P.O. BOX 4600, 90014 University of Oulu • tel. (08) 553 2905, fax (08) 553 2906 • www.oulubusinessschool.fi

Aligning digital marketing with CRM

Jari Salo, Professor of Marketing

Adjunct Professor (Aalto University School of Business)

Associate Editor of Journal of Information Technology Research

Oulu Business School

University of Oulu

Department of Marketing

Research:

• Industrial marketing (innovation, services, relationships, digitization)

• Digital retailing (Facebook in clothing retail, FB addiction)

• Role of technology in marketing (e.g. avatar creation, virtual world spending behavior, mobile advertising)

• Advertising and branding (industrial/digital context)

P.O. BOX 4600, 90014 University of Oulu • tel. (08) 553 2905, fax (08) 553 2906 • www.oulubusinessschool.fi

P.O. BOX 4600, 90014 University of Oulu • tel. (08) 553 2905, fax (08) 553 2906 • www.oulubusinessschool.fi

Company references

Agenda

• Digital Marketing Framework

• Customer Relationship Management

• Mobile Customer Relationship Management

• Future of Customer Relationship Management

P.O. BOX 4600, 90014 University of Oulu • tel. (08) 553 2905, fax (08) 553 2906 • www.oulubusinessschool.fi

P.O. BOX 4600, 90014 University of Oulu • tel. (08) 553 2905, fax (08) 553 2906 • www.oulubusinessschool.fi

Digital Marketing Introduction and Framework

A working definition for digital marketing

• Digital marketing aims at creating, demonstrating, documenting,

communicating and delivering value in digitized way to customers (B2C

and B2B) and for managing customer relationships in ways that enhance

digital joint value creation of customers, organizations and stakeholders.

(Journal of Digital Marketing)

Digital marketing landscape

Source: http://internetiseverywhere.wordpress.com/2011/04/09/internet-web-2-0

Why DM?• Business to consumer marketing has exploded in recent years

(use of Facebook, Instagram, Pinterest, Twitter + measuring compelling customer experience)

• BUT… even professional buyers have used and are using digital tools e.g. social media in their daily job – even more than the industrial sellers (see Davis, 2008).

• 65 % out of 1000 buyers operating in B2B markets tell that they start search process (new, rebuy, modified buy) with general search engines and after that move to industry specific search engines like business.com

Most popular DM tools today in Finnish companies?Most popular DM tools used in Finnish companies:

• Company website• Search engine optimization and advertising = SEM• Newsletters and internet advertising• Social media rising fast

Reasons that have influenced to adopt DM:• Cost pressure• Chancing consumer/customer behavior

More than 33 % of the Finnish companies that responded have allocated a budget for DM

(AaltoEE:Divia report, 2014)

Digital Marketing Framework

P.O. BOX 4600, 90014 University of Oulu • tel. (08) 553 2905, fax (08) 553 2906 • www.oulubusinessschool.fi

SCMSCM

CRMCRM

INNOVATION & NPD INNOVATION & NPD

On

line m

etricsO

nlin

e metrics

Business Strategy

Customer Strategy

Business Strategy

Customer Strategy

Value creation

Value co-creation

Value capture

Value creation

Value co-creation

Value capture

Performance assesment

process

a) Shareholder results

b) Performance measuring

c) KPI

Performance assesment

process

a) Shareholder results

b) Performance measuring

c) KPI

Multichannel integration-FB, Instagram

Twitter-YouTube-Email &

newsletters-Company websites

SEO/SEA…Web advertising-Blogs, pods, -

Vpods, webcasts-Mashups, widgets

-Location based services

e.g. tablet computers

Multichannel integration-FB, Instagram

Twitter-YouTube-Email &

newsletters-Company websites

SEO/SEA…Web advertising-Blogs, pods, -

Vpods, webcasts-Mashups, widgets

-Location based services

e.g. tablet computers

Information systems - Data storaging & mining

- Front & back office applications- Big data and cloud applications

Information systems - Data storaging & mining

- Front & back office applications- Big data and cloud applications

Salo ©

P.O. BOX 4600, 90014 University of Oulu • tel. (08) 553 2905, fax (08) 553 2906 • www.oulubusinessschool.fi

Customer Relationship Management

Context for relationships• There are different ways to organize exchange

• Main interest of marketing is in exchange behavior

• Exchange can occur in industrial/business markets or in consumer markets which both can be jointly labeled customer markets

• Exchange can be organized in two opposite ways that are market (transactions) or hierarchy (within a company)

• However, mostly exchange occurs in quasi-forms between markets and hierarchies

P.O. BOX 4600, 90014 University of Oulu • tel. (08) 553 2905, fax (08) 553 2906 • www.oulubusinessschool.fi

Shift in marketing paradigm

Transaction marketing

• Focus on a single sale

• Orientation on product features

• Short time-scale

• Little emphasis on customer service

• Limited customer commitment

• Moderate customer contact

• Quality is primarily a concern of customer

Relationship marketing

• Focus on customer retention

• Orientation to customer values

• Long time-scale

• High customer service emphasis

• High customer contact

• Quality is the concern of all

Zineldin, 2000

The relationship continuum

Day, 2000

The relationship continuum

Day, 2000

Markets-relating capability

Day, 2000

CRM• CRM is the outcome of the continuing evolution and integration of marketing

ideas and newly available data, technologies, and organizational forms.

CRM • relates to strategy• the management of the dual creation of value• the intelligent use of data and technology• the acquisition of customer knowledge • the diffusion of this knowledge to the appropriate stakeholders• the development of appropriate (long-term) relationships with specific

customers and/or customer groups• and the integration of processes across the many areas of the firm and

across the network of firms that collaborate to generate customer value

Boulding et al., 2005 JM

Managing customers for profit

P.O. BOX 4600, 90014 University of Oulu • tel. (08) 553 2905, fax (08) 553 2906 • www.oulubusinessschool.fi

Kumar, 2008

To reiterate - So what is CRM about ?

P.O. BOX 4600, 90014 University of Oulu • tel. (08) 553 2905, fax (08) 553 2906 • www.oulubusinessschool.fi

One definition for CRM

• CRM is a strategic approach that is concerned with creating improved

shareholder value through the development of appropriate relationships with

key customers and customer segments. CRM unites the potential of

relationship marketing strategies and IT to create profitable, long-term

relationships with customers and other key stakeholders. CRM provides

enhanced opportunities to use data and information to both understand

customers and co-create value with them. This requires a cross-functional

integration of processes, people, operations, and marketing capabilities that

is enabled through information, technology, and applications.

Payne and Frow (2005) JM

Mobile Customer Relationship Management

-Developing database

-Initiating mobile CRM

- Using mobile for CRM purposes

-Examples of mCRM 

P.O. BOX 4600, 90014 University of Oulu • tel. (08) 553 2905, fax (08) 553 2906 • www.oulubusinessschool.fi

CRM, database development

Seven steps to develop a customer database

1.Define the database functions

2.Define the information requirements

3.Identify the information sources

4.Select the database technology and hardware platform

5.Build applications to access and process information

6.Populate the database

7.Maintain the database

Developing a customer database

On-going One-off

Maintain the Database

Select the Database

Technology and

Hardware PlatformPopulate the Database

Build Applications

to Access and

Process Information

Identify the Information SourcesDefine the

Database Functions

Define the Information

Requirements

O´Connor & Galvin, 2001

Basic outlay of a customer database

- Customers- Suspects- Prospects

Planning Systems

Financial Systems

Sales Systems

Customer Service Systems

Marketing Systems

From Analytical to Operational

CustomerDatabase

A simple mCRM system

Sinisalo et al., 2005

mCRM frame

•Regulatory

•CRM System •Mobile Devices

•Consumer Acceptance

•Mobile Infrastructure

•Marketing Enviroment

•Technology

•Server •Number •Gateways •Campaign logic •Billing

•Marketing

•Media mix •Permission Database

(Sinisalo et al., 2005)

mCRM

•mCRM is defined as an application of CRM system, which utilizes

any form of marketing, advertising, or sales promotion activity

aiming at building and maintaining a profit-maximizing portfolio of

customer relationships by taking advantage of the mobile channel.

Sinisalo et al., 2005

Mobile marketing

• Mobile Marketing Association (2009): Mobile marketing is the use of wireless media in the delivery of integrated content and as a direct response vehicle in integrated media campaign or in marketing communication campaigns

• Mobile advertising refers to a form of advertising in which advertiser communicates with the target group via a mobile device

• Mobile media refers to portable devices and services

Mobile marketing process

Salo et al., 2008

Salo & Karjaluoto, 2007

Why mobile medium is effective ?

Location based mobile marketing

Salo & Tähtinen, 2004

Context / location awereness

• Apple's iBeacon technology - in-store Bluetooth location trackers designed to interact with smartphones - enables retailers and app publishers to identify people individually the moment they enter a shop

• iBeacon available with many vendors

• Similar to iJack service developed by TeliaSonera in early 2000 which they abandoned in 2004

P.O. BOX 4600, 90014 University of Oulu • tel. (08) 553 2905, fax (08) 553 2906 • www.oulubusinessschool.fi

Sales/deals 80%

Content relevant to interest/Location 62%

Swirl 2013

Future of Customer Relationship Management

P.O. BOX 4600, 90014 University of Oulu • tel. (08) 553 2905, fax (08) 553 2906 • www.oulubusinessschool.fi

Future areas

• Instead of CRM – Customer experience management (CEM)

• Social CRM for customer insight

• Social login for retailing

• Linking big data insights to CRM

• Cloud / open CRM

• Mobile – location specific and real time CRM

P.O. BOX 4600, 90014 University of Oulu • tel. (08) 553 2905, fax (08) 553 2906 • www.oulubusinessschool.fi

References

Tähtinen, J. & Salo, J. (2004). Special Features of Mobile Advertising and their Utilization. Proceedings (CD-ROM) of the 33rd European Marketing Academy (EMAC) conference Worldwide marketing, Murcia, Spain. May 18th-21st, 2004, p.1-8.

Sinisalo, J., Salo, J., Karjaluoto, H. and Leppäniemi. M. (2007). Mobile Customer Relationship Management – Underlying Issues and Challenges. Business Process Management Journal, 13, (6), 771-787, ABDC B).

Salo, J. and Karjaluoto, H. (2007). Mobile games as an advertising medium: towards a new research agenda. The International Research Journal Innovative Marketing, 3, (1), 72-83.

Salo, J., Sinisalo, J. and Karjaluoto, H. (2008). Intentionally Developed Business Network for Mobile Marketing: A Case Study from Finland. Journal of Business & Industrial Marketing, 23, (7), 497-506. (SSCI 0.53 impact, ABDC A).

P.O. BOX 4600, 90014 University of Oulu • tel. (08) 553 2905, fax (08) 553 2906 • www.oulubusinessschool.fi

P.O. BOX 4600, 90014 University of Oulu • tel. (08) 553 2905, fax (08) 553 2906 • www.oulubusinessschool.fi

jari.salo@oulu.fijari.salo@aalto.fi

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