eCRM

The concept of relationship marketing was first coined by Berry in 1983. He considered it to consist of attracting, maintaining and enhancing customer relationships within organizations. In the years that followed, companies were engaging more and more in a meaningful dialogue with individual customers. In doing so, new organizational forms as well as technologies were used, eventually resulting in what we know as Customer Relationship Marketing (CRM). The main difference between RM and CRM is that the first does not acknowledge the use of technology, where the latter uses Information Technology (IT) in implementing RM strategies.

The exact meaning of CRM is still subject of heavy discussions. However, the overall goal can be seen as effectively managing differentiated relationships with all customers and communicating with them on an individual basis. Underlying thought is that companies realize that they can supercharge profits by acknowledging that different groups of customers vary widely in their behavior, desires, and responsiveness to marketing.

As the internet is becoming more and more important in business life, many companies consider it as an opportunity to reduce customer-service costs, tighten customer relationships and most important, further personalize marketing messages and enable mass customization. Together with the creation of Sales Force Automation (SFA), where electronic methods where used to gather data and analyze customer information, the trend of the upcoming Internet can be seen as the foundation of what we know as eCRM today. We can define eCRM as activities to manage customer relationships by using the Internet, web browsers or other electronic touch points. The challenge hereby is to offer communication and information on the right topic, in the right amount, and at the right time that fits the customer’s specific needs.

Channels through which companies can communicate with its customers, are growing by the day, and as a result, getting their time and attention has turned into a major challenge.[8] One of the reasons eCRM is so popular nowadays is that digital channels can create unique and positive experiences – not just transactions – for customers. An extreme, but ever growing in popularism, example of the creation of experiences in order to establish customer service is the use of Virtual Worlds, such as Second Life. Through this so-called vCRM, companies are able to create synergies between virtual and physical channels and reaching a very wide consumer base. However, given the newness of the technology, most companies are still struggling to identify effective entries in Virtual Worlds. Its highly interactive character, which allows companies to respond directly to any customer’s requests or problems, is another feature of eCRM that helps companies establish and sustain long-term customer relationships.

Furthermore, Information Technology has helped companies to even further differentiate between customers and address a personal message or service. Some examples of tools used in eCRM:

Personalized Web Pages where customers are recognized and their preferences are showed.
Customized products or services (Dell).

CRM programs should be directed towards customer value that competitors cannot match. However, in a world where almost every company is connected to the Internet, eCRM has become a requirement for survival, not just a competitive advantage.

Different levels of eCRM

In defining the scope of eCRM, three different levels can be distinguished:

a) Foundational services:

This includes the minimum necessary services such as web site effectiveness and responsiveness as well as order fulfillment.

b) Customer-centered services:

These services include order tracking, product configuration and customization as well as security/trust.

c) Value-added services:

These are extra services such as online auctions and online training and education.

Self-services are becoming increasingly important in CRM activities. The rise of the Internet and eCRM has boosted the options for self-service activities. A critical success factor is the integration of such activities into traditional channels. An example was Ford’s plan to sell cars directly to customers via its Web Site, which provoked an outcry among its dealers network. CRM activities are mainly of two different types. Reactive service is where the customer has a problem and contacts the company. Proactive service is where the manager has decided not to wait for the customer to contact the firm, but to be aggressive a contact the customer himself in order to establish a dialogue and solve problems.

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