To be successful in e-commerce it’s become essential for companies to rethink their business focus into becoming more customer-centric. Putting customers at the heart of your businesses strategy adds to differentiation in today’s highly competitive market, therefore, delivering more customer value is necessary if companies want to keep up (Wu & Hung, 2009).

Consumers are highly informed, powerful and smart, and their demand for interaction and better service is something companies have had to give into. So, the customer relationship management (CRM) strategy is a management concept implemented to help approach the matter. CRM creates customer value, ultimately increasing customer loyalty by building long-term relationships and structural bonds for consumers (Wu & Hung, 2009).

Companies who have failed to build long-term relationships and fulfil their customer’s needs have felt the backlash and it has been the failure of many dot-coms, following huge expenditure on customer acquisition (Chaffey & Ellis-Chadwick, 2012). As Reichheld & Schefter (2000) suggest, acquiring customers is 20-30% higher than traditional businesses – acquiring customers online are just plain expensive! So keeping the ones you already have engaged can save your company.

With the proliferation of the digital world, an eCRM strategy works alongside CRM. This article gives a good outline of the difference between the two. The goal of an eCRM system is to improve customer service, retain valuable customers and help provide analytical capabilities for an organisation (Fjermestad and Romano, 2003), this is done by using digital platforms to integrate customer databases with websites and generating a more personalised and targeted message (Chaffey & Ellis-Chadwick, 2012).

This video shows how McDonald’s in Germany had a vision to ‘create a more personal and innovative dining experience’ so they used data gained from a promotion to find out what their customers like and how they can analyse the data to predict what their customers would like to eat! Such invaluable data to have, especially when thinking of creating a new burger – now McDonalds has the info on what certain people prefer, in certain locations. Amazing!

But there are some challenges of integrating eCRM technologies outlined by Kennedy (2006):

Customer Interaction & Relationships

The use of the eCRM system means that traditional physical customer proximity becomes substituted by digital proximity. Customers need reassurance when a purchase is about to be made, the absence of a real person there means consumers turn to other ways of getting this assurance e.g. virtual communities for their testimonials on the product. The overall ability to create intimacy with a customer makes building trust more difficult with the relationship element of eCRM as companies try to build a connection that’s more than purely transactional. Therefore, privacy policies in place help with this issue as it’s essential for customers to share the data they need from successful CRM.

Managing an online channel

As selling on the internet has become essential, companies have to make every possible effort to integrate online channels tightly with existing business processes and/or channels first. Companies can sometimes see the Web as a single channel and isolate from the other channels, which shouldn’t be the case, it should work together – a good framework to use for this is ‘Chaffey’s 6 channels’ http://www.smartinsights.com/reach/attachment/digital-marketing-channels/ showing how offline and online communications together (Chaffey & Ellis-Chadwick, 2012).

If eCRM is used in the right ways it can provide rich and accurate data for its consumers, this article which talks about big data being the backbone for eCRM with examples of how major retailers are using the system and how it’s worked for them.

References:

Azar, F.S., Safari, R., Ebrahimian, K. & Fahimi, G. (2013), “Electronic customer relationship management (eCRM) and its role in marketing”, Interdisciplinary Journal of Contemporary Research In Business,vol. 5, no. 1, pp. 986.

Chaffey, D. & Ellis-Chadwick, F. (2012), Digital marketing: strategy, implementation and practice, 5th edn, Pearson Education, Harlow.

Jerry Fjermestad Nicholas C. Romano Jr, (2003),”Electronic customer relationship management”, Business Process Management Journal, Vol. 9 Iss 5 pp. 572 – 591

Kennedy, A. (2006), “Electronic Customer Relationship Management (eCRM): Opportunities and Challenges in a Digital World”. Irish Marketing Review, vol. 18, no. 1/2, pp. 58.

Reichheld, F.F. and Schefter, P. (2000), E-loyalty: Your secret weapon on the web. Available at: https://hbr.org/2000/07/e-loyalty-your-secret-weapon-on-the-web (Accessed: 7 May 2016).

Wu, I. & Hung, C. (2009), “A strategy-based process for effectively determining system requirements in eCRM development”, Information and Software Technology, vol. 51, no. 9, pp. 1308-1318.