The implementation of customer profitability analysis: A case study

By using customer profitability analysis (CPA), firms can determine the profit contribution of customer segments and/or individual customers. This article presents an approach for the implementation of CPA. The implementation process is illustrated using a case study of a firm producing and selling professional cleaning products. The case study highlights specific issues related to CPA in an industrial setting, and the results provide examples of the possible benefits of implementing a process of regular CPA.     

Understanding success and failure in customer relationship management

Customer Relationship Management (CRM) systems can help organizations manage customer interactions more effectively. Like many new technologies, CRM has been accompanied by vendor hype and stories of implementation failure. Work on critical success factors (CSFs) should encourage more appropriate implementation practice; however many CSF studies conclude with a list of factors but provide little further guidance. In particular, there is a need for stronger theoretical models of the entire CRM innovation process which can be used by managers to understand better the underlying causes of success and failure. This paper adopts a novel approach to this problem by firstly developing a conceptual model of CRM innovation and then converting this model into a dynamic simulation model. Some early simulation results illustrating changes in CRM benefits and organizational support over time are presented together with a discussion of the underlying causes and suggestions for how managers can counteract potential innovation failure.     

Strategic relationships between boundary-spanning functions: Aligning customer relationship management with supplier relationship management

This review focuses on the potential impact of enhanced strategic relationships between the boundary-spanning functions in supplier organizations. Specifically, the concern is with alignment between the organizational groups managing: marketing, sales and strategic account management; purchasing and supply strategy; and, collaborations and external partnerships. The topic is framed by the organizational evolution being driven by market change, and the search for superior innovation capabilities and business agility. These changes bring new challenges in cross-boundary integration and managing complex market networks. The logic is that strategic external relationships (with customers, supplier and partners) should be mirrored in strategic internal relationships (between the functions with lead responsibilities for managing relationships with customers, supplier and partners). Approaches to enhancing this capability include process management, internal partnering strategies and internal marketing activities. The discussion identifies a number of implications for practice and new research directions.     

A process-oriented perspective on customer relationship management and organizational performance: An empirical investigation

Research on the CRM-performance link has been fragmented due to various perspectives on CRM. This study, considering different concepts of CRM, proposes a process-oriented framework for examining the relationship among CRM resources, CRM process capabilities, and organizational performance. Based on the resource-based view (RBV) of the firm, CRM resources are classified as “technological CRM resources” and “infrastructural CRM resources”. Data from 77 Iranian Internet service provider firms were gathered in a field survey. The empirical work indicates that the measured constructs demonstrate key psychometric properties including reliability and validity. The results reveal that CRM processes are more affected by infrastructural CRM resources rather than technological CRM resources. Moreover, the findings indicate that firms with improved CRM process capabilities enjoy better organizational performance.     

The development and diffusion of customer relationship management (CRM) intelligence in business-to-business environments

CRM data is among the most important and comprehensive information available to management in many organizations. This is particularly the case in business-to-business marketing, where the firm's extended working relationship with its customers is frequently crucial for the maintenance of a healthy business. However, in many instances management has treated CRM data as highly specific to its client relationships and has therefore neglected to analyze this information across market segments, customer categories, and customer–firm relationship forms in order to draw meaningful conclusions for driving business decisions.     

The role of multichannel integration in customer relationship management

This paper reviews the strategic role of multichannel integration in customer relationship management (CRM) with the objective proposing a structured approach to the development of an integrated multichannel strategy. Alternative perspectives of CRM are reviewed and it is concluded that adoption of a strategic perspective is essential for success. Multichannel integration is posited as one of the key cross-functional processes in CRM strategy development. The nature of industry channel structure and channel participants, channel options, and alternative channel strategies are reviewed. The customer experience is explored both within and across channels. Analytical tools, such as market structure maps, the customer relationship life cycle, and demand chain analysis, are described. Key steps in building an integrated multichannel strategy are examined. Major challenges faced by enterprises in their adoption of an integrated multichannel approach and areas for future research are discussed.     

Marketing metrics' usage: Its predictors and implications for customer relationship management

This research aims to determine the conditions that foster use of marketing metrics in customer relationship management (CRM) and identify the organizational factors that strengthen/weaken the impact of usage of marketing metrics on CRM performance. Based on the customer value-based theory of the firm and the contingency perspective, a research framework was developed to shed light on the predictor roles of customer value-based organizational culture and processes in determining usage of marketing metrics, and foster an understanding of the moderating roles of marketing-supply chain conflict, and innovative value proposition on the marketing metric-performance relationships. Empirical evidence from a sample of 209 business firms confirmed the main effect that customer value-based organizational culture and processes support a firm's use of marketing metrics that in turn enhance its CRM performance. Notable moderating effects were also identified. Although marketing-supply chain conflict weakens the impact of marketing metrics usage in achieving superior CRM performance, innovative value proposition strengthens the conversion of marketing-metric-related knowledge into superior CRM performance.     

Customer relationship management: Finding value drivers

Despite significant interest from both academicians and practitioners, customer relationship management (CRM) remains a huge investment with little measured payback. Intuition suggests that increased management of customer relationships should improve business performance, but this intuition has only inconsistent empirical or real world support. To remedy this situation, this study identifies a core group of expected CRM benefits and examines their ability to increase a firm's value equity, brand equity and relationship equity which are components of customer equity. Ten propositions explore the anticipated effects of these drivers and form an agenda for future research. These propositions establish a framework for measuring CRM and supporting the link between CRM and performance.     

Linking account portfolio management to customer information: Using customer satisfaction metrics for portfolio analysis

When appropriate variables are used, account portfolio analyses engender a convenient framework for the relationship composition of companies and allow management to reconsider which customers and relationship dimensions need attention. Based on an industrial company's key account relationships, the portfolio approach considered in this study employs Customer Satisfaction (CS) metrics as a portfolio dimension and suggests a new and more customer oriented approach to account portfolio analysis. Proposed portfolio matrices provide insights into the strength and stability of customer relationships. Furthermore, the matrices force managers to adopt a future perspective on customer relationships by evaluating the business potential of customers along with CS information and allow prioritization with respect to resource allocation. The study attempts to put forward customer heterogeneity in industrial markets and offers a managerial guideline embracing customer specific marketing actions. In addition, the paper proposes a new use for CS information in strategic decision making.     

Sales force technology usage—reasons, barriers, and support: An exploratory investigation

Increasingly, salespeople are being asked to adopt and use a variety of technologies to increase their selling productivity and efficiency, including sales force automation and customer relationship management technologies. However, little research has investigated what happens once sales force automation (SFA) technology is adopted. This paper explores the reasons why salespeople use SFA technologies, the perceived barriers to SFA usage and how management can increase the usage of SFA technology. First, a qualitative study was performed to gain insight about salespeople's automation technology usage and the reasons why some salespeople fully use or do not utilize technology. After the initial study, 130 salespeople were surveyed. More productivity/efficiency was the main reason why salespeople use technology, the lack of management and technical support proved to be the main barrier to usage, and training proved most effective in increasing usage of SFA technology. Sales managers are provided with implications of the findings.     

Selling in the new millennium: A joint agenda

Progressive sales organizations are becoming more strategic in their approaches to the initiation, development, and enhancement of customer relationships. In moving to a more strategic, less tactical approach, these organizations are exploring new leadership models to direct change. In addition, they are using emerging technologies to support sales strategy. This article presents a 15-point joint agenda following a review of pertinent research in the sales strategy, leadership, and technology areas. This joint agenda offers action items, food for thought, and research ideas for sales executives, academicians, trainers, consultants, and professional organizations.     

A CRM performance measurement framework: Its development process and application

We suggest a performance measurement framework called a customer relationship management (CRM) scorecard to diagnose and assess a firm's CRM practice. The CRM scorecard was developed through a rigorous and stepwise development process collaborated with a number of firms in a variety of industries. During the development process, we conducted an extensive literature review to build a theoretical causal map, in-depth interviews with practitioners to extract a hierarchical map from industrial perspectives, feasibility tests to check whether or not Key Performance Indicators (KPI) could be measured, and Analytic Hierarchy Process (AHP) analysis to prioritize the evaluation factors on the CRM scorecard. The CRM scorecard contains antecedent/subsequent and objective/perceptual evaluation factors in four different perspectives to comprehensively measure corporate CRM capability and readiness. To illustrate the applicability of the proposed CRM scorecard, we apply the framework to a retail bank in Korea well-known for its exemplary CRM strategy.     

Salespeople as information gatherers: Associated success factors

Salespeople are in a vantage position to have intimate knowledge of the customers. How to motivate them to be effective information retrievers becomes a challenge to sales managers in today's knowledge economy. This paper presents the results of a study into managerial factors that are associated with more effective information retrieval by sales forces for use in their CRM systems. Sales executives (n = 150) responded to a mailed survey describing the importance of a set of activities to their recruiting/selecting, training, supervisory processes and the climate in the organization generated by upper level management. Results show that supervision and upper management support associate significantly with the effective information retrieval of salespeople; while training those more technically savvy sales recruits results in more effective information retrieval.     

Applying knowledge management to project marketing in a demanding technology transfer project: Convincing the industrial customer over the knowledge gap

Literature in project and knowledge management has examined knowledge management in projects, but the utilization of knowledge management in project marketing is still largely unexplored. This study examines the links between knowledge management and project marketing activities in a project where the seller wants to convince the potential buyer about a demanding investment project. An in-depth case study illustrates this in a situation hampered by a technical knowledge gap between the parties. The buyer is committed when they can trust the seller's capability to successfully accomplish the project. The seller must criticize and communicate its core and project specific knowledge of technologies and customer needs through project marketing. A framework and implications on knowledge management and project marketing activities in different project phases is presented. It is proposed that knowledge management is a pertinent tool for project marketing as it helps to understand the roles of different knowledge types.     

Industrial distributors: Can they survive in the new economy?

As e-commerce evolves and gains power in the business-to-business (B2B) marketplace, what lies ahead for the industrial distributor? The fundamental issue from the distributor's point of view is how to compete more effectively and profitably, given the changing business environment of the new economy. This paper reviews the literature on the distributor's role and relationships and introduces a conceptual model of distributor viability. The model identifies sources of value that distributors offer to manufacturers and customers, including customer relationship management (CRM), production and operations management (POM), and knowledge management (KM). The paper explores the managerial implications of distributor relationships and sources of value. This provides the foundation for better understanding of the viability of industrial distributors in the new economy.     

Supplier traits for better customer firm innovation performance

Previous research on embedded ties with suppliers in an innovation context has ignored the need for customer firms to assess and select suppliers on the basis of market orientation strategies and relationship marketing attributes. To address this void, this study investigates the effects of suppliers' downstream customer orientation and supplier-customer homophily (i.e., similarity of the supplier and the customer) on the customers' innovation performance. Data pertaining to new product development projects with contributions from supplier firms was collected on both sides of the supplier-customer dyad. The analysis shows that downstream customer orientation and supplier-customer homophily have a significant impact on the customer firms' new product efficiency (i.e., project cost and project speed) and new product effectiveness (i.e., innovativeness), which in turn positively influence new product performance in terms of profitability, market share, and growth.     

A relationship-management assessment tool: Questioning, identifying, and prioritizing critical aspects of customer relationships

With customer-relationship management (CRM) no longer a buzzword among trendsetters, organizations in all types of industries initially rushed to embrace it. Although a seductively attractive concept, the implementation of CRM proved difficult, however, and organizations are struggling with realizing their vision of a CRM organization. To help managers assessing the stage of relationships between their organization and the organization's business customers we consider the automotive industry. Based upon our case organization and its relationships with numerous business customers we develop a practical tool to question, identify, and prioritize critical aspects of customer-relationship management. First, we identify key areas in CRM. Secondly, we investigate how the chosen case organization has managed each of these key CRM areas over a broad range of business-customer relationships. Thirdly, we acknowledge that many organizations simultaneously have different types (transaction-relationship continuum) of business customers. We finish the article with a discussion of the study's limitations, and suggest avenues for future research.     

Churn analysis for an Iranian mobile operator

To survive in the challenging environment of a global market, organizations must recognize and analyze customer attitudes. To be competitive, organizations must recognize and forecast customer preferences and behaviors to maximize customer retention before their rivals do so. This research identifies factors that affect customer churn, the single most valuable of an organization's assets. One year's data from call log files relating to 3150 customers were selected randomly from an Iranian mobile operator call-center database. Binomial Logistic Regression was the method of analysis used in this research. The results of this research indicate that a customer's dissatisfaction, their amount of service usage and certain demographic characteristics have the most influence on their decision to remain or churn. The results also imply that customer status (active or inactive status) mediates the relationship between churn and the cause of churn. The Iranian government's current plan to privatize the telecommunications industry without deregulation leads to a non-square competition environment. Deregulation in favor of delegating more authorities of customer care is necessary in order to develop a square private competition environment in the Iranian mobile telecommunications industry.