Business and Customers Relationships - Coursework Example

Relationship Management Beginning from the mid-twentieth century, the techniques employedin mass production and marketing resulted in the revolution of the competitive landscape, which led to the increase in availability of products for the consumers. Despite this, the process of purchasing, which enabled the customers and shopkeepers to have good time together in order to know each other was drastically altered. There was an eventual loss of uniqueness by the customers while the shopkeepers lost track of the individual needs of the customers owing to the fullness of services and products on the markets. As a result of this, there has been need by most companies today to race towards the re-establishment of their connections to the customers, as well as other businesses in order to enhance their competitiveness and efficiency of their businesses. For instance, the companies have sought to reconnect both new and the existing customers as a way of boosting long-term loyalty among customers. On the other hand, several companies are effectively competing and eventually winning their races through the relationship marketing principle implementation, by use of technology and strategy-based relationship management application. This essay, therefore, provides an analysis of the relationship management by defining and describing the numerous types of relationship management practiced today. By extension, the benefits of this practice will be discussed. A case study of a real organization will be examined in terms of its practice of relationship management and recommendations made on the ideal strategies to be adopted by the organization in enhancing its productivity, profitability, and its general competitiveness in the global market. Introduction Relationship management can be defined as the strategy used by an organization, where a high engagement level is maintained continuously by the organization together with its audiences (Senn, Thoma and Yip, 2013). In this case, therefore, relationship management may occur between a business and the customers, which is referred to as customer relationship management, or between one business and another, which is referred to as business relationship management (Alvarez, Casielles and Martin, 2011). The relationship management practice has gradually become the major focus of investing and financial industries as a means of identifying probable cross-sales of their services and products. In essence, therefore, relationship management is aimed at developing some partnership between an organization and its own audiences as opposed to considering a relationship as a mere transactional occurrence (Ryals, 2005). The customers who believe that the business of the given organization is appropriately responding to their respective needs have higher likelihood of continuing to use the services and products of the company (Theron, Terblanche and Boshoff, 2008). In addition, maintaining a high communication level with the customers helps the business in the identification of potential sources of the problems in the organization, which could be proving costly to the organization prior to their coming. The professional involved in improving the relationship of the firm with the customers and other partner firms is referred to as the relationship manager (Senn, Thoma and Yip, 2013). Both customer relationship management and business relationship management have a common goal, where they all facilitate good link between parties to enable the business in maximizing its relationship value, and overall maintenance of the good reputation in the public (Ryals, 2005). Traditionally, relationships were considered as being an intangible business aspect whose inherent management and assessment was extremely difficult. In this case, therefore, the relationship managers constitute part of the movement tasked with applying the scientific approaches in gaining a greater control over the business relationships (Senn, Thoma and Yip, 2013). These mangers are also known for defining, quantifying, and analyzing the relationship in order to ensure that such important business aspects are not left to chance. Types of Relationship Management i. Business Relationship Management BRM aims at providing a holistic and complete business relationship model together with the business relationship value over a period of time, and this enables the accomplishment of various business relationship aspects, both measurable and explicit (Alvarez, Casielles and Martin, 2011). The maturity of a BRM is depicted in its ability to give support to strategic research in business and efforts of development, as well as supporting the techniques and tools necessary in the implementation of BRM principles. Among the principles of BRM is the measurement and analysis, which entails incorporation of principles and concepts that are effectively measurable and identifiable. This means that based on the respective model, one must identify the business relationship in which they are engaged, and be able to appropriately measure them in terms of duration and quantity (Alvarez, Casielles and Martin, 2011). Additionally, the BRM principles include purpose, where each business relationship possesses a purpose that demands taking part in numerous roles for its accomplishment. The purpose of each business relationship is thus quantifiable and discrete. Reputation and trust constitutes another principle of BRM, and in this, the model of BRM should seek to quantify and model the concepts of trust and reputation therein (Theron, Terblanche and Boshoff, 2008). Each relationship, together with every interaction in the relationship, is important in determining the reputation. Reputation is important in mitigating the risk as well as reducing the resultant frictions in the business process (Alvarez, Casielles and Martin, 2011). Loss of trust leads to failure of the business trust. Trust is instrumental in enhancing the business efficiency and smooth resolution of conflicts. The organization must also seek to describe the existing relationship between the emerging components of the online community, and the traditional core concepts of trust (Ryals, 2005). Governance is another principle of BRM and in this, the model applied in BRM must be able to account for and ensure alignment with the corporate governance model, which include legal constraints, business ethics, together with the social norms based on their application in the business relationship (Alvarez, Casielles and Martin, 2011). Boundaries are another aspect of BRM principles and it is demanded that the BRM model provide clear boundaries within which the business relationship operate in the large interpersonal relationship continuum (Theron, Terblanche and Boshoff, 2008). On the other hand, there must be personal connection optimal levels, which must be spelt out, particularly in terms of their distinctions in terms of the roles, type, and other notable attributes. The model must have the ability to optimize effectiveness and give support to the ideal practices of governance (Ryals, 2005). ii. Customer Relationship Management Among the most important aspects of the CRM are the fact that the implementation of this is a process aimed at enhancing the relationship between the buyer and the seller, and that the relationship must be significantly strong and endurable (Senn, Thoma and Yip, 2013). In order to ensure this, the institution has the responsibility of discovering the respective desires of the customers and ensures effective response to them. The CRM implementation process is aimed at enhancing and creating the relationship and engagement with other external parties, particularly the end customers and the agents (Ryals, 2005). Similarly, CRM is a strategy that attaches great value to the customer’s life period enabling the institution to determine the type and amount of resources to be invested by the organization in this relationship (Theron, Terblanche and Boshoff, 2008). The institution is thus tasked with the assessment of its continuous relationship with the customers, and in response, assign priorities in quest of implementing a direct interaction with the customer based on the respective quantitative profitability during the customer’s life period. Therefore, CRM is the company’s investment in its customers, and the customers are expected to be of significant value to the institution (Senn, Thoma and Yip, 2013). On the other hand, the company has the obligation of reducing its investment in the otherwise valueless customers to the business. This CRM practice is also considered as being philosophy where the retention of customers is to be achieved through the established relationship and maintenance of the same (Alvarez, Casielles and Martin, 2011). The customer form the prime focus of the organization, and the firm thus focuses on understanding the ever changing needs of the customer (Ryals, 2005). This means that the practice is not temporal and aims at focusing on the customer for the ultimate benefit of the organization. Additionally, this practice is viewed as an ability that facilitates profitability and long-term relations that can only be realized when the organization is capable of customizing its continuous behaviors towards the respective customers. In this case, therefore, the company has to process a set of both tangible and intangible resources for use in the flexible remodeling of its behaviors with the customers (Theron, Terblanche and Boshoff, 2008). It implies that CRM is the ability and desire by the institution to customize its behaviors to the individual customer, based on their respective personal information as obtained from the customers, as well the knowledge held by the institution about its customers (Ryals, 2005). As a technology, the CRM practice involves management of knowledge together with the reactions, and this constitutes the major resources needed by the institution towards the establishment of long-term and profitable relationships with its customers. In this case, the institution must adhere to the functional method, as well as the acceptance of the user of the applied technology by the institution (Alvarez, Casielles and Martin, 2011). This determines the practicability of the customer knowledge establishment and reaction management. It can thus be concluded that CRM is the applied technology towards the integration of sales system, information system, and marketing systems, as used in establishment of relationship with customers (Alvarez, Casielles and Martin, 2011). Benefits of Relationship Management Despite the changes that have been realized in the customer relationship in the recent past, the core objectives of keeping the customers and making sales has remained constant. Essentially, relationship management concerns the efforts within the emerging market in the business process as far as pursuance, identification and management of essential customer and business relationship (Ryals, 2005). It all involves knowledgement and understanding regarding the buying preferences and habits of the customers and other business partners in order for the concerned organization to place itself strategically in ensuring maximum benefit from the transactions. a. Improved Customer Experience Among the major benefits accrued from relationship management is the improvement of the customer experience. In the modern market, the customers have much preference for streamlined and customized experience from start to the end (Theron, Terblanche and Boshoff, 2008). In essence, customers expect the business to understand what and when they need it without delays or any other forms of inconveniences. Therefore, the relationship management system is ideal in enabling the organization to identify its customers with speed, be able to meet their initial demands, and eventually make recommendations for extra services and products which fit their profile (Alvarez, Casielles and Martin, 2011). The organizational staffs are also given the ability of recognizing the individuals they constantly deal with from the start, hence making them more productive and efficient in business. b. Ensures focused efforts of marketing In this case, the relationship management provides the organization with a comprehensive picture of the sales pipeline together with that of customers in existence (Theron, Terblanche and Boshoff, 2008). With this, the business is capable of identifying and targeting the people with highest potential for sales in future. As opposed to using a mass marketing technique, relationship management enables the business to effectively focus and fine-tune the efforts of marketing in place in order to ensure maximum productivity (Alvarez, Casielles and Martin, 2011). This means the business stands to benefit from less money used since resources are only used on people that will eventually become customers. c. Efficiency in reporting and analytics Regardless of the business size, the firm may not have enough time for tracking and analyzing the buying habits within a period of time (Theron, Terblanche and Boshoff, 2008). In such instance, the application of relationship management helps in handling such puzzling tasks. Since the information about the sales and the customers is intact, the organization has an automatic access to the full range reports regarding the kind of service or product that are on demand and the specific group in need (Theron, Terblanche and Boshoff, 2008). Additionally, the organization gains a comprehensive picture of sales. The centralized warehouse of information from relationship management provides a powerful reporting and analytic tools that are not easy to acquire in the stand-alone techniques. d. Ensures better cooperation and coordination For instance, when the marketing, sales, and customers share a common platform within relationship management, they have better communication and sharing of ideas (Theron, Terblanche and Boshoff, 2008). The departments within the organization enhance cohesion in their operations thus forming a single effective functional unit. This means they have knowledge of their respective goals and the manner in which they should be attained. The relationship management practice is also instrumental in offering a more administrative support to the business. Tasks such as daily keeping of records, scheduling of appointments, together with tracking of follow-ups within the sales team are made easier through relationship management since they are carefully detailed for easy management (Alvarez, Casielles and Martin, 2011). IBM Company The International Business Machines Corporation (IBM) deals in information technology. The company operates within five segments, amongst which are the Global Technology Services, Global Financing, Global Business Services, and the Software, Systems and Technology. The Global Technology Services essentially offers services in IT infrastructure as well as the business process services (Harreld, OReilly and Tushman, 2007). On the other hand, the Global business services offer professional services together with services in application management. However, Software is primarily made up of operating system and middleware software. The Systems and Technology offers the clients with solutions to variable business problems that need advanced and powerful computing and high storage capabilities (Theron, Terblanche and Boshoff, 2008). Global financing essentially invests within the financing assets, the leverages with debt, and ensures effective management of the associated debts. In the past, most companies have adopted and practiced a more costly and equally time-consuming tribulations and trials of application management and deployment. For instance, majority of the organizations may lack the resources or requisite skills to facilitate the operation of various practices in the company (Theron, Terblanche and Boshoff, 2008). Despite this, there is a continuous demand from the executives that the organization produce tangible and rapid results from its own initiatives. It is for this reason that most companies have recently turned to embrace the third party CRM provider expertise (Harreld, OReilly and Tushman, 2007). The CRM service management is important in offering the organization the spanning experience, as well s targeting that knowledge to the needs of the singular business for adoption by the organization. It is for this reason that the international business management corporation (IBM) sought to adopt the CRM practice, as a way of acquiring the reduced risk services, streamlined cost of management, together with speedy deployments, and all these are important in facilitating a positive investment return. The IBM Company believes that the direct route to CRM success, which equally has fewer risks, greater potential and rapid deployment, is by use of guidance from pioneers together with the current leaders in the industry (Theron, Terblanche and Boshoff, 2008). With this, the company believes the operations make an excellent business sense in leveraging the lessons that have been already learnt and acquire the hard-won experiences. Ideally, IBM boasts of massive experience gained from the previous practices where it has handled successful engagements in CRM for SmithKline Beecham, General Motors, Telstra, Universal, and LexisNexis among others (Alvarez, Casielles and Martin, 2011). The IBM Company has internally deployed the largest CRM solution in the world, which is distributed across all of the business units owned by the company globally. In this, there are 26 call centers and about 700 employees at the moment. In addition, the company has ensured the integration of the piece parts in order to offer seamless design, run and build services for the customers (Theron, Terblanche and Boshoff, 2008). The services of CRM management in IBM are basically for the purpose of reducing risks, fostering a superior performance, as well s producing rapid RIO through deployment and management of the applications of CRM within the IBM e-business state-of-the-art hosting centers. This company provides the best proven practices through the industry-based CRM Templates, which are constituted by a set of configured, synergetic work products that facilitate a speedy implementation, reducing the risk of deployment, and potential ROI (Alvarez, Casielles and Martin, 2011). The management services of CRM in IBM are holistic, but they may equally be deployed modularly to the sales, marketing, or other service sectors (Harreld, OReilly and Tushman, 2007). This provides an effective answer to the issues related to implementation time and cost, while at the same time facilitating customized solutions. The management services of CRM within the IBM Company are in line with the Siebel Systems as well as other leading solutions to CRM. The company boasts of more than 100 customer references for consulting in the CRM program across all industries, and has equally been successful in having at le4ast 500 outsourcing engagements across the globe (Harreld, OReilly and Tushman, 2007). The company has a proven and deep expertise that facilitates business intelligence, and has more than 900 practitioners who provide help to customers in turning the customer data into relevant and useful customer intelligence. As a way of enhancing its relationship management practices, IBM provides a renowned strategy together with consulting services. IBM comes together with other best-of-breed providers in offering comprehensive services of call center management, and this means the customers can call and have their queries and concerns attended to effectively (Theron, Terblanche and Boshoff, 2008). Through this, the company is able to obtain the different types of data and information including complaints and appreciations, and this constitute a key component of the company’s determination of improvements to be made in the services and products it offers to the customers (Theron, Terblanche and Boshoff, 2008). On the other hand, the company has efficient mechanisms in driving successful telesales and optimizing both inbound and the outbound interactions with customers. Recommendations Within the Loyalty Suite Building of the IBM Company, customer loyalty should not be limited to identification, capture, and retaining of the loyal customers instead, it must done on the basis of profitable relationship (Senn, Thoma and Yip, 2013). The components of loyalty suit solution adopted by the company should apply a customer-centric approach that uses a management perspective of the customer in integrating the operations of CRM, the techniques of customer collaboration, as well s the process of CRM analytics (Harreld, OReilly and Tushman, 2007). The outside-in techniques and perspectives in determination of customer loyalty are the major factors that differentiate loyalty suit from the other consultant approaches of CRM. Generally, the operations adopted by the IBM Company in the CRM practice are good for the purpose of enhancing the profitability and competitiveness of the company on the global market (Alvarez, Casielles and Martin, 2011). The company should, however, improve on its Customer-Focused channels and process in order to facilitate differentiation, attraction, and retention of customers on the basis of the provided value at the time of key touch points with the customer facing channels. This can be initiated by the company making its responses more prompt and reaching out to their respective clients every time they need them. For instance, there could be introduced more customer care centers and other quick response mechanisms, particularly through emails and other social media platforms. This would facilitate effective implementation of customer-defined, outside-in vision practice. On the other hand, there must be a proper utilization of the existing channels and process-specific segmentation, as well as determination of the outside-in, customer vision of delivery of ideal value at vital touch points (Senn, Thoma and Yip, 2013). The approach employed by the IBM Company is also ideal in identification of business processes together with channel capabilities, infrastructure, and organization required for consistent delivery on the need, wants, and vision of the customers (Harreld, OReilly and Tushman, 2007). However, the effectiveness of the CRM practice could be further enhanced by the provision of gap analysis within the current channel capabilities and process. Additionally, the company’s strong IT expertise makes its operations exceptionally competitive in the market. For instance, as opposed to other companies, who have to employ the IT services from other providers, the IT mechanisms of the company, which are used in frequent access and analysis of the company’s customers, are internally built and managed, making them perfectly compatible with the operations. Such competitive advantage aspects must be comprehensively utilized for maximum profitability of the organization. Conclusion It is evident that the global business is continuously undergoing changes thus requiring different approaches by the businesses in order to maintain their relevance and satisfy the constantly dynamic demands of the customers. This makes the relationship management practice an ideal aspect of any business venture for global competitiveness. Embracing information technology in the running of the business emerges as the most important aspect of business, and this provides a wide and convenient avenue on which the organization can interact with its customers and other stakeholders with easy. The benefits of relationship management are a reason enough for the organizations to adopt the modern and proven business approach for profitability, competitiveness and relevance of the business in the global scene. For instance, relationship management enhances the competitiveness of the business organization since it facilitates an increase in revenue while lowering the costs of operation. On the other hand, the company is able to oversee and manage efficient and effective satisfactions and retention of its customers. Considering that overcoming competition requires the business to outdo other rivals in terms of customer satisfaction, the practice is important in facilitating determination of customer loyalty together with profitability through parameters like longevity, repeat purchases, and dollar spent. References Alvarez, L, S., Casielles, R, V. and Martin, A, M., 2011. Analysis of the role of complaint management in the context of relationship marketing. Journal of Marketing Management, 27(1/2), p143-164. Harreld, J. B., OReilly, C, A. and Tushman, M, L., 2007. Dynamic Capabilities at IBM: DRIVING STRATEGY INTO ACTION. California Management Review, 49(4), p21-43. Mende, M., Bolton, R, N. and Bitner, M, J., 2013. Decoding Customer-Firm Relationships: How Attachment Styles Help Explain Customers Preferences for Closeness, Repurchase Intentions, and Changes in Relationship Breadth. Journal of Marketing Research (JMR), 50(1), p125-142. Ryals, L., 2005. Making Customer Relationship Management Work: The Measurement and Profitable Management of Customer Relationships. Journal of Marketing. 69(4), p252-261 Senn, C., Thoma, A. and Yip, G, S., 2013. Customer-Centric Leadership: HOW TO MANAGE STRATEGIC CUSTOMERS AS ASSETS IN B2B MARKETS. California Management Review, 55(3), p27-59 Theron, E., Terblanche, N, S. and Boshoff, C., 2008. The antecedents of relationship commitment in the management of relationships in business-to-business (B2B) financial services. Journal of Marketing Management, 24(9/10), p997-1010. Read More