E-marketing and Customer Loyalty: With Special Reference to Search Engine Marketing Part 1

From Wix.com

EXECUTIVE SUMMARY

The report aims to study the current E-marketing trends and how they generate customer loyalty. This project studies the nature of E-marketing and search engine marketing in detail which has become the most prevalent tool of E-marketing.

The remarkable growth and impact of the Internet and World Wide Web have spurred almost every business to explore E-marketing strategies to enrich relationships with customers, employees, and suppliers. Internet marketing to simply equate to Search Engine Marketing, but while this is important this scope is too narrow to take full advantage of digital media. These techniques are used to support objectives of acquiring new customers and providing services to existing customers that help develop the customer relationship.

E-Marketing is the process of marketing a brand using the Internet. It includes both direct response marketing and indirect marketing elements and uses a range of technologies to help connect businesses to their customers. EMarketing encompasses all the activities a business conducts via the worldwide web with the aim of attracting new business, retaining current business and developing its brand identity.

INTRODUCTION

INTERNET

An email address and a website has become a necessity and not a mere accessory or a luxury, it is given that any self respecting business or enterprise will have a website. The opportunities of the medium to business include advertising space to strengthen brand equity coupled with lower infrastructure costs, unlimited shelf space, a global audience that can be catered to without the restrictions of time zones and working hours. The Internet user represents every facet of society and transcends any bias. ‘Business’ and ‘Enterprise’ have been equally keen on embracing this medium. The Internet coupled with media consumption bridges the ‘convergence of aspirations’ divide between country cousins and urban brats. Changing lifestyles and shopping habits coupled with superior options and selections make this interactive medium most attractive to this e-generation.

The opportunities of the medium to business include advertising space to strengthen brand equity coupled with lower infrastructure costs, unlimited shelf space, a global audience that can be catered to without the restrictions of time zones and working hours.

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Users between the ages of 18-35 are the biggest segment accounting for 50% of all users on the Internet.

Some interesting facts :

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44% of Internet users believe that a film's online participation influences their judgment in watching a movie reinforcing the need for movie houses to be present online.

<img src="/images/f/f2/64836-3.png" _fck_mw_filename="64836-3.png" _fck_mw_location="left" alt="" class="fck_mw_left" />aaa73% of Internet users spend less than $15 on a visit to the cinema indicating an affluent demographic. The 18-35 age group is the biggest spenders.

<img src="/images/1/18/64836-4.png" _fck_mw_filename="64836-4.png" _fck_mw_location="left" alt="" class="fck_mw_left" />a33% of Internet users have a penchant to buy movie merchandise online & this frequency is likely to grow as we are reaching to households owning DVD Players & Recorders aaa(35%), VCD Players (56%)

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aaa 94% of users are susceptible to mobile marketing. Moreover, there is high propensity to talk, share amongst friends.

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aa47% of Internet users would pay for mobile content like alerts, ringtones, wallpaper etc.

INTERNET MARKETING TRENDS

The results of a survey of global chief executive officers portend significant Internet growth and business usage over the next five years, with 92 percent of executives projecting revenues derived from E-commerce. Although the information technology that supports electronic marketing currently accounts for just 8 percent of the United States’ total economic output, over the last five years it has fueled more than one-third of economic growth in the United States. The remarkable growth and impact of the Internet and World Wide Web have spurred almost every business to explore E-marketing strategies to enrich relationships with customers, employees, and suppliers. In fact, the characteristics and availability of the E-commerce infrastructure are driving strategic planning.

Internet marketing to simply equate to Search Engine Marketing, but while this is important this scope is too narrow to take full advantage of digital media.

These techniques are used to support objectives of acquiring new customers and providing services to existing customers that help develop the customer relationship.
However, for Internet marketing to be successful there is still a necessity for integration of these techniques with traditional media such as print, TV and direct mail. This is multi-channel E-marketing.

LITERATURE REVIEW

E-MARKETING

E-marketing can be considered to be equivalent to Internet marketing. Most in the industry would look at it this way.

However, E-marketing is sometimes considered to have a broader scope since it refers to digital media such as web, e-mail and wireless media, but also includes management of digital customer data and electronic customer relationship management systems (E-CRM systems).

E-Marketing is the process of marketing a brand using the Internet. It includes both direct response marketing and indirect marketing elements and uses a range of technologies to help connect businesses to their customers. eMarketing encompasses all the activities a business conducts via the worldwide web with the aim of attracting new business, retaining current business and developing its brand identity.

Dave Chaffey, working from a relationship marketing perspective, has defined e-marketing as:

Applying Digital technologies which form online channels (Web, e-mail, databases, plus mobile/wireless & digital TV) to contribute to marketing activities aimed at achieving profitable acquisition and retention of customers (within a multi-channel buying process and customer lifecycle) through improving our customer knowledge (of their profiles, behavior, value and loyalty drivers), then delivering integrated targeted communications and online services that match their individual needs.

Chaffey's definition emphasizes that:

It should not be the technology that drives e-marketing, but the business returns from gaining new customers and maintaining relationships with existing customers.
It also emphasizes how e-marketing does not occur in isolation, but is most effective when it is integrated with other communications channels such as telemarketing, direct-mail, personal selling, advertising, publicity, sales promotion, and other promotional techniques.

Online channels should also be used to support the whole buying process from pre-sale to sale to post-sale and further development of customer relationships where this is appropriate.

It should be based on knowledge of customer needs developed by researching their characteristics, behavior, what they value, and what keeps them loyal.
The web and e-mail communications should be personally tailored to individual buyers based on the information obtained in the research.

Products of E-Marketing

• E-ticketing-
• 39% have bought Railway Tickets online & 48% are likely to buy them in the near future.
• 47% of Railway ticket purchasers are in the 26-35 age groups
• 29% have bought Airline Tickets online & 46% are likely to buy them in the near future.
• 20% have booked Hotel Rooms

• Online books-41% have bought Books online & 44% are likely to buy them in the near future. The 26-35 years (45%) age group represents the highest penchant for shopping for Books online and 85% are Male.

Music online- 24% have bought Music online & 33% are likely to buy them in the near future. The 18-35 age groups are the highest purchasers of Music online accounting for 74% of purchases & 39% of buyers of Music online are ‘Unmarried’ and 42% are ‘Married with kids’.

• Electrical goods-40% have bought Electronic Gadgets online & 53% are likely to buy them in the near future. 74% of Electronic Gadgets are being bought by 18-35 year age group, predominantly male driven (91%), 45% of shoppers are ‘Married with kids’ & 37% are ‘Unmarried’ .

• Financial products

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Tools and techniques of E-Marketing

• Search engine marketing
• Email marketing
• Banner ads
• Extranets
• Metrics and analysis
• Event registration
• Asset sharing
• Bulletin board
• Online survey
• Webinars
• Live chats

• Search Engine Marketing (SEM): Search engine marketing has of late become one of the principle tools in the armory of the Sauvé internet marketer. This prominence of SEM is owing to the fact that the search engines like Google, Yahoo etc. are being used by more and more people as their principle method of searching for relevant information. And, you can hope to sell through them if your website is visible on these search engines. The principle techniques employed in SEM are:

o Search Engine Optimization (SEO): A set of practices employed to get ranking for WebPages on relevant keywords (search queries). SEO does this by improving a websites structure and content.

o Pay per Click (PPC): PPC takes the sponsored route to drive relevant traffic to a website. The positioning of Ads is determined by a competitive bidding structure.
o Paid Inclusion: In paid inclusions, you can pay your way up on to the natural listings of search engines. As of now, Google has stopped its paid inclusion program.

• E-Mail Marketing: As the name suggests, e-mail marketing is promotion through e-mails. If used effectively it can assure you maximum returns on each penny you spend. It can be used for acquiring new customers, enhance the relationship you have with your existing clientele.

o Advantages: Cheap, instant, easily traceable and if used properly the return on investment can be astounding.

o Disadvantages: Due to the overdoing of the e-mail campaigns by online companies, they are now being categorized as Spam mail. Thereby reducing the chances of it actually reaching the intended person.

• Banner Advertising: Banner marketing involves placing your advertisement on any third party website. This Ad will link to your website, this way if the potential customer clicks on your banner, he will be directed to your website. It can be a good way of attracting relevant traffic to your website.

• Interactive Advertising: It involves the use of interactive media applications to promote products online. It in fact involves the right use of text, images, Flash animations, AV clips etc. The interactive advertising platform in a way intends to send across a personalized message by giving the readers/ viewers a visual treat.

• Blog/ Article marketing: Articles and blogs can be used effectively to propagate a marketing campaign. By submitting in various directories like Ezine and Go articles, you can hope to generate traffic through the link you have placed on the article directing towards your website.

Methods of e-marketing are evolving as rapidly as new technologies are developed, but many firms are still struggling with the basics of even getting started. An effective e-marketing program should consist of, at a minimum:
• Company website
• Email application capable of maintaining lists and groups
• Email application capable of sending and receiving HTML-formatted messages
• Shared company project, personnel and contact database
• Adobe Acrobat software for producing universal-format electronic documents (PDF

What types of eMarketing tools are agencies using today?

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Benefits of E-Marketing

E-marketing, which includes internet research, having a business website, selling on-line and using email and mobile technologies, is a cost effective way of selling internationally to one or more customers, 24 hours a day, 7 days a week, 52 weeks of the year.

On-line trading is convenient, quick and cost effective. It provides customers with more variety as they can compare prices and quickly find detailed information on products and the vendor with no pressure from sales staff.

Free workshops cover key areas such as how to get the best from a website, starting to address web marketing, using broadband, and increasing business by selling on-line and many other topics which will help you to e-market your business.
Wider customer base can also benefit from valuable information from you - providing it helps them to do their jobs.

•TAX BREAKS. When you operate a home based business you can write off the costs for:

The area in your home you use for business
Office supplies (including your computer)
Related tools (hosting fees, journals, magazines, cable TV),
Job expenses
Travel expenses
Meals and entertainment
Advertising
Your phone
Legal and professional services
Training

• LOW STARTUP COSTS. Most businesses cost AT LEAST $5,000 to get started.
• LOW OPERATING COSTS.
• HIGH PROFIT MARGIN. Since your costs are low you keep more of the money you make from sales. If you sell a product delivered online (like e-books) you don't have to pay for shipping either.
• MARKET FOR LITTLE OR NO MONEY.
• YOU DON'T NEED YOUR OWN PRODUCT. There are a ton of folks with great products you can sell through affiliate programs.
• TIME FREEDOM. You build your business as fast or slow as you like.
• JOB SECURITY ON AUTOPILOT.
• OPEN 24 HOURS IN EVERY COUNTRY.
• CHEAP AND FREE RESOURCES
• REACH: eMarketing opens up new avenues for smaller businesses, on a much smaller budget, to access potential consumers from all over the world.
• SCOPE : Internet marketing allows the marketer to reach consumers in a wide range of ways and enables them to offer a wide range of products and services.
• INTERACTIVITY
• IMMEDIACY : Internet marketing is able to, in ways never before imagined, provide an immediate impact.
• DEMOGRAPHICS AND TARGETING : Generally speaking, the demographics of the Internet are a marketer's dream. Internet users, considered as a group, have greater buying power and could perhaps be considered as a population group skewed towards the middle-classes.
• ADAPTIVITY AND CLOSED LOOP MARKETING : By continuously tracking the response and effectiveness of a campaign, the marketer can be far more dynamic in adapting to consumers' wants and needs. With eMarketing, responses can be analyzed in real-time and campaigns can be tweaked continuously
• Minimal advertising spend wasted on less than effective campaigns.
• Creates new opportunities to seize strategic competitive advantages.
• The combination of all these factors results in an improved ROI and ultimately, more customers, happier customers and an improved bottom line.

E-Marketing plan and E-business Model

The e-marketing plan defines your business model, builds commitment from all people who will be involved in its implementation, and establishes performance criteria and benchmarks for success.

The e-marketing plan gives you a road map or a blue print to e-business success. The prerequisite to writing a good e-marketing plan is a complete understanding of your e-business model.

What is your e-business model?

A business model describes your architecture for product, service, and information delivery and a description of sources of revenues .A business model identifies the value chain elements of the business such as inbound logistics, operations, outbound logistics, marketing, service; and support activities.

At a minimum, your business model will influence the way you forecast sales and predict e-marketing expenses. However, beyond basic sales forecasting and budgeting, there are aspects of your e-marketing plan that address the specific way you will do business, generate revenue, and consume resources. Your e-marketing plan should discuss how you will use information technologies to manage the marketing mix (product, price, place, and promotion), how you plan to optimize your content, and how you will allocate resources to attract new customers, create loyalty with existing ones, and create revenue streams.

Merchant Model

The Merchant model is web marketing of wholesalers or retailers of goods and services. The goods and services might be unique to the web or an extension of a traditional “brick and mortar store front. This model includes catalogers who have decided to complement their catalog operation with a web site or have decided to migrate completely to an online model. Benefits of this model include increased demand for goods and services via an entry into the global market, potential lower costs of promotion and sales, 24/7 ordering and customer service, and one-to-one custom marketing.

Auction Model

The auction model web implementation of bidding mechanisms through multimedia presentation of goods and services. Revenue streams are derived from licensing of the auction technology platform, transaction fees, and advertising.

Manufacturer Model

The manufacturer model uses the web to compress the distribution channel so that rather than use intermediaries to get your products and services to market, you go direct to the customer via the web.

Affiliate Model

The affiliate model is a “pay for performance model”. Revenue streams are created when customers click through links or banner ads to purchase goods and services. Affiliate marketing is when one web site (the affiliate) promotes another web site's products or services (the merchant) in exchange for a commission.

Advertising Model

Like a traditional broadcaster or news media business models, the web advertising model provides content and services (i.e., email, chat, forums, auctions, etc) supported by banner ads and other forms of online advertising (perhaps email newsletter ads). Some advertising models are called portals (like AOL, Yahoo, and AltaVista) while others are called “Free Models”; like Blue Mountain Arts where giveaways help create high volume.

Infomediary Model

This is a web model whereby the infomediary collects data from users and sells the information to other businesses. Traffic is driven to the infomediary’s site by free offers

Subscription Model

In a subscription model, users pay for access to the site and the high value content that they view.

Virtual Communities Model

The virtual communities’ model facilitates the online interaction of a community of users. The model makes it easy for the community members to add their own content to the online community web site.

When developing an Internet Marketing Campaign, consider the following:
Target Audience –

Know your audience. Find out everything you can about them, from what they like to how much they make per year. The more information you have on your target, the better chance of your Internet Marketing Campaign succeeding.

Website User Friendliness-

Your website must be easy to navigate and get right to the point. Most users don't want to spend to much time on website when they know what they are looking for.

Easy Point-of-Sale –

Make sure your website has the ability to process Credit Cards online in a easy manor. Complicated issues and many pages for purchases are a big turn off.

Copy clear and Concise –

Make sure your copy is easy to read and understand. Most people do not want million dollar words, just the facts. Spell Checking is a must.

The Top 10 E-marketing strategy issues of today and tomorrow?

Customer-centric e-marketing is:

Applying…Digital technologies which form online channels… (Web, e-mail, databases, plus mobile/wireless & digital TV) to… Contribute to marketing activities aimed at achieving profitable acquisition and retention of customers through Improving our customer knowledge then delivering integrated targeted communications and online services that match their individual needs.

Online channels should also be used to support the whole buying process from pre-sale to sale to post-sale and further development of customer relationships.

The final part of the definition summarizes approaches to customer-centric e-marketing. It shows how it should be based on knowledge of customer needs developed by researching their characteristics, behavior, what they value, what keeps them loyal and then delivering tailored web and e-mail communications.

Four years after the dot.com boom and bust there is now resurgence in investment in E-marketing. This resurgence has been driven by a combination of changes in consumer behavior and online services that have been refined to meet these consumer needs. This showed the following variation in popularity for browsing and purchasing products online:
• 64% browse for holidays online and 28% buy online.
• 58% browse for travel tickets and 37% buy online.
• 55% browse for music online and 26% buy online.
• 47% browse for books online and 31% buy online.
• 36% browse for electrical goods online and 20% buy online.
• 25% browse for clothes online and 16% buy online.
• 24% browse for financial products online and 10% buy online.

Top ten strategic E-Marketing issues

Issue 1. The E-marketing planning process
The integration of e-marketing-specific objectives, strategies and activities into the traditional annual marketing planning process.

Issue 2. Organizing and resourcing for e-marketing
As the importance of online channels increases, the structure of the marketing organization and responsibilities may need to change to maximize the opportunities available through new media.

Issue 3. Defining the Internet value proposition (IVP)
To achieve increased customer usage of online channels (web, e-mail, wireless), a distinct, detailed proposition must be developed for these online channels and it must be clearly communicated online and offline.

Issue 4. E-brand value
• How does the Internet contribute to and influence brands?
• Reputation management (or PR) – how do we manage how third-party sites present the brand through proactive promotion of the brand and reactive limitation of negative PR?
• Viral marketing – how do we use the efficiency of online networks to create involvement with a brand?

Issue 5. Setting the e-communications mix
• Defining the proportion of online spend on different elements of the communications mix
• Percent of communications budget allocated to e-communications
• Online spend % on advertising, direct mail and PR
• Demonstrating return on investment for e-marketing tools
• Continuous vs campaign spend
• Relative spend on different online tools, i.e. search, affiliates, online ads, rented e-mail lists, online sponsorship, etc

Issue 6. E-mail marketing integration (Touch strategy)
Integrating different forms of marketing e-mail, i.e. rented list, house list e-blasts, service e-mails and e-newsletters with traditional communications, i.e. direct mail, advertising, etc to achieve maximum response.

Issue 7. E-CRM
• Using online channels (web, e-mail, wireless messaging linked to customer databases) to build and deepen relationships with customers.
• What methods do we use to target and personalize messages for online customers?
• How do we manage change associated with CRM?
• Which technologies do we select to support CRM?
• What level of customer service do we provide online and how do we control the level of online versus offline enquiries?

Issue 8. Building and exploiting customer knowledge
Customer knowledge is profiling information and research characterizing customers including their characteristics, communications preferences, behaviors and perception of service.

Issue 9. E-marketing automation
Developing personalized marketing messages delivered by web and e-mail in response to customer events and behaviors.

Issue 10. E-channel optimization
Developing a continuous improvement process to monitor the effectiveness of web and e-mail marketing.
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Product Considerations

The exponential growth of the Internet and the World Wide Web presents significant opportunities for marketing products to both organizations and consumers. Through E-marketing strategies, companies can provide products, including goods, services, and ideas, that offer unique benefits and improve customer satisfaction. Computers and computer peripherals, industrial supplies, and packaged software are the leading organizational purchases online. Consumer products account for a small but growing percentage of Internet transactions, with securities trading, travel/tourism, and books among the hottest consumer purchases.9 The online marketing of goods such as computer hardware and software, books, videos, CDs, toys, automobiles, and even groceries is accelerating rapidly. Ideas, such as marriage counseling, medical advice, tax/legal advice, and even psychic services, are being marketed successfully online as well.

Distribution Considerations

The role of distribution is to make products available at the right time at the right place in the right quantities. The ability to process orders electronically and to increase the speed of communications via the Internet provides marketers with an excellent opportunity to reduce physical distribution costs, speed communication and delivery times, and improve customer service. The interactivity characteristic of E-marketing also allows firms to develop closer working relationships with members of their supply chains. Thus, E-marketing can improve customer satisfaction by networking supply chain members to reduce inefficiencies, costs, and redundancies in the entire marketing channel.

One of the most visible members of any marketing channel is the retailer, and the Internet is increasingly becoming a retail venue.

Promotion Considerations

The Internet is an interactive medium that can be used to inform, entertain, and persuade target markets to accept an organization’s products. In fact, gathering information about products and services is one of the main reasons people say they use the Internet. The accessibility and interactivity of the Internet present exciting opportunities for marketers to complement their traditional media usage for promotional efforts. The control characteristic of E-marketing means that customers who visit a firm's Web site are there because they choose to be, which implies that they are interested in the firm’s products and therefore can be at least somewhat involved in the message and dialogue provided by the firm.
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Advertising is a paid nonpersonal communication about an organization and its products that is transmitted to a target audience through a mass medium. Many companies augment their TV and print advertising campaigns with Web-based promotions. Thousands of well-known firms, from The Coca-Cola Company to the Mead Corporation, from Target Stores to Century 21, have set up Web pages to tout their products, circulate company information, entertain and inform users, and interact with customers. Companies also use banner ads, which are small rectangular ads—static or animated—that typically appear at the top of a Web page, to promote themselves and/or their products on Internet portals and other Web sites.

Pricing Considerations

Pricing, which relates to perceptions of value, is the most flexible element of the marketing mix. E-marketing facilitates both price and nonprice competition because the accessibility characteristic of E-marketing gives consumers access to more information about the cost and price of products than has ever been available to them before.

Do’s and Don’ts of E-marketing

Make Sure Your Message is Making it Into the INBOX

In order to assure that your message is delivered, look to partner with an e-marketing expert who is intimate with the ins and outs of the system. They'll help you create productive relationships with major ISPs to prevent being blacklisted .It's also important to develop an effective tracking tool to make sure that your messages are arriving at their destinations.

Never Underestimate the Power of Your Word Choice

Technology wizards and standard-setters have partnered to create algorithm thresholds that trigger message rejections when you exceed certain standards or use too many "buzz" words.

If You Build it, They May Still Not Come

If you've developed your electronic presence based on input you've gathered from your customers, you are probably on strategically sound ground. But once you've got the foundation up, you have to drive customers to your site. Search engine marketers like Google, Overture and others are important allies to help drive this traffic. And they can be remarkably cost effective if you choose your approach wisely.

Before Advertising, Be Strategic

Unfortunately, the technological ability to deliver messages far exceeds our ability to effectively measure the actual impact of the message. Make sure you've enveloped online advertising use as part of your overall strategic marketing plan rather than as a stand alone. And never employ electronic gadgetry like pop-ups unless you've worked out your objectives and strategies thoroughly.
Good Content + Bad Design = No Results

Electronic marketing and the Internet in general are driven by emerging and evolving forms and functions. What works today may not even exist tomorrow. Most businesses are used to maximizing complete control over their marketing efforts. Make the use of e-marketing part of your greater plan and determine a list of realistic objectives with which to measure its effectiveness. Above all, treat visitors to your site with respect, honor their privacy, and avoid annoying and unresponsive practices. Building customer relationships, including via electronic media, begins with treating customers as you would want to be treated. That, coupled with smart application of the unique technological opportunities the Internet presents for e-marketing, can help make the Internet a vital engine for overall business growth.

Part 2