Customer Relationship Management: Concepts & Application
Slippery Concepts in Context Key words: Public services, relationship marketing, research design Public Management Review. Volume The Concept of Customer Relationship Management A Critical Review of reflected in the formulated responses on the following aspects of CRM: CRM context. PDF | Customer relationship management: concepts and tools is the first the many varied contexts in which it is used, the technologies that are deployed, and .
Stage 6 - Enhancing the customer experience Just as a small group of customers are the most profitable, a small number of complaining customers often take up a disproportionate amount of staff time. If their problems can be identified and resolved quickly, your staff will have more time for other customers.
Potential drawbacks of CRM There are several reasons why implementing a customer relationship management CRM solution might not have the desired results. There could be a lack of commitment from people within the company to the implementation of a CRM solution.
Adapting to a customer-focused approach may require a cultural change. There is a danger that relationships with customers will break down somewhere along the line, unless everyone in the business is committed to viewing their operations from the customers' perspective.
The result is customer dissatisfaction and eventual loss of revenue. Poor communication can prevent buy-in.
In order to make CRM work, all the relevant people in your business must know what information you need and how to use it. Weak leadership could cause problems for any CRM implementation plan.
The onus is on management to lead by example and push for a customer focus on every project. If a proposed plan isn't right for your customers, don't do it. Send your teams back to the drawing board to come up with a solution that will work.
Trying to implement CRM as a complete solution in one go is a tempting but risky strategy. It is better to break your CRM project down into manageable pieces by setting up pilot programs and short-term milestones.
Consider starting with a pilot project that incorporates all the necessary departments and groups but is small and flexible enough to allow adjustments along the way. Don't underestimate how much data you will require, and make sure that you can expand your systems if necessary. You need to carefully consider what data is collected and stored to ensure that only useful data is kept. Avoid adopting rigid rules which cannot be changed. Rules should be flexible to allow the needs of individual customers to be met.
Therefore it is vital to choose your supplier carefully. Making the wrong choice could be expensive and even jeopardise your business.
Customer relationship management
Before implementing a solution based on CRM technology, you might want to ask any potential suppliers the following questions: How long has the supplier been established? What are the specific costs associated with the product, i. Does the supplier offer any form of evaluation software so that you can try before you buy?
How much is charged for technical support? Meaning of customization of marketing is that, the firm or organization adapt and change its services or products based on presenting a different and unique product or services for each customer.
With the purpose of ensuring that customer needs and requirements are met Customization is used by the organization. Companies can put investment in information from customers and then customize their products or services to maintain customer interests. Multichannel integration shows the point of co creation of customer value in CRM.
On the other hand, a company's skill to perform multichannel integration successfully, is heavily dependent on the organization's ability getting together customer information from all channels and incorporate it with other related information. CRM will let companies to interact with customers more frequently, by personalized message and communication way which can be produced rapidly and matched on a timely basis, and finally they can better understand their customers and therefore look forward to their needs.
Firms can make and improve products and services through the information from tracking e. The firm heavily invests in screening potential cardholders. They implement CRM by marketing the right products to the right customers. The firm implemented personal greetings, collaborative filtering, and more for the customer.
Consumer behaviourBiology and consumer behaviourand Buying decision Customer or consumer profiles are the essence of the data that is collected alongside core data name, address, company and processed through customer analytics methods, essentially a type of profiling.
A customer is abstracted to information that sums up consumption habits so far and projects them into the future so that they can be grouped for marketing and advertising purposes. One research study analyzed relationships between consumers in China, Germany, Spain, and the United States, with over brands in 11 industries including airlines, cars and media.
This information is valuable as it provides demographic, behavioral, and value-based customer segmentation. These types of relationships can be both positive and negative. Some customers view themselves as friends of the brands, while others as enemies, and some are mixed with a love-hate relationship with the brand. Some relationships are distant, intimate or anything in between. Companies can collect this information by using surveysinterviews, and more, with current customers. For example, Frito-Lay conducted many ethnographic interviews with customers to try and understand the relationships they wanted with the companies and the brands.
They found that most customers were adults who used the product to feel more playful. They may have enjoyed the company's bright orange color, messiness and shape. Therefore, the next section presents the adopted methodology, according to the phenomenological approach. The rest of the article is developed as follows: Phenomenology encourages us to back to the things themselves, it means, to approach phenomena that present themselves directly to us as conscious human beings, and attempt to understand their essences.
It has at its centre "the initial recognition of essential intuition as the necessary condition for locating the experiential world that philosophers seek to understand" Natanson,p. A phenomenon is what humans directly experience Crotty, ; Myers, In this study of the CRM phenomenon, a Heideggerian phenomenology has been followed.
To Heidegger, the phenomenon shows some appearances, although the essence of it is behind such appearances. Heidegger, in contrast to Husserl's phenomenology, claims that it is not possible to acquire adequate evidence and complete freedom of prejudice when dealing with a phenomenon. To Heidegger, there are no such things as wrong or right interpretations; life is always interpreting. Phenomenology, thus, is hermeneutic, which means, it is interpretative Dreyfus, ; Gadamer, Hermeneutics can be considered as a theory or philosophy of the interpretation of meaning.
It is primarily concerned with the meaning of a text or text-analogue. A text-analogue is anything that can be treated as a text, such as an event, an action, an organization or a culture, and even an Information System Boland, ; Myers, According to DreyfusHeidegger proposes a hermeneutics of everydayness that involves the understanding of everyday practices and discourse, but in a deep sense, since the fundamental aspects of our existence hide their structure behind common sense.
Researchers have to be suspicious and try to get a deeper and a clearer understanding of them. Researchers must be prepared to revise radically their traditional accounts of objects, subjects, language, space, truth, reality, time, etc, on the basis of the phenomena revealed by their interpretation.
According to these propositions, Heidegger in the initial phase of his work claims a phenomenology of suspicion. This philosophical and methodological approach indicates the necessity of approaching organizational phenomena by questioning the models and concepts taken -for granted about them, and to pay attention to the unexpressed aspects of organizational life, observing the flow of events and considering that "the everyday apparitions should instead be looked at as symptoms, pointers to an organizational phenomenon that does not manifest itself directly.
Both appearances and apparitions are generated by the underlying phenomenon to be unveiled" Ciborra,p. According to Manen phenomenological studies cannot be formalized into a series of technical procedures. However, a variety of activities may be identified that can help in making a phenomenological inquiry.
There are two main types of activities: Empirical inquiry activities aim to explore the range and varieties of pre-reflective experiential material that is appropriate for the phenomenon under study. Reflective inquiry activities aim to interpret the aspects of meaning or meaningfulness that are associated with this phenomenon Manen,p. Considering empirical activities, this study is based on previous works both in consultancy and in academic research by the authors, about CRM.
This previous empirical experience has been considered and the following reflective phenomenological methods have been applied Manen, Conceptual analysis - this is the process of examining a complex conceptual or linguistic entity into its most basic semantic constituents, considering that the meaning of a concept lies largely in its usage.
In this study, the different definitions and concepts about CRM presented in the literature were revisited, as well as the ideas related to this concept, including: Etymological reflection - Frequently the words that are used to refer to a phenomenon have lost some of their original meaning. Being attentive to the etymological origins of words may help the researchers to understand the origins and the essence of concepts that are usually taken for granted.
In this sense the origins of the term relationship have been analyzed, as well as its meaning and all that a relationship implies see next section, especially item The Meaning of Relationship. Collaborative reflective discussions - this type of discussion is helpful in generating deeper insights and understanding about a concept.
Themes and insights can be examined, articulated, reinterpreted or reformulated. The author's empirical experiences, both in consultancy and in academic research in the field of CRM and Information Technology applied in organizational processes have been discussed, as well as the concrete observations of unsuccessful experiences of CRM adoption. The results of these discussions are presented throughout the article, but especially in Sections Discussion and Final Comments. It is important to clarify that this phenomenological approach is related to an interpretative research paradigm.
Following a Heideggerian phenomenology, the study is not free of biases, in the sense that even the choice of the subject of study is conditioned by the previous personal experiences of the authors, which includes a set of values and beliefs.
This has to be considered as a limitation. This methodological approach was considered since it is valid for the purposes of this particular article in proposing a critical and reflective revision of CRM. It does not follow the conditions of a positivist study.
This paper aims to encourage reflection and indicate themes for future research that can be conducted later on according to different including positivist perspectives and methodologies. This limited scope has to be considered as another limitation of this particular study. By analyzing the different CRM definitions, it is possible to conclude that they can be split into three main CRM approaches.
These three different perspectives on CRM are classified in Table 1: CRM as a philosophy of doing businesses, which has to be considered above any kind of strategy or tool. A CRM philosophy is related to a customer-oriented culture keen on building and cultivating long-term relationships with customers. CRM as a strategy, as an organizational strategy that will drive functional plans and actions toward building relationships with customers.
CRM as a tool, focused on the role of IT being used to gather, analyze and apply data to build and manage relationships with customers. According to this business logic, the main idea is to use IT to develop, for instance, target marketing, saving money with untargeted, wasteful promotional campaigns. The CRM as strategy approach is related to a formal and deliberated plan and actions to articulate processes, people, structure and technology to acquire, select and retain customers with a high lifetime value to the firm, independently of the specific IT applied to support this strategy.
In its turn, the CRM as a philosophy approach goes beyond a deliberate strategy or tool application. It is related to positive attitudes towards all kinds of stakeholders. It involves a deep understanding of what relationship means and of all implications related to establishing a relationship such as trust, common objectives, increasing value on both sides, etc. According to this type of analysis, this philosophy is supposed to guide organizational and functional strategies CRM as strategy ; these strategies, in their turn, would have to guide IT applications for CRM CRM as a tool - Figure 1.
Considering CRM as philosophy is the background for any strategy and IT application, it is possible to have a better understanding of what it really means. For this purpose, the focus of the next section is the essence of the concept of CRM, by illuminating the understanding of the very concept of relationship. The Meaning of Relationship In order to understand the essence of CRM, the meaning of the concept of relationship has to be discussed.
The section begins by analyzing the origins of this term, making an etymological reflection, as mentioned in the methodology section. Relation has the meaning of dependence between two things, liaison, friendship, to know each other, intimacy, reciprocity, political, commercial and cultural mutual interests.
By analyzing these different meanings of the term, it can be concluded that a relationship implies commitment, duties, mutual understanding and goals.
In this line of thought, Ford, Gadde, Hakansson and Snehotap. By exploring the literature, a set of conditions and implications that a relationship demands can be pointed out: Mutual knowledge - First of all, a relationship implies mutuality. In order for any state of affairs to be considered a relationship, both parties have to participate in and be aware of the existence of the relationship.
This means it must be inherently a two-way relation in nature. Symmetry - This is a combination of many relationship elements, including information sharing, dependence, and power. Symmetric relationships are more stable than asymmetric ones, because asymmetry undermines the balance of power and creates motivation for the stronger party to take advantage of the weaker party, especially in difficult economic conditions.
Long term orientation - As the very origin of the term relationship indicates, it has to have a long term orientation, with the idea of repetition. It demands that sometimes one of the sides will have to give up some current interests to sustain the long term relationship as a whole. Communication - Ford et al. Communication is interpersonal and dependant upon a social context.
Mutual benefits and satisfaction - Another characteristic of a relationship is that satisfied customers are generally more inclined to remain in the relationship. According to O'Malley and Mitussisthe idea that both parties can derive value from a relationship requires consideration of the motivations, expectations, costs and rewards involved for both organizations and customers in a relationship.
Mutual trust and fairness - While relationship quality is a somewhat subjective term, it is plausible to measure relationship quality based on the levels of trust, commitment, and the ability to solve conflicts effectively.
The higher the levels of these contributors, the greater the quality of the relationship: Mutual learning - In order for a company to develop a relationship with a customer, the learning relationship process is crucial. The more the organization is prepared to learn from a customer in a close relationship, the more the company can provide exactly what the customer wants and the more the customer will invest in the relationship. The opposite way is also true: Mutual commitment and efforts from both parties - To develop an efficient relationship, both sides have to commit themselves and invest efforts, such as "time spent developing contacts with the counterpart, or developing the offering or introducing different equipment or working practices" Ford et al.
Uniqueness - According to Ford et al. Anderson and Jap say that sometimes it is necessary to make unique adaptations or investments to support a relationship. Freedom - Ford et al. So unruliness is an essential aspect of any relationship, because it can never be fully controlled by one party.
Uncertainty - since relationships have a time dimension, they have a future that is uncertain and a history whose interpretation is subjective and can be changed Ford et al. Their development depends upon how the parties involved view each other's capabilities and motives and how they interpret their own actions and those of others. The interpretation can change throughout new experiences.
Since a true relationship is based on emotions and implies elements such as mutual knowledge, some level of symmetry, long term orientation, communication, mutual benefits and satisfaction, mutual trust and fairness, mutual learning, mutual commitment, investments and efforts from both sides, uniqueness and, above all, freedom and uncertainty, it is important to question the very existence of a true relationship between a company and its customers.
Each one of these relationship characteristics could be analyzed, and for each one of them many obstacles and challenges could be found, considering a relationship between one organization and its customers as well as the role of IT in supporting a relationship.
Starting with the notion of mutual knowledge, the usual difficulties in knowing and gathering personal information about clients can be considered. It is not only an IT challenge; it also involves privacy and ethical issues. It is intimately related to the notion of symmetry, in the sense of information sharing, which is difficult for both parties - for the customer to access information about the firm and the firm to access information about the customer.
Extrapolating this power game beyond the organizational frontiers, it is easy to see how hard it would be to have asymmetry in a relationship with clients, especially in a capitalist environment.
The same rationality is valid when the idea of a win-win approach for a full and lasting relationship is considered. According to the usual managerial logic, the background is always the search for efficiency, cost reduction and profit maximizing, which is frequently obtained at the cost of maintaining long term relationships.
On the other hand, according to the theory of consumer behavior Williamson, customers will attempt to maximize utility for themselves, frequently without caring about the organization or loyalty issues at all.