|Customer Relationship Management
Below are some free tips for an effective on-line strategy.
On line customer relationship management can significantly affect the performance of your Internet strategy.
This article outlines five key actions you can use to capture a leading e-business position.
Understand the real value of your most profitable customers.
In any business environment, focusing on your best customers is a key to success, but the Internet provides offers even greater opportunities. It can provide you with a clear window on all purchases and other types of transactions. Knowing which of your customers are profitable and their real value has two significant implications:
a) you will be able to establish who your core customers are and find ways to cater for their needs, such as modifying your web site to deliver the kind of features they are looking for, and
b) it allows you to determine what makes customers profitable, then encourage these behaviours in your current and potential customers.
NB Obviously customer behaviour will vary by product type or purchase, but this type of analyse should lead you to consider complimentary products or a cost reduction initiatives.
Optimise customer acquisition costs.
The key to optimising customer acquisition costs is for you to determine which marketing vehicles deliver the best and most profitable customers (see article on multi-channel marketing).
On line winners decide where to deploy their marketing and advertising budgets based on a good appreciation of customer acquisition costs, not simply on click-through rates. Therefore it is essential that you understand the value and cost per customer to maximise the "productivity" of your on line advertising budget. The end goal is for you to be able to attract high profit customers for a relatively low cost per customer.
Prioritise marketing actions.
Successful companies aggressively manage their customers through the complete customer cycle ie from attraction to engagement to conversion to retention. However, you will not achieve the most value by trying to improve each stage of the cycle simultaneously.
For example, a 50 per cent in your number of web site hits may result in a 10 per cent improvement in profits, but the same profit improvement may be achieved by just a 20 per cent improvement in visitor conversion rates. From this type of analysis you should then be able to determine what actions you take first ie those that deliver improved results,but at a lower acquisition cost.
Use visitor analysis to optimise your site for key customers.
The Internet provides a unique opportunity to observe customer dynamics. You can determine how frequently visitors and customers come to your site, how long they stay, how they interact with your pages and how they transact business. The ability for you to "watch" customers navigate your web site allows you to pinpoint needed site improvements.
Winners analyse site data to determine where visitors get hung up during site navigation and to better understand which content areas lead to customer conversion. A simple example would be if 40 per cent of your visitors do not get beyond your home page you may need to make changes to your web site to improve site penetration and ultimately purchasing behaviour.
Drive conversion, cross selling and loyalty through customer segmentation.
Customer segmentation enables you to find groups of individuals, identify common characteristics among them and for you to develop targeted marketing programs to improve conversion rates. By understanding customer behaviour on the Web, you can often improve cross-selling and retention. Analysing this behaviour, based on a wealth of data available through the Internet, is usually sufficient for you to develop a set of marketing actions. However, traditional off line customer research can also be useful in designing relevant offers and messages.
Likewise, the ability to monitor visitor behaviour provides you with a unique ability to use targeted messages and content to help clinch a sale. Winning companies will track and capture the behaviour of visitors to determine which customers have the potential to be profitable. For example, you can identify visitors that do research at your site, but have yet to make a purchase, and tailor your marketing messages, pricing and other promotions to induce this group of visitor. Alternatively, you may wish to track visitor frequency, duration and location to establish overall behavioural patterns.
By you developing a description of your different types of customers, together with the current and potential profitability of those segments, you can use this information to develop segment-specific marketing action plans and improve the performance of your Internet strategy...