E-marketing excellence - third edition

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eMarketing eXcellence Planning and optimizing your digital marketing This page is intentionally left blank eMarketing eXcellence Planning and optimizing your digital marketing Third edition Dave Chaffey and PR Smith AMSTERDAM • BOSTON • HEIDELBERG • LONDON • OXFORD • NEW YORK PARIS • SAN DIEGO • SAN FRANCISCO • SINGAPORE • SYDNEY • TOKYO Butterworth-Heinemann is an imprint of Elsevier Butterworth-Heinemann is an imprint of Elsevier Linacre House, Jordan Hill, Oxford OX2 8DP, UK 30 Corporate Drive, Burlington, MA 01803, USA First published 2002 Reprinted 2003 (twice) Second edition published 2005 Third edition published 2008 Copyright © 2008, Dave Chaffey and PR Smith. All rights reserved The right of Dave Chaffey and PR Smith to be identified as the author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988 No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher Permissions may be sought directly from Elsevier ’s Science & Technology Rights Department in Oxford, UK: phone (44) (0) 1865 843830; fax (44) (0) 1865 853333; email: permissions@elsevier.com. Alternatively you can submit your request online by visiting the Elsevier web site at http://elsevier.com/locate/permissions, and selecting Obtaining permission to use Elsevier material Notice No responsibility is assumed by the publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloguing in Publication Data A catalogue record for this book is available from the Library of Congress ISBN 978-0-7506-8945-8 For information on all Butterworth-Heinemann publications visit our website at http://elsevierdirect.com Typeset by Charon Tec Ltd, (A Macmillan Co) Chennai, India www.charontec.com Printed and bound in Slovenia 08 09 10 11 12 10 9 8 7 6 5 4 3 2 1 Contents Preface xi Preface to the third edition xvii Acknowledgements xix Chapter 1 Introduction to e-marketing 1.1 Introduction 1.2 Situation – the wired-up world 1.3 Situation – B2C, B2B, C2B and C2C 1.4 Situation – e-definitions 1.5 Situation – sloppy e-marketing 1.6 Objectives 1.7 Objective – sell – using the Internet as a sales tool 1.8 Objective – serve – using the Internet as a customer-service tool 1.9 Objective – speak – using the Internet as a communications tool 1.10 Objective – save – using the Internet for cost-reduction 1.11 Objective – sizzle – using the Internet as a brand-building tool 1.12 Introduction to e-strategy 1.13 Tactics, actions and control Chapter summary References Further reading Web links Self-test 1 3 4 7 12 20 22 25 29 33 35 37 40 43 44 45 46 46 46 Chapter 2 Remix 2.1 Introduction to Remix 2.2 What is the marketing mix? 2.3 Beyond the mix 2.4 Product 2.5 Price 2.6 Place 2.7 Promotion 48 50 51 54 56 64 69 71 vi CONTENTS 2.8 People 2.9 Physical evidence 2.10 Process 2.11 An extra ‘P’ – partnerships Chapter summary References Further reading Web links Self-test 78 82 83 86 88 89 90 90 91 Chapter 3 E-models 3.1 Introduction to e-models 3.2 New models required 3.3 E-marketplace models 3.4 Online revenue models 3.5 Digital communications models 3.6 Models for assessing online communications effectiveness 3.7 Web 2.0 and social network models 3.8 Customer buying models 3.9 Customer information processing 3.10 Loyalty models Chapter summary References Further reading Web links Self-test 92 94 96 98 103 105 109 112 120 121 122 125 126 128 128 128 Chapter 4 E-customers 4.1 Introduction to e-customers 4.2 Motivations 4.3 Expectations 4.4 Fears and phobias 4.5 The online buying process 4.6 Online information processing 4.7 Online relationships and loyalty 4.8 Communities and social networks 4.9 Customer profiles 4.10 Researching the online customer 4.11 The post-PC customer Chapter summary References Further reading Web links Self-test 130 132 140 145 149 151 156 159 163 168 170 176 178 179 180 180 181 CONTENTS Chapter 5 E-tools 5.1 Introduction to e-tools 5.2 Technology development and customer impact 5.3 Interactive digital TV 5.4 Digital radio 5.5 Mobile (wireless) devices 5.6 Interactive self-service kiosks 5.7 Miscellaneous tools 5.8 Repurposing content 5.9 Convergence 5.10 Integrated campaigns Chapter summary References Further reading Web links Self-test 182 184 185 188 194 197 202 204 209 210 212 216 217 218 218 219 Chapter 6 Site design 6.1 Introduction to web site design 6.2 Integrated design 6.3 Online value proposition 6.4 Customer orientation 6.5 Dynamic design and personalization 6.6 Aesthetics 6.7 Page design 6.8 Copywriting 6.9 Navigation and structure 6.10 Interaction Chapter summary References Further reading Web links Self-test 220 222 232 235 239 245 248 257 261 263 268 272 272 274 274 275 Chapter 7 Traffic building 7.1 Introduction to traffic building 7.2 Search engine marketing 7.3 Online PR 7.4 Online partnerships 7.5 Interactive advertising 7.6 Opt-in e-mail 7.7 Viral marketing 7.8 Offline traffic building 7.9 Control 7.10 Resourcing 276 278 282 303 310 319 325 328 330 335 338 vii viii CONTENTS Chapter summary References Further reading Web links Self-test 341 341 343 343 344 Chapter 8 E-CRM 8.1 Introduction to CRM 8.2 Introduction to relationship marketing 8.3 Database marketing 8.4 E-CRM 8.5 Profiling 8.6 Personalization 8.7 E-mail marketing 8.8 Control issues 8.9 Cleaning the database 8.10 Making it happen Chapter summary References Further reading Web links Self-test 345 347 352 359 367 372 375 378 383 385 386 390 391 392 393 393 Chapter 9 E-business 9.1 Introduction to e-business 9.2 E-business architecture 9.3 An e-business value framework 9.4 Buy-side applications 9.5 In-side applications 9.6 Sell-side applications 9.7 Creating the e-business 9.8 E-business security 9.9 E-business success criteria 9.10 E-business failure criteria Chapter summary References Further reading Web links Self-test 395 397 405 408 412 414 416 420 422 426 430 434 435 436 436 437 Chapter 10 E-planning 10.1 Introduction to e-marketing planning 10.2 Situation analysis 438 440 444 CONTENTS 10.3 Objectives 10.4 Strategy 10.5 Tactics 10.6 Actions 10.7 Control 10.8 Resources – men, money and minutes Chapter summary References Further reading Web links Self-test 451 454 464 469 471 475 480 480 481 481 482 Glossary 483 Index 501 ix This page is intentionally left blank Preface Why eMarketing eXcellence? E-marketing impacts all aspects of marketing from strategy and planning through the marketing mix, marketing communications and buyer behaviour to marketing research. eMarketing eXcellence highlights the most significant opportunities, pitfalls and defines the new marketing approaches needed. It highlights best practice in applying digital media to support a range of organizational goals based on the 20 years’ plus combined practical Internet marketing experience of the authors. Best practice is exemplified by a selection of the leading pureplay and multichannel organizations who have exploited the unique characteristics of digital media. E-marketing impacts all organizations. eMarketing eXcellence shows you how to assess your current use of e-marketing and then develop and resource an effective plan. E-marketing does not exist in a vacuum. Planning must ensure that e-marketing integrates with the marketing objectives and the corporate aims of moving towards e-business. eMarketing eXcellence shows how to develop a plan that achieves this integration. The e-marketing imperative is further indicated by success stories from leading adopters of e-marketing such as Alliance and Leicester, BMW, Dell, CIPD, Diageo, E-consultancy, ING Direct, Tektronix and TUI, who have found e-marketing to be effective and who are substantially increasing their online marketing expenditure to double-digit percentages of total marketing communications spend. How is eMarketing eXcellence structured? eMarketing eXcellence has been developed to help you learn efficiently. It has supported students on many university and college business and marketing courses and a range of specialist qualifications in digital marketing offered by the Chartered Institute of Marketing, E-consultancy/Manchester Metropolitan University and The Institute of Direct Marketing. It is structured around ten self-contained chapters, each of which supports learning through a clear structure based on sections with clear learning outcomes, summaries and self-test questions. The E-marketing Insight boxes give varied perspectives from practitioners and academics while the E-marketing Excellence boxes give examples of best practice. We have also included numerous tips and best practice checklists for you to compare your e-marketing against and to help you develop a plan. xii PREFACE Chapter 1 Introduction to e-marketing This chapter introduces e-marketing and its benefits and risks. It describes the difference between e-commerce, e-business and e-marketing; the alternative digital communications channels, the dangers of sloppy e-marketing; how to present a business case for increasing your online activities and the benefits – Sell, Serve, Save, Speak and Sizzle. Chapter 2 Remix The digital world affects every aspect of business, every aspect of marketing and every aspect of the marketing mix. Some argue that physical distribution, selling and pricing absorb the biggest impact. In fact all the elements of the marketing mix are affected by this new world. This chapter shows you exactly how to evaluate the options for varying your organization’s marketing mix. Chapter 3 E-models The business world is changing faster than ever before. Old approaches and models are being turned on their head. In this chapter we show how to assess your online marketplace, review new business, revenue and communications models and develop budget models. Chapter 4 E-customers This chapter looks inside the online customer ’s mind. We explore customers’ issues, worries, fears and phobias, as well as other motivators for going online … and how marketers can respond to these behaviours. We also look at on-site behaviour, the online buying process, web analytics and the many influencing variables. We finish with a look to the future, your future and how to keep an eye on the e-customer. Chapter 5 E-tools This is where the online world begins to get really interesting. Once we move beyond the PC and into the wireless world of pervasive technology, a whole new vision appears. Always on, everywhere, easy to use, contextual, integrated marketing is exploiting these new technological tools to reach and satisfy customers in new ways. Chapter 6 Site design This chapter will make you think about web sites a little differently. We go beyond best practice in usability and accessibility, to show how to design commercially-led sites which deliver results. Commercially-led site designs are based on creating compelling persuasive experiences which really engage visitors through relevant messages and content, encouraging them to stay on the site and return to it. PREFACE Chapter 7 Traffic building Sadly it’s not always the best products that succeed, but rather reasonably good ones that (a) everyone knows about and (b) everyone can easily find when they need them. The same is true of web sites. This chapter shows you how to build traffic – how to acquire the right visitors to your site in order to achieve the right marketing outcomes for you. You will receive a briefing on the different digital communications channels, including search engine marketing, online PR, online partnerships, interactive advertising, opt-in e-mail and viral marketing. We will also show you that to succeed with your online communications also means gaining different forms of visibility on partner sites which are themselves successful in traffic building. Chapter 8 E-CRM Online customer relationship management is packed with fundamental common sense principles. Serving and nurturing customers into lifetime customers makes sense as existing customers are, on average, five to ten times more profitable. At the heart of this is a good database – the marketer ’s memory bank, which if used correctly, creates arguably the most valuable asset in any company. In this chapter we show how to develop integrated e-mail contact strategies to deliver relevant messages throughout the customer lifecycle. Chapter 9 E-business The dot-com disasters still scare many professionals. Clicks and mortar companies generally outperform pure-play Internet companies. Why didn’t these new e-businesses survive? Where did they go wrong? The answer is that they weren’t e-businesses. They weren’t even businesses, since many were ignorant of business essentials such as the need to integrate front-office systems with back-office systems, keep close to customers, deliver real added value, have clear propositions, carefully target the right customers, etc. This chapter clarifies what is meant by e-business; a much abused concept. Chapter 10 E-planning E-marketing planning involves marketing planning within the context of the e-business e-environment. So, not surprisingly, the successful e-marketing plan is based on traditional marketing disciplines and planning techniques, adapted for the digital media environment and then mixed with new digital marketing communications techniques. This chapter shows you how to create a comprehensive e-marketing plan, based on the well-established principles of the SOSTAC® Planning System (PR Smith, 1993). WHO IS THIS BOOK FOR? Marketing and business professionals ● Marketing managers responsible for defining an e-marketing strategy, implementing strategy or maintaining the company web site alongside traditional marketing activities. xiii xiv PREFACE ● Digital marketing specialists such as new media managers, e-marketing managers and e-commerce managers responsible for directing, integrating and implementing their organizations’ e-marketing. ● Senior managers and directors seeking to identify the right e-business and e-marketing approaches to support their organizations’ strategy. ● Information systems managers and Chief Information Officers also involved in developing and implementing e-marketing and e-commerce strategies. ● Technical project managers or web masters who may understand the technical details of building a site, but want to enhance their knowledge of e-marketing. Students This book has been created as the core text for the CIM e-marketing professional development award and the Institute of Direct Marketing Digital Marketing Qualifications. As such, eMarketing eXcellence will support the following students in their studies: ● Professionals studying for recognized qualifications. The book provides comprehensive coverage of the syllabus for these awards. ● Postgraduate students on specialist masters degrees in electronic commerce, electronic business or e-marketing and generic programmes in Marketing Management, MBA, Certificate in Management or Diploma in Management Studies which involve modules or electives for e-business and e-marketing. ● Undergraduates on business programmes which include marketing modules on the use of digital marketing. This may include specialist degrees such as electronic business, electronic commerce, Internet marketing and marketing or general business degrees such as business studies, business administration and business management. ● Postgraduate and undergraduate project students who select this topic for final year projects/ dissertations – this book is an excellent source of resources for these students. ● Undergraduates completing work placement involved with different aspects of e-marketing such as managing an intranet or company web site. MBA – we find that this book actually gives non marketing people a good grounding in marketing principles, business operations and of course emarketing. WHAT DOES THE BOOK OFFER TO LECTURERS TEACHING THESE COURSES? This book is intended to be a comprehensive guide to all aspects of deploying e-marketing within an organization. It builds on existing marketing theories and concepts and questions the validity of these models in the light of the differences between the Internet and other media, and references the emerging body of literature specific to e-business, e-commerce and e-marketing. Lecturers will find this book has a good range of case study examples to support their teaching. Web links given in the text and at the end of each chapter highlight key information sources for particular topics. PREFACE LEARNING FEATURES A range of features have been incorporated into eMarketing eXcellence to help the reader get the most out of it. They have been designed to assist understanding, reinforce learning and help readers find information easily. The features are described in the order you will find them. At the start of each chapter ● Overview: a short introduction to the relevance of the chapter and what you will learn. ● Overall learning outcome: a list describing what readers can learn through reading the chapter and completing the self-test. ● Chapter topics: chapter contents and the learning objectives for each section. In each chapter ● E-marketing Excellence boxes: real-world examples of best practice approaches referred to in the text. ● E-marketing Insight boxes: quotes, opinions and frameworks from industry practitioners and academics. ● E-marketing Best Practice Checklists: to enable you to evaluate and improve your current approaches or plan a new initiative. ● Practical e-marketing Tip: Do’s and don’ts to improve your website, e-mail or database marketing. ● Definitions: key e-marketing terms are highlighted in bold and the glossary contains succinct definitions. ● Web links: where appropriate, web addresses are given for further information, particularly those to update information. ● Section summaries: intended as revision aids and to summarize the main learning points from the section. At the end of each chapter ● Summary: also intended as revision aids and to summarize the main learning points from the chapter. ● References: these are references to books, articles or papers referred to within the chapter. ● Further reading: supplementary texts or papers on the main themes of the chapter. Where appropriate a brief commentary is provided on recommended supplementary reading on the main themes of the chapters. ● Web links: these are significant sites that provide further information on the concepts and topics of the chapter. All web site references within the chapter, for example company xv xvi PREFACE sites, are not repeated here. The web site address prefix ‘http://’ is omitted for clarity except where the address does not start with ‘www ’. ● Self-test questions: short questions which will test understanding of terms and concepts described in the chapter and help relate them to your organization. At the end of the book ● Glossary: a list of definitions of all key terms and phrases used within the main text. ● Index: all key words and abbreviations referred to in the main text. Preface to the third edition The innovation in digital technologies and the ways in which we interact with them have continued relentlessly since the second edition of eMarketing eXcellence. The most dramatic changes have been in user participation facilitated by the new Web 2.0 digital technologies and evolving Web 3.0 approaches. Today, and into the future, consumers don’t only go online to save time and money while selecting and purchasing products, they go online via web or mobile to spend time, to socialize and simply for entertainment. The rise of the now familiar social networks such as Bebo, MySpace, Facebook and in the business arena, Linked In and Ecademy are now where many of us spend time, sometimes discussing brands, but for most of the time just socializing. And of course when we’re socializing, we mostly don’t want to be interrupted by marketing messages – so customer engagement has become a key challenge. Systems to tell others what we think about products and brands are also important and user generated content generated on rating platforms such as Delicious, Digg, YouTube and the shopping comparison sites are only going to increase in importance. Many of the forecasts that we made have proved true. We forecasted that customers would start to consolidate their choices to better, added value sites and services. We also described the growth of blogs and the emergence of interactive Web 2.0 applications. And that the role of comparison intermediaries would increase, although it has taken longer than we thought for customer behaviour to change. We also said that being customer centric online was essential to create real value added customer experiences that nurture customer satisfaction and ultimately, highly profitable, repeat business. Nothing too surprising there, you might say. What is surprising is that many organizations are only at an early stage of developing their online marketing capabilities. Many have not implemented or refined many of the core digital marketing techniques that we describe in this book such as search engine optimization, partner marketing, personalized web recommendation, A/B and multivariate testing and automated e-mail contact strategies. Many of the permission-based approaches to e-marketing we recommended in earlier editions are now legal requirements due to European and US privacy laws such as the European Community Electronic Communications Directive and the US ‘CAN-SPAM’ laws. E-marketers also now have to make sure their web sites are accessible to be compliant with the Disability and Discrimination Act (which is good practice since it also assists with search engine optimization). xviii PREFACE TO THE THIRD EDITION Despite all of this, the fundamental principle remains the same (we said this in the second edition) – stick close to customers. Talk to them. Listen to them (in communities and social networks). Understand them better than they understand themselves. Become customer experts. Be crystal clear about the target markets, who they are, how you access them, why you are going after them. Use marketplace analysis and modelling to understand your offering and how you compare to competition, both in reality and in customers’ perceptions. Then develop credibility before raising visibility. After that, strong and clear value propositions help to win customers’ and prospects’ permission (permission marketing). Use e-marketing analysis techniques such as surveys, audience data and web analytics to refine your online offering. You can then refine your proposition and develop relations (relationship marketing) through effective, usable web sites and timely reminders (whether by opt-in e-mail, text messages, direct mail or even telephone (permission allowing). Many readers will be moving from their initial e-plans onto the next generation of e-plans or developing a long-term e-marketing roadmap to introduce new approaches. We hope this book helps to move you along the evolutionary path towards e-plans that really help to boost performance in an integrated way. Although the benefits of e-marketing span right across an organization’s functions (customer feedback, customer service, product enhancement, sales, finance/payment, delivery, administration and marketing), we tend to link it strongly to marketing communications plans. The reality is that any e-marketing plan needs to be part of a Marketing Communications Plan and it also should be part of a broader Marketing Plan. Needless to say the e-plan should fit in with the overall business plan and goals. Enjoy the read, enjoy the digital ride and let us know what you think via our sites. Dave (www.davechaffey.com/E-marketing) and Paul (www.prsmith.org) Acknowledgements Our thanks to our many friends and colleagues who have helped us in many ways. In particular, Paul Smith would like to thank Alison Bowditch, Martin Burke, Lou Burrows, Peter Hurst, Jan Klin, Mike Langford, Martin Lindstrom, Gerry McGovern, Paul O’Sullivan, Steve Saunders and John Twomey. Dave Chaffey would like to thank the following for e-inspiration: Bryan Eisenberg, Ashley Friedlein, Avinash Kaushik, Neil Mason, Jim Novo, Richard Sedley and Jim Sterne. All web site screenshots included in this book are examples of best practice. We thank all companies who have agreed to have their sites included and offer our apologies to those it has not been possible to contact. Finally thanks to the Smith clan: Beverley, Aran, Cian and Lily and the Chaffey clan: Sal, Zoe and Sarah.
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