Instructor’s Manual
Digital Marketing
Seventh edition
Dave Chaffey
Fiona Ellis-Chadwick
Part 1: Chapter 6-10
Part 2: Chapter 1-5
, CHAPTER 6
Relationship marketing using digital platforms
One sentence overview
Building long-term relationships with customers is essential for any business and this chapter
explores techniques for achieving relationship marketing using the Internet.
Notes on using slides for the sixth chapter in lectures – lesson plan
1. Relationship marketing using digital platforms. Slide 85 introduces the key elements to
consider in this session.
2. The goals of marketing orchestration Figure 6.1, highlights how businesses need to manage
customer communications Slide 86.
3. Using social media to improve customer loyalty and advocacy Slide 87 ‘social media
marketing has many applications throughout the customer lifecycle’. It can be used very
effectively to develop existing relationships and encourage advocacy. Explain the importance
of social media and how companies can stimulate customer-to-customer conversations to
increase awareness of a brand. As customers participate in the conversations and the sharing
of information they become more involved.
4. What are the main social media platforms? Figure 6.2 shows the social media radar and
highlights different uses and applications of social media platforms. Discuss the difference
and highlight the types of platform available. Also discuss the scope for using different
platforms to achieve various marketing objectives. Slide 88.
5. Social media activities requiring management Slide 89 introduces the six activities for
defining social media goals and strategies.
6. The challenge of customer engagement Slide 90 presents Figure 6.3, showing the different
consumer messaging options (Urban Airship, 2017) that might be used to engage consumers
through mobile messaging. Urban Airship researched the impact of mobile messaging on new
mobile app users and found that within 90 days of opening an App users who didn’t receive
push messages deleted or stopped using the App.
7. Benefits of using CRM to support customer engagement Slide 91 shows the key benefits of
CRM when supporting customer engagement. It is important that students understand the
value of CRM, see pages 244 to 245 for details of the benefits.
8. Marketing applications of CRM Slide 92 highlights some examples of marketing
applications of CRM. Explore these with students.
9. CRM technologies and data management Slide 93 introduces the main types of customer
data held in a CRM system. As well as explaining the types of data it is useful to revisit data
security and GDPR. See pages 247 to 248
10. Artificial intelligence for marketing Slide 94 shows Figure 6.6 – Marketing applications of
AI throughout the customer lifecycle applied to the RACE framework. It is important to
71
© Pearson Education Limited 2019
, Chaffey and Ellis-Chadwick, Digital Marketing, 7e, Instructor’s Manual
highlight the opportunities that might be created by the application of AI. Discuss the
opportunities listed on pages 249 to 252.
11. Customer lifecycle management Slide 95 Shows Figure 6.7 – Customer lifecycle
management strategy. This is the classic model but remains very valid when firms consider
setting marketing objectives relating to customer management. See pages 253 to 254.
12. Permission marketing. Slide 96 outlines the main elements and Figure 6.8 shows a summary
of an effective process of permission-based online relationship building.
13. Example of Pop-up on Smartinsights.com See Slide 97.
14. Matrix of customer touchpoints for collecting and updating email contacts and other
profile information Slide 98 shows Figure 6.10 the Matrix which provides a way to review
possible methods of capturing email addresses. Students may enjoy giving additional
examples.
15. Options for lifecycle email marketing messages for a retailer Slide 99 shows Figure 6.11,
which recommends different contact strategies from Kath Pay, an email marketing consultant.
This figure is useful for highlighting stages where contact strategies can help to ensure
continued relationships with customers.
16. Personalisation and Mass customisation. This is illustrated by Slide 100, which shows
Figure 6.12. Increasingly companies are gathering personal data and using it to develop
personalized messages that align with individual interests This figure shows the different
targeting variables that might be used to increase the relevance of messages. See pages 261
to 262.
17. Summary of the elements of CRM Slide 101 shows a summary of the elements of CRM
strategy. This can be used as a cut off point for topic as lifetime value modelling and RMF
analysis are highly specialized topics.
18. Factors affecting Customer satisfaction and loyalty. Useful to discuss with students what
the drivers of satisfaction and loyalty are (Slide 102). Figure 6.13 shows typical loyalty
drivers which can be reviewed. Important to use customer research to understand specific
factors which might affect loyalty.
19. Activity segmentation of a site requiring registration Slide 103 shows Figure 6.14 which
highlights the different levels of customer activity in a bank. A key part of a CRM strategy it
to define measures that indicate levels of activity.
20. Different representations of LTV calculations Slides 104 to 105. Lifetime value modelling
is key to customer relationship management but LTV is not straightforward to calculate. See
pages 267 to 272 for further explanations. Also see Activity 6.2 which applies the modelling
technique to a charity.
21. RMF analysis. Slide 106 illustrates advanced techniques such as RFM analysis, which are
mainly relevant for professionals or postgraduate students rather than undergraduate students.
22. Dell get closer to its customers through its social media strategy. Slide 107 introduces the
case study for this chapter.
72
© Pearson Education Limited 2019
, Chaffey and Ellis-Chadwick, Digital Marketing, 7e, Instructor’s Manual
Activities
Activity 6.1: Which social interactions occur outside the social network
Identify, through discussion with other students, which types of social interaction occur online
beyond the main social networks. Consider different types of media sites, platforms such as
desktop and mobile usage and different formats of discussion, commenting and rating. Also
consider how these may be integrated with social sharing on the main social networks. For each
type of social interaction, assess the extent to which companies need to and can control them.
Activity 6.2: Charity uses lifetime value modelling to assess returns from new CRM
system
A charity is considering implementing a new email marketing system to increase donations from
its donors. The charity’s main role is as a relief agency that aims to reduce poverty through
providing aid, particularly to the regions that need it most.
Currently, its only email activity is a monthly e-newsletter received by its 200,000 subscribers,
which features its current campaigns and appeals. It hopes to increase donations by using more
targeted approach based on previous customer behaviour. The email system will integrate with
the donor database, which contains formation on customer profiles and previous donations.
The company is considering three solutions that will cost between £50,000 and £100,000 in the
first year. In the charity, all such investments are assessed using lifetime value modeling.
Table 6.3 is a lifetime value model showing customer value derived from using the current system
and marketing activities.
A Donors – this is the number of initial donors. It declines each year dependent on the retention
rate (row B)
B Retention rate – in lifetime value modeling this is usually found to increase year-on-year,
since customers who stay loyal are more likely to remain loyal.
C Donations per annum – likewise, the charity finds that the average contributions per year
increase through time within this group of customers.
D Total donations – calculated through multiplying rows A and C.
E Net profit (at 20 per cent margin) – LTV modelling is based on profit contributed by this
group of customers; row D is multiplied by 0.2.
F Discount rate – since the value of money held at a point in time will decrease due to inflation,
a discount rate factor is applied to calculate the value of future returns in terms of current-day
value.
G NPV contribution – this is the profitability after taking the discount factor into account to
give the net present value in future years. This is calculated by multiplying row E by row F.
H Cumulative NPV contribution – this adds the previous year’s NPV for each year.
I Lifetime value at net present value – this is a value per customer calculated by dividing row
H by the initial number of donors in year 1.
73
© Pearson Education Limited 2019
Digital Marketing
Seventh edition
Dave Chaffey
Fiona Ellis-Chadwick
Part 1: Chapter 6-10
Part 2: Chapter 1-5
, CHAPTER 6
Relationship marketing using digital platforms
One sentence overview
Building long-term relationships with customers is essential for any business and this chapter
explores techniques for achieving relationship marketing using the Internet.
Notes on using slides for the sixth chapter in lectures – lesson plan
1. Relationship marketing using digital platforms. Slide 85 introduces the key elements to
consider in this session.
2. The goals of marketing orchestration Figure 6.1, highlights how businesses need to manage
customer communications Slide 86.
3. Using social media to improve customer loyalty and advocacy Slide 87 ‘social media
marketing has many applications throughout the customer lifecycle’. It can be used very
effectively to develop existing relationships and encourage advocacy. Explain the importance
of social media and how companies can stimulate customer-to-customer conversations to
increase awareness of a brand. As customers participate in the conversations and the sharing
of information they become more involved.
4. What are the main social media platforms? Figure 6.2 shows the social media radar and
highlights different uses and applications of social media platforms. Discuss the difference
and highlight the types of platform available. Also discuss the scope for using different
platforms to achieve various marketing objectives. Slide 88.
5. Social media activities requiring management Slide 89 introduces the six activities for
defining social media goals and strategies.
6. The challenge of customer engagement Slide 90 presents Figure 6.3, showing the different
consumer messaging options (Urban Airship, 2017) that might be used to engage consumers
through mobile messaging. Urban Airship researched the impact of mobile messaging on new
mobile app users and found that within 90 days of opening an App users who didn’t receive
push messages deleted or stopped using the App.
7. Benefits of using CRM to support customer engagement Slide 91 shows the key benefits of
CRM when supporting customer engagement. It is important that students understand the
value of CRM, see pages 244 to 245 for details of the benefits.
8. Marketing applications of CRM Slide 92 highlights some examples of marketing
applications of CRM. Explore these with students.
9. CRM technologies and data management Slide 93 introduces the main types of customer
data held in a CRM system. As well as explaining the types of data it is useful to revisit data
security and GDPR. See pages 247 to 248
10. Artificial intelligence for marketing Slide 94 shows Figure 6.6 – Marketing applications of
AI throughout the customer lifecycle applied to the RACE framework. It is important to
71
© Pearson Education Limited 2019
, Chaffey and Ellis-Chadwick, Digital Marketing, 7e, Instructor’s Manual
highlight the opportunities that might be created by the application of AI. Discuss the
opportunities listed on pages 249 to 252.
11. Customer lifecycle management Slide 95 Shows Figure 6.7 – Customer lifecycle
management strategy. This is the classic model but remains very valid when firms consider
setting marketing objectives relating to customer management. See pages 253 to 254.
12. Permission marketing. Slide 96 outlines the main elements and Figure 6.8 shows a summary
of an effective process of permission-based online relationship building.
13. Example of Pop-up on Smartinsights.com See Slide 97.
14. Matrix of customer touchpoints for collecting and updating email contacts and other
profile information Slide 98 shows Figure 6.10 the Matrix which provides a way to review
possible methods of capturing email addresses. Students may enjoy giving additional
examples.
15. Options for lifecycle email marketing messages for a retailer Slide 99 shows Figure 6.11,
which recommends different contact strategies from Kath Pay, an email marketing consultant.
This figure is useful for highlighting stages where contact strategies can help to ensure
continued relationships with customers.
16. Personalisation and Mass customisation. This is illustrated by Slide 100, which shows
Figure 6.12. Increasingly companies are gathering personal data and using it to develop
personalized messages that align with individual interests This figure shows the different
targeting variables that might be used to increase the relevance of messages. See pages 261
to 262.
17. Summary of the elements of CRM Slide 101 shows a summary of the elements of CRM
strategy. This can be used as a cut off point for topic as lifetime value modelling and RMF
analysis are highly specialized topics.
18. Factors affecting Customer satisfaction and loyalty. Useful to discuss with students what
the drivers of satisfaction and loyalty are (Slide 102). Figure 6.13 shows typical loyalty
drivers which can be reviewed. Important to use customer research to understand specific
factors which might affect loyalty.
19. Activity segmentation of a site requiring registration Slide 103 shows Figure 6.14 which
highlights the different levels of customer activity in a bank. A key part of a CRM strategy it
to define measures that indicate levels of activity.
20. Different representations of LTV calculations Slides 104 to 105. Lifetime value modelling
is key to customer relationship management but LTV is not straightforward to calculate. See
pages 267 to 272 for further explanations. Also see Activity 6.2 which applies the modelling
technique to a charity.
21. RMF analysis. Slide 106 illustrates advanced techniques such as RFM analysis, which are
mainly relevant for professionals or postgraduate students rather than undergraduate students.
22. Dell get closer to its customers through its social media strategy. Slide 107 introduces the
case study for this chapter.
72
© Pearson Education Limited 2019
, Chaffey and Ellis-Chadwick, Digital Marketing, 7e, Instructor’s Manual
Activities
Activity 6.1: Which social interactions occur outside the social network
Identify, through discussion with other students, which types of social interaction occur online
beyond the main social networks. Consider different types of media sites, platforms such as
desktop and mobile usage and different formats of discussion, commenting and rating. Also
consider how these may be integrated with social sharing on the main social networks. For each
type of social interaction, assess the extent to which companies need to and can control them.
Activity 6.2: Charity uses lifetime value modelling to assess returns from new CRM
system
A charity is considering implementing a new email marketing system to increase donations from
its donors. The charity’s main role is as a relief agency that aims to reduce poverty through
providing aid, particularly to the regions that need it most.
Currently, its only email activity is a monthly e-newsletter received by its 200,000 subscribers,
which features its current campaigns and appeals. It hopes to increase donations by using more
targeted approach based on previous customer behaviour. The email system will integrate with
the donor database, which contains formation on customer profiles and previous donations.
The company is considering three solutions that will cost between £50,000 and £100,000 in the
first year. In the charity, all such investments are assessed using lifetime value modeling.
Table 6.3 is a lifetime value model showing customer value derived from using the current system
and marketing activities.
A Donors – this is the number of initial donors. It declines each year dependent on the retention
rate (row B)
B Retention rate – in lifetime value modeling this is usually found to increase year-on-year,
since customers who stay loyal are more likely to remain loyal.
C Donations per annum – likewise, the charity finds that the average contributions per year
increase through time within this group of customers.
D Total donations – calculated through multiplying rows A and C.
E Net profit (at 20 per cent margin) – LTV modelling is based on profit contributed by this
group of customers; row D is multiplied by 0.2.
F Discount rate – since the value of money held at a point in time will decrease due to inflation,
a discount rate factor is applied to calculate the value of future returns in terms of current-day
value.
G NPV contribution – this is the profitability after taking the discount factor into account to
give the net present value in future years. This is calculated by multiplying row E by row F.
H Cumulative NPV contribution – this adds the previous year’s NPV for each year.
I Lifetime value at net present value – this is a value per customer calculated by dividing row
H by the initial number of donors in year 1.
73
© Pearson Education Limited 2019
