Database Reference
In-Depth Information
1.2.5.5 Permission Marketing
It is estimated that, by 2004, e-business marketers will take advantage of the e-mail channel by
sending more than 200 billion e-mails to reach customers, increase their brand visibility, and
jump-start sales. This is primarily because e-mail marketing has been assessed to achieve purchase
rates as high as four times those achievable using the traditional direct mail methods. But with the
increasing use of the Internet and other digital channels as vehicles for marketing or selling, the
need to manage customer data more effectively in line with government rulings has become very
important (see Chapter 14, Section 14.6 “Privacy and Security”).
The Distance Selling Directive implemented from June 4, 2000, requires the following:
◾
The consumer to be provided with information in a clear and comprehensible manner and
in good time before concluding any distance contract.
◾
The consumer has the right to cancel a distance contract within a specified
cooling off
period.
◾
The consumer cannot be targeted for unsolicited e-mails, faxes, and automatic calling sys-
tems for distance selling purposes, unless the consumer has consented to be contacted by the
vendor enterprise in that way.
Permission marketing is an approach to selling goods and services in which a prospect explicitly
agrees in advance to receive marketing information. Conceived by Seth Godin, Yahoo!'s Internet
marketing pioneer, permission-based marketing seeks to build trust and involve the customers by
putting them in control of asking the enterprise to keep them informed on information and offers
that they are of specific interest to them. The objective is to gain permission from customers to
keep them informed by e-mail, SMS, and WAP or through official channels, on a regular basis of
things that are of interest to them.
1.2.6 Customer Life Cycle (CLC)
Customer relationships evolve over time along with their needs and expectations from the compa-
nies at various stages. The concept of a customer life cycle provides a framework for understanding
and managing these differences at various stages of relationship with the company. Supporting
for the existence of CLC comes from the various studies and research undertaken on new product
acceptance and Recency, Frequency, and Monetary (RFM) analyses.
The different types of customers are as follows:
◾
Prospects
: This is the precustomer stage, where the prospects are not customers yet, but they
represent potential value for the enterprise. In fact, managing prospects is much more dif-
ficult than managing even the disgruntled customers at a later stage. This is because all
customers have predefined thresholds of cost, quality, and price for making the
buy
decision.
If the company's offerings are not perceived to exceed such thresholds, it may not result in
a purchase. But, on the other hand, exceeding them overly also may prove to be counter-
productive as such very high expectations are likely to be unmet resulting in difficulty in
retaining such customers later.
◾
First-time buyers
: A company's customer capital is heavily dependent upon the potential
value of the first-time buyers. Customers achieve this stage upon making their first purchase.
At this stage, the customer is highly vulnerable for defections due to even minor disappoint-
ments or lure of the competitor's offerings.
