E-CRM: Social Networks, Web Analytics, and Database Marketing

Social Networks, Permission Marketing, and E-Commerce Strategy

The disruptive nature of social networks and their effects on marketing are revolutionizing every aspect of customer relationships, including the re-ordering of marketing, sales, and service strategies. In aggregate, social networks are bringing an entirely new level of insight and intelligence to how permission marketing, information acquisition, and e-commerce strategies can be accomplished. The highest-performing marketing and sales organizations have successfully integrated the intelligence and insight gained from social networks — via analytics and customer listening systems — to better tailor selling, product, and service strategies (Bampo, Ewing, Mather, Stewart, & Wallace, 2008). Permission marketing has emerged as one of the most important applications of social network data, enabling companies to align outreach with customer interests, segments, and needs more effectively than any other development of the last decade. The insights gained from social networks are also completely revamping e-commerce strategies through higher levels of personalization and more agile multichannel marketing and selling approaches.

The intent of this analysis is to evaluate how social networks are re-ordering the nature of customer relationships. The nascent yet rapidly growing field of Social Customer Relationship Management (SCRM) — which combines social networking-based prospect and customer information with more structured, traditional CRM platforms — is serving as the basis for many companies' strategies in permission marketing, information acquisition, and e-commerce (Cooke & Buckley, 2008). The mercurial nature of social networks has made it difficult for companies to gain deeper insights into their customer bases. Reliance on advanced analytics in SCRM and CRM systems has made permission marketing more achievable, but social networking has also changed the entire dynamic of relationships with prospects, customers, and the general public, infusing a much greater level of transparency and authenticity into the process.

Ironically, the majority of marketers are not using social networks to listen and respond to customers. Instead, most rely on social network channels to communicate unidirectionally, going so far as to spam prospects and customers alike. What marketers need to drive greater value from social networks is the ability to listen, create trust, and sustain strong communication with prospects, customers, and stakeholders throughout their spheres of influence.

Marketers from both Business-to-Business (B2B) and Business-to-Consumer (B2C) companies have the potential to revolutionize their marketing, selling, service, and long-term profitability by concentrating on these fundamentals (Doyle, 2007). The best practices of maintaining open, transparent, and responsive communication throughout social media channels permeate the companies achieving the best results. Consequently, their efforts at permission marketing, customer information acquisition, and broader e-commerce strategies are significantly more successful (Harris & Rae, 2009). Companies excelling in this area — including Amazon.com, Dell, and Southwest Airlines — have integrated social networks into their broader CRM platforms and strategies. Each of these companies maintains entire staffs dedicated to social CRM, integrating unique customer data, managing ongoing marketing campaigns, and responding to customer service requests initiated over social media channels. The net effect has been to galvanize the effectiveness of these channels and demonstrate that social networks can become a central component of any global, multichannel selling and service strategy (Jones, 2002).

In a recent survey by the Gartner Group, the role of social media on e-commerce as a multichannel strategy was quantified. Gartner reported that brick-and-mortar stores in 2010 accounted for 93.99% of all multichannel activity, with e-commerce at 4.7%, mail order catalogs at 0.23%, call centers at 0.93%, mobile commerce at 0.7%, and all other channels at 0.7%. By 2016, Gartner predicted that brick-and-mortar stores would represent 84.84% of sales in multichannel strategies, followed by e-commerce at 12.28%, mail order catalogs at 0.38%, call centers at 0.65%, mobile commerce at 1.74%, and other channels at 0.11%. These figures show that the pervasive adoption of social networks is having an accelerating effect on e-commerce and mobile commerce specifically, while also making overall sales channels more diverse.

Web 2.0 and Social CRM Maturation

This aligns with what industry researchers have said about the impact of social networks and permission marketing on the multichannel platform strategies of companies selling through e-commerce. The net effect of these advances is a more unified customer experience and the maturation of multichannel selling and service strategies in industries that have long relied on them. The industries gaining the greatest traction from e-commerce include discrete manufacturing, entertainment and media, retail, travel and leisure, and wholesale and distribution management. These industries have among the most diverse multichannel selling networks and supply chains, and they also deal with complex fulfillment and loyalty dynamics. Social networks and the relationships they foster with prospects and customers are also leading to greater agility and flexibility in multichannel-based selling and service strategies. Companies attaining best practices in these areas are using e-commerce as the unifying platform to ensure consistency of customer experience and to earn long-term loyalty.

Successfully integrating social networks, permission marketing, and the processes and systems aimed at customer information acquisition into a unified e-commerce platform also requires companies to appreciate and understand the role of Web 2.0 technologies. Having been originally defined by Tim O'Reilly, Web 2.0 has grown into the foundation and framework of social network product and service design (Cooke, 1994). Web 2.0 design objectives permeate social networks, starting with the concept of the Web itself as the platform. The core competencies of Web 2.0 are commonly used in the development of Software-as-a-Service (SaaS) and highly collaborative networks, including Facebook and Twitter. The rapid adoption of social networks today can be largely attributed to these Web 2.0 design objectives. Forward-thinking companies that plan for these dynamics in their SCRM, CRM, and e-commerce strategies are significantly ahead of competitors who regard social networks only as a means to broadcast messages rather than to listen to and learn from customers.

The proliferation of social networks and permission marketing platforms is a direct result of how thoroughly Web 2.0 design concepts have been adopted throughout global public and private networks. Web 2.0 technologies are also having a dramatic impact on how companies attract, sell, and serve their customers, with specific focus on creating a more open dialog (Cooke, 1994). Permission marketing would not be achievable to the current extent without social media and the continual effort companies invest in creating trust and transparency with prospects and customers alike. Social media has made the attainment of permission marketing — and its many variations, including content marketing — genuinely possible. The role of social media, while much hyped in the context of customer information acquisition and e-commerce strategies, continues to act as a crucible that purifies marketing to its most fundamental form: understanding customer needs and responding to them.

How all this impacts e-commerce is that it forces organizations to create a much more unified customer management strategy, one that is both information-integrated and process-integrated for the greatest possible impact. Creating e-commerce strategies that fully capitalize on social networks, permission marketing, and customer information acquisition requires very high levels of system integration (Qin, Kim, Hsu, & Tan, 2011). In analyzing best practices, data from Gartner Inc. was used to define five maturity phases for how companies are integrating social networking into their broader customer relationship and e-commerce strategies. The majority of companies are in the Developing Phase (45%), with just 3% in the Optimizing phase. This indicates a strong need for greater integration of social networking, permission marketing, and customer information management in many e-commerce strategies today. It also signals significant upside potential for companies that grow quickly through the integration of social networking, trust-based permission marketing, and customer information acquisition that benefits each customer. The majority of companies still in the Developing phase are merely interacting with customers rather than anticipating and planning for their needs. What is needed is a sharper focus on making all elements integral to a common, unified, customer-centric strategy based on trust.

Measuring Website Visits with Google Analytics

The most valuable tools for measuring customer visits to a website, designing more effective navigation, and measuring time spent on a website are web analytics applications. There are literally hundreds of web analytics applications available today. One of the most powerful for accomplishing these tasks is also free: Google Analytics. It is free to use, provides extensive support for tracking customer visits, offers real-time updates on which areas of a site are delivering the greatest navigational value, and can easily measure the time a given customer spends on a website (Perez, 2007). It can also analyze, at the audience level, what specific customer groups are viewing, what they are interested in, and what information they are seeking.

Google Analytics can track web traffic by Audience, Advertising, Content, Conversion, and Traffic Sources. This analytical platform can compare time-series data across an entire range of dates, content sources, and campaigns, and it also has the ability to conduct preliminary testing of advertisements published to Google AdWords — a complementary platform that Google relies on for a substantial share of its advertising revenue (Perez, 2007). Google Analytics also has extensive support for a series of features called E-Commerce Goal Sets, which give companies the ability to define up to four different goals, including visits, transactions, revenue, average value, e-commerce conversion rate, and per-visit value. All of these factors are combined into a single dashboard for evaluating the effectiveness of e-commerce strategies (Plaza, 2009). Data on e-commerce strategies can be analyzed by visits, revenue, transactions, average value, e-commerce conversion rate, and per-visit value — all available in both tabulated reports and graphical formats.

By default, Google Analytics measures the following metrics for all website visitors: Visits, which captures the total amount of traffic a given website receives in a configured time period; Unique Visitors, which differs from Visits in that it captures to the Internet Protocol (IP) address which specific visitors have come to the site; and Pageviews, which shows the number of pages that visitors have viewed. It is common for a well-performing website to show more Visits and a high level of Pageviews relative to Unique Visitors — an indication that the content is of value to readers. The more valuable the content, the higher the number of Pageviews and the higher the Pages/Visit metric. A Pages/Visit value of approximately 3.37, for example, indicates that customers are viewing three pages on every visit, suggesting they find value in the content.

Average Visit Duration is another key indicator: a value of approximately seven minutes and twenty seconds suggests that visitors are staying a relatively long time (by Internet standards) to read and understand what the site provides. These figures also indicate that the e-commerce systems on the site are easy to navigate and can quickly deliver a unique experience. The presence of 70% or more of traffic from new visitors further signals that the site is successfully attracting a fresh audience. Bounce Rate and percentage of New Visits together round out the main dashboard picture. One of the greatest strengths of Google Analytics is the ability to drill down into each specific area or page of content and understand how much traffic it is generating. Many marketers — from both B2B and B2C standpoints — use these fundamental metrics to plan their content management and e-commerce strategies (Plaza, 2010).