Strategic,Operational, and Analytical Customer Relationship Management

Abstract

Customer Relationship Management (CRM) means different things to different people. For some, CRM is the term used to describe a set of IT applications that automate customer-facing processes in marketing, selling and service. For others, it is about an organizational desire to be more customer focused. Others associate CRM with the capture, analysis and exploitation of customer-related data. One distinction that has been made is between strategic, operational and analytical CRM. This paper sets out to understand, conceptualize and operationalize these terms. Our research generally supports the idea of a multi-dimensional conceptualization of CRM. We develop and present an instrument, consisting of a thirteen-item scale, which can be used to assess an organization's orientation towards one or more of these three forms of CRM.     

Impact of CRM technology on sales process behaviors: empirical results from US,Europe, and Asia

Purpose: The diffusion of customer relationship management (CRM) systems across the globe, over the last decade, has created a need to improve the understanding of the impact of technology on the sales process from a global perspective. The authors examine how CRM technology impacts the sales process (creating opportunity, managing opportunity, and managing relationships) in three regions of the world (US, Europe, and Asia).

Methodology/Approach: The differences among US respondents (n = 789), European respondents (n = 327), and Asian respondents (n = 91) were explored. A multivariate analysis of variance (MANOVA) was conducted on creating opportunity, managing opportunity, and managing relationships, with dichotomized CRM effectiveness and geography (US/Europe/Asia) as factors.

Findings: The MANOVA revealed a significant influence of CRM effectiveness, but a non-significance for geography and a non-significance for the interaction between CRM effectiveness and geography. This pattern of results suggests that CRM effectiveness leads to significant differences in sales processes; however, these influences are not qualified by the geography to which the firm belongs. Ensuing univariate Analysis of Varirances (ANOVAs) revealed a significant influence of CRM effectiveness on creating opportunity, managing opportunity, and managing relationships, but not for firm–geography or its interaction with CRM effectiveness. Post hoc tests revealed that firms high on CRM effectiveness were better at creating opportunity, managing opportunity, and managing relationships. Differences in CRM effectiveness lead to significant differences in sales processes; however, these influences once again are not qualified by the geography to which the firms belong.

Originality/Value Contribution: This study provides several contributions to the stream of research focused on CRM globally. First, due to globalization, CRM use and process can be more standardized across regions and cultures. With the evolution of technology such as Web 2.0 and cloud computing, barriers to communicating and exchanging information, regardless of time zone or location, have been decreased. A US firm’s use of a CRM platform can essentially capture the same information on a client that a firm in Europe or Asia also manages. CRM’s ultimate measure of success is for the buyer–seller relationship process to positively impact the level of business conducted.     

Linking marketing capabilities with profit growth

Profit growth is one of the primary drivers of a firm's stock price and therefore is a clear priority for managers. Yet little is known about how a firm's marketing capabilities may be linked with its profit growth. In this study, we use data from a cross-industry sample of 114 firms to investigate how market sensing, brand management, and customer relationship management (CRM) capabilities determine firms' revenue growth and margin growth—the two components of profit growth. Our results reveal that these marketing capabilities have direct and complementary effects on both revenue and margin growth rates. Critically, we find that brand management and CRM capabilities have opposing effects on revenue and margin growth rates, such that a failure to examine these two underlying components would mask the relationships between these marketing capabilities and ultimate profit growth rates.     

Marketing Innovativeness on Marketing Performance: Role of Religio-Centric Relational Marketing Strategy

Abstract

This paper is an empirical study aimed at investigating the effect of marketing innovativeness, market sensing capabilities and customer relationship management on marketing performance. The researchers tried to develop and solve the problem of the gap between marketing innovativeness and marketing performance. The respondents of this study were 318. Some of them are leaders or owners of SMEs Muslim fashion in Central Java, Indonesia. Data was analyzed by using Structural Equation Modeling (SEM). The results of the study show that marketing innovativeness (MI) has no significant effect on marketing performance (MP), while market sensing capabilities (MSC) and Customer Relationship Management Capabilities (CRMC) have a significant effect on marketing performance. Likewise, marketing innovativeness, market sensing capabilities, and CRM capabilities have a significant effect on the religio-centric relational marketing strategy. Furthermore, religio-centric relational marketing strategy (RRMS) is able to mediate the relationship between marketing innovativeness and marketing performance.     

A framework for customer relationship management strategy orientation support in higher education institutions

ABSTRACT

A number of generic Customer Relationship Management (CRM) implementation frameworks have been developed, yet no systematic framework has been developed to help HEIs orientate CRM strategy to align with university business strategies and stakeholder needs. This research iteratively develops the CRM Strategy Orientation Support (CRM-SOS) framework, which aims to support HEIs in orientating their strategic CRM system at the pre-implementation stage and align CRM strategy with the business strategy; thus, reducing the chance that HEIs will experience CRM implementation failure. To reach our proposed CRM-SOS framework, we employed Design Science Research (DSR) methodology steps by analysing UK HEIs specific CRM implementation case studies, conducting semi-structured HEIs-based interviews, followed by evaluation of the resulted framework by HEI Information Systems (IS) experts. We concluded with a new CRM-SOS framework for HEIs consisting of five stages. The framework can be used to personalise the stages until they fit the strategic outputs and match the top management KPIs. Although existing research agrees that intensive attention should be given to CRM planning, there is no consensus or developed framework, for use within HEIs, demonstrating how CRM strategy can be orientated to align with university strategies and customer needs.     

Using CRM to Manage Marketing Productivity

Abstract

The appropriate tool for measuring and managing marketing productivity is the present value of the total dollar contribution produced, divided by the total dollar value of the marketing effort expended to produce it. This ratio is referred to as the contribution return on marketing effort or CRM ratio. CRM integrated with activity based costing (ABC) and activity based management (ABM) systems, value analysis and value engineering (VA-VE) techniques offer a viable and practical foundation for managing customer relationship efforts and linking them to customer- and share holder value. The article offers a systematic approach for integrating contribution return on marketing (CRM) with customer relationship management (CRM).     

Customer Relationship Management in Electronic Markets

Abstract

Customer relationship management, or CRM, has found increased attention in both the academic and managerial worlds of marketing in recent years. While the Internet has greatly enabled the application of CRM in fostering loyal customers, the preliminary results on the effectiveness and efficiency of technology-based CRM has been far from discouraging. The authors identify various contentious issues behind the various key concepts of relationship management and identify several areas that deserve closer academic scrutiny and managerial inspection. The paper also comments on the extent to which Internet technology can bring about closer relationships with a firm's customers.     

Customer Relationship Management: A Strategic Perspective

Over the last decade and a half Customer Relationship Management (CRM) has developed into an area of major significance. However, there is considerable confusion in the academic and managerial literature about what is meant by CRM and how if differs from relationship marketing. Further, despite heavy investment by organizations in CRM, there is extensive reporting of CRM’s failure to achieve anticipated results in the literature. This article reviews the conceptual differences between CRM and relationship marketing and defines these terms. It argues that, in many organizations, CRM failures have occurred through a lack of strategic focus. Key strategic issues are identified. A CRM Strategy Matrix is presented which considers the strategic context of companies and the implications for the development of their CRM strategies. Four alternative approaches towards building customer relationships are identified and migration paths between them are reviewed. Implications for implementing CRM strategy and future research are discussed.

Cause-Related Marketing: An Exploratory Study of Campaign Donation Structures Issues

ABSTRACT

Over the past decade, cause-related marketing (CRM) has become a popular and unique promotional tool for brands. Academic research indicates outcomes of such campaigns are generally positive for all stakeholders. Consumers feel they are making a difference, firms benefit from improved public image and increased sales, and the cause or nonprofit organization receives increased publicity and funding. However, there are ethical issues involved when linking a firm with a nonprofit organization as well as potential negatives (Smith and Stodghill 1994; Andreasan 1996; Meyer 1999; Polonsky and Wood 2001). An exploratory research study was undertaken to understand the impact of the structural elements of cause-related marketing campaigns, including how the donation is quantified, the size of the donation relative to the price of the product, the presence of donation deadlines and caps, and the level of promotion used to publicize the campaign. Findings suggest that the structural elements of cause-related marketing campaigns do influence consumers' perceptions of the campaigns. Based on these results, implications for CRM campaign managers and future research ideas are provided. This information will help practitioners, including marketing managers, advertising managers and advertising creative professionals to design the most effective communication tactics for a cause-related marketing campaign.     

Tradition Versus Change: Evaluating the Currency of Some Traditional Chinese Values in Today's Business Environment

Abstract

In the last decade, the discussion about how marketing is changing has focused largely on practices in more affluent industrialized economies. Far less attention has been given to understanding the marketing strategies and practices of firms in emerging and transition economies. In this paper, we compare marketing of multinational firms versus local firms in Argentina. We identify the environmental characteristics of Argentina's emerging economy and, using survey data of 96 firms, we group firms into five clusters. We refer to two clusters as “traditional/local” as they use very basic marketing methods, with one serving business markets and the other consumer markets. The other three clusters we refer to as “progressive” as they represent state-of-the-art practices. The first two of these are foreign-owned and serve consumer and business markets, the third represents locally-owned service firms. The managerial implications are examined.     

An Analysis of Cause-Related Marketing Implementation Strategies Through Social Alliance: Partnership Conditions and Strategic Objectives

Cause-related marketing (CRM) is an effective marketing tool for promoting corporate social responsibility (CSR) activities and the bulk of campaigns are designed and delivered through collaborative ‘social’ alliances with non-profit organisations (NPOs). The authors seek to uncover some of the factors that explain how firms and NPOs choose their potential partners in the development of their CRM strategy. The rationales for the observed patterns are investigated through semi-structured interviews conducted with managers employed by the UK-based firms and NPOs. The authors find that each party has specific preferences when choosing the particular CRM implementation strategies in different situations, as well as different initial positions when negotiating the formation of the social alliance. This article contributes to our understanding of the CRM implementation strategies and both the company’s and the NPO’s behaviours toward each of the strategies.     

Students,Patients, Citizens,and Believers as “Customers”: A Cross-National Exploratory Study

ABSTRACT

Executives in 94 large UK companies engaging in cause related marketing (CRM) completed a questionnaire concerning (i) their firms' approaches to the management and evaluation of CRM, (ii) the benefits perceived to accrue to the practice, and (iii) whether these businesses applied commercial rather than philanthropic principles when selecting CRM partners. It emerged that, in general, the sample firms employed mainly commercial criteria when choosing CRM projects, that selections were frequently influenced by employee opinion, and that most of the evaluation techniques conventionally used to appraise commercial sponsorship and advertising were also utilised to assess CRM programmes. Companies were reported to demand close and obvious links between their products and the activities of partner charities. Typically, they preferred to affiliate with well-known charities and tended to dislike “controversial” causes. In the main the respondents held low opinions of their charity partners' marketing abilities. The article concludes with a number of recommendations regarding the ways in which charities should formulate proposals when inviting businesses to participate in CRM programmes.     

Cause-Related Marketing

Cause-related marketing (CRM) has become a controversial promotional tactic which impacts charitable organizations, business establishments, and individual consumers as potential donors. Proponents see CRM as creating a win-win situation for sponsoring firms and participating charities; critics caution against real and potential abuses.     

The Comparative Influence of Government Funding by the U.S. Commerce Department's Advanced Technology Program and Private Funding on the Marketing Strategy of High-Tech Firms

SUMMARY

This paper conducts an exploratory study on whether high-tech venture firms funded by a United States Federal Government program–Department of Commerce Advanced Technology Program (ATP)–pursue different types of marketing strategies and different goal levels than firms without such funding. A sample of ATP and non-ATP-funded firms was used. Nineteen hypotheses relating to commercialization processes, i.e., types of strategy (licensing), types of commercial advantage (new, innovative solutions), and types of commercialization applications (product vs. process) and four hypotheses relating to levels of performance (levels of cost reduction) were tested. Small ATP firms are more likely to pursue best practice marketing policies such as R&D collaboration, and licensing strategies, and to pursue higher cost reduction and performance goals than non-ATP firms.     

Success factors in a CRM strategy: technology is not all

Organisations today need to create, maintain and reinforce relationships with customers. Customer Relationship Management (CRM) seems to have helped firms to better understand their relationships. However, past studies have looked at technology and customer orientations (COs) as key factors. This paper aims to analyse the simultaneous effect of Market Orientation (MO) (rather than CO), Knowledge Management (KM) and other organisational factors in order to explain how to implement a successful CRM. Findings suggest that MO and KM may influence CRM success. Data also suggest that particular organisational factors such as employees, leadership and specific know-how may be key factors in determining the success of CRM. For efficiency resource management, this paper recommends to focus not as much in technology, but on programmes for selection, training and motivation of employees which may enhance CRM objectives. Companies may also pursue a higher customer value by putting in place and reinforcing KM schemes in specific know-hows about CRM.     

The Transitioning of Marketing Practices from Segment to Customer-Centric Marketing in the African Business Context: Toward a Theoretical Research Framework

ABSTRACT

Although marketing has long been posited to be shifting from segment marketing to customer-centric marketing, there is little theoretical insight into the status of such transformation, especially in emerging African economies. Therefore, this paper develops an integrated theoretical framework for assessing (a) the extent to which firms in African economies use the segment marketing mix (4Ps) versus the customer-centric marketing mix (4As) as well as (b) their antecedents and performance outcomes. Propositions drawn from qualitative data and theoretical tenets in strategic management and in institutional theory are offered to guide systematic empirical research.     

How does CRM technology transform into organizational performance? A mediating role of marketing capability

Customer relationship management (CRM) technology has attracted significant attention from researchers and practitioners as a facilitator of organizational performance. Even though companies have made tremendous investments in CRM technology, empirical research offers inconsistent support that CRM technology enhances organizational performance. Given this equivocal effect and the increasing need for the generalization of CRM implementation research outside western context, the authors, using data from Korean companies, address the process concerning how CRM technology translates into business outcomes. The results highlight that marketing capability mediates the association between CRM technology use and performance. Moreover, a customer-centric organizational culture and management system facilitate CRM technology use. This study serves not only to clarify the mechanism between CRM technology use and organizational performance, but also to generalize the CRM results in the Korean context.     

The Role of Buyer Trust in Outsourced CRM: Its Influence on Organizational Learning and Performance

Purpose: Company outsourcing of customer relationship management (CRM) functions is increasing (Kalaignanam and Varadarajan 2012). Although outsourcing CRM may provide financial benefits, the tasks of developing and utilizing the complex, cross-functional processes needed to gain enhanced customer knowledge from CRM may be more difficult when some or all CRM activities are outsourced. Trust in the information provided by the outsourced CRM supplier is vital. In this study, the authors examine the influence of buyer trust in its outsourced CRM supplier on cross-functional learning processes and firm performance within the buyer firm.

Methodology: Data were collected from a survey of marketing managers in 221 firms. LISREL 9.2 was used to assess convergent, discriminant, and nomologic validity using the two-step approach (Anderson and Gerbing 1988). Convergent and discriminant validity were evaluated in the measurement model phase, whereas the structural model provided an appraisal of nomologic validity.

Findings: The results provide evidence of buyer firm trust in the outsourced CRM supplier playing a critical role in the buyer firm’s success with information sharing, and both trust and information sharing strongly influencing information interpretation and information access in the buyer firm. All three organizational learning processes positively influence buyer firm customer satisfaction/retention and market performance.

Research implications: An important area for future research is the possibility of varying levels of trust needed for success with outsourced CRM depending on the buyer firm’s goals for its CRM system. It is possible that the simpler CRM functions could be outsourced effectively through efficiency strategies that do not require significant levels of trust, whereas the more complex CRM activities that affect organizational learning require more stringent coordination and inter-organizational development. Varadarajan’s (2009) cost versus quality classifications of outsourcing could be a useful starting point for this type of analysis. Considering the finding in this study that information sharing is critical for information interpretation and information access in the buyer firm, another area for future research is possible differences in the extent of information sharing required by firms that are outsourcing CRM versus those that conduct the CRM function in-house. One starting point could be possible differences in relevance among Maltz and Kohli’s (1996) factors affecting information dissemination.

Practical implications: For effective use of CRM data, it is important for buyer firms to develop trust in their outsourced CRM supplier. Managers can assist in this by communicating qualifications of the outsourced CRM supplier, such as any trade-specific certifications, awards, information about the supplier’s number of years in business, and examples of other companies the supplier has assisted. Managers can also help employees develop confidence in the supplier’s integrity by sharing the supplier’s code of ethics and serving as a champion for the supplier. In addition, firms engaged in outsourced CRM are encouraged to develop reward systems that motivate employees to build relationships with their counterparts in the supplier firm, and it would be useful for the buyer firm to help its employees understand the importance of the CRM outsourcing relationship to the buyer firm’s success. Finally, it is important for management to provide opportunities for interaction between the outsourcing partner and key buyer firm employees who will use the CRM data, to encourage effective processes in information sharing, information interpretation, and information access.

Contribution of the article: This article addresses the significance of outsourcing the CRM function and provides evidence that buyer trust in its CRM supplier is a critical factor in its utilization of CRM data for organizational learning and firm performance. It also demonstrates that effective sharing of information, cross-functional integration of customer data, and CRM information accessibility are critical for firm success.     

Trust,Satisfaction and Loyalty in Customer Relationship Management

SUMMARY

In an attempt to increase customer loyalty amid increasingly competitive business environments, organizations are looking to customer relationship management (CRM) to help provide a solution. In spite of CRM failure rates cited as being as high as 70%, organizations continue to invest hundreds of thousands of dollars on CRM implementations. Attempts of past research to resolve why failure rates are so high have tended to focus on technological factors such as database integration or factors internal to the organization such as system adoption or organizational culture. While these areas are important, reactions of customers may also play a role. This paper uses justice theory to investigate the potential impact that customer involvement in a CRM implementation may have on customer loyalty. Propositions are provided to guide future research.     

The impact of customer relationship management capability on innovation and performance advantages: testing a mediated model

Abstract

Customer relationship management (CRM) and innovation are widely considered to be valuable capabilities associated with competitive advantage. However, there is a lack of research demonstrating how they work together to produce performance advantages. This research investigates the mediating role of innovation between CRM and performance. The authors examine the direct impact of both CRM and innovation on firm performance. Moreover, they investigate the role of innovation as a mediating mechanism to explain the effect of CRM on performance. The authors use structural equation modelling to test the relationships among these constructs. The results support the direct impact of CRM and innovation on performance. Also, the findings indicate that the indirect effect of CRM on firm performance through innovation is significant. These results reinforce the view that developing close relationships with customers enhances a firm's ability to innovate.