CIM revision cards customer communications in marketing by gill wood

CIM REVISION CARDS Customer Communications in Marketing 04/05 PROFESSIONAL CERTIFICATE IN MARKETING 2004 –2005 SYLLABUS Key concepts for revision ● ● ● Relevant! Succinct! Compact! The Chartered Institute of Marketing Helping you to pass your CIM exam CIM REVISION CARDS Customer Communications in Marketing Gill Wood AMSTERDAM l BOSTON PARIS l SAN DIEGO l HEIDELBERG SAN FRANCISCO l l l LONDON l SINGAPORE l NEW YORK SYDNEY l l OXFORD TOKYO Elsevier Butterworth-Heinemann Linacre House, Jordan Hill, Oxford OX2 8DP 30, Corporate Drive, Burlington, MA 01803 First published 2004 Copyright ß 2004, Elsevier Ltd All rights reserved No part of this publication may be reproduced in any material form (including photocopying or storing in any medium by electronic means and whether or not transiently or incidentally to some other use of this publication) without the written permission of the copyright holder except in accordance with the provisions of the Copyright, Designs and Patents Act 1988 or under the terms of a licence issued by the Copyright Licensing Agency Ltd, 90 Tottenham Court Road, London, England W1T 4LP Applications for the copyright holder’s written permission to reproduce any part of this publication should be addressed to the publisher Permissions may be sought directly from Elsevier’s Science & Technology Rights Department in Oxford, UK: phone: (+44) 1865 843830, fax: (+44) 1865 853333, e-mail: permissions@elsevier.co.uk You may also complete your request on-line via the Elseiver homepage (http://www.elsevier.com), by selecting ‘Customer Support’ and then ‘Obtaining Permissions’ British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalogue record for this book is available from the Library of Congress ISBN 07506 62824 For information on all Elsevier Butterworth-Heinemann publications visit our website at http://books.elsevier.com Printed and bound in Great Britain TABLE OF CONTENTS 10 Preface iv Introduction to customer communications Buying behaviour 10 The communication process 19 Verbal communications – theory and methods 26 Written communication formats 48 Using statistical data and visual information 59 The promotional mix – below the line 78 The promotional mix – above the line 95 The role of information communication technology (ICT) 108 Customer service and customer care 116 PREFACE Welcome to the CIM Revision Cards from Elsevier/Butterworth–Heinemann We hope you will find these useful when coming to revise for your CIM exam The cards are designed to be used in conjunction with the CIM Coursebooks from Elsevier/Butterworth–Heinemann, and have been written specifically with revision in mind They also serve as invaluable reviews of the complete modules, perfect for those studying via the assignment route n Learning outcomes at the start of each chapter identify the main points n Key topics are summarized, helping you commit the information to memory quickly and easily n Examination and revision tips are provided to give extra guidance when preparing for the exam n Key diagrams are featured to aid the learning process n The compact size ensures the cards are easily transportable, so you can revise any time, anywhere To get the most out of your revision cards, try to look over them as frequently as you can when taking your CIM course When read alongside the Coursebook they serve as the ideal companion to the main text Good luck – we wish you every success with your CIM qualification! INTRODUCTION TO CUSTOMER COMMUNICATIONS Unit LEARNING OUTCOMES å Understand the importance of effective customer communications in marketing å Identify the internal and external customers in a given situation å Be aware of what is meant by the terms stakeholder and decision-making unit å Appreciate how communication methods and messages alter, depending on the context and the customer Customer communication In business, it is the process by which information is transferred between one individual or group and another, both within and outside the organization The communication can take place verbally or non-verbally and may be transmitted through a variety of communication methods Syllabus Reference: 1.1, 1.2, 2.3 CUSTOMER COMMUNICATIONS IN MARKETING INTRODUCTION TO CUSTOMER COMMUNICATIONS Why People Communicate in Business? n To build relationships internally and externally n To give instructions to others n To disseminate information n To share ideas and values n To negotiate or discuss matters n To motivate, interest or stimulate others n To create awareness n To establish a two-way communication flow Communication roles – DRIP Differentiate – identifying the key differences between one product and another, e.g Daz washes whiter Remind – communicating attributes you may have forgotten, e.g remember how good the original Kellogg’s cornflakes were? Inform – conveying the product details and action required, e.g fill in your tax form on time Persuade – giving a reason to buy, e.g Crunchie – get that Friday feeling External Customers External customers are individuals who have no connection with the organization, other than purchasing goods or services, now or in the past External customers may be purchasers who buy the products or consumers who use the products They may of course be both Customers can be individuals in the business to consumer (B2C) market, or individuals purchasing on behalf of their business, known as the business to business (B2B) market The decision-making unit (DMU) It is important to communicate with all the members of the DMU in B2B markets, as all have different perspectives and can influence the purchase decision n n n n n n Purchaser Initiator User Influencer Decision-maker Gatekeeper CUSTOMER COMMUNICATIONS IN MARKETING INTRODUCTION TO CUSTOMER COMMUNICATIONS The External Communications Mix To communicate with external customers, organizations use a range of promotional activities Stakeholders Stakeholders or publics are internal or external individuals or groups who affect an organization, or are affected by its activities CUSTOMER COMMUNICATIONS IN MARKETING THE ROLE OF INFORMATION COMMUNICATION TECHNOLOGY (ICT) Unit LEARNING OUTCOMES å Describe how technological developments are affecting customer communications å Understand the principles of web design å Appreciate how technology can be used to build databases Syllabus Reference: 3.14, 5.6 How ICT Improves Customer Communications n Database marketing uses computers to capture and store data about customers’ past purchase history, so that communications with customers are more relevant and targeted n Loyalty schemes in supermarkets use EPOs, not just for stock control, but also to target offers to customers n Customer Relationship Management schemes use computer software to identify customer lifetime value and maximize revenues from the most profitable customers n Data mining tracks customer files to identify future targeting opportunities n Database systems can be used for internal knowledge management systems CUSTOMER COMMUNICATIONS IN MARKETING 109 THE ROLE OF INFORMATION COMMUNICATION TECHNOLOGY (ICT) 110 The Internet The Internet connects people from all over the world via a global network of computers It can be used to the following: n Promote and sell products/services n Provide information 24/7 globally n Enable two-way communication via e-mail n Capture contact information when people register details on websites n Build ongoing relationships through e-mail marketing or by giving additional benefits to online customers Websites Most organizations have a website to communicate with their stakeholders Before establishing a website it is important that the following factors are considered: n Decide your objectives for the website and who your audience is n If using sound and graphics, you may need to consider having an alternative simpler version of your website for those without access to sophisticated equipment or broadband access n Include useful links to other websites where appropriate n Ensure the basic information, such as company and product information, is clearly visible n Website design can be improved upon and built up on an ongoing basis n Include interactivity so a customer database can be built up n Measure the number of hits and, if appropriate, calculate how that links with conversions to business n Make the site easy to navigate around with clear instructions n Ensure there is a non-linear design so the website can be accessed from any page CUSTOMER COMMUNICATIONS IN MARKETING 111 THE ROLE OF INFORMATION COMMUNICATION TECHNOLOGY (ICT) 112 Electronic Mail Electronic mail or e-mail is a method of sending text files from one computer to another in seconds Messages can be sent and/or received by setting up an e-mail account with an Internet service provider It can be used as more than a messaging service because text, graphics, video and sound can be sent and received across the Internet E-mail can be sent to lists of customers in the same way as a mailshot can be sent by post E-marketing is a useful promotional tool, especially for reaching named B2B customers It avoids the paper and mailing costs associated with mailshots However, effective e-marketing usually involves professional designers so that the e-mailshots stand out and communicate effectively E-commerce Online shopping transactions are becoming more popular as more people are connected to the Internet and as they become more confident about the security associated with making online payments E-business is less about online transactions and more about making it easy to business with customers, e.g banks enabling customers to look at their accounts and online transactions, or estate agents allowing prospective purchasers to 360 degree virtual tours of houses before they actually visit a property E-commerce is about helping organizations and their suppliers business together conveniently This can help them source parts, reduce waiting times for stock, create inventory efficiencies and enable fast exchange of paperwork CUSTOMER COMMUNICATIONS IN MARKETING 113 THE ROLE OF INFORMATION COMMUNICATION TECHNOLOGY (ICT) 114 Telecommunications There have been massive developments in the field of telecommunications: n Automated switchboards are now within the reach of even the smallest firms n Voice mail can enable companies to deal with large volumes of calls n ISDN allows the faster transfer of large documents than was possible on normal telephone lines and can be used for video conferencing n Mobile telephone technology is becoming more powerful as they are used to access e-mails Wireless Application Protocol (WAP) phones can be used to access the Internet n 3G mobile technology enables videophone calls and will make online transactions easier n SMS text messaging has become a valid tool in customer communications For example, it is used as a very quick and cheap method of communication by estate agencies wishing to inform prospective purchasers of suitable properties that have come to market Digital technology Digital technology for radio and television means improved sound and picture quality and also enables interactivity ‘Tell me more’ buttons enable people to find out more information about products/services, so that there is a move to more ‘permission marketing’ practices as organizations realize that intrusive methods not always work Hints and Tips n This unit has focused on how ICT is being used to improve customer communications n It looks at the role of the Internet generally and more specifically looks at how websites, e-mail and e-commerce are changing the way that organizations communicate and business n The unit also looks at changes in telecommunications and the use of digital technology in relation to customer communications n For assessment purposes it is essential that you can answer questions that are set in the context of ICT but may relate to other areas of the syllabus – so it is about understanding the whole context of ICT in relation to customer communications n Ensure that you are familiar with up-to-date case study examples about how ICT is used and be sure that you can answer questions that relate to the use of ICT and relationship marketing Go to www.cimvirtualinstitute.com and www.marketingonline.co.uk for additional support and guidance CUSTOMER COMMUNICATIONS IN MARKETING 115 CUSTOMER SERVICE AND CUSTOMER CARE Unit 10 LEARNING OUTCOMES å å å å å Appreciate the importance of good customer service Understand how customer care can be improved Understand how customers can be satisfied Examine the issues associated with implementing customer care programmes Identify how customer care could be improved in a given situation Syllabus Reference: 1.3–1.5, 5.1–5.6 Customer Service Customer service is not just about dealing with complaints It is about finding out what customers want and providing that service to a high standard, so that complaints will become unnecessary n n n n Satisfied customers Satisfied customers Satisfied customers Your customers are take up less time cause less stress and bring job satisfaction tell others about your organization your business – without them there is no business CUSTOMER COMMUNICATIONS IN MARKETING 117 CUSTOMER SERVICE AND CUSTOMER CARE Steps to Improving Customer Service The following steps can result in an improved service to customers: n Measure standards by finding out levels of customer satisfaction n Analyze the feedback n Act upon the information and develop the kind of service people want n Train staff to ensure competence 118 n Review processes and procedures to ensure they are customer-focused n Exceed customer expectation if possible n Set up customer care lines and communicate this information widely n Have a ‘contact us’ section on your website n Send out questionnaires to lapsed customers n Train staff to deal with complaints should they arise Customer Needs Meeting Customer Needs The following factors are crucial to providing good customer service: Review sales/ordering systems n Staff having a positive and proactive attitude n Customer friendly systems for payment, delivery, exchange, after sales and complaints n Knowledgeable staff n Product/service reliability and quality # Improve accounts/invoicing processes # Upgrade delivery and after sales # Train staff to deal with customers # Improve internal communication # Invest in knowledge networks # Use customer complaints to improve service CUSTOMER COMMUNICATIONS IN MARKETING 119 CUSTOMER SERVICE AND CUSTOMER CARE 120 Problems with Customer Care Systems There are several factors that can adversely affect the implementation of customer care systems: n If a specific department is allocated for customer care instead of training and empowering all staff to deal with customer care issues n If front line employees are not involved with establishing customer care programmes n If organizations move away from providing local branch networks to impersonal call centres n If employees are employed on short-term contracts then customer service becomes commoditized n If insufficient resources are allocated for rewarding good customer service n If management focus only on technology improvements CUSTOMER COMMUNICATIONS IN MARKETING 121 CUSTOMER SERVICE AND CUSTOMER CARE 122 Hints and Tips n This unit has focused on the importance of customer service, the ways that customer service can be improved and has examined the key customer needs that must be satisfied n It has also looked at the problems associated with implementing customer care systems and how they can be established in an organization n For assessment purposes, ensure that you are familiar with what customers consider to be important and make sure you are able to describe the stages involved in establishing a customer care programme Go to www.cimvirtualinstitute.com and www.marketingonline.co.uk for additional support and guidance ... to maintain and develop customer relationships Go to www.cimvirtualinstitute.com and www.marketingonline.co.uk for additional support and guidance CUSTOMER COMMUNICATIONS IN MARKETING BUYING BEHAVIOUR... structures n Teleworking, with more people working from home CUSTOMER COMMUNICATIONS IN MARKETING INTRODUCTION TO CUSTOMER COMMUNICATIONS The Internal Communications Mix Hints and Tips n This... communicating with both internal and external customers Go to www.cimvirtualinstitute.com and www.marketingonline.co.uk for additional support and guidance CUSTOMER COMMUNICATIONS IN MARKETING 25