right customers to target via e-mail or the Web?" and "What is the right product to push?"

What to buy?

As usual, the choice of the right campaign management tool is a difficult one. On one hand, you have the "big three for the Web," Annuncio, MarketFirst and Rubric. These tools are well ahead of the traditional vendors when it pertains to online marketing. However, they are less sophisticated through the traditional channels. Many of these tools also perform their functions from their own database and data model. Though the data model is usually customizable, the need to replicate data from the marketing database or data warehouse typically gives possible customers pause.

These e-tools are tough to distinguish and differentiate. They all perform the same basic functionality, and customers are having a tough time understanding the advantages. However, the bar has been raised in a couple of different ways. MarketFirst has been active in hosting the application to help customers with quick wins while taking away the infrastructure issues. Broadbase’s acquisition of Rubric gives them an integration point to an analytical tool. This acquisition, once integrated, could be a powerful combination.

The traditional vendors such as Prime Response, Xchange, Inc. (formerly Exchange Applications) and Recognition Systems are racing to update their e-offerings and should be well positioned this year, but they have many battles to fight including process workflow and integration with analytical tools. These applications may be better positioned for true multichannel marketing and coordination.

As in the clickstream world, the best way to determine the best tool for you is by checking the vendors’ references. Some of these companies can boast a large customer base and point to impressive results. Others are just starting out. Whether you choose to go through a formal RFP process or not, have your vendor candidates put together a custom demo script that proves that the campaigns you need to deliver are indeed possible. Make sure your IT department is involved to look under the vendors’ covers and understand where the integration issues are going to be, especially if the tool uses the vendors own database.

Register or login for access to this item and much more

All Information Management content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access