Friday, September 30, 2011

SCRM - Profits!!!

SCRM Bottom-Line Potential: Profits at Many Points
How does SCRM contribute to the bottom-line nature of CRM? It does so in a less direct way than CRM. Hillel, for example, is not a seller of goods or services, but it depends on donations, and its donors love the fact that the organization can now present them with quantifiable, granular data on the engagement of students with Hillel -- data pulled from SCRM.

CRM is a business tool. Like any business tool, its objective is tied to money -- either making more of it through increased sales, or saving it through greater efficiency.

Perhaps because CRM is rooted in sales force automation and hard sales, the customer's path through CRM has mirrored the customer's path through the sales funnel. The objective is to get the customer to the end of the funnel and conversion -- and then to start applying marketing and service muscle to make sure that customer stays in the fold.

When you see visual representations of this, they're very linear. They're either a funnel or a pipeline, mirroring the visual metaphors of sales, or they're circular in design, borrowing from marketing's visual lexicon.

Social CRM (SCRM) can and often does fit into these representations and helps businesses cross the "finish lines" they contain. However, part of the confusion around SCRM stems from the fact that it allows its users to apply customer data in many places along the path to sales, service and retention, often in nontraditional ways, to help reach the ultimate goal of increased revenue.

The value of SCRM can insinuate itself into the way the seller works in multiple segments of the sales path, and it can do so while offering new and useful benefits to both the customer and the seller.

Real-World Examples
For example, a major insurance house uses SCRM tools as part of its processes to prepare inside sales staff for calls. The old, linear process would have been to acquire a lead, distribute it to an agent, call, then use the data provided by the customer to prepare a quote. Research would have been done on an ad hoc basis.

The new process is acquire-distribute-research-call -- the technology enables sales staff to research their prospective customers and prepare quotes ahead of time, allowing them to make the customer experience better and to save them time so they can get more calls accomplished in a day.
Another great example is Hillel, the Foundation for Jewish Campus Life. It uses a social CRM model to track its relationships with students -- what activities they attend, where they are along their journeys as Jewish students, and so on. Facebook and Twitter are key components of the program -- as is the fact that it's speaking to young people through a communications medium they understand.

Back to the Bottom Line
So, how does this relate to the bottom-line nature of CRM? In true SCRM fashion, it does so in a less direct way than CRM. Hillel's not a seller of goods or services, but it depends on donations, and its donors love the fact that the organization can now present them with quantifiable, granular data on the engagement of students with Hillel -- data pulled from SCRM.
In other words, it can connect donor dollars to the effectiveness of the program in a way that it never has been able to in the past -- thus helping to keep the dollars coming to sustain the program. Meanwhile, students are better served as well. By the end of the 2011 academic year Hillel was tracking more than 88,000 students -- and the organization has more effective ways of alerting them about events and opportunities.

In the Hillel example, SCRM provides a means to add to the bottom line right now -- but it also builds a better relationship for the organization with students, who will grow into donors with time.

The real bottom line is always about dollars. That's a given. But how SCRM contributes to the bottom line must now be understood as something that's up to each organization to define and to measure accordingly, and those contributions should come in multiple parts of the customer lifecycle. It's not whether SCRM rings the cash register -- it's how it does so.

Research & Comment;
Do you agree with this type use of data and information? Why or why not? SCRM is the focus of many companies. Provide an example with some factual information to back –up their use of the CRM process?

Monday, September 19, 2011

Mobile Payments

MasterCard gives sneak peek into mobile payments future
The availability of Google Wallet will be announced within weeks
MasterCard on Thursday gave a sneak peek into the near future of mobile payment systems and said that the Google Wallet application is within weeks of being rolled out commercially.

Google Wallet, announced in May, lets mobile phone users pay for purchases in stores by tapping their phones against point-of-sale terminals. At the tail end of a media and analyst day in New York, MasterCard demonstrated the application as well as other, future mobile payments systems.

Initially, Google Wallet will work only on Nexus S phones, made by Samsung, on the Sprint network. Nexus S phones now on the market incorporate Near Field Communication (NFC) technology on an embedded chip, which allows for payment information to be transmitted via the tapping technique.

Google Wallet will work on PayPass terminals already deployed in stores, though some of the terminals will need an upgrade to work with the applications, according to officials at the demonstration. In the U.S., there are about 150,000 retail locations equipped with PayPass terminals, according to Kathleen Reilly, vice president and senior business leader at MasterCard, who said the Google Wallet application will be rolled out "within weeks."

Up to now, the PayPass terminals have worked with NFC chips embedded in cards or special stickers placed on the outside of mobile devices. However, chips embedded in mobile phones offer big advantages, according to Mario Shiliaski, senior vice president of Innovative Platforms.

"A big advantage is that the chips are embedded in secure elements in the hardware, and if they are compromised they are designed to self-destruct," Shiliaski said.

In addition, there will be a range of complementary applications for the technology that users will be able to download, Shiliaski noted. Google Wallets will initially offer the ability to store electronic coupons that can be redeemed at retail outlets, he said. Later this year, MasterCard's inControl will be available for download, he added. InControl is designed to let parents or employers establish parameters for when, where and how their cards are used. Users will get text messages, for example, when certain limits are met.

Major retailers including Macy's, Walgreens, Subway, Noah's Bagels, American Eagle, Bloomingdale's, Peet's Coffee and Toys 'R' Us have signed up to work with Google Wallet.

MasterCard also opened the kimono on a number of projects cooked up by the MasterCard Labs, established after the financial services giant acquired Dublin-based OrbisComm in 2009.

The projects demonstrated Thursday focused on the company's QkR platform, technology that embraces motion and audio signals as well as touch to allow for a range of applications. One application demonstrated Thursday allowed a phone user to scan a rebate coupon and share it via Facebook or Twitter
"This allows for a different type of viral marketing, where people using this technology and sharing information with friends can get additional rebates," said Garry Lyons, chief innovation officer at MasterCard.
The social-network sharing technology is working now in a pilot with more than a hundred users, Lyons said. A more futuristic application involves audio signal technology. In one demonstration, audio signals embedded in a TV commercial were detected by a mobile phone application that a person could then use to download coupons related to the advertisement.
QkR technology goes beyond mobile phones, however. Lyons showed off one application where users could input payment information via the Xbox Kinect, using gesture recognition to select items and go through a checkout process.

Though some of the applications demonstrated by MasterCard are not likely to be rolled out any time soon, the company is looking to officially announce details related to the technology soon, possibly over the next few weeks, officials said.

The QkR platform, with its range of input capabilities, is a good hedge to the NFC-oriented Google Wallet application. NFC will have plenty of competition, including a PayPal mobile payment initiative announced Thursday that works by having mobile devices scan product bar codes and authorize payments through PayPal mobile accounts.
What are your thoughts in respect to this technology? How will society adapt to this innovation? Discuss some pros and cons on this type of new technology? Ie. Security, acceptabilty, adaptability, etc.

Monday, September 12, 2011

E-Business & Shipping

Shipping Shock: Why Ready-to-Buy Customers Bail
Although consumers are certainly enticed by the prospect of free delivery, they are also savvy about purchase prices. If the price of the product incorporates the shipping costs and inflates the price above the same or similar products elsewhere, the consumer will likely be put off at an early stage. With price comparison websites, it is even easier for the discerning buyer to ignore a marked up product.
More than 50 percent of e-commerce shoppers cited shipping as a reason for abandoning their shopping carts online, according to research conducted by Royal Mail, the UK equivalent of the U.S. Postal Service.

Furthermore, 43 percent of consumers' retailer choices were influenced by their delivery experiences and options, the Interactive Media in Retail Group found.
When you consider how much it costs to acquire a new customer on an e-commerce site, it becomes apparent that attempting to make a small extra profit by adding some extra margin on top of delivery costs or not supplying all of the possible delivery options at checkout can be futile.

Mistakes like these mean that e-tailers are not just missing out on the delivery margin, but rather on the entire basket's value and, worse still, the entire potential LTV (life time value) of the consumer. It is therefore important that e-commerce firms take into account the psychology of the consumer when it comes to shipping.

The key factors that influence the buying decision when it comes to delivery options online are price of delivery, speed of delivery, delivery options and carrier choice. The transparency and clarity of these key factors early on in the e-commerce transaction are also major contributing factors.

Free Delivery
Free delivery is becoming a cornerstone for a growing number of e-commerce websites. Free delivery can easily be used as a promotional tool for online companies -- one that not only draws in new customers but also encourages repeat usage from established customers.

This could not be more clear than it is on, which has ingrained free delivery not just as a nicety but as part of its business model. This is proved by its tag line across the site, "FREE DELIVERY ON EVERYTHING." Its delivery policy is outlined immediately for any potential customer and highlights its USP.
Although consumers are certainly enticed by the prospect of free delivery, they are also savvy about purchase prices. If the price of the product incorporates the shipping costs and inflates the price above the same or similar products elsewhere, the consumer will likely be put off at an early stage. With price comparison websites, it is even easier for the discerning buyer to ignore a marked up product.
Free shipping on low-value items can increase revenue while simultaneously eating away at company profits. It is for the company to decide whether factoring in free shipping into the overall budget will ultimately yield a positive return on investment.

Importance of Transparency
Commonly the registration/login page is the point in the user journey where many e-commerce transactions fail if the terms around delivery have not yet been clearly stated. Vistaprint, for example, is a very large and successful company, but it relies on a risky strategy when it comes to shipping costs -- hold them back until the very last moment.

Once the customer gets to checkout, delivery prices are finally displayed, ranging from Pounds 18 to Pounds 3.08 (if a customer is prepared to wait 21 days). While some consumers will be indifferent to shipping costs, the unannounced nature of last-minute additional fees will often scare off others. Therefore, in the case of Vistaprint, the chance of re-use and customer retention is likely to be low due to the lack of transparency throughout the whole process. While this will certainly affect the dropout rate, it is a strategy that has successfully worked for the company for many years.

On the other hand, Amazon (Nasdaq: AMZN) maintains highly transparent shipping costs, whether charged by itself or by sellers who operate on the site. On product pages, alongside the product price, it clearly displays the various delivery options. Product pages on also carry great transparency and clarity in regard to delivery -- not only mentioning that it is free, but also providing an approximate time frame. Play's take on delivery essentially removes any chance for discrepancies or confusion on the part of the user.

Many e-commerce sites that offer free shipping will state certain provisos, such as a minimum spend of US$25 or shipping to an American address. It is in Amazon's best interest to clearly outline these requirements to any potential consumers before they reach the checkout stage.

One of the most interesting delivery promotions run by Amazon is Amazon Prime, which is experiencing huge success. For a yearly fee of around $79, consumers enjoy an "all you can eat" shipping service of free two-day deliveries on all items purchased.

During the 2008 holiday season, Amazon Prime enrollment was as high as 4.8 percent of purchasers, according to This tells us that consumers clearly value speedy, reliable and up-front delivery options.

From an e-tailer's point of view, the lock-in effect of having a consumer pay a subscription for preferred delivery options is substantial. A returning customer, in this case, is worth more than the revenue from an increased shipping cost. Although consumers can be discouraged by shipping costs, the psychological effect of displaying them at every stage of the buying process enforces an e-tailer's trustworthiness.

Context of Shipping Costs
The effect shipping costs will have on a potential consumer is undoubtedly dependant on the item(s) that need to be moved. For example, a customer may be outraged by the thought of paying Pounds 6 shipping for a DVD -- but would be ecstatic if the same cost were applied to a newly bought washing machine.

Within this paradigm, the majority of e-commerce sites do not have universally static shipping costs across varying products but rather base them on item prices or dimensions. Similarly, there are scenarios in which the consumer is willing or even expecting to pay a seemingly higher shipping cost. A consumer who is buying a fragile item, is shipping internationally or has a niche shipping requirement such as a chilled delivery vehicle, will expect a costlier delivery charge.
Consumers have also come to expect a slower shipping service if delivery is free of charge. Conversely, the quality and speed of shipping should be reflected if the consumer pays a premium for delivery.

Comment: What are your experiences of shipping upon ordering online? How much are you willing to pay to get a product shipped to Canada? Is speed of delivery important? Is free delivery ‘free’? Explain. What other options are available in respect to shipping products?