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Internet Marketing Intelligence

Internett Marketing  

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  • Søketeknikker
  • Søkestrategi
  • Market research
  • Markedsundersøkelse

• Internet Situational Analysis of 1to1 Marketing/CRM

Chapter 1 Introduction/overview

Chapter 2 Search Strategy

Chapter 3 One to One Marketing and its environment

Chapter 4 Environmental Scan

Chapter 5 Market analysis

Chapter 6 Competitors Analyses

Chapter 7 SWOT

Chapter 8 Critical Success factors

Chapter 9 Segmentation, Customer analysis and target markets

Chapter 10 Business Objectives and Strategies

Chapter 11 Marketing Mix tactics and Conclusions

Chapter 5

Market Analysis

Chapter 5 Market analysis

5.1 Trends

5.1.1 Mega trends

5.1.2 Emerging Web Trends

5.1.3 1999 Web Trends

5.1.4 Where in the world is the Net taking us?

5.1.5 Future.sri.com

5.1.6 Predictions for the Web in 1999

5.1.7 Other trend forecasts

5.1.8 E-Commerce

5.1.9 Trends Technology

5.1.10 Drivers for Change – Consumers

5.1.11 Demographics

5.2 Internet statistics

5.2.1 Internetstatistic.com

5.2.2 E-Marketer STATISTIKK

5.2.3 NUA

5.2.5 Activmedia

5.2.6 Dataquest

5.2.7 Surveyn.Net – Internet User Survey #2

5.2.8 Other Statistik

5.2.9 Web shopping Statistics

5.3 One to One marketing / Relationship marketing

5.3.1 Relationship Marketing

5.3.2 1:1 marketing

5.3.3 Permission marketing

5.3.4 Power tools for 1:1

5.3.6 Critical Questions

5.3.8 The state of one to one online, part II

5.4 Customer care/ customer service

5.4.1 Customer Care Pricewaterhous & Coopers

5.4.2 Customer Relationship Management CRM

5.4.3 Customer service

5.4.4 Collect customer information

5.4.5 Customer service

5.4.6 Internet Customer Service

5.5 Personalization

5.5.1 Personalization: Marketing to one:

5.5.2 There are 4 ways to ad personalization to the web site

5.5.3 Different articles about personalization

5.6 Privacy

5.6.1 Information sources on Internet concerning privacy

5.6.2 Articles about privacy

5.7 Security

5.7.1 Different articles concerning security

5.7.2 NUA Security Issues

5.8 The Market place 1to1 after Peppers & Rogers

5.8.1 Communications and Media

5.8.2 Customer Knowledgebase

5.8.3 Mass Customization

5.8.4 Distribution and Channel

5.8.5 Organizational Structure

5.9 The future of One to One Web Technology

5.9.1 The Future of One-to-One Web Interactivity

5.9.2 The Future of One-to-One E-Mail

5.9.3 The Future of One-to-One Web Site Personalization

5.9.4 The Future of One-to-One Push

5.2.5 The Future of One-to-One Community

5.9.6 The Future of One-to-One Web Presentation and Conferencing

5.9.7 The Future of One-to-One Advertising and Promotion

5.9.8 The Future of One-to-One Web Site Tracking and Analysis

5.9.9 The future of tracking in a word: databases.

5.10 Products and customers

5.10.1 Who is buying what over the Internet?

5.10.2 Customer-business interaction

5.10.3 Business relationships and communications

5.11 Changes in the market place

5.11.1 Drivers of Change

5.11.2 Consumer Behaviour

5.11.3 Industry Response

5.12 Changes in the market response

5.12.1 Product & Service Offering

5.12.2 Relationship Marketing

5.12.3 One to One Marketing

5.12.4 Mass Customisation

5.12.5 Future Delivery Mediums

5.13 Changes in delivery mediums

5.13.1 Post

5.13.2 Fax

5.13.3 CDs and Disks

5.13.4 Kiosks

5.13.5 Pagers and PDAs

5.13.6 Telephones and Smartphones

5.13.7 Interactive TV

5.13.8 Web TV

5.13.9 Internet E-mail

5.13.10 Internet World Wide Web

5.13.11 Proprietory ISPs

5.13.12 Summary

5.3

One to One Marketing / Relationship Marketing

5.3.1.1 The Definition

A New Perspective

What’s the difference? You’ve heard some of the following terms before, and after awhile they all seem to

sound alike. These laymen’s definitions, used with the all-American lemonade stand as a model, should help put the terms into perspective.

5.3.1.1.1 Mass (Traditional) Marketing

Focus on one product at a time and sell it to as many consumers as possible. (Market one kind of lemonade to as many neighbors as you can.)

5.3.1.1.2 Database Marketing

Target those customers most likely to respond to a specific product. The focus here is on you, rather than the customer. (You get a great deal on limes, so you offer a special deal to customers you know have purchased limeade before.)

5.3.1.1.3 Frequency (Loyalty) Marketing

Increase customer loyalty by rewarding customers for spending more. (You create a frequent-sipper card that rewards customers with a free lemonade after they’ve purchased a certain amount.)

5.3.1.1.4 Relationship Marketing

Reward your customers but also identify who they are and who among them are responsible for the majority of your income — view the customer from a lifetime value perspective. (After finding out customers’ desires, send them special thank-you cards entitling them to their favorite beverage, and continue two-way communication with them, even during the off-season!)

A base level of profitability is achieved year after year.  Satisfied customers use a firm’s services more and more each year which increases revenue.  The cost of servicing a customer declines each year.

Satisfied customers generate new business through referrals.  A five percent increase in customer retention can equal a 25 to 85 percent increase in profitability (depending on the industry).

Q. Why is customer communication so important to relationship marketing?

Customers appreciate it when you take the time to talk and listen. Just as you wouldn’t try to enhance and

build a personal relationship without some form of communication and interaction, the same holds true for

building customer relationships. If they are your best customers, they will respond positively to recognition and rewards.

Q. Who uses relationship marketing?

Anyone interested in reducing marketing costs, increasing customer lifetime value and growing their return on investment.

Q. How do you get started?

It’s important to choose a marketing firm that is compatible with your unique needs. There are some

important questions to keep in mind when choosing a partner:

• Experience — What’s the agency’s reputation, client list, portfolio?
• Capabilities — How has the agency enhanced clients’ revenue?
• Creativity — Does the agency have the capability to execute your design?
• Technology — Does the agency incorporate leading-edge technology into its programs?
• Customer Service — Are the agency’s current customers satisfied?
• Client Involvement — Does the agency work as a partner with its clients?

5.3.1.3.1 What is a marketing Relationship

• Definition: The process of creating maintaining and enhancing strong, value-laden relationships with customers and other stakeholders. (Kotler, 1998)
• Important Elements:
  – Continuing
  – Includes customers and intermediaries or cybermediaries

5.3.1.3.2 Types of Relationships

• Basic – No follow up
• Reactive – encourage further contact
• Accountable – follow up / satisfaction
• Proactive – follow up / sales
• Partnership – continuous working relationship
• Remember, these relationships can be either business to business or business to customer

5.3.1.3.3 Why are Relationships importantGeneral

• The cost of lost customers
• Defection cost = Number of Accounts Lost X Average Account Revenue X Margin
• Switching costs for consumers

On-line

• Low switching costs On-line
• On-line word of mouth
• The unique proporties of many to many communication
• Offline studies show dissatisfied customer tell only ten people but on-line this can be much larger.

5.3.1.3.4 Longevity of Relationships

• How to build Effective customer Relationships on-line
• Netiqutte
• Banner Ads

5.3.1.3.5 Building Relationships Online

• You can’t have a relationship if you don’t know who your customers
• You can’t have a relationship without two way communication
• There’s no relationship if the customers don’t return
• Treat best customers better

5.3.2.1 Some Stats

• IDC chose most successful sites for study
• 92% have customer loyalty programs
• 75% use personalisation and mass-customisation to increase customer retention
• 44% try to calculate their customer lifetime values (CLV)

5.3.2.2 Cookies

• A small text file found in your hard drive
• Allows information about your browser version, type (netscape or explorer), Web surfing patterns and certain computer configurations to be stored
• Your browser program stores this information and sends it to Web site when requested
• Can know how many visits to a particular site and when
• g. customised Web pages
• Remembering your username so that you do not have to type it each time you visit site
• Makes surfing experience more customised and enjoyable

5.3.2.3 Problems with cookies

• User can easily modify or delete cookie
• Browser specific: one cookie per browser
  – Many users use both netscape nav. and MS explorer
  – Several users may use a single computer
  – User may use several computers
• Privacy becoming big issue with cookies

5.3.2.4 Server Logs

• Records all the activities that goes through a server
• Determines what happens at your site
• g. how many, where from, surfing patterns, which pages, ad campaigns.
• Programs that report in easy to read format: http://www.netintellect.com

5.3.2.5 1:1 marketing

• Basic 4 Ps Place, product, price & promotion.
• New P with shift from mass communication to computer-mediated communication: Personalisation.
• Due to Internet’s capability of individualised targeting, instant feedback and global reach.

5.3.2.6 Communications Era (1995 (?) to ?)

• third wave marketing
• mass customisation and personalisation
• Interactivity of CME allows for Individualisation of products and services.
• Knowing the Personality, Preference, Percularities and Penchants of consumers (the new 4 Ps?)
• ie 1:1 marketing (Peppers and Rogers) or Personalisation.

5.3.2.7 New market segmentation

• in addition to demographics, geographics and psychographics
• Technographics: combination of general demographic measures with measurements of an individual’s usage and ownership of interactive technologies.

5.3.2.8 Technographic example

• eg male 25-34,
• spends 10-15 hours a week on the Internet on Netscape Navigator
• uses a Pentium II 300mmx processor chip
• Upgrades hardware every 1 year
• Owns mobile phone
• Uses electronic organiser

5.3.2.9 Two Foundations of 1:1 marketing

• based on principle of valuating customers in terms of customer lifetime value (CLV), not a one-off transaction
• Building a «learning relationship» with customers so they will find it increasingly hard to walk away.
• Perceived risk > perceived benefit

5.3.2.10 Three principles of 1:1 marketing

• Information: Knowing the customer individually and remembering their relationship with the company using a database.
• Communication: Getting feedback from customers on how the company is doing
• Production: Mass customisation, making individually tailor made products.

5.3.2.11 Future of 1:1 marketing: Microchips

• Can be sprayed unto newspapers to monitor reading patterns
• Further, more personalised data can be gathered.
• MEMs (Micro-electro-mechanical)
• Possible to send to planets to test atmosphere and what’s going on down there
• MEOWs: even smaller and faster microchips
• Issues of privacy

5.3.2.12 Example of 1:1 marketing

• one-to-one fast food chain,
• magnetic stripe card that remembers your favorite meals
• swipe your cards at a drive-through kiosk to see a list of the last five meals you ordered (or, if you prefer, you could create your own list of favorites)
• you would not have to wade through a sea of choices to enjoy a meal that is much closer to being delivered «your way.»
• http://www.crayon.net
• http://www.1800usahotels.com (30% rise since Nov ‘98)
• http://www.instantcall.com

5.3.2.13 Potential dangers of 1:1 marketing

• Relying solely on technology can also make you lazy.
• For example: It can take you an hour to get in touch with 10 people on the phone. In an hour you could send 30 emails.
• Alternatively, you could send a mass customised email to 100,000 people in a minute.
• Note that 30 emails with a individual human touch is better than 100,000 annoyed people who feel like they have been spammed.
• Another example of losing the human touch: American Express.
• Amex customer service phone operators using caller ID, greeted members by name even when they had not told the company so
• Resulted in backlash and distaste from many customers
• So Amex allowed customers to identify themselves first- customers had perception that Amex computers were super fast when in fact caller ID had already brought up details
• Moral of the story? don’t lose the human touch, and let your customers feel in control

5.3.2.14 Other pitfalls to avoid

• Don’t ask customers too much; asking them their email every time they purchase something can get annoying
• Don’t give certain customers a feeling of being “left out” just because they purchase less from you
• Don’t pigeon-hole your customers too narrowly just because you can guess what your customer wants, don’t close out other possibilities that the customer may want out of the ordinary- be flexible
• Don’t abuse information and hence…TRUST
• Finally: Interaction sets up stage for a relationship, but does not mean a relationship exists

• People value their privacy, only way to get customers to agree to provide information is to get them to do so willingly
• Make customers feel in control of the relationship- concept of prosumer (where consumer is active and not passive, in control of information he/she is exposed to)
• Conduct permission marketing- based on assumption that everyone is selfish consumers will only give information and allow communication when they see something of value in it for the
• .http://www.free-pc.com giving away 10,000 PCs- attracted over 1 million people to participate in a lengthy survey

5.3.3.1 Phases of permission marketing

• Attention (using Web site)
• Permission (ask for email address in return for e-zine)
• Learning (consumer learns from ezine)
• Trust (leads to change in purchasing behaviour)

5.3.3.2  4 rules of permission marketing

• Permission must be granted– cannot be presumed (buying a email list does not give you permission to send email)
• Permission is selfish– make sure it is clear to prosumers that they percieve that there is something of value for them
• Permission can be revoked as easily as it is granted– allow customers to revoke permission, yet also give them power to grant more permission to you (this will depend on the quality of interactions between you and your customer)
• Permission cannot be transferred– just cuz they give you permission to send them email does not mean you can expect the consumer to permit some other company to send them email (akin to permission for a date)

5.3.3.3  Four tests of permission marketing- from permission to 1:1

• Does every one of your marketing efforts encourage a learning relationship? -Is there opportunity for customers to interact and hence learn more about them?
• Do you have a permissions database? There is a need to track the relationships you have with your customers.
• Do you have valuable information for customers? Be prepared to give information and provide answers to questions
• Are you making efforts to deepen your permission to communicate with your customer?

5.3.3.4  The six levels of permission marketing

level 6: Spam

Making contact with customers with no prior permission (technique from sales era) (note: spam refers to unsolicited emails)

Level 5: Situational selling

When you are visiting a store/web site and there is unsolicited marketing advice

Level 4: Branding

When you have a good brand name in the mind of the consumer

Level 3: Personal relationships

A level at which recommendations are made to the consumer who feels that company is advising in his/her best interest.

Level 2: Green stamps

Long-term relationship where consumer is rewarded with something that he/she wants (e.g. frequent flyer points)

Level 1: Intravenous treatment

There are close bonds  and good  understanding of the consumer  ability of the firm to meet their needs in the best possible way.  Consumer perceives great risk in going to competitors rewarded strongly with current firm.

5.3.4.1  Keyword-based customisation

• Information is categorised into categories and subcategories
• User clicks on categories he/she is interested in
• User is presented with information within the chosen categories
• best used when you have lots of information on your site (content-intensive site) and want to personalise it at a relatively low-price
• Username and password or cookie is used for matching with keywords input previously
• Preferred information is then shown to user based on past choices
• http://www.crayon.net , http://www.customnews.cnn.com

5.3.4.2 Collaborative filtering

• compares the input of many users to identify a common pattern
• based on these patterns, recommendations are proposed
• Based on large database that covers extensive demographic information and psychographic information
• Preference patterns and/or demographic information in the database is used to match your profile and generate recommendations for you

5.3.4.3  Downside of collaborative filtering

• Cost : US$25,000-$50,000 for collaborative filtering system
• Needs significant amounts of information from the user before being able to generate recommendations- more information, more precise the recommendations
• Need a lot of information from a lot of people
• Companies who sell systems: http://www.firefly.com, http://www.wisewire.com
• In action: http://www.moviefinder.com, cinemax.com/critic

5.3.4.4 Rules-based personalisation

• Match users input to a set of rules, or assumptions about user behaviour
• If you tell a site you are 9 and like comedies, the site may suggest the movie “Mulan”
• If you are 80 and you express a liking for comedies, the site may suggest “Grumpy old Men”

5.3.4.5 Challenges with rules-based personalization.

• Expensive, takes a lot of time to set up
• Need to collect a lot of information from a lot of people to make offerings precise
• Need to continually refine your rules
• g. http://www.andysgarage.com , http://www.kodakpicturenetwork.com

5.3.4.6  Case-based personalisation

• System takes each input case-by-case
• Transforms free-form user input into questions that your database may be able to answer
• Designed to deliver specific answers to specific questions, not just suggesting preferences
• a 24 hour online help desk with limited personnel
• Operator needs to establish a parameter for how to respond to different types of messages
• A database and a set of algorithms are established to which incoming input (eg. email enquiries) are compared and sorted
• Sorted emails are then automatically replied with mailbots, with customised messages
• Expensive, requires extensive customisation, needs lots of user input.
• http://www.personalogic.com willing to implement and host system for you in exchange for some share of sales

5.3.5  Summing up 1:1

• Everyone who comes to your site is looking for something unique to their needs
• The best way to take advantage: personalising the Web experience to each user
• give regular visitors their own custom made home page, content and product offerings

• Value driven marketing
• One to one solution
• Lifetime value
• Loyalty and retention strategies
  (Please read «Never say you are a loyal customer» at http://www.webcmo.com/forum/fortop32.htm )
• Customer satisfaction and loyalty
  Key diver of customer satisfaction» http://www.webcmo.com/forum/fortop22.htm
  Please read «Fundamentals of Customer Satisfaction Study» at
  http://www.webcmo.com/forum/series1.htm  and «Strategic CS study is not a good strategy» at http://www.webcmo.com/forum/series2.htm )
  Causal Path Analysis http://www.webcmo.com/sware/advance.htm )
• Value analysis Vs. market analysis
• Summary
  Here I provide a summarized guide of implementing this marketing strategy:

• Create a small but efficient database to collect the most useful information: don’t try to collect every piece of information that is available;
• Establish an algorithm to calculate the value of each customer: make the calculation easy but accurate;
• Calculate the value and assign each customer to a segment based on its value: how many segments do you want to create?
• Adopt one to one marketing strategy to the most valuable customers: one to one solution can only be applied to a small fraction of your customer base;
• Predict the likeliness of defecting for each customer and assign each customer to the loyal or defecting segment: you may ignore this part if you don’t know how to do it;
• Apply loyalty strategy to the high value and loyal segment and retention strategy to the high value and defecting segment: What are good loyalty and retention strategies? There is no certain answer. Therefore, even you are unable to predict the defecting probability of each customer, you are still able to conduct this Value Driven marketing strategy

The key point of this marketing strategy is to focus your resources on the most valuable customers.

Interact: Since the Web provides an efficient way for customers to interact with a company, it’s not surprising that all of the industries represented by the sites we reviewed did a good job interacting with customers. Financial Services and Consumer/Business Services are the leaders in interacting with customers.

Customize: All one to one sites personalize the Web experience to some degree and allow their customers to tailor the site. Portals and media sites are the clear leaders in customizing the online experience for users and customers. The keen competition for eyeballs and «stickiness» in this segment demands that sites customize the information provided to the end user.

• Books/Music/Video (e.g., Amazon);
• Community/Calendar (e.g.,When);
• Consumer Goods (e.g., Gap);
• Consumer/Business Services (e.g.,FedEx);
• Financial Services (e.g., S&P Personal Wealth);
• Information Technology (e.g., Dell);
• Portal/Media (e.g., Wall Street Journal)
• Travel/Hospitality (e.g., BizTravel).