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The customer reach is identified as the number of potential customers a company can attract using a certain advertising channel. Before the emergence of the Internet, the primary traditional venues used by companies to reach out to customers were radio and television (Tuten and Solomon 33). Since most homes in the western world featured at least one TV set or a radio, these measures were considered to be the most effective ways of promoting services and products.
With the creation of social media, however, the balance was changed. These sites provided advantages that the traditional advertising channels could not, namely the potential for data collecting and targeted advertising (Tuten and Solomon 50). Social media promised to fix some of the problems that traditional channels had experienced for decades, namely the relatively small effect on immediate sales of specific products. While they were good at increasing brand exposure, the correlation between successful advertising and sales figures was difficult to discern (Tuten and Solomon 35). With advertisements being tailored to specific customers, on the other hand, it was possible to motivate them to commit to certain purchases.
Companies use social networking sites to create groups of people utilizing the product, promote certain activities, and facilitate virtual word-of-mouth recommendations (Tuten and Solomon 120). Studies show that peer-to-peer communication while being based solely on anecdotal evidence and personal impressions is the most likely to be trusted by potential customers (Tuten and Solomon 121). Psychology plays an important factor here – most individuals believe that a friend or a family member will not willingly lie to them about the advantages or disadvantages of a purchase. Finally, the presence of the companies on social media platforms achieves brand exposure to the same levels TV and radio used to, thus contributing to the diminishing market shares in those areas.
The effectiveness and acceptance rates of social media sites such as Facebook, Twitter, and Instagram in the scope of the UAE market are soaring. According to the latest statistics, about 95% of individuals in the country have stable access to the Internet, using either a wired or wireless connection (Gjylbegaj and Abdi 387). Out of that number, 99% are frequent, and active users of the main social media sites (Gjylbegaj and Abdi 387).
Almost every UAE citizen has a social media account, while the majority of the population possesses several. The average time spent on the internet browsing these platforms is between 3 to 7 hours a day (Dwivedi et al. 295). Therefore, the amount of individual exposure to banners, videos, and other forms of advertising is enormous.
The demographic and sociographic percentages for the use of social media and the Internet in the UAE vary, with the two most important determinants being sex and age. Males are, on average, spending more time on social media sites than women (Dwivedi et al. 298). At the same time, individuals aged between 12-35 are more active in their online activities than older generations (Dwivedi et al. 298). The presence and the length of time spent online fall from 99% to around 70% for individuals aged 50 or above, which is still an impressive number when compared to other countries (Dwivedi et al. 299). Based on the market research provided above, it could be concluded that social media sites are the primary advertising and product promotion channel in the UAE.
Customer lifecycle management is a process that involves the initiation, fostering, and maintenance of relationships throughout an extended period of time. According to the Pareto principle, 20% of the company’s customers are responsible for roughly 80% of all purchases, meaning that the creation of a loyal customer base should be the company’s priority. This part of the assignment will feature the management of various phases of the customer life cycle and lifetime value by Aliexpress, which is an online purchasing platform popular in Eastern Europe and Asia.
The five phases of the customer lifecycle are identified as follows:
- Advocate (Buttle 42).
Each of these steps has its own specific objectives within the scope of
Aliexpress or any similar online platform. The first phase (Reach) states for providing material and marketing content in places where potential consumers would find it, in order to spread awareness of the platform and its services (Buttle 43). Aliexpress does so by heavily investing in search engine advertising and social media promotion. Its banners could be found on Facebook, Instagram, Twitter, Youtube, and many others (Laruccia). It also strives to appear on top of the first page in Google search. It does not utilize conventional means of advertising (TV, Radio, paperback) due to being an entity existing solely on the Internet.
The acquisition phase is very important for eCommerce companies, such as Aliexpress. Simply reaching out to the customers does not provide an increase in sales unless the platform has something the customer needs (Buttle 43). Aliexpress utilizes target marketing by purchasing information from social media outlets and other companies in order to tailor the assortment of goods to a potential customer (Laruccia). Every visitor will find a list of ‘recommended’ items based on their web activity, at a discount. This enables the company to achieve interest with a reasonable degree of accuracy.
The third phase of the customer lifecycle involves developing and nurturing the relationship after the purchase (Buttle 43). Without it, a customer is likely to forget the platform, which would result only in a singular purchase. Aliexpress requires its customers to register in order to make a purchase, thus obtaining the information it needs to maintain further contact (Laruccia). The company sends its customers a newsletter with their latest offers, based on the big data available, as well as customer preferences during the last purchase. The frequency of letters varies and also depends on the time of large sales occurring on the site (Laruccia). That way, Aliexpress ensures the development of a relationship between itself and the customer.
Retention of customers is built on something more than simply providing adequate service and answering their needs (Buttle 44). It revolves around making the customer feel as though their thoughts and opinions matter, effectively making them part of the decision-making process for the company. Aliexpress accomplishes this step by frequently conducting surveys among customers in order to improve the quality of their service and identify trustworthy/untrustworthy suppliers (Laruccia). In return for this kind of cooperation, customers are rewarded with discounts and points, which they could use to make purchases later.
Finally, there is the advocacy step, which stands for individuals recommending the service to their friends and others (Buttle 45). Aliexpress stimulates this behavior by offering points and discounts not only to the new members but also to individuals who invited them (Laruccia). In doing so, they create an incentive for market growth while simultaneously cultivating an inviting culture within the company. Seeing how all five steps of the customer lifecycle are carefully managed, the platform’s success is understandable.
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Buttle, Francis. Customer Relationship Management: Concepts and Technologies. Routledge, 2009.
Dwivedi, Yogesh K., et al. “Social media marketing and advertising.” The Marketing Review, vol. 15, no. 3, 2015, pp. 289-309.
Gjylbegaj, Viola, and Hussein Mohamed Abdi. “The Effects of Social Media on Family Communication in the UAE.” Media Watch, vol. 10, no. 2, 2019, pp. 387-397.
Laruccia, Mauro M. “Social Networks and Post-Purchase Behavior: Analysis of the Content of the Mentions on AliExpress.” SSRN. Web.
Tuten, Tracy L., and Michael R. Solomon. Social media marketing. Sage, 2017.