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Improving Customer Relationship

Management through Database/Internet


Marketing
A theory-building action research project

Robertha Lynn B. Grove


Researchers

Chris O’Leary – Acxiom Corporation, Sydney Australia

Sally Rao – The University of Adelaide, Adelaide, Australia

Chad Perry – Graduate College of Management,


Southern Cross University, Gold Coast Australia

A theory Building Action Research Project


Definition of Terms - Internet Marketing
Internet marketing is the most inexpensive way to reach your target market,
regardless of the size of your business.
But what is internet marketing, really?

Internet Marketing
Definition of Terms - Internet Marketing
Definition of Terms - Internet Marketing

Internet Marketing Ninjas Services. A Message from


Jim Boykin:
Twenty years ago, I started Internet Marketing Ninjas. Today we
employ 48 in-house Ninjas totaling over 300 years of
experience across the team. We create content and brand assets,
then market it to bring you real backlinks, better rankings, and
more traffic.
Definition of Terms - Database Marketing

Database marketing is a term for information-rich


marketing efforts that rely on carefully aggregated
database information. Although many kinds of
marketing use consumer information, database
marketing is distinguished by a specific kind of
approach that uses database information to crunch
the numbers on demographics, come up with
specific target audiences and otherwise direct
marketing efforts.
Definition of Terms - Customer
Relations

Customer relations are the relationships that


a business has with its customers and the way
in which it treats them… Customer relations is
the department within a company that deals
with complaints from the customers.
Definition of Terms - Action Learning

Action Learning Definition


Action learning is a systematic process through which
individuals learn by doing. It is based on the premise that
learning requires action and action requires learning. It engages
individuals in just-in-time learning by "providing opportunities
for them to develop knowledge and understanding at the
appropriate time based on immediate felt needs" (Lewis and
Williams, 1994).
Abstract

1. Firms have only just begun to use the Internet to obtain


customer information in their database marketing processes to
enhance customer relationship management.

2. This research uses an action research approach to develop a


new framework about how they can do this.

3. The action research project was carried out in a large


Australian database company because no other sources
of empirical information about the topic were available and it
could provide rich findings about an under-researched,
practical area.
Abstract

4. Results showed that integration of the Internet and database


marketing enhances the effectiveness of customer relationship
management practices. For example, the Internet offers
benefits such as increased consumer data collection accuracy
and speed, cost savings, greater interaction and better
relationships with customers.

5. This research also identifies that organizational culture, top


management support and collaboration between marketing
and IT teams need to be in place to provide a supportive
environment that is critical for the success of the Integration.
What is the study all about?
 Improving customer relationship management through
database/Internet Marketing.

 Specifically, the study


1. Shows that integration of the internet and database
marketing enhances the effectiveness of customer
relationship management practices
2. Identifies that organizational culture, top
management support and collaboration between
marketing and IT teams need to be in place to
provide a supportive environment that is critical for
the success of integration
Introduction

The aim of this paper is to develop a framework for integrating


the Internet and database marketing to help marketers improve
customer relationship management (CRM), based on rigorous
academic research.

The researcher’s contributions are the first academic study of the


integration of Internet and database marketing, and an example
of how the action research methodology can be used to explore
a relatively technical issue in marketing about a general,
academic research problem,
Introduction
This paper has three parts:

First, a preliminary framework based on the literature is outlined.

The project methodology of focus groups, convergent


interviewing and action research is briefly described.

Finally, a comprehensive framework based on the findings is


presented,

Implications and limitations are discussed and possibilities for


further research are identified.
Three Parts of These Paper
1. A preliminary framework based on literature outlined.

Three usual parts:

a. Inputs – are the customer information gathered


through the internet.
b. Processes – integrate information gathered from the
internet with information in the organization database
c. Outputs – possible uses of internet information that
can be “mined” from databases.
Project Methodology
2. The project methodology of focus group, convergent
interviewing and action research is briefly described.

The used of Action Research Methodology


This research adopted an action research
methodology in its data collection process, that is, a
cyclical process methodology that incorporates the four-
step process of planning, acting, observing and
reflecting on results generated from a particular
project or body of work (Zuber-Skerritt and Perry, 2000;
Dick, 2000; Revans, 1991; Kemmis and McTaggart, 1988;
Kolb, 1984). The concept is essentially concerned with a
group of people who work together to improve their
work processes (Lewin, 1946; Carson et al., 2001; Altrichter
et al., 2000; Bawden and Zuber-Skerritt, 2000).
Project Methodology
Findings
Research Issue Findings about the research issues
1. How can customer data Types of data collected through the Internet
be gathered passively and Both primary and secondary customer data can be collected through the internet
actively through the Primary data collected through the Internet are more useful for internet/database
Internet for database marketing purposes
marketing purposes? Permission marketing has to be in place for the collection and use of customer data
Active vs passive customer data
Customer data collected through the Internet can be categorized into active and passive data
A mix of these two types of data is most effective for learning about the customers
Passive data needs to be matched back with active data to become meaningful
Factors influencing active customer data collection through the internet
Trust in a web environment
Web stickiness
The consumer must be provided with incentives and/or compensated to provide active
personal data
Data capture mechanisms
Cookies and click stream
Web registration forms and online surveys
Transaction records
Information self-service
Dealing with ongoing management and maintenance of data currency
Figure 1 Minimizing number of data variables
Real time updates through the internet
Findings
Research Issue Findings about the research issues
2. How can customer data Data integration through data warehousing and data mining requirement of
from the Internet be supportive environment
integrated into database Supportive organizational culture
marketing processes? Appropriate e-commerce infrastructure
Top management commitment
Use of two marketing databases; one for real-time data accruing from e-business interactions and the
other for integrating other organizational consumer data and linking to the real time database
System management and data standardization
Integrated data analytical and campaign management functionality within the database
marketing application
Artificial intelligence learning and personalisation software for consumer inbound marketing

3. How can customer Strategies that are most likely to be derived from the integration of internet and database
information gathered marketing to improve customer relationship management
through the Internet be Prospecting new customers
used to improve customer Segmenting customers
relationship Retaining customers
management? Use of one-to-one marketing; where consumer interests are elicited and refined on an
individual basis; and the organization’s communications, campaigns anf offers are
structured accordingly
Forging customer loyalty
Promoting and advertising pertinent to a customer’s identified interests
Figure 1 Cross marketing and relationship marketing
Affiliate marketing
Stealth marketing
Findings
F
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a
l

F
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a
m
e
w
o
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k
FIGURE 2
RESULTS – Implications for Practice and
Policy

 The first implication of this research relates to the benefits of integrating


Internet and database marketing. The research showed that the most
important output of the integration of Internet/database marketing is an
enabling of effective customer relationship management

 An important implication for practitioners as a result of the increased


effectiveness of Internet/database marketing is one-to-one marketing
(Peppers and Rogers, 1997)

 Ethical considerations need to be addressed in the internet/database


marketing process because of the increasing concerns amongst
consumers about the impact of the marketing management techniques
on their privacy (Tweney, 1998; Prabhaker, 2000).
RESULTS – Implications for Theory
 This research appears to provide the first investigation about the intersection of
Internet and database marketing in Australian organizations, and how it may be
achieved. Thus this research contributed to the theory-deficient area of the
integration of Internet and database marketing, and provided the first
theoretical framework for such a phenomenon.

 Literature also tends to be from the perspective of countries such as the USA
and the UK which are more advanced than Australia in Internet and database
applications (for example, Smith, 1998; Geiger and Martin, 1999). Therefore
there is little literature about Internet and database marketing pertinent to
countries such as Australia and thus this research appears to be the first
academic investigation of this phenomenon in Australian organizations.

 This research confirmed the usefulness of action research methodology that


provided the opportunity to build theory rather than test theory, with the end
result being the actual effective implementation of integrated
Internet/database marketing within a major Australian organization.
CONCLUSION

 In conclusion, the extent, degree and speed of communication


enabled by the Internet makes it a synergistic component of an
effectual database marketing strategy. An integrated Internet and
database marketing solution appears promising for Australian
organizations.
FURTHER RESEARCH

 Future research could investigate the integration of Internet and


database marketing in the context of business-to-business
because some elements may differ from those in the context of
business-to-consumer context.