The Impact of Information Technology on Business Communication with regard to Increasing Customer Loyalty - Research Proposal Example

Student Name: Tutor: Title: Research Proposal: The impact of Information Technology on business communication with regard to increasing customer loyalty in the 21st Century Course: 1) Title: The impact of Information Technology on business communication with regard to increasing customer loyalty in the 21st Century 2) Abstract Businesses apply several statistical tools to make predictions regarding potential for future events. Predictive analytics can be used in predicting the level to which answers from a survey connect to specific objectives like engagement or loyalty (Verhoef, 2003). Increased competition compels businesses to engage every kind of techniques in winning new customers and retaining the current ones. If keeping the current customers is less costly as compared to winning new ones, then businesses have no option but to invest in programs meant to keep their current customers like the loyalty programs (Deetz, 2001). There is limited literature on the role of information technology on programs like loyalty schemes which could be used to keep or grow the businesses market share. Perfection in customer service can be enhanced by understanding the needs of customers through studying data gathered through customer loyalty platforms in companies. The information gathered through numerous interactions by the customers is integral in the formation of future strategies that results into better service delivery (Consuegra, Molina & Esteban, 2007). At the heart of customer loyalty programs is the application of information technology in order to come up with comprehensive and centralized systems that enhance quick gathering of data. This research proposal seeks to investigate the impact of Information Technology on business communication with regard to increasing customer loyalty in the 21st Century. The research aims to increase literature concerning the application of information technology in business communication with special look at the customer loyalty and its impact on modern businesses. Companies that have invested in information technology to develop customer loyalty programs have ended up gathering crucial information on their customers and how to serve them better within a short time (Yen & Gwinner, 2003). This research concentrates on exposing the gains of companies investing in information technology to develop customer loyalty programs in an effort to perfect business communication. The introduction sets the pace for the research by highlighting the importance of analytics in modern business and the results of having a centralized customer loyalty platform. The literature reviews discusses the importance of effective communication and the need for companies to take advantage of information technology in developing effective customer loyalty programs. Different studies have been explored as well as past literature on the impact on information technology in development of a successful loyalty program with the aim of increasing interaction with the customer. The objectives define the various items that will be explored in this research. The methodology outlines the means through which data will be gathered and interpreted. 3) Introduction In the current business world that is intensely competitive and has fast-changing marketplace, companies cannot continue to rely on guesswork, gut instinct or business as usual. In many industries businesses are resorting to data analytics to accurately respond to and even be able to predict consumer behavior in their urge to increase revenue while concurrently ensuring customer loyalty (Vesel & Zabkar, 2009). The need to engage with customers effectively is propelled by the shift in power from sellers to buyers as a result in increase in use of social media as well as rise of mobile computing. Many competitive global firms are seeking a better interpretation of individual customer needs and enhanced responsiveness to the desires. Bak and Stair (2011) explain that Global market for business analytics software increased by 14% in the year 2011 and 11.6% in the previous year. It follows that the need for use of application of information technology in business communication in the effort to retain loyalty customer is a reality in many companies (Senft & Gallegos, 2010). Companies want to maintain their market share as they seek to acquire new customers in the process. However, various firms across different industries have not integrated their loyalty schemes into a single integrated system. Some managers have not appreciated the importance of loyalty programs and the need of their companies to invest in them (Beverly et al, 2002). Many studies done have dwelled on consumer behavior and effective business communication. Nevertheless, few studies have ventured to explore the role of technology with regard to retention of customer through loyalty programs. Consequently, many companies do not take loyalty schemes serious but as only an appendage on their annual budget and there is nothing substantial that is allocated for development of loyalty systems. Business spend more trying to woe new customers as opposed to keeping the ones that they have hence companies have to take application of information technology in loyalty programs serious (Serenko, 2006). A centralized loyalty platform enables a company to gather crucial information about its regular customers and understand emerging trends and how to meet customers’ needs better. There is need to understand the impact of information technology in business communication and how it affects customer loyalty for the purpose of maintaining and expanding market share. Objectives This research proposal seeks to achieve certain objectives that will help in answering the research questions that is the sole purpose of the research. The objectives helps in achieving the overall target of the research question and these objectives will include: To establish the effect on information technology on long-term relationship of customers with an organization To determine how information technology can be used to improve customer loyalty To establish the impact of information technology on customer loyalty and its resonance on market share To determine the link between application of information technology and customer loyalty To find out how an organization can use information technology to build relationship marketing 4) Literature review Technology has changed the world, the internet and information technology has had immense transformation in data transmission and communication process. Profitability in firms has been enhanced through increasing customer satisfaction and loyal customers and realization of effective satisfaction in customers. Kumar and Shah (2004) elaborate that Information technology plays an important role in establishment of loyalty programs that target to increase customer retention. The knowledge and information revolution commenced at the end of twentieth century and has accelerated gradually. Zhou (2004) says that Digital firms respond to; and sense their environment far more quickly as compared to traditional firms hence they demonstrate more flexibility to survive during the adverse times. Through digitally streamlining and enabling their work, digital firms possess the capacity to attain unprecedented levels of competitiveness and profitability. Jensen (2005) agrees that Communication with the customers is important for the company to maintain its market share. The purpose of business communication is to come up with a shared understanding of business situations that make people to work together successfully. Researches on the impact of information technology on customer loyalty have been scarce and sometimes not comprehensive. Communication is crucial when it comes to building teamwork and trust among employees. In order for one to be a leader who is successful, there must be a great team. Business communication is any form of communication that is used to promote a service, product or an organization with the aim of making a sale (Turel & Serenko, 2006). Business communication focuses on establishing relationships or repeated interpersonal relationships with interested external publics and internal organizational members. Business communication helps firm with accomplishment tasks that are related to specific responsibilities and roles of services, product, and sales. It also helps with acclimatization to changes through organizational and individual adaptation and creativity. Moreover, business communication aids the completion of tasks via the maintenance of procedures, policies or regulations which support continuous and daily operations (Schiffman & Kanuk, 2004). Business communication enables coordination, planning and controlling of operations of the company through the management. Communication is vital to any relationship that is successful be it personal or professional. Communication is integral to every aspect of human activity. Messages in business communication are put across using various media of communication that include print, internet, television, radio, word of mouth and outdoor. All marketing efforts will be futile if the product of the firm do not meet the needs and wants of customers. Customer loyalty results into retention of old customers as the firm seeks to expand its market share through other means like advertising and personal selling. The role of technology is more often than not overlooked when looking customer loyalty programs (Srinivasan, Anderson & Ponnavolu, 2002). Consequently, many firms have not put in place a loyalty platform that is integrated but resort for outsourcing various components of the program. This kind of strategy brings challenges when it comes to integrating technology and data streams; a loyalty platform that is centralized eliminates such risks through combining offer creation, offer redemption, consumer insights, as well as performance metrics reporting. Companies should not at all overlook the role of technology when creating loyalty programs (Saeed, Grover & Hwang, 2005). An integrated system enables the various departments to collect comprehensive data about the consumers that enables the firm to serve them better. The quality of service is bound to go up. A centralized loyalty platform involves offer creation, consumer insights, performance metrics reporting, and redemption. Such a tool enables managers or interested parties in the firm to aggregate loyalty information in all channels of operation with only a single check of the customer and their interaction and purchase behavior (Gray & Byun, 2001). The information can be utilized in creating a tailored loyalty offers basing on the type of consumer the company is targeting such as lapsed, high discount percent or high spending threshold. Companies that use centralized cross-channel loyalty program report many gains like increase the rates of customer retention and increase in rates of customer activations. Petterson (2004) suggests that a centralized loyalty system enables the company to be in charge of the entire loyalty experience and remove the need of integrating disparate data streams into one consolidated system of record. Modern technology has changed the manner in which business is being conducted and it is progressively offering consumers with more comforts. Telecommunication and Internet are the two major technologies that are important in creating new values and bringing up innovative services for consumers (Gummesson, 2002). Telecommunication technology has been pushed for commercial consumer application in the modern times. Consequently the growth of mobile service users has significantly increased especially in developed countries. In the wake of immense growth in mobile service industry, businessmen are facing two problems that involve gaining competitive advantage and increase the market share. The aim of marketing is to offer value to customers, offer satisfaction and establish long term relationship that result in customer loyalty (Miller, 2003). Digital convergence was foretold ten years ago and it is not undisputed reality. The internet is enabling convergence of technologies, roiling markets, firms and industries in the process. The Internet-connected personal computer is playing more the role of a home entertainment control center (Robbins, 2001). Whereas telephone networks are being merged into the internet, cellular phones are moving towards becoming Internet access devices. Information communication in the business environment has undergone a revolution and this has impact the means through which firms communicated with their customers with the aim of increasing marketing share and establishing customer loyalty (Pease & Rowe, 2007). As traditional distributional channels and markets weaken, new markets take their place. Globalization has increasing owing to advanced use of information technology in business communication. Wangenheim (2005) is of the opinion that Changes in technology impact on how a company conducts its business. Business strategy can be changed due to changes in the technological environment. In emerging business realm the customer loyalty has been established as the main aspect that results in competitive advantage particularly in the service industry. It is important to comprehend the customer morale for establishing competitive policies to succeed in differentiation and gaining customer loyalty in order to survive in the competitive market. A company can develop long lasting and profitable associations through developing customer loyalty as explained by Guenzi and Pelloni (2004). Customer loyalty is an important aspect for continued operations and existence of firms in business. Loyalty can be estimated as the intention of repurchase, recommending service or products to friends and relatives or being tolerant or patient towards price. Enabling technologies creates an environment for customer engagement, retention and eventual retention. The enabling technologies have to combine emerging technologies and emerging technologies for loyalty offer creation, redemption and delivery. In order to create a competitive advantage companies have to involve technology as an integral part of the loyalty initiatives (Jablin & Sias, 2001). These technologies have a great impact on customer re-activation, retention, and satisfaction. Customers have the belief that loyalty offers have to be consistent throughout all channels of operation including creation, delivery, and redemption. Disjointed offers or inconsistent branding can lead to customer disenchantment, confusion and finally desertion. Holter and Kopka (2001) observe that Management in firms has tried to align marketing offers with loyalty across channels in order to provide a fluid and seamless customer experience. Various companies in numerous industries evaluated and implemented loyalty programs and strategies for the purpose of making strong relationships with their customer. The fragmentation and proliferation of media make it challenging to access and attract new customers (Bak & Stair, 2011). This reality makes the companies to try as much as possible to keep their current customers. Customers are not usually satisfied from quality and value of the services received hence it cost five times more to attract a new customer as compared to retaining a current customers (Lin & Wang, 2006). Sustainability and competitiveness of a company can be encouraged through retaining its customers. Proper marketing can lead to continued support and loyalty. In the absence of effective communication, it is impossible to meet organizational goals apart from being unable to explain the progress once the goals are met. The capacity to communicate effectively is modern business is pivotal across all industries and a number of communication channels aided by technology are needed to put the message across (Mulligan & Gordon, 2002). Efficiency of any business is enhanced through proper communication that ensures that the desired message is communicated to the target audience without any distortions. For the purposes of development of effective customer loyalty program, managers have to develop a foundation of business process, organizational performance capabilities and knowledge. Market leaders as well as followers are aligning loyalty offers with seasons pricing, merchandising and IT teams as far as establishment of loyalty program in a firm. A loyalty program is designed to reward most profitable customers of a company (Murphy, Hildebrandt & Thomas, 1997). These programs enhance greater use as well as frequency from customers as they work towards increasing their loyalty points in a loyalty structure. Companies can offer incentives basing on purchase patterns of the customers. Discounts, exclusive offers and allowing early access to services or products is important when it comes to establishing deeper customer relationships and tends to make the shopping experience to be felt as personal by the loyal customer. Market leaders have increased the use of digital channels to provide personalized and targeted offers to their customers. Mobile and social channels are being deployed more in the loyalty schemes. Social media marketing tools are top priority in establishment of customer loyalty program (Crossman, 2004). Some of these tools include blogs, social networks, micro-blogging, product recommendations, and user generated content. Customers turn to their peers colleagues and friends for advice with regard to services, products, and brands. Connectivity that is effective between the consumer and the brand is one of the top sources of Return on Investment (ROI) from social media marketing (Day, 2000). Social loyalty marketing permits companies to capitalize of the desire by the customers for immediate gratification. Companies really have to be careful when it comes to social marketing on social networks. A good campaign or offer can precipitate a buzz and result into additional customers and revenue. On the other hand, a bad experience or campaign can result into a social backlash hence spoiling the reputation of the company that can lead to brand switching to rival companies (Eisenberg & Goodall, 2001). A customer analytics application is another enable for loyalty success. The company management can use company analytics to collect and understand customer behavior and purchasing information (Lewis, Semeijn & Talalayevsky, 1998). Moreover, loyalty customers are willing to share more information since they understand they impact on their loyalty standing. Data for customer analytics can be derived from stores together with digital channels like call centers, online stores, and social media monitoring. The constructs of perceive value, service quality and customer loyalty have gained increasing significance in marketing literature, as well as business practice. According marketing literature these aspects will continue to be important in the years to come. Cumulative insights from studies support the observation that service quality boosts perceived value which leads to increase in customer loyalty. Aihie and Bennani (2007) states few studies have explored the impact of information technology in business communication with regard to increase in customer loyalty. How effective can technology used to increase customer loyalty in firms? It will be noted that many firms prefer to outsource components for setting out their loyalty programs instead of creating a centralized platform through application of technology. This can be interpreted as the tendency of some managers to treat application of technology in loyalty programs as a waste of time or unprofitable. This research proposal seeks to dispel myths around loyalty programs and demonstrate how successful application of technology in business communication can lead used to enhance customer loyalty. 5) Statement of the research question A lot of researches have concentrated on the benefit of information technology in the ease of doing business in the modern world. Information technology has played a big role in development of effective business communication in the business world. Customer retention has become an important aspect of business strategy with the intention of maintaining or increasing the market share of the company. Increased competition calls for astuteness in the application of information technology in any sector of the business particularly when it comes to service delivery. Data captured via centralized customer loyalty platforms can be used in better service delivery. Components of customer loyalty programs can be integrated to quicken collection of information into the company’s databases. It is important to establish the impact of application of information technology in the development of customer loyalty platforms. This research proposal seeks to investigate the impact of Information Technology on business communication with regard to increasing customer loyalty in the 21st Century. 6) Methods section: In this research it is expected that more companies are using information technology to integrate their customer loyalty programs for better gathering of data and delivery of service to customers. Many customer loyalty programs used by companies are being outsources and few firms have taken the initiative of implementing a full-fledged information technology platform that hosts the customer loyalty program. Companies have not recognized the need of having a serious customer loyalty program and they still outsource few components from technological companies to host their loyalty programs. Redemption of points becomes cumbersome as well as gathering of information about individual customers. 7) Results: methodology to be used to test the hypotheses The research will start with the formulation of hypothesis of what is expected in the field during the actual research. Both positive and null hypothesis that will be sought to be disapproved or approved after the actual research will be formulated. This research seeks to establish the impact of information communication in business communication with regard to increase in customer loyalty. It seeks to prove the link between increase in information technology in the development of customer loyalty systems and the impact on actual customer loyalty. Null hypothesis: There is no link between customer loyalty and application of information technology in business communication Application of information technology does not in any way affect customer loyalty in an organization Positive hypothesis: There is a strong connection between customer loyalty and application of information technology in business communication Application of information technology in an organization leads to increased customer loyalty in an organization A total of ten companies will be used as a sample in this research. Two companies will be picked randomly from five different categories that include manufacturing, production, retail and wholesaling, hospitality and banking and finance. The correspondents from these categories of companies will be managers, CEOs, current customers and prospective customers. Qualitative and quantitative methods will be used in this research for the purpose of gathering data. Research assistants will be briefed on the research and trained prior to being sent in the field for the purpose of data collection. Methods that will be used in gathering of data will include online surveys, administering of questionnaires, face to face interviews, filling in forms, telephone interviews and observation. Questionnaires will be prepared in advance and tested in order to eliminate any ambiguity or bias questions. Both close and open-ended questions will be used in questionnaires for the aim of gathering both quantitative and qualitative data. Online surveys will be administered since they are cheap to use and can be used to collect data quickly. The correspondents will be picked at random but targeting to cover all the industries that have been mentioned. Online surveys will be conducted through Facebook, Yahoo! Twitter and gmail.com hangouts. The questions to be used in the surveys will be prepared in advance. Background to the research and understanding existing literature on the research question will be done through searching secondary data that will include textbooks, companies’ newsletters, periodicals, magazines, news articles, government records, and journal articles. 8) Conclusions or discussion section The use of information technology has transformed the manner in which business is conducted in the 21st Century. Many organizations have realized that one of the factors that can drive them to attain a competitive advantage age is investing in customer retention systems like the customer loyalty programs. There is no doubt that information technology plays an important role in integrating the various interfaces and components of a customer loyalty program to come up with a centralized system. Interviews with CEO of companies that are reputed to have competitive advantage will reveal the essence of investing in information technology to boost customer loyalty platforms. Centralization of the systems is of essence for quick gathering of data about customers in order to ensure high quality service delivery. Customer analytics application I one example of how customer loyalty programs can be used successfully. Online surveys of customers to companies that use loyalty programs will reveal how best information technology is working for those companies in retention of current customers. Search through current literature will reveal the existing gap with regard to the impact of information technology in increase of customer loyalty in a company. The interviews will be conducted with trained research assistants with keen interest to avoid personal biased and stereotypes. The research is supposed to last ten months before the final report is presented to the sponsors. Bibliography Aihie, O. & Bennani, A.E. 2007, An exploratory study of implementation if customer relationship management of strategy business process management, Journal 13 (1): 139-164. Bak, O. & Stair, N., 2011, Impact of E-business Technologies on Public and Private Organizations: Industry Comparisons and Perspectives, IGI Global, New York. Beverly, K. K., Diane, M., Strong, & Richard, Y. W. 2002, Information Quality Benchmarks: Product and Service Performance, Communications of the ACM, 45(4ve). Consuegra, D., Molina, A. & Esteban, À. 2007, An Integrated Model of Price, Satisfaction and Loyalty: an Empirical Analysis in Service Sector, Journal of Product & Brand management, 16(7), 459-468. Crossman, P. 2004, Online failure impact loyalty online, Intelligent Enterprise 9 (11): 14-15. Day, G.S. 2000, Managing Market Relationships, Journal of the Academy of Marketing Science 28: 24-30. Deetz, S. 2001, Conceptual foundations, In F. M. Jablin & L. L. Putnam (Eds.), The new handbook of organizational communication: Advances in theory, research, and methods (pp. 3-46). Thousand Oaks, CA: Sage. Eisenberg, E. M., & Goodall, H. L. 2001, Organizational communication: Balancing creativity and constraint, New York: Bedford/St. Martin’s. Gray, P. & Byun, J. 2001, Customer Relationship Management, Center for Research on Information Technology and Organizations, IT in business. Gummesson, E. 2002, Relationship marketing in the new economy, Journal of Relationship Marketing, 1, 37-57. Guenzi, P. & Pelloni, O. 2004, The impact of interpersonal relationships on customer satisfaction and loyalty to the service provider, International Journal of Service Industry Management, 15, 365-384. Holter, N. C., & Kopka, D. J. 2001, Developing a workplace skills course: Lessons learned. Journal of Education for Business, 76 (3), 138-143. Hueng, V. C. S. 2003, Internet usage by international travelers: Reasons and barriers, International Journal of Contemporary Hospitality Management, 15 (7): 370-378. Miller, K. 2003, Organizational communication: Approaches and processes (3rd Ed.). Belmont, CA: Wadsworth. Mulligan, P. & Gordon, SR. 2002, The impact of information technology on customer and supplier relationships in the financial services, International Journal of Service Industry Management, 13 (1): 29 - 46 Murphy, H. A., Hildebrandt, H. W., & Thomas, J. P. 1997, Effective business communication (7th Ed.), McGraw-Hill, New York. Jablin, F. M., & Sias, P. M. 2001, Communication competence, In F. M. Jablin & L. L. Putnam (Eds.), The new handbook of organizational communication: Advances in theory, research, and methods (pp. 819-864), Sage, Thousand Oaks, CA. Jensen, N.J., 2005, Technology and intelligence, Journal of Money Laundering Control, 8 (3): 227 - 242 Kumar, V., & Shah, D. 2004, Building and sustaining profitable customer loyalty for the 21st Century, Journals of Retailing, 80, 317-330. Lewis, I., Semeijn, J., & Talalayevsky, A. 1998, The impact of information technology on travel agents, Transportation Journal, 37 (4): 20-25. Lin, H. H., & Wang, Y. S. 2006, An examination of the determinants of customer loyalty in mobile commerce contexts, Information & management, 43, 271-282. Pease, W. & Rowe, M. 2007, Information and Communication Technologies in Support of the Tourism Industry, Idea Group Inc (IGI), New York. Petterson, P. G. 2004, A contingency model of behavioral intention in a service context. European, Journal of marketing, 38(9), 1304-1315. Robbins, S. P. 2001, Organizational behavior (10th Ed.), Upper Saddle River, NJ: Prentice Hall. Saeed, K. A., Grover, V., & Hwang, Y. 2005, The relationship of E-commerce Competence to customer value and firm performance: An Empirical Investigation, Journal of Management Information System, 22(1), 223-256. Schiffman, L. G. & Kanuk, L. L. 2004, Consumer Behavior, Pearson Prentice Hall Publications, U.S.A. Senft, S. & Gallegos, F., 2010, Information Technology Control and Audit, Third Edition, CRC Press, London. Serenko, A., 2006, The use of interface agents for email notification in critical incidents," International Journal of Human-Computer Studies, 64 (11): 1084–1098. Srinivasan, S. S., Anderson, R., & Ponnavolu, K. 2002, Customer loyalty in e-commerce: An exploration of its antecedents and consequences," Journal of Retailing 78 (1): 41-50. Turel, O. & Serenko, A. 2006, Satisfaction with mobile services in Canada: An empirical investigation, Telecommunications Policy, 30 (5-6), 314-331. Yen, H. J. R., & Gwinner, K. P., 2003, Internet retail customer loyalty: the role of relational benefits, Journal of service industry management, 14(5), 483-500. Vesel, P., & Zabkar, V. 2009, Managing customer loyalty through the mediating role of satisfaction in the DIY retail loyalty program, Journal of retailing and customer services, 16, 396-406. Verhoef, P. C. 2003, Understanding the Effect of Customer Relationship Management Efforts on Customer Retention and Customer Share Development, Journal of Marketing, 67, 30-45. Wangenheim, F. 2005, Post-switching negative word of mouth, Journal of Service Research, 8 (1): 67-78. Zhou, Z. 2004, E-Commerce & information technology in hospitality & tourism, Scarborough, Canada, Delmar Thomson Learning. 9) Appendix Sample questionnaire The information that will be provided by the correspondent will be treated with uttermost confidentially and used according to the aim of the research and agree upon by the correspondent. Answer the questions honestly and to the best of knowledge 1. Are you a loyal consumer to any company products? Yes………... No…….. 2. Is effective communication one of the reasons that you prefer the company’s products? Yes…… No…….. 3. Do you think that loyalty programs are important? Yes….. No…… 4. Who benefits from loyalty programs? Company or Customer?……….. 5. Do you subscribe to any customer loyalty programs? Yes……No…. 6. What benefits do you accrue from the loyalty programs? Explain……………………………………………………………………………………... 7. What would you like to be done better about the loyalty program of your company? Explain.............................................................................................................................. 8. Does information technology enhance interaction between companies and their customers? Yes……… No……… 9. Does information technology play a crucial role in development of customer loyalty platforms? Yes…..No…. 10. Do you believe that loyalty programs contribute to repeat purchases? Yes…… No…. 11. What your general advice about customer loyalty programs and their use in the modern business world? Explain………………………………………………………….. Thank you for taking your time to answer these questions. Your cooperation is highly appreciated and we wish you the best of luck in everything that you do. Thank you. Table of schedule of Activities Activity/Month Sept. Oct. Nov. Dec. Jan. Feb. Mar. April May June pre-planning and exploration of secondary sources Developing research design and schedule of activity table Questionnaire preparation Pilot test and questionnaire testing. Questionnaire administration Conducting interviews Online surveys Collection of data Data analysis and interpretation Preparation of report Presentation of report Read More