Online personalisation is just for the marketing department, right?Not quite - Alison Classe discovers that IT directors can get to grips with e-CRM - it is just like the traditional concepts of marketing with the added ingredient of the Internet
For anyone less than relaxed about e-marketing, it's reassuring to find that e-marketing concepts are mostly the same as traditional marketing models with the Internet as an added ingredient.
Customer relationship management (CRM) is about putting the customer at the centre of the business, giving the business a single view of the customer and various other unexceptionable goals. In practice, CRM has had a bad rap lately, due to some disappointing experiences. One problem was that early CRM systems tended to be the preserve of a single department - some were really just sales force automation or customer services systems - so they couldn't deliver the single view in any but the most limited sense.
Companies are starting to use "customer value management" and other alternative expressions and to emphasise that they now want to manage customer relationships across all of their departments.
When a marketing person refers to e-CRM, they may be thinking about one of two separate things, or both. One meaning is the use of Web technology to achieve CRM objectives, for example, the sharing of customer information across the company. The other meaning is the extension of CRM to customer interactions taking place over the Internet.
John Hilsdon, senior corporate communications officer with the Chartered Institute of Marketing, says, "If you've got a customer database, you want all your communications with the customer across any medium to be linked to that database."
Hilsdon explains that the challenge for IT is to integrate CRM with Web sites and software that supports other "channels", such as the call centre. The objective is for customers to use the various channels interchangeably, and simultaneously if need be, without having to explain who they are and what they want each time.
Some suppliers in the e-CRM marketplace may oversell products by encouraging marketing people to think that they can be used virtually off-the-shelf. Others recognise that their products will have to co-exist with existing CRM solutions.
Tony Leach, E.piphany executive vice-president, says, "Our product sits on top of conventional customer databases and can both draw data from them and put it back in."
As well as knowing about individual customers, there's also an analytical aspect to e-CRM - the part that helps companies analyse and understand customer behaviour in aggregate. That can involve discovering typical patterns in Web site usage - for example, you might find that customers that made their way to your site from another one or who reached a particular page, were more likely to buy, with obvious marketing implications.
Analysts at Meta Group last year identified the analytical aspect of CRM as particularly fast-growing, with a growth rate of 82%. However, it put the overall rate for CRM at 50% - which could be a case of companies shutting the stable door after the e-horse has bolted.
Paul Corriveau is product marketing manager with Accrue Software, which specialises in this analytical aspect of e-CRM. He says companies often design their Web sites without giving much thought to the e-CRM question, and then want to retrofit e-CRM to a site that is already up and running.
"Retrofitting is certainly possible and we do it daily. Ideally, though, we would like to get involved earlier on, because we can help plan the site in a way that makes it easier for organisations to get to know their customers," explains Corriveau.
"How can we personalise the Web site," asks the marketing department. This can mean a number of things. Peter Barrett, e-business consultant with PA Consulting Group, argues that the term "personalisation" is often abused.
"People who use it are often actually talking about customising the way the site behaves, so that if you click certain boxes you see certain screens. I'd argue that personalisation proper really has to happen through personal interaction - for example, when a call centre agent picks up on a previous conversation in a natural manner," says Barrett.
When the marketing department talks about personalisation, they may be talking of tailoring its behaviour based on knowledge of the customers' preferences, stored in a database. The tailoring could range from the rudimentary - the online pet shop remembers that you have a cat and not a dog; to the sophisticated - the financial services site knows your current portfolio and offers you propositions to complement it.
Another idea is to tailor the interaction based on demographics collected when you register on the site, or in more subtle ways. E.piphany, for example, says its system can personalise behaviour based on a real-time profile constructed from clickstream data, customer databases, transaction systems, third-party data, and other sources.
"What about affiliate marketing," is a question commonly asked by marketing. In other words, they would like to recruit a network of Web sites to act as cross between a sales force and a body of satisfied customers who recommend you to their friends. Affiliates' sites would typically include not just links to, but also content from your site, and preferably an explicit or implicit endorsement of some kind.
According to Serge Acker, UK managing director of European e-marketing specialist 404 Found!, this type of promotion and pre-selling can deliver "click-through" rates that are 10 times better than those of banner ads.
Marc Wolters is business development manager with Internet wine merchant Chateau Online, which has created its own affiliate network.
"Our goal was to have as many other Web sites as possible talking about us - small, medium and large. In return, we offer them three things. Firstly, a service, including free content they can put on their sites, exclusive special offers and country managers to help them get the best results. Secondly, we pay them £10 per customer that they introduce," said Wolters.
That compares favourably with a percentage per sale, Wolters argues, particularly as introduced customers tend to return directly for subsequent purchases rather than coming via the affiliate.
"Thirdly, the sites that join our programme become part of a community - and we give visibility to the best affiliates, so there is reciprocity to the relationship," explains Wolters.
Chateau Online uses 404 Found!'s software to automate the creation and tracking of affiliate relationships.
Wolters comments, "Using a product like this or iMediation may not be as easy as joining an affiliate platform like Be Free or magicbutton, but it has the big advantage that the affiliates are in your programme, not someone else's."
Permission-based marketing is also called "opt-in marketing". This involves getting punters to agree to receive e-mails on topics that interest them, for example, pensions or digital cameras. For the consumer, companies like 2busy2surf.com put this forward as a convenient way of researching a topic, such as an intended purchase, without trawling the Web.
According to Derek Holder, managing director of the Institute of Direct Marketing, it's an old concept, given a new lease of life by the novelty of e-mail marketing.
"There's a window of opportunity at the moment, but the novelty may wear off when everyone's getting hundreds of these e-mails," Holder warns.
Sustained success will depend on carefully designed messages that tantalise the customer into clicking on the link without offending or boring them, how easy it is to opt out.
Besides being a way of reaching new customers, permission marketing can be a way to conduct market research. By sharing information from permission-based marketing specialists, you may find out more about the demographics of people who are interested in your product category. Companies with something to publicise can hook up with an existing permission-based specialist, such as Mailtrack. Often your products will feature more or less prominently in mailings depending on a sliding scale of charges.
Marketing departments also want to know if they can use Web technology to facilitate their interactions with the agencies they outsource to. They are interested in Web technology as a means of improving internal communications and automating administration of marketing processes.
According to Chris Unsworth, international marketing director with network services provider Genuity, "Companies outsource a lot of their marketing activities these days: we might outsource telemarketing, PR, media buying, booth design, and so on, using different companies in each country.
"By setting up an extranet to link all those organisations together, we can give everyone access to the same material - logs, press releases, PDFs of adverts. That ensures that we deliver consistent messages in a very efficient way," adds Unsworth.
He suggests that processes and data can be standardised through Web technology. "People think of marketing as all about free thinking and creativity, but that's just one aspect. For the rest, it's a process-driven system that can benefit from standardisation as much as any other," explains Unsworth.
So your marketing director might be interested to hear about workflow or groupware systems for passing work out to agencies and keeping track of its progress.
The marketing department may like to use Internet technology in the operational management of a campaign. The idea is to apply Internet technology to marketing processes, as well as using it as a communications channel.
Richard Andersen, director for business development in Europe for MarketFirst, says, "Marketing campaigns comprise several steps, including planning, design, execution and measurement. Technology can help with all these steps."
Andersen talks about creating a dialogue with customers over the Internet - something much more sophisticated than a mere electronic mailshot.
"For example, we worked with an ISP who wanted to investigate their high attrition rate and we were able to contact a sample of customers and question them in some depth about what they really wanted from an ISP. That evolved into a genuine two-way sharing of information," explains Andersen.
So marketing people may be very interested in any software that can help them interact with customers without the need to employ squads of people feverishly writing e-mails.
Though the temptation for the uninitiated is to bracket sales and marketing together, marketing people insist there's a big distinction. "Marketing is not just the front end of a sales process," Andersen emphasises.
"Often the desired outcome is for both parties simply to be better informed about a mutual need."
A site that gives customers information to plan their buying may generate more sales in the long run than one that sets out to sell; bombarding people with sales messages creates resistance, whereas giving them the information they want creates a more open frame of mind.
Steve Martin, managing director of Aspect Consulting, has worked as a marketing director and as a network manager. He says the confusion between marketing and selling is a common reason why IT people and marketing often to fail to communicate.
"What marketing people are looking for, above all, is insight into how customers think and behave," says Martin.
In terms of using a Web site, that could mean keeping track of how people get there and ideally why and when they leave and where they go next. If being asked for information, such as your partner's income, makes you take umbrage and immediately go off to a competitor's site, that would be useful to know, Martin points out.
Although e-marketing principles are the same old marketing principles, the immediacy of the Internet has made a difference to how they are interpreted.
Holder says, "It's now realistic to put a campaign together in 24 hours, and because you can get the responses analysed without human intervention, the old days of waiting 12 weeks to see if it worked are gone."
Claire Hewson, marketing manager with buy.com, agrees that speed is of the essence.
"We do a lot with e-mailing coupons which can drive a customer straight to the site and then create a transaction. It works extremely well - you get the sales, and the costs of acquiring customers are relatively low," explains Hewson.
She sees advertising the brand through banners and the like as a less attractive option than these initiatives that create an immediate call to action.
The Internet also offers the ability to track the success of campaigns in near real-time and make appropriate adjustments.
Hewson says, "We can track hourly activity resulting from any campaign and if it's not working we change it at once." Buy.com uses a system developed in-house by its US parent but there are also packages that aim to do the same thing.
Leach calls this feature a "self-learning engine" and explains that it can not only track the overall success of campaigns but fine-tune an individual campaign on the fly.
"By monitoring a campaign in real-time, you can immediately detect which offers are working and which ones aren't, and make sure that customers get the ones that they're likely to find most attractive," adds Hewson.
Why are marketing people sometimes heard to complain that the IT department is preventing them achieving what they want with the Internet? It's an accusation that's less commonly levelled at IT people in dotcoms and start-ups than those in more traditional companies.
Hewson previously worked for a traditional blue-chip company and finds working with buy.com's IT team refreshing.
"The attitude of the technical team here is that there's nothing that can't be done", Hewson comments. She points out that because the whole business is centred on the online world, everyone tends to be on the same wavelength.
As Barrett says, "A dotcom typically has a small team of people who all talk to each other and are all aware of both the business and the Internet. They don't have the departmental barriers other companies suffer from."
They also don't have the history of marketing feuding with IT because they can't get labels printed for their mailshots on time, nor the legacy systems to integrate with, nor the development backlogs into which e-marketing projects have to be shoe-horned.
What the bricks-and-mortar companies do have is an established brand and, in some form, knowledge about their customer base. If there can be a meeting of minds between IT and marketing, then the potential advantages could be huge.
Tips for e-marketing enthusiasts