The role of technology

1
The role of technology

• The relevance of technology
• Things to do before you start with technology
• Developing a technology strategy
• The critical relevance of a customer information
  file
• Using technology to create relationships

2
The relevance of technology

• Technology is not the most important factor in
  determining the success of a firms relationship
  marketing strategy
• Technologies serve to implement the relationship
  marketing strategy
• Beware of the trap to overinvest in leading edge
  technology success is not determined by
  technogical differentiation but by creating a
  viable strategy

3
Technology strategy

• If you want to start using new technologies dont
  just start with designing a Web page, but make
  your whole organization ready for the new digital
  reality!
• This requires an infrastructure that supports
  relationship marketing today and tomorrow
• Thus, you need to develop a technology strategy
• But first agree on a number of basic elements
  and definitions

4
Building blocks and definitions

• Customer profiles
  define exactly what you want
  to know about your customers
• Business rules
  set of
  implicit and explicit rules in conducting
  business (if a customer places an order larger
  than X, than the customer gets Y discount)
• Business events
  all key
  events/activities that affect the customer
• Business objects
  fundamental building blocks that
  need to be defined (e.g. customer, account,
  order, product)

5
Developing a technology strategy

• Use proven technologies wherever possible,
  especially at the customer interface (unless you
  want to (and can afford to) be a true innovator)
• Avoid developing critical technology in-house
• Carefully evaluate evolving competition among
  technology providers when there is no standard
  yet
• Design a modular technology architecture

6
Choosing technologies...

• Internet or proprietary networks?
• Internet is cheaper
• Internet is becoming standard
• Internet is more flexible
• Which overlay technologies?
• transactions and payment technologies
• data collection software
• integration technologies
• graphics and animated software
• streaming content delivery

7
but

• Consider more options than just regular Internet
• interactive kiosks
• touch-tone phone
• ATMs
• smart cards
• fax and fax response
• addressable video
• print on demand

8
Data capture technologies

• Various technologies to capture data
• the Internet
• reverse cookies
• television set-top boxes (tracking Internet and
  television viewing behavior)
• credit cards and smart cards
• Relational databases customer profiles
• Linked with customer relationship management
  software to integrate various sources of data
• Infomediaries can leverage rich customer profiles
  in both directions

9
Reality check!

• Most companies dont know
• who their customers are
• who their largest customers are
• how important their customers will be after
  tomorrow
• why their customers buy their products
• what business their customers are in
• how they (can) contribute to the success of their
  customers business

10
Building customer
information files

• Determine the value of individual customers
• Allow for more targeted marketing efforts
• Establish a dialogue with customers
• Just some questions
• who will build and maintain the CIF?
• what will be included in the CIF?
• where can the information be collected?
• how will the CIF be organized?
• how will the CIF be used?

11
Getting the information

• Talking, talking, talking to customers
• Dell conducts app. 30.000
  conversations with customers
  every week!
• Telemarketing
• Warranty cards
• Free customer service phone numbers
• Websites
• Purchase records
• External databases

12
The case of Amazon.com

• Amazon doesnt make a profit on selling books.
• But that is not what they are after. Ultimately
  they have a totally different goal. Look at
  someones bookcase. Books tell a lot about
  someones personality. Amazon is going to make
  big bucks because they know the customer.
• (M.
  Suidman, Bruna Internet manager)

13
Building a customer database

• Inventory differences between customers and
  available knowledge in the firm
• Inventory current information systems
• upgrade existing system
• build new system
• Evaluate the quality of current customer data
• Determine who, what, when, where, why and how?
• Implement the (new) information system

14
The rise of infomediaries

• Information about customers used to be gathered,
  owned and used by suppliers
• Because of smart cards, browsers and personal-
  financial-management software such information
  (i.e. a detailed customer profile!) can be
  gathered and owned by the customer
• Infomediaries will place themselves between both
  parties
• bargain for customers safeguarding privacy
• provide information to suppliers

15
Consumer privacy protection technologies

• Anonymization software
• leading supplier is Anonymizer (www.anonymizer.com
  )
• Cookie suppression
• E-mail filters
• e.g. Spam Buster
• Anonymous e-mail
• through remailer services
• Anonymous payments
• anonymous credit or debit card or smart card
• Digicash, Cybercash

16
A plan for Internet privacy

• Every supplier needs to display his privacy
  policy in clear terms and an accessible place
• Allow customers to choose
• opt-in (e.g. for sensitive information and
  selling information)
• opt-out
• Give customers access to the profile and allow
  them to change it
• Enforce the rules by imposing stiff penalties for
  violation

17
Profile technologies

• Firefly Passport (Firefly Networks
  www.firefly.net)
• across Web sites, across customers
• allows customized information to customers
• Grouplens (Net Perceptions www.netperceptions.com
  )
• within a Web site, across customers
• recommendations based on behavior of others
• Engage Technologies (www.engagetech.com)
• across Web sites, individual customers
• individual profiles (anonymous for clients)

18
Using technology (1)

• A 3-year contract for all diapers (app. 7000!)
• delivery at home with automatic replenishment
• changing table right now
• bicycle with training wheels for the childs
  third birthday
• cheaper per diaper
• An annual contract for gift/flower service
• specifying gifts and recipients for the whole
  year
• paying per delivery
• reminder cards two days in advance
• at the end of year request to update the list
• cheaper per delivery

19
Using technology (2)

• FreeFone paying customers for receiving
  advertising
• messages based on customer profile
• messages based on number dialled intercept plus
  alternative offered
• Furniture using a digital camera
• use computer to combine the customers picture of
  the room with pictures of furniture
• print advertising with pictures displaying the
  furniture in the customers own living room

20
Using technology (3)

• Designing individual custom-made products
• jeans
• swimsuits
• shoes
• NOTE All these opportunities already existed or
  were possible in 1992!!!
• Many new technologies
• print on demand
• streaming audio and video
• e-mail
• datamining
• customized newspapers and television

21
Five stages to e-commerce (1)

• Supplying company and product information
  (brochureware) on the Web
• logical starting point
• first-generation Web site
• marketing information and company background
• often very static
• not profitable

22
Five stages to e-commerce (2)

• Providing customer support and enabling
  interactions
• the logical next step if you have consumers or
  business customers who are, or soon will be,
  using Internet
• examples are checking on the status of delivery,
  changing addresses, seeing if payment has been
  made
• the support functions to offer can be determined
  by looking at e-mails and phone calls and
  identify the FAQ

23
Five stages to e-commerce (3)

• Supporting electronic transactions
• enable customers to purchase goods and services
  from the Web
• some customer prefer talking to a real person
• some customers are worried about safety issues
• Personalizing interactions with customers
• build customer profiles with individual interests
  and preferences
• personalize the Web site the customer gets a
  personalized experience and keeps coming back
• the more information you have about customers the
  greater the hold on them

24
Five stages to e-commerce (4)

• Fostering community
• creating a feeling of community among your
  customers
• e.g. by letting customers help each other, swap
  experiences, give tips
• people like the feeling of belonging to a special
  club that is why so many Web sites have members
  only areas
• the act of contributing increases commitment